Home Health & Hospice Week

Are ZPICs going easier on you than MACs?

If your home health agency is in one of certain jurisdictions, you may need to brace yourself for more scrutiny in 2013 from Medicare Administrative Contractors and Zone Program Integrity Contractors.

A scathing report from the HHS Office of Inspector General called out lackluster efforts by both MACs and ZPICs, particularly in the Southern United States. Fraud hotspots like Miami, Tampa, Baton Rouge, Houston and Dallas -- all part of the Region C MAC -- had suspiciously few HHA improper payments and other indicators of fraud.

In the report, CMS and Contractor Oversight of Home Health Agencies, the OIG studied the Region A and Region C MACs, as well as four ZPICs. The OIG found that although Region A prevented 98 percent ($268 million) of the improper payments in the review, the more fraud-prone Region C prevented only 2 percent ($6 million). Compounding this statistical discrepancy is the fact that MAC A had only 326 HHAs, as opposed to MAC C’s 6,812 HHAs.

Collectively, the two MACs prevented $275 million in improper payments and referred 14 instances of potential home health fraud to benefit integrity contractors for further investigation, the OIG report states.

News Flash: Don’t Expect Standardized Audit Methods

"Contractor efforts to detect and deter fraud varied greatly," David Samchok, program analyst with the OIG’s Office of Evaluation and Inspections in Atlanta, said in a recent podcast interview on the report. "For example, we had two contractors that recommended administrative actions, and referred cases to law enforcement, nearly eight times more than two other contractors — even though both sets of contractors worked in fraud-prone areas."

In some ways, ZPICs fared worse than MAC C. All four ZPICs that the OIG reviewed did not identify any HHA vulnerabilities in 2011. "Additionally, ZPICs in different geographic zones and fraud-prone areas did not perform similar levels of activities to detect and deter fraud among HHAs in 2011," the report states.

 Big problem:  But the OIG did find issues that appeared to pass through the contractors’ radar. "In 2011, we found that Medicare inappropriately paid five agencies with suspended or revoked billing privileges, and CMS did not act on all revocation recommendations," Samchok says.

What The Report Means For You

Certain MAC regions and perhaps all ZPICs are now under "trickle-down" pressure from the OIG and CMS to bolster their audit efforts to root out fraud and improper payments by HHAs.

The Partnership for Quality Home Healthcare believes the OIG’s report "underscores the need to reform Medicare’s current ‘pay and chase’ practices and advance targeted program integrity reforms." The Partnership is pushing lawmakers to focus on provisions to prevent overpayments before they happen as part of a package of suggested reforms called the "Skilled Home Healthcare Integrity and Program Savings." Enforcing stricter entry rules and payment reforms can prevent overpayments, the Partnership contends.

"Federal data pinpoints where fraud is occurring," Partnership chairman and senior counsel Billy Tauzin said in a recent statement. "As a result, the federal government can target fraudulent activity, preventing it from occurring in the first place and protecting seniors and taxpayers alike."

Based on the findings, the OIG recommended that CMS:

1. Establish additional contractor performance standards for high-risk providers in fraud-prone areas;
2. Develop a system to track revocation recommendations and respond to them in a timely manner; and
3. Follow up on and prevent future inappropriate payments made to HHAs with suspended or revoked billing privileges.

"CMS agreed with all of our recommendations and acknowledged that home health services have been vulnerable to fraud, waste, and abuse," Samchok states. "CMS also shared information on its new Fraud Prevention System, which uses predictive analytic technology on claims. This should help identify suspicious claims so CMS can take administrative action if necessary."

 Bottom line:  CMS is pushing MACs and ZPICs to beef up their oversight of your compliance and billing practices. Expect the OIG’s report to light a fire under contractors and instigate further zeal in their task of rooting out overpayments.