Overpayment Audit: Medicaid is Serious About Excluded Providers

Under the Affordable Care Act (ACA), providers and suppliers who bill for services furnished by an excluded or an unlicensed person are considered to have received an overpayment from Medicare which must be reported and returned within 60 days of “identifying” the overpayment (claims-based overpayment). New Jersey Medicaid recently reminded providers that a similar requirement for Medicaid and Medicaid Managed Care providers exists in New Jersey and will be enforced. 

NJ Medicaid broadly states that “any payments received from the State of New Jersey” cannot be for items or services furnished directly or indirectly, ordered, directed, managed or prescribed “in whole or in part” by an excluded, unlicensed, or uncertified person or entity.

To avoid denial of payment or recoupment (with interest and other civil penalties that may be imposed by the State), NJ Medicaid strongly recommends that providers and Medicaid Managed Care organizations check, on a monthly basis, license and exclusion status of any current or prospective employee (including temporary employees), contractors or subcontractors who directly or indirectly are or will be furnishing, ordering, directing, managing or prescribing items or services reimbursed by the State.

The State identified 5 mandatory databases (a sixth mandatory database exists for certified nurse aide/personal care assistant), as well as an optional, fee-based, database, to perform the monthly verifications.

As part of their compliance programs, providers and suppliers should update an entity’s policies and procedures to reflect a duty to verify licensure and exclusion status that meets the Federal and State requirements. Policies and procedures should also require appropriate training and education of an entity’s work force.

NJ Medicaid requires providers and MCOs who discover receipt of payment for items or services furnished by excluded, unlicensed or uncertified individuals to notify the New Jersey Medicaid Fraud Division.

If you are facing an Medicaid overpayment audit or have questions regarding Medicare or Medicaid overpayment based on exclusion, revocation, suspension,  or have other health law related questions, please contact our office.