Review of Medicaid Disproportionate Share Hospital Payments to University Hospital, University of Medicine and Dentistry of New Jersey: July 1, 1995, Through June 30, 2001

EXECUTIVE SUMMARY:

This is the fifth in a series of reports on Medicaid DSH claims that a consultant prepared under a contingency fee contract with New Jersey.  The objective of this review was to determine whether disproportionate share hospital (DSH) payments to University Hospital for State fiscal years 1996 through 2001 complied with the hospital-specific limits imposed by section 1923(g) of the Social Security Act (the Act) and the approved State plan.  We found that DSH payments to University Hospital exceeded the hospital-specific limits imposed by section 1923 (g) of the Act and the approved State plan by $171.4 million ($85.7 million Federal share). New Jersey relied solely on a contractor to prepare and document the additional acute care DSH claims and failed to ensure the accuracy of the claims before submitting them for Federal reimbursement.  As a result of the consultant's work, University Hospital received an additional $560 million ($280 million Federal share) for State fiscal years 1996 through 2001.

We recommended that New Jersey (1) refund $85,697,689 to the Federal Government, (2) adhere to Federal law and State plan requirements when submitting future DSH claims for Federal reimbursement; and (3) review all work performed by consultants to ensure the veracity of future Medicaid claims to the Federal Government.  New Jersey disagreed with $89,500,544 of the $90,582,877 refund recommended in our draft report. New Jersey agreed with the remaining recommendations.  After reviewing applicable Federal requirements, the State plan, and New Jersey's comments on our draft report, we revised our findings and recommendations where appropriate.