House passes bill clarifying OIG duties for Medicaid oversight, emphasizing balance between enforcement and provider protections

The Utah House unanimously passed first substitute House Bill 315 on March 1, clarifying the duties and authority of the Office of Inspector General for Medicaid services.

Sponsor Representative Dunnigan said the bill is intended to balance the OIG’s duty to identify fraud, waste and abuse with protections for providers who comply with written guidance and to encourage consultation and communication. Among the provisions, the bill encourages the OIG to issue requests in ways that minimize provider disruption, to distinguish between honest mistakes and intentional fraud for settlement negotiations, to recover Medicaid dollars when appropriate, and to consult with providers before adopting rules.

The sponsor said the bill also directs the OIG to report inconsistencies between an agency’s bulletins or manuals and the state Medicaid plan to the Legislature’s administrative rules committee and to adopt minimally invasive processes for record review unless there is a credible allegation of fraud. Supporters on the floor described the legislation as long overdue and said it would bring balance to oversight while protecting compliant providers.

Representative Chavez‑Houck asked for clarification on the provision about balancing cost reduction and network adequacy; the sponsor said balancing is required in some contexts but not when the OIG is recouping costs for fraud investigations. Representative Kennedy, with health care experience, supported the bill as a needed moderation of OIG activity. Representative Ray highlighted provisions that reconcile differences between agency amendments and the state Medicaid plan.

First substitute HB 315 passed the House by a unanimous vote of 68‑0 and was referred to the Senate.