To Amend The Law Concerning Certain Audits Of Healthcare Providers; And To Create The Arkansas Medical Audit Bill Of Rights Act.
Summary
HB1314 creates the Arkansas Medical Audit Bill of Rights Act and adds a new subchapter to Arkansas insurance law governing audits of healthcare providers. The bill defines key terms such as “audit,” “auditor,” “clerical or recordkeeping error,” and “healthcare provider,” and then sets detailed procedural rules for how audits must be conducted. These rules include advance notice, limits on audit scope and frequency, deadlines for preliminary and final reports, a right to appeal unfavorable findings, and restrictions on recoupment practices.
The bill also limits the use of extrapolation in calculating recoupments or penalties, requires audits involving clinical judgment to be handled by or in consultation with a provider of the same specialty, and provides that clerical or recordkeeping errors are not fraud absent proof of intent. It excludes Medicaid audits by DHS or its designee and excludes investigations involving alleged fraud, willful misrepresentation, abuse, or insurance fraud. The Insurance Commissioner is directed to adopt rules to implement and enforce the new law.
Impact
HB1314 changes Arkansas law by adding new statutory protections for healthcare providers subject to private or commercial payer audits, while leaving Medicaid fraud and abuse investigations outside its scope. It places substantive limits on auditors’ ability to expand audit samples, use extrapolation, reverse claim approvals, or recoup funds before the appeals process is complete, and it requires auditors to follow uniform standards for similarly situated providers. The bill also creates enforceable timelines and procedural rights that may affect insurers, third-party payors, claims administrators, and providers across the state.
Sentiment
The bill appears to have been broadly supported. It passed the House on third reading by a vote of 98-0 and the Senate on third reading by a vote of 34-0, indicating unanimous support in both chambers. The absence of committee transcript discussion suggests there was little recorded public controversy in the available materials, and the voting record reflects a strong consensus in favor of the measure.
Contention
The main policy tension in HB1314 is between protecting healthcare providers from broad or burdensome audit practices and preserving auditors’ ability to investigate improper billing and recover overpayments. Providers are favored by provisions limiting audit frequency, sample size, extrapolation, and recoupment timing, while insurers and other auditors may view those limits as constraining fraud detection and payment recovery. The bill addresses that concern by carving out audits involving fraud, willful misrepresentation, abuse, and Medicaid-related investigations, but no recorded debate in the provided materials identifies specific opponents or amendments.