TPE Audits: The Process & Expected Targets in 2023

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Medicare providers and suppliers are being subjected to Targeted Probe and Educate audits by Medicare Administrative Contractors around the country. - Liles Parker

(January 26, 2023): Since the inception of the pilot program in 2015, the Targeted Probe and Educate Audit (TPE audit) program has effectively been a double-edged sword for most providers. On the positive side, it has served as an educational tool that providers can use to better ensure that their medical necessity, documentation, coding and billing practices fully comply with applicable regulations and administrative requirements. On the negative side, many providers have found that their practices have fallen short in one or more of these areas. To the extent that a provider continues to have problems during Round 2 or Round 3 of the TPE audit process, those failures can serve as a trigger to the initiation of other, more serious administrative audits and / or sanctions. Depending on the facts, failed TPE audits can even lead to civil and / or criminal investigations by the government. In this article, we will present an overview of the TPE program, what it is, how it works, and who should expect to be targeted. Additionally, we will discuss a TPE alert by Novitas Solutions, LLC (“Novitas”) which was published in late 2022 and laid out the next set of targeted services.

I. What is a Targeted, Probe and Educate Audit (TPE Audit)?

The Targeted Probe and Educate program is administered by Medicare Administrative Contractors (MACs), purportedly as an alternative to more punitive audits. The original goal was to incorporate learning and an opportunity to take corrective action over several periods rather than subject a Medicare provider to immediate sanctions for noncompliance immediately.[1] The program’s name came from the process of the audit itself. MACs target specific services or types of providers who exhibit high rates of noncompliance or potential compliance risks. Audit requests then include a probe into those specific services where they may be noncompliance, and—if the audit results in a certain percentage of failure—educational sessions are offered to the provider as an opportunity to learn more about how to ensure their documentation meets the coverage requirements. MACs are authorized to target any provider whose practices meet any of the following criteria:[2]

A. The provider has a history of questionable billing practices.

Any provider or supplier with a history of errors in their Comparable Billing Reports[3] are likely to be subject to a TPE audit at some point.

B. The provider has previously been audited and their claim error rates were higher than average.

As with most other types of audits, once a provider has been audited once, the likelihood of being subjected to a TPE skyrockets. CMS wants to ensure that providers who have already faced compliance challenges have implemented sufficient new protocols to avoid errors in the future.

C. The practice provides services with high national billing error rates.

Even if a provider has never been audited or found noncompliant in any way, he or she may be targeted for a TPE audit simply because particular services are incorrectly billed at a higher rate nationally. Targeting of home health agencies and laboratories are examples of this.

D. The practice provides services that are generally a financial risk to Medicare.

Like the above, regardless of a provider’s error rates, any service with a high financial burden on Medicare will make a TPE audit more likely for that provider. Examples of such services include intensive surgeries, long term care services, and larger DME purchases.

II. Overview of the TPE Audit Process:

The first step in a TPE audit is always going to be the receipt of a “Notice of Review” which will generally outline why a provider or supplier has been selected for audit. For example, in a recent TPE audit letter sent to a home health provider, the MAC merely stated that the provider “was selected for review based on data analysis”. Unfortunately, home health claims have been at the center of repeated CERT and TPE audits for several years.[4]

Most TPE audits are conducted on a pre-payment review basis, involving a probe sample of between 20 and 40 claims. Depending on the MAC’s findings after review the provider’s documentation, a provider may be subjected to a 2nd and or 3rd round of TPE audits. Each round is described below:

  • Round 1 -- TPE Audit. In the first round, the provider will produce 20-40 claims records for the MAC to assess. Though this sounds like a small number of documents, the request will oftentimes include a significant number of medical charts. For each claim, the provider must first identify the claims requested and then combine all medical records, claim forms, and any supplemental documentation that may be beneficial to the provider’s case in the MACs review.
    If they pass this initial round, the provider will be released from the audit. However, this virtually never happens; in order to pass, the claims reviewed must have a 0% error rate. At this point, the MAC will send a letter or make a call to discuss the results of the review and will then recoup any monies from errant claims. A quick note: Any errors the MAC discovers may be appealed, so it behooves a provider to have legal counsel involved in the TPE process from the start.
    At this point a representative from CMS is assigned as main point of contact with the provider and the first educational period begins. The provider is given a chance to have a meeting with this person, their “educator”, who will go over the findings of the review and suggest areas of the provider’s compliance plan which can be adjusted to prevent further noncompliance. While these education meetings are not mandatory, it is crucial that the provider attend. Having a detailed conversation to understand the errors found will both help to mitigate those issues in the next round of review and help inform any potential appeals the provider may wish to pursue. Upon completion of the education period, the provider then has 45 days to implement any new protocols or compliance systems to their practice.
  • Round 2 – TPE Audit. After the 45-day period following the Round 1 education, the next round of review will commence with another Notice of Review probing for 20-40 claims. The process is identical to the first round of review at this point; however, unlike the first round, perfect compliance is not necessary. The provider must only reach a target error rate. According to CMS, the error percentage rate required for release from the audit varies based on the service or product under review.[5] It is necessary to ask the educator what the expectations are going into this second round. If the review finds adequate compliance levels, the provider is released from the audit. If not, a second period of education and corrections will commence.
  • Round 3 – TPE Audit. If a provider finds themselves facing a third round, it is crucial that they succeed this time. The process is the same for the probe, and the target error rate is generally the same as the second round. Failure to meet the review’s requirements in this round means referral for further investigation. This can, and almost always will, lead to administrative, civil, and—on occasion—criminal penalties.

At any point in this process the provider is released from the audit, CMS promises they will not face another TPE for at least a year. However, this comes with the caveat that providers may still be targeted again if compliance standards change at any point within that year. Thus, one may not rest on their laurels. It is crucial to remain privy to the ever-changing standards and adjust compliance accordingly.

III. Considerations When Undergoing a TPE Audit:

There are several considerations to keep in mind when preparing your organization for a potential TPE audit. Below are the most crucial tips for handling a TPE audit with ease.

  • Do not miss the Notice of Review. One of the most common mistakes providers make is simply missing the first round of review because they overlooked the Notice of Review when it was received at their office. Unfortunately, providers are inundated with correspondence from CMS and insurance companies and other potential auditors, so it can be easy to miss. However, failing to identify and address the next steps for a TPE audit will result in the loss of that first round of review, which is a major disadvantage in the larger process. It behooves providers to alert office managers or any other employees responsible to take extra care when skimming through the mail for urgent matters.
  • Do not cut corners. Auditing is extremely time-consuming and financially costly. It may seem beneficial in the moment to gather documents for review as quickly as possible or to just throw together a compliance plan after education. However, that mindset will ultimately cost the provider more time and money. While it may not be possible to perfectly perform for the first round, if providers and their team go into a TPE audit with their full energy and attention to detail, it is more likely that they may be released from the audit in round two. This removes the extra costs of working through the second education period as well as the third round of review.
  • Use every resource given to you during this process. The TPE audit education process is invaluable for gaining direct experience regarding the expectations for compliance. During the one-on-one sessions, providers are allowed to include as many employees and even legal counsel if they wish. Having everyone who may become involved in error mitigation efforts present during these sessions can help later when errors are discovered. Further, the more involved a provider and its employees are, the more understanding the educators and auditors are likely to be.
  • Don’t wait until a TPE audit to conduct internal auditing and monitoring. Avoiding a TPE audit may not be possible for all providers, but for many, periodic auditing and monitoring of applicable medical necessity requirements, documentation obligations, coding and billing responsibilities, will prepare you in advance for a wide variety of payor audits. Along those same lines, providers must keep up to date with updates to both National and Local Coverage Determinations and periodically review applicable payor-specific requirements. It may be difficult, but updating your practices to comply with changes in payor requirements is a surefire way to help avoid high billing error rates.
  • Keep lines of communication open and active. If you have not already done so, establish a relationship with experienced legal counsel specializing in health care compliance, coding and billing. Don’t try to respond to a TPE audit on your own – get help from the professionals.

IV. What to Expect from TPE Audits in 2023:

According to a list of current TPE targeted services issued by Novitas[6], several active reviews will be performed in 2023. Some have previous review results from prior probes but are experiencing second, third, or more additional reviews. The list for 2023 (at this point) is as follows:

  • End Stage Renal Disease (ESRD) services (CPT 90960-90961)
  • Rehabilitation services: Outpatient physical and occupational therapy (CPT 97530)
  • Surgical services: Cataract extraction (CPT 66982-66984)
  • Drugs and Biologicals: Drug injections (HCPCS J0178 (Eylea), J2778 (Lucentis), J0717 (Cimzia), J7318, J7320, J7321 (Hyaluronan Acid Therapies) with associated administration and placement codes)
  • Psychiatric services: Psychotherapy (CPT 90832, 90834, 90837)
  • Anesthesia services: Anesthesia for diagnostic or therapeutic injections; prone position (CPT 01992)
  • Rehabilitation services: Outpatient physical, occupational, and speech therapy services billed with KX modifier
  • Drugs and Biologicals: Drug Injections (Hyaluronan Acid Therapies (HCPCS J7318, J7320-J7332)
  • Removal of Benign Skin Lesions (CPT 11102-11103, 11200-11201, 11300-11303, 11305-11313, 11401-11406, 11421-11424, 11426, 11440-11446)
  • Laboratory Services: Definitive Drug Testing (HCPCS G0480-G0483)

If you are a provider performing any of these services, it is wise to seek legal counsel and prepare for a TPE audit which may be coming your way.

Ashley Morgan has extensive experience representing providers in TPE audits. - Liles Parker

Liles Parker attorneys have extensive experience representing healthcare providers and suppliers around the country in connection with claims audits by OIG, UPICs, MACs and other CMS contractors. Notably, many of our health lawyers are also Certified Professional Coders (CPCs) and / or Certified Medical Reimbursement Specialists (CMRSs). Give us a call if your practice is audited, WE CAN HELP. Questions? Give us a call. For a free consultation, we can be reached at: 1 (800) 475-1906.