File No. 34365

This rule was published in the February 1, 2011, issue (Vol. 2011, No. 3) of the Utah State Bulletin.

Health, Administration

Rule R380-400

Use of Statistical Sampling

Notice of Proposed Rule

(New Rule)

DAR File No.: 34365
Filed: 01/14/2011 03:55:19 PM


Purpose of the rule or reason for the change:

In their report to the Legislature, Number 2009-12, and in subsequent reports, the Office of Legislative Auditor General recommended that the State Medicaid program obtain authority to use statistical sampling to establish overpayment recoveries due the State. This rule sets forth the methodology to adopt that sampling methodology and sets standards for its use.

Summary of the rule or change:

Statistical sampling techniques are authorized when: 1) a pattern of errors are discovered during an audit such that an error rate greater than 10% is discovered; 2) sampling size must establish a confidence level of 95% and a confidence interval of plus or minus 5%; and 3) the estimated error rate will then be extrapolated to the universe from which the sample is drawn to establish the overpayment.

State statutory or constitutional authorization for this rule:

  • Section 26-1-5
  • Section 26-18-3

Anticipated cost or savings to:

the state budget:

Data gathered by the Office of Legislative Auditor General and reported at pages 64 to 65 in report 2009-12 suggests the potential of a 2,000 percent increase in recoveries. Savings are anticipated to the state budget. The exact amount cannot be predicted. Some state agencies are Medicaid providers in some instances and recoveries are possible. Exact amount cannot be predicted.

local governments:

Local governments are Medicaid providers in some instances and recoveries are possible. Exact amount cannot be predicted.

small businesses:

Small businesses are Medicaid providers in some instances and recoveries are possible. Exact amount cannot be predicted.

persons other than small businesses, businesses, or local governmental entities:

Other businesses are Medicaid providers in some instances and recoveries are possible. Exact amount cannot be predicted.

Compliance costs for affected persons:

There may be significant costs to Medicaid providers to respond to sampling established recoveries if they choose to hire their own experts to verify the work by state auditors. Exact amount unknown.

Comments by the department head on the fiscal impact the rule may have on businesses:

This method to increase recoveries of overpayments may have a significant impact on businesses that incorrectly bill Medicaid or other Department of Health programs. Based on the recommendation of the Office of Legislative Auditor General, I support proposing this rule to allow for public comments. A public hearing will be held in anticipation of strong interest in this rule.

David Patton, Acting Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

  • Doug Springmeyer at the above address, by phone at 801-538-6971, by FAX at 801-538-6306, or by Internet E-mail at

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:


Interested persons may attend a public hearing regarding this rule:

  • 02/17/2011 06:00 PM, Utah State Capitol, 350 N State Street, Capitol Board Room (second floor east end), Salt Lake City, UT

This rule may become effective on:


Authorized by:

David Sundwall, Executive Director


R380. Health, Administration.

R380-400. Use of Statistical Sampling.

R380-400-1. Use of Statistical Sampling Techniques.

The Department's procedures for auditing or reviewing Medicaid or other providers may include the use of random sampling and extrapolation. Extrapolation will be used when, at the discretion of the director of Internal Audit, performing the audit or review will be cost effective for the Department.


R380-400-2. Methodology.

(1). A statistically valid random sample will be selected from the universe of records to be audited or reviewed. The sample size shall be selected using accepted sample size estimation methods. The confidence level of the sample size calculation shall be 95% with a confidence interval of plus or minus 5%.

(2). Following the sample audit or review, the statistical margin of error of the sample will be computed and a confidence interval will be determined. The estimated error rate will be extrapolated to the universe from which the sample was drawn within the computed margin of error of the sampling process.

(3). Commonly accepted statistical analysis program may be used to estimate the sample and calculate the confidence interval, consistent with the sampling parameters.


R380-400-3. Prima Facie Effect of Review Findings.

The audit or review findings generated through statistical sampling procedures shall constitute prima facie evidence in all department proceedings regarding the number and amount of overpayments or underpayments received by the provider.


R380-400-4. Preliminary Report of an Audit or Review Findings and Minimum 10% Error Rate for Extrapolation.

If the department concludes from the audit or review that an overpayment has occurred, the department will issue the preliminary findings of a tentative overpayment and inform the provider of an opportunity to request a fair hearing. In cases where an error rate of 10% or less is discovered, actual damages will be used to calculate the overpayment. In cases where the error rate is greater than 10% extrapolation methodology will be utilized to calculate the overpayment. The Department will determine the 10% error rate without statistical parameters. The 10% error rate may be determined by the dollar error rate or the actual number of claims with errors. If either error rate exceeds 10%, extrapolation will be used to determine the overpayment and will be based on sound statistical sampling.


R380-400-5. Dollar Amount of Cost Errors.

The dollar amount of the overpayment will be based on actual cost errors. For example, if a provider submits an incorrect bill for an Evaluation and Management Code 99215 and the correct billing code should have been for 99212, the difference in the fee schedule between the two codes will be the overpayment.


KEY: Medicaid

Date of Enactment or Last Substantive Amendment: 2011

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-18-3


Additional Information

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For questions regarding the content or application of this rule, please contact Doug Springmeyer at the above address, by phone at 801-538-6971, by FAX at 801-538-6306, or by Internet E-mail at