Sneak Preview: HHS OIG Seeks Medicaid Refund from New Jersey

January 27, 2017 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reaffirmed its recent audit recommendation that the New Jersey Department of Human Services return about $95 million in Medicaid funds to the federal government, despite the state’s contention that the audit recommendation would impose “unreasonable documentation standards” on Medicaid providers.

The New Jersey Department of Human Services, which administers the state’s Medicaid program, maintains a program that provides partial care services to Medicaid beneficiaries with serious mental illnesses. These beneficiaries receive individualized outpatient clinic services, thus reducing unnecessary hospitalization. The services are billed on an hourly basis.

The HHS Centers for Medicare and Medicaid Services (CMS) State Medicaid Manual establishes requirements for various types of outpatient psychiatric treatment programs, including specific documentation guidance for intake assessments, individualized plan-of-care development and other services provided. Also, New Jersey law requires partial care providers to maintain individual records necessary to fully disclose the nature and extent of each service provided and any other information that the state agency may require. In addition, New Jersey’s Medicaid state plan requires, as of July 1, 2009, the prior authorization of partial care services for those services to be eligible for Medicaid reimbursement.

During a May 2012 review of New Jersey’s claims for Medicaid services to adults with mental illness who reside in community residences, the OIG found that the state improperly submitted numerous service claims for federal Medicaid reimbursements. To determine whether the state appropriately claimed Medicaid reimbursement for adult mental health partial care services, the OIG reviewed a random sample of 100 claims made between January 2009 and December 2012, during which time the state submitted about 3.8 million partial care services claims seeking about $272 million in reimbursements.

The OIG found that of the 100 claims, only eight complied with federal and state requirements. Of the remainder of the claims, services were not documented or supported for 84 claims; services were not provided by, or under the direction of, a psychiatrist affiliated with the facility where the services were provided for 20 claims; and individualized plan-of-care requirements were not met for six claims.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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