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Skilled nursing facilities continue to receive visits from Zone Program Integrity Contractors (ZPICs) seeking to initiate the audit process. To date, there is no formalized, publically available tracking; however, it is known that the overall number of such visits indicates that many more healthcare entities could be included in this process in the future.

As a reminder, ZPICs have oversight of Medicare A and part B, hospice care, home health and durable medical equipment (DME). A ZPIC audit is different than a RAC or MAC audit, the primary purpose of which is to review payments. The primary purpose of a ZPIC audit is to identify fraud, and while this makes ZPIC audits more serious than most, bear in mind that these audit targets are selected based on sample data analysis. A ZPIC audit may be performed as the result of other audits, and after a ZPIC audit, a MAC or RAC may be referred. There are three primary reasons for conducting a ZPIC audit:  a) analysis of rates (high rates of utilization of ultra-high resource utilization groups, or RUGs), b) whistleblower complaints, and/or c) results of other audits.

The Medicare Definition of Abuse

The Centers for Medicare & Medicaid Services (CMS) defines Medicare abuse as behaviors or practices of providers, physicians or suppliers of services and equipment that, though normally not considered fraudulent, are inconsistent with accepted and sound medical, business or fiscal practices. The practices may directly or indirectly result in unnecessary costs to CMS, improper payments or payment for services that fail to meet professionally recognized standards of care (and/or which are medically unnecessary). Some provider “errors” fall within the CMS definition of abuse. As such, financial penalties may expose the erring provider to fraud claims. Some examples of Medicare fraud might include using another person’s Medicare card or number, billing for services or supplies that were not provided, changing claims to obtain higher payments, soliciting payment for referral of clients, etc. 

ZPIC Authority and Outcomes

In my experience, our profession is generally honest, and it is exceedingly rare that providers would violate Medicare guidelines intentionally for financial gain. However, some violations (or abuse) arise from facility error, which is included in the definition above. It also merits noting that the scope of ZPIC authority is quite broad, allowing for on-site interviews of staff and or residents, review of all internal records required under the Medicare/Medicaid contract, and scrutiny of resident clinical, financial and time production records.

ZPICs also wield power of referral to another governmental agency and/or referral to another audit entity. As such, ZPIC audits can have devastating results, including payment recoupment, extrapolation from a sample analysis, referral for criminal prosecution, decertification from programs, or professional board referral for non-compliance of practice acts. As such, it is critical that facilities remain proactive and prepared.  

Being Proactive is Key

Being proactive involves responding to the question “What can I do to be ready?” This means looking at your internal compliance program in order to evaluate how you inspect what you expect. It also means setting projected assessment reference dates (ARDs) based on the individual clinical status of residents and the results of their assessments and evaluations (not on a set facility practice), conducting a daily reimbursable minute review (RTM) to ensure that no change of therapy (COT) is required, and performing weekly pre-billing triple check reviews (involving representatives from billing, rehab and nursing/medical records) to follow up on any concerns or misplaced items necessary for a given claim. Remember, once the resident is no longer using his or her Medicare A benefit and a final PPS MDS has been submitted and accepted, should a mistake be found later, per MDS 3.0 guidelines, that resident’s MDS cannot be modified. Therefore, best practices usually include an end-of-the-month pre-billing (quad check) to ensure that any misplaced items are found and are supportive of the MDS. Being proactive takes knowledge, time, planning and commitment, but it is critical. Administrators should remember that it is their responsibility to ensure that their facility is compliant – and, as noted, professionals can be referred to their respective professional boards for discipline. 

In Summary

While ZPIC audits present great risks, you can mitigate them by being proactive, regularly inspecting what you expect, remaining diligent in compliance programs and performing internal audits and evaluations. Because of the broad scope of authority wielded by ZPICs, audit defense needs to involve your legal and accounting experts in addition to your clinical risk management team. And being proactive means seeking legal and accounting guidance, as well as clinical risk management advice, before you find a ZPIC team at your door.

About the Author

Robin Bleier is the FHCA RAI-MDS-PPS certificate program instructor at RB Health Partners, Inc. are also available through a strategic alliance with Moore Stephens Lovelace, PA.

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