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HB 786

MEDICAID MANAGED CARE: Prohibits certain processes used in healthcare provider claim payments

2026 Regular Session Introduced by Peter Egan

Extrapolation cannot be used to complete provider claim audits or determine payments; adjustments must be based on actual overpayments or underpayments.

Effective date: 08/01/2026.
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Bill Summary · HB 786

Summary of HB 786 (2026 Louisiana Session)

Purpose and intent

HB 786 aims to reform how extrapolation is used in audits of healthcare provider claims within Louisiana’s Medicaid Managed Care program. The bill defines extrapolation and strictly prohibits its use in completing audits or determining any related payments or refunds to providers. The overarching goal is to ensure that any adjustments to provider payments are based on actual overpayments or underpayments, not on extrapolated estimates.

Key provisions and changes

  • Definitions
    • Defines “extrapolation” as a mathematical process used by a managed care organization (MCO) to estimate audit results for a larger batch or group of claims not reviewed.
  • Prohibition on extrapolation
    • The MCO, its contracted vendor, or any agent is strictly barred from using extrapolation to complete an audit of a healthcare provider.
    • Any subsequent payment owed to a provider, or any refund/recoupment by the MCO, must be based on actual overpayments or underpayments, not on extrapolated estimates.
  • Contractual provisions
    • The prohibitions in this section cannot be waived by contract; any contractual clause attempting to waive these requirements is void.
  • Enforcement and penalties
    • If the MCO, its contractor, or agent violates the section, penalties may be imposed by the Department, in line with contract provisions or rules adopted under the Administrative Procedure Act.
    • Penalties can be imposed without prior corrective-action notices.
  • Administrative terms
    • Clarifies the meaning of “electronic funds transfer” as the EFT through the federal ACH network.
  • Technical and structural changes
    • Amends Louisiana Revised Statutes (R.S.) 46:460.75(C)–(E) and adds new subsection (F) to codify the prohibition and related provisions.

Who/what is affected

  • Affected entity: Louisiana’s Medicaid Managed Care Organizations (MCOs), including their contracted vendors or agents, that perform provider claim audits and determine related payments or refunds.
  • Providers: Healthcare providers participating in Louisiana’s state medical assistance program who could be subject to audit-based recoupments or payments.
  • State oversight: The Department of Health or its designated department responsible for enforcing these provisions and imposing penalties.

Procedural and timeline aspects

  • Effective language clarifies that the prohibition is a statutory requirement, not a contractual option.
  • Enforcement mechanism: Penalties for violations are to be imposed under contract provisions or department regulations issued under the Administrative Procedure Act, with the notable point that corrective-action notices are not required prior to penalties.
  • Legislative history (highlights)
    • Read by title and amended on 2026-04-16; passed to 3rd reading.
    • Reported with amendments on 2026-04-15 (13-0 vote).
    • Introduced for prefill in February 2026; sponsor: Rep. Egan; co-sponsor: Rep. Peter Egan (likely the same legislator in sponsor role).

Practical impact and considerations

  • Providers gain greater assurance that audit-based adjustments will be grounded in actual claim data rather than extrapolated estimates.
  • MCOs must adjust audit processes to rely on precise, claim-by-claim determinations.
  • Potential administrative burden on MCOs to ensure audits are not extrapolated, but may improve accuracy and reduce disputes over inflated refunds or underpayments.
  • The bill emphasizes consumer (provider) protections and strengthens state law against contractual waivers that would weaken this prohibition.

If you’d like, I can add a side-by-side comparison with the current statute to highlight the exact textual changes and provide a plain-language redline summary.

Compiled from official sources — confirm details with the bill’s official record.

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