The Medicaid Fraud Division of the Office of the State Comptroller works to improve both the efficiency and integrity of the New Jersey Medicaid, FamilyCare, and Charity Care programs by investigating, detecting and preventing Medicaid fraud and abuse. The division serves as the watchdog over both providers and recipients of Medicaid services in order to ensure that those services are delivered in a quality manner and only to those who truly qualify for them.

History of the Medicaid Fraud Division

The New Jersey "Medicaid Program Integrity and Protection Act", C.30:4D-53 et seq. established the Office of the Medicaid Inspector General to detect, prevent, and investigate Medicaid fraud and abuse, recover improperly expended Medicaid funds, enforce Medicaid rules and regulations, audit cost reports and claims, and review quality of care given to Medicaid recipients.

On June 29, 2010, Governor Chris Christie signed P.L. 2010, Chapter 33, which officially transferred these functions, powers and duties of the Office of the Medicaid Inspector General to the Office of the State Comptroller.

The Office of the State Comptroller then created the Medicaid Fraud Division. The Division conducts investigations of fraud, waste and abuse, performs background checks on all Medicaid provider applicants, and coordinates oversight efforts among all State agencies which provide and administer Medicaid services and programs, including FamilyCare and Charity Care.

The Medicaid Fraud Division also works to recover improperly expended Medicaid funds, enforces Medicaid rules and regulations, audits cost reports and claims, reviews the quality of care given to Medicaid recipients, and excludes or terminates providers from the Medicaid program where necessary.

Additionally, the Division refers criminal prosecutions to the Attorney General's office, issues recommendations for corrective or remedial actions to the Governor, President of the Senate, and Speaker of the General Assembly and conducts educational programs for Medicaid providers, vendors, contractors and recipients.

What We Do

The Medicaid Fraud division is divided into three units: Fiscal Integrity; Investigations; and Regulatory.
  • Fiscal Integrity Unit
    The Fiscal Integrity Unit is made up of the Division's Audit, Data Mining, and Third-party Liability units.

    The Audit Unit conducts audits and reviews of Medicaid providers' billings to ensure compliance with program requirements and, where necessary, to recover overpayments. These activities serve to: monitor the cost-effective delivery of Medicaid services to ensure the prudent stewardship of scarce dollars; ensure the required involvement of professionals in planning care for program recipients; safeguard the quality of care, medical necessity and appropriateness of Medicaid services provided; and reduce the potential for fraud, waste, and abuse. For information on the audit process, please view our Audit Guide Book [pdf 415kB].

    The Data Mining Unit looks for unusual patterns in claim reimbursement from providers and refers findings to the Audit or Investigations Units for further analysis.

    Since Medicaid is the payer of last resort, the Third Party Liability Unit (TPL), working with an outside vendor, seeks to determine whether Medicaid beneficiaries have other insurance. If the recipient has other insurance, TPL recovers money from the private insurer.

  • Investigations Unit The Investigations Unit examines and analyzes the activities of various medical providers including adult medical daycare facilities, pharmacies, durable medical equipment (DME) providers, and laboratories. When an investigation reveals an overpayment made to a provider or recipient as a result of fraud, waste or abuse, the investigator will refer the case upon completion to Recovery and Exclusions to seek recovery of any monies paid and to exclude the provider, where appropriate, from the program. If the conduct is also criminal in nature, the unit will refer the case to the New Jersey Medicaid Fraud Control Unit for additional investigation.

    The Special Projects Unit reviews provider applications for DMEs, pharmacies, laboratories, and adult medical day care centers to verify that potential Medicaid providers have no outstanding criminal or disciplinary complaints.

  • Regulatory Unit
    The Division's Regulatory Unit reviews provider exclusion and termination decisions, represents the Division in all Administrative Law hearings, guides the Investigations Unit and provides guidance regarding pending legislation and proposed changes to existing Medicaid regulations.

    The Recovery and Exclusions Unit sends out Notices of Claim and Notices of Demand, works with federal authorities to ensure the federal government receives its share of a recovery once a recovery is identified and/or received, works with the Division of Medical Assistance and Health Services to ensure fraudulent and excluded providers are terminated, recovers improper payments and collects interest, damages, and penalties from providers and recipients on behalf of the State of New Jersey and where necessary excludes or terminates a provider from the Medicaid program.