How Healthcare Providers Can Prepare for Medicare TPE Audits


The Centers for Medicare and Medicaid (CMS) has designed the Targeted Probe and Educate (TPE) program to assist providers and suppliers reduce claim denials and appeals by providing one-on-one help. The CMS resumed TPE audits in September 2021 after suspending the TPE program in the course of the earlier stages of the COVID-19 pandemic. For healthcare providers targeted in these audits, knowing what to anticipate—and find out how to prepare effectively—will be critical for avoiding unnecessary consequences. While TPE audits are usually not enforcement mechanisms as such, providers which are present in non-compliance in the course of the TPE audit process can face follow-up enforcement motion, and this will potentially result in recoupments, prepayment review, and other consequences. 

In consequence, Medicare-participating healthcare providers which are facing TPE audits have to handle their situations rigorously. Providers cannot assume that TPE audits are trivial or inconsequential. While they is likely to be for providers which have a powerful compliance record and the documentation to prove it, they will also be dangerous if not handled effectively. 

“Facing a Medicare TPE audit isn’t necessarily as straightforward because it could appear. While these audits ostensibly deal with education and correction, issues uncovered during TPE audits have the potential to steer to CMS enforcement motion if targeted providers don’t address them effectively.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

So, what do healthcare providers have to learn about Medicare TPE audits in 2022? Listed below are a few of the highlights: 

1. The Focus of a Medicare TPE Audit is “Improvement” 

In line with CMS, the goal of a TPE audit is to assist the targeted provider “quickly improve.” This refers specifically to improving the targeted provider’s billing compliance rate. Billing fraud costs CMS tens of billions of dollars annually; and, while some cases of billing fraud are intentional, many involve inadvertent mistakes that result from failure to adopt an efficient Medicare billing compliance program. 

2. Medicare Administrative Contractors (MACs) Conduct TPE Audits for CMS

As CMS further explains, during a TPE audit, “Medicare Administrative Contractors (MACs) work with you, in person, to discover errors and allow you to correct them. Many common errors are easy . . . and are easily corrected.” Medicare Administrative Contractors are private firms that work with CMS to uncover billing violations. They’ve access to providers’ billings submitted to Medicare, they usually have the authority to acquire and review providers’ billing records on CMS’s behalf. 

TPE audits are intended to assist providers address easily correctable errors that are usually not indicative of intentional Medicare fraud. Education is a key aspect of the method—in contrast to non-TPE Medicare Administrative Contractor (MAC) audits during which providers will often struggle to know why they’re being penalized. When conducting TPE audits, MACs are speculated to work collaboratively with providers to either (i) confirm that the providers’ billing practices are compliant, or (ii) discover and implement specific vital improvements. 

3. MACs Select Providers for TPE Audits Based On Their Billing Data

Medicare Administrative Contractors don’t select providers for TPE audits at random. As an alternative, MACs analyze providers’ billing data and select targets for TPE audits based on a number of of the next aspects: 

On condition that that is the case, while it is feasible that a TPE audit could lead to a finding of compliance, MACs generally go into TPE audits with the expectation that they are going to discover flaws within the provider’s Medicare billing compliance practices and procedures. This is essential to be mindful—although TPE audits are speculated to be non-adversarial and academic in nature, providers will still often find themselves struggling to persuade MACs that no corrective motion is warranted. 

4. Medicare TPE Audits are Subject to Strict Rules

Unlike other kinds of Medicare compliance audits, TPE audits are subject to strict rules. For instance, the Medicare Administrative Contractor (MAC) may only select 20 to 40 claims for review, and it might only request that the targeted provider supply supporting medical records for those specific claims. If the MAC determines that these 20 to 40 claims are compliant, the method ends. Nevertheless, if the MAC determines that any of the topic claims violate the Medicare billing rules, the method will proceed. 

5. Issues Uncovered During a TPE Audit Will Lead To an “Education Session”  

Once a MAC determines that a number of of a targeted provider’s subject claims are non-compliant, the MAC and the provider must schedule an “education session.” In line with CMS, “experience has shown that this education process is well received by providers/suppliers and helps to forestall future errors.” Whether or not this is really the case is up for debate. In any event, MACs and providers must each take part in the education session in good faith; and, following the education session, the provider have to be given a minimum of 45 days to deal with any compliance issues before facing the second round of review of one other 20 to 40 claims. 

6. Providers Get Three Possibilities to Pass a TPE Audit

Providers can undergo this process as much as 3 times. If a provider passes the audit at any stage, then the provider is entitled to a one-year reprieve from facing one other TPE audit. But, there are exceptions. During this one 12 months, the provider can still potentially face a TPE audit targeting a special area of billing compliance, and CMS states that “MACs may conduct a further review if significant changes in provider billing are detected.” 

With this in mind, when facing Medicare TPE audits, healthcare providers should take the time to conduct a comprehensive review of their billing processes and procedures. Even when a provider addresses the problem (or issues) uncovered during a TPE audit, this may not necessarily be enough to guard the provider from further scrutiny—or penalties. Medicare-participating providers have to take a comprehensive approach to billing compliance, and they can’t afford to depart the final result of future audits (or investigations) to likelihood. 

7. Providers that Fail TPE Audits Will Be Referred to CMS

If a provider fails to pass a TPE audit after three rounds of claim reviews, education sessions, and process improvements, the MAC will refer the provider to CMS. Because the agency explains, “any problems that fail to enhance after 3 rounds of education sessions will probably be referred to CMS for next steps. These may include one hundred pc prepay review, extrapolation, referral to a Recovery Auditor, or other motion.” Depending on the problems identified in the course of the TPE audit, this “other motion” could range from an in-depth billing compliance audit to a criminal Medicare billing fraud investigation. 

8. Quite a few Billing Issues Can Result in Medicare TPE Audit Failures 

Generally speaking, Medicare TPE audits deal with a particular billing issue, similar to missing physician signatures or insufficient documentation of medical necessity. Nevertheless, TPE audits can goal every kind of Medicare billing violations; and, if a MAC identifies a billing issue during a TPE audit, it actually isn’t going to let the problem go ignored. In consequence, even when a Notice of Review indicates that a TPE audit will deal with a particular billing issue, it isn’t protected to assume that that is the one issue that has the potential to steer to problems. Some additional examples of common Medicare billing violations include: 

  • Missing or incomplete certification or recertification documents 

  • Billing for items or services Medicare doesn’t cover

  • Billing for items or services not actually provided to patients 

  • Upcoding, unbundling, clustering, and other coding violations 

  • Failure to make use of coding modifiers 

9. Failing a TPE Audit Can Have Significant Consequences 

As discussed above, while Medicare TPE audits are usually not necessarily intended as enforcement tools, providers that fail their TPE audits can face significant consequences. Targeted Probe and Education audits can result in comprehensive Medicare billing compliance audits, they usually can even result in federal billing fraud investigations. The Centers for Medicare and Medicaid Services even have the choice to directly impose certain administrative penalties, similar to prepayment review, without additional inquiry. 

If a comprehensive Medicare billing compliance audit or a billing fraud investigation results in civil allegations of Medicare fraud, the targeted provider can face recoupments, fines, Medicare exclusion, lack of Medicare billing privileges, and other penalties. If an audit or investigation results in criminal prosecution by the U.S. Department of Justice (DOJ), the targeted provider (and potentially its owners, executives, physicians, and other personnel) can face these same penalties plus the potential for federal imprisonment.

10. Providers Can (and Should) Prepare to Defend Against TPE Audits

Given the risks related to facing a TPE audit, Medicare providers need to organize for these audits effectively. Although CMS describes the TPE audit process as a collaborative engagement between the auditing MAC and the targeted provider, providers should approach TPE audits with a defensive mindset. They need to assume that any unfavorable findings will probably be used against them; and, with this in mind, they need to focus their efforts on proactively resolving their TPE audits without referral to CMS. 

These are only a few of the key considerations for healthcare providers which are facing TPE audits. To make sure that they’re making informed decisions and protecting their practices to the fullest extent possible, providers should engage federal healthcare fraud defense counsel promptly upon receiving a Notice of Review.

Oberheiden P.C. © 2022
National Law Review, Volume XII, Number 160


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