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.
How Does a TPE Audit Work?
A Targeted Probe and Educate (TPE) review is a Medicare medical review process used by a Medicare Administrative Contractor (MAC) to examine whether a particular healthcare provider or supplier is submitting claims that comply with Medicare requirements. Rather than reviewing every provider billing a particular service, TPE targets providers identified through data analysis as having elevated claim error rates, unusual billing patterns, or other indicators of potential payment risk.
A provider selected for TPE generally receives a notification letter from its MAC explaining the review and identifying the item, service, or claims category being examined. The MAC then requests medical records and other documentation needed to evaluate the selected claims.
A traditional TPE round typically involves 20 to 40 claims for a particular provider or supplier and a particular service or item. The MAC reviews the corresponding documentation to determine whether the claims satisfy applicable Medicare requirements, including coverage, medical necessity, coding, and documentation requirements. TPE reviews can occur on either a prepayment or post-payment basis.
The process generally follows this structure:
| TPE Stage | What Happens | Potential Provider Concern |
|---|---|---|
| Selection | MAC identifies provider through data analysis | Billing patterns may differ from peers or show elevated errors |
| Notification | Provider receives TPE letter | Failure to understand the scope can lead to an incomplete response |
| Initial probe | MAC reviews a sample of claims and records | Documentation, medical necessity, coding, or coverage issues may be identified |
| Education | MAC provides individualized education | Provider must understand and correct identified deficiencies |
| Second round | Additional claims may be reviewed | Recurring errors can increase compliance concerns |
| Third round | Final TPE round may occur | Continued noncompliance can result in referral to CMS |
| Post-TPE action | CMS determines next steps if problems persist | May include additional medical review or other program-integrity measures |
CMS generally allows up to three rounds of TPE, although current Medicare guidance permits additional rounds when directed by CMS. If the provider demonstrates compliance, the MAC discontinues the TPE process.
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.
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 help 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.