Pursuant to the Medicare Program Integrity Manual (Pub. 100-08), Chapter 3, Section 3.2.5, participating providers who fail to achieve acceptable error rates during Targeted Probe and Educate (TPE) audits may be subjected to 100 percent prepayment review, extrapolation, or referral to a Unified Program Integrity Contractor (UPIC) for further administrative action by CMS or its authorized contractors.
This post explains TPE audits and what to expect before, during, and after the auditing process.
Medicare TPE Audit Timeline: What Happens in Each Round
A Medicare TPE audit is run by your Medicare Administrative Contractor (MAC), not by CMS directly. It can last up to three rounds. The table below shows each step, how long it takes, and what triggers the next one.
| Step | What happens | Timing |
|---|---|---|
| 1. Selection | Your MAC sends a letter saying you were chosen for TPE. MACs use data analysis to find providers with high claim error rates or unusual billing, and services with high national error rates. | Start of the review |
| 2. Round 1 review | The MAC requests medical records through an Additional Documentation Request (ADR) and reviews 20 to 40 of your claims. If you don’t send the records in time, the MAC can deny the claims. | 45 calendar days to respond to a MAC ADR |
| 3. Results | If your claims are compliant, you’re done with TPE on that topic. If some claims are denied, the MAC offers a one-on-one education session. The MAC may also educate you during the round when it finds simple errors. | After the MAC finishes reviewing the sample |
| 4. Correction period | You use what you learned to fix documentation and billing before the next round begins. | At least 45 days after the education session |
| 5. Rounds 2 and 3 | The same process repeats with a new sample of 20 to 40 claims, followed by education after each round. | Each round starts no earlier than 45 days after the last education session |
| 6. Referral to CMS | If errors don’t improve after three rounds, the MAC refers you to CMS. Next steps may include 100% prepayment review, extrapolation, referral to a Recovery Auditor, or other action. | After round 3 |
If you pass a round, CMS says you won’t be reviewed again on that topic for at least one year, although the MAC can review you sooner if your billing changes significantly. Sources: CMS, Targeted Probe and Educate; CMS TPE fact sheet (PDF); CMS, Additional Documentation Requests; 42 CFR 405.930.
Smaller practices: CMS also runs a Low Biller Probe and Educate Program for providers with lower claim volumes. It reviews fewer than 20 claims per round, for up to three rounds, with education after each round.
For help preparing records, see our guide to responding to a Medicare ADR.
Can You Appeal TPE Claim Denials?
Yes. CMS says “the appeals process is unchanged under the TPE process.” Every claim denied during a TPE round can go through the normal five-level Medicare appeals process. CMS also says that claims overturned on appeal are taken into account in later rounds and if a provider is referred to CMS.
That makes appeals strategic, not just about the money on a single claim. Each denial that stands raises your error rate. Each one you reverse can help keep you out of a second or third round.
| Level | Who decides | Deadline to file |
|---|---|---|
| 1. Redetermination | Your MAC (different staff from the original review) | 120 days from receiving the denial notice (42 CFR 405.942) |
| 2. Reconsideration | A Qualified Independent Contractor (QIC) | 180 days from receiving the redetermination (42 CFR 405.962) |
| 3. Hearing | An Administrative Law Judge at the Office of Medicare Hearings and Appeals (OMHA) | 60 days from receiving the QIC decision |
| 4. Council review | The Medicare Appeals Council | 60 days from receiving the hearing decision |
| 5. Judicial review | A federal district court | 60 days from receiving the Council decision |
Levels 3 and 5 also require a minimum amount in dispute, which CMS adjusts every year. See CMS, Medicare fee-for-service appeals.
Is the Medicare TPE Program Active in 2026?
Yes. CMS’s Targeted Probe and Educate page was last updated on March 4, 2026, and describes TPE as an active program run by the MACs. It also describes the newer Low Biller Probe and Educate Program for lower-volume providers.
Each MAC chooses its own TPE topics based on its data, so the services under review differ by region and change during the year. Check the TPE page of your MAC (such as Noridian, Novitas, Palmetto GBA, CGS, First Coast or WPS) to see which services it is currently reviewing.
Medicare TPE Audit Statistics
CMS’s most recent published TPE figures cover fiscal year 2019 (October 2018 to September 2019):
~13,500 providers and suppliers were started on TPE.
~435,000 claims were reviewed, and about 60% were accepted as billed.
Under 2%of providers and suppliers failed all three rounds.
- MACs made about 90,000 educational contacts with providers during and after TPE reviews in fiscal year 2019, according to CMS.
- About 40% of the claims reviewed under TPE in fiscal year 2019 were not accepted as billed, according to CMS.
Source: CMS, TPE Questions and Answers (PDF). CMS hasn’t published more recent national TPE figures.
When a TPE Audit Becomes a Bigger Problem
TPE is designed to be educational, and most providers come out of it with better billing and no further action. But a TPE review creates a record of your claims, your errors, and how you responded. If that record looks bad, it can follow you into reviews with much higher stakes.
Watch for these warning signs that your matter is moving beyond TPE:
- Referral to CMS after round 3. This can lead to a 100% prepayment review, where every claim is reviewed before you’re paid, or to extrapolation, where an error rate from a sample is applied to a much larger group of claims.
- A Recovery Auditor review. Recovery Auditors look back at paid claims and can demand repayment of past overpayments.
- A request from a UPIC. Unified Program Integrity Contractors investigate potential fraud, not just billing errors. Their record requests usually give you only 30 days to respond.
- A payment suspension, a subpoena or contact from HHS-OIG or the FBI. At that point, the issue is no longer education. It’s a potential fraud investigation.
How you respond in a TPE review matters later. Records that are incomplete, altered or added after the fact can be used as evidence if a review turns into a False Claims Act case or a criminal investigation. Have counsel review your response strategy before you submit documentation, not after a referral.
Learn more about MAC audits vs. UPIC audits, what to do if HHS-OIG contacts you, and our Medicare audit defense practice.
What Does a TPE Review Examine?
A TPE review typically focuses on a specific service, item, or billing issue rather than examining a provider’s entire Medicare billing history. The MAC compares the claims selected for review against applicable Medicare requirements and evaluates whether the supporting documentation establishes that the claims were properly submitted.
A TPE review may examine:
- Medical necessity: Whether the medical record supports the need for the service or item billed.
- Documentation: Whether the records contain the information required to support the claim.
- Required service elements: Whether the provider documented all elements necessary to support the billed service.
- Certifications and recertifications: Whether required certifications or recertifications were completed properly and within applicable requirements.
- Signatures: Whether required physician or practitioner signatures are present and properly documented.
- Medicare coverage requirements: Whether the service or item meets applicable Medicare coverage rules.
- Coding and billing: Whether the claim accurately reflects the services provided and complies with applicable billing requirements.
CMS identifies issues such as missing signatures, incomplete documentation, and insufficient support for medical necessity among common claim errors.
Being selected for TPE does not by itself establish that a provider committed Medicare fraud. TPE is a medical review and education process intended to identify and correct improper billing and documentation. However, providers should take a TPE review seriously as unresolved compliance problems can result in additional Medicare program-integrity actions.
What Happens If a Provider Fails TPE?
If errors continue after the education and review process, the matter may be referred to CMS for further action. CMS states that possible next steps can include 100% prepayment review, extrapolation, referral to a Recovery Auditor, or other action.
For that reason, healthcare providers should not treat a TPE notice as merely an educational correspondence. The claims selected for review can reveal broader weaknesses in documentation, coding, billing practices, or internal compliance procedures. It’s important to work with a Medicare audit defense attorney to explore the next phases.
Healthcare providers facing TPE should carefully evaluate the notice, identify the precise services under review, preserve relevant records, assess the claims before responding, and determine whether professional assistance is appropriate.
When a TPE Review Turns Into UPIC, Extrapolation or False Claims Act Exposure
CMS describes TPE as education, and for most providers that’s all it is. But a TPE review also creates a written record: which claims were wrong, what the MAC taught you, and whether your billing changed afterward.
That record has legal consequences that CMS and the MACs don’t explain. There are three main ways a TPE review becomes much more serious.
| Risk | What can trigger it | Legal basis |
|---|---|---|
| Extrapolation | Errors continue after documented TPE education | Social Security Act §1893(f)(3) |
| UPIC review and payment suspension | Billing patterns that suggest possible fraud rather than simple errors | 42 CFR 405.371 |
| False Claims Act liability | Billing the same way after education, or keeping overpayments past the 60-day deadline | 31 U.S.C. 3729; 42 U.S.C. 1320a-7k(d) |
1. A failed TPE can open the door to extrapolation
Federal law limits when Medicare contractors can use extrapolation. Under Social Security Act §1893(f)(3), a contractor can extrapolate an overpayment only if CMS finds a sustained or high level of payment error, or if “documented educational intervention has failed to correct the payment error.”
TPE education sessions are exactly that kind of documented educational intervention. If your error rate doesn’t improve after three rounds, the record CMS needs to justify extrapolation already exists. The statute also says CMS’s finding of a sustained or high error rate can’t be appealed.
Extrapolation is what turns a small audit into a large demand. An error rate from a sample of claims is applied to a much larger group of similar claims. For example, if a sample shows an average overpayment of $40 per claim and that rate is applied to 5,000 similar claims, a few thousand dollars in denials becomes a $200,000 repayment demand. (This example is for illustration only.)
You can still challenge how the sample was chosen and how the overpayment was calculated when you appeal. Those challenges are technical, and they work best when they’re planned from the start.
2. When a UPIC gets involved
A TPE review doesn’t automatically go to a Unified Program Integrity Contractor (UPIC). MACs focus on billing errors and education. UPICs investigate potential fraud, waste and abuse. Your matter is more likely to reach a UPIC when the claims suggest something other than an honest mistake, such as:
- cloned or copy-and-paste medical records across many patients
- services billed that the records don’t show were provided
- the same errors continuing after one-on-one education
- billing volumes far above similar providers, or sudden spikes
- tips from patients, employees or competitors
UPIC reviews move faster and carry more risk. A UPIC records request usually gives you 30 days to respond, compared with 45 days for a MAC. Under 42 CFR 405.371, Medicare payments can be suspended when there is reliable information that an overpayment exists, or after consulting the HHS Office of Inspector General, when there is a credible allegation of fraud. UPICs can also refer cases to HHS-OIG and law enforcement.
3. How TPE findings can create False Claims Act exposure
The False Claims Act is the federal government’s main civil tool against healthcare fraud. TPE can create exposure in two ways.
- Knowledge after education
A provider is liable under the False Claims Act for claims submitted “knowingly.” That term includes reckless disregard and deliberate ignorance, and it requires “no proof of specific intent to defraud.” Once a MAC has explained a specific billing error to you in a one-on-one session, continuing to bill the same way is much harder to defend as an innocent mistake.
- The 60-day overpayment rule
Under federal law, a provider that knowingly receives or retains a Medicare overpayment must report and return it within 60 days. TPE denials can suggest the same problem exists in claims outside the sample. The 60-day deadline can be suspended for up to 180 days while you conduct a timely, good-faith investigation of related overpayments (42 CFR 401.305). An overpayment kept past the deadline becomes an “obligation” under the False Claims Act, which can create liability on its own.
The penalties are severe: three times the government’s damages, plus a civil penalty for each false claim, adjusted every year for inflation. The False Claims Act also allows whistleblowers, often current or former employees, to file lawsuits on the government’s behalf.
How a federal defense attorney handles a TPE review differently
A billing consultant asks how to pass the next round. A federal defense attorney also asks how this record will look to a UPIC investigator, an Assistant U.S. Attorney, or a whistleblower’s lawyer later. At Lowther | Walker, we use the TPE review to protect you on both fronts:
- Review records before they go out. We look at the sampled claims for problems the MAC will find, and for patterns that could interest a UPIC.
- Appeal strategically. We decide which denials to appeal, because reversed denials count in later rounds and can lower your error rate.
- Investigate under privilege. If TPE suggests a wider problem, we run the look-back review at the direction of counsel to help protect privilege and manage the 60-day overpayment deadline.
- Document corrective action. We make sure the changes you make after each education session are recorded, which is your best evidence that any errors weren’t intentional.
- Respond to escalation. We handle UPIC requests, payment suspensions, extrapolated overpayment appeals, and contact from HHS-OIG or the Department of Justice.
Facing a TPE Audit? Protect Your Practice Before the Review Escalates
A TPE review can expose more than an isolated billing error. If a Medicare Administrative Contractor identifies recurring problems with documentation, medical necessity, coding, or billing practices, the consequences can extend beyond the claims initially selected for review.
Lowther | Walker represents healthcare providers and professionals facing Medicare audits, healthcare fraud investigations, and other federal compliance matters. Our attorneys can assess the scope of a TPE review, evaluate the claims and supporting documentation, identify potential compliance issues, and develop a response designed to address the government’s concerns.
Contact Lowther | Walker to discuss your TPE review with experienced federal healthcare defense counsel.
Answers to Your TPE Audit Questions
Why was my healthcare practice selected for TPE?
CMS uses data analysis to identify providers or suppliers whose billing patterns indicate potential compliance concerns. Selection can be associated with elevated claim error rates, unusual billing practices, or services presenting significant Medicare payment risk.
How many claims does a TPE audit review?
A traditional TPE round generally reviews 20 to 40 claims for a particular provider or supplier and a particular item or service. Lower-volume providers may be subject to smaller samples under certain TPE initiatives.
How many rounds of TPE can a provider face?
TPE is typically conducted for up to three rounds, although CMS guidance allows additional rounds in certain circumstances at CMS direction.
Is a TPE review the same as a fraud investigation?
No. TPE is primarily a Medicare medical review and education process. However, unresolved billing or documentation problems can lead to additional program-integrity action, depending on the circumstances.
Can a TPE review happen before Medicare pays a claim?
Yes. CMS guidance states that TPE reviews can be conducted on either a prepayment or post-payment basis.
What documentation does a MAC request during TPE?
The requested records depend on the service being reviewed. The MAC may request medical records and other documentation necessary to determine whether the claim satisfies Medicare coverage, medical necessity, coding, and billing requirements.
What happens after the first TPE review?
The MAC provides the provider with the review results and, when appropriate, individualized education addressing identified errors. The provider is generally allowed to correct problems before another round is conducted. CMS currently provides at least 45 days for providers to make changes and improve before another traditional round.
What happens if my claims remain noncompliant after TPE?
A noncompliant provider can be referred to CMS for additional action. Potential consequences include 100% prepayment review, extrapolation, Recovery Auditor referral, or other measures.
Should a healthcare provider hire a lawyer for a TPE audit?
Not every TPE review requires legal representation. However, legal counsel may be appropriate when the review involves substantial payment exposure, recurring documentation or billing problems, disputed medical necessity, potential overpayments, or concerns that the matter could escalate beyond routine education and medical review.