These days it seems like everyone and their brother is trying to put a financial squeeze on health care providers. Even putting aside the growth in malpractice judgments, providers are facing government cuts in provider reimbursement, on the one hand, and aggressive government efforts to increase the number of provider audits and recoup amounts already paid on the other hand. Private insurers, as well, find a timely audit and repayment demand a potent weapon in their arsenal of tools to reduce compensation to members of the medical profession. And don’t forget the whistleblowers. Type “Qui Tam healthcare” into your search engine and you will be amazed at how many law firms are eager to give you a FREE evaluation of your theory that some nefarious provider is raking in too much government money and needs to be sued under the False Claims Act.1
This article is about the latest arrow the government, the whistleblowers and the private insurers are attempting to add to their quiver: statistical sampling and extrapolation. Quite simply, sampling and extrapolation is a scientific way to estimate something about a large population by examining only a small subset of that population. Much like political poll takers ask a few thousand people how they intend to vote, and then project that number to the entire electorate, in the health care realm, payors may review 100 bills submitted by a provider and project any error rate they identify in that subset to the thousands of similar unreviewed claims the provider has submitted.
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