HB2797 limits how the Oklahoma Health Care Authority (OHCA) may audit and recoup payments for Medicaid home- and community-based services claims. The bill defines key audit terms such as “extrapolation,” “probability sample,” “sample,” and “universe,” and then prohibits OHCA from using extrapolation or other statistical methods in a way that would require a provider to repay more than the amount tied to the audited sample, for claims submitted between January 27, 2020 and November 1, 2027. It also declares certain prior audits using the prohibited methodology invalid for a specified period and voids repayment demands and penalties based on those audits.
The bill also requires OHCA to comply with existing fraud-reporting requirements and directs OHCA and the Department of Human Services to jointly develop and refine an audit methodology for Home and Community-Based Waiver-related programs. That joint effort must include training materials and guidance for providers and their agents, with the goal of creating clearer, more consistent audit standards by November 1, 2027. In addition, the bill amends a DHS statute to clarify that DHS remains responsible for annual performance audits of community-based services, while OHCA audits claims to verify services were actually delivered under federal Medicaid requirements.
The bill’s impact is to constrain OHCA’s audit and recoupment authority over certain Medicaid waiver providers, especially those serving home- and community-based care populations. It effectively nullifies some prior audit results, limits future use of statistical extrapolation in this context, and may reduce or eliminate repayment liabilities and penalties that would otherwise have been imposed on providers. It also reinforces the division of responsibilities between DHS and OHCA and requires the agencies to coordinate on audit standards and provider education.
Overall, the sentiment reflected in the voting history appears strongly supportive, with unanimous committee votes and substantial majorities on third reading in both chambers. The bill’s passage suggests broad legislative concern about the fairness and predictability of OHCA audit practices, as well as a desire to protect providers from large extrapolated repayment demands. At the same time, the bill’s restrictions on audit methodology indicate a policy tension between provider protections and the state’s ability to recover overpayments or address billing errors through statistical sampling.
The main point of contention is likely the use of extrapolation and statistical sampling in Medicaid audits. Supporters appear to view those methods as overly punitive or unreliable when used to generate large repayment demands from relatively small samples, while opponents may be concerned that limiting those tools could weaken fraud detection, overpayment recovery, and program integrity. The bill also touches on interagency authority and oversight, but the central dispute is the balance between audit enforcement and provider due process in the Medicaid waiver system.
HB2797 amends Title 56 to restrict OHCA’s ability to use extrapolation and certain statistical sampling methods in audits of Medicaid home- and community-based services claims, and it nullifies specified prior audit demands and penalties based on those methods. It also requires OHCA to follow fraud-reporting law, directs OHCA and DHS to jointly develop provider-facing audit guidance and training, and clarifies DHS’s performance-audit role versus OHCA’s claims-audit role for waiver services.
The bill appears to have enjoyed broad bipartisan support, with unanimous or near-unanimous committee approval and comfortable floor passage in both chambers. The voting pattern suggests legislators were receptive to concerns from providers about audit fairness and repayment exposure, while still preserving fraud-reporting and audit oversight functions.
The primary controversy is the use of statistical extrapolation and sampling in Medicaid audits. Providers and their advocates likely support the bill because it limits large repayment assessments based on small samples and voids certain past demands, while those focused on Medicaid program integrity may worry that the bill reduces OHCA’s ability to detect and recover overpayments. A secondary issue is the allocation of audit responsibilities between OHCA and DHS and the need for clearer, standardized audit guidance.