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Report File
Date Issued
Submitting OIG
Department of Health & Human Services OIG
Other Participating OIGs
Department of Health & Human Services OIG
Agencies Reviewed/Investigated
Department of Health & Human Services
Report Number
A-02-15-01010
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.

Report Type
Audit
Location

NJ
United States

Number of Recommendations
3
Questioned Costs
$300,452,930
Funds for Better Use
$0
Additional Details
https://oig.hhs.gov/oas/reports/region2/21501010.asp

Open Recommendations

This report has 3 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
261430 No $300,452,930 $0

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 No $0 $0

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 No $0 $0

We recommend that the State agency revise its payment rates to comply with Federal requirements.

Department of Health & Human Services OIG

United States