May 2019 Volume LIV Number 3


Legislative and Regulatory Update

November 2015 Volume L Number 6

Unless otherwise noted, for further information on any of these issues, please contact Chief Operating Officer and General Counsel C. Scott Litch at (312) 337-2169 or

State News
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 Dentistry, 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 Aug. 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 Technical Brief from the AAPD’s Pediatric Oral Health Research and Policy Center at Also see
Background of the case
This case, Bridgeport Dental, LLC v. Commissioner of Social Services, involves a general dentist audited by the state Medicaid program.  The auditors reviewed a two year period in which 1,295 Medicaid claims were paid to the practice, totaling $873,744. The auditors sampled 100 claims, purportedly random calculated that $6,600 was overpaid due to inadequate documentation, incorrect procedure codes, enrolled patients and other factors. The auditors then multiplied the average overpayment per claim by the universe of 1,295 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 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 correctly, 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 2010 the legislature passed Public Act 10-116, which required Department of Social Services (DSS) to promulgate formal regulations on its audit process. In 2014, the legislature passed Public Act 14-162 to require DSS to promulgate regulations on 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
For further information, please contact AAPD Chief Operating Officer and General Counsel C. Scott Litch at or Connecticut Public Policy Advocate Dr. Doug Keck at
New Medicaid RAC Audit Reform Law in Nebraska
As reported in the May 2015 PDT, based on a significant challenge posed by a Medicaid Recovery Audit Contractor (RAC) in Nebraska that impacted all Medicaid participating dentists in the state, the Nebraska Society of Pediatric Dentistry and the Nebraska Dental Association (NDA) pursued RAC Audit reform legislation.  Legislative bill 315 was introduced, followed by a legislative hearing.  During the Feb. 18, 2015, hearing on this bill, both pediatric and general dentists testified including pediatric dentists Drs. Jessica Meeske and Eric Hodges.  Also testifying were medical, hospital, community health center, nursing home pharmacy associations.  Ron Wiseman, the office manager of pediatric dentist Dr. Lourdes Secola-Ocanto, also provided heartfelt testimony.  
While Medicaid RAC audits are required under the Affordable Care Act, the implementing federal regulations do not provide a precise framework for how such audits are conducted.  LB 315 is an effort to resolve that, and is being considered a model for legislation in other states.  Approved by and signed into law by Nebraska Governor Pete Ricketts on May 29, 2015, LB 315 requires the following of RAC auditors utilized by the state’s Medicaid program:
  • They may only reviews claims within two years of the date of payment.
  • They must send a determination letter within 60 days of a provider submitting all requested material.
  • They must utilize a licensed health care provider from the area of practice being audited to establish relevant audit methodology consistent with practice guidelines, standards of care and state-issued Medicaid provider handbooks.
  • They must provide greater due process for notification of an adverse determination and scheduling of on-site audits, along with the right to appeal a determination.  This includes an informal appeals process along with a formal administrative appeal.  A provider must receive advance notice of not less than 10 business days for an on-site audit, and the auditor must make a good faith effort to establish a mutually agreed upon time and date.  
  • They must exclude from medical necessity reviews cases in which the provider had obtained prior authorization for the service and service was performed as authorized.
  • They may audit no more than 5 percent of the number of claims filed by the provider being audited, not to exceed 200 records.  A provider must have at least 45 days to respond to and comply with a records request.
  • They must submit an annual report, posted on the state’s DHHS website, regarding their performance, including the amount of overpayments and underpayments identified.
  • Along with the state DHHS, they must perform annual education and training programs for providers, including description of common issues, problems and mistakes identified through audits and reviews along with opportunities for improvement.
  • They are prohibited from recovering overpayments until all informal and formal appeals have been completed, except in cases where this is a credible allegation of fraudulent activity by the provider.
  • For any contingent fee contract, they must be paid the same for overpayments or underpayments.
  • They must allow electronic submission of requested records.
Special thanks goes to:
Dr. Jessica Meeske, AAPD Council on Government Affairs NorthCentral district representative. She is pictured in the photo with the governor.
Dr. Holly Portwood, Nebraska Academy of Pediatric Dentistry Public Policy Advocate
Dr. Scott Morrison, Nebraska Dental Association president
Kim Robak, Esq., Nebraska Dental Association contract lobbyist
David O’Doherty, Nebraska Dental Association executive director
For further information, please contact Chief Operating Officer and General Counsel C. Scott Litch at (312) 337-2169 or or Nebraska Public Policy Advocate Dr. Holly Portwood at

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