HB 1412: Department of Health Care Policy & Financing Statistical Sampling & Extrapolation - Colorado

Final Act → Signed Act · 6 edits · Jun 4, 2026

MODERATE

This bill authorizes the Department of Health Care Policy and Financing to use statistical sampling and extrapolation to recover overpayments from Medicaid providers, mirroring federal audit methods. It specifically targets services like nonemergency medical transportation and pediatric behavioral therapy, allowing auditors to expand audits to other services if a significant error rate is found. The bill also adjusts state funding assumptions for the 2026-27 fiscal year based on expected decreases in federal Medicaid funds.

Scope change

The bill expands the scope of audits by allowing auditors to extrapolate findings from specific high-risk services to other services provided by the same provider if a statistically significant error rate is identified.

REQUIREMENT

Authorized the use of statistical sampling and extrapolation to recover overpayments, moving away from individual claim audits.

Mandated that audit contracts cannot be contingency-based, meaning auditors cannot be paid a percentage of the recovered funds.

ELIGIBILITY

Specifically included nonemergency medical transportation and pediatric behavioral therapy as services subject to these new audit methods.

ENFORCEMENT

Established a trigger where a claims error rate exceeding 10% allows auditors to extend audits to all services provided by a provider between January 1, 2024, and December 31, 2025.

Required the State Auditor to annually review and report on the department's use of statistical sampling methods to ensure accuracy.

FISCAL

Adjusted the state appropriation for the 2026-27 fiscal year to reflect an anticipated decrease in federal Medicaid funding of approximately $6.86 million.

Rerevised → Final Act · 5 edits · Jun 3, 2026

MODERATE

This bill authorizes the Colorado Department of Health Care Policy and Financing to use statistical sampling and extrapolation to recover overpayments from Medicaid providers for specific services, such as nonemergency medical transportation and pediatric behavioral therapy. It replaces the requirement for individual audits of every claim with a more efficient method that aligns with federal standards, while adding strict rules to prevent fraud and ensure transparency.

Scope change

The bill expands the scope of recovery methods to include statistical sampling for specific high-risk service areas, whereas previous versions required individual audits for all claims.

REQUIREMENT

Added authorization for the state to use statistical sampling and extrapolation to recover overpayments for nonemergency medical transportation and pediatric behavioral therapy services.

Required the state to issue a detailed notice to providers within 60 days of identifying an overpayment, including the methodology and data used, before any recovery action is taken.

TIMELINE

Established specific audit windows: sampling for services provided between Jan 1, 2022, and Dec 31, 2023, and expanded audits for services provided between Jan 1, 2024, and Dec 31, 2025, if a statistically significant error rate is found.

FISCAL

Adjusted state appropriations to decrease the general fund by $6.86 million and increase the cash fund by $13.72 million to reflect anticipated changes in federal reimbursement and recovered funds.

ENFORCEMENT

Mandated that any contracts for audits cannot be contingency-based (i.e., paid a percentage of recovered funds) and required the State Auditor to annually review the statistical methods used.

Revised → Rerevised · 3 edits · Apr 16, 2026

MINOR

The bill was re-revised to include an additional Senate sponsor, Hinrichsen, and to update the status to reflect that it has passed the Senate's third reading unamended. The substantive policy text regarding Medicaid auditing methods was removed from this version, likely because the specific language was moved to a different section or the text shown here is incomplete.

Scope change

The bill's scope regarding Medicaid auditing appears to have shifted or been relocated, as the detailed justification for using statistical sampling over individual audits was removed from this specific excerpt.

TIMELINE

Added a stamp indicating the bill passed the Senate's third reading unamended on April 16, 2026.

ELIGIBILITY

Added Senator Hinrichsen to the list of Senate sponsors.

REQUIREMENT

Removed the detailed legislative findings justifying the use of statistical sampling for Medicaid audits instead of individual audits.

Reengrossed → Revised · 3 edits · Apr 15, 2026

MINOR

The bill was renumbered from 'Reengrossed' to 'Revised' and updated its amendment history to reflect adoption on second reading in the Second House. The text includes new headers indicating the date April 15, 2026, and the Senate's involvement. Substantive policy content regarding Medicaid overpayment recovery for specific services was removed from this version.

Scope change

The bill's scope regarding the recovery of overpayments for nonemergency medical transportation and pediatric behavioral therapy was removed in this version, leaving only the title and procedural headers.

REQUIREMENT

Removed specific legal provisions authorizing the Department of Health Care Policy and Financing to use statistical sampling to recover overpayments for nonemergency medical transportation and pediatric behavioral therapy services provided between 2022 and 2023.

TECHNICAL

Added headers indicating the bill is 'Revised' rather than 'Reengrossed' and includes amendments adopted on second reading in the Second House.

Inserted the date 'April 15, 2026' and the word 'SENATE' into the document body.

Engrossed → Reengrossed · 3 edits · Apr 11, 2026

MINOR

The bill was reengrossed to include additional House sponsors and update the title to reflect all amendments. A new section was added to authorize the State Department to recover overpayments using statistically valid sampling methods, while a previous section detailing this same authority was removed to prevent redundancy.

Scope change

The bill now includes Woodrow as a House sponsor and adds specific authority for recovering overpayments via statistical sampling.

ELIGIBILITY

Added Woodrow as a House sponsor alongside Sirota and Taggart.

REQUIREMENT

Added a new provision authorizing the State Department to determine and recover overpayments using a statistically valid sample of records and extrapolation methods.

Removed a previous section that granted the State Department the same authority to recover overpayments using statistical sampling, likely to avoid duplication.

Introduced → Engrossed · 1 edit · Apr 9, 2026

MINOR

The bill was amended to remove a specific provision that allowed auditors to use statistical sampling methods to audit nonemergency medical transportation and pediatric behavioral therapy providers for a two-year period. This change narrows the scope of the bill by eliminating a particular enforcement mechanism that would have enabled broader, data-driven audits of these specific service areas.

Scope change

The bill's scope is reduced by removing a requirement for statistical sampling in audits for specific service providers.

ENFORCEMENT

Deleted a clause authorizing auditors to use statistical sampling and extrapolation methods to audit claims for nonemergency medical transportation and pediatric behavioral therapy providers from January 1, 2024, through December 31, 2025.

Department of Health Care Policy & Financing Statistical Sampling & Extrapolation

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