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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;
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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
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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 Medicaid-
8 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
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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 Medicaid-
12 related services to recipients, or any other duty specified in its
13 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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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 14Every fact on this page links to its source, starting with the official bill record.