Aggressive Anti-fraud Measures Put Rheumatologists under the Spotlight

Sandra Yin

Claims-based analysis using powerful algorithms, predictive sampling by aggressive ZPICs, a focus on disguised kickbacks, prepayment reviews that effectively freeze billing, and other anti-fraud measures add up to a challenging regulatory environment for rheumatologists.

Zoned Program Integrity Contractors (ZPICs) are for-profit contractors that are hired by CMS to ferret out fraud and are evaluated and rehired based on their ability to identify overpayments and people and practices that are breaking the law.

Since just about everybody is interested in reducing waste and fraud in the health care system, any measure or program designed to accomplish this should be viewed as a positive step and embraced by practicing physicians, right? Not so fast, said Robert Liles, JD, managing partner at Liles Parker PLLC, during a session at the American College of Rheumatology’s 2012 meeting in Washington, DC.

During his talk on the top compliance risks facing physicians, Liles told the audience of rheumatologists and other physicians that they should beware of ZPICs because “You guys are under the radar right now, but you dispense some of the most expensive drugs in the system.”

ZPICs will often show up at practices unannounced to conduct an audit, asking to see billing records and interview employees. Liles said that the auditors may come in and “ask to see 50 files. Typically they will want records that pertain to billing and coding information, such as medical records, and information that relates to your business.”

He said that ZPICs may ask providers questions about a wide range of business topics, including “Where do you get your business from? Where do you send your business to? Are you being paid as a medical director by anyone? If you are being paid, are you being paid fair market value?” He said that “They’re looking for indications or violations of the False Claims Act, violations of the Stark Law, and violations of the Anti-kickback Statute.”

When ZPICs come in, they “might want to look at 10 claims today and 40 the next week.” They’re looking for evidence of overutilization of treatment, overprescribing, and other signs of fraud. “If they don’t see the medical necessity when you order Remicade (infliximab) or Enbrel (etanercept) or any of those other high-cost drugs… well, then you’ve got a real problem,” said Liles.

Liles said that most of the time, when ZPICs ask to see a small portion of your records, say 50 claims, they will bring a letter with them that says it is part of a statistically relevant review, which means they’re doing statistical sampling and will extrapolate their findings out to cover all of your records. “If they find a 90% error rate based on the 50 filews, they’re going to eventually extrapolate that to the universe. Based on that, they’ll want all the money back. Then a long administrative process ensues,” said Liles.

Prepayment audits can also be concerning. Liles said that if a practice is kept on prepayment review, there’s a high likelihood the payer will deny the claim. In the event a claim is disallowed, the administrative appeals process can take as long as 18 to 24 months. A practice could be on prepayment review for a year or six months before they’ll lift it. “Could you deal with cutting off 50% of your cash flow?” asked Liles.

Another compliance risk is the increased possibility of criminal referral, suspension, or revocation of a practice’s Medicare billing privileges. Liles told the audience that the government has increased criminal prosecutions by 81% this year, due to changes in enforcement practices. Under the Affordable Care Act, for instance, “you no longer have to show actual knowledge that you’re committing a kickback. You no longer have to have specific intent to commit a kickback,” he said.

As an example, Liles noted that the free lunches and dinners provided by pharma reps might not be as harmless as some physicians think, although they’re allowed when coupled with education. But if a physician or practice is investigated by the government and is alleged to be overutilizing a particular drug or treatment, it could look bad if investigators find out the people who bring lunch for that practice’s staff every day are the makers of that drug. “These little things can get you into trouble. They’re disguised kickbacks.” said Liles.

The government is on the lookout for these things. “When they come in and find that kind of evidence and see that you’re the highest utilizer of a particular drug in the state, you’ve got a problem,” he said.