Review of Inpatient Psychiatric Crossover Claims to Medicaid for Patients Between the Ages of 21 to 64 in New Jersey's Private and County Operated Institutions for Mental Diseases

The objective of this audit was to determine if controls were in place to effectively preclude New Jersey from claiming federal financial participation (FFP) under the Medicaid program for crossover claims (Medicare to Medicaid) for inpatient psychiatric services provided to 21 to 64 year old residents of private and county operated psychiatric hospitals that were institutions for mental diseases. We determined that improvements were needed in controls established by the state to preclude claiming FFP for such claims. Although it was state policy not to claim FFP for these services, we determined that for the period December 1, 1991 through May 20, 2002, the state improperly claimed $896,072 of FFP. We discussed this issue with state officials who agreed with our findings and instituted corrective actions. One of the corrective actions consisted of amending an edit within their Medicaid Management Information System (MMIS) to prevent FFP from being claimed. Our report recommended that New Jersey refund $896,072 to the Federal Government, identify and return any improper FFP claimed subsequent to May 20, 2002, and that they periodically review the edit in their MMIS to ensure that it is functioning as intended. New Jersey officials generally concurred with our recommendations.