New Jersey, Maine to Pay Back Millions in Federal Medicaid Payments

A series of improper payments have left New Jersey’s and Maine’s Medicaid programs with sizeable bills from the federal government, which splits the cost of the programs with the states. Maine is estimated to owe $3.8 million for its mistake, while New Jersey’s debt comes to a hefty $61 million.

MaineCare’s $7.7 Million Computer Malfunction

Mary Mayhew, Maine’s Health and Human Services (DHHS) Commissioner, came forward with the information that MaineCare, the state’s Medicaid program, paid $7.7 million for medical services for people who were ineligible for the program. An error in the DHHS’s computer system resulted in 7,730 people remaining on MaineCare’s rolls that should have been removed due to a change in eligibility status.

DHHS and Mayhew have faced a great deal of criticism for waiting to disclose the computer problem until the state’s legislature passed a budget that helped patch DHHS’s budget to avoid the reduction of benefits to MaineCare beneficiaries. Many state legislators have called for an official investigation into the whether DHHS could have disclosed the improper payments at an earlier date.

Representative Peggy Rotundo addressed Mayhew at a meeting of the legislature’s Appropriations Committee, raising concerns that “[w]e did not get this information in a timely way when we were putting together the budget. We were having public discussions about figures and wanting to get accurate figures, and someone out there was not tuned in to the fact that numbers were relevant to what we were doing.”

Mayhew responded that it was difficult for the department to ascertain which computer system problems required reporting to legislators because the problems were so numerous. She also cast doubt on whether the portion of the improper payments made by the state could be recovered, saying, “These health care providers that provided services had a card” and properly provided services to residents they saw as eligible for MaineCare services. “I don’t see an opportunity to recover,” she concluded.

New Jersey’s Undocumented Services

During a 2 year period, from 2005 to 2007, New Jersey’s Medicaid program received $1.4 billion for a home care program, which aims to keep mentally and physically disabled beneficiaries out of institutions. In addition to frequently failing to follow federal procedures, the state neglected to document many services that it billed for, such as respite care. Often, patients’ disabilities were not regularly assessed, as required for federal reimbursement.

In October, Valerie Harr, the director of the state’s Division of Medical Assistance and Health Services, sent a letter to federal government auditors, supplying them with supplementary documents and requesting a recalculation of the Medicaid program’s debt. Auditors responded with a bill of $61 million, less than the originally estimated $90 million.