Medicaid Audits: Challenging Statistical Sampling and Extrapolation

State Medicaid agencies are using statistical sampling and extrapolation to determine overpayments in their audits and investigations, as has long been the case in the Medicare program. A sample of claims is audited, and the results of that audit are extrapolated to the entire claims universe, resulting in substantial repayment demands on providers.

When facing an alleged overpayment, Medicaid providers generally have the burden of demonstrating that the reimbursement they received was proper. If the state Medicaid agency uses statistical sampling and extrapolation to establish the overpayment, the onus is on the provider to present sufficient evidence to refute the results of the sampling and extrapolation process. If the provider is successful, the extrapolated repayment amount will be removed from the case, leaving only the sample error and corresponding repayment to be challenged. This typically results in much less of a financial burden than the extrapolation.

Most state requirements, if there are any at all, for statistical sampling and extrapolation tend to de minimis in nature. To challenge state determinations of overpayment, Medicaid providers can look to Medicare rulings and cases for guidance. It is critical for Medicaid providers and their counsel to understand proper statistical sampling and extrapolation methods, and to know how to recognize questionable processes to facilitate a legal challenge.

Listen as our panel examines how statistical sampling is being used to recover Medicaid overpayments. The panel will also guide counsel for healthcare providers on how to challenge the sampling results and the alleged Medicaid overpayment, leveraging lessons from Medicare cases.

1. How states are using statistical sampling
   1. Methodology
   2. Requirements
2. Challenging sampling results
   1. Attacking statistical validity
   2. Detecting flaws in the audit method
   3. Evidence rebutting results
   4. Expert testimony
   5. Leveraging guidance from Medicare cases

The panel will review these and other high priority issues:

• Primary considerations for Medicaid providers in working with counsel to challenge such overpayments
• Proactive steps needed to properly mount the challenge
• Data required to evaluate a state agency’s (or contractor’s) statistical sampling and extrapolation
• Probability-related requirements of the methods and statistics being used
• Benefits of having a statistical sampling and extrapolation expert on the case