1. (a) All services for which the department is charged are subject to review and audit. During a review or audit, the contractor must give the department or its authorized representative information about his claims for payment. The contractor is responsible for proving he is entitled to payments. If a review or audit reveals that improper payments were made or that the contractor's records do not support the payments according to federal, state, and local laws and rules, department procedures, and the contract provisions, the contractor must make restitution.
2. (b) Department procedures for contract reviews or audits may include the use of sampling and extrapolation. In this procedure, the department selects a representative sample of the cases or claims for which the contractor received payment for the time under review and examines records for those cases or claims. All improper payments or units of service in the sample are then totalled and extrapolated to all of the cases or claims for which the contractor has been paid during the audit period. After being notified and given the opportunity for a hearing according to the requirements in §730.1602 of this title (relating to Right to a Hearing), the contractor is required to pay the department 93% of the total extrapolated amount of the improper payments.

Source Note:The provisions of this §732.301 adopted to be effective November 1, 1988, 13 TexReg 3993; duplicated effective September 1, 1992, as published in the Texas Register September 11, 1992, 17 TexReg 6279.