Medicare Compliance & Reimbursement

You might be next on the fraud contractors' hit list, experts warn.

You could be in for a payment ambush that would close your doors forever if your documentation isn't pristine.

Zone Program Integrity Contractors, which are Medicare's new fraud contractors, appear to be ramping up audits on home care providers throughout the United States, experts say.

Hundreds of home care providers are coming under the ZPICs' microscope, warns Tim Johnson with Jackson Davis HealthCare in Denver, which does ZPIC audit consulting. Recovery Audit Contractors have mostly focused their reviews on hospitals, and ZPICs have swooped in to cover reviews of smaller providers like home health agencies, hospices, and durable medical equipment suppliers, Johnson notes.

In reports and congressional testimony, the government is depicting the home care industry as riddled with fraud, notes attorney Edward Vishnevetsky with Thompson Coe Cousins & Irons in Dallas. Instead of acknowledging that the fraud is typically committed by a small group of fraudulent individuals, the government is treating the entire industry as suspect. That attitude has motivated ZPICs to crack down on home care. ZPIC home care activity may be nationwide, but the most intense concentration of audits appears to be in Texas, Florida, and California, Vishnevetsky observes. Agencies in the central Southwest, Northeast, and Atlantic states are also getting hit heavily, Johnson says -- plus agencies in Michigan, Ohio, and Kentucky.

Background: The Centers for Medicare & Medicaid Services has awarded ZPIC contracts in three of seven zones it established. In zones not yet assigned ZPICs, the old Program Safeguard Contractors (PSCs) still function.

The three ZPICs are Health Integrity (Zone 4: Texas, Colorado, New Mexico, and Oklahoma), AdvanceMed (Zone 5: Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia), and SafeGuard Services (Zone 7: Florida, Puerto Rico, and the Virgin Islands). Zone 4 has been "especially active" in home care, notes Washington, D.C.-based health care attorney Elizabeth Hogue. ZPIC Issue Urgent

ZPIC audits "are a huge problem happening right now," Vishnevetsky stresses. They "will end up hurting beneficiaries and ... closing doors. This is our most urgent issue that we need to deal with."

ZPIC audits are "much worse to me than RAC or CERT [audits]," says consultant Tom Boyd with Boyd & Nicholas in Rohnert Park, Calif. ZPIC audits are "a provider's worst nightmare," warns one industry veteran working with an agency on a ZPIC payment suspension.

Why? ZPICs can put providers on 100 percent pre-pay review or payment suspension that will entirely halt Medicare cash flow for months at a time. "The suspension of payments will close agencies, and do so prior to the expiration of the contractor review or the appeal period," Boyd says. That suspension is often based on a very small number of patients, Boyd adds. In the case of one Texas HHA, Health Integrity suspended payments based on just six patients. "What percentage of the total patient population of the HHA is the six?" Boyd asks. "What percentage of the total was the valid random sample of 25 patients?"

The timeline to get Medicare payments reinstated often will close a provider's doors, whether they are guilty or innocent of any Medicare fraud or abuse, Vishnevetsky laments. It takes at least two months to get an initial determination that could reverse pre-pay review or a payment suspension. And providers usually have to go through a few levels of appeals to get review or a suspension reversed, which takes up to five months, he notes. If a provider's business isn't diversified with other payors or the provider doesn't have significant financial reserves, such a long time period without Medicare payment is a killing blow.

During that time, providers basically must service patients and get no reimbursement for it, Vishnevetsky protests. ZPIC audits are also punishing because they go back a long period -- up to six years, Boyd notes.

That's longer than RACs' three-year look-back window. In the case of the Texas HHA, it was likely targeted for review based on outlier billing from 2007 to 2009.

The outlier basis for suspension "is a kicker," Boyd adds. "The rules changed on Jan. 1, 2010 and yet the government is punishing them for activity from 2007 to 2009," he tells us. "CMS does have the option of looking at all their claims via ADR and CERT, so tossing this ... cause into the suspension should be considered unethical if not illegal," Boyd maintains.

Bait and switch: ZPIC audits usually punish home care providers for reasons unrelated to the target. For example, the Texas HHA was most likely chosen for audit due to its outlier billing, but its payment suspension was largely justified with homebound and medical necessity audit findings.

Homebound review is a serious problem for agencies because it is such a gray area. HHAs "are extremely vulnerable regarding this issue," Hogue warns. That's because "the standards used to determine homebound status remain ill-defined," she says. Also, "since Medicare homecare services are provided only intermittently, as opposed to continuously, agencies are unable to verify homebound status with absolute certainty."

Medicare generally considers patients homebound if they leave home infrequently for only short durations of time for reasons other than to seek medical care, and if leaving home takes a great and taxing effort and/or requires maximum assistance, Hogue notes.

"The difficulty that agencies have in interpreting these standards is evident," Hogue says. "For example, what is a 'short duration of time?' What is 'great and taxing effort' or 'maximum assistance?'"

CMS states that patients may remain homebound if they leave home to attend religious services, and they can seek medical care. But HI's audit cites attending church and making medical visits as reasons the audited patients aren't homebound. The issue is more about how great and taxing the effort involved is, experts suggest.

Another burden: Providers must expend great energy to respond to ZPIC audits. The audits contain "requirements to copy a large number of charts," Hogue notes. They are usually due to the ZPIC within thirty days.

Providers must respond "as comprehensively as possible" to audit requests, or risk closure, Vishnevetsky warns.

Who's next? Home care providers that haven't been hit by ZPIC activity are far from safe, Vishnevetsky observes. Unaffected providers are saying, "it hasn't happened to me, so I'm not worried about it," he says.

But "if you haven't been affected by it yet, your time is coming," Vishnevetsky warns. Providers can't stick their heads in the sand about this new threat, he cautions. CMS seems to be using ZPIC audits for "thinning the herd," intentionally closing provider doors, Vishnevetsky worries.