AMARILLO, TX – In recent years, CMS has shifted its audit strategy. It has moved from a “pay and chase” model to a model in which it does not let the money out the door. As a result, DME suppliers are seeing an increase in the number of prepayment audits conducted by CMS. A prepayment audit is more desirable than an extrapolated post-payment audit conducted many years after the provision of service. The sheer number of audits has caused problems for suppliers. While a small number of DME suppliers try to “game the system,” the vast majority of suppliers want to be compliant. Unfortunately, the widespread use of prepayment audits is causing undue stress and burden on compliant DME suppliers.

To compound the problem, appeals are backlogged at the Administrative Law Judge level, taking on average 3 to 4 years for a hearing. There has to be a better way to safeguard the Medicare program with less burden on patients and DME suppliers. The Targeted Probe and Educate (“TPE”) initiative appears to be a step in the right direction.

This year has been very different due to the Public Health Emergency (“PHE”) resulting from the COVID-19 pandemic. In March 2020, most audit activity was suspended. Many CMS regulations were relaxed to allow suppliers to take better care of patients during the PHE. The PHE was recently extended for a 3^rd time effective on October 23, 2020, and it is scheduled to end after the inauguration. It will not be surprising if the PHE extends well beyond the inauguration.

In August 2020, the DME MACs began conducting post-payment audits for reviews of items and services provided before March 1, 2020. TPE audits are still on hold. Effective March 1, 2020, TPE reviews and associated edits were suspended. Pending claims were released for payment. Claims denied for non-response on or after March 1, 2020, were reopened for payment regardless of whether or not an appeal was filed. It is anticipated that after the PHE is over, TPE audits will resume.

TPE – How it Works
Data analysis is used to determine items and suppliers that will be subjected to TPE review:

• High claim error rates; and/or
• Unusual billing practices; and/or
• Items and services that have high error rates and financial risk to Medicare.

The DME MAC may conduct a probe review where 10 claims are selected for review. If all 10 claims are favorable, then the DME will not need to undergo any further review. If not, up to three rounds of TPE review will be conducted. Under TPE, suppliers will not be subjected to unlimited requests for documentation followed by vague denials that go on forever. The DME MAC is limited to requesting 20 to 40 medical records per supplier per issue. Once the records are submitted and reviewed by the DME MAC, it must explain any denials and provide detailed education to the supplier. The supplier is then given 45 days to implement any appropriate changes.

If the supplier is not compliant, the DME MAC can request an additional 20 to 40 records to determine if the errors identified are being addressed. The process will then repeat itself with more education if necessary. The DME MAC will conduct up to three rounds of TPE. If a supplier continues to exhibit errors after three rounds of TPE, a referral to CMS may be made.

Upon receipt of a referral, CMS has multiple options on how to handle the continued errors, including referral to the UPIC, 100% prepayment review, or extrapolation. Once a supplier exhibits an acceptable error rate, the probes will cease. It is to a supplier’s advantage to learn from the education being provided and implement the appropriate corrective actions. Successful suppliers will not be subject to DME MAC review for a minimum of one year. This does not stop UPIC or RAC audits.

TPE – History
In 2014, CMS began using a medical review strategy called “Probe and Educate” for hospital inpatient status cases. This strategy was also used for home health. The Probe and Educate strategy used claim review and education to reduce errors. The Probe and Educate strategy included broad spread probes with CMS choosing the topics for the probe. The data showed there was a decrease in errors after hospitals and home health agencies received education. CMS decided to move from the broad Probe and Educate strategy to a more targeted strategy focusing on specific issues or providers. In Medicare Transmittal 1861, the Probe and Educate strategy was expanded into the TPE pilot that allowed the MACs to select their own review topics. The pilot included Jurisdictions B, D, E, and F with the purpose of testing the strategy for DME and urban regions. Jurisdiction E is the Part A and Part B carrier and includes certain states and U.S. territories. Jurisdiction F is the Part A and Part B carrier and includes certain states.

According to Transmittal 1861, the key elements of the pilot included:

• Replace all current complex and routine reviews in the MAC’s Improper Payment Reduction Strategy with three rounds of a prepayment Targeted Probe and Educate process. This pilot will be for the medical review process in one MAC jurisdiction. This instruction excludes any reviews or pilots that are otherwise mandated by CMS.
• If high denial rates continue after three rounds, the MAC will refer to CMS for additional action that may include extrapolation, referral to the ZPIC/UPIC, and/or referral to the RAC.
• The MAC, rather than CMS, will select the topics for review (based on existing data analysis procedures).
• The MAC can target the strategy on the providers most likely to be submitting non-compliant claims rather than reviewing 100% of the providers.
• Limit the sample for each probe “round” to a minimum of 20 and a maximum of 40 claims.

During the pilot, MACs were required to cease all complex reviews, routine reviews, and documentation compliance reviews. CMS has deemed the pilot a success and has expanded TPE to all MAC jurisdictions. As a result, TPE has been used in all DME MAC jurisdictions since October 2017.

Selection of Claims
The DME MACs select claims for items and services that, in their opinion, pose the greatest financial risk to the Medicare program and/or those that have a high national error rate. The DME MACs will focus only on suppliers that have the highest claim error rates or billing practices that vary significantly from their peers. The suppliers and specific items or services are identified by using data analysis. TPE claim selection is different from that of the previous probe and educate programs. In the previous programs, the first round of reviews were of all providers for a specific service. In the current program, the TPE claim selection is supplier specific from the onset. This eliminates a burden on suppliers that, based on data analysis, are already submitting claims that are compliant with Medicare policy. If selected for review, suppliers are not excluded from other Medical Review activities such as automated reviews, other pilot review programs, prior authorization, etc.

Responding to a TPE
What should the supplier do if selected for TPE?

• The supplier should timely respond to any request for documentation.
• It will be necessary for the supplier to obtain medical records if it does not already maintain them.
• The supplier should provide the documents in a well-organized manner along with a summary of the records, specifically pointing out where in the documentation the local coverage determination criteria can be found.
• Once the supplier receives the results, it will be given the opportunity for detailed education pertaining to the errors.
• The supplier needs to take full advantage of this opportunity.
• The supplier should make sure that it understands the error and what it needs to do to correct the problem.
• If the DME MAC suggests changes to the supplier’s documentation, the supplier should make the changes.
• Once the education has been completed, the supplier should implement appropriate corrective action.
• The corrective action should include training of key personnel who will be in a position to assure that moving forward the supplier’s documentation meets Medicare guidelines.

The sooner the supplier is compliant, the sooner it will be released from TPE. If the supplier does not implement the appropriate corrective action and continues to have a high error rate, it will receive additional probe reviews. The supplier will be given at least 45 days to implement changes before a new probe is started. Under TPE, suppliers will be provided the education needed to submit compliant claims. CMS believes it will be able to reduce the number of claims being pumped into the appeals process by educating suppliers on claim requirements.

Feedback
Feedback from the supplier community has been positive. TPE appears to be a step in the right direction.

TPE Results – The Big Picture

• CMS Overall Statistics
  • 32% of suppliers released after Round 1
  • 43% of suppliers released after Round 2
  • 57% of suppliers released after Round 3
  • 193 suppliers referred to CMS
    • 50 are DMEPOS

• Jurisdiction A Results as of June 2019
  • 11% of suppliers excluded based on 10-claim pre-TPE
  • 25% of suppliers move from Round 1 to 2 (failed Round 1)
  • 41% of suppliers move from Round 2 to 3 (failed Round 2)
  • 1% of suppliers failed Round 3
    • Referred to CMS

• Jurisdiction B Results as of February 2020
  • 7% of suppliers excluded based on 10-claim pre-TPE
  • 50% of suppliers move from Round 1 to 2 (failed Round 1)
  • 56% of suppliers move from Round 2 to 3 (failed Round 2)
  • 84% reached exclusion after Round 3

• Jurisdiction C Results as of February 2020
  • 7% of suppliers excluded based on 10-claim pre-TPE
  • 43% of suppliers move from Round 1 to 2 (failed Round 1)
  • 47% of suppliers move from Round 2 to 3 (failed Round 2)
  • 45% reached exclusion after Round 3

• Jurisdiction D Results as of February 2020
  • 28% of suppliers excluded based on 10-claim pre-TPE
  • 25% of suppliers move from Round 1 to 2 (failed Round 1)
  • 34% of suppliers move from Round 2 to 3 (failed Round 2)
  • 19% of suppliers failed Round 3
    • Referred to CMS

AAHomecare’s Retail Work Group
The Retail Work Group is a vibrant network of DME industry stakeholders (suppliers, manufacturers, consultants) that meets once a month via video conference during which (i) an expert guest will present a topic on an aspect of selling products at retail, and (ii) a question and answer period will follow. The next Retail Work Group video conference is scheduled for November 12, 2020, at 11:00 a.m. Central. Lisa Wells of NATURALLY ABLE will address “Reaching Your Retail Audience Beyond Google Ads.” Participation in the Retail Work Group is free to AAHomecare members. For more information, contact Ashley Plauché, Manager of Member & Public Relations, AAHomecare ([email protected]).

Denise M. Leard, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. She represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Leard is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6318 or [email protected].

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].