A Medicare Part B TPE audit, also known as Targeted Probe and Educate, is a claim-level review that a Medicare Administrative Contractor (MAC) may use. The MAC runs this claim review on behalf of the Centers for Medicare & Medicaid Services (CMS).
MACs focus on suppliers and billers with the highest claim denial rates for specific items or services, or billing patterns that differ significantly from their peers.
Each MAC sets its dedicated review targets for one-on-one education during each review round. With the help of this education program, practices can:
- Understand documentation deficiencies
- Correct coding errors
- Improve future claim accuracy
In simpler terms, the TPE audit ensures the healthcare providers are following Medicare coverage, coding, and documentation requirements.
Importance of TPE Audit in Healthcare
TPE audits hold great significance in healthcare for multiple reasons that new practices must understand before moving forward. These reasons include:
Provider and Medicare Relationship
Medicare Part B TPE audit has a direct impact on the relationship between Medicare reviewers and providers. According to Nordian, the TPE program resumed to educate providers and reduce claims denials.
Therefore, the program is an educational and corrective initiative rather than a punitive review. It does not penalize practices for violations and provides comprehensive education and guidance for multiple rounds.
For this reason, it leads to a stronger provider-Medicare relationship and reduces the chances of errors.
Individualized Education
According to CMS, the TPE audit program focuses on reviewing fewer than 20 claims per round for up to three rounds. The primary purpose of this program is education, but not all providers are selected for review.
Providers with compliant billing patterns are generally less likely to be selected for the Medicare Part B TPE audit. Additionally, even selected providers receive individualized (one-on-one) education. This education is targeted towards specific errors found in their claims.
This way, the TPE review creates a built-in feedback loop, which provides practices an effective chance to rectify coding or documentation issues before they escalate further.
It helps reduce repeated denials and avoid escalation to more intensive medical review if gaps are corrected.
More importantly, this correction opportunity has a positive impact on a larger scale. CMS’s own 2025 improper payment data reported a 93.45% payment accuracy rate and a 6.55% improper payment rate for Medicare fee-for-service claims.
Such numbers indicate targeted educational reviews are essential for Medicare’s strategy for payment integrity.
Reduced Burden on Practices
Did you know that, according to Experian, 10% or more of claims are denied for a growing number of providers? Such denials result in a serious administrative burden, impacting the quality of healthcare services provided by a practice.
Fortunately, the Medicare TPE audits aim to reduce future denials and the administrative burden associated with appeals via provider education.
This is because of the one-on-one education provided before, during, and after every probe. The TPE audit program’s real value is its corrective intent, as it prevents practices from being penalized immediately.
Fraud, Waste, and Abuse (FWA) Prevention
TPE reviews typically do not qualify as fraud investigations. However, they can identify risks in healthcare billing regarding:
- Fraud
- Waste
- Abuse
When providers implement the education received during TPE, practices may improve:
- Billing workflows
- Claim accuracy
- Denial management
- Documentation quality
This helps CMS protect the Medicare system from improper payments and financial leakage.
RCM Strengthening
A TPE audit can impact a practice’s revenue cycle management (RCM) in healthcare. So, if a practice uses outdated billing practices, they may face:
- Increased accounts receivable (AR) days
- Revenue leakage
- Delayed reimbursements
- High claim denial rates
However, with the help of TPE reviews, all of the above can be avoided. And as the improvements compound over time, the revenue cycle for the practice is streamlined.
Targeted Probe and Educate (TPE) Audit Process
As mentioned earlier, a Medicare Part B TPE audit typically involves the review of 20 claims per round for up to three rounds.
This limit applies to each supplier, provider, service, or item, considered one round. Before participating in Medicare TPE audits, it is necessary to understand the process. A typical process includes:
Round One
During the first round of a TPE review, the MAC identifies providers for review based on:
- Provider type
- Item or service billed
- Billing issues
- Unusual billing patterns
Once the claims have been identified, the MAC may request supporting medical records for a selected sample of claims. During the review, the MAC verifies compliance with Medicare standards for:
- Coverage
- Coding
- Documentation
- Medical necessity requirements
Depending on the review, this may occur before or after the payment is made. More importantly, at times, MACs may use a phased approach.
A good example is Noridian’s Durable Medical Equipment (DME), which may begin with a 10-claim preview.
If all the claims reviewed are compliant or have a zero-error rate, the TPE audit concludes without extending to additional claims. Conversely, if the claims have errors, the review proceeds with a larger sample of claims.
Rounds Two and Three
A provider may be required to undergo the second or third round of the TPE audit in certain situations.
It typically occurs when a provider’s existing claim error rate is unacceptably high, even after review and education provided in the previous round.
Each subsequent round repeats the same steps:
- A new claim sample is reviewed
- Specialized and individualized education is provided
- The provider demonstrates claim compliance and accuracy improvement
Even during the second and third rounds, the objective of the TPE audit is to provide corrective education and not punishment. Typically, this process ends as soon as a provider consistently submits compliant claims.
Important TPE Insight: A provider generally undergoes no more than three rounds of TPE for the same issue before the MAC considers other administrative actions if improvement is not demonstrated.
What Happens If a Provider Fails All Three Rounds?
Although a Medicare Part B TPE audit is designed to provide comprehensive corrective education to providers, it may not always yield the desired results.
Some providers may maintain a high claim denial or error rate even after completing three of the TPE audits.
In such cases, the MAC may refer the provider for additional review or oversight, which can involve CMS program integrity contractors, such as:
- Recovery Auditor
- Unified Program Integrity Contractor (UPIC), formerly ZPIC in many jurisdictions
Typically, these referrals are made for program integrity investigation, but may not occur automatically.
If a provider remains non-compliant for extensive periods, it may showcase an increased risk to the Medicare program.
A MAC may discontinue the TPE audit if the provider sustains improvement and reaches an acceptable claim error rate before completing all the rounds.
Common Challenges During a TPE Audit
The Medicare Part B TPE audit is a step-by-step process meant for corrective education of providers with high error rates. Despite its systematic approach, the TPE review has its challenges.
Staff Turnover
A trained staff is the backbone of any medical practice. However, when this Medicare-trained team leaves for some reason, it must be replaced with a new one. Unfortunately, compliance and billing knowledge can be lost even if a small number of employees leave.
Losing an integral staff member mid-review might impact how efficiently a practice responds to audits. Therefore, practices with a higher staff turnover rate are typically at a higher risk.
Tight Deadlines and Scheduling Changes
Meeting documentation deadlines can be challenging, especially when audit requests coincide with scheduling or staffing changes. Small or medium-sized practices may not have a dedicated compliance officer.
Therefore, they are often subject to this pressure. Generally, the staff member handling the TPE response also manages daily billing and patient care.
Missing or Incomplete Documentation
Insufficient documentation supporting medical necessity is one of the most common findings during TPE audits and reviews.
Ideally, the documentation must justify the reason for the service being medically necessary and reasonable. Typically, this is based on the patient’s condition.
The submitted documentation may fail to support Medicare coverage requirements adequately. So, the claim will be denied even if the service was clinically necessary, but the documentation did not include the following:
- Patient history
- Assessment
- Clinical rationale
- Treatment justification
EHR Authentication and Signature Limitations
All documentation submitted for claim processing must be properly authenticated per CMS guidance. The TPE review may be adversely affected if the EHR system limitations continue to result in:
- Incomplete signatures
- Unsigned orders
- Unauthenticated documentation
Such instances can directly reduce the evidentiary importance of the submitted medical records, making the review process more complex.
Scattered Documentation
Differences among submitted documentation can be a leading cause of TPE audits. All medical records and their components should correspond and align with one another, which may include:
- Procedure reports
- Billing codes
- Orders
- Diagnoses
- Physician notes
If these documents have inconsistencies, it may create uncertainty and require clarification or additional scrutiny.
Multi-Provider Records
The more fragmented a practice’s records are, the harder it typically is to compile them. If data is coming from multiple providers, it can increase the chances of errors during information transfer and recording.
To avoid such instances, practices must maintain dedicated systems for:
- Clinical documentation
- Imaging
- Laboratory results
- Billing information
These systems can be helpful when retrieving records from multiple sources that need to be retrieved quickly.
If practices continue using fragmented documentation, it can increase the preparation time for a complete submission. Additionally, it may result in the absence of essential supporting records, increasing the chances of compliance violations.
Changes in Medicare Requirements
Medicare documentation requirements are a foundational element of compliance. Incomplete documentation may result in continued TPE audits, reviews, and additional rounds of education.
In addition to compliance, the changes in Medicare coverage policies are also a serious concern. Providers must ensure their existing systems comply with these requirements.
Typically, the required documentation includes compliance with:
- Local Coverage Determinations (LCDs)
- National Coverage Determinations (NCDs)
- Medicare Administrative Contractor (MAC) guidance
If practices fail to monitor these changes, they may follow outdated documentation practices, resulting in a direct violation.
Important Insight: The documentation requirements may be subject to change based on annual updates. Therefore, practices must verify the latest requirements before their audits.
Summing It Up
A Medicare Part B TPE audit provides practices an opportunity to correct deficiencies and improve compliance before a more intensive Medicare review. The audits may be beneficial only to practices that can respond to such requests immediately.
Practices must respond promptly and completely to TPE requests to benefit from the program’s educational process. The benefits may include:
- Accurate coding
- Documentation support
- Ongoing compliance monitoring
- Audit readiness
If your in-house teams are unable to deliver this, MediBillMD’s medical billing services identify documentation gaps and align claims with requirements set by Medicare.
