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The rules, which include the first amendments since the agency’s creation in 2008, clarify when OSC may impose civil penalties and charges on Medicaid providers and the public contracting requirements and processes that governmental entities must follow.   

Specifically, the rules explain: 

• OSC’s Medicaid Fraud Division’s use of statistical sampling and extrapolation to determine the total amount a provider may have been overpaid.

• When OSC may take enforcement actions, including charging 6 percent interest on assessed overpayments and imposing civil monetary penalties up to $150,000 for repeat violations.   

• The process for the Medicaid provider to submit records and respond to OSC findings.  

Additionally, OSC’s Procurement Division has been renamed the Public Contracting Oversight (PCO) Division. The amendments clarify that cooperative purchasing systems are subject to OSC review. The rules also state that entities seeking to award insurance contracts using the extraordinary unspecifiable services exception to bidding – meaning without a public bidding process – must submit to OSC insurance broker contracts as part of the procurement review. OSC audits have previously found that some public entities failed to have broker agreements.    

In developing these regulations, OSC took into account feedback from the public and stakeholders.