PA 10-116—SB 283

Human Services Committee

Judiciary Committee

AN ACT CONCERNING AUDITS BY THE DEPARTMENT OF SOCIAL SERVICES

SUMMARY: This act makes changes in the law governing audits of providers that bill the Department of Social Services (DSS) for services rendered to clients enrolled in DSS programs. It:

1. requires the reviewer of an audit report that a provider contests to issue a final decision after the review,

2. gives the provider the right to appeal final audit decisions to the Superior Court, and

3. requires (a) DSS to adopt regulations to carry out the auditing statute and (b) DSS or the entity it contracts with to perform the audits to provide a copy of these regulations when notifying a provider that it will be audited.

EFFECTIVE DATE: July 1, 2010

AUDIT APPEALS

By law, a provider aggrieved by a decision contained in the final audit report can request a review, which is presided over by an impartial designee of the commissioner who is not an employee of DSS' Office of Quality Assurance or an entity with whom the DSS commissioner contracts to conduct the audits. The act requires the reviewer to issue a final decision after reviewing the items the provider disputes.

The act also gives the provider the right to appeal the final decision to the Superior Court.

REGULATIONS

The act requires DSS to adopt regulations to carry out the auditing statute. The regulations must ensure the fairness of the audit process, including the sampling methodologies associated with it.

By law, DSS or its contracted auditor must notify providers, in writing, that they intend to audit them at least 30 days before beginning the audit. But the commissioner or auditor can bypass the notification if either one, in good faith, determines that (1) the health or safety of someone receiving the provider's services is at risk or (2) the provider is engaging in vendor fraud. The act requires a copy of the regulations to be attached to the notice.

BACKGROUND

Audits

DSS audits providers who bill it for providing services to individuals enrolled in its welfare programs, including the Medicaid, HUSKY B, and ConnPACE programs. The audit law also applies to the department's cash assistance programs.

DSS uses an extrapolation process when performing the audits. Extrapolation is the practice of (1) dividing the total number of payment errors found in a sample of documents by the sample size to arrive at average errors per sample or an “error rate” and (2) multiplying this rate by the total number of claims to arrive at a presumed, extrapolated number of payment errors for all payments to the provider during the audited time period. The provider must repay DSS based on these extrapolated errors.

The law prohibits basing a finding of over- or underpayment to a provider on extrapolation unless (1) there is a sustained or high level of payment error involving the provider, (2) documented educational intervention has failed to correct the error, or (3) the value of the claims in the aggregate is more than $150,000.

OLR Tracking: RC: JK: VR: ts