CMS traditionally has relied heavily on contractors to assist in the administration of the Medicare and Medicaid programs. Recently, CMS has begun hiring contractors to focus, not on administrative support, but rather on program integrity, identifying overpayments and investigating improper payments. This diverse breed of contractors includes CERT contractors, Medicaid Integrity Contractors (MICs), RACs, Program Safety Contractors (PSCs) and ZPICs. Medicare Administrative Contractors (MACs) also have a role to play in recovering overpayments.

While the attention lately has been on RACs and their bounty-hunter style overpayment audits, providers should not lose sight of significant consequences that a ZPIC or PSC review could cause. ZPICs and PSCs focus on fraud and abuse and, to that end, conduct data analysis, investigations and, upon discovering potential fraud, may refer the issue to the Office of Inspector General (OIG), U.S. Department of Justice or Federal Bureau of Investigation. ZPICs and PSCs also routinely amplify audit findings through the use of statistical sampling and extrapolation of overpayments. Thus, by applying their error rates to a larger universe of claims, they are able to identify a much larger overpayment for collection. Therefore, the effect of ZPIC or PSC review can be far-reaching and have dire consequences, possibly resulting in large overpayments, sanctions, civil monetary penalties or criminal prosecutions.

CMS currently is transitioning from using PSCs to ZPICs so as to better coordinate with MACs and encompass larger geographic areas. It is important that providers be aware of the players in their region and act accordingly. For example, AdvanceMed, ZPIC for Zones 2 and 5 and PSC in certain areas not yet converted to the ZPIC system, was recently acquired by NCI, Inc. for $62 million. The acquisition may not result in a name change; however, providers should expect AdvanceMed's proficiency in data-mining and investigations to continue to grow with the added boost of NCI's information technology expertise.

With so many contractors frolicking on the program integrity landscape, providers should promptly identify the entity with which they are dealing to assess the nature of the review, be prepared to respond in a targeted manner and seek legal counsel, if necessary.