HB 1226 Summary

• Creates new Chapter 13.5 of Indiana Code governing Medicaid recovery audits and requires the office of Medicaid policy and planning to contract with a recovery auditing entity to ensure program integrity.

• Establishes audit procedures including identification of third-party liability, review of claims not older than two years, and requirement to issue determination letters within 60 days of receiving all requested materials.

• Limits audit scope to no more than 5% of claims filed for a specific service or 200 claims, whichever is less, and prohibits use of extrapolation except for sustained high error rates or claims exceeding $150,000 annually.

• Provides providers with appeal rights, 45 days to respond to record requests, and requires auditing entities to use licensed health care professionals and establish informal consultation processes approved by the office.

• Prohibits contingency fee compensation for auditing entities and requires them to pay the same amount for identifying underpayments as overpayments, with all detected savings returned to the Medicaid program.