How to Prevail in ZPIC Audit and Appeals

Healthcare Attorneys Providing Legal Counsel for the ZPIC Audit and Appeals Process

What is a ZPIC?

In order to survive a ZPIC audit one must first understand what a ZPIC is. A Zone Program Integrity Contractor, or ZPIC, is an entity created by CMS with a primary goal of identifying cases of suspected fraud. There are seven ZPIC’s across the country whose jurisdiction mirrors the jurisdiction of the Medicare Administrative Contractor (MAC) who pay Medicare claims for services rendered in their region. As a result, a provider may be subject to medical records requests from two separate and distinct entities; for example, a provider in Texas will receive Medicare payments from Novita’s Solutions, Inc. while being subject to the authority of Health Integrity for allegations of suspected fraud.

What Does a ZPIC Do?

CMS has endowed the ZPIC with certain functions and responsibilities; the first and foremost being the prevention, detection, and deterrence of Medicare fraud. The ZPIC’s other responsibilities include identifying program vulnerabilities, proactively identifing incidents of potential fraud, and initiating appropriate administrative actions to deny or suspend payments that should not be made to providers where there is reliable evidence of fraud.

While CMS contracts with ZPICs to perform functions related to fraud detection, there are certain activities that are not the responsibility of the ZPIC. Functions and responsibilities that fall within the purview of the MAC and not the ZPIC include; but are not limited to, claims processing and payment determinations, non-fraud related medical review, and provider outreach and education.

As stated above, the ZPIC’s chief obligation is to investigate allegations of fraud made by beneficiaries, providers, CMS, or other sources and refer verified allegations of fraud to HHS OIG for consideration of civil or criminal prosecution. Although ZPICs are contractually obligated to initially refer its cases of suspected fraud to HHS OIG, ZPICs do have other referral options. A memorandum of understanding (MOU) exists so that ZPICs can refer cases simultaneously to HHS OIG and the FBI. The MOU allows HHS OIG the opportunity to act upon the referral and determine whether or not they are going to accept or decline the case before the FBI takes action. ZPICs can also refer suspected fraud cases to state Medicaid Fraud Control Units (MFCU) or any other state agency that may have authority to investigate the provider type under review by the ZPIC. Providers should be aware that law enforcement, at times, has adopted the belief that if a provider is defrauding one government program, they are defrauding multiple government programs. As such, it is not uncommon for a ZPIC referral to be accepted and worked, in partnership, by HHS OIG, FBI, and state MFCU.

In order for the ZPIC to accomplish their primary fraud detection goal, CMS has provided ZPICs a list of approved investigative techniques. ZPICs can use data analysis to identify trends and aberrancies, interview beneficiaries, conduct on-site visits of the provider’s location, and request medical records. A ZPIC cannot; however, go on-site or request documents solely at the direction of law enforcement.

What to Do?

The first step in succeeding in a ZPIC audit is to understand and acknowledge what exactly is going on. An audit by the ZPIC is not the same as an audit by the MAC. The purpose of a MAC audit is to reduce error rates through provider notification and feedback, whereas the purpose of a ZPIC audit is to uncover potential fraud. In fact, referring to what the ZPIC does as an audit is disingenuous and somewhat of a misnomer. Remember, a ZPIC does not engage in provider outreach and education. ZPICs investigate fraud. ZPICs are contracted to identify fraud and refer that fraud to a law enforcement agency for the purpose of civil or criminal prosecution. A ZPIC investigator arriving at your office to perform an on-site visit or requesting medical records and referring to it as an “audit” is a kin to the verbal judo utilized by a patrol officer arresting a motorist on a warrant issued for a traffic violation and telling the motorist he simply has “some tickets out”. Both statements are designed to put the listener at ease and diminish the severity of the action that follows, but make no mistake about it, the consequences of both can result in your personal freedoms being taken from you.

The second step to prevailing is to understand the ZPIC’s role and responsibilities and how they relate to your operation as a Medicare provider. Healthcare fraud, regardless of who is investigating it, is interview and document intensive. When interviews with beneficiaries do not match with what the claims for service or medical records reflect, suspicions will be raised. As a submitter of claims to the Medicare Program, providers are responsible for knowing the Local Coverage Determinations (LCD) established by the MACs for their region and applying those LCD’s to the CPT codes billed. Providers also need to fully understand the rules and regulations governing their provider type and how those rules and regulations relate to the submission of claims to the Medicare program; for example, state statues or provider licensing requirements. A provider that is not properly licensed may not be entitled to reimbursement for Medicare services.

We Can Help You

The Oberheiden, P.C. consists of former Medicare fraud prosecutors and law enforcement personnel that have specific experience with hundreds if not thousands of ZPIC audits. Our combined experience of decades in charge of Medicare and Medicaid investigations helps our clients to better understand what government lawyers are looking for when reviewing healthcare data and ZPIC information. Below is our recommended ZPIC audit attorney.

• With a profound understanding of the law and superb litigation skills, Attorney Lynette Byrd consistently finds success for her clients. While Attorney Byrd is a former Assistant United States Attorney, she now focuses her practice on criminal and civil litigation, Medicare and insurance audits, and general advice and counseling for those with questions pertaining to healthcare law.

Feel free to contact one of our attorneys directly. We are happy to share our ideas with respect to ZPIC audits and how to make sure that the audit does not turn into a bigger-scale Medicare investigation. Your call is free and confidential and you can reach our attorneys also on weekends. to analyzing claim data, ZPIC will likely request and review medical documentation for evidence of alteration or fabrication. It may also contact beneficiaries or related physicians regarding claims billed. If the ZPIC identifies inaccuracies in a medical company’s billing, the critical question for criminal referral is whether those inaccuracies were the result of billing mistakes or whether they were caused by conscious fraud. If the ZPIC auditors determine that fraud occurred, they will likely refer the matter for civil or criminal investigation.

An important first step to preventing a criminal referral is retaining experienced healthcare fraud defense lawyers that can manage communications with the ZPIC. Counsel also often recommends and may assist you in performing your own analysis of the records requested. This may allow you and your counsel to determine important information regarding the types of procedures, codes, time periods, and patients that the ZPIC is investigating. Understanding the focus of the ZPIC audit can help you and your counsel assess the scope and magnitude of the problem and explain to the auditors that any errors were unintentional. It is important to start this process as quickly as possible so that it can be completed before the ZPIC makes a decision to refer a case for prosecution. Your first priority must be to avoid criminal indictment, and your counsel will have a much easier time accomplishing that goal at the ZPIC stage rather than after the ZPIC refers a matter.

What Happens When the U.S. Attorney’s Office Gets Involved?

ZPICs frequently refer matters to the U.S. Attorney’s Office for civil or criminal investigation and enforcement. If your case is referred, the FBI or other government investigators may investigate your business. These investigators have access to much more aggressive tactics: They may raid your business, confiscating medical and billing records, computers and other related evidence. They may also freeze your private and business bank accounts. These actions could interrupt your company’s ability to do business.

Investigators may attempt to interview you or your employees. If you are confronted by investigators, it is important for you to remember that you are not required to speak with government investigators and it is generally not in your best interest to do so, even if you believe you have done nothing wrong. Investigators often have years of experience eliciting damaging admissions, and they may be more familiar with your billing practices than you are. You should always rely on your legal counsel or healthcare fraud attorney to manage communications with the government.

What Are the Penalties for Medicare Fraud?

Criminal penalties for Medicare fraud are serious and can result in incarceration of:

• Up to 10 years for each count of Medicare fraud;
• Up to 20 years for each count if the fraud resulted in serious bodily injury; or
• Up to life in prison if the fraud resulted in the patient’s death.

These penalties are in addition to restitution, criminal fines, and program exclusion.

We Can Help You

• Nick Oberheiden has successfully represented healthcare executives, business owners, public officials, physicians, and lawyers in healthcare prosecutions across the United States. Dr. Oberheiden is the managing principal of Oberheiden, P.C. and he assists clients in Dallas, Garland, Mesquite, Richardson, McKinney and surrounding communities in federal healthcare investigations.

• Lynette S. Byrd is a former Assistant United States Attorney (AUSA). Until recently, Ms. Byrd prosecuted healthcare fraud, Anti-Kickback violations, False Claims Act, and Stark violations on behalf of the United States at the U.S. Attorney’s Office in Dallas, Texas.

Call us today and speak to one of our experienced attorneys directly. We are available to discuss your situation in a free and confidential call, including on weekends.