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Three Strikes and You're Out: CMS Targeted Probe and Educate (TPE) Process

May 3, 2018

Has your practice received a Targeted Probe and Educate (TPE) audit from a Medicare Administrative Contractor (MAC)[1]? If so, did you know you only have three strikes before you’re out?

If you are a Medicare provider and have not heard of the TPE process, please finish this short read! CMS rolled out the TPE programs for the MACs to implement and most began identifying targeted providers and sending out round-one reviews by the end of last year.[2] If you or your practice received a request, it is imperative that you understand the process and potential consequences. We've summarized the process below.

Providers are “selected” (targeted) for TPE based on:

  • Analysis of billing data indicating “questionable billing practices”;
  • High claim error rates from prior reviews or adjudications;
  • Services that have high national error rates; or
  • Services that are a “financial risk to Medicare.”

Some of the most common claim errors:

  • Missing signature of the certifying physician;
  • Documentation does not establish medical necessity;
  • Encounter notes lack support for all elements of eligibility; and
  • Missing or incomplete initial certifications or recertification for services.

The basic steps in the TPE process:

  1. Targeted providers will receive a letter from the MAC requesting documentation for 20-40 claims;
  2. The MAC will review the documentation to determine if there are errors and recoupment should be made;
  3. Providers with denied claims will be invited to a one-on-one education session;
  4. Providers will have 45 days to make changes and improve (established by another production and review);
  5. Providers that do achieve 100% compliance will not be reviewed for at least another year; and
  6. Providers that do not achieve 100% compliance within three reviews in less than 1 year will be referred to CMS for the potential options below;

Potential consequences of failing three reviews:

  • 100% pre-payment review of all claims (charts must be produced and reviewed for approval of all claims submitted);
  • The MAC can extrapolate an error rate from a statistically valid sample (one of the reviews) over the universe of claims reviewed (potentially 6 years back) and make an overpayment demand for the percentage error of all the claims;
  • Referral to a Recovery Audit Contractor (RAC) that has the same audit and extrapolation ability;
  • Referral to a Zone Program Integrity Contractor (ZPIC) or Unified Program Integrity Contractor (UPIC) for a fraud and abuse investigation;
  • CMS can begin Medicare exclusion proceedings to terminate a providers participation; and/or
  • CMS can refer the provider to the Office of Inspector General (OIG) for potential criminal prosecution of billing fraud by the Depart of Justice (DOJ).

What’s the bottom line? You really need to take a TPE review seriously and hit it out of the park!


[2] E.g. https://med.noridianmedicare.com/web/jea/cert-reviews/targeted-probe-educate


Matthew Roberts,Esq., is a Member ofNexsen Pruet based in Columbia, South Carolina. He leads thefirm's Health Care Practice Group and is admitted in North and South Carolina. 

Stephen Bittinger, Esq. is a Member of Nexsen Pruet based in Charleston, South Carolina. Stephen is admitted in North Carolina, Ohio and the District of Columbia. He is not licensed to practice law in South Carolina. Stephen has a unique, national practice in health care reimbursement defense and litigation.


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