South Texas Medicare Providers Are Under the ZPIC Audit Microscope

(July 16, 2010):  The number of ZPIC audits being conducted in Texas appears to be increasing with each passing day.  Health Integrity LLC, the Zone auditor responsible for Zone 4, is proving to be an active auditor of physician practices, physical therapy services, home health care, and other types of Medicare covered treatment in the region.

Even in a nationwide environment of intensifying oversight, Medicare providers in South Texas are under particularly close scrutiny.  According to a study by the Dartmouth Institute for Health Policy & Clinical Practice, updated as recently as May 12, 2010, “even after price adjustment, Miami and McAllen Texas are the highest cost regions in the country.” (Emphasis added).  And don’t forget that ZPIC auditors are essentially being “graded” based on the amount of overpayments recovered, along with the number of enforcement actions handled and referred to law enforcement.

As many Medicare providers in South Texas can attest, the folks at Health Integrity are becoming a familiar sight in their offices and clinics — reportedly conducting extensive on-site ZPIC audits with little if any notice.  To their credit, most health care providers have reported that Health Integrity’s representatives have been reasonable in their requests when conducting an on-site review, typically taking a sample of certain records and asking that the remaining records be sent within a reasonable amount of time after the visit.  Nevertheless, health care providers should take care when responding to the ZPIC’s requests for information.  While a provider may have an obligation to cooperate with the ZPIC, you should contact your counsel to ensure that your rights are protected while still fully meeting your obligations as a Medicare participant.

Notably, ZPIC audits are not limited to post-payment assessments.  ZPIC audits are now occurring as “prepayment reviews”.   A prepayment audit can effectively delay a provider’s cash flow up to six months (and in some cases even longer).  Given the GAO’s recommendation last month that CMS put more emphasis on automated prepayment review, we expect to see this audit tool continuing its precipitous rise for the near future.

Home health providers and other South Texas health care providers in McAllen, Harlingen, Brownsville, Laredo and Corpus Christi, should not wait until their home health claims are under the microscope.  If you have not already done so, we strongly recommend that you implement an effective Compliance Plan covering the services you provide and the claims that you bill to Medicare.

Robert W. Liles serves as Managing Partner at the Firm.  Robert and other Liles Parker attorneys represent health care providers around the country.  ns regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert or one of our other attorneys at 1 (800) 475-1906.