Audit Process
Audit Process

The State of New Jersey will perform pre- and post-payment monitoring to ensure that incentive payments are paid in accordance with all Federal and State regulations and policies. Hospitals should keep all documentation supporting attestation for at least 6 years in case of audit.

Pre-Payment Audit and Monitoring

Prior to issuing payment, all cases will be reviewed based on information provided in the attestation. These reviews will include electronic inquiries and manual reviews using available data sources such as the hospital's IT systems, claims and encounter data stored in the New Jersey Medicaid Management Information System (MMIS) as well as State databases and registries.

Checks will be made to verify the following:

  • The hospital is enrolled in New Jersey Medicaid.
  • The hospital is licensed and was licensed for the applicable time frame with no suspensions or revocations.
  • The hospital’s Tax Identification Number (TIN) has been verified by matching with an IRS TIN
  • From a check of claims volume and the supporting information submitted, the minimum patient volume threshold is achieved.
  • No previous year incentive payment was made for providers claiming incentives based on adoption, implementation, or upgrading EHR technology.
  • The hospital has adopted certified EHR technology.
  • The acute care hospital’s average length of stay is less than 25 days for the relevant time period.
Post-Payment Audit and Monitoring

After the payment is issued, each hospital will have an onsite inspection of the documentation supporting their original attestations and other eligibility criteria.  Original documentation to be tested will include, but not be limited to, the documents that support the following information used to calculate the incentive payment:

  • Total acute inpatient discharges for the last 4 completed hospital fiscal years
  • Total acute inpatient bed days for the entire hospital fiscal year completed in the most recently completed federal fiscal year
  • Acute inpatient bed days which Medicaid (Title XIX only, fee-for-service or managed care) paid a share of for the same hospital fiscal year, excluding Medicaid/Medicare dual eligible days
  • Total charges for the hospital fiscal year completed in the most recently completed federal fiscal year
  • Total Charity Care charges for the hospital fiscal year completed in the most recently completed hospital fiscal year

The documentation supporting the adoption, implementation, or upgrade certified EHR technology also will be reviewed.  Representatives of Mercadien, P.C. will perform these onsite inspections and report the findings to the New Jersey Division of Medical Assistance and Health Services.  Click here for an example of the Medicaid Audit Announcement Letter [pdf].


Correcting Overpayments
If an audit determines that an error in payment has been made, a written notification will be created and sent, informing the hospital of the intent to recover funds. Payment plans will be considered and will require the provider to sign a promissory note.