(1) At the option of the department, the amount of money erroneously paid to a provider for any given period of time may be determined by the use of statistical sampling and extrapolation, rather than by an audit of 100% of the claims submitted by the provider during the period of time under review. Statistical sampling and extrapolation shall not be used to determine overpayments for inpatient hospital services, outpatient hospital services, or hospital inpatient psychiatric services, or in cases where the number of line items in the review period does not equal 500 or more.

(a) A line item consists of a single service, under one procedure rate with one or more units of service, procedure or item on a Medicaid claim form for which a provider has received payment.

(2) If the department chooses to use statistical sampling and extrapolation to determine an overpayment, it will use a statistical method to draw a random sample of claims for the review period and will audit these claims. The department will calculate the provider's error rate based on the net dollar amount overpaid to the provider after any underpayments occurring in the sample have been offset against the overpayments occurring in the sample. The department will then calculate the total overpayment for the review period using an appropriate statistical methodology.

(3) If the department chooses to use statistical sampling and extrapolation, it shall notify the provider of its intention to do so. When the sampling and extrapolation process is completed, the department shall provide the provider with information regarding the sample size, the sample selection method, and the formulas and calculations used in the extrapolation.

(4) It is presumed that the overpayment amount determined by the use of statistical sampling and extrapolation is correct. However, the provider may rebut this presumption by presenting evidence that the sampling and extrapolation process used by the department was invalid, by presenting evidence that claims in the sample determined by the department to be erroneous or overpaid were correctly paid, or by requesting an audit of 100% of the claims paid in the review period, as provided in (5).

(5) A provider who does not agree with the overpayment amount determined by statistical sampling may request that the department conduct a 100% audit of the claims paid in the review period. The request for a 100% audit must be made within 30 days of the date of the notice informing the provider of the results of the statistical sampling. The department must then conduct such a review.

(a) If the audit shows an overpayment amount which is different from the overpayment amount determined by sampling and extrapolation, the amount determined by the audit shall be used by the department in assessing an overpayment against the provider. A provider who is aggrieved by a department determination based upon the results of the audit may appeal by means of the fair hearing procedures set forth in ARM 37.5.304, 37.5.305, 37.5.307, 37.5.310, 37.5.311, 37.5.313, 37.5.316, 37.5.322, 37.5.325, 37.5.328, 37.5.331, 37.5.334 and 37.5.337.

(b) The provider must pay the department's costs for such an audit, unless the overpayment amount determined by the 100% audit is at least 10% less than the overpayment amount determined by the statistical sample.

(6) A provider who is aggrieved by an overpayment determined by statistical sampling and extrapolation may appeal by means of the fair hearing procedures set forth in ARM 37.5.304, 37.5.305, 37.5.307, 37.5.310, 37.5.311, 37.5.313, 37.5.316, 37.5.322, 37.5.325, 37.5.328, 37.5.331, 37.5.334 and 37.5.337.