TRENTON – An audit by the Office of the State Comptroller (OSC) finds a mental health provider failed to conduct criminal background checks of employees who treat minors, and this failure went undetected by the State until OSC’s audit. 

As a result, OSC has urged the New Jersey Division of Medicaid Assistance and Health Services (DMAHS), part of the Department of Human Services, to issue a new rule to require intensive in-community (IIC) providers to undergo a fingerprint-based background check from the State, prior to being allowed to treat children and young adults. IIC providers offer mental health services to youths who are Medicaid beneficiaries. 

Currently, IIC providers are required to obtain criminal background checks of behavioral assistants. But there is no government oversight to make sure that happens, and there is no requirement for a fingerprint-based check, which is considered the gold standard.   

OSC audits have uncovered egregious examples of providers that failed to conduct required background checks yet billed for and received Medicaid payments.  

The latest case involved John Gore, a South Plainfield, NJ licensed drug and alcohol counselor, who improperly billed and received Medicaid payments totaling $1.1 million that he must repay to the Medicaid program. Gore also allowed behavioral assistants that he employed to provide services to minors, typically in a one-on-one setting, without having first undergone successful criminal background checks.     

According to Josh Lichtblau, Director of OSC’s Medicaid Fraud Division, “It’s standard practice for teachers, doctors, coaches, and many others who work with children to undergo fingerprint checks. Children who are in these Medicaid-funded community programs are entitled to the same protection.” 

Back in November 2021, OSC notified DMAHS about the flaws in the current regulations and the risks they posed to children; OSC recommended that DMAHS adopt comprehensive regulations, seek legislative changes, or more immediately, provide guidance to IIC providers.   

In September 2022, DMAHS issued a newsletter that informed providers that they should contact the state’s Children’s System of Care to initiate a fingerprint-based background check, but it left the responsibility for compliance on the provider. DMAHS proposed a new rule in January 2023 that failed to address any of the flaws OSC identified in November 2021 - it did not contain a fingerprint requirement, and it did not entail oversight from the State.  

On February 6, 2023, OSC sent another letter to DMAHS, again urging the division to initiate rulemaking to address the risks posed by the continued lack of oversight. “Our findings are serious. When providers fail to ensure that employees have clean criminal backgrounds, they’re placing vulnerable children in potentially unsafe circumstances,” said Lichtblau. “The State should work quickly to close this gap in oversight.”   

As an intensive in-community mental health rehabilitation and behavioral assistance services provider, Gore provides services to children and young adults. In addition to personally providing services, Gore also billed for services provided by 116 other behavioral health professionals with whom he contracted.   

OSC’s audit found that Gore failed to comply with state regulations in about 34 percent of claims OSC sampled. OSC also found that Gore billed for unsubstantiated services, maintained inaccurate and incomplete records, and failed to ensure that his providers had current and valid drivers’ licenses before allowing these providers to provide services to Medicaid beneficiaries.  

Other deficiencies include: 

• Gore assigned cases to behavioral assistants without confirming they had the required professional licenses. OSC determined that six did not.    
• Gore failed to ensure that behavioral assistants had the required training certifications. OSC confirmed that 24 did not.    

Gore is required to reimburse Medicaid $1.1 million.  

Read OSC’s letters to DMAHS. 

Read OSC’s audit of John Gore.  

To report government fraud, waste, mismanagement or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.