PURPOSE: This rule establishes the method where the billing forms or claims for payment submitted by Medicaid providers will be examined to determine compliance with Title XIX (Medicaid) Program requirements and proper payment, and sets forth the statistical methodology to be employed and the manner in which providers may challenge the results.

1. (1) The following definitions will be used in administering this rule:

   1. (A) Adequate records means records from which services rendered and the amount of reimbursement received for services by a provider can be readily discerned and verified with reasonable certainty. Adequate medical records are records which are of the type and in a form required of good medical practice;
   2. (B) Amount due means an amount of money owed to the Medicaid agency by a provider resulting from a finally determined overpayment;
   3. (C) Claim for payment or claim means a document or electronically transmitted data submitted to the Medicaid agency for the purpose of obtaining payment by the Title XIX Medicaid Program. A claim for payment means any one (1) document regardless of how many services, dates of service or recipients to which it pertains. In the case of electronically transmitted claims for payment, a claim for payment means all services for each recipient for which reimbursement is sought in the transmitted information;
   4. (D) Medicaid agency or the agency means the single state agency administering or and Procedure of General Applicability

supervising the administration of the state Medicaid plan;

1. (E) Overpayment means an amount of money paid to a provider by the Medicaid agency to which s/he was not entitled by reason of improper billing, error, fraud, abuse, lack of verification or insufficient medical necessity;
2. (F) Participation means the ability and authority to provide services or merchandise to eligible Medicaid recipients and to receive payment from the Medicaid program for services or merchandise;
3. (G) Provider means any person, partnership, corporation, not-for-profit corporation, professional corporation or other business entity that enters into a contract or provider agreement with the Department of Social Services for the purpose of providing services to eligible persons and obtaining from the department or its divisions reimbursement for services;
4. (H) Records means any books, papers, journals, charts, treatment histories, medical histories, test and laboratory results, photographs, X rays and any other recordings of data or information made by or caused to be made by a provider relating in any way to services provided to Medicaid recipients and payments charged or received for services. Medicaid claim for payment information does not constitute adequate records. A provider must retain all records for five (5) years;
5. (I) Review group means all claims for payment or all claims relating to a specific service or a specific item or merchandise submitted by a provider between two (2) certain dates. To be valid, the review group beginning and ending dates must be established before the statistical sample is selected. If the dates are changed, a new statistical sample must be identified;
6. (J) Selected at random means the process where claims in a review group are assigned consecutive numbers and after the assignation, twenty-five percent (25%) of those numbers identified as the statistical sample by use of a random numbers table or computergenerated random numbers;
7. (K) Statistical sample means twenty-five percent (25%) of a review group of claims for payment submitted by a provider. The sample must be selected at random to be valid; and
8. (L) Supervision means the service was performed while the provider was physically present during the service or the provider was on the premises and readily available to give direction to the person actually performing the service.

1. (2) When the Medicaid agency determines that claims for payment submitted by a provider shall be reviewed, the following actions will be taken:

   1. (A) A Review Group Selected. All claims for which the provider was not paid or for which a particular service or item of merchandise under review was not paid will be removed from the review group before a statistical sample is identified. The agency shall not use statistical sampling to determine overpayment where the review group consists of fewer than one hundred (100) claims for payment;

   2. (B) A Statistical Sample Selected From the Review Group.

      1. 1. When the review group selected by

the state agency exceeds five hundred (500) claims, the agency, at its discretion, may request that the provider whose claims are under review waive examination of a portion of the claims in a statistical sample. If a request results in a waiver, the state agency will not review claims in the randomly selected statistical sample in which the total aggregate amount paid for the claim document is less than a fixed amount specified in the waiver request. A waiver will not reduce the number of claims in the review group and calculations of underpayments or overpayments shall be made as if all claims in the randomly selected statistical sample had been reviewed.

1. 2. At the sole discretion of the state

agency, any request for waiver of a full statistical sample review may offer the provider the further option that it may elect to have the statistical sample selected from the review group by the following statistical sampling formula:

Sample Size= 1+(96÷Review Group Size) The request for waiver shall contain the formula with the calculations completed for the size of the review group selected for the provider in question.

1. 3. When a statistical sample has been

selected by formula, the number of claims in the review group remains the same in calculating total overpayments or underpayments. A statistical sample selected by formula replaces the twenty-five percent (25%) statistical sample in calculating total overpayments or underpayments.

1. 4. The state agency has the sole discre-

tion both to request a waiver and whether to offer in this request an election to the provider to use a sample selected by statistical sampling formula. If a waiver is requested, the provider has the sole discretion whether to have the full twenty-five percent 13 CSR 70-3

(25%) statistical sample reviewed or to waive examination of a portion of claims in a statistical sample. If the provider elects the waiver, only claims paid above a fixed amount will be reviewed or, if a statistical sampling formula option has been offered by the state agency, the provider has the sole discretion to elect the statistical sampling formula.

1. 5. Once a provider has waived a full sta-

tistical sample review or has elected to have a sample selected by statistical sampling formula, the provider’s decision may not be revoked or rescinded by the provider; and

1. (C) Each claim or each portion of a claim relating to a particular service or item of merchandise reviewed. The review process may include any one (1) or more of the following:

   1. 1. Determination of medical necessity

by a qualified consultant or employee of the agency. The reimbursement received by the provider for services or merchandise determined to be medically unnecessary shall constitute an overpayment. Medically unnecessary includes services that are inappropriate or excessive for the diagnosis tested;

1. 2. Determination of proper billing codes

as required under program benefit limitations. The reimbursement received by the provider for services or merchandise through the use of improper billing codes or billing codes in excess of program benefit limitations shall constitute an overpayment;

1. 3. Determination that services or mer-

chandise were delivered by the provider in compliance with the requirements of 13 CSR 70-3.030(2)(A)1.–35. The reimbursement received by the provider for services or merchandise delivered in violation of any provision of 13 CSR 70-3.030(2)(A)1.–35. shall constitute an overpayment;

1. 4. Determination that delivery of ser-

vices or merchandise appearing on the reviewed claims is verified by adequate records kept by the provider. Reimbursement received by the provider for services or merchandise not verified by adequate records shall constitute an overpayment;

1. 5. Determination that services or mer-

chandise delivered by the provider were performed or delivered by the provider for services performed or merchandise delivered by another or without proper supervision shall constitute an overpayment;

1. 6. Determination that services per-

formed or merchandise delivered by the provider are verified by statements of the eligible recipients of the services or merchandise. Reimbursement received for services or merchandise not verified by the recipients shall constitute an overpayment; and

1. 7. Determination that information sub-

mitted by the provider accompanying the claims for payment was adequate. This includes, but is not limited to, physician examination certifications, medical necessity forms and test results. Reimbursement received by the provider for services or merchandise not accompanied by adequate information of this type shall constitute an overpayment.

1. (3) When a review of a provider’s claims by statistical sampling has been completed, a total overpayment shall be computed by totaling all overpayments for the statistical sample and subtracting all underpayments found in the sample to obtain a total overpayment. This total is then divided by the number of claims contained in the statistical sample to obtain an average overpayment for the sample. The total overpayment for the review will then be determined by multiplying the average sample overpayment by the number of claims in the review group. If there exists a net underpayment for the sample, then the average underpayment shall be computed in the same manner and the provider notified of the results.
2. (4) When a total overpayment has been computed by statistical sampling, the Medicaid agency may proceed to recover the full amount of the overpayment from the provider as an amount due. Recovery of the overpayment shall be accomplished according to the provisions of 13 CSR 70-3.030(5)(A)–(D), except that in cases where the amount due was computed by statistical sample, the notice informing the provider of the amount due required by 13 CSR 70-3.030(5)(A) and

3. (B) shall also contain the following information:

   1. (A) The dates encompassed by the review group;
   2. (B) The number of claims in the review group and, if applicable, what particular service or item or merchandise pertained to the review group;
   3. (C) The number of claims in the statistical sample; and
   4. (D) A generally summarized description of the reasons for the overpayment determinations with all claims in the statistical sample identified as to which overpayment description applies to each.

AUTHORITY: sections 207.020, RSMo Supp. 1993, 208.165, RSMo 1986 and 208.153, RSMo Supp. 1991.* This rule was previously filed as 13 CSR 40-81.161. Original rule filed April 14, 1983, effective Oct. 13, 1983. Amended: Filed Sept. 17, 1986, effective Dec. 11, 1986. Emergency amendment filed Feb. 4, 1987, effective Feb. 14, 1987, expired April 25, 1987. Amended: Filed Feb. 4, 1987, effective June 11, 1987. *Original authority: 207.020, RSMo 1945, amended 1961, 1965, 1977, 1981, 1982, 1986; 208.153, RSMo 1967, amended 1967, 1973, 1989, 1990, 1991; and 208.165, RSMo 1982.