Department of Health and Human Services 
 
OFFICE OF 
 
  INSPECTOR GENERAL 
 
 
 
 
 
 
E N
N HANCEMENTS  EEDED IN 
 
T
  THE  RACKING AND 
 
C M
OLLECTION OF  EDICARE 
 
O I
VERPAYMENTS  DENTIFIED BY 
ZPIC PSC  
S AND  S 
 
Daniel R. Levinson 
Inspector General 
 
September 2017 
OEI-03-13-00630  Report in Brief 
 
September 2017 
OEI-03-13-00630 
 
Enhancements Needed in the Tracking and 
Why OIG Did This Review 
Collection of Medicare Overpayments Identified by 
This study continues the Office of 
ZPICs and PSCs  
Inspector Generals (OIGs) body of 
work examining overpayments made by 
What OIG Found 
Medicare.  Overpayments can be 
ZPICs and PSCs are key players in identifying Medicare overpayments, and 
identified by a number of key players, 
they referred $559 million in overpayments in FY 2014 to the MACs 
including providers and Medicare 
responsible for collecting overpayments.  The dollars referred varied widely 
contractors.  Recovering overpayments 
across ZPICs and PSCs, with just 2 of 10 contractors identifying half of the 
is critical to reducing improper  total overpayment dollars.  Based on ZPIC and PSC referrals, MACs sought to 
payments in the Medicare program.   collect $482 million but collected only $96 million, or 20 percent; 80 percent 
Past OIG work found that  remained uncollected as of September 30, 2015.  Although the collection 
overpayments referred by program  rate remains low, it is almost three times the 7-percent collection rate for 
safeguard contractors (PSCs) for  PSC-identified overpayments that OIG found in its 2010 review when only 
collection did not result in significant  PSCs were in existence.  MACs collection rates ranged from a low of 
recoveries to the Medicare program.   11 percent for home health and hospice overpayments to a high of 
As of 2012, the Centers for Medicare &  59 percent for Part A overpayments referred by ZPICs and PSCs.  We found 
Medicaid Services (CMS) had  that ZPICs, PSCs, and MACs continue to experience challenges in tracking 
referrals and collections of overpayments.  In particular, the number and 
transitioned the workload of most PSCs 
amount of overpayment referrals reported by ZPICs and PSCs often did not 
to six zone program integrity 
match what was reported by MACswith discrepancies totaling 
contractors (ZPICs).  In 2016, CMS 
$130 million.  Furthermore, ZPICs, PSCs, and MACs used different report 
began transitioning the remaining PSCs 
formats, which can lead to difficulty in tracking overpayment referrals.      
and ZPICs to unified program integrity 
 
contractors (UPICs).  OIGs work on  Collection Status of FY 2014 ZPIC-Referred Overpayments 
both PSCs and ZPICs identified 
deficiencies in how contractors were 
tracking and reporting overpayment 
data.  This study provides an update on 
the collection of ZPIC- and PSC-referred 
overpayments and identifies ongoing 
challenges that contractors face in 
tracking and collecting overpayments 
identified by ZPICs and PSCs. 
What OIG Recommends   
How OIG Did This Review 
We recommend that CMS identify and implement strategies to increase the 
Our study focused on overpayments  identification of overpayments as well as MACs collection of ZPIC- and 
that ZPICs and PSCs sent to Medicare  UPIC-referred overpayments.  To increase collections, CMS should 
administrative contractors (MACs) for  implement the surety bond requirement for home health providers and 
collection in fiscal year (FY) 2014.  We  consider surety bonds for other providers based on their level of risk.  
collected and analyzed overpayment  Furthermore, we recommend that CMS improve the ability of ZPICs, UPICs, 
referral and collection data from ZPICs,  and MACs to track overpayment referrals and collections by creating a 
PSCs, and MACs, and we surveyed them  standard report format for all contractors and requiring ZPICs, UPICs, and 
to understand their procedures for  MACs to use a unique identifier for each overpayment.  CMS concurred with 
tracking overpayment referrals and  all of our recommendations except the one regarding surety bonds. CMS did 
collections. We also asked them to 
not concur or non-concur with this recommendation; it stated that it is 
identify any barriers and challenges 
evaluating how to effectively implement the surety bond requirement while 
they face in performing these tasks.   
avoiding undue provider burden. 
 
Full report can be found at http://oig.hhs.gov/oei/reports/oei-03-13-00630.asp 
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................6 
Findings........................................................................................................9 
ZPICs and PSCs referred a total of $559 million in overpayments 
to the MACs in 2014; however, the dollar amounts referred varied 
widely across ZPICs and PSCs ........................................................9 
MACs did not collect 80 percent of the $482 million they  
sought to collect from ZPICs and PSCs overpayment referrals  
in 2014 ........................................................................................... 11 
ZPICs, PSCs, and MACs continue to experience challenges in 
tracking referrals and collections of overpayments  ......................13 
Conclusion and Recommendations ............................................................18 
Agency Comments and Office of Inspector General Response .....21 
Appendices .................................................................................................22 
A:  Matrix of ZPICs and PSCs and Associated MAC 
Jurisdictions ...................................................................................22 
B:  Amount of Overpayments Referred per $1 Million Paid  
to ZPICs and PSCs .........................................................................24 
C:  Comparison of ZPIC/PSC-Reported and MAC-Reported Data 
on FY 2014 ZPIC and PSC Overpayment Referrals to MACs ......25 
D:  Agency Comments ...................................................................27 
Acknowledgments......................................................................................30 
 
   
OBJECTIVES 
1.  To determine the number and amount of Medicare overpayments that 
zone program integrity contractors (ZPICs) and program safeguard 
contractors (PSCs) referred to Medicare administrative contractors 
(MACs) for collection in fiscal year (FY) 2014. 
2.  To determine the collection rate of Medicare overpayments sought by 
MACs based on referrals from ZPICs and PSCs in FY 2014.  
3.  To determine how ZPICs, PSCs, and MACs track Medicare 
overpayment referrals and collections. 
BACKGROUND 
This study continues the Office of Inspector Generals (OIGs) body of 
work examining overpayments made by Medicare to providers.  
Overpayments can be identified by a number of key players, including 
providers, Medicare contractors, and OIG.  OIG has identified ensuring 
program integrity in Medicare Parts A and B as a top management 
challenge for the Department of Health and Human Services.1  One of the 
key focus areas in addressing this challenge is reducing improper 
payments, which includes recovering overpayments.  With Medicare 
Parts A and B payments totaling $366 billion in 2016, identifying and 
recovering overpayments is critical to reducing improper payments in the 
Medicare program.  Past OIG work has found that overpayments referred 
for collection by PSCs did not result in significant recoveries to the 
Medicare program.  As of 2012, the Centers for Medicare & Medicaid 
Services (CMS) had transitioned the workload of most PSCs to six ZPICs.  
In 2016, CMS began transitioning the remaining PSCs and ZPICs to 
unified program integrity contractors (UPICs).2  OIG work on both PSCs 
and ZPICs has identified deficiencies in how Medicare contractors were 
tracking and reporting overpayment data.3  This study provides an update 
on the collection rate of ZPIC- and PSC-referred overpayments.  It also 
identifies ongoing challenges that contractors face in collecting and 
tracking overpayments. 
                        ____________________________________________________________ 
1 OIG, Top Management & Performance Challenges Facing HHS.  Accessed at 
https://oig.hhs.gov/reports-and-publications/top-challenges/2016/TMC_2016_508.pdf on 
February 7, 2017.  
2 UPICs will eventually perform all of the benefit integrity functions performed by ZPICs 
and PSCs.    
3 OIG, Collection Status of Medicare Overpayments Identified by Program Safeguard 
Contractors, OEI-03-08-00030, May 2010; OIG, Zone Program Integrity Contractors 
Data Issues Hinder Effective Oversight, OEI-03-09-00520, November 2011. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  1   
ZPICs and PSCs 
ZPICs and PSCs are the benefit integrity contractors that detect and deter 
fraud and abuse in Medicare Parts A and B, including the areas of home 
health and hospice and durable medical equipment, prosthetics, orthotics, 
and supplies (DME).   
As part of their role in detecting and deterring fraud and abuse, ZPICs and 
PSCs conduct investigations and refer cases of potential fraud to law 
enforcement; they also take administrative actions, such as referring 
overpayments to MACs.  In their investigative work, ZPICs and PSCs 
review Medicare payments and may identify overpayments.  When they 
identify overpayments, they are required to refer them to MACs for 
collection.      
PSCs were the first benefit integrity contractors that CMS created.  As part 
of Medicare contracting reform, CMS established ZPICs to replace PSCs.  
As of 2012, CMS had transitioned most PSCs to ZPICs.  In FY 2014, 
ZPICs were fully operational in six of seven geographical zones (see 
Exhibit 1).  One zone still had four PSCs conducting benefit integrity 
activities.    
Exhibit 1.  ZPIC and PSC Jurisdictions and Associated MACs in FY 20141 
 
 
 
ZPICs/PSCs    Associated MACs 
ZPIC 1    J6, JE, DME D 
ZPIC 2    J5, J6, J15, JF, JL, DME D 
ZPIC 3    J6, J8, J15, JM, DME B 
ZPIC 4    J15, JH, JM, DME C 
ZPIC 5    J15, JH, JJ, JM, DME C 
ZPIC 7    J6, JM, JN, DME C 
DME PSC    DME A 
EA BISC    JK, JL 
NE BISC    J6, J15, JK, JL 
PA BISC    JL 
 
Source: OIG summary of ZPIC, PSC, and MAC information from CMS, 2014. 
1 Not shown on this map are the U.S. territories of American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands.  The first three territories 
are in ZPIC 1s jurisdiction, the last one is in ZPIC 7s jurisdiction.   
2 DME PSC oversees DME in all States in the PSC coverage area.  Eastern Benefit Integrity Support Center (EA BISC) oversees Parts A and B in New Jersey and 
New York.  New England Benefit Integrity Support Center (NE BISC) oversees home health and hospice for all States in the PSC coverage area; Parts A and B in 
Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island, and Vermont; and Part B in the counties of 
Arlington and Fairfax, VA, and the city of Alexandria, VA.  Pennsylvania Benefit Integrity Support Center (PA BISC) oversees Parts A and B in Pennsylvania. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  2   
Task orders are awarded to ZPICs and PSCs, each of which specifies the 
requirements for the benefit integrity work that the contractor will 
perform.  One type of task order is the fee-for-service task order, which 
covers detecting, deterring, and preventing fraud, waste, and abuse within 
that ZPICs or PSCs jurisdiction.  CMS may award additional task orders 
to ZPICs and PSCs to perform other types of work, such as for specific 
projects or tasks.  ZPICs and PSCs may identify overpayments during the 
course of their work on any of these types of task orders.  
MACs 
CMS contracts with MACs to provide administrative services for 
Medicare Parts A and B, including processing and paying claims for 
Medicare services.  As part of their responsibilities, MACs collect 
overpayments, including those identified by ZPICs and PSCs.  MACs 
have responsibility for specific geographic jurisdictions (e.g., J5, J6, or JE) 
and specific claim types (i.e., Part A, Part B, home health and hospice, and 
DME).  ZPICs, PSCs, and MACs do not cover identical jurisdictions and 
claim types.  Therefore, a single MAC can receive overpayment referrals 
from multiple ZPICs and PSCs.  
Identification and Collection of Medicare Overpayments 
ZPICs and PSCs may identify overpayments during the course of their 
work and are required to refer them to MACs for collection.4  
Overpayments are payments made to providers in excess of amounts 
properly payable under Medicare statutes and regulations.5   
An overpayment referral that a ZPIC or PSC sends to a MAC for 
collection may include multiple claims for service, i.e., the amount in a 
single referral may represent overpayments made to a provider for 
multiple claims.  The ZPIC or PSC also may extrapolate overpayment 
amounts based on a sample of the providers claims.6  Although ZPICs and 
PSCs refer overpayment amounts to the MACs, the MACs make the final 
determinations of the dollar amounts to be collected from providers.7   
When a MAC makes an overpayment determination, it sends a demand 
letter to the provider that contains the dollar amount that it is seeking to 
collect, i.e., the initial demand amount.  This dollar amount may be the 
same as, more than, or less than the dollar amount that the ZPIC or PSC 
referred.  Additionally, because providers have the right to appeal 
                        ____________________________________________________________ 
4 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 4  4.9.6.3. 
5 In this report, provider refers to any type of Medicare provider or supplier, e.g., 
hospital, physician, or supplier of DME. 
6 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 8,  8.4.1.1. 
7 CMS, Medicare Financial Management Manual, Pub. No. 100-06, ch. 4,  10 and 
90.2, and Medicare Program Integrity Manual, Pub. No. 100-08 ch. 8  8.2. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  3   
overpayment determinations, the initial demand amount is not always the 
same as the final overpayment amount for which the MAC seeks 
collection. 
A provider can repay its overpayments immediately, or MACs may 
withhold the overpayment amount from a providers future Medicare 
payments as long as a provider continues billing Medicare.  If an 
overpayment remains unpaid after 120 days, MACs must refer the 
overpayment to the U.S. Department of the Treasury for collection.8  In the 
case of DME providers that have surety bonds, DME MACs must first 
request payment from the surety (up to the full amount of the surety bond) 
before referring the overpayment to the U.S. Department of the Treasury.9  
A surety bond is a bond issued by an entity (the surety) guaranteeing that a 
provider will fulfill an obligation or series of obligations to Medicare.  If 
the obligation is not met, the surety covers losses up to the bond amount.  
Exhibit 2 shows the key players in the overpayment process.   
 
Exhibit 2.  Key Players in the Identification and Collection of 
Overpayments Identified by ZPICs and PSCs in FY 2014 
Tracking Overpayment Referrals and Collections  
MACs, ZPICs, and PSCs all play a role in tracking and reporting 
overpayments.   
MAC responsibilities.  MACs are responsible for keeping track of 
collection information on overpayments they seek to recover.  MACs must 
submit monthly reports to CMS that identify overpayment collections 
deposited in the Medicare trust funds.  In addition, each MAC sends a 
monthly report to the ZPICs and PSCs that shows the amounts that the 
MAC collected on ZPIC and PSC overpayment referrals.  
ZPIC and PSC responsibilities.  ZPICs and PSCs are required to report 
monthly workload statistics to CMSs Analysis, Reporting, and Tracking 
System (CMS ARTS).  This includes reporting the number and amount of 
                        ____________________________________________________________ 
8 CMS, Medicare Financial Management Manual, Pub. No. 100-06, ch. 4,  10. 
9 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.21.7.1. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  4   
overpayment referrals sent to MACs as well as collection information on 
these referrals that is received from MACs.        
Joint Operating Agreements.  CMS requires MACs to enter into joint 
operating agreements with ZPICs/PSCs.10  A joint operating agreement 
delineates the roles and responsibilities of each entity and outlines how the 
MAC and ZPIC or PSC intend to interact to complete the tasks outlined in 
their task orders, including the processing of overpayments.  With regard 
to overpayments, the joint operating agreements outline each contractors 
responsibility to refer, collect, report, and track overpayments.  For 
example, a joint operating agreement may specify the method by which a 
ZPIC or PSC should send the overpayment referral to a MAC, or whether 
the MAC should send to the ZPIC or PSC a list of demand letters issued to 
providers.                  
Related OIG Work 
In 2010, OIG reported that overpayments referred by benefit integrity 
contractors (then PSCs) to claims processors (now referred to as MACs) 
for collection did not result in significant recoveries.11  Specifically, as of 
June 2008, claims processors collected only 7 percent, or $55 million, of 
the $835 million in overpayments that PSCs referred in 2007.  In a second 
report, OIG found that the amounts of overpayments that PSCs referred 
were not always related to the size of their respective oversight 
responsibilities.12  In addition, OIG reported that claims processors could 
not provide data for more than a quarter of the overpayment referrals, 
representing $64 million of the overpayment dollars.  In response to our 
report recommendations, CMS stated that it was adding reporting 
requirements that would improve the tracking of overpayments.  However, 
in 2011 OIG reported that ZPICs continued to experience issues with 
tracking the collection of overpayments.13   
In a 2016 report, OIG found continued variation in the amount of 
overpayments referred by benefit integrity contractors, and this variation 
could not be explained solely by differences in oversight responsibility, 
i.e., the dollar amount of paid claims for which a given ZPIC has 
oversight.14  OIG recommended that CMS examine the variation among 
                        ____________________________________________________________ 
10 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 4,  4.28. 
11 OIG, Collection Status of Medicare Overpayments Identified by Program Safeguard 
Contractors, OEI-03-08-00030, May 2010. 
12 OIG, Medicare Overpayments Identified by Program Safeguard Contractors, 
OEI-03-08-00031, May 2010. 
13 OIG, Zone Program Integrity Contractors Data Issues Hinder Effective Oversight, 
OEI-03-09-00520, November 2011. 
14 OIG, Medicare Benefit Integrity Contractors Activities in 2012 and 2013: A Data 
Compendium, OEI-03-13-00620, May 2016.  
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  5   
benefit integrity contractors andas appropriateidentify performance 
issues that needed to be addressed, best practices that could be shared, and 
workload definitions that needed to be clarified to ensure that contractors 
report data uniformly and in the way CMS intends.  CMS concurred with 
this recommendation and stated that it was developing the Unified Case 
Management system, which will collect contractors workload statistics in 
a unified manner.   
METHODOLOGY 
Scope 
Our study focused on overpayments that ZPICs and PSCs referred to 
MACs in FY 2014 (October 1, 2013, to September 30, 2014).  We also 
reviewed collection information on these referrals through September 30, 
2015.  Because we collected information through September 30, 2015, 
MACs had 12 to 24 months to collect the overpayments, depending on 
when in FY 2014 they were referred.  Although MACs collect 
overpayments identified through other means, in this report we use the 
term overpayments to mean only ZPIC- or PSC-referred overpayments.   
Data Collection 
We collected data from the 6 ZPICs and 4 PSCs that were operational as 
of December 2015, as well as from the 16 MACs that were operational 
during that time.  Although all ZPICs, PSCs, and MACs responded to our 
data request, ZPIC 3 was unable to provide data regarding overpayment 
referrals and collections for FY 2014, as there was a different contractor 
operating in that zone in FY 2014.       
Data from ZPICs and PSCs.  We requested data from the six ZPICs and 
four PSCs regarding their FY 2014 overpayment referrals.  These data 
included the following: the total number and amount of overpayments 
referred to MACs in FY 2014; the total initial amount demanded by the 
MAC; the total amount sought for collection (this is the final overpayment 
amount that the MAC requested from the provider); and the total amount 
collected by MACs as of September 30, 2015.  We asked the ZPICs and 
PSCs to report these data for each claim type (Part A; home health and 
hospice; Part B; and DME), task order, and associated MAC.  In addition, 
we asked each ZPIC and PSC to report its total oversight responsibility, 
i.e., total number and amount of claims paid in its jurisdiction in FY 2014.   
We also requested information about procedures regarding the 
transmission of overpayment data between ZPICs/PSCs and MACs as 
well as barriers and challenges that ZPICs and PSCs face when sending 
overpayment information to MACs and receiving overpayment 
information from them.    
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  6   
Finally, we requested copies of all written policies and procedures, 
including joint operating agreements, and examples of overpayment 
referrals that were sent to MACs for September 2014 and September 2015, 
and copies of the monthly overpayment collection reports sent to ZPICs 
and PSCs by the MACs for September 2014 and September 2015. 
Data from MACs.  From the 16 MACs, we requested data regarding the 
overpayments referred by ZPICs and PSCs in FY 2014.  These data 
included the following: the total number and amount of overpayments 
referred by ZPICs/PSCs in FY 2014; the total number of overpayments for 
which collection had begun; the total initial demand amount; total amount 
sought for collection; the total principal amount collected; the total interest 
collected; and the total amount (principal plus interest) collected as of 
September 30, 2015.  We asked each MAC to report these data for each 
ZPIC and PSC and claim type (Part A; home health and hospice; Part B; 
and DME).   
We also asked MACs for information about their procedures for receiving 
overpayment referrals from ZPICs and PSCs, tracking overpayments, 
sending overpayment collection reports to ZPICs and PSCs, and the 
barriers and challenges they face in performing these tasks and collecting 
overpayments. 
Data from CMS.  We requested information on how much CMS paid to 
each ZPIC and PSC in FY 2014.   
Data Analysis 
Overpayment referrals.  We used the overpayment referral data that we 
received from the ZPICs and PSCs to calculate the total number and 
amount of overpayments that ZPICs referred to the MACs in FY 2014.  
We summarized these data by ZPIC and PSC and by claim type.  Because 
the current ZPIC 3 could not provide overpayment referral data, for our 
calculations we used the referral data that the MACs associated with 
ZPIC 3 had reported to us.     
To make meaningful comparisons across ZPICs and PSCs, we determined 
the amount of overpayments each ZPIC and PSC referred for its fee-for-
service task order, then calculated the amount referred per $1 million in 
oversight responsibility, i.e., the dollar amount of paid claims for which a 
given ZPIC has oversight.  We also determined the amount of 
overpayments each ZPIC and PSC referred for all task orders, then 
calculated the amount referred per $1 million paid to the contractor. 
We compared the ZPIC- and PSC-reported referral data to the 
MAC-reported referral data to identify differences.  Because ZPIC 3 could 
not report referral data, we excluded ZPIC 3 from this comparison.   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  7   
Overpayment collection.  We used the MAC-reported overpayment 
collection data to calculate the total amount of overpayments collected and 
each MACs collection rate.  We calculated collection rates as a 
percentage, using the total dollar amount collected divided by the dollar 
amount of the final overpayment sought for collection.  We summarized 
these data by MAC and claim type.   
Review of Procedures.  We reviewed and summarized ZPIC, PSC, and 
MAC responses to our questions regarding their policies and procedures; 
joint operating agreements; and barriers and challenges to collecting and 
tracking overpayments.  We reviewed and summarized supporting 
documentation that we received from ZPICs and PSCs to identify the types 
of information contained in ZPIC and PSC referral reports and MAC 
monthly collection reports.  We also reviewed and summarized information 
contained in the joint operating agreements to determine how ZPICs/PSCs 
and MACs agreed to report and track overpayment information.  Although 
there are 35 ZPIC/PSC and MAC combinations, some of the joint operating 
agreements covered multiple MACs or ZPICs/PSCs; for example, ZPIC 1 
has a single joint operating agreement that covers all three of its associated 
MACs.  Therefore, we reviewed 30 distinct joint operating agreements.   
Limitations 
We did not independently verify the information reported by the ZPICs, 
PSCs, and MACs.  However, we reviewed the data for consistency and 
possible data-entry errors and followed up with contractors when we 
identified potential errors or inconsistencies. 
At the time of our data collection, MACs had 12 to 24 months to collect 
FY 2014 overpayments.  However, it is possible that CMS could still 
collect on certain overpayments if they were undergoing multiple levels of 
appeal or were placed on an extended repayment plan.  
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency.   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  8   
FINDINGS 
ZPICs and PSCs referred a total of $559 million in 
overpayments to the MACs in 2014; however, the 
dollar amounts referred varied widely across ZPICs 
and PSCs 
In FY 2014, ZPICs and PSCs referred 4,058 overpayments, totaling 
$559 million, to MACs for collection.  Across the ZPICs and PSCs, referral 
amounts in FY 2014 ranged from $3.5 million to $159 million.  Referrals 
from two ZPICsZPIC 5 and ZPIC 7accounted for half of the total 
overpayment dollars referred.  Combined, these two ZPICs referred a total 
of $283 million in overpayments to the MACs.  Exhibit 3 shows the 
distribution of overpayments that ZPICs and PSCs referred in FY 2014, 
ranked by each ZPICs and PSCs percentage of the total amount referred.  
 
Exhibit 3.  Distribution of Overpayment Referrals and 
  Dollars by ZPIC and PSC in FY 2014 
  Percentage of Total 
ZPIC/PSC  Amount Referred 
Amount Referred 
 
ZPIC 5  $159,256,463   28% 
  ZPIC 7  $123,249,353   22% 
ZPIC 31  $89,203,327   16% 
 
ZPIC 4  $80,313,745   14% 
ZPIC 2  $39,526,105   7% 
 
EA BISC  $31,246,510   6% 
  ZPIC 1  $17,581,573   3% 
PA BISC  $11,512,991   2% 
 
NE BISC  $3,525,202   1% 
  DME PSC  $3,522,088   1% 
   Total  $558,937,3582  100% 
 
Source: OIG analysis of ZPIC and PSC data for overpayments referred in FY 2014.   
 
1 Because ZPIC 3 was unable to provide overpayment referral data for FY 2014, we used 
the overpayment referral data reported by its associated MACs to calculate the amount 
  referred. 
2 The amounts referred do not add up to the total because of rounding. 
 
There was substantial variation across ZPICs and PSCs in the amount of 
overpayments they referred, even after adjusting for differences in 
oversight responsibility, i.e., the dollar amount of paid claims for which a 
given ZPIC has oversight.  ZPICs and PSCs respective oversight 
responsibilities in FY 2014 ranged from $1.4 billion to $63.9 billion.  
Under their fee-for-service task orders, ZPICs and PSCs referred between 
$77 (NE BISC) and $4,204 (ZPIC 7) per $1 million in oversight 
responsibility.  Exhibit 4 shows the amount of overpayments referred per 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  9   
$1 million in paid claims for each ZPIC and PSC.  There also was 
substantial variation in the amount of overpayments ZPICs and PSCs 
referred for all task orders, even after adjusting for differences in the 
amount that ZPICs and PSCs were paid to perform their tasks.  
Appendix B presents the results of this analysis.   
Exhibit 4.  Amount of Overpayments Referred for Fee-for-Service Task 
Order per $1 Million in ZPIC and PSC Oversight Responsibility  
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
1 
NE BISC ZPIC 1 ZPIC 2 ZPIC 4 PA BISC EA BISC ZPIC 3 ZPIC 5 DME ZPIC 7
PSC
Source: OIG analysis of ZPIC and PSC data for overpayments referred in FY 2014. 
1 Because ZPIC 3 was unable to provide overpayment referral data for FY 2014, we used the overpayment 
referral data reported by its associated MACs to calculate the amount referred. 
 
The highest number of overpayment referrals was for Part B 
and DME, but home health and hospice referrals accounted for 
the largest overpayment amount 
There was a substantial difference in the total number and amount of 
overpayments referred based on claim type.  As shown in Exhibit 5, Part B 
and DME claims represented the majority of overpayments referred, 
60 percent and 26 percent, respectively.  However, the largest 
overpayment referral dollars were for home health and hospice.  Of the 
$559 million ZPICs and PSCs referred to MACs, home health and hospice 
overpayments constituted $242 million, or 43 percent, of that total 
amount. 
   
   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  10   
Exhibit 5.  Number and Amount of Overpayments Referred by ZPICs and 
PSCs by Claim Type (FY 2014)  
    Percentage    Percentage of 
  Number  of Total  Amount  Total Amount 
Claim Type  Referred  Referrals  Referred  Referred 
Part A  280  7%  $29,518,176  5% 
DME  1,038  26%  $64,370,669  12% 
Part B  2,445  60%  $223,290,932  40% 
Home Health 
295  7%  $241,757,581  43% 
and Hospice 
   Total  4,058  100%  $558,937,358  100% 
Source: OIG analysis of ZPIC and PSC data for overpayments referred in FY 2014.   
 
MACs did not collect 80 percent of the $482 million they 
sought to collect from ZPICs and PSCs overpayment 
referrals in 2014 
Of the overpayments referred by ZPICs and PSCs in FY 2014, MACs 
sought to collect $482 million from providers.15  As of September 2015, 
MACs had collected $96 million, or 20 percent, of the amount they sought 
to collect from providers as a result of these overpayment referrals.  While 
this is an improvement from the 7-percent collection rate that OIG 
reported in 2010,16 MACs did not collect 80 percent of overpayment 
dollars sought for collection based on ZPIC and PSC referrals from 
FY 2014.  
As shown in Exhibit 6, MACs collection rates for overpayments referred by 
ZPICs and PSCs ranged from less than 1 percent to 81 percent.  The amount 
sought for collection by MACs ranged from $2 million to $134 million, and 
the amount collected by MACs ranged from $56,533 to $19.3 million.  The 
highest collection rate was for overpayments referred to MAC DME A.  This 
MAC collected 81 percent of the dollars sought for collection.   
  
 
                        ____________________________________________________________ 
15 Because MACs make the final determination of the overpayment amount, the amount 
that a MAC seeks to collect from a provider can differ from the amount that a ZPIC or a 
PSC initially refers to the MAC.  
16 OIG, Collection Status of Medicare Overpayments Identified by Program Safeguard 
Contractors, OEI-03-08-00030, May 2010. The collection rate provided in this report 
was based on the amount of overpayments that PSCs referred to claims processors (now 
referred to as MACs) in 2007 and that claims processors had collected as of June 2008.     
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  11   
Exhibit 6.  MAC Collection Rates for FY 2014 ZPIC- and PSC-Referred 
Overpayments  
  Total Amount  Total Amount   
MAC  Sought for Collection  Collected  Collection Rate 
DME B  $24,769,170    $56,533  < 1% 
J15  $20,066,952  $1,559,820  8% 
J6  $39,155,699  $4,360,747  11% 
JE  $1,951,916  $223,961  11% 
JK  $40,513,062  $4,834,557  12% 
JM  $134,192,729  $19,257,589  14% 
JH  $84,880,694  $14,220,124  17% 
J8  $10,246,196  $2,714,224  26% 
JJ  $21,663,257  $5,938,983  27% 
DME C  $18,053,038  $6,061,003  34% 
JF  $15,674,260  $6,082,960  39% 
JL  $12,932,825  $5,107,016  39% 
DME D  $18,299,710  $7,078,323  39% 
JN  $26,308,240  $10,592,425  40% 
J5  $10,363,724  $5,355,563  52% 
DME A  $3,167,527  $2,559,222  81% 
   Total  $482,238,999  $96,003,0491  20% 
Source: OIG analysis of MAC data for overpayments referred by ZPICs and PSCs in FY 2014 and collected 
by MACs as of September 30, 2015.   
 1 The amounts collected do not add up to the total because of rounding.   
 
 
Fifty-nine percent of Part A overpayments sought were 
collected, but the collection rate for other claim types ranged 
from 11 to 25 percent 
As shown in Exhibit 7, the collection rate of overpayments for Part A 
serviceswhich are mainly delivered by institutional providers such as 
inpatient hospitalswas 59 percent, almost three times the collection rate 
for all overpayments sought.  Collection rates for the other claim types 
were 25 percent or lower.  The lowest collection rate was for home health 
and hospice overpaymentsonly 11 percent of overpayment dollars 
sought were collected.  However, home health and hospice overpayments 
accounted for the second largest percentage of dollars that MACs sought 
for collection.   
 
 
 
 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  12   
 
Exhibit 7.  Overpayment Collection Rates by Claim Type  
 
 
  Amount Sought for      
 
Claim Type  Collection  Amount Collected  Collection Rate 
 
  Home Health 
$170,353,725  $19,471,526  11% 
  and Hospice 
  Part B  $217,270,107  $42,807,719  20% 
 
DME  $64,289,444  $15,755,081  25% 
 
Part A  $30,325,724  $17,968,723  59% 
 
     Total  $482,238,999  $96,003,049  20% 
 
Source: OIG analysis of MAC data for overpayments referred by ZPICs and PSCs in FY 2014 and collected by 
  MACs as of September 30, 2015. 
 
MACs reported challenges with collecting overpayments from 
providers referred by ZPICs and PSCs 
When asked about barriers and challenges to collecting overpayments, 
many MACs reported that collections can be a challenge if a provider has 
filed for bankruptcy or is no longer in business.  Some MACs also raised 
the issue of providers being revoked from the Medicare program or on 
payment suspension, which can make collecting overpayments from these 
providers challenging.  Because a primary goal of the ZPICs and PSCs is 
to identify cases of suspected fraud, waste, or abuse, the providers they are 
identifyingand subsequently referring to the MACs for overpayment 
collectionare potentially problematic providers.  Therefore, it is likely 
that some of these providers may no longer be billing Medicare and may 
be revoked or excluded from the Medicare program as a result of their 
actions.  Once a provider is no longer billing Medicare, it can be difficult 
for MACs to recover overpayments because they no longer have the 
ability to withhold or suspend future payments to these providers as a way 
to recoup these overpayments.   
ZPICs, PSCs, and MACs continue to experience 
challenges in tracking referrals and collections of 
overpayments 
Tracking referrals continues to present a challenge for the ZPICs, PSCs, 
and MACs.  In previous reports, OIG has highlighted problems with the 
tracking of overpayment referrals and collections.17  Specifically, OIG 
found that the claims processors (now referred to as MACs) could not 
                        ____________________________________________________________ 
17 OIG, Collection Status of Medicare Overpayments Identified by Program Safeguard 
Contractors, OEI-03-08-00030, May 2010; OIG, Zone Program Integrity Contractors 
Data Issues Hinder Effective Oversight, OEI-03-09-00520, November 2011. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  13   
provide data for 26 percent of the overpayments referred by the PSCs in 
2007.  In addition, OIG has previously reported issues with overpayment 
reporting that made it difficult for ZPICs to track collections on their 
overpayment referrals.  Some of these issues still persist among the current 
ZPICs, PSCs, and MACs.    
Overpayment referral data reported by ZPICs/PSCs and MACs 
often did not match 
The amount of overpayment referrals that was reported by ZPICs/PSCs 
and MACs often differed.  A comparison of the amount of overpayment 
referrals reported by each ZPIC/PSC to the amount reported by each of 
their associated MACs showed discrepancies that equaled $130 million.18  
As shown in Exhibit 8, almost half of the discrepancies between individual 
ZPICs/PSCs and MACs totaled more than $1 million, and four ZPIC/PSC 
and MAC combinations differed by more than $10 million.  The number 
of referrals reported by ZPICs/PSCs and MACs also differed.  Appendix C 
shows the differences in amount and number of referrals for each 
ZPIC/PSC and MAC combination. 
Exhibit 8.  Almost Half of the Discrepancies in Overpayment   
Referral Amounts Reported by Individual ZPICs/PSCs and MACs 
 
 
Differed by More Than $1 Million1
 
 
 
 
 
 
 
 
 
 
 
 
Source: OIG analysis of ZPIC, PSC, and MAC data for overpayments referred in FY 2014. 
1 ZPIC 3 did not report data for FY 2014; thus, comparisons could not be made between 
this ZPIC and its five associated MACs.  Therefore, our analysis included only 30 of the 35   
unique ZPIC/PSC and MAC combinations. 
                        ____________________________________________________________ 
18 Because ZPIC 3 was unable to provide overpayment referral data for FY 2014, we 
excluded ZPIC 3 data in this comparison.      
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  14   
When we followed up with MACs to determine the reason for the 
discrepancies in their overpayment data compared to the ZPIC and PSC 
data, MACs could not give definitive explanations for these differences.  
However, some MACs offered possible explanations for these 
discrepancies, such as differences in how MACs and ZPICs/PSCs count 
referrals.  For example, a MAC might count one ZPIC/PSC referral that 
contained multiple claims as multiple referrals.  Timing could also create 
discrepanciesfor example, if a ZPIC sent a referral in FY 2013, but the 
MAC recorded having received it in FY 2014.      
Variation in joint operating agreements may contribute to 
inconsistent and incomplete data sharing across ZPICs/PSCs 
and MACs  
Joint operating agreements are designed to promote cooperation between 
ZPICs/PSCs and MACs and establish the shared expectations among 
contractors.  CMS provides minimum guidelines as to what should be 
included in these agreements, but ZPICs/PSCs and MACs are responsible 
for developing the terms of their respective joint operating agreements.  
As a result, the level of specificity and detail varies across joint operating 
agreements. 
Collection reports are not standard across MACs.  Although all MACs 
submitted monthly collection reports to ZPICs and/or PSCs, not all joint 
operating agreements specified the types of information that should be 
included in these reports.  While 26 of the 30 joint operating agreements 
stated that MACs need to send a monthly report of overpayment 
collections, joint operating agreements varied with regard to the data 
elements that should be included.  For example, 13 joint operating 
agreements specified that MACs should report the monthly amounts 
collected.  However, six joint operating agreements specified that MACs 
should provide the cumulative collection amounts.  Exhibit 9 shows how 
many of the 30 joint operating agreements specified certain data elements 
to be included in the MACs monthly collection reports.   
Consequently, some ZPICs and PSCs identified the lack of a standard, 
consistent report format that MACs could use to send collection 
information as a challenge.  Because most of the ZPICs/PSCs are 
associated with multiple MAC jurisdictionsand therefore have multiple 
joint operating agreementsthere may be variation across the collection 
report that a ZPIC or PSC receives from each of its MACs.  This lack of a 
standard, consistent format can make it difficult for ZPICs and PSCs to 
easily track collections on their referred overpayments.  The ability of 
ZPICs and PSCs to track overpayment collections back to their original 
referrals is important to ensure that no overpayment is left unaccounted for 
and, therefore, uncollected.     
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  15   
Exhibit 9:  Monthly Collection Report Data Elements Specified   
in Joint Operating Agreements (N = 30) 
 
Overpayment amount collected 26
 
Monthly collection amount 13
 
Provider identification number 12
 
Demand amount 10
 
Demand letter date 8
Provider name 7  
Accounts receivable number 6  
Cumulative collection amount 6
 
Balance due 4
 
Source: OIG analysis of joint operating agreements between ZPICs/PSCs and MACs. 
  
Referral reports are not standard across ZPICs/PSCs.  Most of the joint 
operating agreements specified that a referral template be used by 
ZPICs/PSCs to send referral information to MACs.  However, because 
ZPICs/PSCs and MACs adhere to multiple joint operating agreements, the 
format of these templates varies.  The difference in formats may present 
difficulty for MACs when they receive referrals from multiple ZPICs or 
PSCs.  One MAC noted that the format of referral data differs among its 
ZPICs, which results in additional time and effort for the MAC to ensure 
that it receives all required information.  Some MACs also stated that the 
referral reports they receive from ZPICs/PSCs sometimes contain 
incorrect claim or beneficiary numbers or may lack certain information 
(such as dates) necessary to process overpayments.   
MACs expressed concerns about the manual efforts to track 
and report overpayment collections and the room for error 
involved in the process   
According to some MACs, the electronic Healthcare Integrated General 
Ledger Accounting System (HIGLAS) used by most MACs presents 
challenges for their tracking and reporting of collections associated with 
ZPIC/PSC referrals.19  When asked about the challenges and barriers of the 
HIGLAS system, some MACs reported that the HIGLAS-generated 
collections report gives cumulative overpayment collection amounts, not 
monthly amounts.  To produce the monthly report for ZPICs/PSCs, some 
MACs reported that they have to use the previous months report and 
                        ____________________________________________________________ 
19 HIGLAS is the financial accounting system that processes payments for Medicare 
claims.  Most MACs use the system to process and track overpayment collections and to 
help produce the monthly collection reports that they send to ZPICs and PSCs.  DME 
MACs do not use HIGLAS. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  16   
manually go through each transaction to calculate the total collected for 
the current month.  This manual effort requires additional time and 
increases the possibility of errors. 
 
 
   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  17   
CONCLUSION AND RECOMMENDATIONS  
This study is part of OIGs continued efforts to monitor CMSs progress in 
improving its identification, recovery, and tracking of overpayments.  In 
this study, we found substantial variation in the amount of overpayments 
that ZPICs and PSCs referred, even after adjusting for differences in 
oversight responsibility.  We also found thatwhile the collection rate for 
FY 2014 ZPIC- and PSC-referred overpayments has improved compared 
to the collection rate that OIG reported in 2010MACs did not collect 
80 percent of overpayment dollars they sought.  Furthermore, the tracking 
of these overpayments remains a challenge for most MACs, ZPICs, and 
PSCs, and the discrepancies between the ZPIC- and PSC-reported data 
and the MAC-reported data continue to raise questions regarding the 
effectiveness of the procedures currently in place to track overpayments.  
These discrepancies raise concerns that overpayment dollars may be left 
unaccounted for and uncollected.     
Given our findings, we recommend the following: 
To improve identification of overpayments, CMS should share best 
practices across ZPICs and UPICs and address challenges that 
hinder their identification of overpayments 
CMS should work with ZPICs and UPICs to identify best practices to improve 
the identification of overpayments.  We found that referrals from two ZPICs 
accounted for half of the total overpayment dollars referred.  We also found 
substantial variation in the amount of overpayments referred by ZPICs and PSCs 
even after adjusting for differences in oversight responsibility, i.e., the dollar 
amount of paid claims for which a given ZPIC has oversight.  CMS should 
examine overpayment identification methods used by ZPICs and the UPIC to 
determine if there are best practices that other ZPICs and UPICs can use.   
CMS should identify strategies to increase MACs collection of 
ZPIC- and UPIC-referred overpayments  
CMS should work with MACs to identify strategies to improve collection 
rates.  CMS should examine the collection methods of MACs with the 
highest collection rates and determine if there are best practices or 
strategies that other MACs can use.  CMS also should determine the 
barriers or challenges to collection that the MACs with the lowest 
collection rates are experiencing as a means to help identify strategies to 
improve these MACs collection rates.   
 
 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  18   
To improve overpayment tracking, CMS should work with ZPICs, 
UPICs, and MACs to create a standard report format both for 
overpayment referral reports and overpayment collection reports 
ZPICs, UPICs, and MACs should receive the same types of information on 
referrals and collections to allow them to easily review and track the 
information they receive.  In fact, 7 of the 10 ZPICs/PSCs specifically stated 
that they would prefer that MACs use a single standard format to report 
overpayment collections.  CMS should work with ZPICs, UPICs, and MACs to 
create a standard report format both for referral and collection reports.  This 
should include a standard report for referring overpayments that all ZPICs and 
UPICs use to send referral data to MACs, as well as a standard MAC collections 
report that all MACs use to send collections data to ZPICs and UPICs.  Finally, 
these contractors should incorporate any updated tracking procedures into their 
joint operating agreements.   
To improve overpayment tracking, CMS also should require ZPICs, 
UPICs, and MACs to use a unique identifier for each overpayment  
Because there were discrepancies between ZPIC- and PSC-reported 
overpayment data and MAC-reported overpayment data, CMS should require 
all ZPICs, UPICs, and MACs to use a unique identifier or tracking number for 
each overpayment.  A unique tracking number would allow ZPICs, UPICs, 
and MACs to more easily match collections data to the original referrals.   
To increase the likelihood of overpayments being recovered, CMS 
should implement the surety bond requirement for home health 
providers and consider the feasibility of implementing surety bonds 
for other providers based on their level of risk 
Overpayments referred by ZPICs and UPICs may involve providers who have 
been revoked or excluded from Medicare, which creates a challenge for 
MACs in their attempts to collect overpayments from these providers.  To 
ensure that at least some money owed is collected from these providers, CMS 
could implement a surety bond requirement for additional providers.  Federal 
law requires surety bonds specifically for DME and home health providers.  
CMS has implemented this requirement for DME providers but not for home 
health providers.  Therefore, we recommend that CMS implement the 
statutory requirement for home health providers to have surety bonds.  
Furthermore, in addition to requiring surety bonds for DME and home health 
providers, the Secretary of HHS has the authority to require surety bonds for 
other providers based on their level of risk.  CMS should consider 
implementing a surety bond requirement for other types of Medicare providers 
determined to be a high financial risk to the program.  Previous OIG reports 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  19   
found that the use of surety bonds could result in substantial recoveries for the 
Medicare program.20      
   
                        ____________________________________________________________ 
20 OIG, Surety Bonds Remain an Unused Tool to Protect Medicare from Home Health 
Overpayments, OEI-03-12-00070, September 2012; OIG, Surety Bonds Remain an 
Underutilized Tool to Protect Medicare From Supplier Overpayments, OEI-03-11-0350, 
March 2013.  
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  20   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In response to our draft report, CMS noted its commitment to robust 
program integrity efforts in Medicare and highlighted some program 
integrity initiatives underway.  CMS reported that it began transitioning 
the workload of ZPICs and PSCs to the UPICs.  CMS believes that the 
UPICs ability to look across the Medicare and Medicaid programs to 
pursue potential fraud, waste, and abuse; perform data analysis; and 
identify improper payments will enhance program integrity.  To assist in 
its oversight, CMS is developing the Unified Case Management system.  
The Unified Case Management system supports cooperation and 
communication among regional program integrity contractors to ensure a 
national approach to trends that occur across regions.   
CMS concurred with the first four of our five recommendations.  CMS 
agreed that it will work to: 
  identify and share best practices implemented by ZPICs and UPICs 
to enhance program integrity;  
  identify strategies to increase MACs collection of ZPIC-referred 
overpayments;  
  create a standard reporting format for both overpayment referral 
reports and overpayment collection reports; and  
  require a unique identifier for each overpayment. 
In response to our fifth recommendation to implement the surety bond 
requirement for home health providers and consider implementing surety 
bonds for additional providers based on risk, CMS did not state whether it 
concurred or not.  CMS reported that it is evaluating how to effectively 
implement a surety bond requirement while avoiding undue provider 
burden. 
OIG believes that implementation of these recommendationsincluding 
the surety bond requirementwill improve the identification, recovery, 
and tracking of overpayments, thereby reducing waste and saving taxpayer 
dollars.  We look forward to receiving updates from CMS on its progress 
toward these recommendations through the initiatives described.    
The full text of CMSs comments can be found in Appendix D. 
 
   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  21   
APPENDIX A 
Exhibit A-1.  Matrix of ZPICs/PSCs and Associated MAC Jurisdictions  
ZPIC/PSC  Associated MACs (Including Types of Claims Processed by MAC) 
ZPIC 1  
JENoridian Healthcare Solutions, LLC (Part A, Part B) 
Safeguard Services, LLC 
J6National Government Services, Inc. (Home Health and Hospice) 
DME DNoridian Healthcare Solutions, LLC (DME) 
ZPIC 2   J5Wisconsin Physicians Service Insurance Corporation  
AdvanceMed  (Part A, Part B) 
Corporation  JF Noridian Healthcare Solutions, LLC (Part A, Part B) 
JLNovitas Solutions, Inc. (Part A) 
J6National Government Services, Inc. (Home Health and Hospice) 
J15CGS Administrators, LLC (Home Health and Hospice) 
DME DNoridian Healthcare Solutions, LLC (DME) 
ZPIC 3  J6National Government Services, Inc.  (Part A, Part B, Home 
Health and Hospice) 
AdvanceMed 
Corporation  J8 Wisconsin Physicians Service Insurance Corporation   
(Part A, Part B) 
J15CGS Administrators, LLC  (Part A, Part B) 
JMPalmetto GBA, LLC (Home Health and Hospice) 
DME BNational Government Services, Inc. (DME) 
ZPIC 4   JHNovitas Solutions, Inc.  (Part A, Part B) 
Health Integrity  J15CGS Administrators, LLC (Home Health and Hospice) 
JMPalmetto GBA, LLC (Home Health and Hospice) 
DME CCGS Administrators, LLC (DME) 
ZPIC 5  JMPalmetto GBA, LLC (Part A, Part B, Home Health and Hospice) 
AdvanceMed  JJCahaba Government Benefit Administrators, LLC  
Corporation  (Part A, Part B) 
JHNovitas Solutions, Inc. (Part A, Part B) 
J15CGS Administrators, LLC (Home Health and Hospice) 
DME CCGS Administrators, LLC (DME) 
ZPIC 7   JNFirst Coast Service Options, Inc. (Part A, Part B) 
Safeguard Services  J6National Government Services, Inc. (Home Health and Hospice) 
JMPalmetto GBA, LLC (Home Health and Hospice) 
DME CCGS Administrators, LLC (DME) 
 
Continued on next page 
 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  22   
Exhibit A-1.  Matrix of ZPICs/PSCs and Associated MAC Jurisdictions 
(continued) 
ZPIC/PSC  Associated MACs (Including Types of Claims Processed by MAC) 
New England Benefit  J6National Government Services, Inc. (Home Health and Hospice) 
Integrity Support Center 
JKNational Government Services, Inc. (Part A, Part B,  Home Health 
PSC (NE BISC) 
and Hospice) 
Safeguard Services 
JLNovitas Solutions, Inc. (Part A, Part B) 
J15CGS Administrators, LLC ( Home Health and Hospice ) 
Eastern Benefit Integrity  JKNational Government Services, Inc. (Part A, Part B) 
Support Center PSC  
JLNovitas Solutions, Inc. (Part A, Part B) 
(EA BISC) 
Safeguard Services 
Pennsylvania Benefit  JLNovitas Solutions, Inc. (Part A, Part B) 
Integrity Support Center 
PSC (PA BISC) 
Safeguard Services 
DME PSC   DME ANHIC, Inc. (DME) 
TriCenturion 
 Source: OIG summary of ZPIC, PSC, and MAC information from CMS.  
 
 
 
   
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  23   
APPENDIX B 
Amount of Overpayments Referred per $1 Million Paid to ZPICs and PSCs 
There was substantial variation in the amount of overpayments that ZPICs and PSCs 
referred for all task orders even after adjusting for differences in the amount that ZPICs 
and PSCs were paid to perform their tasks.  ZPICs and PSCs were paid between 
$4.3 million and $32.7 million in FY 2014.  After adjusting for these differences, the 
amount of overpayments referred ranged from $469,451 (NE BISC) to almost $8 million 
(ZPIC 3) for every $1 million paid to ZPICs and PSCs.  Exhibit B-1 shows the amount of 
overpayments each ZPIC and PSC referred for all task orders per $1 million paid for their 
tasks.   
Exhibit B-1.  Amount of Overpayments Referred for All Task Orders per 
$1 Million Paid to ZPICs and PSCs 
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
NE BISC DME PSC ZONE 1 PA BISC ZONE 2 EA BISC ZONE 7 ZONE 4 ZONE 5 ZONE 31
Source: OIG analysis of ZPIC and PSC data for overpayments referred in FY 2014. 
1 Because ZPIC 3 was unable to report overpayment referral data for FY 2014, we used the overpayment referral data reported 
by its associated MACs to calculate the amount referred. 
    
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  24   
APPENDIX C 
Comparison of ZPIC/PSC-Reported and MAC-Reported Data on FY 2014 
ZPIC and PSC Overpayment Referrals to MACs 
 
Exhibit C-1.  Comparison of Referral Amounts Reported by ZPICs/PSCs and 
MACs for FY 20141 
  Associated  Amount Reported  Amount Reported   
ZPIC/PSC  MAC  by ZPIC/PSC  by MAC  Difference 
DME PSC  DME A  $3,522,088  $3,167,527  $354,561 
EA BISC PSC  JL  $850,295  $1,115,354  $265,059 
EA BISC PSC  JK  $30,396,215  $38,230,990  $7,834,775 
NE BISC PSC  J15  $108,468  $137,421  $28,953 
NE BISC PSC  JK  $2,134,212  $1,857,258  $276,954 
NE BISC PSC  JL  $1,282,523  $1,282,595  $73 
NE BISC PSC  J6  $0  $0  $0 
PA BISC PSC  JL  $11,512,991  $12,411,360  $898,368 
ZPIC 1  DME D  $4,154,370  $21,436,076  $17,281,706 
ZPIC 1  J6  $11,562,204  $32,850,298  $21,288,094 
ZPIC 1  JE  $1,864,999  $1,958,447  $93,448 
ZPIC 2  J6  $1,144,524  $334,504  $810,020 
ZPIC 2  J5  $13,401,445  $15,672,844  $2,271,399 
ZPIC 2  JF  $13,803,644  $16,046,836  $2,243,192 
ZPIC 2  J15  $5,019,906  $5,829,926  $810,020 
ZPIC 2  DME D  $5,978,874  $5,981,790  $2,915 
ZPIC 2  JL  $177,710  $177,710  $0 
ZPIC 4  JM  $27,354,494  $19,772,483  $7,582,010 
ZPIC 4  JH  $46,788,709  $50,992,555  $4,203,847 
ZPIC 4  DME C  $6,170,543  $6,385,115  $214,572 
ZPIC 4  J15  $0  $0  $0 
ZPIC 5  JJ  $25,197,294  $43,212,671  $18,015,377 
ZPIC 5  JM  $94,642,618  $62,231,299  $32,411,319 
ZPIC 5  DME C  $8,956,687  $6,569,398  $2,387,289 
ZPIC 5  JH  $15,585,476  $14,052,030  $1,533,445 
ZPIC 5  J15  $14,874,389  $14,885,206  $10,817 
ZPIC 7  J6  $622,519  $104,073  $518,446 
ZPIC 7  JM  $85,128,914  $78,102,303  $7,026,611 
ZPIC 7  DME C  $10,804,973  $11,357,341  $552,367 
ZPIC 7  JN  $26,692,947  $27,976,970  $1,284,023 
   Total  $469,734,0302  $494,132,3792  $130,199,6593 
Source: OIG analysis of ZPIC, PSC, and MAC referral data for overpayments referred by ZPICs and PSCs in FY 2014. 
1 The current ZPIC 3 contractor was not operational in FY 2014 and was unable to provide overpayment data for this timeframe.   
2 The referral amounts do not add up to the total because of rounding. 
3 This column shows the absolute difference between the referral amounts reported by the ZPICs/PSCs and the MACs; 
therefore, the total of $130 million is the sum of all the differences.  The total net difference between the ZPIC/PSC- and 
MAC-reported amounts was $24 million.    
 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  25   
Exhibit C-2.  Comparison of Referral Numbers Reported by ZPICs/PSCs and 
MACs for FY 20141 
  Associated  Number Reported  Number Reported   
ZPIC/PSC  MAC  by ZPIC/PSC  by MAC  Difference 
DME PSC  DME A  40  50  10 
EA BISC PSC  JL  86  102  16 
EA BISC PSC  JK  127  171  44 
NE BISC PSC  J15  1  2  1 
NE BISC PSC  JK  44  42  2 
NE BISC PSC  JL  23  25  2 
NE BISC PSC  J6  0  0  0 
PA BISC PSC  JL  98  115  17 
ZPIC 1  DME D  51  81  30 
ZPIC 1  J6  10  16  6 
ZPIC 1  JE  32  28  4 
ZPIC 2  J6  2  1  1 
ZPIC 2  J5  45  42  3 
ZPIC 2  JF  306  293  13 
ZPIC 2  J15  5  6  1 
ZPIC 2  DME D  43  42  1 
ZPIC 2  JL  1  1  0 
ZPIC 4  JM  40  51  11 
ZPIC 4  JH  82  94  12 
ZPIC 4  DME C  10  16  6 
ZPIC 4  J15  0  0  0 
ZPIC 5  JJ  660  619  41 
ZPIC 5  JM  786  656  130 
ZPIC 5  DME C  780  795  15 
ZPIC 5  JH  337  321  16 
ZPIC 5  J15  19  20  1 
ZPIC 7  J6  5  3  2 
ZPIC 7  JM  86  86  0 
ZPIC 7  DME C  107  40  67 
ZPIC 7  JN  133  77  56 
   Total  3,959  3,795  5082 
Source: OIG analysis of ZPIC, PSC, and MAC referral data for overpayments referred by ZPICs and PSCs in FY 2014. 
1 The current ZPIC 3 contractor was not operational in FY 2014 and was unable to provide overpayment data for this timeframe.  
2 This column shows the absolute difference between the referral numbers reported by the ZPICs/PSCs and the MACs; 
therefore, the total of 508 is the sum of all the differences.  The total net difference between the ZPIC/PSC- and MAC-reported 
numbers was 164.    
  
 
 
 
 
 
 
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APPENDIX D 
Agency Comments 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ACKNOWLEDGMENTS 
Maria Schepise Johnson served as the team leader for this study.  Others in the 
Office of Evaluation and Inspections who conducted the study include Jacqualine 
Reid.  Office of Evaluation and Inspections staff who provided support include 
Joe Chiarenzelli, Kevin Farber, Lucia Fort, Evan Godfrey, and Christine Moritz.  
This report was prepared under the direction of Linda Ragone, Regional Inspector 
General for Evaluation and Inspections in the Philadelphia regional office, and 
Tara Bernabe, Deputy Regional Inspector General.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain copies, 
contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. 
 
 Enhancements Needed in the Tracking and Collection of Medicare Overpayments (OEI-03-13-00630)  30   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS) programs, as  well  as the health  and welfare of individuals served by those programs.  
This statutory mission is carried  out through a nationwide network of audits, investigations,  
and inspections conducted by the following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of fraud and misconduct  related to HHS programs, operations, and individuals.  With  
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and  abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.