The mission of the New Jersey Office of the State Comptroller - Medicaid Fraud Division (MFD) is to mitigate fraud, waste and abuse in the Medicaid program resulting in cost effectiveness to New Jersey's taxpayers. As part of our multi-disciplinary approach to attaining these goals, we support providers who find problems within their own organizations, reveal (self-disclose) those issues to the MFD, and return inappropriate payments.
The Affordable Care Act of 2010 imposes new federal requirements on Medicaid providers to have a more proficient and time-sensitive process for identifying errors and overpayments received under the Medicaid program, and disclosing and repaying the Medicaid program for amounts that providers received in error. Under changes set forth in the ACA, providers are obligated to report, explain and repay overpayments within 60 calendar days of identification. See ACA Sec. 6402, expected to be codified at 42 U.S.C. Sec. 1320a-7k(d)(2). Those that fail to disclose, explain, and repay the overpayment in a timely manner may be subject to liability under the New Jersey and federal False Claims Acts.
The MFD recognizes that many improper payments are discovered during the course of a provider's internal review processes. While providers who identify that they have received inappropriate payments from the Medicaid program are obligated to return the overpayments, it is essential to develop and maintain a fair, reasonable process that will be mutually beneficial for both New Jersey and the provider involved. In order to encourage self-disclosure, MFD offers incentives for providers to investigate and report matters that involve possible fraud, waste, abuse or inappropriate payment of funds-whether intentional or unintentional-under the state's Medicaid program. By forming a partnership with providers through this self-disclosure approach, MFD's overall efforts to eliminate fraud, waste and abuse will be enhanced, while simultaneously offering providers a mechanism or method to reduce their legal and financial exposure.
The MFD recognizes that situations which are subject to this guidance could vary significantly; therefore, this protocol is written in general terms to allow providers the flexibility to address the unique aspects of the matters disclosed.
Advantages of Self-Disclosure
Self-disclosing overpayments, in most circumstances, will result in a better outcome than if MFD staff had discovered the matter independently. While the specific resolution of self-disclosures depends upon the individual merits of each case, the MFD will extend the following benefits to providers who, in good-faith, participate in a self-disclosure:
- Avoidance of False Claims penalties if reported within 60 days of identification
- Forgiveness or reduction of interest payments (for up to two years)
- Extended repayment terms
- Waiver of penalties and/or sanctions
- Timely resolution of the overpayment
- Decrease in the likelihood of imposition of an MFD Corporate Integrity Program
Developing such a partnership with the MFD during the self-disclosure process may also lead to more thorough understanding of the MFD's audit and investigatory processes, benefitting the provider in the future.
When to Disclose
Section 1128J (d)(2) of the Social Security Act requires a provider to self-disclose an overpayment within 60 days of the overpayment being identified or the date any corresponding cost report is due, if applicable. Under subsection (3) of the statute, failure to report the overpayment in a timely manner, makes the claims comprising the overpayment subject to the penalties described in the False Claims Act. Matters related to an on-going audit/investigation of the provider are not generally eligible for resolution under the self-disclosure protocol. Unrelated matters disclosed during an on-going audit may be eligible for processing under the self-disclosure protocol assuming the matter has received timely attention. If MFD is already auditing or investigating the provider, and the provider wishes to disclose an issue, in addition to submitting a disclosure under this protocol, the provider should bring the matter to the attention of the on-site audit staff. If another outside agency is auditing or investigating the provider, and the provider seeks to disclose an issue to MFD, the provider should follow this guidance accordingly. However, because of the wide variance in the nature, amount and frequency of overpayments that may occur over a wide spectrum of provider types, it is difficult to present a comprehensive set of criteria by which to judge whether disclosure is appropriate. Providers must determine whether the repayment warrants a self-disclosure or whether it would be better handled through administrative billing processes. Because of the complexity of some issues surrounding self-disclosures, providers may want to consider obtaining the advice of experienced healthcare legal counsel or consultants.
Each incident must be considered on an individual basis. Factors to consider include the exact issue, the amount involved, any patterns or trends that the problem may demonstrate within the provider's system, the period of non-compliance, the circumstances that led to the non-compliance problem, the organization's history and whether or not the organization has a corporate integrity agreement (CIA) in place.
Issues appropriate for disclosure may include, but are not limited to:
- Substantial routine errors
- Systematic errors
- Patterns of errors
- Potential violation of fraud and abuse laws
MFD is not interested in fundamentally altering the day-to-day business processes of organizations for minor or insignificant matters. Consequently, the repayment of simple, more routine occurrences of overpayment should continue through typical methods of resolution, which may include voiding or adjusting the amounts of claims. Providers should be aware that the MFD monitors both the number of occurrences and dollar amounts of voids and/or adjustments, as well as any patterns of voids and/or adjustments. The MFD highly discourages providers from attempting to avoid the self-disclosure process when circumstances in fact warrant its use.
Once a provider determines to disclose a problem, an initial report should be prepared which includes gathering the following information:
- The basis for the initial disclosure, including how it was discovered, the approximate time period covered and an assessment of the potential financial impact;
- The Medicaid program rules potentially implicated;
- Any corrective action taken to address the problem leading to the disclosure, the date the correction occurred and the process for monitoring the issue to prevent reoccurrence; and
- The name and telephone number(s) of the individual making the report on behalf of the provider. The individual may be a senior official within the organization or an outside consultant or counsel but should, in any event, be in an appropriate position to speak for the organization.
Contact the MFD with the above information by telephone or via formal letter to the Chief of Investigations, Medicaid Fraud Division, P.O. Box 025, Trenton, New Jersey 08625-0025. Providers may also use the printable version of MFD's self-disclosure form
After this initial reporting phase, the MFD will consult with the provider and determine the most appropriate process for proceeding. MFD staff will discuss the next steps, which may include requesting additional information. Ultimately, the provider should be prepared to present the following:
- A summary of the identified underlying cause of the issue(s) involved and any corrective action taken;
- A CD containing an Excel file containing a detailed list of claims paid that comprise the overpayments. Each claim should list the provider Medicaid ID number, client name and Medicaid ID, dates of service(s), rates or procedure codes and the amount(s) paid by Medicaid;
- The names of individuals involved in any suspected improper or illegal conduct and whether they are still employed by the provider, the names of the individuals who found the problem ans the names of the individuals involved in rectifying the problem;
- The nature and extent of any investigation or audit conducted to identify and determine the amount of overpayment;
- An attestation of accuracy and completeness; and
- The name, correspondence address, email address and telephone number(s) of the individual making the report on behalf of the provider. The individual may be a senior official within the organization or an outside consultant or counsel but should, in any event, be in an appropriate position to speak for the organization.
Assuming a provider completely cooperates and responds promptly to information requests, the MFD expects that the vast majority of self-disclosures will be completed within six months of submission of this information.
The MFD will consider the provider's involvement and level of cooperation throughout the disclosure process in determining the most appropriate resolution and the best mechanism to achieve that resolution. In the event that the provider and the MFD cannot reach agreement on the amount of overpayments identified, or if a provider fails to cooperate in good faith with the MFD to resolve the disclosure, the MFD may pursue the matter through established audit or investigation processes, and any less stringent repayment and/or sanction terms may no longer apply. Upon review of the provider's disclosure and related information, the MFD may conclude that the disclosed matter warrants referral to the New Jersey Attorney General's Medicaid Fraud Control Unit (MFCU). Alternatively, the provider may request the participation of a representative of the MFCU, DHHS OIG, the Department of Justice or a local United States Attorney's Office in settlement discussions in order to resolve potential liability under the False Claims Act or other laws.
Access to Information
Providers are expected to promptly comply with MFD requests to provide documents and information materially related to the disclosure and to speak with relevant individuals. The MFD also expects the provider to execute and provide business record affidavits whenever requested, in a form acceptable to the MFD.
The MFD is committed to working with providers in a cooperative manner to obtain relevant facts and evidence without interfering with the attorney-client privilege or work-product protection. Discussions with the provider's counsel will explore ways to gain access to factual or other non-protected information pertinent to the case in the event that documents or other material contain thought processes or advice from the provider's legal counsel, without the need to waive the protection provided by an appropriately asserted claim of attorney-client privilege or attorney work product. Assuming the provider acts in good-faith, the mere fact that the provider and MFD are unable to agree on an amount and resolve the disclosure will not automatically preclude favorable repayment terms, particularly related to the portion of the matter to which the provider and MFD are able to agree.
All provider self-disclosures are subject to a thorough MFD review to determine whether the amount identified is accurate. The MFD will not accept any payment for self-disclosures prior to reviewing the provider's submission, and confirming the accurate amount of the overpayment.
Following the review, MFD staff will consult with the provider's respective state oversight agency to establish a repayment amount and schedule and explore the need to pursue any further administrative action. MFD's determination will be based on several factors, including the nature of the problem, the effectiveness of the provider's compliance program, the dollar amounts involved, the time period, thoroughness and timing of the provider's disclosure, any potential harm to the health and safety of Medicaid recipients and the provider's efforts to prevent the problem from recurring.
Once a repayment amount has been established, assuming full repayment has not previously been made, the MFD expects the provider to reimburse the State of New Jersey for the overpayment with a check for the full amount, or enter into a repayment agreement. Repayments can occur through monthly payments to MFD or by having MFD withhold a portion of that provider's weekly reimbursement. The MFD will work with providers to establish repayment terms, which may include some forgiveness of interest and/or extended repayment. Providers interested in extended repayment terms will be required to submit audited financial statements, if available, and/or other documentation to assist the MFD in making that determination. The MFD will assess a provider's culpability and good-faith efforts in reaching the disposition of a self-disclosure. Cooperation will be measured by the extent to which a provider discloses relevant facts and evidence, not its waiver of the attorney-client privilege or work product protection. A lack of information may make it difficult for MFD to determine the nature and extent of the conduct which caused the improper payment. Once the repayment has been finalized, the MFD will issue a letter indicating closure of the matter.