Seven Key Facts for Health Care Providers About the ZPIC Audit Appeals Process

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If a Zone Program Integrity Contractor (ZPIC) has determined that you or your company is liable for repayment of Medicare payments, you have the right to file an appeal. In this article, the healthcare fraud defense attorneys at The Criminal Defense Firm discuss seven key facts about the ZPIC appeals process.

Zone Program Integrity Contractors (ZPICs) are entities tasked by the Centers for Medicare and Medicaid Services (CMS) with uncovering and recouping improper payments resulting from Medicare fraud. Since ZPICs work for (and get paid by) the government, it is strongly in their best interests to help the government recover as much money as possible. As a result, healthcare providers subjected to ZPIC audits regularly face recoupment requests, and those who fail to take appropriate action to protect themselves can also face civil or criminal charges from the Department of Justice (DOJ).

If you or your healthcare company is facing pre-payment review or recoupment requests as a result of a ZPIC audit, or if your case has been referred to the DOJ, CMS, the Office of Inspector General (OIG), or any other federal agency for prosecution, here is what you need to know about filing a ZPIC appeal:

1. You Have the Right to Appeal the Outcome of Your ZPIC Audit.

First, to be abundantly clear, you have the right to appeal the outcome of your ZPIC audit. ZPICs are private contractors while they have been endowed with certain powers by CMS, they are not government authorities, and they do not have the final say in determining whether a provider is liable for recoupment or should face civil or criminal charges for Medicare fraud.

2. ZPICs Can Take Adverse Action Against Healthcare Providers Suspected of Fraud.

That said, ZPICs can still wreak havoc on healthcare provider’s businesses. The following are just some of the reasons why a healthcare provider may need to file a ZPIC appeal:

  • A ZPIC has referred the provider to a state licensing board
  • A ZPIC has referred the provider to the OIG or another agency for investigation
  • A ZPIC is seeking to recover alleged overpayments made to the provider
  • A ZPIC revoked the provider’s assignment privileges
  • A ZPIC suspended the provider’s payments from Medicare

Even if the ZPIC does not issue a recoupment request, the consequences of an unfavorable ZPIC audit can still have significant ramifications for healthcare providers. In fact, if a ZPIC audit result in a provider’s professional license or future eligibility for participation in Medicare being put at risk, this can have far greater consequences than being asked to repay amounts previously received.

3. If You Have Received an Adverse Outcome from a ZPIC Audit, You Should Promptly Assess Your Grounds for Appeal.

The window for filing a ZPIC appeal is limited. To protect their rights, healthcare providers facing unfavorable results from a ZPIC audit should assess their options for filing an appeal as soon as possible. The Medicare billing system is extraordinarily complex, and it can take time to assess both (i) whether a ZPIC’s determinations are accurate, and (ii) what grounds may be available for filing an appeal.

4. There Are Five Stages of Appeals for Unfavorable ZPIC Audit Outcomes.

Following an unfavorable ZPIC audit, there are actually five stages of appeal. Ideally, the first-level appeal will result in a reversal of the ZPIC’s determination. But, if it does not, healthcare providers can pursue subsequent appeals until they achieve an acceptable resolution.

The five stages of ZPIC appeals are:

1st Stage: Redetermination

The first stage of ZPIC appeal is known as “redetermination.” Once the ZPIC completes its audit, it will submit its findings to a Medicare Administrative Contractor (MAC). The MAC will then provide a “revised initial determination” to the provider. This usually includes a demand for payment. From receipt of the demand, the provider has 120 days to file an appeal with the MAC for redetermination. Note, however, that you may need to file sooner (within 30 days) in order to avoid recoupment liability.

2nd Stage: Reconsideration

If the MAC’s redetermination does not change the outcome of the audit (which is typically the case), then the next stage in the appeals process is filing a request for “reconsideration.” This request must be filed within 180 days of receipt of the MAC’s redetermination decision, and it is filed with the Qualified Independent Contractor (QIC) assigned to your jurisdiction instead of the MAC.

During the reconsideration proceeding, the QIC will review the provider’s evidence in order to independently assess the accuracy of the ZPIC’s and MAC’s determinations. Similar to the first stage of appeal, in order to avoid recoupment liability while a request for reconsideration is pending, providers should file their requests early (in this case, within 60 days) even though the window to file is technically longer.

3rd Stage: Administrative Hearing

If the QIC upholds the ZPIC’s and MAC’s determinations on reconsideration, then the next stage in the process is to file an appeal with the Office of Medicare Hearings and Appeals (OMHA). These appeals are more similar to traditional court proceedings than redeterminations and reconsiderations, though they still involve simplified procedures. During an OMHA appeal, an administrative law judge (ALJ) hears evidence and arguments from both sides and then issues an independent ruling.

Requests for OMHA appeals must be filed within 60 days of receipt of the results of the QIC’s reconsideration.

4th Stage: Medicare Appeals Council

If the ALJ upholds the QIC’s decision on reconsideration, the fourth stage of appeal for ZPIC audits is to request a review by the Medicare Appeals Council. The Medicare Appeals Council is comprised of ALJs who have specific experience in matters involving allegations of overpayment and Medicare fraud. However, rather than reviewing the facts of the case, the members of the Medicare Appeals Council review the OMHA ALJ’s ruling for errors of law and abuses of discretion, similar to the role of a federal court of appeals.

5th Stage: Federal District Court

Finally, once these administrative avenues have been exhausted, the provider’s last form of recourse is to file a request for review in federal district court. Importantly, the federal district court’s role in ZPIC appeals is very different from its role in other types of litigation. Unless it determines that a lower appellate decision was “against the substantial weight of the evidence” or “arbitrary and capricious,” it will generally uphold the determination against the provider.

5. If It Isn’t Too Late, You Should Try to Avoid the Need to File an Appeal.

Considering the challenges that providers often face during the ZPIC appeals process, if at all possible, they should seek to avoid the need to file an appeal. This means being proactive about Medicare compliance, and taking an active role in the ZPIC’s audit. Steps healthcare providers can take to reduce their risk of an unfavorable ZPIC audit outcome and the need to file an appeal include:

  • Creating a compliance plan, conducting training on the plan, and reviewing it annually
  • Designating a compliance officer and internal point of contact for all ZPIC-related communications
  • Engaging outside professional advisors (including healthcare fraud defense attorneys and Medicare billing specialists) who can help assess potential issues
  • Regularly conducting internal audits
  • Reviewing key policy documents and systems following changes in Medicare billing regulations

Healthcare providers, who are in the process of going through a ZPIC audit should seek legal counsel promptly? before providing information to the ZPIC and before the ZPIC reaches an unfavorable determination.

6. You Could Have Numerous Grounds to Contest the Outcome of Your ZPIC Audit.

ZPICs are incentivized to issue recoupment requests and refer providers to the federal government for prosecution. As a result, even providers who have taken appropriate steps to protect themselves will often find themselves in the position of needing to file an appeal. The good news is this: Depending upon the circumstances at hand, providers will often have numerous grounds to challenge a ZPIC’s determination. Some of these grounds include:

  • Exceeding the ZPIC’s authority during the audit or in its determination
  • Failure to provide required information regarding the ZPIC’s determination
  • Failure to seek an appropriate expert opinion
  • Improper review of information supplied by the provider
  • Inaccuracies in the ZPIC’s conclusions
  • Misapplication of the Medicare billing regulations
  • Procedural errors during the ZPIC’s audit
  • Use of improper or unsound sampling and statistical methods

7. If You Do Not File an Appeal, the Consequences Could be Devastating for Your Business.

We mentioned this above, but it bears repeating: ZPIC audits can and do lead to federal prosecutions. If the ZPIC refers your case to the DOJ, OIG, or CMS, you could be forced to defend against civil or criminal charges. While dealing with the ZPIC appeals process can be a hassle, the consequences of a criminal conviction can be devastating. To minimize the consequences of your ZPIC audit, call to speak with an attorney today.

Contact the Medicare Fraud Defense Attorneys at The Criminal Defense Firm

If you or your company is facing a ZPIC audit or you need to file a ZPIC appeal, contact The Criminal Defense Firm for a free and confidential case assessment. To speak with our team of national Medicare fraud defense attorneys, call 866-603-4540 or request an appointment online today.

7 Facts In The ZPIC Audit Appeals Process – Medicare Fraud Defense Info

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