1| STATE OF OKLAHOMA | | | 2| 2nd Session of the 60th Legislature (2026) | | | 3|HOUSE BILL 3358 By: Williams | | | 4| | | | 5| | | | 6| AS INTRODUCED | | | 7| An Act relating to Medicaid provider audits; defining | | terms; providing for review of Medicaid providers or | 8| managed care organizations; providing penalties; | | directing Medicaid providers or managed care | 9| organizations to retain records for a certain period | | of time; requiring the production of records if | 10| requested; directing for promulgation of rules; | | providing for determination of overpayments or | 11| credible allegations of fraud; establishing the | | methodology for audits; providing for notice of right | 12| to informal conference and expedited adjudicatory | | proceeding; mandating that the Oklahoma Health Care | 13| Authority allow for corrective action plans; | | providing qualifications for hearing officer; | 14| providing costs for expedited adjudicatory | | proceeding; allowing Medicaid providers to challenge | 15| the preliminary or final determination for | | overpayment; providing for codification; and | 16| providing an effective date. | | | 17| | | | 18| | | | 19|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: | | | 20| SECTION 1. NEW LAW A new section of law to be codified | | | 21|in the Oklahoma Statutes as Section 5029.10 of Title 63, unless | | | 22|there is created a duplication in numbering, reads as follows: | | | 23| As used in this act: | | | 24| 1. "Claim" means a request for payment for services; | | | Req. No. 13887 Page 1 ___________________________________________________________________________
1| 2. "Clean claim" means a claim for reimbursement that: | | | 2| a. contains substantially all the required data elements | | | 3| necessary for accurate adjudication of the claim | | | 4| without the need for additional information from the | | | 5| Medicaid provider or subcontractor, | | | 6| b. is not materially deficient or improper, including | | | 7| lacking substantiating documentation required by | | | 8| Medicaid, and | | | 9| c. has no particular or unusual circumstances that | | | 10| require special treatment or that prevent payment from | | | 11| being made in due course on behalf of Medicaid; | | | 12| 3. "Credible" means having indicia of reliability after the | | | 13|state has reviewed all allegations, facts, and evidence carefully | | | 14|and acted judicially on a case-by-case basis; | | | 15| 4. "Credible allegation of fraud" means an allegation that has | | | 16|been verified by the state from any source, including fraud hotline | | | 17|complaints, claims data mining, and provider audits; | | | 18| 5. "Department" or "Authority" means the Oklahoma Health Care | | | 19|Authority; | | | 20| 6. "Director" means the director of the Oklahoma Health Care | | | 21|Authority; | | | 22| 7. "Fraud" means any act that constitutes fraud under state or | | | 23|federal law; | | | 24| | | | Req. No. 13887 Page 2 ___________________________________________________________________________
1| 8. "Managed care organization" means a person eligible to enter | | | 2|into risk-based prepaid capitation agreements with the Authority to | | | 3|provide health care and related services; | | | 4| 9. "Medicaid" means the medical assistance program established | | | 5|pursuant to Title 19 of the federal Social Security Act and | | | 6|regulations issued pursuant to that act; | | | 7| 10. "Medicaid provider" means a person that provides | | | 8|Medicaid-related services to recipients; | | | 9| 11. "Overpayment" means an amount paid to a Medicaid provider | | | 10|or subcontractor in excess of the Medicaid allowable amount, | | | 11|including payment for any claim to which a Medicaid provider or | | | 12|subcontractor is not entitled; | | | 13| 12. "Person" means an individual or other legal entity; | | | 14| 13. "Recipient" means a person who the Authority has determined | | | 15|to be eligible to receive Medicaid-related services; and | | | 16| 14. "Subcontractor" means a person that contracts with a | | | 17|Medicaid provider or a managed care organization to provide | | | 18|Medicaid-related services to recipients. | | | 19| SECTION 2. NEW LAW A new section of law to be codified | | | 20|in the Oklahoma Statutes as Section 5029.11 of Title 63, unless | | | 21|there is created a duplication in numbering, reads as follows: | | | 22| A. Consistent with the terms of any contract between the | | | 23|Authority and a Medicaid provider or managed care organization, the | | | 24|director shall have the right to be afforded access to the Medicaid | | | Req. No. 13887 Page 3 ___________________________________________________________________________
1|provider's or managed care organization's records and personnel, as | | | 2|well as its subcontracts and that subcontractor's records and | | | 3|personnel, as may be necessary to ensure that the Medicaid provider | | | 4|or managed care organization is complying with the terms of its | | | 5|contract with the Authority. | | | 6| B. Upon not less than two days' written notice to a Medicaid | | | 7|provider or managed care organization, the director may carry out an | | | 8|administrative investigation or conduct administrative proceedings | | | 9|to determine whether a Medicaid provider or managed care | | | 10|organization has: | | | 11| 1. Materially breached its obligation to furnish | | | 12|Medicaid-related services to recipients, or any other duty specified | | | 13|in its contract with the Authority; | | | 14| 2. Intentionally or with reckless disregard advertised or | | | 15|marketed, or attempted to advertise or market, its services to | | | 16|recipients in a manner as to misrepresent its services or capacity | | | 17|for services, or engaged in any deceptive, misleading or unfair | | | 18|practice with respect to advertising or marketing; or | | | 19| 3. Fraudulently procured or attempted to procure any benefit | | | 20|from Medicaid. | | | 21| C. Subject to the provisions of subsection D of this section, | | | 22|after affording a Medicaid provider or managed care organization | | | 23|written notice of hearing not less than ten (10) days before the | | | 24|hearing date and an opportunity to be heard, and upon making | | | Req. No. 13887 Page 4 ___________________________________________________________________________
1|appropriate administrative findings, the director may take any or | | | 2|any combination of the following actions against the Medicaid | | | 3|provider or managed care organization: | | | 4| 1. Impose an administrative penalty of not more than Five | | | 5|Thousand Dollars ($5,000.00) for engaging in any practice described | | | 6|in subsection B of this section, provided that each separate | | | 7|occurrence of such practice shall constitute a separate offense; | | | 8| 2. Issue an administrative order requiring the Medicaid | | | 9|provider or managed care organization to: | | | 10| a. cease or modify any specified conduct or practices | | | 11| engaged in by its employees, subcontractors or agents, | | | 12| b. fulfill its contractual obligations in the manner | | | 13| specified in the order, | | | 14| c. provide any service that has been denied, | | | 15| d. take steps to provide or arrange for any service that | | | 16| it has agreed or is otherwise obligated to make | | | 17| available, or | | | 18| e. enter into and abide by the terms of a binding or | | | 19| nonbinding arbitration proceeding, if agreed to by any | | | 20| opposing party, including the director; or | | | 21| 3. Suspend or revoke the contract between the Medicaid provider | | | 22|or managed care organization and the department pursuant to the | | | 23|terms of that contract. | | | 24| | | | Req. No. 13887 Page 5 ___________________________________________________________________________
1| D. If a contract between the Authority and a Medicaid provider | | | 2|or managed care organization explicitly specifies a dispute | | | 3|resolution mechanism for use in resolving disputes over performance | | | 4|of that contract, the dispute resolution mechanism specified in the | | | 5|contract shall be used to resolve such disputes in lieu of the | | | 6|mechanism set forth in subsection C of this section. | | | 7| E. If a Medicaid provider's or managed care organization's | | | 8|contract so specifies, the Medicaid provider or managed care | | | 9|organization shall have the right to seek de novo review in district | | | 10|court of any decision by the director regarding a contractual | | | 11|dispute. | | | 12| SECTION 3. NEW LAW A new section of law to be codified | | | 13|in the Oklahoma Statutes as Section 5029.12 of Title 63, unless | | | 14|there is created a duplication in numbering, reads as follows: | | | 15| A. Medicaid providers, managed care organizations, and their | | | 16|subcontractors shall retain, for a period of at least six (6) years | | | 17|from the date of creation, all medical and business records that are | | | 18|necessary to verify the: | | | 19| 1. Treatment or care of any recipient for which the Medicaid | | | 20|provider, managed care organization, or their subcontractor received | | | 21|payment from the Authority to provide that benefit or service; | | | 22| 2. Services or goods provided to any recipient for which the | | | 23|Medicaid provider, managed care organization, or subcontractor | | | 24| | | | Req. No. 13887 Page 6 ___________________________________________________________________________
1|received payment from the Authority to provide that benefit or | | | 2|service; | | | 3| 3. Amounts paid by Medicaid or the Medicaid provider or managed | | | 4|care organization on behalf of any recipient; and | | | 5| 4. Records required by Medicaid under any contract between the | | | 6|Authority and the Medicaid provider or managed care organization. | | | 7| B. Upon written request by the Authority to a Medicaid | | | 8|provider, managed care organization, or any subcontractor for copies | | | 9|or inspection of records pursuant to this act, the Medicaid | | | 10|provider, managed care organization, or subcontractor shall provide | | | 11|the copies or permit the inspection, as applicable within two (2) | | | 12|business days after the date of the request unless the records are | | | 13|held by the subcontractor, agent or satellite office, in which case | | | 14|the records shall be made available within ten (10) business days | | | 15|after the date of the request. | | | 16| C. Failure to provide copies or to permit inspection of records | | | 17|requested pursuant to this section shall constitute a violation of | | | 18|this act. | | | 19| SECTION 4. NEW LAW A new section of law to be codified | | | 20|in the Oklahoma Statutes as Section 5029.13 of Title 63, unless | | | 21|there is created a duplication in numbering, reads as follows: | | | 22| The director shall adopt and promulgate rules appropriate to | | | 23|administer, carry out, and enforce the provisions of this act. | | | 24| | | | Req. No. 13887 Page 7 ___________________________________________________________________________
1| SECTION 5. NEW LAW A new section of law to be codified | | | 2|in the Oklahoma Statutes as Section 5029.14 of Title 63, unless | | | 3|there is created a duplication in numbering, reads as follows: | | | 4| A. The Authority may audit a Medicaid provider or subcontractor | | | 5|for overpayment, using sampling for the time period audited. If the | | | 6|Authority contracts for the audit, the Authority shall contract only | | | 7|with an independent auditor approved by the state auditor. Each | | | 8|audited claim shall be reviewed by a person who is licensed, | | | 9|certified, registered, or otherwise credentialed in Oklahoma as to | | | 10|the matters such person reviews, including coding or specific | | | 11|clinical practice. | | | 12| B. The Authority shall not extrapolate audit findings unless a | | | 13|Medicaid provider's or subcontractor's error rate exceeds ten | | | 14|percent (10%) based upon appropriate samplings and a representative | | | 15|sample of claims computed by valid statistical software approved by | | | 16|the United States Department of Health and Human Services. | | | 17| C. Prior to reaching either a final determination or | | | 18|overpayment or a credible allegation of fraud, the Authority shall | | | 19|serve the Medicaid provider or subcontractor with a written | | | 20|preliminary finding of overpayment. | | | 21| D. The preliminary finding of overpayment shall: | | | 22| 1. State with specificity the factual and legal basis for each | | | 23|claim forming the basis of an alleged overpayment; | | | 24| | | | Req. No. 13887 Page 8 ___________________________________________________________________________
1| 2. Include a copy of the final audit report if the alleged | | | 2|overpayment is based on an audit; and | | | 3| 3. Notify the Medicaid provider or subcontractor that is the | | | 4|subject of a preliminary finding of overpayment of its right to | | | 5|request, within thirty (30) calendar days of service of the | | | 6|preliminary finding of overpayment, an informal conference with a | | | 7|representative of the Authority who is knowledgeable about the | | | 8|Authority's preliminary finding of overpayment and with a member of | | | 9|the audit team, if an audit formed the basis of any alleged | | | 10|overpayment, to informally address, resolve, or dispute the | | | 11|Authority's preliminary finding of overpayment. | | | 12| E. Prior to making either a final determination of overpayment | | | 13|or a determination of credible allegation of fraud, the Authority | | | 14|shall impose corrective action upon the Medicaid provider or | | | 15|subcontractor to address systemic conditions contributing to errors | | | 16|in the submission of claims for payment to which a Medicaid provider | | | 17|or subcontractor is not entitled. | | | 18| SECTION 6. NEW LAW A new section of law to be codified | | | 19|in the Oklahoma Statutes as Section 5029.15 of Title 63, unless | | | 20|there is created a duplication in numbering, reads as follows: | | | 21| A. A Medicaid provider or subcontractor seeking an informal | | | 22|conference pursuant to this section shall serve the Authority with a | | | 23|written request for such conference no later than thirty (30) | | | 24|calendar days following the service of a preliminary determination | | | Req. No. 13887 Page 9 ___________________________________________________________________________
1|of overpayment by the Authority on the Medicaid provider or | | | 2|subcontractor. Upon receipt of a request for an informal | | | 3|conference, the Authority shall set a date for the conference to | | | 4|occur no later than fourteen (14) business days following receipt of | | | 5|the request. | | | 6| B. Within seven (7) business days following the informal | | | 7|conference, a Medicaid provider or subcontractor may submit a | | | 8|proposed corrective action plan to the Authority to correct | | | 9|clerical, typographical, scrivener's, and computer errors or to | | | 10|provide requested credentialing, licensure, or training records | | | 11|identified in audit findings. The Authority shall not unreasonably | | | 12|withhold approval of the proposed corrective action plan. A | | | 13|Medicaid provider or subcontractor shall have no less than thirty | | | 14|(30) business days from the date of approval of its corrective | | | 15|action plan to provide additional information or documentation to | | | 16|the Authority to attempt to address or resolve a disputed | | | 17|preliminary finding of overpayment. | | | 18| SECTION 7. NEW LAW A new section of law to be codified | | | 19|in the Oklahoma Statutes as Section 5029.16 of Title 63, unless | | | 20|there is created a duplication in numbering, reads as follows: | | | 21| A. A Medicaid provider or subcontractor seeking an expedited | | | 22|adjudicatory proceeding pursuant to this act shall serve the | | | 23|Authority and the administrative hearings office with a written | | | 24|request for such proceeding no later than thirty (30) calendar days | | | Req. No. 13887 Page 10 ___________________________________________________________________________
1|following the service of a final determination of overpayment by the | | | 2|Authority on the Medicaid provider or subcontractor. | | | 3| B. The chief hearing officer of the administrative hearings | | | 4|office shall appoint or contract with a hearing officer qualified to | | | 5|hear these types of hearings no later than thirty (30) calendar days | | | 6|after service upon the administrative hearings office of a request | | | 7|for an expedited adjudicatory proceeding pursuant to this act by a | | | 8|Medicaid provider or a subcontractor. | | | 9| C. The expedited adjudicatory proceeding requested by a | | | 10|Medicaid provider or subcontractor in accordance with this act shall | | | 11|commence no later than thirty (30) days following the appointment of | | | 12|the hearing officer or as stipulated by the parties or as otherwise | | | 13|ordered by the hearing officer upon a showing of good cause. The | | | 14|evidentiary hearing of an expedited adjudicatory proceeding pursuant | | | 15|to this section shall not exceed ten (10) business days in length. | | | 16| D. After affording the parties the opportunity to submit | | | 17|proposed findings and conclusions of law, and based solely upon the | | | 18|record in accordance with this act and the Administrative Procedures | | | 19|Act, the hearing officer shall make findings of fact and conclusions | | | 20|of law on all material issues of fact, law or discretion, stating | | | 21|the basis for each. In addition, the hearing officer shall | | | 22|determine the amount of overpayment with respect to each disputed | | | 23|claim submitted for payment, if any. The findings of fact and | | | 24|conclusions of law of the hearing officer shall be made and served | | | Req. No. 13887 Page 11 ___________________________________________________________________________
1|upon all parties of record within thirty (30) calendar days | | | 2|following the hearing officer's receipt of the record. | | | 3| E. The hearing officer's findings of fact and conclusions of | | | 4|law shall be binging on the Authority and constitute a final agency | | | 5|decision. | | | 6| SECTION 8. NEW LAW A new section of law to be codified | | | 7|in the Oklahoma Statutes as Section 5029.17 of Title 63, unless | | | 8|there is created a duplication in numbering, reads as follows: | | | 9| A. The hearing officer presiding over the expedited | | | 10|adjudicatory proceeding held pursuant to this act shall: | | | 11| 1. Be licensed and in good standing to practice law in Oklahoma | | | 12|or another state; | | | 13| 2. Have at least three (3) years cumulative experience in one | | | 14|or more of the following areas: | | | 15| a. the health insurance industry, | | | 16| b. the Medicaid program, | | | 17| c. health care regulatory compliance, | | | 18| d. medical claims administration, or | | | 19| e. health law; | | | 20| 3. Not currently be employed by or represent, or belong to a | | | 21|law firm that currently represents, the Authority or a Medicaid | | | 22|provider or managed care organization or third-party administrator | | | 23|currently doing business with the Authority; and | | | 24| | | | Req. No. 13887 Page 12 ___________________________________________________________________________
1| 4. Not be related within the third degree of consanguinity to a | | | 2|person currently employed by the Authority, currently doing business | | | 3|with the Authority, or currently employed by an organization doing | | | 4|business with the Authority. | | | 5| B. The hearing officer shall not be: | | | 6| 1. A lobbyist registered with the Ethics Commission who | | | 7|currently represents, or has in the prior calendar year represented, | | | 8|a client in matters before the Authority; or | | | 9| 2. Affiliated with, or the spouse of, a lobbyist registered | | | 10|with the Ethics Commission who currently represents, or has in the | | | 11|prior calendar year represented, a client in matters before the | | | 12|Authority. | | | 13| C. The chief hearing officer of the administrative hearings | | | 14|office shall select the hearing officer to preside over an expedited | | | 15|adjudicatory proceeding held pursuant to this act. | | | 16| SECTION 9. NEW LAW A new section of law to be codified | | | 17|in the Oklahoma Statutes as Section 5029.18 of Title 63, unless | | | 18|there is created a duplication in numbering, reads as follows: | | | 19| A. Each party shall be responsible for its own costs related to | | | 20|the expedited adjudicatory proceeding, including costs associated | | | 21|with preparation for the hearing, discovery, depositions, subpoenas, | | | 22|service of process, witness expenses, travel expenses, investigation | | | 23|expenses and attorney fees. | | | 24| | | | Req. No. 13887 Page 13 ___________________________________________________________________________
1| B. The hearing officer shall allow telephonic testimony of a | | | 2|witness, if requested by a party. | | | 3| C. The Authority shall reimburse the administrative hearings | | | 4|office for the costs of a contract hearing officer. | | | 5| SECTION 10. NEW LAW A new section of law to be codified | | | 6|in the Oklahoma Statutes as Section 5029.19 of Title 63, unless | | | 7|there is created a duplication in numbering, reads as follows: | | | 8| A. A Medicaid provider or subcontractor may challenge: | | | 9| 1. The Authority's preliminary or final determination of | | | 10|overpayment as: | | | 11| a. exceeding statutory authority, | | | 12| b. arbitrary or capricious, | | | 13| c. a failure to follow Authority procedure, or | | | 14| d. not supported by substantial evidence; | | | 15| 2. The credentials of persons who participated in the audit or | | | 16|claims review; or | | | 17| 3. The methodology or accuracy of the Authority's audit. | | | 18| B. A Medicaid provider or subcontractor may conduct its own | | | 19|audit or sampling to challenge a preliminary or final determination | | | 20|of overpayment. | | | 21| SECTION 11. This act shall become effective November 1, 2026. | | | 22| | | | 23| 60-2-13887 TJ 12/09/25 | | | 24| | | | Req. No. 13887 Page 14