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Dr. Nick Oberheiden

Aaron Wiley
Former State &
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S. Amanda Marshall
Former U.S. Attorney

Lynette Byrd
Former Assistant
U.S. Attorney

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What Should You Do in a ZPIC Audit Investigation?

Categories: Health Care Law

ZPIC Audit
ZPIC Attorney Hotline: 800-810-0259
Oberheiden, P.C.
Former Medicare Prosecutors & Defense Counsel

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 established the Medicare Integrity Program (MIP).  MIP was established to strengthen the Centers for Medicare & Medicaid Services’ (CMS’) ability to detect and deter potential fraud, waste, and abuse in the Medicare program.  As part of this program, CMS created a uniform type of administrative entity called Medicare Administrative Contractors (MACs). In accordance with the newly established MAC jurisdictions, seven geographical entities entitled Zone Program Integrity Contractors (ZPICs) were created to perform program integrity functions in these zones for Medicare Parts A, B, Durable Medical Equipment, Home Health and Hospice, and Medicare-Medicaid data matching.

Fraud Detection

The primary goal of ZPICs is to investigate instances of suspected fraud, waste, and abuse in the Medicare system.  ZPICs develop investigations early, and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid.  They also identify any improper payments that are to be recouped by the MAC.

Data Analysis

ZPICs perform medical record review, focusing on making coverage and/or coding determinations for medical necessity.   Data and claim analysis is also performed in the course of their investigation to determine if fraud is present.  Fraud committed against the program may be prosecuted under various provisions of the United States Code and could result in the imposition of restitution, fines, and, in some instances, imprisonment.  In addition, a wide range of administrative sanctions (such as deactivation or revocation of Medicare enrollment or billing privileges, suspension of payments, or exclusion from participation in the Medicare program) and civil monetary penalties may be imposed when facts and circumstances warrant such action.  An investigation that demonstrates potential fraud may be referred to law enforcement for further investigation. ZPIC audit investigations are typically initiated from innovative data analysis methodologies, to include:

  1. High frequency of certain services in relation to local or national patterns;
  2. Billing trends indicating an outlier provider;
  3. Lengths of stay outside industry standards;
  4. Mismatch of claim with physician record; and
  5. Improper or inaccurate billing.

Complaints & Routine Audits

ZPIC audits can also arise from complaints or referrals.  More specifically, employee or beneficiary complaints to the Office of Inspector General hotline, fraud alerts, or MACs or other law enforcement agencies may alert the ZPICs. ZPIC audits are not typically random and are often unannounced.  Potential fraud has already been identified and the ZPIC has presumed improper billing activities.  In most circumstances, ZPICs may use statistical sampling to calculate and extrapolate the amount of overpayments made on all claims during a time period.  This allows the ZPIC to generate large overpayment amounts with minimal work.  The ZPIC also has the power to request medical documentation or evidence related to the validity of the claim.  An extrapolated overpayment could quickly devastate a provider.

Follow Up Investigations

The ZPIC has a lot of discretion when conducting a review for benefit integrity.  The ZPIC may determine that beneficiary interviews are necessary to determine medical necessity or billing errors.  ZPICs around the country have been given ready access to a wide variety of claims coding, billing, and utilization databases and are expected to perform complex data analysis with this data in an effort to determine providers and suppliers who have suspicious billing history.  If a health care provider’s claims utilization and billing practices are outside of the norm (making the provider an “outlier”), that provider is likely to be audited.  Providers can be placed on up to 100% pre-payment review by a ZPIC, in which case the provider must stop billing for claims until further notice.

Office of Inspector General

The purpose of any ZPIC investigation is to determine whether there is potential fraud or whether the supplier merely made billing errors.  If the investigation does not result in a case, the ZPIC will act to prevent further payment of inappropriate claims and recover any overpayments.  If the investigation becomes a case, it will be referred to the Office of Inspector General and the Department of Justice.  Regardless of whether or not the investigation becomes a case, the ZPIC will seek recoupment through the MAC whenever it determines there is an overpayment.

FBI Investigation

ZPICs choose a wide range of targets, from single-doc shops to home health companies to larger clinics.  ZPICs do not have to get CMS approval for the issues they choose to target.  ZPICs also do not have to provide education to providers or post their areas of focus publicly.  ZPIC investigations can start with a letter requesting claim documentation to determine if an overpayment has occurred.  Other times, the ZPIC conducts unannounced site visits where auditors take photos and records.  The ZPIC contractors work closely with agents from the Office of Inspector General-Health and Human Services and the Federal Bureau of Investigation.  Therefore, their audit tactics sometimes closely resemble those of a law enforcement agency.

How Can Experienced Attorneys Help You with ZPIC Audits?

ZPIC audits play a significant role in the government’s arsenal of monitoring and prosecuting healthcare fraud. Most recently, the federal government has indicated a growing intention to investigate healthcare companies based on analyzed data. What this means in practice is that companies that are particularly profitable, and thus have larger claims submissions, appear on the government’s radar and are far more likely to be audited than less successful providers. The purpose of this brief article is to demonstrate how experienced attorneys can impact a ZPIC audit and help to resolve the auditor’s issues at an early stage.

Goals of Legal Advice

Many healthcare fraud investigations start with a ZPIC audit or similar document requests. Mistakes being made in the stage of mere administrative requests can lead to large scale audits and investigations that involve the federal government’s U.S. Attorney’s Office, the Medicare Fraud Strike Force, the OIG, the FBI, and the Department of Health and Human Services.

  • Self-Analysis. Lawyers that assist with ZPIC audits must review your files before the government does to advise you on the thoroughness and strengths of your files. Experienced attorneys will be able to identify mistakes, errors, and such misinformation that may prompt the government to extend its inquiry.
  • Deadline Extension. Because some audits ask for a great number of documents, sometimes even from different offices within one company organization, it may be helpful for your attorneys to request a deadline for production. Doing so will give you more time to gather requested files and to analyze your files together with your lawyer without missing a deadline or losing credibility.
  • Improve Compliance. Experienced attorneys will not just look at the files requested but also keep an eye on the big picture. What if the auditor sees a necessity for a follow up or a federal subpoena? Is the company structure intact? Is management prepared for a government intervention? Are the company’s overall compliance efforts satisfactory and updated? Is the compliance program professionally handled and convincing? Is the compliance officer prepared to defend the company? Are all corporate documents current? What weaknesses does the organization have? What would a prosecutor or law enforcement agent think when looking at the level of compliance and sophistication? While responding to the auditors is certainly important, the time the government provides to do so is incredibly valuable, and should be used to improve the business’s overall compliance appearance to mitigate potential deficiencies in the audit and to build arguments for anticipated settlement conferences with the government.
  • Working with the Auditors. The best way to find out what may have prompted a particular audit and what exactly the government is looking for is to immediately open a dialogue with the auditors. Knowing the purpose and the goal of a particular audit helps tremendously to tailor the audit responses to the auditors’ needs. In many cases it is the early stage of communicating with the requestors by experienced attorneys (that also know the auditors and vice-versa) that can make a difference, especially if not all of the files are in pristine condition.
  • Convincing the U.S. Attorney’s Office. If an audit is sent to the U.S. Attorney’s Office, it is of cardinal importance for an experienced attorney to defend a client right away before a prosecutor may consider going down a criminal route. This can be done in personal meetings with the prosecutor or sometimes via phone. It is important not to allow the government to build a case and to open an investigation against the company and key personnel. Finding the right attorneys that can keep an investigation civil and that are able to avoid a criminal investigation should be the top priority for any healthcare company under audit or investigation.

Our Attorneys Can Help You

Oberheiden, P.C. offers the expertise and first-hand knowledge of numerous attorneys and law enforcement personnel that have previously overseen ZPIC audits on behalf of the government. These attorneys bring the insights to the table and are able to share with our clients what to do in an audit and how to deal with the auditor. More importantly, our attorneys are able to prepare Medicare providers for follow up audits and government subpoenas if the audit production fails to meet government expectation.

Medicare and Medicaid providers that are facing a government audit, ZPIC audit, or other forms of healthcare investigation should contact the experienced attorneys of Oberheiden, P.C. for a free and confidential consultation. We are also available on weekends.

Free & Confidential Consultations

Unlike other contracting agencies focused on finding billing errors, the ZPIC audit is focused on uncovering fraud.  Every audit has the potential to be a fraud referral to law enforcement.  Our experienced former Medicare prosecutors know the intricacies of a ZPIC audit and how to successfully defend against one.  Please call us if you or your business find yourself in the middle of a ZPIC audit.

Including WeekendsOberheiden, P.C.
Compliance – Litigation – Defense
(800) 810-0259
(214) 469-9009
ZPIC Attorney Hotline: 800-810-0259

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Health Care Practice Group has handled at least one hundred (100) matters in the health care industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence.

Dr. Nick Oberheiden

Dr. Nick

Lynette S. Byrd

Lynette S.