Home > Property & Casualty > Taking aim at Medicare fraud with ZPIC audits

Taking aim at Medicare fraud with ZPIC audits

In an era of budget deficits and difficult economic times for health care providers, the call to eliminate fraud and abuse is constant. So much so that it sometimes seems loose its real meaning. Over the past year, the Centers for Medicare and Medicaid Services (CMS) has started using their latest tool in their ongoing fight against fraud and abuse, the ZPIC audit.

The audit program, called the Zone Program Integrity Contractors Audit, is armed with much more data and has a greater focus than audits that many providers are used to seeing from CMS. Published reports have indicated that these ZPIC audits “can be the most concerning”, according to Mark Higley, vice president of development for VGM Group, Waterloo, Iowa.

“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.” According to a 2010 report from HomeCare, these new audits are creating tremendous amounts of work and causing great concern for providers of all sizes. The implications of the ZPIC audit, if an error or fraud is identified, are very serious and can be significant.


Initial notification is usually via letter. This starts a 30-day period during which the provider must get the auditor the information requested by the letter. This information can range from “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.” And the process does not stop there. Any apparent fraud or abuse can lead to a referral of the matter to other law enforcement agencies that can take other legal action. The impact of such action on small medical providers can be devastating.

The catch-22 for this is the budgetary need for CMS to identify and eliminate fraud and abuse within the health care system in order to save taxpayers money. Our fiscal position, from both a Federal and State standpoint, demand that fraud is attacked whenever it is identified. But from a business owners standpoint, this type of intrusive audit can create excessive amounts of work in order to comply with the ZPIC audit requirements. Without the audits fraud would not abate in a system that estimates the range of fraud and abuse between $60-80 billion. So far, the cost to health care providers is unknown.

As citizens of the national checkbook and participants in the health care system, we face a very challenging effort to amicable resolve the two issues of eliminating fraud and abuse while also allowing entrepreneurs in the healthcare filed to grow and thrive.

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  1. August 25, 2011 at 2:13 pm

    This is great news. I just hope that the audit tool is as good as described. Hopefully this will be the answer to the ballooning medicare fraud. Let’s keep our fingers crossed. 🙂

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