Township Adult Medical Day Care Center Found To Have Over-Billed Medicaid

A township adult medical day care center was one of 21 centers throughout the state identified by state officials to have over-billed for Medicaid-eligible services between 2016 and 2021.

The center, Rainbow Home Medical Day Care on Campus Drive, was cited by the state Office of the Comptroller for having over-billed $12,050.10. The company repaid the over-billed amount in August of 2022.

According to a May 16, 2022 letter to Rainbow from the Comptroller’s Medicaid Fraud Division, the division’s review found that Rainbow had over-billed in three main areas:

  • 123 claims for services rendered for more than five days per week, totaling $9,838.10
  • 19 claims for patients while they were admitted to an inpatient facility such as a hospital or skilled nursing center, totaling $1,507.50
  • 9 claims for recipients while they were receiving services from another adult medical day care center, resulting in a duplication of services, totaling $704.50.

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.

Statewide, the OSC review found 21 centers that had over-billed $946,087 during the six-year review period, according to a press release. OSC has so far recouped $839,000 of that money, the release said.

“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,” Josh Lichtblau, Director of the Medicaid Fraud Division at OSC, said in the release. “That’s a waste of tax dollars and drains resources from the people who need them.”

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, according to the release.

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, according to the release.

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, according to the release.

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, the release said.

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

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