During the course of regular business, durable medical equipment (DME) providers may face audits from zone program integrity contractors (ZPICs) working under Medicare and Medicaid. These audits are meant to root out fraudulent activities. Being selected for an audit doesn’t mean your business is under suspicion, only that an impropriety has cropped up.
First, a little background. The 2003 Medicare Modernization Act created Medicare administrative contractors to oversee the plan’s administration. ZPICs were established to identify fraud, waste and abuse among Medicare Part A and Part B providers, DME prosthetics, orthotics and supplies providers, or home health and hospice providers.
Sources of data mining
ZPICs choose their audits based on several techniques that uncover aberrant practices that may indicate fraud or wasteful billing practices, the most effective of which is data mining. The sources of that data include:
- National claims data system
- Data compiled by the contractor
- Reports by the Office of the Inspector General and the General Accounting Office
- Reports from families, physicians, etc.
- Peer review reports
- Referrals from offices including the Department of Justice and state medical licensing boards
- Comparative billing records
- Provider Statistical and Reimbursement System data
- Enrollment and overpayment data
Before your ZPIC audit
Make sure your diagnosis and treatment coding is accurate. If coding has been a problem or documentation is spread throughout an organization, nominating a liaison or creating a special task force to track down documents for the ZPIC audit may be helpful.
Make sure your compliance program is up to snuff. A proper compliance program compares billing, documentation and coding practices with those of its payers. Using the compliance program, you can find inconsistent practices before the ZPIC audit.
To make sure you’re ready for a ZPIC audit, conduct a mock audit on billing, documentation and coding practices. Not only does this identify any potential problems that you can correct before a real audit, it shows your good intention to comply with rules and regulations.
Remember, ZPIC audits are time-sensitive. If you don’t understand the process and underlying legal system, you should seek legal counsel