By: Dyana Williams, Director, RCM Solutions

Medicare’s Targeted Probe and Educate (TPE) program is designed to identify and reduce improper payments, enhance compliance, and educate providers on proper billing practices. While TPE audits are intended to be educational rather than punitive, receiving an audit notice can be daunting for any medical practice.

This white paper aims to provide an overview of the TPE audit process and to offer practical recommendations for toxicology, molecular, and genetic labs to avoid such audits. Additionally, we provide guidance on steps to take if an audit notice is received.

Understanding TPE Audits

Each Medicare Administrative Contractor (MAC) publishes and regularly updates a list of the services their TPE audits will target. Monitoring this information should be an important element of a laboratory’s compliance plan.

The TPE program identifies specific services and providers based on data analyses conducted by each MAC. When the result of an analysis indicates that there are higher claim error rates compared to a provider’s peers, the MAC will initiate a TPE audit to help the provider come into alignment with proper billing practices, thereby protecting the Medicare program.

TPE audits typically involve three rounds of review, each followed by educational feedback. The initial Notice of Review from the MAC will typically include a request for 20-40 claims. It is possible for a provider to be involved in several TPE audits at once.

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Key Aspects of TPE Audits:

Review Process: The MAC will conduct an initial review of claims. Providers must submit comprehensive documentation supporting the medical necessity and billing accuracy of the services rendered.

Education Process: Following this review, the MAC will send an educational letter to the provider, inviting them to an educational session.

Repeat x2: The MAC will then repeat this process twice. Two additional rounds of review and education will be required. This provides an opportunity for the lab to demonstrate their success to the MAC in their ability to implement and maintain compliant billing practices.

Possible Outcomes:

1. Successful completion of the audit: If, after three rounds of review, the MAC determines the lab to be compliant, no additional TPE audits will be performed on the same issue for at least one year.
2. Referral to CMS: If, after three rounds of review, the MAC determines that there are still unusual billing practices taking place, the lab will be referred to CMS.  At that time, CMS may require:

• • Additional rounds of TPE review
  • 100% pre-payment review of all claims
  • Overpayment extrapolation
  • Revocation of Medicare participation
  • Other, including referral to Law Enforcement

Avoiding TPE Audits

TPE audits can evolve into UPIC^* audits at any time during the TPE process if the MAC believes that the provider is engaged in fraud, waste or abuse of either of these programs. With that in mind, the best approach to dealing with TPE audits is to avoid them altogether.

Here are some key strategies we recommend labs implement to minimize the risk of receiving a TPE Review Notice:

Ensure Medical Necessity

Labs play a crucial role in ensuring that the services they provide are medically necessary, even in cases in which the ordering provider is not affiliated with the lab. As a result, clinical labs often need to take an innovative approach to provide sufficient evidence of medical necessity.

The Second Circuit Court of Appeals has defined “Medical Necessity” as “what is medically necessary for a particular patient, and hence entails an individual assessment rather than a general determination of what works in the ordinary case” [emphasis added].

For example, PCR and/or NGS testing are highly desirable to patients and physicians because these tests provide a comprehensive analysis, high sensitivity and specificity, rapid results, precision, and high through-put. Despite these advantages, PCR/NGS testing may not always meet the above definition of medical necessity because the clinical situation might not require such detailed information, a less expensive or simpler test may provide sufficient information for treatment, and clinical decision-making may not be impacted by the advanced results these tests provide.

You might ask, “So, how do labs protect their revenue and reduce the likelihood of TPE audits?” Here are some best practices we have identified:

^{*Note: The Unified Program Integrity Contractor (UPIC) is responsible for handling complaints and referrals brought to their attention by MACs, CMS, HHS OIG, Medicaid Fraud Control Units, providers, beneficiaries, and others.  UPIC’s goal is to detect and prevent fraud waste and abuse in Medicare and Medicaid claims.  Possible outcomes of a UPIC audit include site visits, pre-payment and post-payment reviews, suspension of payment, expulsion from the Medicare/Medicaid program, referral to law enforcement (DOJ, HHS OIG, etc.).}

Handling a TPE Audit Notice

If your lab receives a TPE audit notice, it’s crucial to respond promptly and thoroughly. Here are the steps to follow:

1. Gather Required Documentation: Collect all relevant documentation that supports the claims under review. This includes patient records, provider orders, test results, and billing information. Ensure that all documents are well-organized and easy to review.
2. Verify Accuracy: Double-check that all patient identifiers, dates, and critical details are accurate and consistent across all documents. Correct any discrepancies before submitting the documentation to Medicare. Your goal should be to demonstrate to the MAC that you understand their reason for concern and that you are being proactive in correcting the issue.
3. Respond Timely: Adhere to the specified timeframe for responding to the audit notice. Delays can result in penalties or further complications.
4. Implement Feedback: Carefully review the feedback provided after each round of the audit. Implement recommended changes to avoid future issues. Document any corrective actions taken and continue to monitor compliance.

Conclusion

TPE audits are an essential component of Medicare’s efforts to ensure proper billing practices and reduce improper payments. By implementing robust documentation, accurate billing practices, and ongoing education, toxicology, molecular, and genetic labs can significantly reduce the risk of receiving an audit notice. However, if an audit notice is received, a prompt and thorough response, coupled with careful implementation of feedback, is crucial to navigate the process successfully.

If you are selected for an audit and need assistance complying with the request, or if you want to be proactive about reviewing your billing compliance, contact us for a free consultation to learn more.

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