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U.S. Inspector General Audit Reports Show Improper Billing of Family Planning Services in NJ

by Staff
August 17, 2010
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MEDIA ADVISORY, (christiansunite.com) -- For weeks, certain NJ lawmakers have been lobbying to restore $7.5M in funds to family planning/Planned Parenthood clinics and to force the state of NJ to apply for a federal waiver which would reimburse these clinics 90% for every Medicaid service they provide.

Audits performed by the U.S. Inspector General for the Department of HHS uncovered a consistent problem with NJ family planning clinics improperly billing Medicaid for services that did not qualify as family planning. State officials were sent letters in July 2007, June 2008 and August 2008 notifying them of the problems and requesting action to correct the errors. The three reports covered the period from February 1, 2001 through January 31, 2005. The first audit identified that the state of New Jersey improperly received federal reimbursement at the enhanced 90% rate for 160,955 prescriptions drug claims that were billed as family planning, but did not qualify as family planning services. In the letter and accompanying report to Commissioner Velez, the Inspector General recommended that NJ repay $2,219,746 to the Federal Government.

The second audit by the U. S. Inspector General for the Department of HHS found that family planning clinics improperly received the enhanced 90% rate for outpatient services which did not qualify as family planning services. Of the 107 claims, 64 were for family planning services eligible for Federal Medicaid reimbursement at the 90 percent rate and 43 claims did not qualify as family planning services, and were therefore ineligible for Federal Medicaid reimbursement at the 90% rate. The report specifically cites Planned Parenthood Providers who told investigators that they billed all claims to Medicaid as "family planning" and "populated the family planning indicator field on Medicaid claims even though the service provided did not meet the criteria for 90 percent Federal funding." As a result, a letter and the report was sent to the Commissioner of Human Services on June 17, 2008, by the Office of Inspector General recommending that the state refund $597,496 to the Federal Government and amend their procedures to prevent improper billing in the future.

The third audit found that the state of NJ received Federal Medicaid reimbursement for 111 of the 161 claims for inpatient services which were improperly billed as family planning at the enhanced 90 percent rate. As a result, the OIG recommended that the state of NJ reimburse $162,548 to the federal Government and determine the amount of federal Medicaid funds improperly reimbursed at the 90% rate for inpatient hospital services following the audit period and refund that amount to the Federal Government.

The facts cannot be denied. These audits show a systematic abuse of improper billing of Medicaid for family planning services to the federal government to obtain 90% reimbursement. Planned Parenthood has been cited specifically as one of the principal agents of these improper billing practices by the OIG. Page five of the 2008 report entitled, "Review of Outpatient Medicaid Claims Billed as Family Planning by New Jersey" says, "During our visits to family planning clinics throughout the State, many providers (especially Planned Parenthood providers) stated that they billed all claims to Medicaid as 'family planning.' Therefore, officials at these clinics often populated the family planning indicator filed on Medicaid claims even though the service provided did not meet the criteria for 90 percent Federal funding. By populating this field, the MMIS designated the claim as eligible for 90 percent Federal funding."

Planned Parenthood's supporters not only want to use $7.5M in taxpayer dollars to fund these family planning clinics, they also want the state of NJ to permanently apply for a federal waiver to reimburse family planning clinics 90% for every Medicaid service they provide despite the clinics' history of improperly billing Medicaid and contributing to the nearly $3M in fees calculated by the Federal Government to be refunded to them. Taxpayers should be outraged. These facts should give every legislator who voted for Bill S2139 a good reason to now oppose any misguided effort to override Governor Christie's veto.

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