Healthcare agencies drop ball in pursuit of Medicaid fraud, Comptroller says

TRENTON – Health care organizations contracted by the state to provide Medicaid services to residents failed to aggressively pursue fraud and abuse, according to a state Comptroller audit report released Wednesday.

The audit found organizations that receive state money largely skimmed the surface by recovering fractions of misspent Medicaid dollars. The Comptroller alleges one of the state’s largest Medicaid health maintenance organizations failed to meet its contractual obligation with the state that were put in place to help lower insurance costs.

“With billions of tax dollars flowing through New Jersey’s Medicaid program, our state relies on its Medicaid HMOs to fulfill their oversight responsibilities in an aggressive manner,” said State Comptroller Matthew Boxer in a statement.

“This is another audit that shows an HMO failing to live up to requirements designed to combat fraud and lower state Medicaid costs,” he said.

The audit found an HMO that receives more than $800 million annually to provide Medicaid services, United Healthcare Community Plan of New Jersey, recovered an average of $800,000 per year in misspent funds over a two-year period. The recoveries amount to less than one-tenth of one percent of the annual payments the HMO received from the state, according to the report.

Boxer says more aggressive recoveries would result in lower state insurance costs.

The audit is the second to question the performance of the state’s Medicaid HMOs in recouping wrongful Medicaid payments.  A 2011 audit reviewed recoveries by the state’s largest Medicaid HMO, Horizon NJ Health.  

In a response to the audit, United Healthcare Community Plan acknowledged certain errors in the process to pursue misspent funds and submitted to the Comptroller plans to modify its procedures for recouping funds.