Medicare TPE Audits: A Wolf in Sheep’s Clothing (Part II)

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Original story posted on: June 5, 2019

Let’s talk targeted probe-and-educate (TPE) audits – again.

I received quite a bit of feedback on my recent RACmonitor article regarding Medicare TPE audits being a “wolf in sheep’s clothing.”

So I decided to delve into more depth by contacting providers who had reached out to me to discuss specific issues. My intent is to shed the sheep’s clothing and show the big, pointy ears; the big, round eyes; and the big, sharp teeth that the Medicare Administrative Contractors (MACs) will use to hear, see and eat you through the Medicare TPE audits. So call the Woodsman, arm yourself with a hatchet, and get ready to be prepared. I cannot stress enough the importance of being proactive.

The very first way to rebut a TPE audit is to challenge the reason you were selected, which includes challenging the data supporting the reason. A poor TPE audit can easily result in the termination of your Medicare contract, so it is imperative that you are prepared and appeal adverse results. 42 C.F.R. § 424.535, “revocation of enrollment in the Medicare program” outlines the reasons for termination. Failing the audit process – even if the results are incorrect – can result in termination of your Medicare contract. Be prepared and appeal.

In 2014, the Centers for Medicare & Medicaid Services (CMS) began the TPE program, which combines a review of a sample of claims with “education” to allegedly reduce errors in the Medicare claims submission process; however, it took years to get the program off the ground. But off the ground it is. It seems, however, that CMS pushed the TPE program off the ground and then allowed the MACs to dictate the terms. CMS claims that the results of the TPE program are favorable, basing its determination of success on the decrease in the number of claim errors after providers receive an education. But providers undergoing the TPE audit process face tedious and burdensome deadlines to submit documents, and to undergo the “education” process. These 45-day deadlines to submit documents are not supported by federal law or regulation; they are arbitrary deadlines. Yet they must be met by the providers, or the MACs will assert 0 percent accuracy. Private payors may create and enforce arbitrary deadlines; they don’t have to follow federal Medicare regulations. But Medicare and Medicaid auditors must obey federal regulations. A quick search on Westlaw confirms that no provider has challenged the MACs’ TPE rules (at least, litigiously).

The TPE process begins by the MAC selecting a CPT/HCPC code and a provider. This selection process is a mystery. How the MACs decide to audit sleep studies versus chemotherapy administration or a 93675 versus a 93674 remains to be seen. According to one healthcare provider that has undergone multiple TPE audits and has Noridian Healthcare Solutions as its MAC, at times, they may have 4 -5 TPE audits ongoing at the same time. CMS has touted that TPE audits do not overlap claims or cause providers to undergo redundant audits. But if a provider bills numerous CPT codes, the provider can undergo multiple TPE audits concurrently, which is clearly not the intent of the TPE audits, in general. The provider has questioned ad nauseum the data analysis that alerted Noridian to assign the TPE to them in the first place. Supposedly, MACs target providers with claim activity that contractors deem unusual. The usual TPE notification letter contains a six-month comparison table, purportedly demonstrating the paid amount and number of claims for a particular CPT/HCPC code, but its accuracy is questionable. See below.

This particular provider ran its own internal reports, and regardless of how many different ways this provider re-calculated the numbers, it could not figure out what the TPE letter was alleging they were billing. But because of the short turnaround deadlines and harsh penalties for failing to adhere to these deadlines, this provider has been unable to challenge the MAC’s comparison table. The MACs have yet to share their algorithm or computer program used to govern a) which provider to target; b) what CPT code to target; c) how the paid amount and number of claims is determined.

Pushing back on the original data on which the MACs supposedly relied to initially target you is an important way to defend yourself against a TPE audit. Unmask the wolf from the beginning. If you can debunk the reason for the TPE audit in the first place, the rest of the findings cannot be valid. It is the classic “fruit of the poisonous tree” argument.

For example, in the above image, the MAC compared one CPT code (78452) for this particular provider for dates of services from Jan. 1, 2017, through June 30, 2017, and then compared those claims to dates July 1, 2017, through Dec. 31, 2017. Why? How is a comparison of the first half of a year to the second half of a year even relevant to your billing compliance? Before an independent tribunal, this chart, as supposed evidence of wrongdoing, would be thrown out as ridiculous. The point is, the MACs are using similar yet equally irrelevant charts as proof of alleged aberrant billing practices.

Another way to defend yourself is to contest the auditor’s/surveyor’s background knowledge. Challenging the knowledge of the nurse reviewer(s) and questioning the denial rate in relation to your TPE denials can also be successful. I had a dentist client who was audited by a dental hygienist. Not to decry the profession of a dental hygienist, but you can understand the awkwardness of a dental hygienist questioning a dentist’s opinion of the medical necessity of service. If the auditor/surveyor lacks the same level of education of the healthcare provider, an independent tribunal will defer to the more educated and experienced decisions. This same provider kept a detailed timeline of their interactions with the hygienist reviewer(s), which included a summary of the conversations. Significantly, notes of conversations with the auditor/surveyor would normally not be allowed as evidence in a court of law due to the hearsay rules. However, contemporaneous notes of conversations written in close time proximity of the conversation fall within a hearsay exception and can be admitted.

Pushing back on the MACs and/or formally appealing the MAC’s decisions is extremely important in getting the correct denial rate.  If your appeal is favorable, the MACs will take into your appeal results into account and will factor the appeal decision into the denial rate.

The point is this – do not accept the sheep’s clothing. Understand that you are under fire during a TPE “educational” audit. Understand how to defend yourself, and do so. Call the Woodsman. Get the hatchet.

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Knicole C. Emanuel Esq.

Knicole C. Emanuel is a partner at the Potomac Law Group, PLLC.

For more than 16 years, Ms. Emanuel has maintained a litigation practice, concentrating on Medicare and Medicaid litigation, healthcare regulatory compliance, administrative law, and regulatory law. She understands the intricate Medicare and Medicaid payment system, the unique business of healthcare providers, the overlay of federal and state Medicare and Medicaid rules and regulations, and actions of state agencies that affect the way healthcare entities operate. She has tried over 1,000 administrative cases and has appeared before arbitration panels and in various appellate forums. Knicole is a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

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