Medicare TPE Audits

Q: What Happens During a Medicare TPE Audit 'Education Session'?

During a Medicare TPE audit 'education session,' MAC personnel should work with the provider's billing administrators or other relevant personnel to identify the cause of the provider's billing violations and determine appropriate remedial measures. During these sessions, providers must continue to be careful to avoid disclosing any information that could lead to additional scrutiny.

Medicare Targeted Probe and Educate (TPE) Audits Can Present Serious Risks for Unsuspecting Healthcare Providers

The Centers for Medicare and Medicaid Services (CMS) use Targeted Probe and Educate (TPE) audits to help healthcare providers reduce claim denials and come into compliance when they commit Medicare billing violations. But, while these audits are intended to “educate” Medicare providers, they can have enforcement implications as well. As a result, healthcare providers facing Medicare TPE audits need to be very careful, and they need to work with experienced federal healthcare fraud defense counsel to ensure that any consequences are no greater than necessary.

While CMS suspended the TPE audit program during the early stages of the recent pandemic, it resumed the program in late 2021. Medicare Administrative Contractors (MACs) are currently conducting TPE audits across the country, and many providers targeted in these audits are facing follow-on Medicare compliance audits and healthcare fraud investigations.

Lawyers and Compliance Consultants with Experience on Both Sides of Medicare Audits

The lawyers and compliance consultants at Oberheiden P.C. have experience on both sides of Medicare audits. As former federal prosecutors and law enforcement agents, several members of our Medicare compliance team previously conducted and oversaw audits and investigations on behalf of the federal government. As defense lawyers and consultants, our professionals have advised healthcare providers nationwide, and we have helped numerous providers survive Medicare TPE audits and other Medicare compliance audits without incurring any liability or penalties.

5 Important Facts about Targeted Probe and Educate (TPE) Audits

If your healthcare practice is facing a Medicare TPE audit, there is a lot you need to know. Although the Medicare Administrative Contractor (MAC) is supposed to “work with you” to help you “quickly improve,” facing a Medicare TPE audit can be dangerous if you are not adequately prepared. With this in mind, here are five important facts about Medicare TPE audits:

Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

1. MACs Do Not Choose Healthcare Providers for Medicare TPE Audits at Random

According to CMS, “[p]roviders whose claims are compliant with Medicare policy won’t be chosen for TPE.” This means that if your practice is facing a Medicare TPE audit, there is a specific reason why. Under CMS policy, Medicare Administrative Contractors (MACs) use data analysis to identify providers for TPE audits based on three main criteria. If your practice is being audited, this means that its billing data indicate:

A high claim error rate,
Unusual billing practices, and/or
A high volume of billings for items or services that have a high national error rate.

Given that this is the case, providers facing Medicare TPE audits will often struggle to convince MACs that they have done nothing wrong. When deciding how to approach these audits, providers must have a clear understanding of whether their billing practices are compliant; and, if they are not compliant, providers must work with their counsel to implement appropriate compliance program modifications and convince the MAC that further action is unwarranted.

2. MACs Must Follow Strict Rules During Medicare TPE Audits

When conducting Medicare TPE audits, MACs must follow strict rules. This the TPE audit process very different from other types of MAC audits, during which auditors can review years’ worth of billing data for evidence of any possible billing violations.

During Medicare TPE audits, MACs may only select 20 to 40 claims to review, and they may only examine records on those specific claims. Any broader requests are prohibited and generally should be refused. To ensure that MACs do not examine claims or records that are beyond the scope of the audit, providers should engage counsel to oversee the audit process.

3. Medicare TPE Audits Should Focus on One Specific Type of Billing Issue

Another unique aspect of Medicare TPE audits is that MACs are only permitted to examine one specific type of billing issue. The issue must be determined in advance and disclosed to the provider. If a TPE audit reveals that a provider has improperly billed Medicare due to the issue in question, this will trigger additional steps, and it could ultimately lead to a referral to CMS.

4. Providers Get Three Chances to Improve and Pass Medicare TPE Audits

If a MAC identifies improper claims during Medicare TPE audits, it must conduct an “education session” with the provider. The provider will then be allowed to remedy the underlying issue. This cycle will repeat up to two additional times until either (i) the provider passes the audit, or (ii) the provider fails to improve after three attempts.

5. Providers That Fail Medicare TPE Audits Are Referred to CMS for “Next Steps”

When a healthcare provider fails a Medicare TPE audit, the MAC will refer the provider to CMS for “next steps.” As CMS explains, these next steps “may include 100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action.” As a result, while a TPE audit is not itself a direct enforcement mechanism for CMS, providers that are unable to remedy issues (as determined by their MACs) can ultimately face enforcement action and ensuing penalties.

Common Issues in Medicare TPE Audits

When conducting Medicare TPE audits, different MACs have different priorities. Ultimately, however, a TPE audit can target virtually any type of Medicare billing violation. While some TPE audits focus on generic issues such as missing signatures or dates, many of these audits focus on specific types of items or services or other discrete and highly-technical billing issues. Some examples include:

Ambulance Services
Cardiac Rehabilitation with Continuous ECG Monitoring
Critical Care Visits
Diabetic Self-Management Training
Emergency Room Services
Evaluation and Management
Home Health Eligibility and Medical Necessity
Hyperbaric Oxygen Therapy
Intravenous Immunoglobulin (IVIG)
Lab and Other Tests
Nebulizers
Non-Emergent Ambulance Transport for Dialysis Services
Office or Other Outpatient Visits for Evaluation and Management of Established Patients
Oxygen and Oxygen Equipment
Positive Airway Pressure (PAP) Devices
Spinal Orthoses
Subsequent Hospital Inpatient Care
Surgical Dressing
Therapeutic Exercise

This list is intended to demonstrate the breadth of issues that MACs can target during Medicare TPE audits. There are many more possibilities. Again, when facing TPE audits, providers must work with their counsel to ensure that both (i) they proactively identify and address any pertinent issues independent of the MAC’s determination, and (ii) the MAC does not exceed the scope of its authority during the TPE audit.

Understanding the Risks of Medicare TPE Audits

As discussed above, failing Medicare TPE audits can lead to additional scrutiny from the MAC, Medicare, or another Medicare audit contractor (i.e., a Recovery Audit Contractor (RAC)). This additional scrutiny, in turn, can lead to various adverse consequences. When a Medicare TPE audit leads to a follow-on compliance audit or investigation, the targeted provider may be at risk for penalties including:

Recoupments
Fines
Treble (triple) damages
Denial of pending claims
Revocation of Medicare billing privileges
Prepayment review for future claims
Medicare exclusion
Federal imprisonment

When representing healthcare providers during Medicare TPE audits, we take these risks into account from the outset of our representation. We conduct comprehensive and attorney-client privileged compliance audits to assess our clients’ risks, and we structure our defense strategy around the specific issue (or issues) at hand. If a Medicare TPE audit has the potential to trigger additional scrutiny, not only do we focus on favorably resolving the TPE audit, but we also focus on making sure that our client does not face any unnecessary consequences.

FAQs: Defending Against a Medicare Targeted Probe and Educate (TPE) Audit

How Long Do Providers Have to Correct Issues Identified During Medicare TPE Audits?

When a MAC identifies a billing issue during a Medicare TPE audit, it must conduct an “education session” with the provider to address the issue. The provider is then entitled to a period of not less than 45 days to remedy the issue before facing the second round of claim evaluations.

What Happens During a Medicare TPE Audit “Education Session”?

During a Medicare TPE audit “education session,” MAC personnel should work with the provider’s billing administrators or other relevant personnel to identify the cause of the provider’s billing violations and determine appropriate remedial measures. During these sessions, providers must continue to be careful to avoid disclosing any information that could lead to additional scrutiny.

What Can I Do if a MAC Requests Records Beyond the Scope of a Medicare TPE Audit?

If a MAC requests records that are beyond the scope of your Medicare TPE audit, you should discuss the issue with your defense counsel promptly. Your defense counsel will be able to intervene and ensure that you are not unfairly scrutinized or penalized.

What if I Disagree with a MAC’s Determination During a Medicare TPE Audit?

If you disagree with a MAC’s determination during a Medicare TPE audit, it is generally best to address the issue proactively if possible. Typically, this means engaging counsel to intervene and expose the flaws in the MAC’s methodologies or its understanding of the Medicare billing regulations on your behalf. If you fail a Medicare TPE audit, you will need to work with your counsel to assess possible grounds for filing an appeal.

Speak with a Medicare Compliance Attorney or Consultant at Oberheiden P.C.

Are you facing a Medicare TPE audit? If so, we encourage you to contact us promptly for more information. Please call 888-680-1745 or request a complimentary consultation online to speak with an experienced Medicare compliance attorney or consultant at Oberheiden P.C. in confidence.