CMS Transitions Short Stay Inpatient Reviews From the QIO to the TPE MACs

September 1, 2025

Overview

On May 22, 2025, CMS announced that the short stay inpatient hospital medical reviews will be transitioning from The Beneficiary and Family Centered Care (BFCC) Quality Improvement Organization (QIO) to the Medicare Administrative Contractors (MACs) effective September 1, 2025. The BFCC-QIO currently conducting these short stay medical review activities—Livanta, LLC—will conclude their scope of work on August 11, 2025.

CMS further advised that the MACs will be performing these short stay reviews utilizing the Targeted Probe and Educate (TPE) program, allowing providers the benefit of one-on-one education and, when applicable, contractor intervention to correct curable errors.

It is worth noting that CMS has stated the transitioning of this work to the MACs allows the BFCC-QIO to expand their quality of care review efforts to other areas, including quality improvement initiatives, expedited appeals determinations, and certain utilization reviews – such as heavily weighted DRG reviews and referral evaluations.

Key Points

• Effective September 1, 2025, short stay inpatient reviews will be audited on a pre-payment basis by the CMS MACs utilizing the TPE process.
• The MACs will continue to define an inpatient short stay as a hospital stay with a length of stay less than 2 midnights after the inpatient admission.
• Not all providers or short stay inpatient claims will be subject to the TPE review. The TPE audits will focus only on providers who have been identified through data analysis as being a potential risk to the Medicare trust fund and/or whose billing patterns vary significantly from their peers. The audits will also review claims where the diagnosis codes suggest potential billing inaccuracies and especially medical documentation inconsistencies.
• The TPE process begins when a provider receives an Additional Documentation Request (ADR) listing an audit pull of between 20-40 claims. Note that for providers with lower billing volumes, a smaller sample of claims may be requested. A provider will then have 45-days to respond to the ADR with the necessary documentation for each claim selected.
• After responding to the ADR, TPE reviewers have 30-days to render their recommendations and offer an opportunity to engage in an educational session, regardless of whether the claims are considered compliant (i.e., lower rate of error) or not. If the claims exceed the compliance threshold, the provider will have 45-days to make any necessary claim adjustments and the TPE process will proceed to Round 2. A provider may be involved in the TPE process for up to three rounds with an educational opportunity after each round.
• Once a provider is identified as being compliant, a provider may not be reviewed again for at least 1-year on the select topic. Therefore, the sooner a provider can lower their error rate, the more expeditiously they will exit the TPE process.
• Final Note: Traditional Medicare appeal rights will also be made available to providers at the end of each round.

Recommendations & Action Items:

Sign Up to Receive MAC Notifications. On July 30, 2025, CMS held an information session, open to the public, specifically to address the transition. During this session they noted that the jurisdictional MACs will be advising providers of their intended TPE go-live and the specific services and procedures slated for TPE review. They will also post relevant information regarding what providers should expect with regard to the process and how the medical reviews will be performed. To that end, CMS encouraged providers to ensure you are signed up to receive notices from your MAC.

Assess Your Audit Potential. CMS was clear that not every hospital will be audited, stating the TPE program is a targeted review, focusing on certain diagnosis codes, national error rates and data mining to identify providers who have demonstrated aberrant billing practices. We recommend providers pay close attention to the TPE-related communications issued by your MAC to help you prepare.

Ready Your Teams. CMS has advised that the MACs will have the authority to begin the TPE audits effective September 1, 2025, beginning with the Additional Documentation Request (ADR) letter, sent to the provider’s Medical Review address on file. If no medical review address is on file, they will route the letter to the Provider Remittance address on file. Prepare your teams that may be in receipt of these letters, so they can identify and properly route these internally without delay, as you will have 45 days within which to respond to the request. Also, prepare your teams for what the TPE process entails and the best strategy to quickly remedy any opportunities the auditors present to reverse course.

Engage CMS Directly. During the information session, CMS encouraged providers to route additional questions or requests for clarification to your jurisdictional MAC, but also provided the following CMS email address for direct support: medicaremedicalreview@cms.hhs.gov. For more information regarding short stay reviews or the TPR process, CMS has released an Inpatient Hospital Reviews FAQ, offering additional insight into Agency intent.

Contact CorroHealth as Soon as you Receive your ADR. We have vast experience helping providers navigate these audit waters and can provide assistance with your claim reviews and prepare you for the educational sessions in an effort to assist with an expeditious exit from any audits.