Judge’s Ruling Issued: An Update to the Random Sample Extrapolation Rule Change

By ARRM Admin posted 04-05-2021 23:00


You may remember that I reported at the end of January that ARRM and other interested parties had testified before an Administrative Law Judge (ALJ) on changes to the rule on random sample extrapolation in monetary recovery proposed by the Department of Human Services (DHS). This rule applies to providers that serve people in Minnesota’s Medicaid program, including home and community based services waivers, and ARRM and the other testifiers were opposed to the proposed changes.

On March 26, the ALJ issued a report that disapproved the rules, and on April 1, the Chief ALJ concurred with the ruling. Good news!

Not to get too far into the weeds, but ARRM objected to the proposed rule changes on several fronts. Sam Orbovich, an attorney with Fredrickson & Byron, submitted a brief on our behalf that: 1) questioned DHS’ authority to modify the rule; 2) asserted that the proposed changes would decrease the statistical validity of extrapolations; and 3) objected to the removal of a provision that requires providers to be notified of the sampling methodology BEFORE a sample is drawn.

In her 41-page ruling, the judge found that DHS had satisfied all legal and procedural requirements in filing the proposed changes, issuing notifications, and accepting public comments. She also ruled that DHS had the authority to propose changes to the rule. However, she found that the proposed changes did not meet the standard of need and reasonableness required by law. In fact, the judge found that the rule, if amended as proposed, would actually be less clear in many respects than it is currently. As she wrote, “The Department has not established that the proposed rules are needed and reasonable due to material defects in operative portions of the proposed amendments.”

So what happens next? That is up to DHS. They must first make the judge’s report available for review by anyone who wishes to review it for at least five working days before they may take any further action to adopt final rules or to modify or withdraw the proposed rules. If they make changes in the rules, they must submit the rules, along with the complete hearing record, to the Chief Administrative Law Judge for a review of those changes before they may adopt the rules in final form.

At this time, DHS is considering options for how to proceed. If they take any further action, information will be posted on their Surveillance and Integrity Review Section (SIRS) rulemaking page.

-- Ken Bence, Director of Research, Analysis and Policy