Senate Bill 25-314 Preamended

A Bill for an Act

• Page 1, Line 101Concerning changes to the recovery audit contractor

• Page 1, Line 102program, and, in connection therewith, making and

• Page 1, Line 103reducing an appropriation.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov/.)

Joint Budget Committee. The bill allows the department of health care policy and financing (state department) to contract with a recovery audit contractor (RAC) vendor to conduct RAC audits of medicaid providers (providers) on behalf of the state department.

RAC audits may only review claims that are no more than 3 years past the date of the expiration of the timely filing period. The bill allows the state department to review claims that fall outside of this 3-year time frame only if required by a federal audit.

The bill limits the number of audits a provider may undergo each year and limits the number of medical records that can be requested for a given audit.

If the state department identifies preliminary findings during the RAC audit, the state department must send the provider a report detailing the preliminary findings, the rationale for the preliminary findings, and the methodology for how any overpayments were calculated and determined.

The bill allows a provider that received preliminary findings following a complex audit to request an exit conference to discuss the preliminary findings with the state department in an effort to resolve the concerns detailed in the preliminary findings prior to undergoing an informal reconsideration of the preliminary findings.

The bill requires a provider to participate in an informal reconsideration before filing a formal appeal regarding the state department's findings during a RAC audit.

The bill, in the department of health care policy and financing for medical and long-term care services for medical-eligible individuals budget, decreases the cash funds appropriation from recoveries and recoupments by $20,900,588 and the cash funds appropriation from the recovery audit contractor recoveries cash fund is increased by $20,900,588.

• This Unofficial Version Includes Committee

• Amendments Not Yet Adopted on Second Reading

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 25.5-4-301, amend (3.5)(c); repeal (3)(a)(IX); and add (3.3) as follows:

• Page 2, Line 325.5-4-301.  Recoveries - overpayments - penalties - interest -

• Page 2, Line 4adjustments - liens - review or audit procedures - cash fund - rules -

• Page 2, Line 5definitions - repeal. (3) (a)  A review or audit of a provider is subject to the following procedures:

• Page 2, Line 6(IX)  For audits conducted pursuant to 42 CFR 455.506, at least

• Page 2, Line 7quarterly, the state department shall publish on its website an audit

• Page 2, Line 8activity report detailing current and recently completed audits and reviews

• Page 2, Line 9and summaries of the findings of such audits and reviews, including the

• Page 3, Line 1number and amounts of overpayments and underpayments found, the

• Page 3, Line 2number and results of appeals, the amounts collected, and the error rates

• Page 3, Line 3identified. At least quarterly, the state department shall conduct trainings

• Page 3, Line 4for providers and hold stakeholder meetings regarding audits and reviews.

• Page 3, Line 5In addition, when the state department enters into contracts pursuant to

• Page 3, Line 6this subsection (3)(a), the state department shall publish on its website a

• Page 3, Line 7copy of the contract, scope of work, and information regarding supervision of contractor deliverables.

• Page 3, Line 8(3.3) (a)  As used in this subsection (3.3), unless the context otherwise requires:

• Page 3, Line 9(I)  "Automated audit" means a RAC audit that reviews a

• Page 3, Line 10provider's application of coding rules and does not require a provider to submit medical records to be audited.

• Page 3, Line 11(II)  "Complex audit" means a RAC audit that requires a

• Page 3, Line 12provider to submit medical records to be audited, which are

• Page 3, Line 13individually reviewed by a representative of the state department or the state department's RAC vendor.

• Page 3, Line 14(III)  "Denial rate" means the percentage of reviewed

• Page 3, Line 15claims ultimately determined to involve improper payments

• Page 3, Line 16after all administrative processes are complete, including the resolution of an appeal.

• Page 3, Line 17(IV)  "RAC audit" means a recovery audit contractor

• Page 3, Line 18audit conducted pursuant to the federal "Social Security Act", 42 U.S.C. sec. 1396a (a)(42)(B).

• Page 3, Line 19(V)  "RAC vendor" means a vendor who meets the

• Page 3, Line 20requirements of 42 CFR 455.508 and contracts with the state

• Page 3, Line 21department to perform recovery audit contractor audits of providers on behalf of the state department.

• Page 4, Line 1(b)  The state department may solicit the services of a RAC

• Page 4, Line 2vendor through a contract issued pursuant to the

• Page 4, Line 3"Procurement Code", articles 101 to 112 of title 24, and pursuant

• Page 4, Line 4to the federal requirements detailed in 42 CFR 455.508, for the

• Page 4, Line 5purpose of conducting RAC audits of providers to identify possible medicaid overpayments and underpayments.

• Page 4, Line 6(c) (I)  The contract described in subsection (3.3)(b) of this

• Page 4, Line 7section must state that the RAC vendor's compensation is

• Page 4, Line 8contingent upon the amount of overpayments the state recovers

• Page 4, Line 9from a provider. At the expiration of the current contract

• Page 4, Line 10between the state department and the RAC vendor, the state

• Page 4, Line 11department shall establish contingency fee rates based on

• Page 4, Line 12market rates determined by the results of a competitive

• Page 4, Line 13procurement process and may negotiate lower rates as the

• Page 4, Line 14market provides, with contingency rates not to exceed sixteen

• Page 4, Line 15percent of recovered payments. The state department shall

• Page 4, Line 16ensure that the contingency fee requirements are adhered to

• Page 4, Line 17through effective monitoring and enforcement of the RAC

• Page 4, Line 18vendor's performance. For contracts entered into after the

• Page 4, Line 19expiration of the contract that established contingency fee

• Page 4, Line 20rates for RAC vendor payments, the state department shall

• Page 4, Line 21structure the RAC vendor compensation based on a tiered

• Page 4, Line 22payment system that corresponds to the required work unless

• Page 4, Line 23doing so conflicts with federal directives in medicaid guidance

• Page 4, Line 24pursuant to 42 CFR 455, subpart F, or results in an unfavorable

• Page 4, Line 25impact to the state's general fund.

• Page 5, Line 1(II)  When the state department enters into a contract

• Page 5, Line 2pursuant to subsection (3.3)(b) of this section, the state

• Page 5, Line 3department must publish on its website a copy of the contract,

• Page 5, Line 4scope of the work, and information regarding supervision of contractor deliverables.

• Page 5, Line 5(III)  The contract described in subsection (3.3)(b) of this section must require the RAC vendor to:

• Page 5, Line 6(A)  Conduct informal conferences or phone calls with

• Page 5, Line 7providers or provider associations to discuss the RAC program, processes, and findings;

• Page 5, Line 8(B)  Conduct provider outreach and education activities,

• Page 5, Line 9including notifying providers of audit policies, protocols, and common billing errors;

• Page 5, Line 10(C)  Respond to provider questions and requests for

• Page 5, Line 11information within two business days after receiving the question or request for information;

• Page 5, Line 12(D)  Return, within thirty days, the contingency fee

• Page 5, Line 13associated with inaccurate audit scenarios that resulted in provider refunds as prescribed by the state department; and

• Page 5, Line 14(E)  Comply with the sixty-day deadline set forth in 42 CFR

• Page 5, Line 15455.508 (e)(4) to issue an adverse action and the forty-five-day

• Page 5, Line 16deadline to issue an informal reconsideration determination

• Page 5, Line 17response required pursuant to subsection (3)(a)(VII) of this section.

• Page 5, Line 18(d)  The RAC contract described in subsection (3.3)(b) of

• Page 5, Line 19this section may include an option to pay the RAC vendor to

• Page 5, Line 20identify underpayments for consideration in future state department budget requests.

• Page 6, Line 1(e) (I)  The state department shall implement a process to

• Page 6, Line 2verify that the RAC vendor's staff who make clinical RAC audit

• Page 6, Line 3findings are appropriately licensed pursuant to industry

• Page 6, Line 4standards and federal requirements, including that the RAC

• Page 6, Line 5vendor hire qualified coders and that the RAC vendor's staff

• Page 6, Line 6who make billing RAC audit findings have knowledge of medicaid

• Page 6, Line 7billing and coding rules and guidance adopted by the state department.

• Page 6, Line 8(II)  The state department must ensure that qualified

• Page 6, Line 9coders have relevant credentials for the type of medical services being reviewed, in accordance with industry standards.

• Page 6, Line 10(III)  Any complex audit that requires a review of medical

• Page 6, Line 11records must be conducted by licensed clinical staff with

• Page 6, Line 12training and competency in the specific type of complex audit

• Page 6, Line 13being conducted, in accordance with industry standards.

• Page 6, Line 14Providers must make all relevant medical records and

• Page 6, Line 15information related to claims reviewed during the complex

• Page 6, Line 16audit available to the RAC vendor within the time limits specified in the initial medical records request.

• Page 6, Line 17(IV)  The state department shall fully inform the RAC

• Page 6, Line 18vendor of any changes to the state billing standards and ensure

• Page 6, Line 19that the vendor only applies billing standards that were in

• Page 6, Line 20effect at the specified date of service. The state department is

• Page 6, Line 21responsible for monitoring compliance with this requirement

• Page 6, Line 22and taking appropriate action to ensure the RAC vendor's

• Page 6, Line 23compliance.

• Page 7, Line 1(V)  The state department shall ensure that the RAC

• Page 7, Line 2vendor complies with the contract requirements described in

• Page 7, Line 3subsection (3.3)(b) of this section and conducts RAC audits in a fair and consistent manner.

• Page 7, Line 4(VI)  The state department shall ensure that the RAC

• Page 7, Line 5vendor incorporates into each audit scenario, whether an automated audit or a complex audit, the following information:

• Page 7, Line 6(A)  Federal statutes and billing rules and standards

• Page 7, Line 7that are applicable to the specific provider during the specified dates of service for each audit;

• Page 7, Line 8(B)  State statutes, billing rules and standards, and

• Page 7, Line 9policies as documented in the state department's provider billing

• Page 7, Line 10manuals and provider bulletins, as well as in program guidance

• Page 7, Line 11and directives effective for the specific provider during the specified dates of service for each audit; and

• Page 7, Line 12(C)  Input from the state department's RAC staff and

• Page 7, Line 13medical director, as well as any other necessary state

• Page 7, Line 14department staff based on the staff's or medical director's review of the audit scenario.

• Page 7, Line 15(VII)  When auditing claims to make RAC audit findings,

• Page 7, Line 16the state department must ensure that the RAC vendor follows

• Page 7, Line 17all relevant and appropriate federal billing guidelines,

• Page 7, Line 18requirements set by the medicaid billing manual, standard

• Page 7, Line 19clinical guidelines, and any other applicable state or federal rules and regulations.

• Page 7, Line 20(f)  The state department shall comprehensively review

• Page 7, Line 21all audit types proposed by the RAC vendor and must approve,

• Page 8, Line 1adjust, or reject each audit type before the RAC vendor

• Page 8, Line 2conducts the RAC audit. Within eighteen months of the rollout

• Page 8, Line 3of a new audit, if the state department, in collaboration with

• Page 8, Line 4providers and the provider advisory group created in subsection

• Page 8, Line 5(3.5) of this section, determines that the audit is inaccurate, the

• Page 8, Line 6state department must refund providers who submitted

• Page 8, Line 7repayments based on inaccurate audit findings and require the

• Page 8, Line 8RAC vendor to return the contingency fee associated with the payments within thirty days.

• Page 8, Line 9(g)  The state department shall regularly review active

• Page 8, Line 10RAC audits to ensure compliance with federal and state

• Page 8, Line 11regulation changes and policy updates and discontinue a RAC

• Page 8, Line 12audit if and when appropriate due to a change in federal or state regulation or policy updates.

• Page 8, Line 13(h)  Consistent with 42 CFR 455.508 (f), RAC audits and

• Page 8, Line 14reviews conducted pursuant to this section must not review

• Page 8, Line 15claims more than three years after the expiration of the timely

• Page 8, Line 16filing period. The state department may conduct a RAC audit for

• Page 8, Line 17a claim filed more than three years after the expiration of the

• Page 8, Line 18timely filing period if required by a federal audit that would

• Page 8, Line 19otherwise result in costs to the general fund or, if directed by

• Page 8, Line 20the federal centers for medicare and medicaid services, the

• Page 8, Line 21United States department of health and human services, or any

• Page 8, Line 22other federal agency. If a RAC audit is initiated in response to

• Page 8, Line 23a federal directive, the state department must provide notice to

• Page 8, Line 24an impacted provider and include the reason for the RAC audit

• Page 8, Line 25and any relevant information about the federal requirement in the notice.

• Page 9, Line 1(i) (I)  The RAC vendor shall not require a provider to

• Page 9, Line 2undergo more than three complex audits per calendar year.

• Page 9, Line 3Hospitals must be grouped for complex audits based on their

• Page 9, Line 4total medicaid reimbursement in the previous fiscal year, and

• Page 9, Line 5groupings must be determined using state data and published annually by the state department.

• Page 9, Line 6(II)  The maximum number of medical record requests a

• Page 9, Line 7provider may receive each month must be clearly communicated

• Page 9, Line 8to providers and reviewed annually by the state department.

• Page 9, Line 9The RAC vendor shall not request more than the following number of medical records per hospital per month:

• Page 9, Line 10(A)  Six hundred for hospitals with over two hundred fifty million dollars in medicaid revenue;

• Page 9, Line 11(B)  Four hundred for hospitals with between seventy

• Page 9, Line 12million dollars and two hundred forty-nine million nine

• Page 9, Line 13hundred ninety-nine thousand nine hundred ninety-nine dollars in medicaid revenue;

• Page 9, Line 14(C)  Two hundred for hospitals with between forty million

• Page 9, Line 15dollars and sixty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine dollars in medicaid revenue;

• Page 9, Line 16(D)  One hundred for hospitals with between twenty

• Page 9, Line 17million dollars and thirty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine dollars in medicaid revenue;

• Page 9, Line 18(E)  Fifty for hospitals with between ten million dollars

• Page 9, Line 19and nineteen million nine hundred ninety-nine thousand nine

• Page 9, Line 20hundred ninety-nine dollars in medicaid revenue;

• Page 10, Line 1(F)  Twenty-five for hospitals with between one million

• Page 10, Line 2dollars and nine million nine hundred ninety-nine thousand nine hundred ninety-nine dollars in medicaid revenue;

• Page 10, Line 3(G)  Twenty for hospitals with under one million dollars in medicaid revenue; and

• Page 10, Line 4(H)  Ten for out-of-state facilities.

• Page 10, Line 5(III)  The requirements of this subsection (3.3)(i) do not apply if:

• Page 10, Line 6(A)  Federal medicaid directives required pursuant to 42 CFR 455, subpart F, require a higher level of claim audits;

• Page 10, Line 7(B)  An agency of the federal government requires, in

• Page 10, Line 8writing, the state department to initiate additional audit activity; or

• Page 10, Line 9(C)  A federal audit identifies additional provider findings

• Page 10, Line 10that impact the state general fund and that should be

• Page 10, Line 11appropriately recovered from that provider through an additional RAC audit and its recoupments.

• Page 10, Line 12(j) (I)  The RAC vendor shall not require a provider to

• Page 10, Line 13undergo more than four automated audits per calendar year.

• Page 10, Line 14Providers must be grouped for automated audits based on their

• Page 10, Line 15total medicaid reimbursement in the previous fiscal year, and

• Page 10, Line 16groupings must be determined using state data and published annually.

• Page 10, Line 17(II)  The maximum number of provider claims across all of

• Page 10, Line 18a provider's locations for a given calendar year that undergo automated audits must not exceed:

• Page 10, Line 19(A)  2.92 percent for providers with over ten million dollars in medicaid revenue;

• Page 11, Line 1(B)  2.50 percent for providers with between four million dollars and ten million dollars in medicaid revenue;

• Page 11, Line 2(C)  2.08 percent for providers with between one million

• Page 11, Line 3dollars and three million nine hundred ninety-nine thousand nine hundred ninety-nine dollars in medicaid revenue; and

• Page 11, Line 4(D)  1.67 percent for providers with less than one million dollars in medicaid revenue.

• Page 11, Line 5(III)  After the administrative process is exhausted, if the

• Page 11, Line 6state department identifies a denial rate of forty percent or

• Page 11, Line 7higher for a specific provider on a specific audit type, the state

• Page 11, Line 8department shall audit no more than an additional twenty-five

• Page 11, Line 9percent of the claim percentages stated in subsection (3.3)(j)(II) of this section associated with that audit type.

• Page 11, Line 10(IV)  The requirements of this subsection (3.3)(j) do not apply if:

• Page 11, Line 11(A)  Federal medicaid directives required pursuant to 42 CFR 455, subpart F, require a higher level of claim audits;

• Page 11, Line 12(B)  An agency of the federal government requires, in

• Page 11, Line 13writing, the state department to initiate additional audit activity; or

• Page 11, Line 14(C)  A federal audit identifies additional provider findings

• Page 11, Line 15that impact the state general fund and that should be

• Page 11, Line 16appropriately recovered from that provider through an additional RAC audit and its recoupments.

• Page 11, Line 17(k)  When conducting audits, the RAC vendor must:

• Page 11, Line 18(I)  Request provider records that are relevant to the

• Page 12, Line 1claims being audited and that do not duplicate information already provided;

• Page 12, Line 2(II)  Not audit the validity of a provider's prior authorization received from the state department; and

• Page 12, Line 3(III)  For a complex audit, not audit claims that are on the

• Page 12, Line 4federal centers for medicare and medicaid services

• Page 12, Line 5inpatient-only list at the date of service for a level-of-care determination.

• Page 12, Line 6(l) (I)  If the RAC vendor identifies preliminary findings

• Page 12, Line 7during the RAC audit, the RAC vendor shall send the provider

• Page 12, Line 8a report detailing the preliminary findings, the rationale for

• Page 12, Line 9the preliminary findings, and the methodology for how any overpayments were calculated and determined.

• Page 12, Line 10(II)  For a complex audit, a provider may request an exit

• Page 12, Line 11conference meeting to discuss the preliminary findings with the

• Page 12, Line 12RAC vendor and the state department medical director, or the

• Page 12, Line 13state department medical director's designee, prior to

• Page 12, Line 14participating in an informal reconsideration. The provider may

• Page 12, Line 15provide additional information supporting the provider's claims

• Page 12, Line 16at the exit conference meeting. A provider must request an exit

• Page 12, Line 17conference meeting no later than thirty days after the RAC

• Page 12, Line 18vendor sends the preliminary findings to the provider. If the

• Page 12, Line 19provider requests an exit conference meeting, the state

• Page 12, Line 20department or the RAC vendor must schedule the exit

• Page 12, Line 21conference meeting within sixty days after the request is made and on a mutually agreed upon date and time.

• Page 12, Line 22(III)  If, based on the RAC audit, the state department

• Page 13, Line 1determines that an overpayment occurred, the notification to

• Page 13, Line 2the provider regarding the preliminary findings must include a

• Page 13, Line 3demand for repayment and a description of the informal reconsideration process.

• Page 13, Line 4(IV)  If a provider does not request an exit conference

• Page 13, Line 5meeting or if a provider participates in an exit conference

• Page 13, Line 6meeting and the preliminary findings are not dismissed, the

• Page 13, Line 7provider must undergo an informal reconsideration before the

• Page 13, Line 8provider may formally appeal the state department's determination.

• Page 13, Line 9(V)  The state department must not recover an

• Page 13, Line 10overpayment from a provider until the informal

• Page 13, Line 11reconsideration and subsequent formal appeal, if filed, are complete.

• Page 13, Line 12(VI)  To participate in an informal reconsideration, the provider must:

• Page 13, Line 13(A)  Submit all medical records relevant to the claims and

• Page 13, Line 14the reasoning for the provider's disagreement concerning the

• Page 13, Line 15RAC audit findings to the state department within ninety days

• Page 13, Line 16after the request for informal reconsideration is made. The

• Page 13, Line 17relevant medical records must allegedly substantiate the

• Page 13, Line 18provider's argument to overturn any disputed audit findings to

• Page 13, Line 19allow the state department and the RAC vendor to reconsider the findings.

• Page 13, Line 20(B)  Work with the state department to determine the

• Page 13, Line 21relevant staff to participate in the informal reconsideration.

• Page 13, Line 22The staff who participate shall attend and participate in good faith in an effort to resolve the dispute.

• Page 14, Line 1(C)  Request an extension of no more than sixty days after

• Page 14, Line 2the date of the originally scheduled informal reconsideration

• Page 14, Line 3if additional time is necessary to adequately prepare for the informal reconsideration.

• Page 14, Line 4(VII)  If a provider participates in an informal reconsideration, the state department must:

• Page 14, Line 5(A)  Schedule an informal reconsideration meeting at a

• Page 14, Line 6mutually agreed upon date and time and timely notify the provider of the date and time;

• Page 14, Line 7(B)  Review all medical records submitted by the provider prior to the informal reconsideration meeting;

• Page 14, Line 8(C)  Attend and participate in the informal

• Page 14, Line 9reconsideration meeting in good faith in an effort to resolve the dispute;

• Page 14, Line 10(D)  Work with the provider to determine if it is necessary

• Page 14, Line 11for the state department medical director, or the state

• Page 14, Line 12department medical director's designee, to attend the informal

• Page 14, Line 13reconsideration meeting in order to assess the appropriateness of the disputed findings independent of the RAC vendor; and

• Page 14, Line 14(E)  Reschedule the informal reconsideration meeting on

• Page 14, Line 15a mutually agreed upon date and time that takes place no later

• Page 14, Line 16than ninety days after the original informal reconsideration

• Page 14, Line 17meeting date if either the provider requests an extension

• Page 14, Line 18pursuant to subsection (3.3)(l)(VI)(C) of this section or the state

• Page 14, Line 19department needs additional time to review the submitted

• Page 14, Line 20medical records.

• Page 15, Line 1(VIII)  If a provider requests a formal appeal, the provider

• Page 15, Line 2must include in the request an explanation of the basis of the

• Page 15, Line 3appeal in accordance with the rules adopted by the state department.

• Page 15, Line 4(m) (I)  If the RAC vendor identifies an alleged

• Page 15, Line 5overpayment during the RAC audit, the RAC vendor must send

• Page 15, Line 6the provider a notice of adverse action or notice of informal

• Page 15, Line 7reconsideration detailing a description of the basis of the

• Page 15, Line 8alleged overpayment, the rationale for the alleged

• Page 15, Line 9overpayment, and the methodology used to determine and calculate the alleged overpayment.

• Page 15, Line 10(II)  The state department shall provide ninety days for

• Page 15, Line 11the provider to respond to the notice of adverse action or

• Page 15, Line 12informal reconsideration determination reported by the RAC vendor.

• Page 15, Line 13(III)  If the state department or the RAC vendor fails to

• Page 15, Line 14issue a notice of adverse action within sixty days after the

• Page 15, Line 15federal deadline set forth in 42 CFR 455.508, the state

• Page 15, Line 16department waives its right to recover the state share of an overpayment.

• Page 15, Line 17(n)  Providers are subject to all state and federal

• Page 15, Line 18medicaid fraud, waste, and abuse laws and must comply with all

• Page 15, Line 19applicable program integrity requirements. Failure to comply

• Page 15, Line 20may result in removal from the state medical assistance

• Page 15, Line 21program, financial penalties, civil lawsuits, or criminal

• Page 15, Line 22prosecution pursuant to 42 U.S.C. sec. 1320a-7k(d), 42 U.S.C. sec.

• Page 15, Line 231320a-7, 31 U.S.C. secs. 3729-3733, sections 24-31-808, 25.5-4-301,

• Page 16, Line 125.5-4-303.5 to 25.5-4-310, and 10 CCR 2505-10, sec. 8.076. By

• Page 16, Line 2participating in the medical assistance program, providers

• Page 16, Line 3acknowledge and accept their obligation to adhere to all state

• Page 16, Line 4and federal laws governing medicaid fraud, waste, and abuse, and program integrity.

• Page 16, Line 5(o) (I)  The state department shall publish and maintain on

• Page 16, Line 6its website a RAC audit activity report for each RAC audit and

• Page 16, Line 7review completed in the preceding year summarizing the findings

• Page 16, Line 8of those RAC audits and reviews. The information posted on the

• Page 16, Line 9state department's website concerning each RAC audit must include the following information:

• Page 16, Line 10(A)  A summary of the audit scenario, the state

• Page 16, Line 11department's billing practices, and policy guidelines being reviewed by the RAC vendor;

• Page 16, Line 12(B)  The error rates identified during the RAC vendor's review;

• Page 16, Line 13(C)  The number and amounts of overpayments and underpayments identified by the RAC vendor;

• Page 16, Line 14(D)  The recoveries collected by the state department on identified overpayments;

• Page 16, Line 15(E)  The number of claims appealed as a result of the audit; and

• Page 16, Line 16(F)  Details on the audit scenarios and billing standards

• Page 16, Line 17used by the RAC vendor and policy guidance on proper billing practices.

• Page 16, Line 18(II)  In addition to the information required by subsection

• Page 16, Line 19(3.3)(o)(I) of this section, the state department shall publish and

• Page 17, Line 1maintain on its website information on the number of informal

• Page 17, Line 2reconsideration meetings the state department participated in

• Page 17, Line 3and the associated percentage of findings that were upheld, the number of appeals, and corresponding determinations.

• Page 17, Line 4(p)  On or before January 1, 2026, the state department

• Page 17, Line 5shall publish on its website provider education information;

• Page 17, Line 6resources to assist providers in understanding the state

• Page 17, Line 7department's medicaid billing manual and rules; and procedures

• Page 17, Line 8related to RAC audits, including documentation requirements and the process for resolving disputes.

• Page 17, Line 9(q)  At least quarterly, the state department shall:

• Page 17, Line 10(I)  Conduct medicaid billing training for providers and

• Page 17, Line 11hold meetings with providers to gather feedback on the RAC

• Page 17, Line 12audit process. The state department shall publish meeting dates

• Page 17, Line 13and times on the state department's website at least two weeks prior to the meetings.

• Page 17, Line 14(II)  Conduct trainings for providers and hold

• Page 17, Line 15stakeholder meetings regarding audits and reviews, during

• Page 17, Line 16which the state department and RAC vendor must identify

• Page 17, Line 17common billing errors identified by the RAC vendor in the previous quarter and provide clarification on the billing errors.

• Page 17, Line 18(r)  The state department shall work with small or rural

• Page 17, Line 19providers in order to identify and implement opportunities to

• Page 17, Line 20reduce administrative burdens and better support compliance

• Page 17, Line 21with medicaid billing practices, as adopted in the state

• Page 17, Line 22department's medicaid billing manual, and experience with RAC

• Page 17, Line 23audits.

• Page 18, Line 1(s)  The state department must submit an annual report to

• Page 18, Line 2the joint budget committee that includes a description of the following:

• Page 18, Line 3(I)  The divisions of the state department that are

• Page 18, Line 4included in the review and approval of RAC audit scenarios and the roles and responsibilities of each division;

• Page 18, Line 5(II)  The RAC vendor's compliance with the response

• Page 18, Line 6requirement described in subsection (3.3)(c)(III)(C) of this section;

• Page 18, Line 7(III)  The state department's oversight and enforcement of

• Page 18, Line 8the contractual requirement that the RAC vendor conduct

• Page 18, Line 9informal conferences or phone calls with providers or provider

• Page 18, Line 10associations to discuss the RAC program, appeal processes, and findings;

• Page 18, Line 11(IV)  The training materials prepared by the RAC vendor

• Page 18, Line 12after each RAC audit that identify and address the common

• Page 18, Line 13errors and issues identified during the audit and the content

• Page 18, Line 14and materials the RAC vendor used to educate providers to prevent errors in the future;

• Page 18, Line 15(V)  A summary of the RAC vendor's outreach and education activities;

• Page 18, Line 16(VI)  A summary of the state department's written policies,

• Page 18, Line 17procedures, and guidance that establish processes for the state

• Page 18, Line 18department to log provider communications, provide direction

• Page 18, Line 19on how state department staff must respond to communications

• Page 18, Line 20in a timely and relevant manner, and how the state department

• Page 18, Line 21instituted routine analysis of provider communications to inform decisions on program improvements; and

• Page 19, Line 1(VII)  The total amount of alleged overpayments

• Page 19, Line 2identified by the RAC vendor, the proportion of those

• Page 19, Line 3overpayments that were recovered, and the total amount paid to the RAC vendor.

• Page 19, Line 4(t)  All recoveries collected by the state department on

• Page 19, Line 5identified overpayments pursuant to this subsection (3.3) must be

• Page 19, Line 6transmitted to the state treasurer, who shall credit the same

• Page 19, Line 7to the recovery audit contractor recoveries cash fund, which

• Page 19, Line 8fund is created in the state treasury and referred to in this

• Page 19, Line 9subsection (3.3)(t) as the "cash fund". The cash fund consists of

• Page 19, Line 10money credited to the cash fund pursuant to this subsection (3.3)

• Page 19, Line 11and any other money that the general assembly may appropriate

• Page 19, Line 12or transfer to the cash fund. Subject to annual appropriation by

• Page 19, Line 13the general assembly, the state department may expend money

• Page 19, Line 14from the cash fund to offset the need for appropriations for

• Page 19, Line 15medical services and to pay the RAC vendor. The state

• Page 19, Line 16treasurer shall credit all interest and income derived from the

• Page 19, Line 17deposit and investment of money in the recovery audit contractor recoveries cash fund to the cash fund.

• Page 19, Line 18(u)  The state department may adopt rules, as necessary, to implement the requirements of this subsection (3.3).

• Page 19, Line 19(3.5) (c) (I)  The state department shall create a provider advisory

• Page 19, Line 20group for recovery audits consisting of employees of the state department

• Page 19, Line 21and members from different provider groups types, including physicians,

• Page 19, Line 22hospitals, and any other provider types directly impacted by audits

• Page 19, Line 23conducted pursuant to this section, appointed by the executive director.

• Page 20, Line 1The provider advisory group shall meet at least quarterly to review

• Page 20, Line 2quarterly activity reports required by subsection (3)(a)(IX) subsection

• Page 20, Line 3(3.3)(m) of this section and advise the state department on issues

• Page 20, Line 4providers experience with audits of the recovery audit contractors program.

• Page 20, Line 5(II)  The state department and the RAC vendor shall

• Page 20, Line 6provide the provider advisory group with the opportunity to

• Page 20, Line 7review RAC audit scenarios during the provider advisory group's quarterly meetings.

• Page 20, Line 8(III)  The state department shall give providers the

• Page 20, Line 9opportunity to anonymously describe RAC audit scenarios they

• Page 20, Line 10are experiencing and ask questions about billing practices. The

• Page 20, Line 11state department shall include RAC vendor staff and the

• Page 20, Line 12relevant state department division staff in these discussions. If

• Page 20, Line 13the discussions lead the state department to determine that an

• Page 20, Line 14audit scenario was inaccurate, the state department must work with the RAC vendor to rescind the RAC audit.

• Page 20, Line 15SECTION 2.  Appropriation adjustments to 2025 long bill.

• Page 20, Line 16(1)  To implement this act, appropriations made in the annual general

• Page 20, Line 17appropriation act for the 2025-26 state fiscal year to the department of

• Page 20, Line 18health care policy and financing for medical and long-term care services for medical-eligible individuals are adjusted as follows:

• Page 20, Line 19(a)  The cash funds appropriation from recoveries and recoupments is decreased by $20,900,588;

• Page 20, Line 20(b)  The cash funds appropriation from the recovery audit

• Page 20, Line 21contractor recoveries cash fund created in section 25.5-4-301 (3.3)(t),

• Page 20, Line 22C.R.S., is increased by $20,900,588.

• Page 21, Line 1SECTION 3.  Act subject to petition - effective date. This act

• Page 21, Line 2takes effect at 12:01 a.m. on the day following the expiration of the

• Page 21, Line 3ninety-day period after final adjournment of the general assembly; except

• Page 21, Line 4that, if a referendum petition is filed pursuant to section 1 (3) of article V

• Page 21, Line 5of the state constitution against this act or an item, section, or part of this

• Page 21, Line 6act within such period, then the act, item, section, or part will not take

• Page 21, Line 7effect unless approved by the people at the general election to be held in

• Page 21, Line 8November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.