Review of New Jersey's Medicaid School-Based Rates

New Jersey claimed Medicaid reimbursement for health-related services through a program called the Special Education Medicaid Initiative (SEMI) program.  The State also claimed Medicaid reimbursement for administrative costs through a program called the Medicaid Administrative Claiming (MAC) program.  The rates used by the State to claim Medicaid reimbursement under the SEMI and MAC programs were not reasonable and did not comply with Federal requirements and the Medicaid State plan.  The SEMI and MAC rate-setting methodologies included costs that were duplicated, unallowable, or improperly allocated.  As a result, the State improperly received Federal Medicaid payments during the period July 1, 1998, through June 30, 2001.  These improper payments were not quantified because a prior Office of Inspector General audit report (A-02-03-01003) questioned school-based claims billed by New Jersey for the same period.  We recommended that the State work with the Centers for Medicare & Medicaid Services to determine the overpayment amounts and return those overpayments to the Federal Government and that it properly develop and document its school-based rates.  New Jersey concurred with our findings and recommendations.