UPIC: Understanding Medicare and Medicaid Program Integrity

In Florida and other designated high-risk fraud areas across the nation, who has not heard of a UPIC or ZPIC?  Program Integrity became an integral part of the Centers for Medicare and Medicaid Services (CMS) in 1996 when the Health Insurance, Portability, and Accountability Act (HIPAA)[1] was enacted.  From there, the Program Safeguard Contractors, Zone Program Integrity Contractors (ZPIC), and now Unified Program Integrity Contractors (UPIC) were born. 

At the Justice Group, our first goal when working with a client is to identify activity that may cause a UPIC to target a healthcare provider for review. Working hand in hand with health care providers and businesses, the Justice Group’s team of subject matter specialists serve as a vital resource when working through administrative agency actions that can be difficult and confusing. For example, we recently assisted a client who had followed advice of counsel to discontinue billing immediately after being placed on pre-payment review. 

Pre-payment reviews have a significant impact on a provider’s business because payments are delayed, and documentation production is costly and burdensome to staff.  However, the initiation of a pre-payment review does not require a provider to cease billing.   In fact, in the above example, the decision to discontinue billing triggered additional adverse actions by the UPIC.  Even good faith efforts by providers to comply with an administrative action can be viewed with suspicion by a UPIC.  Because the provider may continue to receive approved payments during a prepayment review, the above example is one of the least financially burdensome actions a provider may encounter.   We will discuss harsher actions a UPIC may impose later in this article.

To understand the function and reach of a UPIC, one must first understand the Code of Federal Regulations and CMS Manuals used to guide CMS and UPIC activities. The role of the UPIC is to detect and prevent Fraud, Waste and Abuse (FWA).  The actions they take are guided by a Statement of Work (SOW) and other instructions received from their Contracting Officer’s Representative (COR) or Business Function Leads (BFL).  However, the single most important document to understand, for anyone involved in a UPIC inquiry, is the Program Integrity Manual (PIM).

The PIM provides critically important information about what the UPICs can and cannot do.  It establishes procedures for conducting investigations, managing cases, taking administrative actions, and performing medical reviews.  The PIM also establishes timeframes that program integrity contractors and CMS must work within. The PIM, in essence, is a Program Integrity survival book for both UPICs and providers alike. 

A UPIC in Action: Pre-Payment Review:

A pre-payment review occurs when the UPIC requests that the Medicare Administrative Contractor (“MAC”) implement an edit that flags claims for review by the UPIC, prior to payment of the claim.  This does not mean the provider cannot continue to submit claims and is certainly different from a Payment Suspension or RAP Suppression. Claims are submitted by the provider and dependent upon the parameters of the edit, the claim is flagged and sent to the UPIC for review.  An Additional Documentation Request (ADR) is then sent to the provider, generally by the MAC, identifying the actual documentation that is being requested to make a payment determination.  Once the documentation is received and reviewed, the UPIC will determine whether the claim will be paid, denied, reduced, or in certain circumstances changed to reflect a more accurate increase in payment based upon the level of service documented.  The PIM requires that the UPIC have a system in place to evaluate the effectiveness of the pre-payment edit[2].  Further, the same section of the PIM states that “Prepayment edits shall be evaluated on a quarterly basis”.  Yes, this means that payments to a healthcare business, dependent upon the evaluation by the UPIC, may be delayed for a substantial period of time.

During an administrative action, it is extremely important for providers to analyze the communication received by the UPIC, including an ADR, as this may provide indications as to why the pre-payment, or other review, was initiated.  It is imperative that both providers and their advisors understand the parameters for the pre-payment review.  For example, if the pre-payment review extends to 100% of a provider’s claims, it suggests a different reason for pre-payment review than if the review is specific to procedure or diagnosis code, percentage based, or date a service was performed.  Analyzing the communication from the UPIC also gives the provider and/or consultant information necessary to effectively communicate with UPIC or CMS representatives to potentially remove or lessen the burden of the edit. 

Chapter 4 of the PIM provides guidance to the UPICs regarding the activities and resulting actions the UPIC may take.  Whether a RAP Suppression, Prepayment Edit, Payment Suspension, Revocation or Deactivation these actions, as well as the precipitating investigation or case is guided by the PIM. 

Although we have focused primarily on Chapter 4 of the PIM, Program Integrity, the PIM consists of 15 different chapters.  Different departments or subcomponents within your business, depending on size, should be familiar with distinct sections of the PIM including, but not limited to, Chapter 8 that deals with statistical sampling and overpayments and/or Chapter 2, which covers data analytics.  Chapter 4, however, is the chapter that will primarily guide activities and actions taken by the UPIC that are most likely to affect most care businesses. Chapter 4, section 4.2 of the PIM sets out the reach of the UPIC and provides examples of actions that can be taken to prevent FWA in the Medicare program.  Some examples are payment suspension, payment denials, recoupment of overpayment, and referrals to law enforcement for civil and criminal actions. 

[1] Medicare & Medicaid Milestones, 1937 to 2015, July 2015 (cms.gov)

[2] Medicare Program Integrity Manual (cms.gov); Ch. 4; 4.3(D)(5)