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 ZPICs Being Used for Backdoor Policymaking, Industry Advocate Asserts

The Obama administration is using Zone Program Integrity Contractor (ZPIC) audits as a Trojan Horse in an effort to ban high-intensity therapy, the American Health Care Association (AHCA) has claimed.

“Our nursing facility members who operate Medicare skilled nursing facilities are facing coordinated and policy-driven ZPIC audits that target facilities that exceed certain unpublished threshold levels of high-intensity therapy,” AHCA Senior Vice President for Finance Policy and Legal Analysis Elise Smith said in a letter to the Centers for Medicare & Medicaid Services (CMS).

“Our view is that this is an abuse of the wide latitude provided for under the ZPIC authority and is essentially stealth policymaking without the benefit of dialogue with stakeholders.”

The letter, dated June 12, is addressed to Peter Budetti, MD, the deputy administrator and director of CMS’ Center for Program Integrity. The government appears to have made “a policy decision … to disallow high-intensity therapy as per se inappropriate” in the wake of a 2010 report by the Department of Health and Human Services’ Office of Inspector General (OIG) that found that billing for high-intensity therapy had skyrocketed, Smith said.

The report suggested that nursing facilities were moving patients into higher-paying Resource Utilization Groups in order to pay their bills.

But OIG’s report contains “factually incorrect and misleading” data, which makes the findings “necessarily flawed,” Smith claimed.

“Nonetheless, it is these and similar findings that the government is relying on to force upon providers, through government investigations and ZPIC audits, its current policy with respect to high-intensity therapy,” Smith said.

Efforts to reach CMS for comment were unsuccessful.

The pre-payment review process is “unclear,” offers “no defined end” for nursing homes, and is “fundamentally unfair,” Smith added.

In her letter, Smith urges CMS to:
• Require auditors to notify nursing homes formally that they are under investigation;
• Clearly identify the relationship between the ZPIC and the Medicare Audit Contractor, as well as their respective roles, during a pre-payment review;
• Come up with timelines for audit lengths;
• Require auditors “to communicate to the provider, in writing, the results of the initial determination”; and
• Offer providers “the opportunity to contest the pre-payment review.”

Read Provider's recent interview with Budetti about ZPIC practices here.​​

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