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Bill

SB 1811

Relating to the use of extrapolation by a health maintenance organization or an insurer to audit claims.

89th Legislature (2025) Introduced by Donna Campbell and 1 co-sponsor

SB 1811 restricts Texas insurers' ability to statistically project claim audit findings across entire populations without explicit regulatory standards or provider safeguards.

Referred to Health & Human Services
#audits&auditors(s4334) #healthmaintenanceorganizations(s0853) #insurance--health&accident(i0422)
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Bill Summary · SB 1811

Legislative bill overview

SB 1811 regulates how health maintenance organizations (HMOs) and insurers can use statistical extrapolation when auditing insurance claims. The bill establishes parameters for when and how insurers can project findings from a sample of claims across an entire population rather than auditing every individual claim. This addresses a common practice where insurers identify potential overpayments in a subset of claims and mathematically extend those findings to calculate total liability.

Why is this important

Extrapolation-based audits can significantly increase financial liability for healthcare providers and affect claim reimbursement rates. The practice is controversial because statistical projections may not accurately reflect actual overpayments across all claims, potentially resulting in excessive claw-backs from providers. Clear legislative guardrails could protect both providers from disproportionate penalties and insurers from undiscovered systematic billing errors.

Potential points of contention

  • Provider vs. insurer interests: Providers argue extrapolation inflates penalties for isolated billing errors, while insurers contend it's an efficient tool to detect patterns of systematic overbilling
  • Statistical validity standards: Disagreement over what sample sizes, confidence intervals, and error margins should be required to make extrapolation results legally defensible
  • Audit cost burden: Dispute over whether stricter extrapolation rules will force insurers to conduct more expensive claim-by-claim audits, potentially raising insurance costs

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

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