This amendment changes the bill's language to refer to 'alleged' overpayments instead of just 'overpayments' when discussing audits for specific Medicaid services.
Colorado2026Enacted
HB26-1412
Using Statistical Sampling to Recover Medicaid Overpayments for Specific Services
Last scannedAug 24, 2026, 8:22 AM
In one sentence
This law allows state officials to use statistical sampling and extrapolation methods to find and recover overpaid funds from providers of nonemergency medical transportation or pediatric behavioral therapy.
What it does
- Authorizes the Department of Health Care Policy & Financing (HCPF) to use statistical sampling for audits started after July 1, 2026, covering services provided between January 1, 2022, and December 31, 2023.
- Allows the State Auditor to apply these same methods to audit a provider's services from 2024 through 2025 if an earlier audit finds a statistically significant pattern of overpayments defined as an error rate exceeding ten percent.
- Requires HCPF to send providers a notice within 60 days after identifying an alleged overpayment, including details on how the amount was calculated and evidence used.
- Prohibits contracts for conducting these audits from being based on a percentage of money recovered from the provider.
- Mandates that the State Auditor examine HCPF's audit methods to ensure they follow proper statistical standards and report findings annually to legislative committees until audits are complete.
Who it affects
- Medicaid providers who offer nonemergency medical transportation services or pediatric behavioral therapy, including applied behavior analysis.
- The Department of Health Care Policy & Financing (HCPF).
- The State Auditor's office.
- State legislative committees responsible for audits and budgets.
Limits and unknowns
- The law only applies to audits initiated after July 1, 2026.
- Budget adjustments described in the bill depend on whether the annual general appropriation act for fiscal year 2026-27 becomes law.
Plain language
Terms to know
- Statistical sampling and extrapolation
- A method where officials review a small, random group of records to estimate errors in the entire set of claims rather than checking every single one.
- Nonemergency medical transportation
- Transport services for Medicaid patients that are not related to immediate life-threatening emergencies.
- Pediatric behavioral therapy
- Therapeutic services, such as applied behavior analysis, provided to children with specific needs under the Medicaid program.
Official record
Sources
Official summary
If an audit of a medicaid provider who provides nonemergency medical transportation services or pediatric behavioral therapy is initiated after July 1, 2026, for services provided from January 1, 2022, through December 31, 2023, the act authorizes the department of health care policy and financing (HCPF) to determine and recover overpayments to a provider using statistical sampling and extrapolation. If an audit identifies a statistically significant pattern of alleged overpayments to a provider, the act authorizes the state auditor to use the same statistical sampling and extrapolation methods to audit services provided by the provider from January 1, 2024, through December 31, 2025. If the audit identifies an alleged overpayment, HCPF is required to issue a notice of the alleged overpayment within 60 days after the alleged overpayment is identified. The notice of alleged overpayment must include the basis of the alleged overpayment, the rationale for the alleged overpayment, the methodology used to calculate the alleged overpayment, and information on how HCPF identified the alleged overpayment. If HCPF enters into a contract for the purpose of conducting an audit, the contract must not be a contingency-based contract based on a percentage of the amount of recovery collected from the provider. After HCPF completes an audit of a provider, the state auditor's office is required to conduct an examination to determine that proper statistical sampling and extrapolation methods were used by HCPF when determining whether overpayments were made to a provider. The state auditor shall annually present a report of the findings to the legislative audit committee and the joint budget committee. The act reduces the general fund appropriation to HCPF for medical and long-term care services for Medicaid-eligible individuals by $6,861,775 and increases the cash fund appropriation to HCPF for medical and long-term care services for Medicaid-eligible individuals by $13,723,550. (Note: This summary applies to this bill as enacted.)
Official activity
Bill history
- Governor SignedGovernor
- Sent to the GovernorGovernor
- Signed by the President of the SenateSenate
- Signed by the Speaker of the HouseHouse
- House Consideration of First Conference Committee Report result was to Adopt Committee Report - RepassHouse
- Senate Consideration of First Conference Committee Report result was to Adopt Committee Report - RepassSenate
- House Considered Senate Amendments - Result was to Not Concur - Request Conference CommitteeHouse
- Senate Third Reading Passed - No AmendmentsSenate
- Senate Second Reading Special Order - Passed with Amendments - Committee, FloorSenate
- Senate Committee on Appropriations Refer Amended to Senate Committee of the WholeSenate
- Introduced In Senate - Assigned to AppropriationsSenate
- House Third Reading Passed - No AmendmentsHouse
- House Third Reading Laid Over Daily - No AmendmentsHouse
- House Second Reading Special Order - Passed with Amendments - FloorHouse
- House Second Reading Special Order - Laid Over Daily - No AmendmentsHouse
- House Committee on Appropriations Refer Unamended to House Committee of the WholeHouse
- Introduced In House - Assigned to AppropriationsHouse
Changes
Amendments
3 stored
This amendment removes the word 'alleged' from sections of the bill that discuss audits for Medicaid providers offering transportation or therapy services.
This amendment adds rules to ensure that audits of Medicaid providers use federal-approved methods and bans using statistical sampling for minor paperwork errors.