An Act Concerning Forensic Audits Conducted By The Department Of Social Services.
Summary
HB 7105 revises the statute governing audits by the Department of Social Services (DSS) of certain Medicaid-participating long-term care and disability facilities, including nursing homes, rest homes with nursing supervision, residential care homes, and certain intermediate care facilities for individuals with intellectual disabilities. The bill defines “forensic audit,” clarifies when DSS may use extrapolation to calculate overpayments or underpayments, and limits the use of extrapolated findings unless there is sustained or high-level payment error, failed educational intervention, or annual claims above $200,000.
The bill also adds procedural protections for audited facilities. DSS must generally give 30 days’ advance notice before an audit, allow at least 30 days for facilities to respond to discrepancies, issue a preliminary report within 60 days after the audit, hold an exit conference, and then issue a final report within 60 days after that conference. Facilities may request rehearing and, if issues remain unresolved, binding arbitration before a three-member board. The bill further requires DSS to provide free training on cost reports, publish audit protocols, and ensure qualified health professionals are involved in audits as needed.
Impact
The bill amends General Statutes section 17b-99a and would change how DSS conducts and resolves audits of covered facilities, especially in Medicaid reimbursement matters. It adds limits on extrapolation-based findings, creates notice and response timelines, authorizes rehearings and arbitration, and allows DSS to assess civil penalties or recover forensic audit costs in certain circumstances, including through recoupment from Medicaid payments. It also makes false or misleading fiscal submissions grounds for payment suspension and a class D felony, reinforcing enforcement authority over facilities and their financial reporting practices.
Sentiment
The available vote history suggests the bill had majority support in the Human Services Committee, passing on a 15-7 joint favorable vote. The structure of the bill indicates a generally pro-regulatory but also process-oriented approach: it strengthens DSS audit authority while adding procedural safeguards for providers. No committee transcript is available, so the public discussion record here does not show detailed debate, but the vote split suggests some members were concerned about the burden or enforcement powers imposed on facilities.
Contention
The main points of contention are likely to be the balance between fraud detection and provider protections. Supporters would favor stronger DSS authority to investigate suspected Medicaid fraud, recover improper payments, and charge facilities for audit costs when serious financial issues are found. Opponents are likely to object to the potential cost burden on nursing homes and related facilities, the criminal penalty for false fiscal submissions, and the possibility of recoupment from Medicaid funds. Another likely concern is the bill’s limits on extrapolation, which may be viewed either as a necessary safeguard against overreach or as a constraint on the state’s ability to recover overpayments efficiently.