What is the ZPIC Audit Appeals Process?
Help with ZPIC Audit Appeals from Experienced Federal Defense Attorneys
Zone Program Integrity Contractors (ZPICs) are among the Centers for Medicare and Medicaid Services’ (CMS) most-potent weapons for combating Medicare fraud and abuse. These private government contractors are compensated for uncovering false and fraudulent claims on a contingency-fee basis, which means that they are financially incentivized to find wrongdoing. The concept is simple: the more overbillings they uncover, the more they get paid.
Unfortunately, for health care providers and medical supply companies, the ZPIC audit process is anything but straightforward. Due to this contingency-fee (or “fee-for-service”) model, ZPICs aggressively pursue evidence of Medicare overbillings, often overstepping their boundaries and misapplying the Medicare billing rules and regulations at various stages along the way. As a result, not only are unfavorable audit determinations common, but unjustified unfavorable determinations are common as well – and this means that many providers are left with no option but to file an appeal.
Avoiding the Need to File a ZPIC Audit Appeal
There is much that can be done to prevent ZPIC auditors from reaching inaccurate conclusions during an audit, and providers who are facing ZPIC audits need to be proactive about intervening in the audit process. Preventing an unfavorable determination is greatly preferable to appealing a recoupment demand and the institution of prepayment review; and our attorneys can help if your audit is still ongoing. Learn more: What Should You Do in a ZPIC Audit Investigation?
You’ve Received an Unfavorable ZPIC Audit Determination. What Now?
But let’s assume that you have just gone through the ZPIC audit process, and your business or practice is being accused of overbilling Medicare. You are facing a substantial demand for recoupment (of perhaps hundreds of thousands or even millions of dollars), and your future Medicare billings are at risk of becoming subject to prepayment review. Here is what you need to know about filing a ZPIC audit appeal.
1. Recoupments and Prepayment Review Could Be Just the Beginning
While recoupments and prepayment review of future Medicare billings can undoubtedly have drastic consequences for medical professionals, health care facilities, and other providers – the consequences of an unfavorable ZPIC audit determination can actually make your situation far worse. If your audit results trigger a federal investigation or an inquiry from your state licensing board, an unfavorable ZPIC audit determination could also indirectly lead to:
- Suspension or revocation of your license
- Treble (triple) damages
- Fines, costs, and fees
- Revocation of assignment privileges
- Federal imprisonment
Although only a relatively small percentage of ZPIC audits lead to federal investigations, all providers need to understand that they are potentially at risk of being targeted – particularly if a ZPIC audit alleges intentional Medicare fraud. In addition to avoiding prepayment review and payment of recoupments that are not actually due, clearing up any false allegations that could lead to a civil or criminal investigation is another key reason for providers to appeal their ZPIC audit determinations.
2. There are Numerous Issues that Can Justify a ZPIC Audit Appeal
If your business or practice has received an unfavorable ZPIC audit determination, it is important to understand that you could potentially have numerous grounds on which to file an appeal. Providers should never assume that ZPIC auditors’ conclusions are correct, and they should work with legal counsel to explore all potential grounds for appeal as soon as possible after receiving the ZPIC’s recoupment demand.
Some of the most-common grounds for appealing unfavorable ZPIC audit determinations include:
- Failing to Provide Required Information – When imposing liability for alleged Medicare overbillings, ZPICs must provide certain required information to the targets of their audits. Failure to provide this information can provide grounds to file an appeal.
- Failing to Seek an Expert Opinion – Contrary to what you might expect, ZPIC auditors and personnel are not necessarily experts in the Medicare billing rules and regulations. If an issue involved with your audit called for an expert opinion, rendering a determination without this opinion could provide grounds for an appeal.
- Improper Review of Information – When conducting audits, ZPICs must give due consideration to all relevant information supplied by health care providers. Selectively reviewing records, improperly interpreting data, and other mistakes can all lead to flawed and unenforceable audit determinations.
- Inaccuracies in ZPICs’ Conclusions – In many cases, ZPICs’ conclusions are simply inaccurate. This can result from a wide range of factors, and providers and their counsel must be able to spot flaws in the auditor’s reasoning and calculations in order to determine whether grounds exist to file an appeal.
- Misapplication of Medicare Billing Regulations – There are two ways in which ZPIC auditors commonly misapply the Medicare billing regulations. First, auditors will frequently attempt to apply current regulations to past billings that were submitted in compliance with a prior version of the Medicare Claims Processing Manual. Second, ZPIC auditors often mistakenly apply out-of-date regulations to recent billings, once again resulting in unjustified audit determinations.
- Procedural Errors – The procedural guidelines that apply to ZPIC audits are designed, at least in part, to help protect health care providers from ZPICs overstepping their boundaries. Like other common mistakes, procedural errors can often provide strong grounds on which to file an appeal.
- Unsound Sampling and Statistical Methods – In addition to the issues listed above, ZPIC auditors commonly use improper and unsound methods to determine a provider’s liability. Our attorneys are knowledgeable about the appropriate sampling and statistical methods for assessing compliance with the Medicare billing guidelines, and we can determine if mistakes have been made that justify an appeal.
- ZPICs Exceeding Their Authority – While CMS has endowed ZPICs and other Medicare contractors with broad authority to conduct audits and impose liability, ZPICs’ powers are not absolute. If the ZPIC exceeded its authority while conducting your audit (for example, by imposing liability for technical deficiencies that are not within the scope of its review), you may be entitled to have your audit outcome overturned.
3. Appealing an Unfavorable ZPIC Audit Determination Can Be a Process
There are five stages of appeal for unfavorable audit determinations. While some providers will find success at the initial stage, oftentimes, providers will need to go through multiple stages in order to achieve a favorable resolution. The five stages of ZPIC audit appeals are:
- Stage 1: Redetermination – After receiving an unfavorable ZPIC audit determination, the first stage of appeal involves filing for “redetermination” with the appropriate Medicare Administrative Contractor (MAC). Requests for redetermination must be filed within 120 days; but, in order to avoid penalties and interest for non-payment of recoupments, providers may need to file within 30 days.
- Stage 2: Reconsideration – If the MAC denies your appeal or issues a “revised initial determination” still requiring payment, the next stage of appeal is to file for “reconsideration” with a Qualified Independent Contractor (QIC). Like ZPICs and MACs, QIC are private contractors engaged in CMS’s fee-for-service recovery program. Requests for reconsideration must be filed within 180 days of receiving the MAC’s decision on your request for redetermination (or within 60 days in order to toll recoupment liability).
- Stage 3: Administrative Hearing – If you are not satisfied with the outcome of your request for reconsideration, the next step is to request an administrative hearing with the Office of Medicare Hearings and Appeals (OMHA). While redetermination and reconsideration proceedings involve independent reviews of the veracity of a ZPIC’s conclusions, during your administrative hearing, an administrative law judge (ALJ) will review the previous proceedings for errors in the review process. In order to obtain an administrative hearing, you must file a request within 60 days of the QIC’s denial of your request for reconsideration.
- Stage 4: Medicare Appeals Council – Following your administrative hearing at the OMHA, the next stage of appeal involves review by the Medicare Appeals Council. Administrative law judges assigned to the Medicare Appeals Council will review the decision at the OMHA, and then render a decision based upon whether it believes that the OMHA ALJ made any errors of law or abused his or her discretion.
- Stage 5: Federal District Court – Once all of the contractor-level and administrative appeals processes have been exhausted, health care providers who are dissatisfied with their ZPIC audit determinations can finally have their day in court. In its appellate role, the federal district court will review the Medicare Appeals Council’s decision to determine whether it was rendered “against the substantial weight of the evidence” or in an “arbitrary and capricious” manner.
Experienced Health Care Fraud Defense Attorneys for ZPIC Appeals
Oberheiden, P.C. is a health care fraud law defense law firm comprised of former federal prosecutors with the U.S. Department of Justice (DOJ). Our lawyers have defended numerous health care providers in ZPIC audits and appeals, and we rely on our extensive government experience and health care law focus in all ZPIC-related matters.
If you are in the midst of a ZPIC audit, or if you have recently received an unfavorable ZPIC audit determination, we encourage you to contact us promptly to learn more about how we can help. For a free and confidential consultation, please call (888) 519-4897, or inquire online now.