The RAC program is just one of the CMS programs designed to ramp up "benefit integrity" efforts and to otherwise preserve or recoup cash for the trust fund. Providers must be aware of all the alphabet soup measures. Be prepared for the Zone Program Integrity Contractor (ZPIC) program that will come your way in the near future.

What do RACs and ZPICs have in common?

They are both relatively new and designed to "find and prevent waste, fraud and abuse in Medicare." The ZPICS will look at billing trends and patterns, focusing on providers whose billings for Medicare services are higher than the majority of providers in the community.

What is different about the ZPICs?

The main difference is that the ZPICs are not bounty hunters. That is they do not work for contingency fees and instead are paid by CMS. However, the ZPICs will more than likely need to perform to standards established by CMS in order to justify the lucrative contracts. (For instance, AdvanceMed Corporation was awarded a $107,957,737.00 five-year contract for Zone 5.)

Also, the ZPICs have a bite that can be much worse than the RACs. This is because the primary goal of the ZPIC is to identify cases of suspected fraud, develop them thoroughly, and take immediate action. Pre & Post payment reviews, suspension of payment, denial of payments, and the recoupment of "overpayments" are some examples of the administrative actions that may be taken. The real bite is that all cases of potential fraud will be referred to the Office of Inspector General (OIG) for consideration and possible initiation of criminal or civil prosecution, civil monetary penalty, or administrative sanction actions.

In a recent conversation with a CMS source, it was comforting to hear that the ZPICs & CMS are expected to differentiate between "borderline" cases and cases that are "truly egregious". The borderline cases will most likely be dealt with by an "administrative" action, thereby avoiding perhaps the more draconian measures such as treble fines or even imprisonment. According to the CMS source, "We recognize that most providers are good providers." Thank goodness for that.

A Brief History

Originally, CMS program "integrity efforts" (i.e., responsibility for detecting "fraud & abuse") were assigned to CMS fiscal intermediaries and carriers. In 1999, CMS began transferring the responsibility to Program Safeguard Contractors (PSCs are transitioning to the new name of ZPICs). The enactment of section 911 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) mandated a change in CMS' contracting structure by phasing out the fiscal intermediaries and carriers and phasing in the Medicare Administrative Contractors (MAC) for CMS Medicare claims processing.

As a result of the adoption of the MAC strategy, CMS is reassigning the ZPIC jurisdictions so that workloads align with the new MACs. The intent of these realignments is to have one ZPIC responsible for the detection and deterrence of "fraud, waste, and abuse" across all claim types. CMS anticipates that the ability of a ZPIC to analyze data across all claims types will vastly improve identification of potential fraud.

CMS has established seven (7) jurisdictional zones for the ZPICS that are designed to align effectively with multiple MAC jurisdictions. They are:

• Zone 1 ZPIC - California, Nevada, American Samoa, Guam, Hawaii, and the Mariana Islands.
• Zone 2 ZPIC - Alaska, Washington, Oregon, Montana, Idaho, Wyoming, Utah, Arizona, North Dakota, South Dakota, Nebraska, Kansas, Iowa and Missouri.
• Zone 3 ZPIC - Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, and Kentucky.
• Zone 4 ZPIC - Colorado, New Mexico, Oklahoma, and Texas. Contract awarded to Health Integrity, LLC
• Zone 5 ZPIC - Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. Contract awarded to AdvanceMed Corporation, but under dispute.
• Zone 6 ZPIC - Pennsylvania, New York, Maryland, Washington D.C., Delaware, Maine, Massachusetts, New Jersey, Connecticut, Rhode Island, New Hampshire, and Vermont.
• Zone 7 ZPIC - Florida, Puerto Rico and Virgin Islands. Contract awarded to SafeGuard Services, LLC

To date, only the ZPICS for Zone 4 and 7 are operational, and have been so since February 1, 2009. CMS has not released the date by which all contracts will be awarded, but a CMS source did state that CMS is actively working on awarding the contracts.

Sources of Data for ZPICs

ZPICS are required to use a variety of techniques, both proactive and reactive, to address any potentially fraudulent practices.

Proactive techniques will include the ZPIC IT Systems that will combine claims data (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data) and other data to create a platform for conducting complex data analysis. By combining data from various sources, the ZPIC will be expected to present an entire picture of a beneficiary's claim history regardless of where the claim was processed. The primary source of this data will be the CMS National Claims History (NCH).

Among other sources, RACs are expected to report cases of suspected fraud. A RAC denial resulting in a Provider repayment will not necessarily prevent a ZPIC and /or the OIG from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from the overpayment.

Medical Review Determinations

ZPICS can conduct medical review of charts to determine, among other things, whether the service submitted was actually provided, and whether the service was medically reasonably and necessary.

Based upon the review, ZPICs can down code or deny, in part or whole. It is not comforting to note that ZPICs are not required to have a Physician review a claim in order to deny the claim. Nurses will more than likely be conducting the medical reviews. It is therefore imperative to plan to evaluate every ZPIC denial, and to appeal vigorously all inappropriately denied claims as the consequences can be more significant than a loss of revenue.

Linda Fotheringill blogs regularly at RACMonitor.com.