Review of Pharmacy Claims Billed as Family Planning Under New Jersey's Medicaid Program

EXECUTIVE SUMMARY:

Our objective was to determine whether the prescription drug claims for which New Jersey received Federal reimbursement at the enhanced 90-percent rate of Federal financial participation (FFP) qualified as family planning services.

New Jersey improperly received Federal reimbursement at the enhanced 90-percent rate of FFP for 160,995 prescription drug claims that did not qualify as family planning services. As a result, the State improperly received $2,219,746 in Federal Medicaid funds. This amount represents the difference between the enhanced 90-percent rate and the applicable 50-percent or 52.95-percent Federal medical assistance percentage.

We recommended that the State (1) refund $2,219,746 to the Federal Government; (2) review all National Drug Codes (NDC) presently coded as family planning in the Medicaid Management Information System (MMIS) to verify that they are related to family planning; (3) periodically review all NDCs to ensure that they are appropriately coded in the MMIS; and (4) determine the amount of Federal Medicaid funds improperly reimbursed at the 90-percent rate for non-family-planning NDCs, both prior and subsequent to our audit period, and refund that amount to the Federal Government. New Jersey concurred with our findings and recommendations.