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September 21, 2012

Are All Providers Equal in the Eyes of the ZPICs?

bloglogo2.jpgZone Program Integrity Contractors (ZPICs) are charged with detecting fraud, waste and abuse in Medicare Parts A, B, C, D, Durable Medical Equipment, Prosthetics, and Orthotics Suppliers (DMEPOS), Home Health and Hospice agencies (HH+H), and Medi-Medi (a partnership between Medicaid and Medicare designed to enhance collaboration between the two programs to reduce fraud, waste and abuse). In conducting their work, money.jpgZPICs are not limited by time as to the claims they may review or the number of documents they may request "to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid out and that any mistaken payments are recouped." In carrying out their responsibilities, ZPICs do not conduct random audits. Instead ZPICs rely on data analysis to detect high frequency of certain services as compared with local and national patterns, trends of billing, or other information that may suggest the provider is an outlier. ZPIC audits may also be triggered by employee or beneficiary complaints to the Office of Inspector General hotline, fraud alerts, or information received from a MAC or other contractor and law enforcement agencies.

The World of Medicare Contractors

As the number of stand-alone health care providers continues to decrease, the number of corporate relationships between companies hired by CMS to ensure the integrity of the Medicare program and Medicare providers continues to increase. The result of this consolidation is the growing possibility that these relationships will not be detected or adequately addressed by CMS, with the result that complaints of wrongdoing against some providers will not be investigated as vigorously as complaints against other providers.

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August 22, 2012

Who are the Medicare Auditors?

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for bloglogo2.jpgCMS has entered into contracts with numerous auditing companies to review provider billing for various purposes. As time goes by, it is more and more likely that billings submitted by almost every Medicare provider will be subject to review by one or more of these audit contractors. Set forth below is a brief description of the auditing functions of the various CMS auditors.

Medicare Administrative Contractors

auditor.jpgAccording to Chapter 3 of the Medicare Program Integrity Manual (PIM), in addition to their claims processing functions, Medicare Administrative Contractors (MACs) have the authority to review any claim prior to payment. MACs have the discretion to select target areas because of:

  • High volume of services;
  • High cost;
  • Dramatic change in frequency of use and/or
  • High risk problem-prone areas

What this means is that a MAC, unlike a RAC, does not have to obtain CMS' approval of what procedures it will subject to prepayment review. Also, there is currently no limitation, other than the MACs discretion, as to how many Additional Document Requests (ADR) a MAC may make.

If the MAC feels that a certain procedure is being miscoded or that there is no medical necessity for a procedure, it will conduct a prepayment review of each claim submitted for extended periods of time. This means the provider will be subject to ongoing requests for records and suffer a substantial negative impact to its current cash flow.

Recovery Audit Contractors

A demonstration Recovery Audit program was authorized by ยง 306 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 and conducted from March 2005 to March 2008, in six states, to determine if Recovery Auditors could effectively be used to identify improper payments for claims paid under Medicare Part A and Part B. The Tax Relief and Health Care Act of 2006 made the program permanent and expanded it to cover the entire country. To implement the program, CMS divided the country into four regional areas.

The RACs are responsible for identifying improper payments for:

  • Items or services that do not meet Medicare's coverage and medical necessity criteria.
  • Items that are incorrectly coded and
  • Services where the supporting documentation submitted does not support the ordered service.

keyboard.jpgAutomated reviews conducted by the RACs typically focus on DME, physician and outpatient claims and do not require the production of additional records by the provider. Complex reviews, which do involve the production of additional medical records by the provider, involve coding issues, Diagnosis Related Group (DRG) validations and medical necessity reviews. CMS must approve the issue a RAC wants to review and has imposed limits on the number of medical records a RAC may request. Each RAC has established a website that lists, among other things, the claims that have been approved for audit.

CMS recently announced that a three year RAC pre-payment review demonstration project will begin on August 27, 2012. CMS conducted an Open Door Forum on August 9, 2012 to discuss the operation of this new program. The transcript of the Open Door Forum can be found here

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