Plain English Breakdown
The official text does not explicitly define 'extrapolation' or 'statistically valid sampling,' so definitions were inferred from standard usage within the context of the provided statute.
Changes to How Pharmacies Are Audited for Medicaid
This law sets a rule that auditors cannot use math estimates to find overpayments unless the estimated error is more than two and three-quarters percent of total claims paid, and it requires new training materials before audits begin.
What This Bill Does
- Sets a limit that auditors cannot use extrapolation unless the estimated net overpayment exceeds two and three-quarters percent of total claims paid to the provider for the audit period.
- Requires state officials to make education materials and technical assistance documents available to assist providers with proper Medicaid billing before using extrapolation, starting with audit periods beginning on January 1, 2027.
Who It Names or Affects
- Providers in programs operated by the department under specific chapters of state law.
- Excludes providers whose payment rates are established pursuant to section 17b-340 from these extrapolation rules.
Terms To Know
- Extrapolation
- A method used in audits where a finding of overpayment is based on calculations derived from a sample rather than checking every single claim.
- Statistically valid sampling
- The required methodology for selecting claims to ensure the math estimate accurately represents the total amount owed or overpaid.
Limits and Unknowns
- The law does not specify exactly what topics will be covered in the new education materials.
- These rules apply only to audit review periods commencing on or after January 1, 2027 for training requirements and October 1, 2026 for the extrapolation threshold.