Failed a TPE Round? What Happens Next and How to Recover Before Round Three

Receiving a Targeted Probe and Educate (TPE) results letter that shows a high denial rate can be discouraging. A failed TPE round means the Medicare Administrative Contractor (MAC) found too many claims that did not meet Medicare requirements, and it means another round of review is coming. But a failed round is not the end of the process. TPE is designed around education and improvement, and CMS reports that the majority of providers who participate in TPE increase the accuracy of their claims.

The most important point is timing. After each round, the MAC offers one-on-one education and then must wait at least 45 days before selecting new claims for review. That window is the provider's opportunity to identify what went wrong, fix it, and demonstrate improvement. Providers that use this time well often pass the next round. Providers that do not may face a third failed round and referral to CMS for further action, which can include 100 percent prepayment review, extrapolation of overpayments, referral to a Recovery Audit Contractor, or referral for revocation.

This article explains what happens after a failed TPE round, how to read the results letter, how to make the most of the education session, how to conduct a root cause analysis, how to use the 45-day improvement period, when and how to appeal, and how to prepare for round three. It is educational and does not replace advice from qualified professionals.

A Quick Review of How TPE Works

According to CMS and the Medicare Program Integrity Manual, Chapter 3, Section 3.2.5:

• MACs use data analysis to identify providers with high claim error rates or unusual billing practices, and services with high national error rates.

• A TPE round typically involves review of 20 to 40 claims per provider or supplier, per item or service. Low-volume providers may have fewer claims reviewed under CMS's Low Biller Probe and Educate Program.

• TPE reviews can be prepayment or postpayment.

• After each round, the MAC sends a results letter and offers one-on-one education.

• The MAC must provide at least 45 days after each post-probe education session before selecting new claims.

• The process typically continues for up to three rounds, but may involve additional rounds at CMS direction.

• If the provider becomes compliant, the MAC discontinues TPE, with follow-up review in one year or sooner if data shows changes.

• If high error rates continue after three rounds, the MAC refers the provider to CMS for further action.

• MACs may refer suspected fraudulent providers to a Unified Program Integrity Contractor (UPIC) at any time.

What Happens Immediately After a Failed Round

The Results Letter

At the end of each round, the MAC sends a letter detailing the results, including the claims reviewed, the claims denied, and the reasons for denial. CMS's TPE questions and answers explain that the letter details the results of the claims reviewed during the round, including details regarding claim errors.

The Offer of Education

The MAC offers a one-on-one education session. CMS describes this education as individualized, claim-specific, and interactive, designed to alert the provider to errors and how to resolve them and to provide education on the review topic to prevent new issues.

The Clock Starts

The next round will involve claims with dates of service at least 45 days after the post-probe education session. CMS's TPE questions and answers also explain that if a provider declines to schedule education within a reasonable time after receiving the offer, subsequent reviews will be for claims with dates of service no earlier than 45 days from the education offer. In other words, delaying education does not delay the next round. It only shortens the time available to learn and improve.

Step 1: Read the Results Letter Carefully

Start by analyzing the results letter in detail.

• List every denied claim, the beneficiary, the date of service, and the denial reason.

• Group denials by reason, such as missing documentation, insufficient medical necessity, missing signatures, missing orders or certifications, coding errors, or no response.

• Identify which clinicians, locations, or workflows are associated with each denial.

• Note any denials you believe were incorrect and may be candidates for appeal.

This analysis becomes the foundation for the education session, the root cause analysis, and the corrective action plan.

Step 2: Schedule and Prepare for the Education Session

Schedule Promptly

Schedule the education session as soon as possible. The sooner education happens, the more time the organization has to implement changes before claims for the next round are selected.

Invite the Right People

Include the people who can implement changes, such as clinical leaders, clinicians involved in the denied claims, intake or admissions staff, documentation and coding staff, and billing staff. The compliance officer should also participate or receive a summary.

Prepare Specific Questions

Bring a list of questions tied to each denial category, for example:

• What specific documentation element was missing or insufficient for each denied claim?

• What would compliant documentation look like for this service?

• Which coverage determinations, policy articles, or manual provisions apply?

• Were any records not received, and how can we confirm receipt in the future?

• Are signature attestations acceptable for any of the signature-related denials?

• Are there MAC checklists, templates, or educational materials we should use?

Take Detailed Notes

Document the guidance provided for each issue, along with any referenced resources. These notes will drive process changes and serve as a record of the education received.

Step 3: Conduct a Root Cause Analysis

Denials are symptoms. To pass the next round, the organization must fix the underlying causes. A practical root cause analysis asks why each error occurred and keeps asking until it reaches a process that can be changed.

Common root causes include:

• Documentation templates. Electronic health record templates that do not prompt for required elements, or that produce generic or cloned text.

• Intake and admission processes. Missing orders, certifications, or face-to-face documentation at the start of care.

• Physician or practitioner communication. Delays in obtaining signed orders or certifications.

• Clinical documentation habits. Notes that describe what was done but not why it was medically necessary.

• Signature practices. Missing, illegible, or improperly dated signatures.

• Coding practices. Codes or levels of service that do not match documentation.

• ADR handling. Late or incomplete responses, records sent to the wrong address, or missing pages.

• Training gaps. Staff who are unaware of specific coverage requirements.

For each root cause, identify the responsible process owner and the change needed.

Step 4: Build and Implement a Corrective Action Plan

A written corrective action plan helps organize the work and demonstrate good faith. For each issue, the plan should include:

• The problem identified.

• The root cause.

• The corrective action.

• The responsible person.

• The deadline.

• How effectiveness will be measured.

Common Corrective Actions

• Revise documentation templates to prompt for required elements while avoiding cloned language.

• Create service-specific documentation checklists based on coverage requirements.

• Update intake procedures to confirm that orders, certifications, and required encounters are in place before services begin or claims are submitted.

• Retrain clinicians and staff on the specific errors found, using examples.

• Implement pre-billing review for the targeted service so that every claim is checked before submission.

• Improve ADR processes, including a central log, deadline tracking, and a quality check before submission.

• Establish a process for obtaining missing signatures appropriately, including signature attestations where allowed.

Step 5: Use the 45-Day Improvement Period Wisely

The time between education and the next round is critical. A suggested timeline:

Days 1 to 10

• Complete the root cause analysis and corrective action plan.

• Communicate the plan to leadership and staff.

• Begin retraining.

Days 11 to 30

• Implement template, checklist, and workflow changes.

• Begin pre-billing review for all claims for the targeted service.

• Track issues found during pre-billing review and correct them before submission.

Days 31 to 45 and Beyond

• Conduct an internal audit of a sample of recent claims using the MAC's review criteria.

• Measure the internal error rate and compare it to the failed round.

• Address any remaining issues.

• Continue pre-billing review into the next round.

Remember that the next round will review claims with dates of service after the improvement period begins, so changes must be in place for services furnished during and after this period.

Step 6: Appeal Denials You Believe Are Incorrect

Not every denial is correct. TPE denials are initial determinations that can be appealed through the Medicare fee-for-service appeals process, beginning with a redetermination request to the MAC, generally within 120 days of receiving the initial determination.

Reasons to appeal include:

• The documentation submitted actually supported the claim, and the reviewer overlooked it.

• Relevant records existed at the time of service but were not included in the original submission.

• The reviewer applied a coverage requirement incorrectly.

CMS manual instructions state that when a provider is referred to CMS after TPE, the referral includes results of appealed denials, to the extent available at the time of referral. Successful appeals can therefore matter. However, appeals should be supported by records that existed at the time of service. Records must never be created or altered after the fact.

At the same time, providers should not rely on appeals instead of fixing real problems. If denials reflect genuine documentation gaps, corrective action is essential.

For postpayment TPE reviews that result in overpayments, remember that filing a redetermination within 30 days of the demand letter, and a reconsideration within 60 days of the redetermination decision, can limit recoupment during those appeals under 42 CFR 405.379.

Step 7: Prepare for the Next Round

Monitor for ADRs

Watch the MAC portal and mail closely for new ADRs. Log each request immediately.

Respond Early and Completely

Respond well before the 45-day deadline. Include all relevant documentation, not just the note for the date of service. CMS manual instructions allow reviewers to consider documentation related to the beneficiary's condition before and after the service.

Quality Check Every Submission

Use a checklist to confirm that every required element is present, signatures are valid, records are legible, and the submission is organized.

Never Ignore an ADR

CMS instructions state that non-responses to ADRs count as errors when calculating a provider's error rate. A missed ADR is a guaranteed error.

A Sample Corrective Action Plan Entry

A clear, specific entry makes a corrective action plan easier to implement and verify. For example:

• Problem: Seven of fifteen denials in Round 1 cited missing or insufficient documentation of the face-to-face encounter.

• Root cause: The intake checklist did not require confirmation that the encounter note addressed the primary reason for services, and referral sources were sending incomplete notes.

• Corrective action: Revise the intake checklist to require review of the encounter note before the start of care; create a referral source education sheet; add a pre-billing check for every new admission.

• Responsible person: Director of intake, with support from the clinical manager.

• Deadline: Checklist revised within 10 days; referral source outreach within 20 days; pre-billing check in place within 15 days.

• Measure of effectiveness: Internal audit of 15 new admissions after 30 days, with a target of no encounter-related errors.

A Hypothetical Recovery Example

Consider a physician practice selected for TPE on high-level evaluation and management visits. In Round 1, the MAC reviews 30 claims and denies 14, mostly because documentation did not support the level of medical decision making billed.

The practice schedules education within a week. During the session, the MAC explains which elements were missing and refers the practice to applicable guidance. The practice then reviews its templates and finds that they automatically populate extensive text that does not reflect the actual complexity of each visit. It revises the templates, trains physicians on documenting medical decision making, and has a certified coder review every high-level visit before billing for the next two months.

An internal audit 40 days later shows a much lower error rate. In Round 2, the MAC denies 4 of 25 claims. After another education session focused on the remaining issues, the practice passes Round 3, and the MAC discontinues TPE. The practice keeps periodic coding audits in place to sustain the improvement.

Communicating With Leadership and Staff

A failed TPE round should be reported to leadership and the compliance committee, along with the corrective action plan and expected timeline. Leadership support helps ensure that staff have time for training and that resources, such as additional coding review, are available. Staff communication should be constructive, focused on specific improvements, and paired with practical tools such as checklists and examples.

What If You Fail Round Two?

If round two also shows a high error rate, the provider will move to round three after another education session and improvement period. This is the last standard opportunity to demonstrate improvement before referral to CMS. At this stage:

• Escalate leadership involvement and resources.

• Consider an independent external review of documentation and processes.

• Expand pre-billing review and internal audits.

• Review whether problems extend beyond the targeted service.

• Evaluate whether any identified errors outside the TPE sample create overpayment obligations under the 60-day rule at 42 CFR 401.305.

What Happens If You Fail Round Three?

According to CMS, problems that fail to improve after three rounds are referred to CMS for next steps, which may include:

• 100 percent prepayment review.

• Extrapolation of overpayments.

• Referral to a Recovery Audit Contractor.

• Referral for revocation.

• Additional TPE rounds at CMS direction.

• Other action.

CMS manual instructions state that referrals include the reason the provider was selected, TPE review results, results of appealed denials, education provided or offered and refused, and other relevant information. A well-documented record of corrective actions and appeals can be helpful context.

Avoiding a UPIC Referral

MACs may refer suspected fraudulent providers to a UPIC at any time during TPE. Documentation errors alone usually lead to education and escalated medical review, but certain patterns may raise fraud concerns, such as:

• Services that cannot be documented as provided.

• Documentation that appears altered, backdated, or cloned across many patients.

• Beneficiaries who did not receive services.

• Billing that suggests identity misuse.

If internal review reveals these kinds of issues, the organization should involve experienced legal counsel promptly.

Measuring Progress Before the Next Round

Organizations should not wait for the MAC's next results letter to learn whether changes are working. A simple internal measurement approach includes selecting a random sample of recent claims for the targeted service, reviewing them against the same coverage requirements the MAC applies, calculating an internal error rate, and comparing it with the failed round. Tracking these results over time shows whether improvements are taking hold and highlights any remaining weak spots. Sharing the results with leadership and the compliance committee also helps maintain focus and accountability.

Common Mistakes After a Failed Round

• Delaying or declining education.

• Assuming the denials were simply wrong without careful review.

• Fixing individual claims without fixing the underlying process.

• Training staff without changing templates and workflows.

• Failing to implement pre-billing review.

• Missing ADRs in the next round.

• Not documenting corrective actions.

• Appealing without addressing real documentation gaps.

Frequently Asked Questions

How much time do I have before the next round?

CMS requires at least 45 days after the post-probe education session before new claims are selected. The next round involves claims with dates of service at least 45 days after education, or after the education offer if education is declined or delayed.

Should I appeal TPE denials?

Appeal denials you believe are incorrect, within the deadlines. CMS includes appeal results in referrals after TPE. At the same time, address legitimate documentation problems.

What counts as passing a round?

CMS does not publish a specific error rate threshold in its public TPE materials. The MAC determines whether the provider is compliant based on the review results. Focus on reducing errors as much as possible.

Can I be referred to a UPIC during TPE?

Yes. MACs may refer suspected fraudulent providers to a UPIC at any time during TPE.

What happens if I pass round two?

If the provider is compliant, the MAC discontinues TPE. CMS manual instructions provide for follow-up review in one year, or sooner if data indicates changes in billing patterns or risk.

Will the same claims be reviewed again in the next round?

No. Each round reviews new claims, generally with dates of service at least 45 days after the prior round's education. This is why changes must be implemented quickly so that services furnished during the improvement period meet requirements.

Conclusion

A failed TPE round is a warning, but also an opportunity. By reading the results letter carefully, scheduling and preparing for education promptly, conducting a real root cause analysis, implementing corrective actions, using the 45-day improvement period wisely, appealing incorrect denials, and responding completely to every ADR in the next round, providers can often pass before round three and avoid escalation to 100 percent prepayment review, extrapolation, RAC referral, revocation, or UPIC involvement.

How HealthBridge Can Help

HealthBridge is a healthcare management consulting firm that specializes in Medicare medical review and Targeted Probe and Educate recovery. We help providers analyze TPE results, prepare for education sessions, conduct root cause analyses, build corrective action plans, implement pre-billing review, conduct internal audits, and prepare appeals. If your organization has failed a TPE round and wants to recover before round three, please get in touch with us. We will be happy to help you with this topic.

References

• Centers for Medicare & Medicaid Services. Targeted Probe and Educate. https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-and-education/targeted-probe-and-educate-tpe

• Centers for Medicare & Medicaid Services. Targeted Probe and Educate (TPE) Questions and Answers. https://www.cms.gov/files/document/updated-tpe-qas.pdf

• Centers for Medicare & Medicaid Services. Medicare Program Integrity Manual, Chapter 3. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c03.pdf

• Centers for Medicare & Medicaid Services. CMS Manual System, Pub. 100-08, Transmittal 819. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R819PI.pdf

• Centers for Medicare & Medicaid Services. CMS Manual System, Pub. 100-20 One-Time Notification, Transmittal 2239. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019downloads/R2239OTN.pdf

• Centers for Medicare & Medicaid Services. Targeted Probe and Educate Flow Chart. https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Downloads/TPE-Pilot-Flow-chart06-20-17v9-final.pdf

• Centers for Medicare & Medicaid Services. Medicare and Medicaid Program Integrity Report to Congress 2023. https://www.cms.gov/files/document/fy2023-medicare-and-medicaid-report-congress.pdf

• Centers for Medicare & Medicaid Services. Original Medicare (Fee-for-Service) Appeals. https://www.cms.gov/medicare/appeals-grievances/fee-for-service

• Electronic Code of Federal Regulations. 42 CFR 405.379, Limitation on Recoupment of Provider and Supplier Overpayments. https://www.ecfr.gov/current/title-42/section-405.379

• Electronic Code of Federal Regulations. 42 CFR 401.305, Requirements for Reporting and Returning of Overpayments. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-A/part-401/subpart-D/section-401.305

• Centers for Medicare & Medicaid Services. Fiscal Year 2025 Improper Payments Fact Sheet. https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2025-improper-payments-fact-sheet

• U.S. Department of Health and Human Services, Office of Inspector General. General Compliance Program Guidance. https://oig.hhs.gov/compliance/general-compliance-program-guidance/