CMS To Expand Use of TPE Audits Nationwide by End of 2017

Perhaps lost amid the healthcare news coverage of competing proposals regarding “Medicare for All” and the repeal of Obamacare, the Centers for Medicare & Medicaid Services (“CMS”) last month announced the expansion of its Targeted Probe and Educate (“TPE”) claims review program to the entire country by the end of the year. CMS’s announcement can be found here.


The expansion of the TPE program is welcomed by the provider community, many members of which view this as an opportunity for proactive education and corrective action with CMS, as opposed to the punitive approach taken under other Medicare programs that evaluate claims retrospectively and put the provider at risk of fines and other penalties if a mistake is discovered.  During the recent pilot phase of the TPE program in four Medicare Administrative Contractor (“MAC”) jurisdictions, CMS found decreases both in the number of claim errors after providers/suppliers received education and in the number of appealed claims decisions, which demonstrate that the program works to increase claims accuracy.


MACs, on behalf of CMS, review clinical documentation related to claims to prevent improper Medicare payments. Historically, when conducting an audit, MACs have reviewed all providers/suppliers billing a particular service. However, the approach under TPE will be different in that it will focus on only a subset of providers/suppliers. Specifically, MACs focus on those providers/suppliers identified through data analysis as having (a) the highest claim error rates or (b) billing practices that differ greatly from their peers with respect to those items/services (i) that pose the greatest financial risk to Medicare and/or (ii) that have a high national error rate.


Another difference from prior audit programs is that providers/suppliers identified for the TPE program have a more manageable, limited number of claims (e.g., 20-40) reviewed, compared to the burdensome number of claims that have been audited in other Medicare programs.  Following the claims review, CMS will provide individual education to address any errors found. This review and education process continues for up to three rounds. A helpful CMS flowchart outlining this process can be found here.


Providers/suppliers that demonstrate sufficient improvement may be excused from the TPE process following any round. On the other hand, providers/suppliers with persistent high error rates after three rounds of the TPE process may face consequences such as prepay review, extrapolation, RAC audits, or other actions.


Neal N. Peterson

Neal regularly advises clients regarding compliance with laws specific to the health industry, such as state licensure requirements and corporate practice of medicine statutes and regulations. Neal's experience includes representing clients who are both payers and providers of health care, such as health insurers, HMOs, management services organizations, integrated delivery systems, accountable care organizations, hospitals, multi-specialty physician groups, pharmacies, nursing homes and assisted living facilities.

Alissa Smith

Alissa represents health systems, hospitals, pharmacies, long-term care providers, home health agencies and medical practices, as well as nonprofit and municipal organizations. Alissa’s transactional practice includes contracts, leases, mergers, acquisitions and joint ventures. Alissa’s regulatory practice includes the interpretation and application of state and federal fraud and abuse laws, Medicare and Medicaid rules, tax-exemption laws, HIPAA and privacy laws, EMTALA laws, licensing matters, employment laws, governmental audits and open records and open meetings matters. She also assists with corporate and health system governance issues, including the revision and negotiation of medical staff bylaws.

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