The following is based on a true story.

Warning: This is not a bedtime story! Content may induce sleeplessness or even nightmares.

The Initial UPIC Audit

A busy wound care practice receives a Unified Program Integrity Contractor (UPIC) medical record request covering a small number of patients with multiple dates of service. The practice responds, producing the requested records and supporting documentation.

A few months later, the decision arrives: 100% denial.

While certainly not the outcome the practice wanted, a 100% denial in an initial UPIC review is not that unusual. In this case, the total demand is less than $10,000. The owners are frustrated but not stunned.

The owner practitioners deliberate. They know 100% denial is common in the first round. They believe they could appeal at least some of the claims. Then comes operational reality. The practice has no internal team members with both the subject matter expertise and the bandwidth to prepare a strong appeal.

The owners consider the numbers.

Outside counsel and consulting support would likely cost several times the amount of the UPIC demand. Add the disruption of an administrative appeal, the possibility of an eventual Administrative Law Judge (ALJ) hearing, and the economics, and it appears obvious.  

Ultimately, a seemingly rational business decision is made: pay the demand, close the file, and get back to caring for patients.

So, the practice promptly repays the full amount.

Over and done. Onward and upward. Right?

For a While, It Appears That Way

A couple of years pass. There are no new UPIC audits. The practice grows. Patients are healing.  Reviews are strong. Employees are stable. There is not a cloud on the horizon.

Then, without warning, the state Attorney General discloses an ongoing investigation.

There is no suspected whistleblower. Staff turnover has been low. The team is cohesive. No serious patient complaints have surfaced that would explain the sudden scrutiny. Yet, somehow, the stakes are no longer measured in thousands of dollars.  They are measured in millions.

The Cost of the Second Decision

This time, the stakes are dramatically different. There is no practical choice but to engage experienced outside counsel and consultants.

Legal strategy is developed. Records are audited. Coding, documentation, and billing patterns are analyzed. The owners carve time away from their practice in repeated strategy discussions.

After many months of both work and negotiations, the matter is resolved through a settlement. The financial cost is substantial; so is the collateral damage: local media attention, patient questions, staff demoralization, increased turnover, and stalled growth.

Was the earlier UPIC decision the sole reason for the later investigation? That is not the lesson—and every matter is fact-specific. The more critical point is that the earlier 100% denial went unchallenged. The practice made its first decision primarily around the size of the immediate demand, not the potential significance of the finding in a larger compliance story.

What Can We Learn From This Story?

Was the practice wrong to pay the original UPIC demand rather than appeal?

Not necessarily.

At the time, the decision may have appeared to make perfect business sense. Spending several times the amount of a less-than-$10,000 demand to pursue an appeal can be difficult to justify—particularly when an organization is already stretched for time and resources.

But that is exactly why UPIC denials deserve a closer look.

The cost of a UPIC denial cannot always be measured by the amount of the immediate demand. A small denial may represent a much larger issue—or it may not. The challenge is knowing the difference.

That is why organizations should consider having an experienced professional evaluate the denial, the underlying documentation, and the potential implications before making a final decision.

Sometimes a $10,000 demand is not really a $10,00 decision.

The moral of the story is: If there is any possibility of overturning the denial, even at a D-Minus standard, appeal it.

Sometimes the most expensive appeal is the one you decide not to file.

How LW Consulting, Inc. Can Help

LW Consulting, Inc. (LWCI) can help organizations navigate the complexities of UPIC audits and denials by providing experienced, objective analysis of audit findings and supporting documentation.

Our team can help organizations evaluate the circumstances surrounding a denial, identify potential areas of vulnerability, assess opportunities for appeal, and develop an appropriate response strategy.

Most importantly, we can help organizations look beyond the immediate dollar amount and understand the bigger picture—so leadership can make an informed decision based on both the immediate situation and potential downstream consequences.

LW Consulting, Inc. (LWCI) offers a comprehensive range of services to assist your organization in maintaining compliance, identifying trends, providing education and training,  or conducting documentation and coding audits. For more information, contact LWCI to connect with one of our experts!