Program Integrity Contractors


One of the primary stated goals of the Centers for Medicare & Medicaid Services (CMS) is to pay correct amounts to legitimate providers, for covered, correctly coded and correctly billed services, provided to an eligible beneficiary. To achieve its goal of lowering error rates, CMS utilizes the services of Affiliated Contractors (ACs), Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs) and Comprehensive Error Rate Testing (CERT) contractors. These contractors assist in the process of preventing and recovering erroneous payments.
 
In addition to reducing erroneous payments, CMS has a goal of protecting the program from potential fraud. In pursuit of this goal, CMS contracts with Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs). PSCs and ZPICs refer cases of potential fraud to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), Office of Investigations (OI) and may also furnish requested information on ongoing fraud investigations to State Attorneys General and to State agencies.
 
Together, these contractors and units have the full range of remedies and actions available to deal with questionable, improper or abusive practices of practitioners, providers and suppliers under publicly funded health care programs.
 
If you believe you're the subject of program integrity contractor review and need legal representation, or if you need assistance maintaining and enhancing your regulatory compliance program, contact John Little, Attorney at Law, PC.

ACs, MACs, CERTs and RACs (Errors)

One of the primary stated goals of the Centers for Medicare & Medicaid Services (CMS) is to pay correct amounts to legitimate providers, for covered, correctly coded and correctly billed services, provided to an eligible beneficiary. To achieve its goal of lowering error rates, CMS follows three parallel strategies:
  1. Preventing improper payments through Affiliated Contractors (ACs) and Medicare Administrative Contractors (MACs), which are charged with evaluating program vulnerabilities and taking necessary action to prevent identified vulnerabilities in the future,
  2. Correcting past improper payments through postpayment claim review by Recovery Audit Contractors (RACs), and
  3. Measuring improper payments and pinpointing their causes by calculating service specific, provider type and contractor specific error rates by Comprehensive Error Rate Testing (CERT) contractors.
CMS implemented the Comprehensive Error Rate Testing (CERT) program pursuant to the Improper Payment Information Act in order to establish error rates and estimates of improper payments.
 
In the Tax Relief and Health Care Act of 2006, Congress required a permanent and national Recovery Audit Contractor (RAC) program to be in place by January 1, 2010. The stated goal of the Recovery Audit Program is to identify improper payments (which may be overpayments or underpayments) made on claims of health care services provided to Medicare beneficiaries. The national RAC program is the outgrowth of a demonstration program covering health care providers and suppliers in California, Florida, New York, Massachusetts, South Carolina and Arizona which resulted in $900 million in overpayments being returned to Medicare and $38 million in underpayments returned to health care providers. RACs are paid on a contingency fee basis on both the overpayments and underpayments they find.
 
Health care providers subject to RAC review include hospitals, physician practices, nursing homes, home health agencies, durable medical equipment (DME) suppliers and any other provider or supplier that bills Medicare Parts A and B.  Providers subject to RAC review should:
  • conduct internal assessments to ensure submitted claims meet the Medicare rules,
  • identify where improper payments have been persistent in the provider community by reviewing RAC websites,
  • implement procedures to respond timelely to RAC medical record requests,
  • in cases of disputed RAC determinations, file a timely appeal,
  • keep track of denied claims and previous error corrections, and
  • determining the corrective actions that need to be taken to ensure regulatory compliance.
Affiliated Contractors (ACs) are Carriers and Fiscal Intermediaries, and as required by Section 911 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), CMS is in the process of awarding Medicare claims processing contracts through competitive procedures resulting in replacing ACs with new contract entities called Medicare Administrative Contractors (MACs).  ACs and MACs primarily use error rates produced by the CERT program and vulnerabilities identified through the Recovery Audit Contractor (RAC) program to identify where to target their improper payment prevention efforts. ACs and MACs analyze their internal data to determine which corrective actions would be best to prevent CERT and RAC identified vulnerabilities in the future.
 
CMS has determined that most improper payments in the Medicare Fee for Service (FFS) program occur because a provider did not comply with Medicare’s coverage, coding or billing rules. Therefore, the cornerstone of AC and MAC efforts to prevent improper payments is each contractors’ Error Rate Reduction Plan (ERRP), which includes initiatives to help providers comply with the rules. These initiatives usually fall into one of three categories:
  1. Targeted provider education concerning items or services with the highest improper payments,
  2. Prepayment and postpayment claim review targeted to those services with the highest improper payments (In addition, in order to encourage providers to submit claims correctly, ACs and MACs can perform extrapolation reviews as needed), and
  3. New or revised local coverage determinations, articles or coding instructions to assist providers in understanding how to correctly submit claims and under what circumstances the services will be considered reasonable and necessary.
If you believe you're the subject of program integrity contractor review and need legal representation, or if you need assistance maintaining and enhancing your regulatory compliance program, contact John Little, Attorney at Law, PC.

PSCs and ZPICs (Fraud)

In addition to reducing erroneous payments, CMS has a goal of protecting the program from potential fraud. In pursuit of this goal, CMS contracts with Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs). The primary task of PSCs and ZPICs is to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure the integrity of Medicare Trust Fund payments. PSCs and ZPICs are charged with:
  • Proactively identifying incidents of potential fraud that exist within its service area and taking appropriate action on each case,
  • Pursuing leads through data analysis, the Fraud Investigation Database (FID), news media, and other sources,
  • Investigating and determining the factual basis of fraud allegations made by beneficiaries, providers, law enforcement, CMS, OIG, and other sources,
  • Initiating administrative actions to deny or suspend payments that should not be made to providers where there is reliable evidence of fraud, and
  • refering cases to the Office of the Inspector General's Office of Investigations (OIG/OI) for consideration of civil and criminal prosecution and application of administrative sanctions.
PSCs and ZPICs refer cases of potential fraud to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), Office of Investigations (OI) and may also furnish requested information on ongoing fraud investigations to State Attorneys General and to State agencies.
 
If you believe you're the subject of program integrity contractor review and need legal representation, or if you need assistance maintaining and enhancing your regulatory compliance program, contact John Little, Attorney at Law, PC.

Referral to OIG

PSCs and ZPICs are required to immediately advise the OIG/OI and maintain internal documentation on these communications when it receives allegations with one or more of the following characteristics, regardless of dollar thresholds or subject matter:
  • cases involving an informant that is an employee or former employee of the suspect physician or supplier,
  • involvement of providers who have prior convictions for defrauding Medicare or who are currently the subject of an OIG fraud investigation,
  • situations involving the subjects of current program investigations,
  • multiple carriers involved with any one provider (in order to coordinate activities among all involved carriers),
  • cases with, or likely to get, widespread publicity or involving sensitive issues,
  • allegations of kickbacks or bribes,
  • allegations of a provider engaging in a pattern of improper billing
  • allegations of a provider submitting improper claims with suspected knowledge of their falsity,
  • allegations of a provider submitting improper claims with reckless disregard or deliberate ignorance of their truth or falsity,
  • allegations of a crime by a federal employee,
  • indications that organized crime may be involved, and
  • indications of fraud by a third-party insurer that is primary to Medicare.
The OIG/OI will typically exercise one or more of the following options when deciding whether to accept a case:
  • conduct a criminal and/or civil investigation,
  • refer the case back to the PSC or ZPIC unit for administrative action or recovery of overpayment with no further investigation,
  • refer the case back to the PSC or ZPIC unit for administrative action or recoupment of overpayment after conducting an investigation in consultation with the appropriate Assistant U.S. Attorney (AUSA) office,
  • refer the case back to the PSC or ZPIC unit for administrative action or recoupment of overpayment after the AUSA's office has declined prosecution, or
  • Refer the case to another law enforcement agency for further investigation.
If you believe you're the subject of program integrity contractor review and need legal representation, or if you need assistance maintaining and enhancing your regulatory compliance program, contact John Little, Attorney at Law, PC.

Corrective Actions and Sanctions

Sanctions which may be imposed on providers include the full range of administrative remedies and actions available to HHS and law enforcement to deal with questionable, improper or abusive practices of practitioners, providers and suppliers under publicly funded health care programs. Of course, he most serious of these sanctions, exclusions, Civil Monetary Penalties (CMPs) and criminal prosecutions. However, other, less severe administrative remedies may precede more punitive sanctions affecting participation in the programs. The corrective actions that PSCs, ZPICs, ACs, and MACs are required to initially consider are:
  • provider education and warnings,
  • revocation of assignment privileges,
  • suspension of payments,
  • recovery of overpayments, and
  • referral of situations to state licensing boards or medical/professional societies.
If you believe you're the subject of program integrity contractor review and need legal representation, or if you need assistance maintaining and enhancing your regulatory compliance program, contact John Little, Attorney at Law, PC.