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An Act
ENROLLED SENATE
BILL NO. 1645 By: Gollihare of the Senate
and
Lawson and Williams of the
House
An Act relating to the state Medicaid program;
defining terms; establishing certain requirements and
procedures for audits of Medicaid providers;
directing establishment of certain appeals process;
providing for review by administrative law judge;
authorizing certain judicial review; prohibiting
certain adverse action by the Oklahoma Health Care
Authority or a contracted entity; stipulating certain
requirements for recoupment of funds; limiting
applicability of certain provisions; directing
promulgation of rules; providing for codification;
and providing an effective date.
SUBJECT: Audits of Medicaid providers
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 5051.11 of Title 63, unless
there is created a duplication in numbering, reads as follows:
A. As used in this section:
1. “Audit” means any review, analysis, or investigation
conducted by the Oklahoma Health Care Authority, a contracted
entity, or an entity on behalf of the Authority or the contracted
entity, of a Medicaid claim submitted by a provider if the review,
analysis, or investigation:
ENR. S. B. NO. 1645 Page 2
a. may result in recoupment, withholding, denial, or
adjustment of Medicaid payments, and
b. involves records, documents, or information other than
the filed claim;
2. “Capitated contract” and “contracted entity” have the same
meanings as provided by the Ensuring Access to Medicaid Act, Section
4002.2 of Title 56 of the Oklahoma Statutes;
3. “Clerical or recordkeeping error” means a mistake or an
omission in the filed claim regarding a required document or record.
A clerical or recordkeeping error includes, but is not limited to,
a:
a. typographical error,
b. scrivener’s error, or
c. computer error;
4. “Long-term care provider” means a provider as defined in
this subsection that is a:
a. nursing facility,
b. intermediate care facility for individuals with
intellectual disabilities (ICF/IID),
c. Medicaid home- and community-based services provider,
or
d. program of all-inclusive care for the elderly (PACE)
organization; and
5. “Provider” means any health care provider or behavioral
health provider that is contracted with the Authority or a
contracted entity to provide services to members of the state
Medicaid program.
ENR. S. B. NO. 1645 Page 3
B. Subject to applicable federal law, when the Oklahoma Health
Care Authority or a contracted entity conducts an audit of a
Medicaid provider, the audit shall be conducted according to the
following requirements and procedures:
1. The Authority or the contracted entity shall give the
provider notice of the audit at least one (1) week before conducting
the initial audit for each audit cycle;
2. a. An audit that involves the application of clinical or
professional judgment shall be conducted in
consultation with any state agency that licenses,
contracts with, or has oversight of a provider through
a memorandum of understanding or similar agreement.
b. The Authority or the contracted entity shall not cite
a provider that is contracted with a state agency
other than the Authority for delivery of Medicaid
services for an error based on an act or omission that
complied with applicable rules, policies, or guidance
of such state agency;
3. a. A clerical or recordkeeping error shall not:
(1) constitute fraud, or
(2) be subject to criminal penalties without proof of
intent to commit fraud.
b. A claim arising under subparagraph a of this paragraph
may be subject to recoupment;
4. Submission of a corrected claim by a provider shall not
constitute an admission of liability, fault, or wrongdoing;
5. a. When an audit is for a specifically identified problem
that has been disclosed to the provider, the audit
shall be limited to a claim that is identified by a
claim number.
b. For an audit other than that described in subparagraph
a of this paragraph, the audit shall be limited,
ENR. S. B. NO. 1645 Page 4
except where a credible allegation of fraud may exist,
to the following:
(1) if the provider is a long-term care provider, the
greater of:
(a) fifty claims, or
(b) twenty-five one-hundredths percent (0.25%)
of the number of claims billed by the
provider in the previous calendar year, or
(2) for all other providers, the greater of:
(a) fifty claims, or
(b) five percent (5%) of the number of claims
billed by the provider in the previous
calendar year.
c. (1) If an audit reveals the necessity for a review of
additional claims, the audit shall be conducted
by one of the following methods:
(a) on-site,
(b) electronically, or
(c) by the same method as the initial audit.
(2) The method of the audit shall be at the
discretion of the provider, except that an on-
site audit may only be conducted on a long-term
care provider.
d. Except for an audit initiated under subparagraph a of
this paragraph, the Authority or the contracted entity
shall not initiate an audit of a provider more than
two (2) times in a calendar year;
6. A recoupment shall not be based on:
ENR. S. B. NO. 1645 Page 5
a. documentation requirements in addition to the
requirements for creating or maintaining documentation
prescribed by state law or rule or federal law or
regulation, or
b. a requirement that a provider perform professional
duties prescribed by state law or rule or federal law
or regulation;
7. a. Recoupment shall only occur following the correction
of a claim and shall be limited to amounts paid in
excess of amounts payable under the corrected claim.
b. The Authority or the contracted entity may recoup the
entire overpaid claim if payment is issued for the
corrected claim on the same date.
c. Following a notice of overpayment, a provider shall
have at least sixty (60) days to file a corrected
claim;
8. Approval of a service, provider, or patient eligibility upon
adjudication of a claim shall not be reversed unless the provider
obtained the adjudication by fraud or misrepresentation of claim
elements, unless the reversal is necessary under state or federal
law;
9. Each provider shall be audited by the Authority or the
contracted entity under the same standards and parameters;
10. The Authority or the contracted entity shall disclose to
providers all policies, manuals, billing guidelines, and audit
criteria and any changes to such policies, manuals, guidelines, and
criteria. No recoupment may be based on undisclosed or
retroactively applied criteria, unless required by state or federal
law;
11. A provider shall be allowed at least sixty (60) days
following receipt of the preliminary audit report in which to
produce documentation to address any discrepancy found during the
audit;
ENR. S. B. NO. 1645 Page 6
12. The period covered by an audit shall not exceed twenty-four
(24) months from the date the claim was submitted to the Authority
or the contracted entity;
13. a. The preliminary audit report under paragraph 11 of
this subsection shall be delivered to a provider
within one hundred twenty (120) days after the
conclusion of the audit.
b. A final audit report shall be delivered to a provider
within six (6) months after receipt of the preliminary
audit report or receipt of the final appeal as
provided for in this subsection, whichever is later;
and
14. Notwithstanding any other provision in this section, the
Authority or the contracted entity shall not use the accounting
practices of statistical sampling, projection, or extrapolation
methodologies to calculate alleged overpayments, recoupments, or
penalties for audits.
C. 1. The Authority shall establish an appeals process under
which a provider may appeal a final audit report to the Authority,
and each contracted entity shall adopt the same appeals process. A
decision of the Authority or the contracted entity after the appeal
shall be final and binding unless a review is requested under
paragraph 2 of this subsection.
2. Any decision of the Authority or the contracted entity after
the appeal shall be subject to review by an administrative law judge
designated by the Administrator of the Oklahoma Health Care
Authority upon a timely request for review by the applicant or
recipient. The Administrator may only designate an administrative
law judge at another state agency, as established in the State
Medicaid Plan and approved by the Centers for Medicare and Medicaid
Services. The designated administrative law judge shall issue a
decision after review.
3. Any applicant or recipient under this title who is aggrieved
by a decision of the designated administrative law judge rendered
under paragraph 2 of this subsection may petition the district court
in which the provider is located within thirty (30) days of the date
ENR. S. B. NO. 1645 Page 7
of the decision for a judicial review of the decision pursuant to
the provisions of Sections 318 through 323 of Title 75 of the
Oklahoma Statutes. A copy of the petition shall be served by mail
upon the general counsel of the Authority.
D. The Authority or the contracted entity shall not take
adverse action against a provider for exercising rights conferred by
this section including, but not limited to, retaliation through
selection for additional audits.
E. A recoupment of any disputed funds shall only occur after
final disposition of the audit, including the appeals processes
described in subsection C of this section.
F. The total amount of any recoupment on an audit shall be
refunded to:
1. The contracted entity if the audited services were provided
under a capitated contract. The contracted entity shall report such
recoupment to the Authority and shall retain, use, or transfer the
funds in accordance with rules promulgated by the Oklahoma Health
Care Authority Board; or
2. If the audited services were provided through the fee-for-
service portion of the state Medicaid program:
a. the state agency responsible for paying the state
share of the Medicaid services provided by the
provider, if an agency other than the Authority, or
b. in the absence of the conditions described in
subparagraph a of this paragraph, the Authority.
G. This section does not apply to any audit, review, or
investigation that involves alleged fraud, willful
misrepresentation, or abuse.
H. The Oklahoma Health Care Authority Board shall promulgate
rules to implement the provisions of this section.
SECTION 2. This act shall become effective January 1, 2027.
ENR. S. B. NO. 1645 Page 8
Passed the Senate the 25th day of March, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the 29th day of April, 2026.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________