Comptroller audit leads to State recovering $9 million through settlement with Medicaid provider

Elizabeth-based nonprofit that assists New Jerseyans with disabilities improperly retained millions in unspent public funds

  • Posted on - 04/21/2022

TRENTON – New Jersey’s Medicaid program has recovered $9 million under a settlement with Community Access Unlimited (CAU), a Medicaid provider that the Office of the State Comptroller (OSC) found in an audit had improperly kept millions of unspent public funds that it was required to return to the Medicaid program.

CAU returned $7.8 million of unspent funds during the course of OSC’s audit. The settlement between CAU and the state Department of Human Services (DHS) brings the total amount of funds recovered from CAU to over $16 million.

OSC released an audit in 2017 that found that the Division of Disability Services (DDS) within DHS – the state entity responsible for overseeing CAU’s contract performance – had not adequately overseen CAU. OSC found that CAU had improperly kept unspent public funds, along with interest on these funds, meant to fund a program for New Jersey residents with disabilities. In addition, the audit revealed that CAU had transferred a significant portion of these unspent funds to a financial institution, where the wife of CAU’s executive director worked as an investment manager, to invest the funds on CAU’s behalf.

“With OSC’s 2017 audit as a catalyst, DHS and CAU entered a settlement that has resulted in millions of dollars being returned to the Medicaid program and to New Jerseyans who rely on Medicaid for their care,” said OSC’s Medicaid Fraud Director Joshua Lichtblau. “This significant settlement, which tracks our audit findings, demonstrates OSC’s commitment to aggressively rooting out fraud, waste and abuse in the Medicaid program, which ensures that public funds are properly spent and accounted for.”

Between 1999 and 2017, CAU was contracted by the State on behalf of DDS to administer the financial elements of a Personal Preference Program (PPP). The PPP program allowed individuals with disabilities to obtain personal care assistance services such as help with bathing, dressing, preparing meals, and housekeeping. Participants could hire someone – a friend, family member, or someone from a personal care assistance agency – to facilitate daily living activities.

CAU acted as a fiscal agent for the program and was responsible for establishing bank accounts for program participants, acting as the custodian for these accounts, and performing bookkeeping and payroll services for participants. By contract, each month the state paid CAU a monthly allowance for each PPP participant, and CAU was required to administer contracted services on behalf of the PPP participants. CAU was required by contract to return annually any unspent funds to the State.  

Over the course of OSC’s audit, CAU returned $7.8 million of retained funds to the State. OSC’s 2017 audit calculated that CAU still improperly retained approximately an additional $10.7 million in unspent participant funds, administrative funds, and accumulated interest.

The audit recommended that DDS should seek the return of all unspent funds that, by contract, were due to the State. DHS followed that recommendation and, through this settlement, has recovered $16.8 million out of approximately $18.5 million in improperly held funds identified in the audit.   

As of June 2017, the State and CAU ended their PPP contractual relationship.  

If you have any information about Medicaid fraud, waste or abuse, file a complaint with OSC or call 1-888-937-2835.

The Office of the State Comptroller (OSC) is an independent State agency that works to make government in New Jersey more efficient, transparent and accountable. OSC is tasked with examining all aspects of government expenditures, conducts audits and investigations of government agencies throughout New Jersey, reviews government contracts, and works to detect and prevent fraud, waste and abuse in Medicaid.

Stay up-to-date with the latest from OSC by following us on Twitter, Facebook, LinkedIn, and on Instagram at @NewJerseyComptroller.

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