Department of Health and Human Services

Office of Inspector General -- AUDIT

"Office of Inspector General's Partnership Plan - New Jersey Office of the State Auditor's Report on the Department of Health and Senior Services, Division of Consumer Support, Medical Assistance to the Aged, Medical Day Care Program," (A-02-02-01026)

March 24, 2003


Complete Text of Report is available in PDF format (310 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

This audit, performed by the New Jersey Office of the State Auditor (OSA), was conducted as part of the OIG's continuing partnership efforts with state auditors to expand audit coverage of the Medicaid program.  The objectives of the audit were to determine whether payments to medical day care (MDC) providers for health related services were reasonable, related to the department's programs, and recorded properly in the accounting system during the period July 1, 2000 to October 31, 2002.  The OSA found that it could not determine the reasonableness of the cost of the MDC program due to program regulations not adequately defining the population to be served.  Without explicit regulations defining the types of medical conditions which warrant MDC services, and medical condition diagnosed by a physician would be sufficient to enroll an individual in the program.  In addition, OSA found that New Jersey's Department of Health and Senior Services (DHSS) was unaware that 78 MDC providers received $6 million in payments by participating in the Department of Agriculture's Child and Adult Food program.  The payments represent reimbursement of costs that were also included in the per diem rates made to the providers by DHSS.  Further, OSA determined that DHSS had inadequate controls over provider reimbursements.  As a  result, the DHSS may have made approximately $619,000 ($309,500 federal share) in improper payments to MDCs during the audit period.  Moreover, OSA identified claims totaling approximately $1 million ($500,000 federal share), which had potential conflicts due to the providers' billing methods.