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UPIC Report Card: The OIG's Evaluation of the UPICs Provides Insight Into the Future of Hospice Audits



The Department of Health and Human Services Office of the Inspector General (OIG) recently released a report detailing its evaluation of CMS’s primary fraud, abuse and waste investigators—the Unified Program Integrity Contractors (UPIC). In this episode, Husch Blackwell’s Meg Pekarske talks with Bryan Nowicki about the OIG’s report, what it reveals about UPIC activities, and what it means for the future of UPIC audits.

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00;00;05;01 - 00;01;57;28
Meg Pekarske
Hello and welcome to Hospice Insights, The Law and Beyond where we connect you to what matters in the ever changing world of hospice and palliative care. The UPIC report card, the OIG's evaluation of the UPICs provides insight into the future of hospice audit. This is a very stirring title Bryan about and what we're going to be talking about here which is you know a fancy way of saying the OIG came out with a very recent report about UPIC activity and how is it effective and what kinds of things are they doing. And it may be a place to start, Bryan, because I feel like we get this question all the time. Aren't aren't these contractors incentivized to deny claims? Right. And so they're thinking about the RACS, who there was sort of like a contingency. They get a percent of recovery, but most contractors don't you know, get that. However, there is reviews like this. And, you know what? What is it that you you pigs are actually doing? In terms of how robust is your program integrity activities? What money are you collecting? What kinds of enforcement are you taking? And things like that. So I think we always have to answer that question as, yeah, they're not paid on a contingency basis. However, you know, it's part of performance metrics. So and I think one caveat, Bryan, with this report is this is looking at 2019 data. So this is it feels like truly a lifetime ago this is pre-COVID. But what jumped out at you in this report.

00;01;58;03 - 00;03;11;23
Bryan Nowicki
We I agree the intervention of COVID kind of changed a lot about this and I suspect that a lot of what they observed back in 2019 it'd be a completely new set of observations now but on the point you just referenced we there are some subtle indications in this report about that compensation component. And like you said the suspicion of a lot of our clients is these are all contingent auditors. They're looking to get a cut and they're there for their inflating denial rates and the value of those denials. And that's really not a direct relation ship that exists for UPICs. But the report is clear that rather than looking at or each audit, is there a continuum fee or they judged based upon that audit? And do they get a cut of that, which is not the case? CMS does look for a return on their investment with each of these UPICs and so it's more of a broader based analysis. So if you go through this report, which will you kind of attach to? What do we call them? The comments, the liner notes.

00;03;11;28 - 00;03;13;18
Meg Pekarske
Episode notes?

00;03;13;18 - 00;03;14;29
Bryan Nowicki
Yes, the episode notes. Yes.

00;03;15;05 - 00;03;17;18
Meg Pekarske
I know you're still in this. You know.

00;03;17;18 - 00;03;54;03
Bryan Nowicki
Oh, yeah. The liner notes from albums and stuff. So yeah, this will be in the episode notes report, but you can see how they I think they they make an effort to say that we they're not compensated in a way that influences how they conduct these audits. And the one hand but on the other hand, they do say, but we do expect the return on our investment with these providers. And I think that's kind of the the tension that exists is it's just not as direct as the contingent arrangement that a lot of our our customers clients think exists.

00;03;54;22 - 00;04;52;01
Meg Pekarske
A thing that jumped out at me in this report was, I think the death knell that people are most fearful of is payment suspension and just surprised by the number of payment suspensions that were instituted. And they break it out by region. And I mean, this is still in this report talks about all that UPIC activity, right? This is just hospice. So, you know, we're sort of a drop in the bucket but I think it is a real enforcement remedy. And I was just surprised the number of times I know you have it at your fingertips, Bryan, and this is 2019 data. And my guess is this might shift if they, you know, do the same analysis you know, into the future. But but, but what was the data on them.

00;04;52;16 - 00;06;05;02
Bryan Nowicki
Yeah. So in 2019 there were about 400 payment suspensions issued across the country by these duplicates and those payments suspensions can be devastating in our view. It's a rather low bar that allows that a UPIC must must overcome to institute a payment suspension and then the payment suspensions can last for many many months. And so you're talking about your Medicare revenue being cut off in whole or in part for months at a time. I think there's a six month increment that can be extended to another six month increment. Just imagine no longer getting Medicare revenue for that amount of time and the fact that there were 400 of these back in 2019 and 400 different providers and I'm sure we know that a large number of those were hospices just being faced with that prospect and they're very difficult to get out from. You really cannot appeal the imposition of that. You can just try to persuade CMS and the auditor to speed up the process so that the suspension is lifted as soon as possible.

00;06;05;13 - 00;07;34;24
Meg Pekarske
Yeah, and we unfortunately have dealt with, you know, a lot of payment suspensions over over the years and so it is interesting that they're tracking that, paying attention to that. And as you said, I think can feel very much like a black box when it's happening to you because the bar, in terms of the information they need to give you is fairly limited. And so but I guess another thing that was interesting in this report was the discussion of Medicaid. And I would say before we had UPICs, right? We had Zep picks and we had mics which were Medicaid integrity contractors and they were very active. And we dealt with lots and lots of lots of mic audits. And then when UPICs happened and they created a unified contractor to do both Medicare and Medicaid, we saw a drop off in Medicaid audits and we've seen somewhat of a building back up. But that's again, probably post-COVID or you know, after 20, 20 once COVID had hit that we have more UPIC audits that have a Medicaid arm to them. And so but the report talked about there wasn't as much activity on the Medicaid side of things.

00;07;35;07 - 00;09;31;28
Bryan Nowicki
Right. And when when these new picks first formed, our initial observations was that they were having a tough time coordinating their efforts across Medicare and Medicaid. It seemed like some of these new picks had different teams allotted to each half of those audits when they did a combined audit, they took different approaches to document requests. So it seemed like a a rough start, which you can imagine when you have that significant of a change and then as you get into these audits. Yeah, I mean, what we work in every day, Meg, is the appeals of these go in two very different tracks. The Medicare goes through a federal appeal process, the Medicaid audit results, you appeal through the state. And so there's 50 different processes as to appeal that. And the Medicaid side, you need approvals from the state. So it's a much slower process. So I think in trying to combine those, they had some rough patches. But yes, we are seen especially since I guess earlier this year when COVID was no longer as much of an obstacle. We're seeing a definite uptick where they're kind of restarting that. They're getting better and more efficient at it, more coordinated. So I think the data from 2019 that shows this huge disparity where they had significantly more in recoveries or overpayment findings for Medicare even though Medicaid spending overall greatly exceeds Medicare spending. I would be surprised if that disparity is going to continue on. And certainly from our perspective, we're seeing a lot of Medicaid UPIC activity for it could range from any any kind of amounts five figures up or six figures and beyond. So I think this disparity that the OIG was concerned about and wanted CMS to explain when they did the report, it's probably in the process of being resolved.

00;09;31;28 - 00;11;13;22
Meg Pekarske
Yeah. Well, and it's interesting, hospice is somewhat of an anomaly in the sense that we are so heavily Medicare. So when we were talking about payment suspension. Right, it is can be the death now because 95 plus percent of our revenue comes from Medicare on the other hand, Medicaid ride, these are Medicaid audits that we're talking about being on the rise. You know, that's a real small sliver because and I think that my concern with Medicaid audits is they're more complicated. And especially when we talk about how hospice works and Medicaid revenues, because sometimes people get confused about Medicaid dollars we get for room and board, which is not a hospice service, nursing home room and board services. But somehow they try to audit those patients where Medicare paid for their hospice services, but they want to audit them because we got room and board services and we're not going to go into all the details about why that's incorrect and whatnot. But I think with the rise that we're seeing and probably sense of pressure to do more on the Medicaid side, I think we just had a team meeting the other day about dusting off remember all these complications with Medicaid audits. And we really need to stay on top of our game. And because I would say a lot of these contractors don't understand how Medicaid works in hospice. And so you know, we could do a whole podcast on Medicaid audits because they're complicated.

00;11;14;12 - 00;12;09;21
Bryan Nowicki
All right. And there really are three UPMC that hospices are dealing with. The report you'll see breaks it into five territories. But we're really talking about Claremont in the West and Southwest Safeguard in the northeast and southeast and then Cove and bridge in the Midwest. So they cover many states, each one of them. And we are we are finding with this kind of recent uptick with Medicaid that I think is difficult or complicated for them to understand that the rules in Florida may be different from they are in South Carolina with regard to the Medicaid practices and then kind of the more general complications like you had mentioned, Meg Dooley, eligible patients or, you know, what is Medicaid services versus Medicare hospice services and how do you separate those out appropriately? So another layer of complication.

00;12;10;06 - 00;13;23;20
Meg Pekarske
And so I think as with any OIG report and maybe this is served with the wrap up comment here is right, it's for everyone's eyes to see that there are disparities between how active certain you pics are. And so one of the recommendations was identify the reasons for the unexplained variation in program integrity activities across UPICs. Right. So if I'm a UPIC and I'm sort of finishing last in terms of dollars, collect it and activities. And now I have a very public report that says that, you know, I think all the more reason that we're going to continue to see audit activity and I think in our group in particular, again, we're all about data and so we keep a lot of data and we've had the most audit activity that we've ever had in since hospice audits began probably 12 years ago or 13 years ago. So that could continue to ratchet up more and more in light of this report.

00;13;24;04 - 00;14;40;02
Bryan Nowicki
Yeah, I don't see the most active UPICs throttling back and slowing down to allow the other ones to catch up. Everybody's going to kind of I suspect they do compete and their contracts come up periodically. They are competing for their territories and they want to show they got a good return on investment, which means being active in all these areas. So their, their competition is not to the benefit of providers, but I think it's happening and it's going to continue to happen. Interesting report. I think not a whole lot of surprises except, you know, my heart jumped a bit when I saw the number of payments, suspensions and because, you know, obviously we work on those. But it is pretty eye-popping the number of times that that's used because for someone like, you know, a hospice, as we said, uniquely situated that can be really impactful. But in the whole scheme of things, the likelihood that that's going to happen to you as a provider is still pretty small. But obviously it's something that they are tracking and in addition to total dollars collected. So so thanks for the insights, Bryan. Always fun to talk to you.

00;14;40;12 - 00;14;41;07
Bryan Nowicki
Yeah, thanks, Meg.

00;14;45;25 - 00;15;01;20
Meg Pekarske
Well, that's it for today's episode of Hospice Insights, The Law and Beyond. Thank you for joining the conversation. To subscribe to our podcast, visit our website at or sign up wherever you get your podcasts. Till next time, may the wind be at your back.