Is TPE really as easy as 1,2,3?

Monday, September 24, 2018

As you are likely well aware by now, Medicare has transitioned away from widespread prepayment review and is now full speed ahead on their Targeted Probe and Educate (TPE) audit program. The key word here being “targeted.” The widespread medical review audits were previously focused on procedure codes and not necessarily on providers. Anyone submitting claims for codes under review were subject to prepayment audits. Now, they pick specific suppliers to focus their audit efforts on based upon data analysis and prior error rates. Suppliers are given three chances to pass the TPE audit. If a supplier cannot pass with an acceptable rate after three rounds of prepayment claim audits, then additional actions will occur. If they do pass in the first three phases, then they will receive an audit reprieve for a year on that particular code. 

Well…as with any audit program, consistency is key. Thus far, the interactions we have had with our clients and the contractors has been positive and we’ve seen several achieve that much sought after audit reprieve, but there have still been some bumps in the road. During a recent DME industry meeting where CMS was presenting details on this program to the audience, one industry veteran stated, “It’s like we’re flying in a plane while it’s still being built.” In essence, it’s a new program that was implemented pretty quickly and extensively, following a relatively short pilot program (for CMS standards).

One challenge we have seen includes questionable data analysis. For example, a client received a TPE audit in a competitive bid area (CBA) for a product that they did not win a bid for and were not billing. Other entities with multiple PTANs have been bombarded with multiple TPE audits at once, making it a challenge to manage the process. The analysis is currently focused on particular procedure codes, so a company can be audited on related supplies or equipment multiple times—despite that the requirements are the same (i.e. CPAP mask and CPAP tubing). These issues have been raised to CMS and they genuinely seem committed to improving the program for suppliers.

We have seen some inconsistencies from both DME MACs and individual reviewers. While this is not something new, there were some denial reasons that were identified that hadn’t been previously identified that created some confusion. Also, just like with any new program, you have inconsistencies between how the individuals participate in the program. For example, in some instances, we have had reviewers that have been very communicative and forthright with information, while others have had a much more reserved approach. Hopefully, we start seeing more of the former versus the latter as people get comfortable and expectations are set by CMS. It’s clear that the goal of the program is to streamline the audit process to reduce denial rates, which is a step in the right direction for everyone.

While industry champions continue to share insight and recommendations with CMS, there are some suggestions I can make to help you in the process. First, make sure to develop an open line of communication and establish a rapport with your reviewer. In most cases, your reviewer is going to be the same throughout the course of your TPE and it will be important for you to know where you stand throughout the audit. I’d also recommend establishing a point person in your office to manage the TPE response. Don’t bombard the reviewer with multiple people asking similar questions. At any point in the review, you should know where you stand, rather than just relying on the DME MAC.

Lastly, if you disagree with a denial, explain why you do. Everyone makes mistakes and explaining why you disagree, in a reasonable and respectful manner, could result in fewer denials or claims getting overturned. You also have appeal rights on these claims, so that is certainly an option, as well. If the claim gets overturned in the appeal process, then the reviewer should take that into consideration when deciding whether to move you on to the next phase or not. 

Your goal is to pass TPE review in Phase 1 or Phase 2. If you get to Phase 3, you’ll need to pay even more particular attention to the denials. Failing Phase 3 will result in a referral to CMS and, likely, a much more expansive audit or extrapolation. Also, while they have not indicated their intent to exercise this authority, CMS does have the ability to revoke the billing privileges of a supplier who shows a “pattern or practice” of submitting claims erroneously.

With some effort, TPE can be as easy as 1, 2, 3.

Wayne van Halem, CFE, AHFI, is president of The van Halem Group. Reach him at