What is a ZPIC Audit?
Healthcare Fraud Defense Lawyers Explain ZPIC Audit Procedures
Zone Program Integrity Contractors (ZPICs) are non-governmental entities who get paid to uncover improper and fraudulent billings under the federal Medicare system. Facing a ZPIC audit is an extremely serious matter, as these audits have the potential to lead to federal investigations (and federal charges). Has your home health agency, hospice, durable medical equipment (DME) company, or other health care practice or organization been contacted by a ZPIC If so, here is what you need to know.
The Criminal Defense Firm is a team of health care fraud defense lawyers and former federal prosecutors who bring decades of experience to defending health care providers and organizations in ZPIC investigations. Our attorneys have successfully represented providers and organizations in administrative contractor and federal government investigations nationwide, consistently resolving cases with no liability or federal charges. Here, our attorneys provide answers to some frequently asked questions (FAQs) about facing ZPIC audits:
Q: What is a ZPIC audit?
A ZPIC audit is an investigation conducted by a government contractor authorized under the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the Medicare Modernization Act (MMA) of 2003. These contractors, known as Zone Program Integrity Contractors (ZPICs), operate under a “Fee-For-Service” recovery program pursuant to which they get paid for recouping payments and denying future payments that violate the Medicare billing regulations.
Q: What should I do if my health care practice or organization has been contacted by a ZPIC?
If your practice or organization has been contacted by a ZPIC, it is important that you seek experienced legal representation right away. You want to get your healthcare fraud defense lawyers involved before the audit gets out of hand. Your attorneys should be able to advise you of your rights, tell your employees what to do (and what not to do), and communicate with the ZPIC’s auditors on your behalf.
When dealing with a ZPIC, you need to be forthright, but you also need to be careful to avoid mistakes that could lead to a federal inquiry and potentially jeopardize your practice. You need to be respectful toward the ZPIC’s auditors, but you also need to let them know that they are not going to run rampant over your practice and falsely accuse you of defrauding the Medicare system.
Q: Since ZPICs are not government agencies, can I just ignore the audit?
Unfortunately, no. A ZPIC audit is not a problem that will simply go away on its own. If you do not reasonably cooperate with the ZPIC’s auditors, you can generally expect to receive an unfavorable determination at the end of the process. This means that you will be looking at a lengthy appeals process, and the ZPIC may even refer your case to the Department of Justice (DOJ) or the Office of Inspector General (OIG) for civil or criminal prosecution.
While it is true that ZPICs are not government agencies, they are authorized by statute to undertake quasi-law-enforcement efforts. ZPICs can issue legally enforceable recoupment requests and denials of eligibility for Medicare reimbursement; and, as noted above, they have a direct line to the DOJ and OIG to recommend further government inquiry.
Q: What information should (and shouldn’t) I provide during a ZPIC audit?
This is a delicate issue, and the answer will depend on the unique circumstances involved in your case. While you may have an obligation to disclose certain information under certain circumstances (and in some circumstances, it may even be to your benefit to share certain information with the ZPIC’s auditors), you also have clear statutory and Constitutional rights that limit what you are required to disclose. When facing a ZPIC audit, we recommend working closely with your legal team to assess your rights and obligations, and then execute a defense strategy designed to limit your disclosures while providing the information necessary to resolve the audit in your favor as quickly as possible.
Q: What if I unintentionally overbilled Medicare can I still face consequences from a ZPIC audit?
If your practice or organization inadvertently overbilled Medicare, you may have a legal obligation to repay the overbilled amounts. However, federal health care law makes clear that in order to be liable for fraud, the government must prove intent. In fact, a key defense strategy in cases where a provider acknowledges overbilling Medicare is to focus on challenging the government’s evidence of intent.
But, before we get ahead of ourselves, let’s not rush to judgment. Are you certain that you overbilled Medicare? The Medicare billing regulations are extraordinarily complex and they change frequently, so it is entirely possible that a reimbursement request that you think was improper was actually fully compliant with the law.
What makes you think that you overbilled Medicare? Is it because one of the ZPIC’s auditors said so? The ZPICs are incentivized to identify improper billings and they often misinterpret the Medicare billing guidelines, so you should not be relying on any information you receive from the ZPIC’s auditors.
Q: Aside from hiring legal counsel, what else should I be doing to protect my health care practice or organization?
There are several important steps that home health agencies, hospices, DME companies, and other health care entities can take to protect themselves in the early stages of a ZPIC investigation. For example, one thing you can do right away is limit the number of employees who have the authorization to communicate with the ZPIC’s auditors. You only want those employees who have a clear understanding of the ZPIC audit process and the issues involved in the audit to be making statements on your behalf. Your defense attorneys can help you establish appropriate points of contact and advise your employees on what to do (and what not to do) when dealing with ZPIC auditors.
At this point, you should also be implementing protocols to ensure your practice’s or organization’s compliance with all applicable laws and regulations. Is there in fact a Medicare billing issue? If so, you will want to address it appropriately. Do you have policies and logical controls in place to prevent not only unnecessary disclosure but also improper destruction, of pertinent records? If not, you need to implement them as soon as possible.
Q: Can I challenge the ZPIC’s findings before it issues a final determination?
Yes, and this is another of the primary reasons to seek legal representation during your ZPIC audit. ZPIC auditors overreach, they make mistakes, and they don’t know your organization or practice as you do. In many cases, they will misinterpret and misapply the pertinent Medicare billing regulations, and even the limits on their own statutory authority.
When we represent clients in ZPIC audits, we focus on identifying issues with the ZPIC’s methods, assumptions, and conclusions before the ZPIC issues its final determination. By taking this approach, we are frequently able to resolve our client’s audits favorably without the need to file an appeal or deal with the further federal inquiry.
Q: What if the ZPIC finds that my health care practice or organization violated the Medicare billing regulations and I disagree?
If your health care practice or organization has received an unfavorable ZPIC audit determination, your next course of action should be to file an appeal. There are five stages of ZPIC appeals, starting with a request for redetermination filed with the ZPIC’s Medicare Administrative Contractor (MAC). Then, there are four stages of intermediate appeals, followed by the fifth and final level of seeking to have the prior unfavorable rulings overturned in federal district court.
Q: What are the potential consequences of an unfavorable ZPIC audit determination?
The consequences of an unfavorable ZPIC audit determination can be substantial. As noted above, the ZPICs have the authority to issue recoupment requests and deny payment for alleged improper reimbursement requests, and they can also refer providers to the DOJ, OIG, and other agencies for further investigation. If one of these agencies decides to prosecute, your practice or organization and its key personnel could face penalties including Substantial fines, treble damages, denial of Medicare (and other federal benefit programs) eligibility, and even federal imprisonment. ZPICs also have the authority to refer providers to state licensing boards and revoke their assignment privileges under Medicare.
Contact The Criminal Defense Firm About Your ZPIC Audit
If your health care practice or organization has been contacted by a ZPIC, the federal health care fraud defense lawyers of The Criminal Defense Firm can help. We serve clients in Texas, California, and Michigan, and represent clients in ZPIC investigations nationwide. We take a unique team approach that allows each client to benefit from our healthcare fraud defense attorney’s collective knowledge and decades of experience. We focus on resolving our client’s audits as quickly and favorably as possible. To discuss your ZPIC audit with our defense team in confidence, call (888) 452-2503 or submit our free case evaluation request form today.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.