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