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“TPE” Audits: Three Strikes and You could be Out (Of Business)!

“TPE” Audits: Three Strikes and You could be Out (Of Business)!-
Medicare Administrative Contractors (“MACs”) are sending out letters to ambulance service suppliers across the country. These letters indicate that you have been selected for a “Targeted Probe and Educate” review, or “TPE” for short. This is not a prestigious award, and you have not won a prize; you are being audited. Here’s what you need to know if and when you get one of these letters:

  • The TPE is a new form of pre-payment review, which began as a pilot project before being expanded into all states at the end of 2017. The MAC will begin this process by asking you for documentation from 20 to 40 transports. Based on a review of these claims, you will be assigned an error rate. If your error rate is sufficiently low, then the process ends and you will not be re-selected for review for at least a year. However, if your error rate is “high” (there is no set or published threshold for what is considered a “high” rate of error, so I cannot tell you what expect on that point) the auditor will send you “educational” materials and you will move on to round #2. From some of the MACs, the educational materials you receive are often no more than a data dump of every known regulation and guideline that may apply to ambulance services. This can leave you digging through the educational materials in order to find something relevant to your specific error, however the MAC is supposed to allow for an educational conference call with you as well, so do not miss the opportunity to discuss your claims and errors with them.
  • In the second round of review, they will give you about two months to let the “education” take effect and give you time to get your errors corrected, then you will be asked for another 20 to 40 claims. The review of these claims will result in your new error rate. If it has decreased to an acceptable level, you are off the hook. If the error rate is still what the MAC considers to be high, you move on to the final round.
  • If you make it on to round three, you are in harm’s way. A “high” error rate after this third round may result in 100% pre-pay review, referral to a recovery auditor (a ZPIC or RAC) for a post-payment audit, extrapolated damages (note: a sustained high error rate or failure of prior education to correct errors are the two basis upon which a Medicare contractor may use extrapolation to increase the amount you owe them by applying your error rate to all claims you have submitted to them, not just the handful that they actually reviewed), or other action which could include being removed from the Program. Any one of these options will carry huge financial consequences that could be more than a small ambulance service can withstand.

So, what should you do when you get this TPE letter in the mail? First, take it very seriously and make sure it gets into the hands of the proper staff with your service. Second, make sure you gather all of the requested materials and review them to make sure they are complete and legible before you send them back (but be sure to send them back in time!). Third, if the documentation is not complete or parts are illegible (including signatures and/or credentials), there are some things you can appropriately do to correct your errors before they are identified by the MAC, take advantage of that opportunity and make addendums, get signature attestations, gather third party (SNF or Hospital) medical records, etc. And finally, if you have any question about what I mean in the prior sentence, or if you are found with a high error rate after round one, GET HELP! There is too much at stake to go it alone unless you are sure that you can get these errors corrected and drop your error rate quickly. The consequences for failure after the third round of review can be devastating- just remember, three strikes and you could be out!

Christopher Kelly is a lawyer who focuses on regulatory healthcare law as it relates to the EMS and ambulance industry. This article is not intended as legal advice. For more information, he can be reached at EMS Consultants, Ltd., (800) 342-5460 or email to