ZPIC Audits Cripple Miami Provider

MIAMI — Carolina Ferreiro-Diaz, CEO and owner of
Pharma-Express in Miami, has been in the home medical equipment
business for a dozen years, and while she has dealt with declining
reimbursement, increasingly oppressive rules and regulations and
impending competitive bidding, she has never felt as threatened as
she does now.

Ferreiro-Diaz’s full-line HME company is one of scores targeted
by Zone Program Integrity Contractors for a 100 percent prepayment
audit. CMS has established ZPICs to do both post and prepay audits
as a way of curbing improper Medicare payments.

But those audits have proven to be more than onerous, according
to reports surfacing in several states, most notably Florida and
Texas. Stakeholders say that the ZPICs are zeroing in on small
providers to such an extent that they can barely run their
businesses because they are so consumed with trying to assemble all
the paperwork the auditors demand.

“Every single day, the agency contracted by Medicare to carry
out the audit [SafeGuard Services] sends us letters automatically
denying the claims for payment submitted by our firm until all
documentation is provided to them within 30 days, and then we must
wait for 90 to 120 days [for payment],” a frustrated Ferreiro-Diaz
told HomeCare.

“We firmly believe that this 100 percent payment process audit
that stops payments to our company so radically is with the
intention to put an economic strain on us, as well as on all of the
other providers, [and] make our business impossible to operate,
thus servicing Medicare’s goal of having less providers,”
Ferreiro-Diaz continued.

“All of this is without any prior history on our part or any
fraud or anything of that sort,” she added. “We have run a clean
business for 12 years.”

Of all the different types of audits affecting HME providers,
the ZPIC audit can be the most concerning, according to Mark
Higley, vice president of development for VGM Group, Waterloo,
Iowa. Higley put together an information sheet on ZPIC audits, including how to
prepare for them and what to do if you receive an audit letter.

“Instead of random audits, ZPICs will have information in hand,
and they will know exactly what they want to zero in on,” Higley
wrote. “Essentially, if you are being audited, it is because the
ZPICs may already have evidence that there is a problem
with your billing.

“Consequences of a ZPIC review include payment denials,
recoupment of overpayments and referral to other law enforcement
agencies,” Higley added. “Because ZPICs can refer cases to the
Department of Justice, Office of Inspector Genera or other law
enforcement agencies, a ZPIC review may only be the first step in a
long legal battle.”

For Pharma-Express, the deluge of denials began with 90 letters
on Feb. 1, said Kevin M. Cabrera, DME clerk. It hasn’t ceased since
then, with every new claim, no matter what the item, being denied,
he said.

The ZPIC is demanding progress notes, medical history, pictures
of service, purchase invoices, assessment records and a host of
other data that can amount to 50 pages of documentation per claim,
Ferreiro-Diaz said.

Assembling the added documentation is extraordinarily
problematic and is, in fact, causing them to lose referral sources,
Ferreiro-Diaz said.

“To provide this documentation, we encounter a lot of problems,”
she said. “Doctors’ offices most of the time don’t have the time or
the personnel to stop their job and start making copies for us of
the patients’ records/history. They consider this an unnecessary
burden on their daily tasks and consequently, they prefer to do
business elsewhere.”

She runs into the same problems with hospitals, which also often
charge a fee for providing records.

Cabrera said Pharma-Express has sought to find out why the
company is being audited to such a degree and has, in fact, talked
with a ZPIC investigator. The investigator told company officials
there had been a complaint but would not elaborate or provide any
more details, Cabrera said.

“When it will stop or how long it will go on — it’s an
indefinite thing,” he said.

Providers have 30 days from the date on the letter of
notification to get the auditor the information it has requested.
If documentation is insufficient or is not received, the affected
claims are denied and the contractor demands return of the
funds.

Providers can appeal a denial, but even if they win, it could
take as long as another three months before the claim is paid,
Cabrera said. “So that means waiting for six months to get paid,”
he said.

That time element is critical to a company like Pharma-Express,
which counts on Medicare for at least 80 percent of its revenue,
Cabrera said.

Ferreiro-Diaz believes such audits will eventually push smaller
providers into closing their doors, thus impeding access for
beneficiaries.

“Forcing providers to close their doors means that only the big
companies will be in the field and patients will have less options
to receive services,” she said. “Small companies placed out of
business will not only affect the owners but also will mean fewer
jobs and, more importantly, less personal care for patients who
will be the most affected part of this equation.”

CMS set up seven ZPIC zones, but so far has awarded contracts in
only three:

• Health Integrity in Zone 4 – Texas, Colorado, New Mexico and
  Oklahoma;
• AdvanceMed in Zone 5 – Alabama, Arkansas, Georgia, Louisiana,
  Mississippi, North Carolina, South Carolina, Tennessee, Virginia,
  and West Virginia; and
• SafeGuard Services in Zone 7 – Florida, Puerto Rico, and Virgin
  Islands.