Lynette Byrd
Lead Attorney Lynette Byrd

If your home health agency contracts with Medicare to provide services to Medicare beneficiaries, your agency faces the possibility of a ZPIC audit. ZPIC stands for Zone Program Integrity Contractor. Medicare contracts with separate entities to carry out its necessary functions and these ZPICs perform audit services on behalf of the Medicare program. The purpose of these ZPIC audits is to identify fraud, waste and abuse occurring in home health agencies (and all other Medicare contracted healthcare providers). The ZPICs serve as an oversight to home health agencies to ensure they are providing medically necessary and correctly billed for services.

Just because you receive a ZPIC audit does not automatically mean your home health agency is doing something improper. Often, the ZPICs send audit requests just to verify certain information from your home health agency. However, a ZPIC audit should not be ignored and the response to it should be handled with care.

Your home health agency may be selected for a ZPIC audit based on a few reasons. The most common reason to receive a ZPIC audit are: a patient referral, someone complained about your practices or a cause for concern was identified by CMS software. ZPICs have their own internal data analytics that analyzes data from all healthcare providers that submit claims for reimbursement to Medicare. If this software identifies “outlier” issues with regard to your home health agency, you could be subjected to an audit. Outlier issues could be any of the following:

  • Your home health agency is billing a high volume of a particular code
  • Your home health agency is billing a higher volume for a particular service than other home health agencies in your geographic region
  • Your home health agency is incorrectly using a particular code or modifier

ZPIC audits are also sent to home health agencies that are suspected of billing for services not provided. For example, if a patient receives his or her explanation of benefits and listed on that explanation is an itemization for home health services. This patient may report that they never received home health services and report may trigger an audit. ZPICs also conduct audits to ensure medical necessity for services billed. If a ZPIC audit is for medical necessity reasons, the auditor will request patient records from your home health agency. Doctors and nurses that work for CMS will review your patient records to see if the level of care supports the services submitted for reimbursement.

Home health agencies usually receive a written notice in the mail from their respective ZPIC is they are being flagged for an audit. However, auditors can sometimes show up in person to your home health agency and deliver the audit notice. These auditors can sometimes be accompanied by investigators and these individuals can try to interview you and your staff on the spot. It is never a wise idea to speak with auditors or federal investigators without first consulting with an attorney. If an auditor or agent arrives at your home health agency, kindly tell them you will not speak with them and to contact your attorney.

If you simply receive an audit notice in the mail, you will have a specified number of days to respond to the audit and provide the ZPIC with the documentation they have requested. Do not ignore a ZPIC audit. Not responding to an audit can have dire consequences for your home health agency.

While the majority of ZPIC audits seek to identify if any overpayment has been provided to your home health agency, not all audits are as benign. As discussed above, ZPICs seeks to identify fraud, waste and abuse. If your response to a ZPIC audit is not handled properly and/or if the underlying allegations that prompted the audit are serious, your home health agency’s practices potentially can be referred to the federal authorities for further investigation. If a ZPIC auditor believes your home health agency is committing fraud based on his or her review of your audit response, he or she has authority to get the US Attorney’s Office involved. The US Attorney will review the auditor’s findings and decide if further proceedings against your home health agency are warranted. The US Attorney can potentially bring criminal or civil charges against your agency. An experienced healthcare counsel is critical to mitigating your home health agency’s potential exposure to government investigations.

If a ZPIC auditor determines, after reviewing your documentation supplied in response to the audit that an overpayment is due, a demand for overpayment will be made to your home health agency. This demand seeks quick recoupment of Medicare funds paid to your agency. The demand will detail why and how the auditor arrived at their conclusion. You do have the right to appeal this overpayment decision. Do not simply accept the auditor’s findings as fact. Your attorney can help you craft an effective appeal that pertinently details why the auditor’s overpayment determination is incorrect. Your appeal should be supported by documentation.

Keeping documents in an organized fashion is crucial to withstanding a ZPIC audit. If you do not have the documentation the auditor requests, or do not have documentation to support your appeal, your case becomes more difficult to defend. As a standard practice, your home health agency should be diligent about record-keeping and not get dispose of any documents relating to the services you provide your patients until you are legally allowed to do so.

Getting a ZPIC audit can be confusing and perplexing to home health agencies. If you are the owner of a home health agency, you need experienced healthcare counsel on your side – counsel that understands the intricacies of how the audit process works and understands the overarching federal laws that govern these audits. You work hard to provide superior care to your patients. Do not let a ZPIC audit derail all that you have worked for.