Unified Program Integrity Contractors - An Overview

February 11, 2021

Atlanta, GA - Unified Program Integrity Contractors (UPICs) have been around now since 2016. These audit contractors are tasked with identifying and preventing fraud, waste and abuse. Unfortunately, what we often see are auditors identifying claim errors and overpayments versus identifying actual fraudulent activity. The original UPIC contracts were valued between $76 and $129 million over a multi-year contract, which means in order to show CMS a return on its significant investment, the UPICs must identify a significant amount of cost-savings to the Medicare Program. This could be in the form of extrapolated overpayments, claim denials, or even more significant actions including payment suspensions.

As part of their process, UPICs will often contact your referral sources directly and request documentation. They may contact or visit your patients and interview them about the services they received and their interaction with you as the supplier. You will also likely see a request for documentation at the same time on a sample of claims to which you must respond.

A payment suspension is a tool that the UPICs are using more often these days. 42 CFR 405.371(a)(1) affords contractors the authority to implement a payment suspension when the contractor “…possesses reliable information that an overpayment exists or that payments to be made may not be correct.” Essentially, in a situation where they believe claims should be denied, they can utilize this tool to stop payments to suppliers for 180 days while the conduct an audit and calculate an overpayment. At the end of 180 days, if they are not done with their review, they can extend it for another 180 days. During the period of the payment suspension, suppliers can still submit claims, but they must be reviewed and if approved, the money is sent to an escrow account until such time as an overpayment is calculated. As you can imagine, the overpayments they identify are often large extrapolated overpayments. A payment suspension can easily destroy a business, or in the very least, have a big impact that is challenging to recover from. As such, the UPICs must get CMS approval before implementing, but when notifying you of the action, they only have to provide five examples of claims that they feel were paid in error.

That is not the only action a UPIC can take. They can also recommend revocations and prepare a referral to federal law enforcement agencies if they feel they have evidence that intentional fraud has been committed. In instances where law enforcement disagrees, or the UPIC might determine that there was no fraud, but claims were paid improperly, the UPIC will proceed with administrative action. This generally means you will receive an overpayment demand letter with the findings from your audit. Rarely have we seen a UPIC audit that has not at least resulted in an overpayment. Unfortunately, they are often sizable as the UPICs work to show CMS their value.

Once the UPIC identifies an overpayment, they send it to the DMAC, who will generate the overpayment demand letter to you. At that point, you can then take advantage of the administrative appeal process and limitation on recoupment provisions. Be sure to be familiar with these processes as you navigate through your response and plan of action moving forward.

Another issue that now often results from a UPIC audit is their instructions outlined in their audit findings letter, which puts suppliers on notice of their requirement to exercise “reasonable due diligence” in accordance with the 60-day overpayment rule. This rule states that once you have been notified of a potential overpayment, you are required to perform a six-year lookback audit on all claims submitted to Medicare. This can be accomplished either through a 100% review of all claims or statistically valid random sample of claims. These audits are onerous and challenging for suppliers and you should certainly seek the advice of an expert if faced with these circumstances. Further, the rule states that if you did not exercise reasonable due diligence, there are potential False Claims Act implications, so the risks are high.

A UPIC audit can wreak havoc on suppliers as the auditors have a wide variety of tools at their disposal that they can utilize when conducting an investigation. Suppliers are limited in what they can do to mitigate their impact, however, being proactive and having proper oversight of the claims you are submitting is integral in avoiding any long-term implications as a result of a UPIC audit.

The current UPICs are Qlarant Integrity Solutions (West and Southwest); CoventBridge (Midwest); Safeguard Services (Northeast and Southeast).

About The van Halem Group

The van Halem Group is committed to providing comprehensive, fair, confidential and sound counsel to health care providers and suppliers, attorneys, law enforcement, government agencies and their contractors regarding health care laws and regulations. Their team has more than 130 years of related experience and works collaboratively with key government stakeholders, such as Centers for Medicare and Medicaid Services (CMS), the Office of Inspector General (OIG) and other government contractors and agencies. This expertise provides clients the benefit of knowing proper communication channels and processes reducing the regulatory burden. Learn more at vanhalemgroup.com.

The van Halem Group is a division of the VGM Group, the nation’s largest and most comprehensive member service organization (MSO) for post-acute healthcare, including DME/HME, respiratory, sleep, wound care, complex rehab, women’s health, home modifications and orthotics and prosthetics providers.