Medicare and Medicaid Audits Using Statistical Sampling and Extrapolation: Challenging Methods and Results

Medicare contractors, such as Zone Program Integrity Contractors (ZPICs) and Uniform Program Integrity Contractors (UPICs), and the Office of Inspector General (OIG), and Medicaid agencies frequently use statistical sampling and extrapolation to determine overpayments in their audits and investigations. A sample of claims is audited, and the results are extrapolated to the claims universe, resulting in substantial repayment demands on providers.

When the government auditor uses statistical sampling to establish the overpayment amounts, the burden is on the provider to present sufficient evidence to refute the results of the sampling and extrapolation process. If the provider succeeds, the extrapolated repayment amount will be removed from the case, leaving only the sample error and corresponding repayment to be challenged. This is typically much less of a financial burden.

To challenge these overpayment determinations, Medicare and Medicaid providers must understand the legal and statistical standards required for an extrapolated result to be valid. It is critical for healthcare providers and their counsel to understand proper statistical sampling and extrapolation methods, and to know how to challenge questionable processes to minimize potential repayment obligations.

Listen as our authoritative panel examines how Medicare and Medicaid auditors are using statistical sampling to recover overpayments. The panel will also guide counsel for healthcare providers on how to challenge the sampling results and the alleged overpayment, leveraging lessons from prior matters.

1. Medicare fraud and the government’s use of for-profit auditors
2. Designing and implementing sampling and extrapolation plans
   1. Purpose of sampling
   2. Key terminology
   3. Sample size
   4. Stratification
   5. How the auditors extrapolate the overpayment amount
3. The appeals process and discovery
4. Strategies to contest overpayment extrapolations
   1. Detecting flaws in the audit method
   2. Challenging improper samples
   3. Challenge procedural fairness requirements
   4. Raising sampling issues in the appeals process

The panel will review these and other critical issues:

• What is the legal basis for challenging the use of statistical sampling and extrapolation?
• What are the proactive steps the healthcare provider can take to ensure there is sufficient data to mount a defense against the extrapolation?
• What types of data sampling flaws and procedural fairness issues support an effective challenge to audit samples?
• What are the requirements for implementation and use of a statistically valid sample?
• What are the key considerations for healthcare providers in working with counsel to defend against an audit finding overpayments?