Review of the Adequacy of New Jersey Controls for Preventing Duplicate Medicaid and State Children's Health Insurance Program Payments

EXECUTIVE SUMMARY:

The initial objectives of the audit were to determine whether New Jersey had adequate controls to (1) prevent Medicaid and State Children's Health Insurance Program (SCHIP) from paying providers for the same service to the same beneficiary and (2) prevent individuals from enrolling in both Medicaid and SCHIP or in multiple SCHIP plans. After preliminary audit work, we added a third objective:  to determine whether New Jersey accurately reported Title XXI payments to CMS.  New Jersey's controls were adequate to prevent Medicaid and SCHIP from paying providers for the same service to the same beneficiary and to prevent individuals from enrolling in both Medicaid and SCHIP or in multiple SCHIP plans. However, New Jersey overstated SCHIP payments for certain services on its reports. 

We recommended that New Jersey:  (1) adjust SCHIP payments on the CMS reports by $9,142,057 and refund the $5,942,337 Federal share; (2) determine reported overpayments after March 31, 2004, and refund the Federal share; (3) correct the programming error affecting the reports after March 31, 2004; and (4) reconcile SCHIP expenditures on the reports to the State's database of paid claims to prevent any recurrence of this error.  State officials concurred with our findings and recommendations.