Review of Medicaid Disproportionate Share Hospital Payments to Runnells Specialized Hospital: November 1, 1996, Through June 30, 2001

EXECUTIVE SUMMARY:

Disproportionate share hospital (DSH) payments to Runnells Specialized Hospital exceeded the hospital-specific limits imposed by section 1923(g) of the Social Security Act and the approved State Medicaid plan by $2,239,179 ($1,119,590 Federal share).  State officials relied solely on a contractor to prepare and document the additional DSH claims and failed to ensure the accuracy of the claims before submitting them for Federal reimbursement.

We recommend that New Jersey (1) refund $1,119,590 to the Federal Government, (2) adhere to Federal law and State plan requirements when submitting future DSH claims subsequent to June 2001 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 generally agreed with our recommendations.