Determining When Statistical Sampling May Be Used

8.4.1.4 - Determining When Statistical Sampling May Be Used (Rev. 12127; Issued: 07-21-23; Effective: 08-21-23; Implementation: 08-21-23) The contractor shall use statistical sampling when it has been determined that a sustained or high level of payment error exists. The use of statistical sampling may be used after documented educational intervention has failed to correct the payment error. For purposes of extrapolation, a sustained or high level of payment error shall be determined to exist through a variety of means, including, but not limited to: - high error rate determinations by the contractor or by other medical reviews compared to similar service providers; - provider/supplier history (i.e., prior history of non-compliance for the same or similar billing issues, or historical pattern of non-compliant billing practices); - CMS approval provided in connection to a payment suspension; - information from law enforcement investigations; - allegations of wrongdoing by current or former employees of a provider/supplier; and/or - audits or evaluations conducted by the OIG. If the contractor believes that statistical sampling and/or extrapolation should be used for purposes of estimation, and it does not meet any of the criteria listed above, it shall consult with its BFL, with a copy to the COR, as defined in PIM Chapter 4, §4.7 – Investigations, prior to creating a statistical sample and issuing a request for medical records from the provider/supplier. Examples of this may include, but are not limited to: billing for non-covered services, billing for services not rendered, etc. Extrapolation should not be used when the above criteria is not met unless prior approval is given by the COR and BFL. When an overpayment is identified by data analysis alone, the contractor shall consult with its BFL, with a copy to the COR. In addition, if CMS approves the data driven overpayment, the contractor shall also consult with its BFL, with a copy to the COR, on whether statistical sampling and extrapolation are necessary to identify the overpayment. Additionally, a UPIC shall consult with the appropriate MAC on whether an extrapolated overpayment is more efficient in processing a data-driven overpayment before requesting recoupment from the MAC. Once a decision has been made that statistical sampling may be used, factors also to be considered for determining when to undertake statistical sampling for overpayment estimation instead of a claim-by-claim review, include, but are not limited to: the number of claims in the universe and the dollar values associated with those claims; available resources; and the cost effectiveness of the expected sampling results.