Health Law News From Arnold & Porter
Health Law News From Arnold & Porter
August 08, 2012
2 min read

New initiatives from fraud-detecting government contractors create threats for physicians

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

You've successfully added to your alerts. You will receive an email when new content is published.

Click Here to Manage Email Alerts

We were unable to process your request. Please try again later. If you continue to have this issue please contact

Somewhere between the extreme of having your Medicare contractor ask you for records to confirm the medical necessity of services provided and being visited by the FBI and Office of the Inspector General as part of a criminal investigation is a relatively new initiative that is creating headaches for the physician community.

Government contractors known as Zone Program Integrity Contractors (ZPICs), whose charge is to identify potentially fraudulent and abusive activity by the provider community, have begun to show up unannounced at physician offices, demanding documents and seeking to interview practice employees.

Alan E. Reider


While ZPICs are granted authority under federal law to obtain information and perform reviews, from the reports received from practices that have been visited by a ZPIC, the tactics used by some of these contractors have been unprofessional at best, if not abusive and improper, often threatening suspension of Medicare payment for lack of cooperation.

Unfortunately, a lack of professionalism and courtesy is only a small part of the problem. We have found that some ZPICs fail to understand the underlying program rules and regulations that they are charged to monitor and may wrongly conclude that a physician is out of compliance.

In one case of which we are aware, a physician agreed to an extensive interview with ZPIC personnel. Shortly after the interview, the physician received a notice that she was disenrolled from the Medicare program, based on a violation of Medicare requirements. Upon closer analysis, it was determined that the ZPIC had completely misapplied the applicable rules; after a 3-month battle, the physician was reinstated.

During that period, the physician suffered significant financial loss because of her disenrolled status, aside from the legal fees incurred to correct the improper action by the ZPIC.

Problems related to the conduct of ZPICs have reached the attention of Congress. Recently, the House Energy and Commerce Subcommittee on Oversight and Investigations conducted a hearing about the activities of the ZPICs and other Medicare contactors.

During the hearing, serious questions were raised about the accuracy of the data used by these contractors, the lack of oversight provided by CMS, as well as concerns about the “Wild West” tactics of ZPICs.

With the continued concern about uncontrolled health care costs and increased pressure to pursue fraudulent and abusive conduct, ZPICs are likely to continue to operate and engage in aggressive activity. And while physicians must recognize that these government contractors have authority under the law to obtain information and to perform reviews, that authority does not give them the right to interrogate physicians and their staff or to engage in abusive practices and threaten sanctions if their demands are not met.

If a physician experiences improper or abusive behavior, the physician should file a complaint with the Centers for Medicare and Medicaid Services as well as with a local congressional representative. Hopefully, with congressional oversight, CMS will exercise sufficient control to assure that these contractors perform their duties in a responsible and professional manner. Most importantly, however, physicians should take seriously any inquiry by a ZPIC.

The charge of these contractors is to detect fraudulent and abusive conduct, and if improper conduct is detected, the consequences could be severe.

  • Alan E. Reider, JD,  can be reached at Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004-1206; 202-942-6496; email: