Review of New Jersey's System for Medicaid Provider Overpayments

EXECUTIVE SUMMARY:

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.