By: Matt Fischer
Since the implementation of the ZPIC audit and RAC audit programs, healthcare providers and suppliers have experienced increased scrutiny in the pursuit of overpayments and fraud. Medicare’s most vital tool in its progressive search is the use of statistical sampling. In theory, statistical sampling offers a reliable and low cost approach to addressing large volumes of claims. However, this process gives the government a huge advantage as it places a heavy assumption on a large number of claims without actual review of the claims. Thus, it is important for providers and suppliers to understand the process and know how to challenge such studies in order to minimize potential repayment obligations and retain their revenue.
What is statistical sampling?
Statistical sampling draws a random sample from a universe of claims and extrapolates or projects the results of the sample to the entire universe of claims. In other words, the Medicare contractor will select a sample of claims to review from a look back period or examination period of typically two or three years. For this example, let’s say that the review finds a 40 percent error rate in the sample, meaning 40 percent were not found to meet Medicare requirements for payment. In this case, a contractor will apply the 40 percent finding to the entire two years’ worth of claims and deny these claims based on the sampling results.Continue reading
