Frequently Asked Questions

Unified Program Integrity Contractors (UPICs) (previously known as Zone Program Integrity Contractors or ZPICs) are entities that contract with CMS to perform certain audit and investigation functions. These contractors are primarily tasked with unearthing potential waste, fraud, and abuse in the Medicare and Medicaid programs. UPICs perform “program integrity” functions with respect to both Medicare and Medicaid providers within their jurisdictions.

These types of letters can come from many different sources, so the first step is to identify where the letter came from. Not all audits are the same, and some are conducted in conjunction with fraud investigations. If the letter came from a Unified Program Integrity Contractor (UPIC), the Center for Program Integrity at the Centers for Medicare and Medicaid Services (CMS), the Medicaid Fraud Control Unit (MFCU) in your state, the HHS Office of Inspector General (OIG), or the Special Investigations Unit (SIU) of a commercial insurance company, then contact qualified legal counsel immediately. The fact that you have received a letter from one of these entities indicates you could be the target of a fraud investigation. If a letter did not originate with one of these entities, then the audit may simply be the result of billing data analysis. Nevertheless, the provider may wish to consult with legal counsel if there are a significant number of claims (and therefore financial exposure) at issue.

The second step is to identify what the requestor is seeking with the letter. In some cases, the letter will only seek medical records for certain claims. The volume of records requested can vary depending on the contractor and the scope of the audit.  In other cases, the letter will ask for medical records and other documents, such as lease agreements, vendor contractors, medical director agreements, and other records. In cases where request letters seek more than just medical records, this could indicate that an investigation is underway.

It is also important to remember that requests for medical records can sometimes precede other administrative sanctions, such as payment suspension, pre-payment review, revocation / termination, or the imposition of civil monetary penalties.

Pre-payment review is a process whereby an insurance payor requests and reviews documentation prior to making a decision on whether a claim should be paid. The pre-payment review process can dramatically slow down – or in some cases even hold up completely – a provider’s reimbursement.

No. There are no rules restricting the amount of time that Medicare, Medicaid, or a commercial insurance carrier can review your claims on a pre-payment basis.

No. However, if your claims are denied as part of the pre-payment review process then you retain appeal rights as to those individual claim decisions.

The most important thing to keep in mind is that you are obligated by law to cooperate with these types of investigations or on-site audits. Your failure to cooperate would result in the imposition of a wide variety of administrative sanctions, such as suspension of your payments or revocation of your billing privileges.

With that being said, the activities and requests of the auditor / investigator should be reasonable. They should not significantly disrupt the normal day-to-day activities of your office, demand to speak with a physician when he / she is seeing patients, or the like. If they do, you should politely propose a less disruptive alternative.

In most cases, the auditors / investigators will ask to interview the owners or managing employees. If the owners or managing employees are not comfortable with this, they should politely request to reschedule the interview when the provider’s attorney can be present or to respond to the questions in writing.

The auditors / investigators will also likely hand-deliver a letter to you seeking certain records from your office and often ask that the documentation be produced while the auditors / investigators are present. Providers should politely request to submit all or most the records via mail at a later date. It is critical that the provider not rush to produce the records to the auditor / investigator.

Unannounced site visits often indicate that the provider is the subject of a fraud investigation. If a representative from Medicare or Medicaid comes to your office seeking to interview staff or requesting records, you should contact qualified legal counsel immediately.

In almost every case, an appeals process is available to the provider to contest the alleged overpayment. This process is generally uniform for Medicare overpayments and varies by state / insurance payor for Medicaid and commercial insurance overpayments.

The Medicare claim appeals process consists of five stages, as summarized below.

Appeal Stage	Reviewing Entity	Time Limit for Filing
Redetermination	Medicare Administrative Contractor	120 days
Reconsideration	Qualified Independent Contractor	180 days
ALJ Hearing	Administrative Law Judge	60 days
DAB Review	Medicare Appeals Council	60 days
Judicial Review	Federal District Court	60 days

In such cases, the claims were likely part of a statistical sample drawn from all of your claims over the course of the audit period. This means that the auditors assumed that the claims they reviewed were representative of your overall billing practices, and any overpayments identified in the sample could be “extrapolated” using statistical sampling methodology.

If a provider elects to appeal an overpayment, it can almost always challenge the statistical validity of any sampling methodology used to project the overpayment as well. To do so, the provider will need to retain a qualified statistician and also consult legal counsel.

Generally speaking, yes. In some cases, providers can forestall recoupment for a limited amount of time while they appeal the overpayment. Eventually, however, the recoupment will commence irrespective of whether the provider continues to appeal the overpayment.

In many cases, the provider can request a repayment plan to repay the overpayment in monthly installments. As long as the provider continues to make the payments according to the repayment arrangement, its existing payments should not be subject to recoupment.

In other cases, the provider may be able to obtain a court order that prevents recoupment of the overpayment until the provider has exhausted its appeal rights.

It depends. In most cases, Medicare will not settle an overpayment assessment and expects the provider to contest the overpayment through the administrative appeals process. With that being said, CMS has announced various pilot initiatives aimed at settling a limited number of Medicare overpayment assessments that are the subject of pending appeals. You should contact an attorney to discuss whether your case may qualify for one of these initiatives.

Medicaid and commercial insurance companies, by comparison, are more likely to entertain settlement offers. The likelihood of settling your case and the amount of the settlement will likely depend on the circumstances surrounding the overpayment assessment.

It depends on the government agency or payor that imposed the suspension. Medicare providers do not have the right to a hearing in payment suspension cases, but they can submit a rebuttal statement explaining why the suspension should not be put into effect. In many states, Medicaid providers have the right to request a hearing on a suspension.

It depends. In Medicare cases, suspensions are imposed in 180-day increments. At the conclusion of that initial window, the suspension may be renewed or terminated.

No. Payment suspensions are rarely, if ever, put into place based on misunderstandings or mistakes. In addition, suspensions are sometimes implemented concurrently with civil or criminal fraud investigations. Providers should be very careful when communicating with government agencies or insurance companies without the assistance of counsel after their payments have been suspended.

 

You should contact an attorney to evaluate the situation. The question of whether and how commercial insurance companies can terminate existing provider agreements usually depends on the laws of the state where the provider is located and the terms of the agreements themselves.

No. Almost every revocation is accompanied by a “re-enrollment bar” that precludes the provider from re-enrolling with the program for a certain period of time. For Medicare providers, a re-enrollment bar could range from 1 to 3 years depending on the basis for revocation.

In some cases, a provider’s enrollment is revoked as of a date in the past. Medicare providers, for example, can be revoked retroactively to the date of a felony conviction or the date they were determined to be non-operational as based on a site inspection. In these cases, several weeks or even months may elapse between the effective date of the revocation and the date the provider receives notice of the revocation. This means that any services billed by the provider in the interim will be considered an overpayment and subject to recoupment.

Generally, yes. Physicians, home health agencies, and durable medical equipment suppliers are the types of providers who are most likely to be revoked from the Medicare program.

No. The regulations only allow revocation for the following enumerated reasons:

 

• Non-compliance with Medicare laws, rules, and regulations.
• The provider, an owner, or a managing employee is excluded, debarred, or suspended from participation in a Federal healthcare program or procurement activity.
• The provider, an owner, or a managing employee has been convicted of a felony in the last 10 years.
• The provider has supplied false or misleading information on its Medicare application forms.
• CMS determines the provider is not operational as part of an on-site review.
• Issues related to provider screening requirements.
• The provider misuses its Medicare billing number.
• The provider abuses its Medicare billing privileges.
• The provider fails to timely report changes in its enrollment information to CMS.
• The provider fails to gives CMS access to certain documentation.
• A home health agency does not meet initial reserve operating funds requirements.
• A physician or other practitioner’s DEA prescribing authority has been revoked or suspended.
• A physician or other practitioner demonstrate improper prescribing practices.

In the majority of cases, providers are revoked because a site inspection has determined they are “not operational” or they have failed to timely update their enrollment information with CMS.

Yes. There are seven elements of every effective compliance plan:

• Implementing written policies, procedures, and standards of conduct.
• Appointing a compliance officer to oversee the provider’s compliance efforts.
• Education and training.
• Developing and maintaining open channels of communication.
• Internal auditing and monitoring.
• Enforcing standards and rules through well-publicized guidelines.
• Responding promptly to detected offenses and undertaking corrective action.

The HHS Office of Inspector General (OIG) has issued compliance guidance for many types of providers, including physician practices, home health agencies, hospices, nursing homes, ambulance companies, labs, and third-party billers.

The Affordable Care Act contains a provision whereby the Secretary of the Department of Health and Human Services may require that providers, as a condition of participation in the Medicare and Medicaid programs, implement effective compliance plans.

There are several key benefits to the implementation of an effective compliance program, which include:

• Reducing billing errors.
• Identifying risks or potential problems before they become systematic in nature.
• Avoiding conduct that may be construed as potential waste, fraud, or abuse.
• Promoting patient safety and quality of care.
• Ensuring confidential patient information is kept secure.
• Improving the results of audits or reviews performed by OIG, CMS, or any other government agencies or contractors.

The anti-kickback statute is a criminal law that prohibits the exchange of anything of value for the purpose of inducing or rewarding the referral of services that will be paid under a federal healthcare program.

The Stark law precludes physicians from referring patients participating in federally-funded healthcare programs to certain types of providers with which the physicians have financial relationships. The types of items or services covered by the Stark law, which are known as “designated health services,” include clinical laboratory services, outpatient therapy, certain diagnostic imaging services, radiation therapy and related supplies, durable medical equipment, parenteral and enteral nutrition equipment and supplies, prosthetics, orthotics, home health services, outpatient prescription drugs, and hospital services.

Yes. There are a host of specific, narrowly-tailored exceptions to the self-referral prohibitions under the Stark law. These exceptions are complex, and any provider with questions should contact an experienced healthcare attorney with questions about arrangements or relationships that may implicate the Stark law.

The False Claims Act imposes liability on those who submit false or fraudulent claims to the federal government for reimbursement – including Medicare and Medicaid claims. Providers who are accused of False Claims Act violations will be subject to penalties ranging from approximately $11,000 to $22,000 per claim plus up to three times the value of each claim.

The False Claims Act allows for private parties acting as “whistleblowers” (also known as “relators”) to file suit against those violating the law on behalf of the government. After investigating the merits of the whistleblower’s claims, the government may decide to take over (or “intervene in”) the case.

In cases where money is recovered for the government, the relator will be entitled to a portion of the recovery. If the government previously intervened in the case, the relator can recover anywhere from 15% to 25% of the award. If the government chose not to intervene, the relator may recover between 25% to 30% of the award.

Government regulations require providers who suspect they may have received a Medicare or Medicaid in error to investigate, report, and return the overpayment as soon as possible. A provider who fails to exercise reasonable diligence in returning an overpayment may be subject to liability under the False Claims Act.

If you believe you are the recipient of an overpayment by a federal healthcare program, you should contact qualified legal counsel to discuss your concerns. A thorough, internal investigation may need to be performed. And if you have been overpaid, you will need to act promptly to return the money to the government.