HB 5354, An Act Concerning Medicaid Pharmacy Audits

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE HUMAN SERVICES COMMITTEE

Tuesday, March 3, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning HB 5354, An Act Concerning Medicaid Pharmacy Audits.  CHA supports the bill.

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

HB 5354 appropriately limits the use of extrapolation in pharmacy audits by prohibiting the projection of overpayments when audit findings are based solely on clerical, recordkeeping, or other minor technical errors that do not result in an actual overpayment.  In other words, the bill ensures that extrapolation may not be used to inflate harmless documentation mistakes into substantial repayment demands.

This protection is critically important.  Clerical and technical errors — such as formatting issues, missing non-material documentation elements, or other inadvertent record discrepancies — do not necessarily reflect fraud, abuse, or improper payment.  When such minor issues are extrapolated across a universe of claims, the resulting repayment amounts can be grossly disproportionate to the underlying issue and can create significant financial instability for providers.  Preventing extrapolation in these circumstances ensures that recoupments are tied to actual overpayments rather than technical deficiencies.  Although HB 5354 is specific to pharmacy audits, hospitals share a strong interest in ensuring that all healthcare audit practices distinguish between clerical mistakes and true program integrity concerns.

HB 5354 strikes the right balance by preserving audit authority while ensuring that extrapolation is not used to penalize providers for harmless technical errors.  These protections promote stability in the healthcare delivery system and help ensure continued patient access to medications and pharmacy services across Connecticut.

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.