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Patient Care

Legal Lesson of the Month: TPE Audits

G. Christopher Kelly

Medicare administrative contractors (MACs) are sending out letters to ambulance service suppliers across the country. These letters indicate their recipient has 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 prepayment review that began as a pilot project before being expanded to all states at the end of 2017. The MAC begins this process by asking you for documentation for 20–40 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 reviewed again for at least a year. However, if your error rate is “high”—and there is no set or published threshold for what is considered a high rate of error—the auditor will send you “educational” materials, and you will move on to round No. 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 materials 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 their staff.

In the second round of review, they will give you about two months to let the “education” take effect and correct your errors, and then you will be asked for another 20–40 claims. A 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 it’s still what the MAC considers high, you move on to the final round.

If you make it on to round No. 3, you are in harm’s way. A high error rate after this third round may result in 100% prepay review, referral to a recovery auditor (a zone program integrity contractor [ZPIC] or recovery audit contractor [RAC]) for a postpayment audit, extrapolated damages (note: a sustained high error rate or failure of prior education to correct errors are the two bases upon which a Medicare contractor may use extrapolation to increase the amount you owe them by applying your error rate to all claims you’ve submitted to them, not just the handful 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 a 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 the requested materials and review them to make sure they’re 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 addenda, get signature attestations, gather third-party medical records, etc. 

Finally, if you are found with a high error rate or have any question about what any of this means, get help! There is too much at stake to go it alone unless you’re sure 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—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 reach Chris at EMS Consultants, Ltd., 800/342-5460 or 

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