Part II: A Look at the ZPIC System – The Appointment of Health Integrity to Handle Zone 4

(April 1, 2010): Last week, we posted an initial article examining the ZPIC audit process and the various companies chosen by CMS to administer the program in one or more of the seven “Zones” around the country (based on Medicare Administrative Contractor (MAC) jurisdictions).  As Kim Brandt, CMS’ Program Integrity Group Director has noted, five of the seven zones are considered “hot spots.”  These include: California, Florida, Illinois, New York and Texas.  These five “hot spots” align with Program Integrity field offices.

In September 2008, Health Integrity was awarded the first Zone Program Integrity contract for Zone 4, covering Texas, Colorado, Oklahoma and New Mexico.

On February 1, 2009, Health Integrity began performing program integrity functions for Medicare Part A, Part B, Durable Medical Equipment (DME), Home Health and Hospice services.  Health Integrity was also designated as responsible for handling the Medicare – Medicaid Data Match Projects.  Overall, these responsibilities cover the following six tasks:

• Performing Data Analysis and Data Mining.
• Conducting Medical Reviews in Support of Benefit Integrity.
• Supporting Law Enforcement and Answering Complaints.
• Investigating Fraud and Abuse.
• Recommending Recovery of Federal Funds through Administrative Action.
• Referring Cases to Law Enforcement.

According to Health Integrity, through these efforts, it will “develop innovative data analysis methodologies for detecting and preventing abusive use of services early, develop high quality fraud case referrals for law enforcement, and identify appropriate corrective actions.”

Health Integrity will manage this workload from offices located in Dallas, Texas; San Antonio, Texas; Houston, Texas; Brownsville, Texas; Denver, Colorado; Oklahoma City, Oklahoma; and Albuquerque, New Mexico.  Health Integrity staff include data analysts, nurse reviewers, and fraud investigators.

As you will recall, like RACs, ZPICs are tasked by CMS to “find and prevent waste, fraud and abuse in Medicare.” Consistent with this mandate, ZPICs look at health care provider billing trends and patterns, focusing on those whose billings for Medicare services are higher than their peers. While most cases appear to have been generated as a result of “data mining,” several of our clients are convinced that the audit has been triggered by complaints, likely filed by a former disgruntled employee.

ZPICS are required to use a number of techniques, both proactive and reactive, to address fraud.  These techniques include the ZPIC IT Systems that combine claims data (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data) and other data to create a platform for conducting complex data analysis. By combining data from various sources, the ZPIC will be expected to present an entire picture of a beneficiary’s claim history regardless of where the claim was processed. The primary source of this data will be the CMS National Claims History (NCH).  Note that RACs are expected to report cases of suspected fraud. However, a RAC denial resulting in a provider repayment will not necessarily prevent a ZPIC and / or HHS-OIG from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from the overpayment.

Over the last year, we have worked on several cases involving Health Integrity.  Generally, we have been quite pleased with their willingness to consider arguments initially presented the provider.  Moreover, it has been our experience that Health Integrity takes the new 15-day “rebuttal” stage seriously.  Rather than merely “rubber-stamp” their initial findings, the contractor carefully reviewed the “rebuttal” information we submitted, ultimately deciding to significantly reduce the amount of the alleged overpayment.

Unfortunately, our initial concerns regarding the contractors use of statistical extrapolations in estimating damages remain.  As discussed in previous articles, we strongly recommend that you engage the services of experienced counsel if your practice or clinic is subjected to extrapolated damages.

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.