Avoiding Pitfalls: What the ZPICs, Accrediting Organizations, NSC, And OIG Are Looking For

(April 2012)

Not too many years ago, an HME provider was not vulnerable to scrutiny from many people/agencies. A DMERC (now a DME MAC) may look at some claims on a post-payment basis. An NSC inspector would show up every couple of years to make sure that hours are posted and the provider has insurance. And in a worse-case scenario, which did not happen often, the Department of Justice (“DOJ”)/OIG would investigate the provider. That was about it.

My, how things have changed. Now, the HME provider is in a “house of mirrors.” The provider is constantly being looked at from a variety of angles. DME MACs, RACs, CERTs and ZPICs are routinely looking at post-payment clams. DME MACs, and particularly ZPICs, are aggressively conducting prepayment reviews. The accrediting organizations (“AOs”) are being required by CMS to ask probing questions and report to CMS and the NSC any activities that the AOs believe are improper. The ZPICs are directing DME MACs to suspend payments when the ZPICs conclude that improper activities are occurring. In response to reports from the ZPICs, the NSC is suspending/revoking supplier numbers. When conducting post-payment audits, the DME MACs and ZPICs are asking questions that go far beyond whether the provider has complete and accurate documentation. The NSC is aggressively conducting unannounced on-site inspections; in so doing, the NSC inspectors are asking questions that go beyond the rudimentary questions that have been posed in the past. Here are some examples:

A mail-order diabetic provider had payments from all four DME MACs suspended because in a post-payment audit, the ZPIC concluded that the provider’s file documentation was deficient.

An AO threatened to pull a provider’s accreditation because the AO was critical of the provider’s marketing practices. The AO informed CMS of the AO’s concerns and CMS jumped into the fray and looked at the provider’s marketing practices.

An HME provider was subjected to a prepayment review on five files every month for 12 months. Because the five files did not amount to a great deal of money, the provider either did not respond or responded in a cavalier fashion. The error rate for the five files each month was high. On the 13th month, the provider was placed on a 100% prepayment review. When the provider asked the contractor why it was placed on a 100% review, the contractor replied that it was because the provider had failed so miserably on the limited prepayment review during the preceding 12 months.

The NSC suspended a provider’s Part B supplier number as a result of being informed by a ZPIC that the provider’s documentation was inadequate…….the NSC took the position that the inadequate documentation violated the supplier standards.

In conducting a post-payment audit, the ZPIC asked for names, addresses and phone numbers of the provider’s marketing reps.

In conducting a post-payment audit, a ZPIC investigator visited, on a face-to-face basis, with several of the HME provider’s patients and referring physicians.

You get the picture. No matter which way the provider turns, it will be staring down the figurative barrel of the gun held by a DME MAC, a ZPIC, the NSC, an AO, and others.

Frankly, an enforcement action brought by a Medicare contractor…..or the NSC…..or an AO……is scarier than an action brought by the DOJ/OIG. Here is the reason why. Normally, it takes several years to resolve a DOJ/OIG investigation, and unless the provider has been doing things that are blatantly fraudulent, then the resolution is normally reasonable. With a DOJ/OIG enforcement action, the provider normally is able to keep its doors open. The same is often not true with an enforcement action brought by a DME MAC, ZPIC, the NSC or an AO. With the proverbial “flip of the switch,” the contractor/NSC/AO can cut off the provider’s cash flow. Even if the provider can later show that the actions by the contractor/NSC/AO were without merit, the provider will long ago have been forced to close its doors.

The steps that the provider can take to reduce the chances of having its cash flow cut off are the following: (i) implement a formal corporate compliance program; (ii) conduct regular self-audits of patient files; (iii) have an outside consultant come in at least once a year to audit patient files; (iv) have a competent health care attorney review the provider’s marketing practices and relationships with referral sources to determine if there are any kickback/Stark problems; (v) be diligent and thorough when responding to limited prepayment reviews and post-payment audits; and (vi) be detail-oriented (to a point of almost being paranoid) regarding completeness and accuracy of patient files.

When a Medicare beneficiary complains to CMS or the OIG, a Medicare contractor will almost always respond by launching an inquiry/investigation. Too often, such complaints are unfounded…e.g., the beneficiary forgot that he had ordered the product from the HME provider. Likewise, when a physician complains, an inquiry/investigation will invariably be launched. Too often, the physician’s complaint is without basis…it is the result of a miscommunication. Nevertheless, regardless of the cause of the compliant, the last thing that the provider wants to do is to have to respond to an inquiry/investigation. For this reason, it is important that the provider have clear and unambiguous communications with the patient and physician in order to reduce the risk of contractor scrutiny.

This monograph is not intended to be legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. The law pertaining to this monograph may have changed following the date of the monograph. The reader should consult his or her own attorney for legal advice concerning the contents of this monograph. Except where noted, attorneys are not certified by the Texas Board of Legal Specialization.

Prepared by:

Health Care Group
Brown & Fortunato
P.O. Box 9418
Amarillo, Texas 79105-9418
(806) 345-6300
(806) 345-6363 (fax)
www.bf-law.com

© Brown & Fortunato

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