Just before Thanksgiving in 2016, Rizaldy Villasenor got some unexpected news that would impact his home health care business and cause him to lay off employees and discharge many of the company’s patients. A Medicare subcontractor slapped the Chicago-based agency, MedPro Health Providers, LLC, with an audit and determined improper payments had been made.
That subcontractor, AdvanceMed, was an auditor known as a Zone Program Integrity Contractor (ZPIC). It alerted Villasenor, founder and CEO of MedPro, that his company would no longer receive Medicare reimbursements, and that the provider would have a chance to respond to the allegations of overpayments.
In a twist of fate, the agency had been recognized as a top workplace by The Chicago Tribune roughly a week before Villasenor was notified that Medicare would suspend its payments.
Months later, MedPro’s Medicare reimbursements are still suspended and Villasenor has been forced to lay off workers and discharge hundreds of patients.
Despite the blow, Villasenor isn’t backing down; the business has filed suit against Secretary of the Department of Health and Humans Services (HHS) Tom Price and AdvanceMed for not following Medicare’s procedures related to the audit. MedPro is going after $300,000 it says it is owed in payments.
In addition, the lawsuit could become a class action. The suit could have plenty of cheerleaders in the home health and general health care community. ZPICs are the most feared type of Medicare auditor, as their mandate specifically is to identify suspected fraud, and the federal government has given them sweeping powers to conduct investigations and refer those investigations for civil and/or criminal prosecution.
CMS declined to comment for this story, and AdvanceMed did not respond to requests from Home Health Care News.
A Lack of Due Process?
When MedPro was informed their Medicare payments would be suspended, the agency responded quickly, submitting a roughly 100-page rebuttal statement, highlighting patients that were pulled out as examples by AdvanceMed and including more supplemental documents from doctors. Overnighting all the documents cost roughly $450, Villasenor told Home Health Care News.
“They asked me to submit rebuttal statements, along with additional documentation to prove our case,” Villasenor said.
AdvanceMed’s response, which MedPro received roughly two weeks later in December, was a “general boilerplate” response, and Villasenor questioned whether the ZPIC had reviewed the documents at all, given the short turnaround and lack of specificity in the response. AdvanceMed cited “reliable information” that overpayments had been made to MedPro.
In a conference call in early January, officials told Villasenor they did not review his secondary documents, he told HHCN. In fact, officials said it was AdvanceMed’s policy not to review additional documents, contrary to Medicare procedures, the lawsuit says.
That response is important in the lawsuit, which claims AdvanceMed did not follow due process when conducting the audit by ignoring MedPro’s rebuttal to the allegations and documents. The response, MedPro alleges, must be specific to justify suspension of Medicare payments.
“The Secretary, through its ZPICs, has a plainly defined and nondiscretionary duty to properly and completely respond to MedPro’s rebuttal statement, including but not limited to review additional documentation…” the lawsuit reads. “The Secretary has failed to carry out that duty.”
The lawsuit seeks class action status, inviting other home health agencies that have been subject to unfair audit practices by ZPICs to join. Ten other home health agencies are considering joining the case, while MedPro’s lawyer estimates there could be as many as 40 others with similar experiences, Villasenor told HHCN. Some of these agencies have already closed up shop for good, he added.
Villasenor describes this as a David and Goliath situation, with the home health provider taking on Tom Price in his capacity as secretary of the Department of Health and Human Services, which is tasked with overseeing the Medicare program.
The audit and subsequent suspension of payments has forced MedPro to adjust, including by laying off two-thirds of his care staff, Villansenor said.
MedPro, which was founded in 2011, has grown rapidly over the past six years, totaling nearly 1,000 patients in 2016. Coming from a background with Dublin, Ohio-based health care products and services giant Cardinal Health, Villasenor sought to grow the business like any other corporation, before being hit with the devastating blow.
“We have an extensive referral base, we are popular,” he said. “We had a big marketing team, a marketing strategy. We are doing things the mainstream way that a business should be run in health care.”
Since the end of 2016, MedPro has discharged or transferred all its home health patients, but has kept the business running with managed care patients, which represented roughly 60% of the agency’s patient mix when the audit began.
“I’m not getting paid,” he said. “The good thing is that part of my revenue is managed care.”
With the business operating on a “skeleton staff,” Villasenor is pushing forward, and the case is an uphill battle against practices he considers unfair.
“The ZPIC companies are not liable for lawsuits,” he said. “That’s why they use Gestapo techniques, because they think they are immune to lawsuits. …What we have found out is that they are only not liable if they follow the due process in the guidelines. That’s why we have a case. Our lawsuit says they did not follow the process.”
At this point, Villasenor says, it’s “my word against theirs.”
The next court appearance is scheduled for April 19, according to court documents dated April 11, 2017.
“[With an audit], you feel a little scare or threatened,” Villasenor said. “Right now, it’s anger that I am feeling. We were once ranked the No. 1 workplace. The worst thing is letting the team go because of this. If I’m going to close the company, I say it won’t be this way.”
Written by Amy Baxter