New Medicaid Fraud Audit Finds Big Problems in NJ, Whistleblowers Needed

The U.S. Department of Health and Human Services released its audit findings of the New Jersey Medicaid Nonemergency Medical Transportation program. The results are alarming; as much as 88% of the claims submitted through New Jersey’s program didn’t meet program standards. In just one 12 month period, auditors believe that some 2,538,674 claims worth $65 million dollars did not comply with program requirements.

Following a poor audit in 2006, New Jersey farmed out administration of its nonemergency medical transport program to a private vendor. As the new audit report reveals, that vendor appears to have not done its job properly.

The federal Health and Human Services’ Inspector General serves as the watchdog for both Medicare and Medicaid healthcare programs. Because Medicaid is funded with both state and federal tax dollars, either the state or federal government can investigate claims of Medicaid fraud. Here the Inspector General audited New Jersey’s nonemergency medical transportation program to see if it was in compliance. It wasn’t. That doesn’t mean that New Jersey engaged in any fraud, however.

New Jersey’s Medicaid’s Medical Transportation Program

Medicaid is primarily the primary low income health insurance program in New Jersey. It is funded with both state and federal tax dollars. The program pays for rides to and from medical appointments. Unfortunately, medical transportation has long been rife with fraud. Already over a dozen ambulance companies and their executives have been prosecuted for Medicaid fraud in the southern portion of New Jersey and across the border into Philadelphia.

Under New Jersey’s present nonemergency medical transportation program, a private vendor administers the program. That vendor is required to maintain a provider network, verify beneficiary eligibility, authorize the appropriate mode of transport on the basis of medical necessity, and dispatches vehicles to transport the beneficiary.

In just one year, New Jersey and the federal government paid NJ’s vendor, LogistiCare, $113,259,311 for nonemergency transportation.

As a result of an audit by the Inspector General, the government believes that the vendor has failed to properly perform its job. Specifically, the audit found major problems in the program including a failure to insure that:

  • “vehicles used to transport Medicaid beneficiaries met State requirements,
  • transport personnel were licensed and qualified,
  • prior authorizations were obtained and medical necessity documentation was maintained for beneficiaries who required certain transportation services,
  • transportation providers maintained required insurance coverages,
  • beneficiaries received Medicaid-eligible medical services on the date of transportation, and
  • transportation services were adequately documented.”

After randomly sampling dozens of claims, the audit suggested that 88% of the claims failed to meet program requirements.

New Jersey has agreed with most of the findings. It is working with the federal government to amend its contract to better hold vendors responsible for noncompliance.

Emergency medical transportation programs all over the country are rife with fraud. Whistleblowers are needed to help overworked auditors spot problems and prosecute offenders. Both the New Jersey state government and the U.S. Department of Justice have programs to pay whistleblower awards to those who come forward to report fraud. Both also have whistleblower protection laws to prevent and address retaliation by an employer.

Medicaid Fraud and Whistleblower Awards

Whistleblowers with inside (“original source”) information about Medicaid fraud are entitled to an award of up to 30% of whatever money is recovered by federal or New Jersey state prosecutors.

If you have information about Medicaid fraud anywhere in New Jersey, contact us at 888.742.7248 or use our online report form. To date, whistleblowers have received over $1 billion in awards nationwide.

Disclaimer. The Coalition of State Healthcare Services is a nonprofit advocacy group hoping to stop Medicaid fraud, protect taxpayers, protect whistleblowers and protect patients. We are not a government agency. In general, calling the hotlines operated by most state agencies can help you receive an award of up to $1000. To earn the larger awards (million dollar awards are possible), one must file a sealed complaint and follow strict state and federal guidelines. The Coalition can help you find a lawyer to file a complaint and find a lawyer to protect you if you suffer retaliation. We never charge for our services.


Medicaid Fraud Hotline: 888.742.7248 or Report Online