TRENTON – An audit released today by New Jersey’s Office of the State Comptroller (OSC) found the state’s largest Medicaid health maintenance organization has done a poor job of pursuing and reporting fraud and abuse recoveries that would lower insurance costs paid by the state.
According to the audit, Horizon NJ Health (HNJH) recovered only $188,207 in improper Medicaid payments to its network providers and enrollees in 2009 and 2010. Those recoveries represent less than one-tenth of one percent of the $1.3 billion HNJH receives annually from the state.
HNJH’s contract with the state requires it to maintain a special investigations unit dedicated solely to the detection of fraud and abuse by providers and enrollees within its network. All recoveries of improper payments are required to be reported to the state Department of Human Services and result in lower premium payments the state must pay to its four Medicaid health maintenance organizations (HMOs).
“Horizon NJ Health needs to step up its efforts in investigating Medicaid fraud and abuse and recovering misspent Medicaid dollars,” State Comptroller Matthew Boxer said. “As the state now transitions its Medicaid program to a managed care system, it is becoming even more crucial for Horizon to meet its obligations as the state’s partner in the fight against Medicaid fraud.”
The OSC Medicaid Fraud Division audit found HNJH actively investigated only nine health care providers during the two-year period reviewed and made a total of five recoveries of improper Medicaid payments. It also found that even with the small amount of recoveries, only 14.1 percent of those recoveries were actually reported to the state as required. As a result of the underreporting, the state overpaid $161,666 in premiums to the four Medicaid HMOs, according to the audit. OSC recommends the state seek to recover the overpayments.
The audit further found HNJH did not consistently coordinate its efforts with the OSC, often failing to obtain required approvals for both its investigations and its recoveries. The approval process, which is dictated by HNJH’s contract with the state, was designed to enable OSC to ensure that HNJH is maximizing its recoveries in the cases it pursues.
“The bottom line is we pay a lot of money as a state to Horizon and the state is getting less than what it bargained for in its contract,” OSC Medicaid Fraud Division Director Mark Anderson said.
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