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CMS Announces New Nationwide ‘Targeted Probe and Educate’ Medical Review Strategy

The Centers for Medicare & Medicaid Services recently expanded its national audit strategy, titled “Targeted Probe and Educate,” for Medicare billing review after pilot programs with four Medicare Administrative Contractors produced favorable outcomes.

As of October 1, 2017, the Centers for Medicare & Medicaid Services (CMS) expanded its Targeted Probe and Educate (TPE) program to include all Medicare Administrative Contractors (MACs) including the Home Health and Hospice MACs. The TPE program is a national clinical document review effort that CMS intends to use to reduce and prevent improper payments.


CMS employs a variety of program integrity contractors to review claims for compliance with Medicare’s myriad of billing rules and regulations. CMS largely relies on its network of review contractors, including MACs, to perform reviews of clinical documents in accordance with CMS instructions.

In June 2016, CMS began a pilot of the TPE program in one MAC jurisdiction, and later expanded it to three additional MAC jurisdictions in July 2017. Using the TPE program, MACs designate their review topics based on their own strategies and focus on providers within specific services, such as those that pose the greatest financial risk to the Medicare Trust Fund and/or those that have high national error rates. Similarly, using the TPE prepay review, MACs will focus on providers that have the highest claim error rates or billing practices that vary significantly from their peers, instead of all providers that bill a particular service. During the initial pilot, CMS indicated that it obtained favorable results including decreased incidences of improper payments and increased education of providers. CMS then requested that all MAC jurisdictions implement the new TPE review processes. This expansion will comprise three rounds of prepayment probe review and subsequent education.

Key Elements

CMS’s stated goal of the TPE program is to reduce and prevent improper payments. CMS highlighted specific areas where it saw favorable results during the TPE pilot testing, including the following:

  • The replacement of all current medical record reviews in the current MAC Improper Payment Reduction Strategy with TPE review.

  • If multiple rounds of review resulted in high denial rates, such as denial based on the Medicare Fee-for-Service improper payment rate, the MAC referred providers to CMS for additional appropriate action.

  • The use of a representative sample of 20–40 prepay claims for each TPE round.

CMS TPE Expansion Strategy

The revised TPE program includes certain changes to probe size and follow-up education efforts to permit providers, including hospices, to more effectively request information of the MACs and to understand the errors specific to their claims and documentation. However, at the same time, the TPE program instructs MACs to refer providers with apparent repeated or systemic errors to the applicable Zone Program Integrity Contractor (ZPIC), Unified Program Integrity Contractor (UPIC), or Recovery Audit Contractor (RAC) for possible post-pay extrapolated audits.

While CMS hopes that the TPE program will catch errors on the front end to avoid large overpayments and reduce the number of Medicare appeals, it may—at least in the short term— lead to even more post-pay ZPIC/UPIC/RAC auditing. As CMS’s TPE Flow Chart demonstrates, while hospices will have multiple chances to show that their documentation appropriately supports their claims, MACs and other CMS contractors have historically taken an aggressive position in denying claims associated with clinically ineligible patients. The nature of hospice care and the trajectory of a patient’s terminal condition make prognostication difficult, but CMS contractors often fail to find record support for patients without clear decline. As a result, we anticipate that many hospices could find themselves in TPE Round 2 or 3 with ongoing errors, potentially leading to ZPIC/UPIC/RAC referrals. It is important to remember that CMS contractors generally rely on nurse reviewers, not physicians, when making determinations about clinical eligibility and terminal prognosis.

Responding to TPE Review Requests

Many hospices may perceive these reviews as routine since they are done on a prepay basis. However, without giving these reviews significant attention, the outcome may naturally progress to more serious and more intensive post-pay reviews. Particularly, the TPE program is more like an excessively active Additional Development Request (ADR) review. Yet, given the potential consequences of repeated denials in the TPE program, hospices should not treat these requests like they might an ADR. Instead, hospices should educate and instruct their staff on ensuring that documentation for claims selected in the TPE review process adequately supports the associated physician certifications or terminal illness. Documentation, particularly for patients with Alzheimer’s and other dementia illnesses, should paint a clear and consistent picture of the patient’s terminal decline, including FAST scores that appropriately align and that are consistent with the other observations noted in the medical records. If the patient’s condition does not meet applicable LCD criteria, the records should explain why the patient is nonetheless terminally ill. Hospices should be sure to train not only nurses and hospice aides on effective documentation strategies, but also chaplains, social workers, volunteers, and anyone else who may interact with the patient and his/her family. Medicare contractors do not limit their review to nursing notes and physician narratives—neither should you.

For more information from CMS on the scope of the TPE program please visit CMS: Targeted Probe and Educate Notification. Additionally, CMS has developed a Targeted Probe and Education Flow Chart to detail the step-by-step process.

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume VII, Number 334

About this Author

Howard Young, Morgan Lewis, Healthcare lawyer

A nationally recognized leader in healthcare fraud and abuse and regulatory issues, Howard J. Young leads the Morgan Lewis healthcare practice and co-leads the healthcare industry initiative where he advises a range of healthcare clients on government investigations, regulatory, and transactional matters. Healthcare organizations turn to Howard to address their most critical legal, compliance and strategic business issues and to assist with internal and government investigations and self-disclosures. Howard regularly advises investors, including private equity firms, on...

Jacob Harper, healthcare attorney, Morgan Lewis

Jacob Harper advises stakeholders across the healthcare industry, including hospitals, health systems, large physician group practices, practice management companies, hospices, chain pharmacies, manufacturers, and private equity clients, on an array of healthcare regulatory, transactional, and litigation matters. His practice focuses on compliance, fraud and abuse, and reimbursement matters, self-disclosures to and negotiations with OIG and CMS, internal investigations, provider mergers and acquisitions, and appeals before the PRRB, OMHA, and the Medicare Appeals Council...

Jonelle C. Saunders, MorganLewis, Healthcare lawyer

Jonelle C. Saunders is part of our litigation and healthcare teams providing services in a wide range of areas. Jonelle advises clients on general litigation matters, corporate investigations, and regulatory enforcement and compliance. She also provides counsel to stakeholders across the healthcare industry on regulatory and litigation matters, including federal and state fraud and abuse matters.