New Jersey Claimed Hundreds of Millions in Unallowable or Unsupported Medicaid School-Based Reimbursement

Submitting OIG:

Department of Health & Human Services OIG

Report Description:

New Jersey did not follow Federal regulations and CMS guidance when it developed its payment rates for Medicaid school-based services and, as a result, claimed $300.5 million in unallowable costs. New Jersey claimed an additional $306.2 million in reimbursement using payment rates developed with unsupported costs.

Date Issued:

Monday, November 27, 2017

Agency Reviewed / Investigated:

Department of Health & Human Services

Submitting OIG-Specific Report Number:

A-02-15-01010

Component, if applicable:

Centers for Medicare & Medicaid Services

Location(s):

United States

Type of Report:

Audit

Questioned Costs:

$300,452,930

Funds for Better Use:

Number of Recommendations:

View Document:

Attachment	Size
21501010.pdf	6.03 MB

Additional Details Link:

https://oig.hhs.gov/oas/reports/region2/21501010.asp

Recommendation Number	Recommendation Status	Significant Recommendation
261430	Open	No
We recommend the State agency refund $300,452,930 in Federal Medicaid reimbursement claimed based on payment rates that incorporated unallowable costs. This disallowance is based on $220,314,119 calculated by removing allowable costs and RMS study based on correct activity moments plus $80,138,811 which was claimed based on a pending amendments to its State plan. The $220,314,119 includes the effect of including unallowable costs in the rate pool as follows: -Unpaid Pension Costs-$435,287,077 -Unallowable disabilities teacher-consultant salaries $61,528,162 -Special education or non health related services $75,379,253 The rates were recalculated using corrected random moment timestudy activity codes that were changed by the State agency's contractor. The contractor recoded 235 of the employees' responses, we determined that 203 were incorrect.
261431	Open	No
We recommend that the State agency work with CMS to determine the allowable amount of the remaining $306,233,377 set-aside because the rates included unallowable costs that could not be quantified. Specifically, the payment rates incorporated non-Medicaid related costs lumped together into activity code with Medicaid related costs. In addition, the sample moments used were not supported
261432	Open	No
We recommend that the State agency revise its payment rates to comply with Federal requirements.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

261430

Open

We recommend the State agency refund $300,452,930 in Federal Medicaid reimbursement claimed based on payment rates that incorporated unallowable costs. This disallowance is based on $220,314,119 calculated by removing allowable costs and RMS study based on correct activity moments plus $80,138,811 which was claimed based on a pending amendments to its State plan. The $220,314,119 includes the effect of including unallowable costs in the rate pool as follows: -Unpaid Pension Costs-$435,287,077 -Unallowable disabilities teacher-consultant salaries $61,528,162 -Special education or non health related services $75,379,253 The rates were recalculated using corrected random moment timestudy activity codes that were changed by the State agency's contractor. The contractor recoded 235 of the employees' responses, we determined that 203 were incorrect.

261431

Open

We recommend that the State agency work with CMS to determine the allowable amount of the remaining $306,233,377 set-aside because the rates included unallowable costs that could not be quantified. Specifically, the payment rates incorporated non-Medicaid related costs lumped together into activity code with Medicaid related costs. In addition, the sample moments used were not supported

261432

Open