NJ official: $116M recovered in faulty claims

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Associated Press

Posted on July 27, 2011 at 7:06 PM

Updated Wednesday, Jul 27 at 11:00 PM

TRENTON, N.J. (AP) — More than $116 million believed improperly billed to New Jersey's Medicaid program has been returned to government coffers over the past year, the state comptroller announced Wednesday.

Using advanced data analysis, audits and special investigations, the state found almost one-third more improper Medicaid payments in the fiscal year that ended June 30 than it did in the previous year.

Many of those instances were referred to the state attorney general's office for possible prosecution, and in other cases, doctors and providers have been banned from Medicaid, a health insurance program for low-income residents, State Comptroller Matthew Boxer said.

About half the recouped dollars went back into New Jersey's budget; the other half was returned to the federal government, which splits the cost of Medicaid with the states.

Rooting out fraud can start with something as simple as a tip from a consumer or employee, Boxer said, or something as complex as mining billing data to identify providers whose payments are unexpectedly higher than their peers.

"We continue to refine our audit technique and our data mining technique to focus our resources on areas where we can achieve the greatest returns for taxpayers," Boxer said in an interview. "We expect to get more and more efficient."

And when auditors find evidence of willful misconduct, they refer the cases to state and county prosecutors.

Earlier this year, Boxer's office was part of a team that investigated Salvatore Chillemi, the manager of a defunct adult day care center who was found to have submitted claims for services that were never provided. Chillemi pleaded guilty to defrauding Medicaid and was sentenced in June to three years in prison.

The biggest sum auditors recovered during the past fiscal year was $25 million from Horizon Blue Cross Blue Shield of New Jersey. State officials said that sum represented claims Horizon shouldn't have billed to Medicaid because of a rule that says Medicaid can't be billed until a patient's other coverage options have been exhausted.

"They had not updated their computer systems over the years, so they weren't catching instances where the Medicaid program paid for claims that should have been paid by Horizon," said Pete McAleer, a spokesman for the comptroller.

But Horizon said there was nothing improper in the billing and that the transactions reflected routine reconciliations that occur among insurers when a patient has more than one form of health coverage.

"Insurance and personal circumstances can be complicated, which is why reconciliation is necessary to properly distribute payment liability," said Horizon spokesman Thomas Vincz. "As always, we seek to work with the Medicaid program to ensure a more accurate assignment of insurer liability at the starting point of a claim."

Other sizeable seizures include $1.6 million from Garden Adult Medical Daycare, which the state said couldn't prove it had provided the services it had been paid to deliver. As a result of the investigation, the center's owners have been banned from the Medicaid program, the state announced.

A representative for Garden Adult daycare could not be reached for comment Wednesday. A person who answered the office phone said the company has closed.

In another case, a CVS pharmacist who had already been barred from the program was found to still be doling out drugs to Medicaid patients. The state recouped $910,000 from CVS, according to the comptroller's office.

CVS spokesman Mike DeAngelis said the company had a screening system in place, but the ban on the pharmacist's didn't get flagged. He said that CVS fired the pharmacist as soon as it learned about the ban and that no patients were harmed.

"The company has since enhanced its pre-employment disclosure and screening processes in order to prevent a similar occurrence," DeAngelis said.

Wednesday's announcement comes as Gov. Chris Christie is attempting to fundamentally overhaul the state's Medicaid program. Citing out-of-control spending on entitlement programs, Christie signed a budget in June that cut more than $500 million from state spending on Medicaid, in part by limiting eligibility and requiring patients to participate in managed-care programs.

More than half of that comes from a Medicaid waiver that New Jersey must submit to the federal government seeking permission to make changes to who gets coverage and how they receive services. But the Legislature and much of the state's congressional delegation has asked the Obama administration to reject it, leaving Medicaid patients without a clear picture of what the coverage will be.

Amid strained government budgets and concerns that taxpayers are hemorrhaging dollars to health care fraud, the FBI launched a pilot program Monday urging New Jersey residents to report instances of fraud. Digital advertisements placed in shopping malls and on highway billboards will ask the public to come forward.

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Reach Josh Lederman at http://www.twitter.com/joshledermanAP.

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