ZPIC Audit and Civil Money Penalties
Recently changed Medicare rulings can leave you libel for civil penalties even after you’ve satisfied the ZPIC audit by paying in full. But, there are ways to avoid civil money penalties.
Please contact Barraclough Health (email to firstname.lastname@example.org) to find about about the best ways to avoid civil money penalties and how to reverse Medicare and Medicaid audits.
In most cases, an audit of a Medicare or Medicaid provider will find a number of claims that are invalid. When the health care provider already has submitted claims and then collected a payment from the government, then any money from improper claims must be returned.
But what happens if the government suspects that the improper claims aren’t the result of innocent mistakes? If the government suspects that your mistakes were intentional?
Medicare Rule Changes and Drug Testing Advances
Up until January 1st, 2011, providers would bill Medicare once for each drug assay performed, even from the same urine sample. For example, a single sample would be used for 11 assays, and 11 claims lines would be submitted for the patient, each for a different drug that was being tested for.
But technology became more advanced, and testing improved to be more efficient. Machines could now check for a number of drugs at the same time. As a result, Medicare changed the rules so that testing for multiple drugs would be considered to be a single test.
This new rule would potentially reduce revenue by -90% for health care providers.
Many providers use outsourced coding specialists to perform the paperwork of claim entry. In one case, the coders continued to submit 11 claims for each patient.
What was the result? More than 19,000 bad claims.
A ZPIC audit found these mistakes. It calculated the amount of improper payments and demanded reimbursement by the doctor, whereupon the doctor promptly paid all the money back. The ZPIC sent back a letter stating that “the matter is closed”.
But the matter may not be closed when you are audited by a ZPIC and then you pay back the money.
The government may choose to impose civil money penalties defined in Sec. 1003.100 of 42 CFR.
It could be as much as $10,000 for each wrongful act. Each improper claim would be considered separately. Another option for the government to pursue is to collect 2-3 times the amount of the over payment. So if you have paid back $250,000, then the additional penalty would be $500,000–$750,000.
The law is written so that even if you had no intent to defraud the government, that is not considered.
- Under 42 USC 1320a–7a (i)7B “no proof of specific intent to defraud is required”. What can trigger Civil Money Penalties? The health care provider must “act in reckless disregard of the truth or falsity of the information” or could act “in deliberate ignorance”.
Blame it on the coder?
For most health care providers, subcontractors do the coding. Can they be blamed? Well, perhaps they could, but this will not get you out of Civil Money Penalties because the rules are such that any provider is responsible for their “agents”, and billing companies are considered to be “agents” for the provider.
- “A principal is liable for penalties, assessments, and an exclusion under this section for the actions of the principal’s agent acting within the scope of the agency.”
How to Avoid Civil Money Penalties
Perform a Self-Audit. The law is written so that the way you act can make a difference.
- By promptly performing a self-audit, at your own expense, and then paying back any wrong claims that are discovered, it may help give the impression that you are not a criminal, but instead only a provider who has temporarily run into a coding problem.
Take Education Seriously. When you receive an education letter, stop what you are doing and study the issue carefully.
- Even if a doctor is not doing the day-to-day coding, they nevertheless should know the exact coding details of their services.
Document Your Actions. Keep detailed records of your communications with your coders.
- Document every event in which you discuss coding with them, and if you send instructions to your coder on how to file proper claims, get a confirmation back from them that they received it and will be making an needed changes to their procedures.
Maintain a Chronology. If you get a letter from the OIG (Office of Inspector General) then have ready a complete chronology of every communication with your coders, ZPICs and others in connection to the matter.
- This may be one of the most valuable things you can do to show that you are not acting recklessly.
The more you do these things, the less likely is the OIG to conclude that you deserve to pay back much more than you already have.