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To report Medicare fraud, please contact the Office of Inspector General at (800) 447-8477 or HHSTips@oig.hhs.gov

Jackson Davis HealthCare (formerly the Castle Rock Medical Group) professionals have assisted hospitals, physicians, physical therapists, skilled nursing facilities and DME suppliers facing extensive and far reaching Program Safeguard Contractor / Zone Program Integrity Contractor (ZPIC) audits.  Our industry-leading compliance and legal services staff have extensive experience in working with providers facing pre-payment reviews and select claim denials associated with a wide range of CMS program integrity audits.

We have worked closely with providers to achieve enhanced outcomes associated with Program Safeguard Contractor and Zone Program Integrity Contractor audits including experience with - Health Integrity, CSC AdvanceMed, Western Integrity Center, Cahaba GBA & SafeGuard Services.

To date, our industry-leading clinical, compliance and legal professionals have worked with providers facing extrapolated ZPIC (or PSC) repayments ranging between $48,000 to $2.1M.  Specifically, we have assisted providers with evaluating ZPIC medical review and coding outcomes, ZPIC audit extrapolation, the filing of ZPIC appeals (or PSC appeals) and the mitigation of potential CMS fraud implications.

Zone Program Integrity Contractors (ZPIC Audits / PSC Audits)

While the Medicare Recovery Audits (RAC Audits) program continues to focus the majority of efforts toward hospital adoption of CMS evidence-based coverage policies and site-of-service issues, CMS has rampled up another major initiative to directly challenge providers and stop Medicare fraud.  Although the program - Medicare Zone Program Integrity Contractor audits (ZPIC audits) - was not officially rolled out with an emphasis on physician, physical therapy, skilled nursing facility & DME supplier billing, that is exactly where the program has been recently focusing efforts.

Zone Program Integrity Contractors (formerly Program Safeguard Contractors) are organizations hired indirectly (or in connection with other CMS affiliated contractors) by CMS to perform a wide range of medical review, data analysis and Medicare evidence-based policy auditing activities.  While ZPIC audits are similar in many ways to other CMS audits currently being performed nationwide they do differ in one very important aspect – potential Medicare fraud implications.  Of all the current CMS audit initiatives – RAC audits, MIC audits, etc. – it is vital that providers facing PSC audits or ZPIC audits immediately and effectively address targeted audit issues.

ZPIC Audits / PSC Audits - Primary CMS Focus Areas

Prior to the 1996 enactment of the Health Insurance Portability and Accountability Act (HIPAA), Medicare program safeguard activities were funded from the contracted fiscal intermediary’s general program management budget.  However, HIPAA revised the Social Security Act and established the Medicare Integrity Program - accelerating today’s focus on Medicare fraud, abuse and enforcement of CMS evidence-based coverage policies.

The Medicare Integrity Program’s (MIP) primary purpose is to deter fraud and abuse in the Medicare program by giving CMS authority to enter into contracts with outside entities and insure the “integrity” of the Medicare program.  In 1999, the Centers for Medicare & Medicaid Services (CMS) developed the PSC program to support the MIP, stop Medicare fraud and facilitate provider adherence to codified CMS payment criteria, Conditions of Participation and applicable judicial rulings.

ZPICs (formerly known as PSCs) have a contracted Statement of Work (SOW) that encompasses all of the fundamental activities required for CMS program safeguard activities.  Basically, a PSC (or now referred to as a Zone Program Integrity Contractor – ZPIC) is generally responsible for one or more of the following CMS focus areas - (1) pre or post pay medical review of claims, (2) data analysis, (3) benefit integrity and/or fraud detection, (4) cost report audits and (5) provider education.

At the highest level, CMS considers an individual ZPIC (or PSC) as being responsible for detecting, deterring and even preventing Medicare fraud and abuse.  In this capacity, the ZPIC is directly responsible for operating areas such as investigation, case development, administrative solutions and referral to law enforcement. 

With the establishment of ZPICs, fiscal intermediaries and Medicare administrative contractors typically have some or all of their program safeguard duties removed from the scope of their responsibility.  Step-by-step, CMS appears to be developing a more concentrated functional contracting focus for specific areas such are benefit integrity and claims processing activities.

ZPIC Audits / PSC Audits - CMS Medical Review Process

The CMS Medical Review (MR) program is designed to promote a structured approach in the interpretation and implementation of Medicare policy. The ultimate goal of the MR program is to identify and reduce Medicare program vulnerabilities relating to coverage and by taking the necessary action to prevent or address these areas (i.e. stop Medicare fraud).

The CMS’ national objectives and goals as they relate to medical review are as follows: 1) Increase the effectiveness of medical review payment safeguard activities; 2) Exercise accurate and defensible decision making on medical review of claims; and 3) Collaborate with other internal components and external entities to ensure correct claims payment, and to address situations of Medicare fraud, waste, and abuse.

In order to identify and challenge perceived fraud & abuse issues, Medicare PSC and ZPIC audits are based upon a combination of claims data from multiple sources (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data).  By combining data that originates from a full range of CMS contractors, the Medicare PSC / ZPIC contractor creates a complete profile of the beneficiary’s claim history regardless of where the claim was processed.

Although Quality Improvement Organizations (QIOs) continue to perform reviews related to quality of care and expedited determinations, they no longer perform the majority of utilization reviews for acute PPS hospitals or LTCH claims. The review of acute PPS hospitals and LTCH claims is now the responsibility of other CMS program contractors including: Carriers, Fiscal Intermediaries (FIs), Program Safeguard Contractors (PSCs), Zone Program Integrity Contractors (ZPICs) and Medicare Administrative Contractors (MACs).

While not all contractors perform all Medical Review functions, MR functions may include: analyze data, write local coverage determinations (LCD), review claims and educate providers.  Specific efforts may include: