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CMS Announces Targeted Probes of Health Care Records

Dennis G. Sadler \ 08-28-17

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Without proper self-evaluation, failure is inevitable. - Coach John Wooden

In 2014, the Centers for Medicare & Medicaid Services (CMS) began automatically reviewing a sample of electronic claims to identify errors in the claims submission process. CMS called this strategy of electronic audits, Probe and Educate. CMS announced on Friday, that it would be modifying this strategy by moving to a more targeted approach. The Targeted Probe and Educate (TPE) began as a pilot in one Medicare Administrative Contractors (MAC) jurisdiction in June 2016, and based upon the results, CMS has decided to expand to all MAC jurisdictions later this year.

When performing medical review as part of the new Targeted Probe and Educate (TPE), Medicare Administrative Contractors (MACs) will focus on specific providers and suppliers within the service rather than all who are billing for a particular service. TPE involves the review of 20-40 claims per provider, per item or service, per round, for up to three rounds of review. Each round of 20-40 claim reviews is referred to as a “Probe.” After each round, providers are offered individualized education based on the results of their reviews. If, after three rounds of Probes and education, the provider has not shown improvement that has resulted in compliance, the MAC will refer the provider to CMS for “possible further action.” Of course, if the Probes reveal egregious errors or omissions, the MACs are not required to await three rounds before calling for “further action.”

Utilizing data analysis, the MACs will select claims for items and services that are deemed to pose the greatest financial risk to the Medicare trust fund or have a high national error rate. MACs will focus on providers and suppliers who have the highest claim error rates or billing practices that the data analysis indicates a “significant variance” from their peers. While the change in strategy may help CMS to focus their resources on the most likely abusers of the Medicare and Medicaid programs, it may also have the effect of bringing unwarranted scrutiny to physicians who serve unique populations or utilize innovative treatment plans.

Areas of anticipated focus can be identified by examining the Work Plan of the Office of Inspector General (OIG), available online at The Work Plan has previously identified physician home visits as an area in which they would focus their investigative efforts. In 2017, they added transitional care management, home-health services, and chronic care management as areas of focus. In addition, although telehealth is increasingly being promoted as a means of maximizing availability of care, OIG added this to their Work Plan in July 2017.

The announcement by CMS should serve as notice to all providers that, in the era of Electronic Health Records, their bills are being automatically audited to identify variances form the norm or high rates of errors. Those who utilize the range of services identified in the OIG Work Plan should be especially mindful of that fact. Even though every order written by a physician is individually justifiable, in the aggregate, if those decisions result in a variance from the norm, physicians may expect scrutiny of each decision.

Physicians would be well advised to take steps to ensure that the scrutiny does not result in any action against them. CMS obviously believes that education is the best remedial measure. However, education should be the first line of defense to ensure compliance with health care regulations. In addition, physicians should make sure they are fully documenting the conditions and analysis that leads to treatment decisions; especially when it involves any area identified in the OIG Work Plan. Finally, review of these records should also be included as part of an annual, independent compliance audit of the physician practice. Because, to paraphrase Coach Wooden, without education, documentation, and evaluation, costly targeted Probes are inevitable.

Dennis Sadler received a J.D. from the University of Memphis, Cecil C. Humphreys School of Law and an L.L.M. in Health Law, with a Concentration in Compliance, from Loyola University, Chicago School of Law. He is a Member of the law firm of Leitner, Williams, Dooley & Napolitan, where his practice focuses on health law, construction law, and products liability.