CT HB06550

Establishes a 36-month audit look-back period (from audit date to claim payment date) and requires use of statistically valid sampling methodologies with 95% confidence level for Medicaid provider audits.

Requires 30-day advance written notice of audits to providers, specifying the sampling methodology to be used, except when health/safety risks or vendor fraud is suspected.

Prohibits extrapolation-based overpayment findings for clerical errors unless the provider's error rate exceeds 10% using valid sampling and has a prior overpayment history; caps extrapolated overpayment assessments at three times the original clerical error amount.

Allows providers to conduct independent audits at their own expense when preliminary extrapolation findings exceed $200,000, using either all claims in the universe or a second sample twice the original size.

Changes language from "may" to "shall" in consideration of provider compliance history when selecting providers for audits and requires the Department of Social Services to adopt regulations specifying valid sampling methodologies, audit protocols, and appeal procedures by specified dates.