Senate backs state-led Medicaid fraud unit, sends SB264 to third reading

The Utah Senate voted to advance Senate Bill 264, directing the state to seek a waiver and establish a state-controlled Medicaid fraud unit designed to focus on cost-effective enforcement while avoiding what supporters described as harassment-focused federal tactics.

Senator Nielsen, who introduced the bill, said the proposal would let the state set clear rules for investigations and avoid ‘‘Gestapo-like’’ methods that some physicians described in testimony. ‘‘This is a directive to the state to seek a waiver and come up with a system which is cost effective and which does not use as its primary goal harassment, intimidation,’’ Nielsen said.

Several senators voiced support on the floor. Senator Blackcomb said the bill ‘‘helped create a resolve’’ to address a serious problem and recommended exploring waivers that maximize return on investment. Senator Montgomery said she, too, supported the measure after extensive concern from medical providers about investigative tactics.

Senator Steele questioned the fiscal note and whether replacing federal activity with a state unit would increase general‑fund costs. Nielsen acknowledged that state control would likely add expense if federal support were lost but argued the state could design a more efficient program that would ‘‘pay for itself in the long run.’’

A roll-call was held for third‑reading readiness. The presiding officer reported the result as 25 ayes, 1 nay and 3 absent; the bill was placed on the third‑reading calendar.

The next procedural step is third reading on the calendar; no final enactment was recorded in the transcript.