The Purpose of Statistical Sampling

8.4.1.2 - The Purpose of Statistical Sampling (Rev. 906; Issued: 09-26-19; Effective: 01-02-19; Implementation: 01-02-19) A statistical sample is used to estimate the amount of overpayment(s) made on claims. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), mandates that before using extrapolation (i.e., projection, extension, or expansion of known data) to determine overpayment amounts to be recovered by recoupment, offset, or otherwise, there must be a determination of sustained or high level of payment error, or documentation that educational intervention has failed to correct the payment error. By law, the determination that a sustained or high level of payment error exists is not subject to administrative or judicial review. In this chapter, details are provided on the use of statistical estimation (sometimes, especially in legal contexts, referred to as “extrapolation”) to determine overpayment amounts.