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Why Precision Matters in Healthcare

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If overpayments are found, then the extrapolation recoupment number will go up; if underpayments are found, the extrapolation will go down.

Precision matters – in everything. Especially in Medicare statistical sampling and extrapolations.

But that’s not how the world works.

In the fantasy world of statistical sampling and extrapolation inhabited by program integrity auditors, the statisticians long have grown accustomed to cutting corners and doing substandard and sloppy work. And the Administrative Law Judges (ALJs) have been hoodwinked into accepting this inaccurate work based on a dangerous myth.

Yes, there is a dangerous myth in the world of Medicare auditing, statistical sampling, and extrapolations. What is it?

Well, let’s start with the Program Integrity Manual (PIM), which as we all know has a number of dos and don’ts that are routinely ignored by auditors. In the infamous Chapter 8 on statistical sampling and extrapolation, the PIM states explicitly that the auditor can pick and choose what rules they wish to comply with. Well, it doesn’t say that exactly, but here is the tortured language in Section 8.4.1.1: Failure by a contractor to follow one or more of the requirements contained herein does not necessarily affect the validity of the statistical sampling that was […]

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