ZPIC audits: another government weapon: boards of healthcare organizations risk heightened exposure in the war being waged against abuse and fraud.

• Author: Zacharias, Carol A.N.
• Position: RISK MATTERS - Interview

IT IS NO SECRET that healthcare fraud and abuse enforcement is a top priority of the federal government. Regulatory and enforcement agencies have more focus and resources than ever before, increasing the risk that healthcare providers will become the target of an investigation or audit. This has certainly gotten the attention of providers throughout the country.

However, some providers may not be aware that there are contractors working with the Centers for Medicare & Medicaid (CMS) performing claims audits as part of this enforcement initiative, and a simple audit may turn into a criminal prosecution of the entity as well as individuals.

The contractors conducting these audits are known as the Zone Program Integrity Contractors (ZPICs). ZPICs are charged with investigating fraud and abuse for all Medicare-related claims under Parts A and B (hospital, skilled nursing, home health, provider and durable medical equipment claims), Part C (Medicare Advantage health plans), Part D (prescription drug plans) and coordination of Medicare-Medicaid (Medi-Medi). ZPIC contracts have been awarded to contractors for each of the seven zones, which include all 50 states, Puerto Rico, American Samoa, the U.S. Virgin Islands, Guam, and the Mariana Islands.

As a result, all providers are now at risk for a ZPIC audit.

What does it mean if you are selected for a ZPIC audit? When a provider is selected for a ZPIC audit, it is either the subject of a fraud investigation, or the ZPIC is reviewing the claims information to determine if a fraud investigation should be opened. In other words, no ZPIC audit is random. ZPICs conduct both prepay and postpay review of claims and can interview providers and beneficiaries in addition to reviewing records. ZPICs can also recommend payment suspensions while an investigation is ongoing.

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What happens after the ZPIC audit is completed? Providers face one of three potential outcomes following a ZPIC audit. The first and most serious potential outcome involves the ZPIC referring the case to law enforcement for criminal prosecution, civil litigation through the False Claims Act, and the imposition of Civil Monetary Penalty (CMP) or other sanctions.

Second, the ZPIC may refer the audit results to the Medicare Administrative Contractor (MAC) for collection of the overpayment demand. If an overpayment demand is made, a provider has the right to appeal the...