TRENTON—The Office of the State Comptroller (OSC) released a review today that found 21 adult medical day care (AMDC) providers in New Jersey improperly billed and received payment of  $946,087 in Medicaid funds. 

The 21 AMDCs improperly billed for duplicative services and/or billed for services that exceeded the amount permitted by Medicaid regulations. OSC’s Medicaid Fraud Division examined all AMDC claims for the period from January 2016 through May 2022 and ultimately identified more than 11,000 claims that violated Medicaid regulations in one or more of the following ways:

• Billed for more than five days of services in a week
• Billed for services for a beneficiary who was actually an inpatient at a different facility
• Billed for services provided to a beneficiary when another AMDC also billed for the identical service on the same date.

OSC seeks full repayment from these AMDCs and has so far recouped $839,000.

“Whether the improper billing was due to careless mistakes or intentional fraud, these AMDCs were paid for services that were unauthorized and in some cases, not delivered,” said Josh Lichtblau, Director of the Medicaid Fraud Division at OSC. “That’s a waste of tax dollars and drains resources from the people who need them.”

AMDCs are day programs that provide medically necessary services for the elderly and disabled adults who need assistance with one or more activities of daily living.  The most common and costly issue identified in OSC’s review was the AMDCs' improper billing in excess of five days of service per week for an individual beneficiary – which violates Medicaid regulations. OSC found 7,849 claims, totaling $613,286, in which the AMDC billed in excess of five days of services per week for an individual beneficiary.

The five AMDCs with the highest total overpayments were New Life Adult Care, Peaceful Adult Day Care, and Atmiya Adult Day Care, all in Bergen County, along with Golden Path Adult Day Care in Middlesex County, and Signature Medical Day Care in Essex County.   All five have repaid their identified overpayments in full.

Most of the others have agreed to repay in full. OSC is continuing to pursue recoveries from AMDCs who have not yet repaid these funds.

To prevent future improper payments, OSC recommended that the State and the managed care organizations (MCOs) the NJ Medicaid program contracts with implement cost containment tools to automatically identify and reject these types of improper claims. The New Jersey Division of Medical Assistance and Health Services (DMAHS), which administers Medicaid, agreed and two of the five managed care organizations agreed. The others either didn’t respond or made alternative suggestions that OSC found insufficient.

“These systemic fixes may save New Jersey Medicaid hundreds of thousands of dollars a year,” said Lichtblau. He noted that OSC is continuing to review other AMDCs for these same violations and will seek recoveries as warranted. 

READ OSC’s REPORT

Sign up now for OSC's newsletter.  

To report government fraud, waste, mismanagement, or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.