IntegriGuard’s Medicare Program Integrity team worked behind the scenes for more than six years providing thousands of hours of audit, investigation, medical review, and data analysis services. IntegriGuard’s efforts provided meaningful information to the U.S. Attorney’s office, the OIG, the Federal Bureau of Investigation (FBI), and defense counsel that helped resolve a law enforcement investigation concerning an allegation that the Lester E. Cox Medical Center provided illegal kickbacks to a physicians’ group in exchange for patient referrals. The allegation was resolved through a July 2008 settlement under which Cox agreed to repay Medicare $60 million for payments that the medical center improperly claimed and received.   

“As a leading provider of fraud, waste, and abuse oversight to our nation’s federal healthcare systems, IntegriGuard is well positioned to satisfy the federal government’s ongoing requests for assistance in investigating allegations of fraud,” said Michele Carpenter, Vice President and Managing Director for IntegriGuard. “Our professionals recognize the importance of protecting the Medicare Trust Fund. They work hard to maintain the excellent working relationship established with law enforcement to support their efforts to minimize improper payments within our healthcare systems.”

Since 2002, IntegriGuard has served the Centers for Medicare & Medicaid Services (CMS) as a Program Safeguard Contractor. As such, IntegriGuard is recognized as having the expertise and capabilities to perform program integrity work to protect the Medicare Trust Fund under the Medicare Integrity Program. 

About IntegriGuard, LLC
IntegriGuard, LLC is an ISO-certified and URAC-accredited organization devoted to the prevention and detection of fraud, waste, and abuse in federal healthcare systems. IntegriGuard offers a suite of program integrity and payment accuracy solutions designed to detect fraud and improper payments. The company’s services include audit, compliance & education, data & analysis, eligibility verification, medical review, and investigation. In addition to being designed by the Centers for Medicare & Medicaid Services (CMS) as one of 12 Program Safeguard Contractors, and one of eight Medicare Proscription Drug Integrity Contractors, IntegriGuard is one of eight Qualified Independent Contractors for CMS.

IntegriGuard offers a suite of program integrity and payment accuracy solutions designed to detect fraud and improper payments. The company’s services include audit, compliance and education, data and analysis, eligibility verification, medical review, and investigation services. 

In addition to being designated by the Centers for Medicare & Medicaid Services (CMS) as one of 12 Program Safeguard Contractors and one of eight MEDIC contractors, IntegriGuard is one of eight Qualified Independent Contractors for CMS. 

“IntegriGuard significantly enhances HMS’s ability to serve the Medicare program, and immediately doubles our presence in the Federal market,” said Bill Lucia, CEO of HMS. “As a combined company, we are in an excellent position to respond to CMS’s increased focus on fraud, waste, and abuse identification, and extend IntegriGuard’s capabilities to other healthcare markets.” 

The purchase price was $5.25 million paid in cash. IntegriGuard projects revenues of approximately $12 million for the fiscal year ending March 31, 2010. HMS does not expect this transaction to have a material impact on its 2009 financial results. 

IntegriGuard was formerly a wholly-owned subsidiary of Lumetra, a California Nonprofit Mutual Benefit Corporation. 

About HMS (NASDAQ:HMSY)

HMS is the leader in coordination of benefits and program integrity services for government healthcare programs. The company’s clients include health and human services programs in more than 40 states, 100 Medicaid managed care plans, the Centers for Medicare & Medicaid Services (CMS), and Veterans Administration facilities. HMS helps ensure that healthcare claims are paid correctly and by the responsible party. As a result of the company’s services, government healthcare programs recover over $1 billion annually, and avoid billions of dollars more in erroneous payments.

The award of this contract aligns Medicare program integrity functions with the new Medicare Administrative Contractors as required by the Medicare Modernization Act of 2003. Implementation of the ZPIC will streamline program integrity functions, allowing a single entity to address healthcare fraud and abuse across all claim types.

Since 1997, specialty Medicare contractors known as Program Safeguard Contractors (PSC) were responsible for identifying and investigating fraud and abuse in the Medicare program. Within a state or region, there were several PSCs in operation. Each was responsible for program integrity activities related to specific claim types: Part A; Part B; Durable Medical Equipment Prosthetics and Orthotics (DMEPOS); and Home Health and Hospice. As many as three or more separate PSCs may have been operating in a state or region. Under the ZPIC contracts, program integrity activities related to these claim types will be the responsibility of a single contractor.

ZPIC Zone 7 will be responsible for combating and preventing fraud, waste, and abuse in Florida, Puerto Rico, and the U.S. Virgin Islands for the following types of claims: Parts A and B, DMEPOS, Home Health and Hospice, and Claims for dually-eligible Medicare and Medicaid recipients in Florida.

ZPIC Zone 7 will create a focused resource to detect and deter fraud in the Medicare program. In this capacity, it will develop administrative solutions, investigations, and cases for referral to law enforcement, as well as provide ongoing support to law enforcement as needed. Additional responsibilities include coordination of benefit integrity activities in the region and dissemination of relevant benefit integrity information to other Medicare contractors, healthcare providers, and Medicare recipients. To further optimize its operations, SGS will engage the services of several other subcontractors with specialized experience for various portions of the ZPIC work as well as engage a subcontractor to ensure operational standards are met.

ZPIC Zone 7 does not replace the Medicare program administration work that will be performed by the Medicare Administrative Contactors for Florida, Puerto Rico, and the U.S. Virgin Islands. Their responsibilities include processing and paying claims, performing customer service, reviewing the medical necessity of claims unrelated to suspected fraud and abuse, and auditing facilities for Medicare expenses and reimbursement.
Complaints or allegations of suspected fraud or abuse should be reported to the Medicare contractors who process the claims for initial screening. Allegations of suspected fraud and abuse are brought to the attention of the ZPIC only after the possibility of errors or misunderstandings are ruled out.

“We are very pleased to be entering into this long-term contract with HHS and with our partners,” said Grant Connell, Senior Vice President. “This is an exciting time for IE, as it marks our entry into a new government agency.”

The Information Experts team also includes Serco Inc., North America Provider Resources, Inc., and the National Academy for State Health Policy. “This contract will also allow us to develop and strengthen these partnerships,” he said. “We look forward to working with each of them, and hope to use this contract as a vehicle to expand and
develop new relationships within the healthcare community as well.”

As an Education MIC, the IE team will design and deliver customized classroom instruction, awareness campaigns, meetings and conferences to ensure that educational efforts emphasize the reduction of inappropriate or improper payments within the Medicaid Program and the quality of care issues affecting Medicaid beneficiaries.
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About IntegriGuard, LLC
IntegriGuard is dedicated to safeguarding the integrity and payment accuracy of benefit
programs and payment systems. Headquartered in Omaha, Nebraska, IntegriGuard
professionals offer audit, investigation, medical review, data & analysis, enrollment &
eligibility, and compliance expertise. In addition to being designated by CMS as one of
12 Program Safeguard Contractors, IntegriGuard is one of eight Medicare Drug Integrity
Contractors and one of eight Qualified Independent Contractors for CMS. For more
information about IntegriGuard, please visit www.integriguard.org.

About Information Experts
Information Experts is an award-winning strategic communications firm with a wealth of
conceptual and implementation experience serving public service agencies and
corporations. Headquartered in Reston, Virginia, Information Experts offers full-service
strategic consulting and messaging, content development in marketing and instructional
design, print and digital graphic design, and learning solutions across an array of media.
Information Experts, founded in 1995, is an 8(a) woman-owned business.