Prepayment Reviews

Prepayment review can be financially devastating to any provider or supplier, and swift action should be taken upon receipt of notice that the provider or supplier has been placed on prepayment review. The first thing to determine is what entity has placed the provider or supplier on prepayment review. In the case of the Medicare program, both the Medicare Administrative Contractors (MACs)(formerly known as Carriers or Fiscal Intermediaries) and the Zone Program Integrity Contractors (ZPICs)(formerly known as Program Safeguard Contractors) can initiate prepayment reviews.

Prepayment Review Process

The MACs initiate prepayment review of providers they suspect are not properly billing for services. Under more recent program changes, the MACs also are initiating prepayment reviews of new Medicare-enrolled providers. The MACs conduct prepayment review following Medicare’s Medical Review guidelines. The MACs will generally try to work with a provider or supplier to educate them on proper claims and coding practices and will terminate the prepayment review when the provider is billing correctly. If however, the MAC suspects fraud, or if the provider has difficulty conforming to the MACs view of proper coding or documentation practices, the prepayment review can extend for up to a year or more. Few providers or suppliers can comfortably survive such an extended prepayment review. Providers and suppliers who are subjected to prepayment review conducted by the MACs should consider engaging a reimbursement consultant or competent counsel early in the process to assist them in identifying the basis for the prepayment review and assisting them in achieving as quick a resolution of the prepayment review as possible.

If Fraud Is Detected

If the MAC suspects fraud, they may refer the provider or supplier to the ZPIC for a benefit integrity prepayment review. The ZPIC may also self-initiate a benefit integrity prepayment review based on data analysis or other triggers. The ZPICs view themselves as fraud fighters and are generally far less willing to communicate with providers and suppliers regarding the basis or progress of the prepayment review. Additionally, the ZPICs are tasked with developing and making fraud referrals to the HHS Office of the Inspector General or the FBI. Accordingly, providers and suppliers should treat any contact by the ZPIC as potentially a prelude to law enforcement involvement and should contact competent counsel immediately. Additionally, the time limitations regarding benefit integrity prepayment review are different than those applying to medical review, and if the basis for the review is not timely and properly addressed by the provider, a benefit integrity prepayment review can last indefinitely, and in some cases can result in a referral for the initiation of civil, administrative or criminal sanctions.

Seek The Advice of Counsel

The attorneys at Nicholson & Eastin, LLP represent and defend providers and suppliers in all types of prepayment reviews. We have the knowledge and experience to assist providers and suppliers in responding to notices of prepayment review in order to minimize the time the provider is on review, as well as to successfully appeal any improperly denied claims. Please do not hesitate to contact us to discuss your particular situation.

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