What We Do

The Medicaid Fraud division is divided into three units: Fiscal Integrity; Investigations; and Regulatory.

Fiscal Integrity Unit

The Fiscal Integrity Unit is made up of the Division's Audit, Data Mining and Third Party Liability units.

Audit Unit

The Audit Unit conducts audits and reviews of Medicaid providers' billings to ensure compliance with program requirements and, where necessary, to recover overpayments. These activities serve to: monitor the cost-effective delivery of Medicaid services to ensure the prudent stewardship of scarce dollars; ensure the required involvement of professionals in planning care for program recipients; safeguard the quality of care, medical necessity and appropriateness of Medicaid services provided; and reduce the potential for fraud, waste, and abuse.

Data Mining Unit

The Data Mining Unit looks for unusual patterns in claim reimbursement from providers and refers findings to the Audit or Investigations Units for further analysis.

MFD’s data mining group is involved in the initial stages of the process leading to the recovery of improperly paid Medicaid dollars. The unit employs a variety of analytical techniques to detect anomalous or abnormal claims submitted by providers. Its findings often lead to MFD audits and investigations.

In order to identify patterns of anomalous Medicaid reimbursements, MFD’s data miners review Medicaid fraud reports and investigations from other states and work with a range of additional resources to acquire pertinent data. The data mining group also monitors the Surveillance and Utilization Review System, a federally mandated exception reporting system, for indications of waste, fraud and abuse and to detect duplicate, inconsistent or excessive claim payments.

Third Party Liability Unit (TPL)

Since Medicaid is the payer of last resort, the Third Party Liability Unit, working with an outside vendor, seeks to determine whether Medicaid beneficiaries have other insurance. If the recipient has other insurance, TPL recovers money from the private insurer.

Under federal law, if a Medicaid recipient has other insurance coverage, Medicaid is responsible for paying the medical benefits only in cases where the other coverage has been exhausted or does not cover the service at issue. Thus, a significant amount of the state’s Medicaid recoveries are the result of MFD’s efforts to obtain payments from third-party insurers responsible for services that were inappropriately paid with Medicaid funds. MFD’s Third Party Liability group, working with an outside vendor, seeks to determine whether Medicaid recipients have other insurance and recovers money from private insurers in cases where Medicaid has paid claims for which the private insurer was responsible. In addition, the Third Party Liability group also manages a daily hotline for the public and providers to call and update third-party commercial insurance information for Medicaid recipients.

Investigations Unit

The Investigations Unit examines and analyzes the activities of various medical providers including adult medical daycare facilities, pharmacies, durable medical equipment (DME) providers and laboratories. When an investigation reveals an overpayment made to a provider or recipient as a result of fraud, waste or abuse, the investigator will refer the case upon completion to Recovery Unit to seek recovery of any monies paid and to exclude the provider, where appropriate, from the program. If the conduct is also criminal in nature, the unit will refer the case to the New Jersey Medicaid Fraud Control Unit for additional investigation.

The Special Investigations Unit reviews provider applications for DMEs, pharmacies, laboratories, and adult medical day care centers to verify that potential Medicaid providers have no outstanding criminal or disciplinary complaints.

Regulatory Unit

The Regulatory Unit recovers overpayments that are identified by MFD’s auditors and investigators and determines when to exclude a Medicaid provider from the Medicaid program. In cases of fraud, Regulatory may also assess additional penalties against a provider.

Once MFD identifies overpayments to be recovered, Regulatory sends out appropriate notices, recovers the money from providers and recipients on behalf of the state and works with federal authorities to ensure that the federal government receives its share of any recovery. In instances where R&E cannot resolve an overpayment through a settlement, MFD will take administrative action against the provider or recipient.

Providers can be excluded from participating in the Medicaid program for numerous reasons including criminal convictions, exclusions by another state or the federal government, or adverse action taken by a licensing board. Providers can be excluded for a set number of years or, in some cases, until they provide sufficient evidence supporting reinstatement. Actions taken against these individuals are part of an ongoing OSC effort to ensure that only those medical providers who maintain the highest integrity may participate in the Medicaid program.

MFD’s Regulatory Officers are licensed attorneys who handle MFD-initiated fraud and abuse cases through the administrative law process, from settlement negotiations through Office of Administrative Law Fair Hearings as State Agency Representatives. The Regulatory Officers provide regulatory guidance to the other units of the division which include but is not limited to legal research as well as case reviews for statutory and regulatory support. MFD’s Regulatory Officers also work with other state departments to propose new Medicaid program regulations designed to improve program integrity and strengthen Medicaid rules.