House creates Office of Inspector General for Medicaid to target fraud, waste and abuse

The Utah House passed Second Substitute House Bill 84 to create an Office of Inspector General (OIG) focused on Medicaid fraud, waste and abuse and to reallocate portions of program-integrity staff into the new office. Representative Clark, sponsor of the measure, described the office’s principal duties as pursuing fraud and improving program efficiency and said the bill provides the OIG with tools—including restricted access to some Department of Health databases such as the controlled-substance database—to identify improper payments.

On the floor, members asked about funding and workload impacts, whether responsibilities would be shifted away from the Department of Health and how the Office would measure savings. The sponsor said the proposal moves some program-integrity FTEs into the new office but retains necessary Department of Health capacity through memoranda of understanding and legislative oversight. He also cited examples (from other states) where inspector-general efforts reported substantial savings, and he suggested the new office should be tasked with a legislative report-back on savings benchmarks and outcomes.

Representative Litback and others asked about the distinction between fraud (intentional misuse) and waste (inefficient or programmatic misuse), and the sponsor gave examples—such as multiple dental cleanings billed across different providers—that the OIG could identify as waste and recommend rule changes to avoid in the future.

The House approved the second substitute by roll call, 73 yes to 0 no. The measure will be transmitted to the Senate.