Improvements to the ZPIC Audit Process for Florida’s Long-Term Care Providers

Authors: Starlett M. Miller and Stephanie F. Hedrick

During these times of thinning margins, where many businesses’ daily operations may be jeopardized by a month’s delay in the receipt of reimbursement, the fierce backlash the Centers for Medicare and Medicaid Services (CMS) received from nursing home owners and operators regarding prepayment policies implemented for the Zone Protection Integrity Contractors’ (ZPIC) audits was no surprise.

CMS established the ZPIC audits program to identify cases of suspected Medicare fraud, investigate suspected fraud in a thorough and timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid and that any mistaken payments are recovered.  The ZPIC auditors’ focus has been on skilled nursing facilities, physicians, hospices, HME/Rehab facilities, and physical therapy providers located in the five “hot spot” zones for Medicare fraud, which includes the State of Florida.

Unfortunately, the initiation of a ZPIC audit process initially meant that the provider being audited may face significant challenges to their continued financial viability.  While some providers under investigation may experience a six month time frame for the audit, other providers have seen up to 18-24 months of prepayment reviews.  During the prepayment reviews, the providers were placed on very strict Medicare reimbursement limitations, in which a percentage of their claims undergo review before payment is authorized.

Inside Health Policy recently announced that the CMS modified these rules on August 23, 2012, which will be a significant improvement for long-term care providers.  Thanks in large part to the efforts by the American Health Care Association (AHCA) and the Florida Health Care Association (FHCA), nursing homes in Florida will no longer be subjected to prepayment reviews.   “CMS says circumstances surrounding the reviews indicated that there is still a potential problem with some nursing home documentation, but CMS can accomplish the necessary oversight without prepayment reviews.”  Helpfully, providers against whom ZPIC auditors initiated a prepayment review audit prior to August 23, 2012 who have not yet submitted their responsive documents are not required to submit the information to the ZPICs.

Stripping the prepayment component from the ZPIC auditors’ arsenal is a step in the right direction toward fairness and the restoration of due process in CMS’s ZPIC audits.  Nonetheless, ZPIC audits may still become a costly and daunting process for any healthcare provider.  Many providers will still need to utilize CMS’s appeals process to reverse or modify the decision of the ZPIC auditors.  McCumber Daniels attorneys are available to assist throughout the ZPIC audit process and provide guidance from the initial response to a ZPIC audit through the final appeals process.

Posted in