Understanding Medicare's Targeted Probe and Educate Program

What You Need to Know

TPE's may involve up to three separate rounds of probe reviews that scrutinize claims from your company. Unlike traditional pre-payment and post-payment audits that focus only on identifying errors and preventing/recouping payment, the TPE program has a built-in educational component designed to help you avoid future mistakes. That education occurs at the end of every TPE round, after which you will receive a results letter summarizing your results. You also have direct access to a DME MAC TPE specialist who will provide you detailed feedback about any identified problems at the end of each round.

The first round probe review typically consists of 10 claims. If the DME MACs do not identify any errors in that set of 10 claims, they will close the case for the identified issue under review. If your case isn't closed after round 1, you proceed to subsequent rounds of 20-40 claims each. One thing to be aware of is that the first round probe examines already-filed claims. Subsequently, however, the DME MACs give you time between TPE rounds so that you can implement corrective actions, and from that point forward, they review claims you are submitting in real time as opposed to retrospectively. What this means is that you can take appropriate steps in Rounds 2 and 3 before you file claims involving the identified audit issue to check compliance with all documentation and coverage requirements. This increases the likelihood that you can successfully pass the TPE .

You will receive written notice if you are selected for inclusion in the TPE program. That will include a description of the items under review. The DME MACs will send you Additional Documentation Request letters for all claims involved in the TPE review. You have 45 days to provide the requested information once you have received an ADR. In addition, you may receive emails and/or phone calls from DME MAC Medical Review personnel during this process. You should respond to their outreach promptly, as they may be contacting you to address an easily-corrected error.

The most important thing to know about the TPE program is that if you fail to demonstrate sufficient improvement in your claims error rate by the end of the third round, you will face potentially significant penalties. At that point, the DME MAC will refer you to CMS, where possible actions may include but are not limited to:

• 100% prepayment claim review moving forward;
• Referral to a Recovery Auditor; or
• Extrapolation.

What this Means for You

If you receive notice of a TPE review for your business, you should immediately review it so that you understand the issue giving rise to the TPE. Companies that successfully get released from the TPE program before the end of round 3 typically engage in immediate and repeating education regarding the identified issue with both clinical and claims/revenue cycle staff. A post-round 1 best practice is to not submit any claims falling under the identified issue for payment unless they first pass an internal review for compliance with all documentation and coverage requirements. Your objective should be to extricate yourself from the TPE as quickly as possible and that should impel you to act with a real sense of urgency from the moment you learn of the TPE.

 As noted above, failure to demonstrate sufficient improvement before the end of Round 3 can have materially negative consequences for your business. Getting placed in 100% prepayment claim review will significantly disrupt your cash flow and potentially create liquidity issues for your company - and that's before you know the results of those reviews. Getting referred to a Recovery Auditor is equally disruptive, as those contractors are paid a percentage of all Medicare payments that they can claw back, creating a significant incentive for them to find fault with your claims. And finally, extrapolation is a potentially devastating outcome. This refers to the act of looking at your claim fail rate and applying it retroactively to historical payments. So, for example, if your claim fail rate after round 3 sits at 50%, extrapolation would result in Medicare looking back at all claims you've filed over the past several years involving the identified issue and recouping 50% of those historical payments.

If you do not respond to a TPE review with appropriate urgency and seriousness, you may wind up facing serious adverse consequences. On the other hand, if you treat it as an opportunity to identify and improve weaknesses in your business, it can lead to a quick exit from the TPE and a more compliant/robust claims process both now and in the future.