Review of Medicaid Claims Made By New Jersey for Residents of Institutions for Mental Diseases Who Were Under the Age of 22

EXECUTIVE SUMMARY:

The objective of this audit was to determine if controls were in place to preclude New Jersey from claiming Federal Medicaid funds for all medical services, except inpatient psychiatric services, provided to institution for mental diseases (IMD) residents under the age of 21 and, in certain instances, under the age of 22.  We found that contrary to Federal requirements, New Jersey did not have controls to prevent medical claims for residents of private and county-operated IMDs and that its controls for residents of State-operated IMDs were not always effective.  During our July 1, 1997 through June 30, 2001-audit period, we estimated that New Jersey improperly claimed $848,374 in Federal Medicaid funds.  We recommended that New Jersey: (1) refund $848,374 to the Federal Government, (2) implement controls to prevent Federal claims for medical services provided to under-22-year-old IMD residents of private and county-operated IMDs, (3) strengthen its procedures to prevent Federal claims for medical services provided to under-22-year-old IMD residents of State-operated IMDs, and (4) identify and refund to the Federal Government any improper funds claimed for periods after our audit period.  New Jersey officials concurred with our findings and recommendations.