The Centers for Medicare & Medicaid Services (CMS) is lightening the audit burden on physicians by rolling out a new approach to claims review that targets fewer providers and requires the review of fewer claims than the current approach does. This new policy reduces the likelihood that physicians who follow sound billing practices will be audited.
In an August 14 update on its website, CMS explained that it was revising its medical review process to target only specific providers or suppliers who have billed Medicare for particular services, rather than all of them. Referring to the two-step process of identifying providers who have made billing errors and then educating them, the agency calls this new approach Targeted Probe and Educate (TPE). It replaces the current Probe and Educate program, which began in 2014 and targets all providers who bill for particular services or items.
In both the TPE pilot and the nationwide program that is being introduced, the Medicare administrative contractors (MACs) who perform audits select claims for services or items “that pose the greatest financial risk to the Medicare trust fund and/or those that have a higher national error rate,” CMS said. The MACs focus on providers and suppliers who, on the basis of data analyses, have the highest claim error rates or whose billing practices differ significantly from those of their peers.
The selected providers are subjected to a review of 20 to 40 claims per service. This is a far smaller number than that used in previous medical reviews, CMS said. If this first-round review shows that the provider is noncompliant with Medicare billing requirements, the provider receives individualized education. After a period of at least 45 days, the MAC may review a second batch of 20 to 40 claims. If, after more education, the provider is still noncompliant, a third round of reviews is conducted.
“Providers/suppliers with continued high error rates after three rounds of TPE may be referred to CMS for additional action, which may include 100% prepay review, extrapolation, referral to a Recovery Auditor, or other action,” the document said. (“Extrapolation” refers to the practice of extrapolating errors in certain types of claims to all claims of that kind, which can result in denials of those claims.)
As part of the Trump administration’s commitment to reducing government regulations, the Department of Health and Human Services (HHS), to which CMS belongs, is trying to lighten regulatory burdens on physicians and other providers. For example, Donald Rucker, MD, the new national coordinator of health IT, recently said this will be a major priority for his office. And this week CMS rescinded two new bundled payment programs that were scheduled to start January 1, 2018. The TPE program fits into this pattern of regulatory relief.
Modern Healthcare pointed out that CMS is struggling with a backlog of more than 667,000 pending claims appeals. The publication said that the process by which MACs flag and challenge claims at random has led to this high backlog. If so, it is possible that TPE is aimed partly at decreasing the backlog.
GAO Report
The Government Accountability Office (GAO) last March released a report that was critical of CMS’ provider education approach. GAO found that CMS did not exercise proper oversight with regard to how the MACs identified services and items vulnerable to improper billing.
CMS considered the review-and-educate approach to hospital audits to be a success, based on anecdotal feedback from providers, GAO said. “However, the effectiveness of these reviews cannot be confirmed because CMS did not establish performance metrics to determine whether the reviews were effective in reducing improper billing,” the report noted.
HHS generally concurred with GAO’s recommendations and said it was developing performance metrics to measure the effectiveness of the probe-and-educate reviews.
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