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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of New Jersey’s System for Medicaid Provider Overpayments," (A-02-04-01009)

January 23, 2006

Complete Text of Report is available in PDF format (545 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether New Jersey’s Department of Human Services reported selected types of Medicaid provider overpayments in accordance with Federal requirements.  The State agency did not report all overpayments in accordance with Federal requirements. The State agency (1) delayed reporting overpayments until the date of its final decision or when it collected the overpayment in full, (2) reported negotiated rather than gross overpayment amounts, and (3) recognized overpayments as of the date of the final rather than draft audit report.  The State agency also did not return the Federal share of overpayment interest collected from providers. 

We recommended that the State agency: (1) include unreported overpayments totaling $13,242,420 ($12,279,902 not reported and $962,518 understated) on the CMS-64 and refund the $6,621,210 Federal share; (2) determine the value of unreported overpayments identified after our audit period and report them; and (3) ensure that all overpayments are reported in accordance with Federal requirements. The State generally disagreed with our findings.