What is a TPE Audit, and How Should You Handle It?

If you haven’t yet experienced a Medicare TPE audit, there’s a chance you may soon. As WebPT’s SVP of Revenue Cycle Management John Wallace notes in this month’s Founder Letter, TPE audits are on the rise after a COVID-induced pause. And while in an ideal world you’d never have to deal with an audit, it’s certainly helpful to have the proper recourse should you ever be notified of your inclusion. So, let’s discuss what you can expect with a TPE audit, how you can respond to make the process as painless as possible, and what you can do to avoid one in the future.    

What is a TPE audit? 

What does TPE mean? It’s an acronym for Targeted Probe and Educate—the program that CMS rolled out in 2017 with the stated goal of helping providers reduce the number of denials and appeals with an educational program designed to mitigate common mistakes. But labeling it as a purely educational exercise is a bit misleading; failing these audits come with consequences, as I’ll detail later in this blog. 

Nor are TPE audits randomized spot checks of any and all providers. Rather, data analysis is used to identify “providers and suppliers who have high claim error rates or unusual billing practices” as well as “items and services that have high national error rates and are a financial risk to Medicare” according to CMS’s TPE page. 

The program has been successful since its inception, insofar as it’s had no shortage of participants. CMS notes that 13,500 suppliers and providers were enrolled during Fiscal Year 2019. But as previously mentioned, the program was put on pause during the pandemic, and has only started to ramp up once more beginning in the spring of 2022—which is why rehab therapists need to familiarize (or refamiliarize) themselves with the program.  

What’s the TPE audit process?

The TPE audit process begins when a provider receives a Notice of Review from their Medicare Administrative Contractor (MAC) informing them that they’ve been selected for the review process, and explaining the criteria by which they were selected. The letter will also ask for the relevant medical records for the 20 to 40 claims that make up the sample that is to be audited. 

From there, the MAC will review the records to determine if they support the claims. If they don’t, the provider will be placed into the program’s one-on-one educational sessions, where the MAC will identify the errors and guide them through correcting them. From there, the provider can make the appropriate changes to their billing system over a 45-day period before another TPE review by the MAC. 

Once the MAC is satisfied that the errors have been corrected, the audit is closed. However, if there are more errors uncovered, the provider will likely be entered into another round of auditing (with the same one-on-one education sessions and 45-day review period). If, after a third round of auditing, CMS decides the provider has failed to improve, they will likely require additional action, including “100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action.” Fortunately, that’s not a common occurrence; CMS notes that, of the 13,500 providers in the program during FY 2019, only 2% failed all three rounds of TPE.      

What are MACs looking for during an audit? 

Providers aren’t looking to run afoul of CMS with their billing practices, so they may not be aware of the mistakes that can put them under their MAC’s microscope. In this blog, Mary Daulong, PT, CHC, CHP highlights what billing practices are most commonly flagged during TPE audits, including:  

• Redundant coding that uses the same CPT codes regardless of condition or diagnosis; 
• Flat or non-progressive coding that doesn’t demonstrate progression through an episode of care;
• Generic coding that uses CPT codes without consideration of definition or purpose;
• Payment-focused coding of the highest-paying CPT codes; and
• Volume coding for multiple individuals under one National Provider Number (NPI). 

Similarly, CMS highlights the most common claim errors:  

• Missing signatures from the certifying physician;
• Encounter notes not supporting elements of eligibility;
• Not documenting medical necessity; and
• Missing or incomplete certifications or recertifications. 

Providers should also be aware that MACs are governed by strict rules during the TPE process—  unlike other MAC audits, they can only request records and documentation for the claims that have been selected for the audit.  

Example of a TPE Audit

What does a TPE audit look like in practice? Thankfully, Young Moore Attorneys was able to detail how Palmetto GBA, the MAC for North Carolina facilities, approaches the process. 

In this case, Palmetto focused its initial audits on ultra-high (RU) and very-high (RV) rehab categories. The blog notes that once Palmetto has informed the provider of its entry into the TPE program, its focus for the 20 to 40 claims under review is heavily on pre-payment audits. It also notes that Palmetto’s reviewers are working from an internal checklist for each claim, with a simple rubric: if errors, denials, or partial denials are found with more than 20% of the selected claims, the audit moves to the second round.

After the initial round of the audit, Palmetto’s reviewers hold a call with the provider to offer education on the errors they uncovered. For those continuing to another round of review, Palmetto gives them 45 to 56 days to make improvements before sending additional claims for review; for those that passed, they walk away with notes for improvement, and the assurance that Palmetto can’t conduct another audit of that same category for a year.     

The blog also details the headache that TPE audits can pose for providers on multiple fronts. Audits on  pre-payment claims can keep a significant amount of revenue held up, even as reviewers promise to work quickly. Providers also noted a significant number of errors from the reviewers themselves, and while those errors can be addressed upon review, they can lead to an additional round of audits or even further action from CMS in the meantime. And Palmetto apparently falls short in its educational efforts, as providers note that they receive their TPE audit results only after their educational call with reviewers, denying them the chance to ask more meaningful questions. 

I’m being audited—now what? 

Being audited can feel a bit like a passive exercise for providers—something that’s happening to you, rather than something you’re actively engaged with. But that’s the not the best approach. You actually get to choose how to respond to your TPE audit, and that decision can impact your chances of escaping relatively unscathed by the process. 

You can focus on complying with the process. 

The most important thing you can do when facing an audit is to closely follow the required steps and to respond to any requests or information in a timely manner. Providers have 45 days to respond to requests for additional documentation from MACs, so make sure that contact information within Provider Enrollment, Chain, and Ownership System (PECOS) is up-to-date so that notifications aren’t sent to the wrong location. Providers should also take advantage of any educational sessions offered by the MAC to understand what auditors are looking for and where they can improve in their billing practices.   

You can appeal the results of the audit.

If you feel that the results of your audit aren’t correct, you can choose to appeal through the Medicare Appeals Process. As laid out in this blog, providers will first have to request a redetermination of overpayment by the MAC. If the redetermination isn’t found in your favor, you can seek a review from a Qualified Independent Contractor. If that appeal is also unsuccessful, you can then present your case to an Administrative Law Judge. If you’re denied yet again, you can go to the Medicare Appeals Council to seek judicial review in federal court. It can be a lengthy and complex process if you choose to go this route, so you may want to seek legal advice from a healthcare attorney first.   

You can learn how to avoid future audits.

Hopefully, the biggest lesson you take away from your TPE audit is how to avoid getting audited again in the future. In addition to acting upon the feedback from reviewers, take the opportunity to examine how your current workflows might be leading to unnecessary mistakes in your billing practices. This blog from MagMutual lays out a few good practices clinics can put in place to help avoid future errors that could lead to a TPE audit, like:

• Creating a process and dedicated team for responding to TPE audits, as well as training on that process;
• Having routine internal (or external) audits of your billing practices; 
• Creating checklists for staff to make sure they’re adhering to billing best practices; and  
• Improving your documentation and signature processes. 

To paraphrase Wallace, TPE audits aren’t going away anytime soon, so providers’ only choice is to organize your billing practices around this new reality to make it easier on themselves. 

When it comes to TPE audits, it’s useful to think of the saying “An ounce of prevention is worth a pound of cure.” In this case, prevention is taking the relatively simple step of getting your billing practices in order to avoid the billing errors and claims denials that bring about a painful audit. Make it easier on yourself by opting for software solutions (like WebPT Billing or Therabill) that simplify compliance and cut human error out of the process.   

If you've got further questions about TPE audits, you can always drop 'em in the comments below. We also recommend registering for our annual billing Q&A webinar, during which Wallace and WebPT co-founder and Chief Clinical Officer, Heidi Jannenga, will examine the latest developments in PT billing (including TPE audits), before answering as many viewer questions as time will allow.