Home Health Agency Wins Payment Fight With CMS in ZPIC Audit

A home health agency will be paid for services following a court win that prevents the Centers for Medicare & Medicaid Services (CMS) from withholding and recouping payments—at least temporarily.

A judge granted the home health agency’s temporary restraining order motion in the case, Family Rehab., Inc. v. Azar, which will temporarily ensure payments are not withheld.

A Zone Program Integrity Contractor (ZPIC) alleged in 2016 that the agency, Family Rehab, was overpaid $7.9 million, which was later lowered to $7.6 million. ZPICs are contracted with CMS to conduct audits of home health claims when fraud is suspected.


The ZPIC audit looked at 43 claims in 2016 and determined 93% of them were overbilled, according to the lawsuit, “primarily a result of documentary deficiencies related to the initial home health certification.”

Family Rehab requested a redetermination of the case from its Medicare Administrative Contractor (MAC), but the MAC only reaffirmed the ZPIC’s findings.

Eventually, Family Rehab filed suit against the Secretary of Health and Human Services (HHS), as the provider was not receiving payments while the case was awaiting a long appeals process that was delayed as a result of backlog. A hearing, which is intended to be set within 90 days, was not forthcoming “not within 90 days, and not within 900 days,” the suit claimed.


The Northern District of Texas granted Family Rehab’s motion, which enjoins CMS from withholding, recouping, offsetting or failing to pay the company from any current Medicare receivables. Family Rehab showed it would have had to close it doors without Medicare payments, and lay off staff and lapse providing care to beneficiaries.

Written by Amy Baxter

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