AAPD Joins Friends of Court Brief in Connecticut Medicaid Dental Audit Case

On June 22, 2015, the American Academy of Pediatric Dentistry (AAPD) along with the Connecticut State Dental Association, Connecticut Society of Pediatric Dentists, Connecticut Society of Oral and Maxillofacial Surgeons, American Dental Association, Walgreen Co., and ATG Connecticut petitioned a Connecticut state appellate court for permission to file an amici curiae (friends of the court) brief in a case involving state Medicaid dental auditing practices. The request was granted and the brief was filed on August 5, 2015. The AAPD took this action due to important issues raised concerning the use of sampling and extrapolation in a manner contrary to fair and reasonable audit practices as advocated by the AAPD (see for example the following Technical Brief from the AAPD’s Pediatric Oral Health Research and Policy Center: http://www.aapd.org/assets/1/7/POHRPC_Audit_-_Feb2015_Final.pdf). Also see:  http://www.aapd.org/medicaid_rac_audits_pose_threat_to_children%E2%80%99s_access_to_o​ral_health_care/
 
Background of the case
This case, Bridgeport Dental, LLC vs. Commissioner of Social Services, involves a general dentist audited by the state Medicaid program.  The auditors reviewed a two year period in which 1295 Medicaid claims were paid to the practice, totaling $873,744. The auditors sampled 100 claims, purportedly random, and calculated that $6,600 was overpaid due to inadequate documentation, incorrect procedure codes, non-enrolled patients, and other factors. The auditors then multiplied the average overpayment per claim by the universe of 1295 claims, resulting in an "extrapolated" sum of $85,477. An additional disallowance pushed the total to over $100,000.  The dentist unsuccessfully appealed through the state agency, and then filed an administrative appeal in a state Superior Court that was also unsuccessful.  An appeal to the Appellate Court was then filed on June 2, 2015.
 
The AAPD is most concerned about access to children’s oral health in Medicaid being negatively impacted by unfair and unreasonable audit procedures. The recent history of Connecticut’s dental Medicaid program includes a class action lawsuit brought by beneficiaries in 2000 against the program, and a settlement in 2008 that increased Medicaid dental reimbursement rates, improved program administration, and targeted recruitment of more dentists to participate in the program.  This resulted in a marked increase in Connecticut dentists serving Medicaid patients.  However the audit procedures in question undermine the public policy goal of providing dental care to children of low-income families.
 
Key Points raised in the Amici Brief
The AAPD and other amici are concerned over the state auditors’ flawed use of sampling and extrapolation.  Widespread use of such methods absent statistically sound methodology could result in a tremendous financial impact on providers, already operating on a thin margin in servicing Medicaid populations due to below-market reimbursement.  Amici believes the lower court did not understand the full magnitude of sanctioning such methods in Medicaid audits. It is acknowledged that governing statutes do allow extrapolation in audits. However, if not done statistically correct, it might yield wildly inaccurate outcomes. Ultimately, poorly performed audits will impact children’s access to oral health care, as providers may likely limit their Medicaid patients or withdraw from the program entirely.  In this current case, the state has been cavalier and unresponsive in explaining their methodology. The state apparently declined to apply any statistical test to ensure the reliability of the sample and determine a confidence interval to ensure the extrapolation result is statistically valid. This is not a practice recognized by the federal agency overseeing Medicaid and Medicare, whose guidance recommends a statistically valid sample and methods for projecting overpayments.  Federal guidelines also require complete transparency and disclosure if extrapolation is used to calculate an overpayment.  The state’s actions are contrary to fair and reasonable provider audits as advocated by the AAPD and other amici.  The brief also highlights the Connecticut state legislature’s concerns with the auditing process, which resulted in new laws:  
 
  • In 2014 the legislature passed Public Act 10-116, which required Department of Social Services (DSS) to promulgate formal regulations on its sampling and extrapolation methodology.  DSS has never done so, and its efforts have been rejected by the legislature’s Regulation Review Committee as inadequate.  
  • In 2015 the legislature involved itself more directly, deleting the ineffective requirement for regulations and creating a new statutory mandate that sampling and extrapolation methodology must be validated by a statistician (Public Act 15-5, effective July 1, 2015).  The new law also requires that the methodology be disclosed to the provider at the outset of the audit.  A provider aggrieved by the audit can now obtain a full evidentiary hearing at the agency under the contested case procedures of the Uniform Administrative Procedure Act. 
 
 
The AAPD and other amici contributed to the legal cost of the brief, which was filed by attorney Jeffry R. Babbin of the law firm Wiggin and Dana LLP in New Haven, Connecticut.  See:  http://www.wiggin.com/16030
 
For further information, please contact AAPD Chief Operating Officer and General Counsel C. Scott Litch at slitch@aapd.org.
 
 


Back to News