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ZIPC audits target potential fraud in Medicare billing.

The Centers for Medicare and Medicaid Services (CMS) has a new audit program: the Zone Program Integrity Contractor (ZPIC) Audits. During the past year, CMS started to implement this program to wrestle with the large problem of fraud and abuse.

ZPIC audits will be aimed at combating fraud, unlike the Recovery Audit Contractor (RAC) audits that simply seek overpayments and underpayments made to providers who treat Medicare patients. Also, unlike the RAC audits, ZPIC audits will not be random. ZPIC audits are based on fees and medical necessity, while RAC audits only assess whether charges were overpaid or underpaid. The ZPIC auditors will already have an objective in mind when they approach a practice. In other words, if a ZPIC auditor contacts a physician’s office, he or she already think there is evidence of coding and billing irregularities. Situations these auditors look at include:

• Medical necessity: There must be documentation of medical necessity for all services provided to patients. In addition, a procedure must meet the medical need of the patient (e.g., correct diagnosis, procedure must meet frequency guideline).
• High utilization of a procedure: New technologies are continually being developed, but a physician must demonstrate the medical necessity for the service.
• Cloned medical records: Providers should be careful that their medical notes do not appear to be cloned or are “cookie cutter” notes. Providers should be mindful of this when using an electronic health record.

Currently, ZPIC audits are being performed nationwide and are divided into seven zones:

1. Zone 1: California, Nevada, American Samoa, Guam, Hawaii, and the Northern Mariana Islands
2. Zone 2: Alaska, Washington, Oregon, Montana, Idaho, Wyoming, Utah, Arizona, North Dakota, South Dakota, Nebraska, Kansas, Iowa, and Missouri
3. Zone 3: Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, and Kentucky
4. Zone 4: Colorado, New Mexico, Oklahoma, and Texas
5. Zone 5: Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Tennessee, Virginia, and West Virginia
6. Zone 6: Pennsylvania, New York, Maryland, Washington DC, Delaware, Maine, Massachusetts, New Jersey, Connecticut, Rhode Island, New Hampshire, and Vermont
7. Zone 7: Florida, Puerto Rico, and U.S. Virgin Islands

ZPIC auditors can show up at a practice without notice and physician practices must comply with their request for medical records. If a practice chooses not to comply with a request, Medicare has the right to suspend the provider’s Medicare number immediately—resulting in a provider’s inability to submit any charges for Medicare patients until the matter is resolved.