Coding & Reimbursement

A kinder, gentler audit? Get ready

As if we didn’t have enough audits to worry about, now CMS has come up with a new one!

Q. What is this new audit?

A. The new audit is a Medicare-claims, data-driven review conducted by your Medicare Administrative Contractor (MAC). CMS calls this medical review strategy “Probe and Educate”. Known as a Targeted Probe and Educate review, it began as a single-state pilot program in 2014. In June 2016, it was expanded, and in July 2017, it expanded again to three more MACs. By the end of 2017, the program expanded to all MACs.

CMS notes that the pilot “… combined a review of a sample of claims with education to help reduce errors in the claims submission process”. CMS believes this program has been successful, based on the decrease in the number of claim errors after providers received education.

Q. How are the audits conducted?

A. CMS plans to conduct audits consisting of 20 to 40 claims per provider, per item or service, per round. There will be up to three rounds of review. Each round is a “probe”. CMS notes, “This term is intended to convey that the number of claims reviewed is relatively small in comparison with previous provider specific review where the number of claims reviewed for an individual provider may have been much larger. After each round, providers are offered individualized education based on the results of their reviews.”

CMS notes that if providers do well on early rounds, they are less likely to go through subsequent rounds: “Whereas previously the first round of [other types of] reviews were of all providers for a specific service, the TPE claim selection is provider/supplier specific from the onset. This eliminates burden to providers who, based on data analysis, are already submitting claims that are compliant with Medicare policy.”

CMS adds, “Providers/suppliers may be removed from the review process after any of the three rounds of probe review, if they demonstrate low error rates or sufficient improvement in error rates, as determined by CMS.”

If you have a low error rate after round one, you are probably done. However, if you have a moderate or high error rate after round one, you will continue to round two. Likewise, a high error rate in round two automatically moves you to round three.

Unfortunately, we don’t yet know how CMS will determine what constitutes a “high”, “moderate” or “low” error rate.

Q. How do they choose which issues to include in a review?

A. According to CMS, this is done via data analysis from claims submitted to each MAC. The agency states it “will select claims for items/services that pose the greatest financial risk to the Medicare trust fund and/or those that have a high national error rate. MACs will focus only on providers/suppliers who have the highest claim error rates or billing practices that vary significantly out from their peers.”

Q. What is CMS’ “education” if I don’t do well?

A. CMS says “MACs also educate providers throughout the probe review process, when easily resolved errors are identified, helping the provider to avoid additional similar errors later in the process.” CMS does this in a “1-on-1 education session (usually held via teleconference or webinar), [where] the MAC provider outreach and education staff will walk through any errors in the provider/supplier’s 20-40 reviewed claims. Providers/suppliers will have the opportunity to ask questions regarding their claims and the CMS policies that apply to the item/service that was reviewed.”

The agency says it will allow 6 to 8 weeks for you to implement changes, and for new claims to be filed and processed before the next round begins.

If you don’t do well on round three, it gets worse. Medicare says you can be referred for additional, more serious, actions.

The agency notes, “continued high error rates after three rounds of TPE may be referred to CMS for additional action, which may include 100% prepay review, extrapolation, referral to a Recovery Auditor, or other action.”

  • 100% prepayment review means that every claim will require submission of records, review by the MAC, and a determination of correctness before any payment is forthcoming. This could put a significant financial burden on the practice’s cash flow.
  • Extrapolation means your error rate on the small number of claims is applied to all your submitted claims for a payer for that service. Defending against extrapolated results is burdensome and expensive, and almost always requires legal help.

Q. What can I do to protect myself?

A. Look at your own utilization patterns, both by provider and for the group. If you discover a high number of a particular service provided to Medicare beneficiaries compared with your peers, you might find yourself selected for a TPE audit. CMS is moving to more robust data analysis, and the agency is focusing its reviews far more specifically. We expect that private payers will use your claims data in the same way, if they are not already doing so.

Your chart documentation of services provided and support for medical necessity will determine how well you do.

Careful attention to all payer policies, and practicing consistent with the standard of care, are key. This data analysis to identify outliers emphasizes the need for you to know your own utilization rates.

For additional assistance, CMS published a “TPE QA” in October 2017. It is available to you on the TPE webpage under the “Downloads” area ( ). OM