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This bill has been prepared for the signatures of the appropriate legislative officers and the Governor.
To determine whether the Governor has signed the bill or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.
also SENATOR(S) Bridges and Kirkmeyer, Amabile, Hinrichsen.
also SENATOR(S) Bridges and Kirkrneyer, Amabile, Hinrichsen.
C ONCERNINGAUTHORIZINGTHEDEPARTMENTOFHEALTHCAREPOLICYAND FINANCING TO USE STATISTICAL SAMPLING AND EXTRAPOLATION TO RECOVER OVERPAYMENTS TO PROVIDERS FOR CERTAIN MEDICAID SERVICES ,AND ,INCONNECTIONTHEREWITH ,MAKINGANDREDUCING AN APPROPRIATION .
CONCERNINGAUTHORIZINGTHEDEPARTMENTOFHEALTHCAREPOLICYAND FINANCINGTO USE STATISTICAL SAMPLING AND EXTRAPOLATION TO RECOVER OVERPAYMENTS TO PROVIDERS FOR CERTAIN MEDICAID SERVICES, AND, INCONNECTIONTHEREWITH, MAKINGAND REDUCING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
Be it enacted by the GeneralAssembly ofthe State ofColorado:
(1) The general assembly finds and declares that:
( 1) The general assembly finds and declares that:
(a) The federal centers for medicare and medicaid services, the office of inspector general in the federal department of health and human services, and other federal agencies regularly employ statistical sampling andextrapolationmethodologiestoidentifyandrecoverimproperpayments from the Colorado medicaid program administered by the department of health care policy and financing, or HCPF;
(a) The federal centers for medicare and medicaid services, the office of inspector general in the federal department ofhealth and human services, and other federal agencies regularly employ statistical sampling andextrapolationmethodologiestoidentifyandrecoverimproperpayments from the Colorado medicaid program administered by the department of health care policy and financing, or HCPF;
________ Capital letters or bold & italic numbers indicate new material added to existing law;
Capital letters o& italic numbers indicate new material added to existing law;
dashes through words or numbers indicate deletions from existing law and such material is not part of the act.
dashes through words or numbers indicate deletionsfrom existing law andsuch material is not part of the act.
(b) Certainmedicaidserviceareas,includingnonemergencymedical transportation and pediatric behavioral therapy, such as applied behavior analysis services, have been identified as having elevated rates of insufficient documentation, improper billing, or fraud, waste, and abuse, characterizedbyrapidoutsizedspendinggrowthnotexplainedorsupported by a corresponding increase in the number of individuals served;
(b) Certainmedicaidserviceareas, includingnonemergencymedical transportation and pediatric behavioral therapy, such as applied behavior analysis services, have been identified as having elevated rates of insufficient documentation, improper billing, or fraud, waste, and abuse, characterizedbyrapid outsizedspendinggrowthnotexplainedorsupported by a corresponding increase in the number ofindividuals served;
(d) The inability for HCPF to audit every claim submitted by a provider results in under-represented recoupments, recovery delays, and increasedriskforfederaldisallowance,whichthestateissolelyfinancially responsible for;
(d) The inability for HCPF to audit every claim submitted by a provider results in under-represented recoupments, recovery delays, and increased risk for federal disallowance, which the state is solely financially responsible for;
and (f) Using statistical sampling and extrapolation across providers treating medicaid members for services covered under the nonemergent medicaltransportationbenefitandthepediatricbehavioraltherapybenefit, includingappliedbehavioralanalysis,willprotectColoradomedicaidfunds and the state general fund;
and (f) Using statistical sampling and extrapolation across providers treating medicaid members for services covered under the nonemergent medical transportation benefit and the pediatric behavioral therapy benefit, includingappliedbehavioral analysis, willprotectColoradomedicaidfunds and the state general fund;
In Colorado Revised Statutes, 25.5-4-301, add (3)(a)(VI.5) as follows:
In Colorado Revised Statutes, 25.5-4-301, add (3)(a)(Vl.5) as follows:
(VI.5) (A) IF AN AUDIT OF A PROVIDER WHO PROVIDES PAGE 2-HOUSE BILL 26-1412 NONEMERGENCY MEDICAL TRANSPORTATION SERVICES OR PEDIATRIC BEHAVIORAL THERAPY , INCLUDING APPLIED BEHAVIORAL ANALYSIS ,IS INITIATED AFTERJULY 1,2026,FOR SERVICES PROVIDED FROM JANUARY 1, 2022, THROUGH D ECEMBER 31, 2023, THE STATE DEPARTMENT IS AUTHORIZED TO DETERMINE AND RECOVER AN OVERPAYMENT TO A PROVIDER USING A SAMPLING OF RECORDS AND EXTRAPOLATION OF THE RECORDS SO LONG AS THE SAMPLING AND EXTRAPOLATION METHODS EMPLOYEDUTILIZEASTATISTICALLYVALIDSAMPLEANDAREDESIGNEDAND IMPLEMENTEDINACCORDANCEWITHNATIONALLYRECOGNIZED ,GENERALLY ACCEPTED STATISTICAL PRINCIPLES,STANDARDS ,AND METHODS .
(Vl.5) (A) IF AN AUDIT OF A PROVIDER WHO PROVIDES PAGE 2-HOUSE BILL 26-1412 NONEMERGENCY MEDICAL TRANSPORTATION SERVICES OR PEDIATRIC BEHAVIORAL THERAPY, INCLUDING APPLIED BEHAVIORAL ANALYSIS, IS INITIATED AFTER JULY 1, 2026, FOR SERVICES PROVIDED FROM JANUARY 1, 2022, THROUGH DECEMBER 31, 2023, THE STATE DEPARTMENT IS AUTHORIZED TO DETERMINE AND RECOVER AN OVERPAYMENT TO A PROVIDER USING A SAMPLING OF RECORDS AND EXTRAPOLATION OF THE RECORDS SO LONG AS THE SAMPLING AND EXTRAPOLATION METHODS EMPLOYED UTILIZEASTATISTICALLYVALID SAMPLEAND AREDESIGNEDAND IMPLEMENTEDINACCORDANCE WITHNATIONALLYRECOGNIZED, GENERALLY ACCEPTED STATISTICAL PRINCIPLES, STANDARDS, AND METHODS.
(B) IF AN AUDIT CONDUCTED PURSUANT TO SUBSECTION (3)(a)(VI.5)(AOF THIS SECTION IDENTIFIES A STATISTICALLY SIGNIFICANT PATTERN OF ALLEGED OVERPAYMENTS TO A PROVIDER OF NONEMERGENCY MEDICALTRANSPORTATIONSERVICESORPEDIATRICBEHAVIORALTHERAPY , THEAUDITORISAUTHORIZEDTOUSETHESAMESTATISTICALSAMPLINGAND EXTRAPOLATIONMETHODSTOAUDITSERVICESPROVIDEDBYTHEPROVIDER FROM JANUARY 1,2024,THROUGH D ECEMBER 31,2025.F ORTHEPURPOSES OF THIS SUBSECTION (3)(a)(VI.5)(B), STATISTICALLY SIGNIFICANT PATTERN "MEANS A CLAIMS ERROR RATE IDENTIFIED THROUGH THE AUDIT THAT EXCEEDS TEN PERCENT .
(8 ) IF AN AUDIT CONDUCTED PURSUANT TO SUBSECTION (3)(a)(Vl.5)(A) OF THIS SECTION IDENTIFIES A STATISTICALLY SIGNIFICANT PATTERN OF ALLEGED OVERPAYMENTS TO A PROVIDER OF NONEMERGENCY MEDICALTRANSPORTATIONSERVICESORPEDIATRICBEHAVIORALTHERAPY, THE AUDITOR ISAUTHORIZEDTO USETHE SAME STATISTICALSAMPLING AND EXTRAPOLATION METHODS TO AUDITSERVICES PROVIDED BYTHE PROVIDER FROM JANUARY 1, 2024, THROUGH DECEMBER31, 2025.
(C) IFANAUDITIDENTIFIESANALLEGEDOVERPAYMENT ,THESTATE DEPARTMENT SHALL ISSUE A NOTICE TO THE PROVIDER OF THE ALLEGED OVERPAYMENT WITHIN SIXTY DAYS AFTER THE ALLEGED OVERPAYMENT IS IDENTIFIED.THENOTICEOFTHEALLEGEDOVERPAYMENTMUSTINCLUDETHE BASIS OF THE ALLEGED OVERPAYMENT ,THE RATIONALE FOR THE ALLEGED OVERPAYMENT , THE METHODOLOGY USED TO CALCULATE THE ALLEGED OVERPAYMENT , AND INFORMATION ON HOW THE STATE DEPARTMENT IDENTIFIEDTHEALLEGEDOVERPAYMENT INCLUDINGCLAIMSSAMPLESUSED , CLAIM LEVEL FINDINGS ,AND OTHER DOCUMENTATION TO ENABLE THE PROVIDER TO FULLY EVALUATE AND REPLICATE THE AUDITOR S ANALYSIS.
FOR THE PURPOSES OF THIS SUBSECTION (3)(a)(Vl.5)(8),"STATISTICALLY SIGNIFICANT PATTERN" MEANS A CLAIMS ERROR RATE IDENTIFIED THROUGH THE AUDIT THAT EXCEEDS TEN PERCENT.
PRIOR TO THE STATE DEPARTMENT IMPLEMENTING RECOVERY OF AN OVERPAYMENT , THE PROVIDER HAS THE RIGHT TO AN INFORMAL RECONSIDERATION IN ACCORDANCE WITH SUBSECTION (3)(a)(VIIOF THIS SECTION OR THE RIGHT TO A FORMAL APPEAL IN ACCORDANCE WITH SUBSECTION (3)(a)(VIIIOF THIS SECTION.
(C) IF AN AUDIT IDENTIFIES AN ALLEGED OVERPAYMENT, THE STATE DEPARTMENT SHALL ISSUE A NOTICE TO THE PROVIDER OF THE ALLEGED OVERPAYMENT WITHIN SIXTY DAYS AFTER THE ALLEGED OVERPAYMENT IS IDENTIFIED.
(D) IF THE STATE DEPARTMENT ENTERS INTO A CONTRACT FOR THE PURPOSE OF CONDUCTING AN AUDIT PURSUANT TO THIS SUBSECTION PAGE 3-HOUSE BILL 26-1412 (3)(a)(VI.5),THE CONTRACT MUST NOT BE A CONTINGENCY -BASED CONTRACT BASED ON A PERCENTAGE OF THE AMOUNT OF RECOVERY COLLECTED FROM THE PROVIDER .
THENOTICEOFTHEALLEGEDOVERPAYMENTMUSTINCLUDETHE BASIS OF THE ALLEGED OVERPAYMENT, THE RATIONALE FOR THE ALLEGED OVERPAYMENT, THE METHODOLOGY USED TO CALCULATE THE ALLEGED OVERPAYMENT, AND INFORMATION ON HOW THE STATE DEPARTMENT IDENTIFIEDTHEALLEGEDOVERPAYMENT, INCLUDINGCLAIMS SAMPLES USED, CLAIM-LEVEL FINDINGS, AND OTHER DOCUMENTATION TO ENABLE THE PROVIDER TO FULLY EVALUATE AND REPLICATE THE AUDITOR'S ANALYSIS.
(E) A FTER THE STATE DEPARTMENT COMPLETES AN AUDIT OF A PROVIDERPURSUANTTOTHISSUBSECTION (3)(a)(VI.5)THESTATEAUDITOR OR A PERSON AUTHORIZED BY THE STATE AUDITOR SHALL CONDUCT AN EXAMINATION IN ACCORDANCE WITH SECTION 2-3-103 TO DETERMINE WHETHER THE STATE DEPARTMENT USED PROPER STATISTICAL SAMPLING AND EXTRAPOLATION METHODS WHEN DETERMINING WHETHER OVERPAYMENTS WERE MADE TO A PROVIDER .
PRIOR TO THE STATE DEPARTMENT IMPLEMENTING RECOVERY OF AN OVERPAYMENT, THE PROVIDER HAS THE RIGHT TO AN INFORMAL RECONSIDERATION IN ACCORDANCE WITH SUBSECTION (3)(a)(VII) OF THIS SECTION OR THE RIGHT TO A FORMAL APPEAL IN ACCORDANCE WITH SUBSECTION (3)(a)(VIII) OF THIS SECTION.
THE STATE AUDITOR SHALL ANNUALLY PRESENT A REPORT OF THE FINDINGS MADE PURSUANT TO THIS SUBSECTION (3)(a)(VI.5)(ETO THE LEGISLATIVE AUDIT COMMITTEE AND THE JOINT BUDGET COMMITTEE UNTIL THE AUDITS ARE COMPLETE .
(D) IF THE STATE DEPARTMENT ENTERS INTO A CONTRACT FOR THE PURPOSE OF CONDUCTING AN AUDIT PURSUANT TO THIS SUBSECTION PA G E 3-H O U SE BILL 26-1412 (3)(a)(Vl.5), THE CONTRACT MUST NOT BE A CONTINGENCY-BASED CONTRACT BASED ON A PERCENTAGE OF THE AMOUNT OF RECOVERY COLLECTED FROMTHE PROVIDER.
(E) AFTER THE STATE DEPARTMENT COMPLETES AN AUDIT OF A PROVIDERPURSUANTTOTHISSUBSECTION(3)(a)(Vl.5),THESTATEAUDITOR OR A PERSON AUTHORIZED BY THE STATE AUDITOR SHALL CONDUCT AN EXAMINATION IN ACCORDANCE WITH SECTION 2-3-103 TO DETERMINE WHETHER THE STATE DEPARTMENT USED PROPER STATISTICAL SAMPLING AND EXTRAPOLATION METHODS WHEN DETERMINING WHETHER OVERPAYMENTS WERE MADE TO A PROVIDER..THE STATE AUDITOR SHALL ANNUALLY PRESENT A REPORT OFTHE FINDINGS MADE PURSUANT TO THIS SUBSECTION (3)(a)(Vl.5)(E) TO THE LEGISLATIVE AUDIT COMMITTEE AND THE JOINTBUDGET COMMITTEE UNTIL THE AUDITS ARE COMPLETE.
(1) Except as provided in subsection (3) of this section, to implement this act, the appropriation made in the annual general appropriation act for the 2026-27 state fiscal year to the department of health care policy and financing for medical and long-term care services for Medicaid-eligible individuals is adjusted as follows:
(1) Except as provided in subsection (3) ofthis section, to implement this act, the appropriation made in the annual general appropriation act for the 2026-27 state fiscal year to the department of health care policy and financing for medical and long-term care services for Medicaid-eligible individuals is adjusted as follows:
(2) For the 2026-27 state fiscal year, the general assembly anticipates that the federal funds received bythe department of health care policy and financing for medical and long-term care services for Medicaid-eligible individuals will decrease by $6,861,775.
(2) For the 2026-27 state fiscal year, the general assembly anticipates that the federal funds received by the department ofhealth care policy and financing for medical and long-term care services for Medicaid-eligible individuals will decrease by $6,861,775.
The appropriationinsubsection(1)(a)ofthissectionisbasedontheassumption that the department will not receive this amount of federal funds.
The appropriation in subsection (l)(a) ofthis section is based on the assumption that the department will not receive this amount o f federal funds.
(3) Subsection (1)(a) of this section does not require a reduction of an appropriation in the annual general appropriation act for the 2026-27 state fiscal year if:
(3) Subsection (l)(a) o f this section does not require areduction o f an appropriation in the annual general appropriation act for the 2026-27 state fiscal year if:
PAGE 4-HOUSE BILL 26-1412 (a) Theamountofthegeneralfundappropriationmadeintheannual generalappropriationactforthe2026-27statefiscalyeartothedepartment of health care policyandfinancingformedicalandlong-termcare services for Medicaid-eligible individuals is less than the amount of the adjustment required in subsection (1)(a) of this section;
PAGE 4-HOUSE BILL 26-1412 (a) Theamountofthegeneral fund appropriationmade intheannual general appropriation act for the 2026-27 state fiscal yearto the department ofhealth carepolicy and financing for medical and long-term care services for Medicaid-eligible individuals is less than the amount ofthe adjustment required in subsection (l)(a) ofthis section;
or (b) Theannualgeneralappropriationactforthe2026-27statefiscal year does not include an appropriation to the department of health care policy and financing for medical and long-term care services for Medicaid-eligible individuals.
or (b) The annual general appropriation act for the 2026-27 state fiscal year does not include an appropriation to the department of health care policy and financing for medical and long-term care services for Medicaid-eligible individuals.
except that section 3 of this act takes effect only if the annual general appropriation act for the 2026-27 state fiscal year becomes law, in which case section 3 of this act takes effect upon the effective date of this act or of the annual general appropriation act for state fiscal year 2026-27, whichever is later.
except that section 3 of this act takes effect only if the annual general appropriation act for the 2026-27 state fiscal year becomes law, in which case section 3 ofthis act takes effect upon the effective date ofthis act or of the annual general appropriation act for state fiscal year 2026-27, whichever is later.
The general assembly finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, or safety or for appropriations for PAGE 5-HOUSE BILL 26-1412 the support and maintenance of the departments of the state and state institutions.
The general assembly finds, determines, and declares that this act is necessary for the immediate preservation ofthe public peace, health, or safety or for appropriations for PAGE 5-HOUSE BILL 26-1412 the support and maintenance of the departments of the state and state institutions.
____________________________ ____________________________ Julie McCluskie James Rashad Coleman, Sr.
J ~ ~ James Rashad Coleman, Sr.
SPEAKER OF THE HOUSE PRESIDENT OF OF REPRESENTATIVES THE SENATE ____________________________ ____________________________ Vanessa Reilly Esther van Mourik CHIEF CLERK OF THE HOUSE SECRETARY OF OF REPRESENTATIVES THE SENATE APPROVED________________________________________ (Date and Time) _________________________________________ Jared S.
SPEAKER OF THE HOUSE PRESIDENT OF OF REPRESENTATIVES THE SENATE Vanessa Reilly Esther van Mourik CHIEF CLERK OF THE HOUSE SECRETARY OF OF REPRESENTATIVES THE SENATE APPROVED q,,_7'i-._,.,kjrl 'Ji>2-0Z..Go c,I,.1°r,-,_, ( ate and Time) PAGE 6-HOUSE BILL 26-1412
Polis GOVERNOR OF THE STATE OF COLORADO PAGE 6-HOUSE BILL 26-1412
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