Targeted Probe and Educate (TPE) Audits
· CMS authorizes its MAC’s to conduct Medicare audits of providers and suppliers whose errors rates are higher than their peers related to:
o Billing practices
o Utilization rates (allowables)
· MACs also target providers and suppliers that bill for HCPCS or services with high national errors rates or are focused items/HCPCS
· Includes up to three rounds of reviews and includes 20-40 claims reviewed per round
· If you pass the first round, you will not be reviewed again for that HCPCS, by that contractor, for a year. All other reviews by that MAC and other MACs remain in play
· If provider/supplier does not pass the first round, the MAC will conduct an education session with the provider/supplier and then wait at least 45 days to begin the 2nd round of review.
· If provider/supplier does not successfully pass the review within the three rounds, then the MAC will refer the provider/supplier to CMS for further disciplinary actions that may include:
o 100% pre-pay audits for all claim
o 6-month suspension of billing privileges
o Revocation of Medicare license
o Referral to OIG for criminal investigation
Recovery Audit Contractors (RACs)
· These are companies who are contracted by CMS to identify overpayments and underpayments
o Overpayments are returned to the Medicare Trust Fund
o Underpayments are paid to the provider/supplier
· RACs are HIGHLY motivated and COMPENSATED to focus and find overpayments
o RACs generally receive 9%-12.5% of the overpayments that are returned to the Medicare Trust fund.
o RAC’s found over $900,000,000 in improper payments between 2015 and 2016 alone
§ Approximately, only 18% were underpayments.
Zone Program Integrity Contractors (ZPICs)
· Charged with implementing and enforcing the Medicare Benefit Integrity program
· Involves identifying cases of Fraud: the most serious of audits as these are fraud-based investigations, whereas, RACs, MACs, and TPEs typically are error based.
· ZPICs utilize a variety of proactive and reactive techniques to identify and address any potential fraudulent billing practices.
o This can be via ADRs which could cause great financial damage to the provider/supplier, due to the fact, that all documentation must be submitted, and the appeals process must be completed before the provider/supplier can get paid on the claim
· ZPICs receive referrals from RACs and MACs in additional to their own data analysis to identify potential fraud
· ZPICs utilize date mining from other audits, processed claims, data sharing amongst the various Medicare contractors, etc.