The mission of the Medicaid Fraud Division (MFD or Agency) within the Office of the State Comptroller is to prevent, detect, audit and investigate fraud, waste and abuse by New Jersey providers and recipients. As we look forward to the New Jersey Medicaid Fraud Division 2015 work plan, we analyze the agency’s 2014 activities.
MCO Investigations Questioned
MFD’s biggest priority in 2014 was investigations and audit of providers and recipients within the MCO networks. To that end, the Agency used, among other tools, data-mining of provider claims to identify “questionable payments to network providers and recipients who appear to be receiving services to which they are not entitled.”
The Agency audit activities also revealed that two of the five MCO’s had “serious deficiencies” in the MCO’s special investigations units tasked with finding fraud, waste and abuse in the plan’s network providers and recipients. MFD found, for example, inadequate staffing, failure to report monetary recoveries accurately to the State, undertaking few investigations and audits, and failure by MCO subcontractor’s to report potential fraud and abuse issues to the special investigations units.
Clinical Laboratory Claims
In 2014, the Agency also focused on reviewing independent clinical laboratories for improperly submitted claims for services for lab tests covered by another provider’s billing. Additionally, MFD analyzed laboratory claims for unbundling.
Primary Care Physicians — Exclusion, Enrollment and More
Primary care physicians were also on the Agency’s radar in 2014. The MFD examined physicians’ enrollment records for active licenses and absence of exclusion from State or Federal programs. Provider claims were also analyzed to determine that physicians have not resubmitted previously denied claims under another physician’s Medicaid number and that medical documentation supports an existing physician-patient relationship.
Physician’s not enrolled in Medicaid should also take note. Those doctors not enrolled with Medicaid but who refer services paid for by Medicaid could be held responsible for payments made by the State. Specifically, MFD reviewed claims for ordered services of providers not enrolled in Medicaid for services exceeding $50,000 (e.g., labs, DMEs, prescriptions) and “[i]n those cases, if a non-Medicaid provider causes the Medicaid program to pay for a prescription which was not medically necessary, that provider will be liable to the State for reimbursement.”
Physicians with outlier billings were also the focus of MFD. The Agency planned to send warning letters and audit outlier provider records.
Pharmacy Inventory and Billing Audits
The MFD began a series of pharmacy audits in 2013 that continued into 2014. During such audits, the Agency typically audits the pharmacy inventory and seeks recoveries when it identifies shortages of medications which the pharmacies billed and were paid by Medicaid. In 2013, ten such inventory audits led to recoveries for the State. The 2014 audits also focused on ensuring that billed services were provided and that billed scripts were dispensed. The Agency’s audits also analyzed utilization patterns of beneficiaries as well as analyzed dispensing patterns for drug diversion.
Personal Care Services
The Agency audited providers of personal care services for properly pre-authorized services and provision of services per a physician order. The MFD audits also analyzed whether the personal care services were performed and supervised by properly qualified staff.
If you have questions regarding the New Jersey Medicaid workplan, MCOs, audits, enrollment with New Jersey Medicaid, exclusion, or have other health law questions, please contact our office.