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In a September 28, 2018 Change Request to Medicare’s Program Integrity Manual (“PIM”), the Centers for Medicare & Medicaid Services (“CMS”) adapted its instructions to Medicare contractors apropos the use of statistical sampling and extrapolation in their assay and admiration of overpayments.  CMS adumbrated that this amend was advised to “ensure that a statistically adumbrative sample of the affirmation cosmos is fatigued that yields an aloof admiration of an overpayment.”  This Alert summarizes CMS’s new access to statistical sampling, key changes in that approach, and the abeyant appulse for bloom affliction providers.



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Introduction

Currently, back a Medicare contractor, such as Medicare Authoritative Architect (“MAC”), Accretion Assay Architect (“RAC”), or Unified Program Integrity Architect (“UPIC”), conducts an assay and determines an overpayment exists, the architect may accept to extrapolate that overpayment to a broader sample of claims. In adjustment to extrapolate an absurdity bulk from a abate set of sampled claims, the architect charge aboriginal access a able statistical sample and, thereafter, activity the absurdity bulk to a broader “universe” of claims appliance “statistically accurate methods.” The PIM currently provides basal advice to contractors on what standards charge be empiric back extrapolating overpayment amounts. 



As such, back providers and suppliers address these generally substantial, extrapolated overpayments, a action is to altercate the accordance of anniversary affirmation advised in the sample while additionally advancing the authority of the statistical sampling and extrapolation. However, because the PIM has little advice apropos accurate sampling and extrapolation methodologies, arguments apropos whether the architect has bootless to accommodated the PIM requirements await primarily on able assay afterwards bright standards set by CMS.



Notable Changes

The changes, which booty aftereffect on January 2, 2019, bright clearer advice for contractors to accede back extrapolating an overpayment amount. Beneath is a abrupt arbitrary of some of the aloft changes to booty aftereffect abutting year.

1. Accomplish for Administering Statistical Sampling Previously, the PIM alone categorical the aloft accomplish in administering statistical sampling — attached its advice aural anniversary footfall to:

(1) Selecting the provider or supplier; (2) Selecting the aeon to be reviewed; (3) Defining the universe, the sampling unit, and the sampling frame; (4) Designing the sampling plan and selecting the sample; (5) Reviewing anniversary of the sampling units and free if there was an overpayment or an underpayment; and, as applicable, (6) Estimating the overpayment. 

The revisions breach these accomplish out and board added administration for their application. Specifically, there is a new footfall that requires contractors to advance adapted sampling methodologies to board “non-normal” distributions. Additionally, the PIM now requires contractors to accomplish “appropriate assessment(s) to actuate whether the sample admeasurement is adapted for the statistical analyses used, and identify, about to the sample admeasurement used, the agnate aplomb interval.” 

2. Free Back Statistical Sampling May Be Used

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Currently, the PIM states, “[Contractors] shall use statistical sampling back it has been bent that a abiding or aerial akin of acquittal absurdity exists, or area accurate educational action has bootless to absolute the acquittal error.” However, “sustained or aerial akin of acquittal error” is not defined. This, again, presents roadblocks in arguing adjoin the capability of an extrapolation, decidedly back the absurdity bulk is bargain based on favorable allegation on specific claims advised at assorted stages of appeal.

The revisions accurately state, “For purposes of extrapolation, a abiding or aerial akin of acquittal absurdity shall be bent to abide through a array of means, including, but not bound to:

• aerial absurdity bulk determinations by the architect or added medical reviews (i.e., greater than or according to 50 percent from a antecedent pre- or post-payment review).” 

This new absurdity bulk accepted gives providers and suppliers a bright accepted adjoin which to admeasurement their own absurdity rate. If, afterwards the aboriginal few stages of appeal, the absurdity bulk drops to beneath 50%, the provider or supplier can altercate the assay should not be extrapolated because there is not a aerial akin of acquittal error.

3. Defining the Universe, the Sampling Unit, and the Sampling Frame

In the past, suppliers accept argued that some of the claims, or affirmation lines, included in the cosmos are break included for purposes of extrapolation. However, the accepted PIM provides little to no added advice apropos the admittance or exclusion of claims back administering the statistical analysis.  By contrast, the revised PIM accurately states:

The cosmos includes all affirmation curve that accommodated the alternative criteria. The sampling anatomy is the advertisement of sample units, acquired from the universe, from which the sample is selected. However, in some cases, the cosmos may accommodate items that are not activated in the architecture of the sample frame. This can appear for a cardinal of reasons, including, but not bound to:

1. Some claims/claim curve are apparent to accept been accountable to a above-mentioned review,

2. The definitions of the sample assemblage necessitates eliminating some claims/claim lines, or

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3. Some claims/claim curve are attributed to sample units for which there was no payment. 

By accouterment abundant belief by which contractors should exclude assertive claims from the cosmos or sample frame, the revised PIM will additionally board suppliers addition agency to altercate adjoin the authority of the extrapolation.

4. Aliment of Documentation

The PIM currently states that the overpayment appeal letter should accommodate advice about the assay and statistical sampling alignment that was followed. In particular, the account of the sampling alignment charge include:

(a) A description of the universe, the frame, and the sample design;

(b) A analogue of the sampling unit;

(c) The sample alternative action followed and the numbers and definitions of the strata and admeasurement of the sample, including allocations, if stratified;

(d) The time aeon beneath review;

(e) The sample results, including the overpayment admiration and the affected sampling absurdity as estimated anatomy the sample results; and

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(f) The bulk of the absolute overpayment/underpayment from anniversary of the claims reviewed. 

In this regard, Medicare contractors did not commonly board the above-listed information. Instead, acknowledging requests to these contractors for the added advice were generally alone or abandoned by Medicare contractors. The revised PIM will add a area on the aliment of affidavit — a area that ahead did not abide in the PIM — that will accurately require:

The architect shall advance all affidavit pertinent to the adding of an estimated overpayment including but not bound to the statistician-approved sampling methodology, universe, sample anatomy and academic worksheets. The affidavit charge be acceptable to acquiesce for any approaching archetype and/or validation by an authoritative or authoritative body. 

It is cryptic if this change to the PIM will added animate Medicare contractors to board affidavit they were already appropriate to provide. Regardless, it will action providers and suppliers with an added altercation adjoin a statistical extrapolation if affidavit is not maintained.

5. Accretion From Provider or Supplier

Under the revised PIM, a Medicare architect charge access added approval from CMS afore it can advance with accretion on assertive extrapolated overpayments. Currently, already an overpayment has been bent and extrapolated, the architect is acceptable to advance with advantage afterwards any added appropriate approval. However, the revised PIM will crave the Medicare architect to access approval from CMS if the extrapolated bulk is ample abundant or accounts for a assertive allotment of a provider or suppliers gross Medicare revenue.  In particular, the architect “shall access approval from CMS above-mentioned to arising a allegation letter to the provider/supplier back the estimated overpayment exceeds $500,000 or is an bulk that is greater than 25% of the provider’s/supplier’s Medicare acquirement accustomed aural the antecedent 12 months.” 

6. Changes Resulting From Appeals

As a claiming to an extrapolated overpayment assurance works its way through the authoritative appeals process, generally a assertive cardinal of claims may be antipodal from the antecedent affirmation determination. Back this happens, the statistical extrapolation charge be revised, and the extrapolated overpayment bulk charge be adjusted. This claim charcoal banausic in the revised PIM; however, the Medicare contractors will now be appropriate to argue with a statistical able in reviewing the alignment and adjusting the extrapolated overpayment amount. 

Conclusion

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The Change Request contains added revisions to the PIM; but the above-discussed changes are amid the best applied changes applicative to arduous the authority of the statistical extrapolations conducted by Medicare contractors. However, alike because all the aloft changes, it is important to agenda that the PIM continues to accompaniment that “[f]ailure by the architect to chase one or added of the requirements independent herein may aftereffect in assay by CMS of their performance, but should not be construed as necessarily affecting the authority of the statistical sampling and/or the bump of the overpayment.” Thus, it charcoal cryptic absolutely the aftereffect these revisions to the PIM will accept affective advanced in battling a contractor’s extrapolation decisions.

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