Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
N J M
  EW  ERSEY  EDICAID 
 
F C U : 
  RAUD  ONTROL  NIT
 
2013 O R  
NSITE  EVIEW 
 
Stuart Wright  
Deputy Inspector General for 
Evaluation and Inspections 
 
September 2013 
OEI-02-13-00020   
   
EXECUTIVE SUMMARY:  NEW JERSEY MEDICAID FRAUD CONTROL UNIT:  
2013 ONSITE REVIEW 
OEI-02-13-00020 
 
WHY WE DID THIS STUDY 
 
The Office of Inspector General (OIG) oversees all Medicaid Fraud Control Units 
(MFCU or Unit) with respect to Federal grant compliance.  As part of this oversight, 
OIG reviews all Units. These reviews assess Unit performance in accordance with the 
12 MFCU performance standards and monitor Unit compliance with Federal grant 
requirements, laws, and regulations.   
 
HOW WE DID THIS STUDY  
 
We based our review on an analysis of data from seven sources:  (1) a review of policies, 
procedures, and documentation related to the Units operations, staffing, and caseload; 
(2) a review of financial documentation; (3) structured interviews with key stakeholders; 
(4) a survey of Unit staff; (5) structured interviews with the Units management and staff; 
(6) an onsite review of case files; and (7) an onsite review of Unit operations. 
 
WHAT WE FOUND 
 
From fiscal year (FY) 2010 through FY 2012, the Units recoveries increased but felony 
charges and convictions decreased. The Unit also investigated fewer cases of patient 
abuse and neglect in FY 2012 than in FY 2010.  Although most case files included 
opening and closing documents, half lacked documentation of supervisory review.  
Further, the Unit did not refer 94 percent of convictions to OIG appropriately.  The Unit 
also did not meet the requirements of its training plan in FY 2012.  In addition, the Unit 
Director does not supervise the majority of Unit staff and does not oversee part of the 
Units caseload.  Lastly, the Unit identified as beneficial a case management tool that 
tracks tasks and deadlines and includes descriptions of investigative and legal issues that 
arise. 
   
WHAT WE RECOMMEND 
 
We recommend that the Unit:  (1) take steps to ensure that its case mix includes more 
cases of patient abuse and neglect; (2) ensure that  case files contain supervisory reviews;  
(3) appropriately refer individuals to OIG for program exclusion; (4) ensure that staff 
receive at least the minimum training required in the Units training plan; and (5) change 
its supervisory structure to provide the Unit Director with supervision of all of the Units 
staff and oversight of all of its caseload.  The Unit concurred with our first four 
recommendations and described plans to implement each.  In response to the fifth 
recommendation, the Unit did not specifically state whether it concurred. 
 
 
 
 
   
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................4 

Findings........................................................................................................7 

From FY 2010 through FY 2012, Unit recoveries increased but 

felony charges and convictions decreased .......................................7 

The Unit investigated fewer cases of patient abuse and  

neglect in FY 2012 than in FY 2010. ...............................................7 

Although most case files included opening and closing  

documents, half lacked documentation of supervisory review  ........8 

The Unit did not refer 94 percent of convictions to OIG 

appropriately ....................................................................................9 

The Unit did not meet the requirements of its training plan in  

FY 2012 ............................................................................................9 

The Unit Director does not supervise the majority of Unit staff 
  
and does not oversee part of the Units caseload ...........................10 

Other observation: Case management tool ...................................12 

Conclusion and Recommendations ............................................................13 

Unit Comments ..........................................................................................15 

Appendixes ................................................................................................17 

A: Performance Standards for Medicaid Fraud Control Units .....17 

B: Referrals of Patient Abuse and Neglect, Provider Fraud, and 

Theft of Patient Funds to the Medicaid Fraud Control Unit by 

Source, Fiscal Years 2010 through 2012 ........................................21 

C: Cases Opened and Closed by Provider Category and Case 

Type, Fiscal Years 2010 through 2012 ...........................................22 

D: Organizational Chart ................................................................25 

E: Confidence Intervals for Estimates ..........................................26 

F: Unit Comments.........................................................................27 

Acknowledgments......................................................................................34 

 
 
   
   
OBJECTIVES 
To conduct an onsite review of the New Jersey State Medicaid Fraud 
Control Unit (MFCU or Unit). 
BACKGROUND 
The mission of State MFCUs, as established by Federal statute, is to 
investigate fraud and patient abuse and neglect by Medicaid providers and 
to prosecute it under State law.1  Pursuant to Title XIX of the SSA, each 
State must maintain a certified Unit unless the Secretary of Health and 
Human Services determines that operation of a Unit would not be 
cost-effective because (1) minimal Medicaid fraud exists in that State and 
(2) the State has other adequate safeguards to protect Medicaid 
beneficiaries from abuse and neglect.2  Currently, 49 States and the 
District of Columbia (States) have created such Units.3 In fiscal year 
(FY) 2012, combined Federal and State grant expenditures for the Units 
totaled $217.3 million, with Federal funds representing $162.9 million of 
this amount.4  In FY 2012, the New Jersey Unit was awarded $5.8 million 
in combined State and Federal funds.5    
To carry out its duties and responsibilities in an effective and efficient 
manner, each Unit must employ an interdisciplinary staff that consists of at 
least an investigator, an auditor, and an attorney.6  Unit staff review 
complaints provided by the State Medicaid agency and other sources and 
determine their potential for criminal prosecution and/or civil action.  In 
FY 2012, the 50 Units collectively obtained 1,337 convictions and 
823 civil settlements or judgments.7   That year, the Units reported 
recoveries of approximately $2.9 billion.   
 
1 Social Security Act (SSA)  1903(q).  

2 SSA   1902(a)(61).  Regulations at 42 CFR 1007.11(b)(1) add that the Units 

responsibilities may include reviewing complaints of misappropriation of patients 

private funds in  residential health care facilities. 

3 North Dakota and the territories of American Samoa, Guam, the Northern Mariana 

Islands, Puerto Rico, and the U.S. Virgin  Islands have not established Units. 

4 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures And 

Statistics, March 2013.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2012.asp on  March 5, 2013.  All  FY references in
  
this  report  are based on  the Federal FY  (October 1 through September 30). 
 
5 Office of Inspector General (OIG) analysis of Notice of Award for New Jersey for  

FY 2012. 
  
6 SSA    1903(q)(6) and  42 CFR 1007.13. 

7 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures And 

Statistics, March 2013.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2012.asp on  March 5, 2013.  
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Units are required to have either Statewide authority to prosecute cases or 
formal procedures to refer suspected criminal violations to an agency with 
such authority.8 In New Jersey and 43 other States, the Units are located 
within offices of State Attorneys General; in the remaining six States, the 
Units are located in other State agencies.9 Generally, Units outside of the 
Attorneys General offices must refer cases to other offices with 
prosecutorial authority. 
Additionally, each Unit must be a single identifiable entity of State 
government, distinct from the State Medicaid agency, and each Unit must  
develop a formal agreementi.e., a Memorandum of Understanding 
(MOU)that describes the Units relationship with that agency.10   
Oversight of the MFCU Program  
The Secretary of Health and Human Services delegated to OIG the authority 
to annually certify the Units and to administer grant awards to reimburse 
States for a percentage of their costs in operating certified Units.11  All Units  
are currently funded by the Federal Government on a 75-percent matching 
basis, with the States contributing the remaining 25 percent.12   To receive  
Federal reimbursement, each Unit must submit an initial application to 
OIG.13  OIG reviews the application and notifies the Unit if the application is 
approved and the Unit is certified. Approval and certification are for a 
1-year period; the Unit must be recertified each year thereafter.14    
Pursuant to Title XIX of the SSA, States must operate Units that effectively 
carry out their statutory functions and meet program requirements.15  OIG 
developed and issued 12 performance standards to define the criteria it 
applies in assessing whether a Unit is effectively carrying out statutory 
 
8  SSA  1903(q)(1). 
 
9 Among those States with a Unit, the Unit shares responsibility for protecting the 

integrity of the Medicaid  program with the section of the State Medicaid agency that 

functions as the Program Integrity Unit.  Some States also employ a Medicaid Inspector 

General who conducts and coordinates activities combating  fraud, waste, and abuse for 

the State agency. 

10  SSA  1903(q)(2); 42  CFR  1007.9(d). 
  
11 The portion of funds reimbursed to States by the Federal  Government for its share of 
 
expenditures for the Federal  Medicaid program, including  the MFCUs, is  called Federal 
 
Financial Participation.  

12  SSA 1903(a)(6)(B).  

13 42 CFR   1007.15(a). 

14 42 CFR   1007.15(b) and  (c). 

15  SSA  1902(a)(61). 
 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  2  
 
   
   
functions and meeting program requirements.16  Examples include 
maintaining an adequate caseload through referrals from several sources, 
maintaining an annual training plan for all professional disciplines, and 
establishing policy and procedure manuals to reflect the Units operations.  
See Appendix A for a complete list of the performance standards.17  
New Jersey Unit  
The Unit is located in the New Jersey Attorney Generals Office.  The 
MFCU Director reports to the Insurance Fraud Prosecutor, who reports 
directly to the Attorney General. The Insurance Fraud Prosecutor, 
appointed by the Governor, is also responsible for investigating and 
prosecuting automobile and property fraud.  The Unit has the authority to 
prosecute Medicaid fraud and patient abuse and neglect cases and also 
includes a False Claims Unit that is responsible for civil cases of health 
care fraud.  
As of January 2013, the Unit had 35 employees22 located in the State 
capital of Trenton, and 13 located in a satellite office in Whippany.18   
Investigative teams are composed of Unit attorneys, with support from at  
least two  detectives assigned by the Unit Director.  As needed, auditors 
and/or support staff may also be assigned to the teams.  
The Unit receives referrals of provider fraud from the State Medicaid 
agencythe Division of Medical Assistance and Health Services 
(DMAHS), in the Department of Human Servicesand from the 
Medicaid Fraud Division in the Office of the State Comptroller.  The Unit 
receives referrals of patient abuse and neglect from the State Ombudsman 
for the Institutionalized Elderly (the States Long-Term Care 
Ombudsman) and from the Division of Health Facilities Evaluation and 
Licensing, the State survey and certification agency.  From FY 2010 
through FY 2012, the Unit received an average of 70 referrals of fraud 
each year, and an average of 63 referrals of patient abuse and neglect each 
year. (See Appendix B for a breakdown of referrals by type, year, and 
source.) 
 
16 59 Fed. Reg. 49080 (Sept. 26, 1994).  Accessed at http://oig.hhs.gov on   
November 5, 2012.  OIG published  a revision of  the performance standards, 77  Fed.  Reg. 
32645 (June 1, 2012).  This review applies the previous standards (published on  
September 26, 1994) for the review  period  of FY  2010 through May 31, 2012, and the 
standards published on  June 1,  2012, when  assessing Unit operations after May  31, 2012.  
17 Appendix  A contains the performance standards dated September 26, 1994.  For the  
June 1,  2012, performance standards, see  
https://oig.hhs.gov/authorities/docs/2012/PerformanceStandardsFinal060112.pdf. 
18 The Unit Director has an  office in  both locations.  
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When the Unit receives a referral, it determines whether the referral has 
the potential for criminal or civil prosecution.  For referrals that are civil in 
nature, the Unit assigns them to the False Claims Unit.19 See Appendix C 
for additional information on the Units opened and closed cases, 
including a breakdown by case type and provider category. 
The Unit may open a case and pursue it through a variety of actions, 
including criminal prosecution or civil action.  The Unit may close a case 
through a criminal or civil resolution or through a referral to another 
agency, or for other reasons.   
The Unit participated in several globali.e., multi-Statecivil cases, 
coordinated by the National Association of Medicaid Fraud Control Units 
(NAMFCU), during the review period.  One of the Units attorneys serves  
as an intake attorney on these cases. 
METHODOLOGY 
Our review covered the 3-year period of FYs 2010 through 2012.  We  
analyzed data from seven sources:  (1) a review of policies, procedures, 
and documentation relating to the Units operations, staffing, and caseload 
for FYs 2010 through 2012; (2) a review of financial documentation for 
FYs 2010 through 2012; (3) structured interviews with key stakeholders; 
(4) a survey of Unit staff; (5) structured interviews with the Units 
management and staff; (6) an onsite review of case files that were open in 
FYs 2010 through 2012; and (7) an onsite review of Unit operations 
conducted in January 2013. 
We analyzed data from all seven sources to describe the caseload and 
assess the performance of the Unit.  We also analyzed the data to identify 
any opportunities for improvement and any instances in which the Unit 
did not meet the performance standards or was not operating in 
accordance with laws, regulations, and policy transmittals.20 In addition, 
we described noteworthy practices that appeared to benefit the Unit, based 
on statements from Unit staff, data analysis, and our own judgment.  We  
did not independently verify the effectiveness of these practices, but 
 
19 The Unit may also open cases that were not referred by another agency.  For example, 
a case may be initiated from work on  a related case.  The Unit may also join a False 
Claims Act case initiated by the National Association of Medicaid Fraud Control Units 
(NAMFCU).   NAMFCU is a  voluntary association of all  50  Units that provides training  
opportunities and facilitates the settlement of global (multi-State) civil False Claims  
Act cases involving the U.S.  Department of  Justice and other State MFCUs.  More 
information on NAMFCU and its involvement in  global cases is available online at 
http://www.namfcu.net.  
20  All relevant  regulations, statutes, and  policy transmittals are available online at 
http://oig.hhs.gov.  
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  4  
 
   
   
included the information because it may be useful to other Units in their 
operations. 
Data Collection and Analysis 
Review of Unit Documentation.   We requested and reviewed documentation, 
policies, and procedures related to the Units operations, staffing, and cases, 
including its annual reports, quarterly statistical reports, and responses to 
recertification questionnaires.  We also requested and reviewed the Units  
data describing its caseload, prosecutions, and recoveries.  Data collected 
included information such as the number of referrals received by the Unit 
and the number of investigations opened and closed.   
Review of Financial Documentation. To evaluate internal controls, we 
reviewed policies and procedures related to budgeting, accounting systems, 
cash management, procurement, property, and personnel.  We obtained from  
the Unit its claimed grant expenditures for FYs 2010 through 2012 so that 
we could:  (1) review final Federal Status Reports21  and supporting 
documentation, (2) select and review transactions within categories of direct 
costs to determine whether costs were allowable, and (3) verify that indirect 
costs were accurately computed using the approved indirect cost rate.  We  
also reviewed records in the HHS Payment Management System (PMS)22  
and revenue accounts to identify any unreported program income.23  
Interviews With Key Stakeholders. We conducted structured interviews 
with nine individual stakeholders who were familiar with Unit operations.  
Specifically, we interviewed the two individuals who served as Unit 
directors during our review period. We also interviewed the Acting 
Insurance Fraud Prosecutor; the Director of the Medicaid Fraud Division 
within the Office of the State Comptroller; the Ombudsman for the 
Institutionalized Elderly; the Deputy Chief of Detectives for the Division 
of Criminal Justice; the Assistant Division Director for the Division of 
Medical Assistance and Health Services in the Department of Human 
Services; the Assistant Commissioner for the Division of Health Facilities 
Evaluation and Licensing in the New Jersey State Department of Health; 
and the Assistant Special Agent in Charge for OIGs Region II. These 
interviews focused on the Units interaction with external agencies, Unit 
 
21 The Unit transmits financial status reports to OIGs Office of Management and Policy 
on a quarterly and annual basis.  These reports detail Unit income and expenditures. 
22 The PMS is a grant payment system operated and maintained  by the HHS Program  
Support Center, Division  of Payment Management.  The PMS provides  disbursement, 
grant monitoring, reporting, and cash management services to awarding agencies and 
grant recipients, such as the Units. 
23 Program income is defined as gross income received by the grantee or subgrantee 
directly generated by a grant supported activity, or earned only as a result of the grant 
agreement during the grant period.  45 CFR   92.25(b). 
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operations, opportunities for improvement, and any practices that appeared 
to benefit the Unit and that may be useful to other Units in their 
operations. 
Survey of Unit Staff.  We conducted an electronic survey of all   
nonmanagerial Unit staff.  We requested and received responses from each 
of the 29 nonmanagerial staff members, for a 100-percent response rate.   
Our questions focused on operations of the Unit, opportunities for 
improvement, and practices that appeared to benefit the Unit and that may be 
useful to other Units in their operations.   The survey also sought information 
about the Units compliance with applicable laws, regulations, and policy 
transmittals.    
Interviews with Unit Management and Staff.  We conducted structured 
interviews with the Units Director (also the Chief  Attorney for criminal 
cases), the assistant section chief, the Chief  Attorney for False Claims  Act 
cases, and the senior investigator.  We asked these managers to provide us 
with additional information to better understand the Units operations, 
identify opportunities for improvement, identify practices that appeared to 
benefit the Unit and that may be useful to other Units, and clarify 
information obtained from other data sources.  We also interviewed the 
Units two auditors, two attorneys from  the False Claims Unit, and the nurse 
investigator.  We asked similar questions of these staff. 
Onsite Review of Case Files. We selected a simple random sample of      
100 case files from the 1,004 cases that were open at any point from  
FY 2010 through FY 2012. The design of this sample allowed us to 
estimate the proportion of all 1,004 case files with certain characteristics at 
the 95-percent confidence level. We reviewed these 100 sampled case 
files and the Units processes for monitoring the status and outcomes of 
cases. From these 100 case files, we selected another simple random  
sample of 50 cases for a more in-depth review.  
Onsite Review of Unit Operations. While onsite, we reviewed the Units 
operations. Specifically, we reviewed the Units process for intake of 
referrals, security of data and case files, and the general functioning of the 
Unit. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency.  
   
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FINDINGS 
From FY 2010 through FY 2012, Unit recoveries  
increased but felony charges and convictions 
decreased 
The Unit experienced an 80 percent increase in recoveries from FY 2010 
through FY 2012. Global civil false claims cases accounted for much of 
the increase in recoveries.  In total, the Unit reported recoveries of  
$144 million in 3 yearsan average of $48 million annually (see Table 1).   
Table 1: New  Jersey MFCU Recoveries, FYs 2010 through 2012  
  Annual  
 
FY 2010   FY 2011   FY 2012   Total   Average 
Reported  
Criminal 
Recoveries  $241,220  $692,552   $255,690  $1,189,462   $396,487 
Reported Civil 
Recoveries  
State Only   $0  $0  $2,266   $2,266   $755  
Reported Civil 
Recoveries  
Global  $43,781,406  $20,423,360  $78,637,924  $142,842,690   $47,614,230  
Total Reported 
Recoveries 
$44,022,626  $21,115,912  $78,895,880  $144,034,418   $48,011,473 
Source:   OIG  analysis  of  Unit  data,  2013.  
At the same time, the Units criminal prosecutions saw a marked decrease.   
Specifically, the number of convictions decreased from 54 to 13, while the 
number of individuals or corporations charged with a felony decreased 
from 60 to 18.  The Unit Director explained that the decrease resulted 
from the Unit making a shift towards more complex, high-profile cases, 
which take longer to prosecute. She further stated that this strategy will 
yield more defendants charged per case.  
The Unit investigated fewer cases of patient abuse and 
neglect in FY 2012 than in FY 2010 
According to Performance Standard 4, the Unit should take steps to ensure 
that it maintains an adequate workload through referrals from the State 
Medicaid agency and other sources. The Unit should also ensure that it 
receives adequate referrals of patient abuse complaints from all sources.  
From FY 2010 through FY 2012, the Units number of cases of patient 
abuse and neglect decreased 70 percent, from 108 to 32.   
We identified two actions by the MFCU that may explain this decrease in 
abuse and neglect cases.  In  2010,  the  Unit  dismantled  its Patient Protection 
Unit, which focused solely on patient abuse and neglect cases.  A number 
of staff noted that the Patient Protection Unit was helpful in maintaining a 
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unique focus on these issues and that its staff were highly specialized.   
The Patient Protection Unit also worked closely with a number of 
potential referral sources, including the State Department of Health, the 
Office of the Ombudsman for the Institutionalized Elderly, and the State 
Medicaid Agency. The Unit Director explained that she did not believe 
that a specialized unit was necessary  because all Unit attorneys should be 
capable of handling these cases.  
In 2012, the Unit developed a new policy for accepting referrals of patient 
abuse and neglect. The Unit previously accepted the majority of such 
referrals and investigated them to determine the feasibility of each case.  In 
contrast, the Unit now only accepts referrals where the abuse or neglect was 
witnessed by someone other than the patient and was documented in the 
medical record.  Also, for cases involving theft of patient funds (a type of 
abuse or neglect), the Unit now generally accepts only referrals where the 
financial loss is $100,000 or more and the accused is not a family member.   
The Unit director explained that these thresholds were carefully considered  
and that they were intended to ensure that the cases undertaken by the Unit 
would likely lead to a successful prosecution.  She noted that referral 
sources are being more selective in what they send to the Unit now.  
Stakeholders who refer cases of patient abuse and neglect to the Unit 
confirmed that they now send fewer referrals to the Unit as a result of the 
policy and send more cases to county prosecutors instead.  
Although most case files included opening and 
closing documents, half lacked documentation of 
supervisory review   
According to Performance Standard 6, the Unit should complete cases 
within a reasonable timeframe.  As a part of this standard, supervisors 
should approve the opening and closing of cases and supervisory reviews 
should be conducted periodically and noted in the case file to ensure 
timely case completion.  In our review, we found that almost all case files 
contained opening and closing documents.  Specifically, 91 percent of 
case files had an opening memorandum and 97 percent had a closing 
memorandum.  See Appendix E for confidence intervals. However, 
50 percent of Unit case files lacked documentation of at least one 
supervisory review.24    
  
 
24 The point estimate is 50  percent with a 95-percent confidence interval of 37 to   
63 percent. This analysis  did not include global cases or cases that the Unit opened and 
closed on the same day. 
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The Unit did not refer 94 percent of convictions to OIG 
appropriately 
According to Performance Standard 8(d), the Unit must send reports of 
convictions to OIG within 30 days or other reasonable time period for the 
purpose of excluding providers and nonproviders from participation in 
Federally-funded healthcare programs, including Medicare and Medicaid.25    
From FY 2010 through FY 2012, 50 individuals were sentenced for 
healthcare fraud, patient abuse, neglect, or financial exploitation.  The Unit  
did not refer 47 of these individuals (94 percent) to OIG appropriately.  It  
never referred 6 individuals to OIG, and it referred 41 individuals after the 
30-day timeframe.  The Unit referred the remaining 3 individuals within the 
30-day timeframe.  It took an average of 103 days to send notice to OIG 
after the individual was sentenced; in one case, the Unit sent notice 
260 days after sentencing.  If a Unit fails to properly refer convicted 
providers for exclusion, the providers may be able to continue to submit 
fraudulent claims and receive payments from Federally-funded healthcare 
programs.   
The Unit did not meet the requirements of its training 
plan in FY 2012 
According to Performance Standard 12, the Unit must maintain an annual 
training plan for all professional disciplines.  In addition, Performance 
Standard 12b states that the Unit must have a minimum number of 
required training hours for each professional discipline, and staff must 
comply with the requirement.  The training plan for the New Jersey Unit 
states that each professional discipline in the Unit shall participate in 
3 hours of Medicaid fraud training and 3 hours of False Claims Act 
training sponsored by the Unit.  Additionally, each employee must attend  
two Medicaid Fraud trainings offered by NAMFCU, subject to available 
funding and supervisory approval. 
 
25 Under 42  U.S.C.  1320a-7(a), OIG is  required to exclude from participation in Federal  
health care programs any person or entity convicted of a criminal offense related to the 
delivery  of an item or service under the Medicaid program or to the neglect or abuse of  
patients in residential health care facilities.  See also 42 CFR   1001.1901.  For 
individuals and entities convicted of program-related  crimes, patient  abuse, felony  
healthcare fraud, and felonies relating to controlled substances, a mandatory exclusion is  
required.  See SSA  1128(a). 
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Not all staff met the training requirements.26 The Unit training logs 
indicate that of the 33 Unit staff in a professional discipline that were 
working in the Unit in FY 2012, 23 met the Medicaid fraud training 
requirement in FY 2012.27  The remaining 10, which included attorneys 
and detectives, received no Medicaid fraud training.  In addition, none of 
the staff met the False Claims Act training requirement in FY 2012.  The 
training logs also showed that both types of training were rarely offered in 
the prior 2 fiscal years. Staff also rarely met the requirement for 
NAMFCU training; only seven staff members attended NAMFCU training 
in the 3 fiscal years under review. 
More than half of the non-managerial staff reported that they needed more 
training, with the majority of those staff members specifically citing 
concerns about not receiving an adequate amount of Medicaid fraud 
training. 
The Unit Director does not supervise the majority of 
Unit staff and does not oversee part of the Units
caseload 
Social Security Act  1903(q)(6) requires Units to employ [...] such 
auditors, attorneys, investigators, and other necessary personnel and [be] 
organized in such a manner as is necessary to promote the effective and 
efficient conduct of the entitys activities.   We found that although the 
Unit has a Unit Director, 20 of 34 staff do not report to her, and she does 
not oversee any of the Units civil cases.  The Director has supervisory 
responsibility only for the 14 attorneys and auditors working on criminal 
cases.  The 5 attorneys and auditors working on civil cases, as well as all 
of the Units 15 detectives, do not report to the Director. 
   
 
26 Although  we reviewed training records,  we did not evaluate the staffs professional  
qualifications.  Rather, we applied the performance standards to evaluate whether the 
Unit maintained a formal training  plan  for each professional discipline and whether staff  
met the training  plan requirements.  We recognize that attorneys, investigators, and 
auditors receive professional and law enforcement training, and that not meeting the 
training  plan  requirements does not suggest that professional staff are unqualified.  
27 The Units training plan considers technical  analysts and support staff to  have their 
own professional disciplines and provides training for all disciplines accordingly.   In  
contrast, OIG normally limits its recognition of professional disciplines in  the MFCUs to 
attorneys, detectives, and auditors.  Our review of  the New Jersey Unit used  the 
definition provided by  the  Unit.  
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The Unit Director does not supervise the staff or oversee the 
caseload of the False Claims Unit 
Although the False Claims Unit is part of the MFCU, the False Claims  
Unit staff do not report to the Unit Director.  Rather, as reflected on the 
Units organizational chart (see Appendix D), the head of the False Claims 
Uniti.e., the lead attorney in the False Claims Unitreports directly to  
the Insurance Fraud Prosecutor.  
The Unit Director does not supervise the staff or oversee the caseload of 
the False Claims Unit.  Instead, the lead attorney in the False Claims Unit 
supervises the False Claims Unit and reports directly to the Insurance 
Fraud Prosecutor. The lead attorney manages the day-to-day operations of 
the False Claims Unit, which includes approving the opening and closing 
of all Medicaid False Claims Act cases and managing all of the decisions 
about how cases are to be prosecuted. The Unit Director is copied on 
False Claims Unit emails, but is otherwise not involved in the prosecution.  
During biweekly meetings with the Insurance Fraud Prosecutor, the Unit 
Director reports on her top criminal cases, while the lead attorney of the 
False Claims Unit reports on his top civil cases.  Additionally, the Unit 
Director also does not conduct the performance reviews of staff in the 
False Claims Unit; the lead attorney is responsible for conducting these 
reviews. 
The Unit Director does not supervise the Units detectives 
All of the Units 15 detectives report to a lieutenant in the Unit who is 
responsible for approving and addressing any issues with their time, 
attendance, leave, resource needs, and performance.  This lieutenant does 
not report to the Unit Director, but instead reports to the Deputy Chief of  
Detectives, who is outside of the Unit.  The Deputy Chief of Detectives is 
the second-level supervisor for the MFCU detectives as well as for the 
detectives who investigate private insurance fraud in the Office of the 
Insurance Fraud Prosecutor. The Deputy Chief of Detectives reports to 
the Chief of Detectives, who reports to the Insurance Fraud Prosecutor.  
The Unit Director acknowledged that she currently provides only informal 
feedback to the detectives, including the lieutenant, and does not conduct 
their performance evaluations.  She noted that this may change in the 
future, as the Unit is currently testing a procedure that would allow her to  
have formal input on the evaluations of the Units detectives.28 As the 
Unit Director noted, We want control over the evaluations of the 
sergeants and detectives. I think we should have a say in commenting on 
 
28 The lead attorney in the False Claims Unit is also  participating in this pilot program.   
He will provide written  input on  the one detective in his Unit. 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  11  
 
   
   
and preparing their evaluations. Under this pilot program, the Unit 
Director may provide written comments on draft evaluations of the 
detectives; these comments are then included in the final versions that are  
submitted to the Insurance Fraud Prosecutor.  The State Attorney General 
will determine whether to implement this process on a permanent basis.  
Although the Unit Director noted that she works collaboratively with the 
detectives, one former director noted that the current management 
structure can create tension and potential problems when the Unit Director 
differs with the detectives on how a case should proceed.  He observed 
that when he was director, there were times when the lieutenants in the 
Unit set different priorities than his and that this difference hurt the 
performance of the Unit, as cases took longer to progress. 
Other observation:  Case management tool 
The Unit identified a case management tool that benefited the Unita 
joint investigation plan that continually monitors progress of its 
investigations. 
Joint Investigation Plan. The Unit developed a supervisory review 
document called a Joint Investigation Plan that includes tasks and 
deadlines, as well as descriptions of significant investigative and legal 
issues. An investigative plan is a standard tool used in complex 
investigations. The Units plan contains an additional featurea punch 
list of steps that the investigative team will need to undertake.  Every 
30 days, the plan is updated and initialed by the assigned attorney and 
investigator, as well as the Unit lieutenant who oversees all investigations.  
The plan is then reviewed during monthly supervisory case reviews until 
the case is completed.  The Unit started using the Joint Investigation Plan 
beginning in November 2011, primarily for new cases.  
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  12  
 
   
   
CONCLUSION AND RECOMMENDATIONS 
From FY 2010 through FY 2012, Unit recoveries increased but felony 
charges and convictions decreased.  The Unit also investigated fewer cases 
of patient abuse and neglect in FY 2012 than in FY 2010.  Additionally, 
although most case files included opening and closing documents, half 
lacked documentation of supervisory review.  Further, the Unit did not 
refer 94 percent of convictions to OIG appropriately.  The Unit also did 
not meet the requirements of its training plan in FY 2012.  In addition, the 
Unit Director does not supervise the majority of Unit staff and does not 
oversee part of the Units caseload.   
Our financial review found no significant instances where the Unit failed 
to maintain proper fiscal control of its resources.   In addition, the Unit 
identified as beneficial a case management tool that includes tasks and 
deadlines, as well as descriptions of significant investigative and legal 
issues. 
We recommend that the New Jersey Unit: 
Take Steps to Ensure That the Units Case Mix Includes More 
Cases of Patient Abuse and Neglect 
The Unit should conduct outreach to potential sources of referrals, and 
work with existing sources to determine whether the Unit is receiving the 
appropriate referrals.  Additionally, the Unit should consider revising its 
referral policy since it may not be receiving all appropriate patient abuse 
and neglect referrals because of this policy.    
Ensure That Case Files Contain Supervisory Reviews 
The Unit should include documentation in its case files to demonstrate that 
supervisors conducted periodic reviews, as required by the performance 
standards. Use of the Joint Investigation Plan should help the Unit ensure 
that it has the appropriate documentation.  
Appropriately Refer Individuals to OIG for Program Exclusion 
The Unit should refer convictions to OIG for purposes of program exclusion  
within 30 days of their sentencing, in accordance with Performance 
Standard 8(d) of the revised performance standards. 
Ensure That Staff Receive at Least the Minimum Training 
Required in the Units Training Plan 
The Unit should ensure that staff are complying with the training 
requirements in the Units training plan.  Staff should receive the required 
3 hours of Medicaid training and 3 hours of False Claims  Act training. 
 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  13  
 
   
   
Change Its Supervisory Structure To Provide the Unit Director 
With Supervision of  All Unit  Staff and Oversight of All Its 
Caseload 
To ensure that the Unit is organized in such a manner to promote effective 
and efficient conduct of the Units activities, the Unit should reorganize its 
supervisory structure. Specifically, the Unit Director should be made the 
person primarily responsible for the hiring and termination, discipline, 
day-to-day case activities, and performance evaluations of all Unit staff, 
including all the detectives and False Claims Unit staff.  The Unit Director  
could exercise this authority either as an immediate supervisor or through 
complete supervision of the existing first-line supervisors.   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  14  
 
   
   
UNIT COMMENTS 
The New Jersey Acting Attorney General, on behalf of the New Jersey 
Unit, concurred with the first four recommendations and described plans 
to implement each.  In response to the fifth recommendation, the Unit did 
not specifically state whether it concurred. 
The Unit concurred with our recommendation to take steps to ensure that 
its case mix includes more cases of patient abuse and neglect.  The Unit 
stated that in June 2013 it implemented a revised policy for referral 
standards that it believes will result both in more appropriate cases being 
referred to the Unit and a better case mix.   
The Unit also concurred with our recommendation to ensure that case files 
contain supervisory reviews. The Unit noted that it had recently updated 
the Joint Investigation Plan to include signature lines for the Unit Director  
and Assistant Section Chief, and that the Unit Director had instructed all 
Deputy Attorneys General that it must be used and brought to each 
monthly case review. 
The Unit concurred with our recommendation to appropriately refer 
individuals to OIG for program exclusion.   The Unit stated that it has 
taken steps to remedy the lag time and started sending notifications of 
court action to the regional OIG office at the time a defendant is sentenced 
or when the defendant has been accepted into a deferred sentence 
program.  To ensure that this practice is uniformly followed, the Unit 
Director issued a written reminder to all Unit attorneys to submit timely 
notification to OIG of convictions. 
The Unit concurred with our recommendation to ensure that staff receive 
at least the minimum training required in the Units training plan.  The 
Unit described plans to offer in-house training on Medicaid fraud and 
training on the False Claims  Act, and to require this training of all new 
hires as well as staff who have not completed this training in the past.  The  
Unit also noted that it intends to send staff to NAMFCU training and to 
budget for future out-of-State training. 
The Unit did not specifically state whether it concurred with our 
recommendation to change its supervisory structure to provide the Unit 
Director with supervision of all Unit staff and oversight of all of the Units 
caseload.  The Unit stated that it believes that the supervision of the 
personnel within the Unit continues to be effective and that the current 
structure was put in place in order to respond to certain law enforcement 
issues. The Unit indicated that changing its structure will have a 
substantial impact upon how the Unit and other law enforcement areas 
operate within the State Attorney Generals Office.  It further noted that  
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  15  
 
   
   
during the next several months, in collaboration with other State agencies, 
it will review the supervisory structure of the Unit and strategize on how 
best to proceed in order to address the concerns raised, and will make 
modifications as needed.  The Unit stated that it would notify OIG of any 
organizational changes.  We ask that the Unit also more clearly indicate 
whether it concurs with this recommendation. 
The full text of the Units  comments is provided in Appendix F.   
 
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  16  
 
   
   
APPENDIX A 
Performance Standards for Medicaid Fraud Control Units  
[59 Fed. Reg. 49080, Sept. 26, 1994]29  
1. 	 A Unit will be in conformance with all applicable statutes, regulations, and policy 
transmittals.  In meeting this standard, the Unit must meet, but is not limited to, the 
following requirements:  
a. 	  The Unit professional staff must consist of permanent employees working 

full-time on Medicaid fraud and patient abuse matters. 

b. 	  The Unit must be separate and distinct from the single State Medicaid agency. 
c. 	  The Unit must have prosecutorial authority or an approved formal procedure for 
referring cases to a prosecutor. 
d. 	  The Unit must submit annual reports, with appropriate certifications, on a timely 
basis.  
e. 	  The Unit must submit quarterly reports on a timely basis. 
f. 	  The Unit must comply with the Americans with Disabilities Act, the Equal 
Employment opportunity requirements, the Drug Free workplace requirements, 
Federal lobbying restrictions, and other such rules that are made conditions of the 
grant. 
2. 	A Unit should maintain staff levels in accordance with staffing allocations 
approved in its budget. In meeting this standard, the following performance 
indicators will be considered: 
a. 	  Does the Unit employ the number of staff that was included in the Units budget 
as approved by [the Office of Inspector General (OIG)]? 
b. 	  Does the Unit employ the number of attorneys, auditors, and investigators that 
were approved in the Units budget? 
c. 	  Does the Unit employ a reasonable size of professional staff in relation to the 
States total Medicaid program expenditures?   
d. 	  Are the Unit office locations established on a rational basis and are such locations 
appropriately staffed? 
3. 	A Unit should establish policies and pr ocedures for its operations, and maintain 
appropriate systems for case management and case tracking.  In meeting this 
standard, the following performance indicators will be considered: 
a. 	  Does the Unit have policy and procedure manuals? 
 
29 For the June 1, 2012 performance standards, see:  
https://oig.hhs.gov/authorities/docs/2012/PerformanceStandardsFinal060112.pdf. 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  17  
 
   
   
b.   Is an adequate, computerized case management and tracking system in place? 
4. A Unit should take steps to ensure that it maintains an adequate workload 
through referrals from the single State agency and other sources.  In meeting this  
standard, the following performance indicators will be considered:  
a. 	  Does the Unit work with the single State Medicaid agency to ensure adequate 
fraud referrals? 
b. 	  Does the Unit work with other agencies to encourage fraud referrals? 
c. 	  Does the Unit generate any of its own fraud cases? 
d.	   Does the Unit ensure that adequate referrals of patient abuse complaints are 
received from all sources? 
5. 	A Units case mix, when possible, should  cover all significant provider types.  In 
meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit seek to have a mix of cases among all types of providers in the 
State? 
b. 	  Does the Unit seek to have a mix of Medicaid fraud and Medicaid patient abuse 
cases? 
c. 	  Does the Unit seek to have a mix of cases that reflect the proportion of Medicaid 
expenditures for particular provider groups? 
d. 	  Are there any special Unit initiatives targeting specific provider types that affect 
case mix? 
e. 	  Does the Unit consider civil and administrative remedies when appropriate? 
6. 	A Unit should have a continuous case flow, and cases should be completed in a 
reasonable time. In meeting this standard, the following performance indicators will 
be considered:  
a. 	  Is each stage of an investigation and prosecution completed in an appropriate time 
frame? 
b. 	  Are supervisors approving the opening and closing of investigations?  
c. 	  Are supervisory reviews conducted periodically and noted in the case file? 
7. 	A Unit should have a process for monitoring the outcome of cases.  In meeting this 
standard, the following performance indicators will be considered:  
a. 	  The number, age, and type of cases in inventory. 
b. 	  The number of referrals to other agencies for prosecution.  
c. 	  The number of arrests and indictments. 
d. 	  The number of convictions. 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  18  
 
   
   
e. 	  The amount of overpayments identified. 
f. 	  The amount of fines and restitution ordered. 
g. 	  The amount of civil recoveries. 
h. 	  The numbers of administrative sanctions imposed. 
8. 	 A Unit will cooperate with OIG and other Federal agencies, whenever 
appropriate and consistent with its mission, in the investigation and prosecution 
of health care fraud. In meeting this standard, the following performance indicators 
will be considered: 
a. 	  Does the Unit communicate effectively with OIG and other Federal agencies in 
investigating or prosecuting health care fraud in their State? 
b. 	  Does the Unit provide OIG regional management, and other Federal agencies, 
where appropriate, with timely information concerning significant actions in all 
cases being pursued by the Unit? 
c. 	  Does the Unit have an effective procedure for referring cases, when appropriate, 
to Federal agencies for investigation and other action?  
d.	   Does the Unit transmit to OIG, for purposes of program exclusions under 
section 1128 of the Social Security Act, reports of convictions, and copies of 
Judgment and Sentence or other acceptable documentation within 30 days or 
other reasonable time period? 
9. 	A Unit should make statutory  or programmatic recommendations, when 
necessary, to the State government. In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Does the Unit recommend amendments to the enforcement provisions of the 
States statutes when necessary and appropriate to do so? 
b. 	  Does the Unit provide program recommendations to single State agency when 
appropriate? 
c. 	  Does the Unit monitor actions taken by State legislature or State Medicaid agency 
in response to recommendations? 
10. 	A Unit should periodically review its memorandum of understanding (MOU) 
with the single State Medicaid agency and seek amendments, as necessary, to 
ensure it reflects current law and practice.  In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Is the MOU more than 5 years old? 
b. 	  Does the MOU meet Federal legal requirements? 
c. 	  Does the MOU address cross-training with the fraud detection staff of the State 
Medicaid agency? 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  19  
 
   
   
d. 	  Does the MOU address the Units responsibility to make program  
recommendations to the Medicaid agency and monitor actions taken by the 
Medicaid agency concerning those recommendations? 
11. The Unit Director should exercise proper fiscal control over the Unit resources.  
In meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit Director receive on a timely basis copies of all fiscal and 

administrative reports concerning Unit expenditures from the State parent 

agency? 

b. 	  Does the Unit maintain an equipment inventory?  
c. 	  Does the Unit apply generally accepted accounting principles in its control of Unit 
funding? 
12. A Unit should maintain an annual training plan for all professional disciplines.  
In meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit have a training plan in place and funds available to fully implement 
the plan? 
b. 	  Does the Unit have a minimum number of hours training requirement for each 
professional discipline, and does the staff comply with the requirement? 
c. 	  Are continuing education standards met for professional staff? 
d. 	  Does the training undertaken by staff aid in the mission of the Unit?   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)  20  
 
   
   
APPENDIX B 
Referrals of Patient Abuse and Neglect, Provider Fraud, and Theft of 
Patient Funds to the Medicaid Fraud Control Unit by Source, Fiscal Years 
2010 through 2012 
Table B-1: Total Referrals of Patient Abuse and Neglect, Provider Fraud, and Theft of 
Patient Funds to the Medical Fraud Control Unit and Annual Average Referrals 
 
Fiscal 
3-Year  Annual  
Case Type   Year (FY)  FY 2011   FY 2012  
Total   Average 
2010  
Patient Abuse and Neglect  39  17  14  70  23 
Provider Fraud   25  50  135  210  70 
Theft of Patient Funds  69  33  17  119  40 
Total    133  100  166  399  133 
Source: Office of Inspector General (OIG) analysis of New Jersey  Medicaid Fraud Control Unit 
(Unit) data, 2013.  
 
Table B-2: Unit Referrals, by Referral Source 
 
 
FY 2010   FY 2011   FY 2012  
Theft  
Abuse  Theft of   Abuse  Abuse  Theft of   Percentage 
of 
Referral Source   Fraud   and  Patient  Fraud   and  Fraud   and  Patient  Total   of All 
Patient 
Neglect   Funds   Neglect   Neglect   Funds   Referrals  
Funds  
State Survey  
0  38  25  2  14  21  4  7  2  113  31.2 
and Certification 
Private Citizens  13  1  7  18  3  4  41  1  5  93  25.7 
Long-Term Care 
0  0  32  0  0  7  0  1  4  44  12.2 
Ombudsman  
State Medicaid 
1  0  1  12  0  0  22  1  1  38  10.5 
Agency 
Unit Hotline  2  0  0  3  0  0  17  0  2  24  6.6 
Other State 
0  0  1  3  0  0  11  1  0  16  4.4 
Agencies 
Providers  1  0  2  2  0  0  3  0  0  8  2.2 
Licensing Board  0  0  0  3  0  0  4  0  1  8  2.2 
OIG  0  0  0  1  0  0  2  1  0  4  1.1 
Outside 
2  0  0  1  0  0  0  0  1  4  1.1 
Prosecutors 
Law  
0  0  0  0  0  0  0  1  0  1  0.3 
Enforcement  
Private Health 
0  0  0  0  0  0  0  0  0  0  0.0 
Insurers  
Provider 
0  0  0  0  0  0  0  0  0  0  0 
Associations  
Adult Protective 
0  0  0  0  0  0  0  0  0  0  0 
Services  
Other  3  0  0  1  0  0  4  1  0  9  2.5 
Total  25  39  69  50  17  33  135  14  17  362  100 
Source: OIG analysis of Unit data, 2013.
     
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)
   21 
   
   
APPENDIX C 
Cases Opened and Closed by Provider Category and Case Type, Fiscal 
Years 2010 through 2012 
Table C-1: Total Annual Opened and Closed Cases, by Case Type  
 
 
Fiscal Year 
Case Type   FY 2011  FY 2012  3-Year Total  Annual Average   
(FY) 2010  
 
Opened   191  157  358  706  235 
 
Patient Abuse and   
39  17  15  71  24 
Neglect   
Provider Fraud   83  106  326  515  172   
 
Theft of Patient 
69  34  17  120  40   
Funds  
 
           
 
Closed  142  138  366  646  215   
 
Patient Abuse and 
Neglect  28  28  31  87  29   
 
Provider Fraud   56  58  251  365  122 
 
Theft of Patient  58  52  84  194  65   
Funds  
 
Source: Office of Inspector General (OIG) analysis  of New Jersey  Medicaid Fraud Control Unit (Unit)   
data, 2013.    
   
Table C-2: Outcomes for Closed Cases, by Case Type  
 
Closed by   Closed by Civil  Closed due to  
Closed by Referral 
Prosecution   Action  Insufficient evidence  
Type of  FY  FY  FY  FY  FY  FY  FY  FY  FY  FY  FFY  FY 
Investigations   2010   2011   2012   2010   2011   2012   2010   2011   2012   2010   2011   2012  
Investigations of 
Fraud   11  12  10  15  11  14  29  30  159  3  3  68 
Investigations of 
Patient Abuse and 
Neglect 
3  1  0  0  0  0  25  27  22  0  0  9 
Investigation of 
Theft of Patient 
Funds   5  4  4  0  0  0  41  54  46  6  0  34 
Total  
Investigations   19  17  14  15  11  14  95  111  227  9  3  111 
Source: OIG analysis of Unit data, 2013.  
 
 
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   22 
   
   
Table C-3: Provider Fraud Cases Opened and Closed, by Provider Type  
 
Provider Type   FY 2010   FY 2011   FY 2012  
Facilities   Opened  Closed   Opened  Closed   Opened  Closed  
Hospitals  1  0  1  1  1  3 
Nursing Facilities   0  1  0  0  7  10 
Other Long-Term  Care Facilities   0  0  0  0  1  1 
Substance Abuse Treatment Centers  0  0  0  1  4  3 
Other  Facilities   5  6  10  1  8  17 
Practitioners   Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of Medicine or Osteopathy   7  7  9  6  39  45 
Dentists  2  1  4  2  8  10 
Optometrists/Opticians  0  0  0  0  2  1 
Other Practitioners  0  0  2  0  1  4 
Counselors/Psychologists  0  0  0  0  0  0 
Podiatrists  0  0  0  0  0  0 
Medical Support   Opened   Closed   Opened   Closed   Opened   Closed  
Home Health Care Aides   1   0   0   0   2   3  
Other Medical Support   0  2  1  4  1  2 
Pharmaceutical Manufacturers  0  0  0  0  0  0 
Durable Medical Equipment Suppliers  0  0  5  0  7  9 
Transportation Services  0  0  1  2  4  4 
Pharmacies  11  18  15  16  6  21 
Laboratories  0  0  0  0  2  2 
Home Health Care Agencies  0  0  6  2  4  7 
Nurses/Physicians Assistants/  
Nurse Practitioners/Certified Nurse  0  0  1  1  1  2 
Aides 
Radiologists  0  1  1  0  1  2 
Program Related   Opened   Closed   Opened   Closed   Opened   Closed  
Managed Care   0   0   0   0   0   0  
Medicaid Program  Administration  0  0  0  0  0  0 
Billing Companies  0  2  1  1  0  0 
Other Program Related  2  2  1  2  56  45 
Other   Opened   Closed   Opened   Closed   Opened   Closed  
Global   54   16   48   19   171   60  
Total   83  56  106  58  326  251 
Source: OIG analysis of Unit data, 2013.  
 
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   23 
   
   
Table C-4: Cases of Patient Abuse and Neglect Opened and Closed, by Provider Type 
 
 
Provider Type  FY 2010   FY 2011   FY 2012  
  
Opened  Closed  Opened  Closed  Opened  Closed 
Nursing Facilities   6  2  2  2  4  8 
Other Long-Term  
0  0  0  0  2  4 
Care  
Nurses/ 
Physicians 
Assistants/  
Nurse  22  18  11  17  6  14 
Practitioners/ 
Certified Nurse 
Aides 
Home Health 
3  2  1  1  0  1 
Aides 
Other   8  6  3  8  3  4 
Total    39  28  17  28  15  31 
Source: OIG analysis of Unit data, 2013.  
 
 
 
 
Table C-5: Cases of Theft of Patient Funds Opened and Closed, by Provider Type  
 
 
Provider Type  FY 2010   FY 2011   FY 2012  
  
Opened  Closed  Opened  Closed  Opened  Closed 
Non-Direct Care   3  1  1  1  1  5 
Nurses/ 
Physicians 
Assistants/  
Nurse  10  6  5  5  2  9 
Practitioners/ 
Certified Nurse 
Aides 
Home Health 
0  0  0  0  0  0 
Aides 
Other   56  51  28  46  14  70 
Total    69  58  34  52  17  84 
Source: OIG analysis of Unit data, 2013.  
 
 
 
 
 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   24 
   
   
APPENDIX D 
Organizational Chart 
 
   
 
 
Attorney General  
     
Deputy     Counsel  
Insurance Fraud  Insurance Fraud  and  
Prosecutor   Prosecutor   Head of False 
Claims Unit  
   
Case Screening,   
Litigation, and  False Claims  
Analytical  Unit *  
Support Section  
  Chief of    
  Detectives     
Private  and   Medicaid Fraud 
Insurance  Deputy Chief of  Control Unit  
Detectives **  
Source: New Jersey Medicaid Fraud Control Unit, 2012.  
* Staff at the False Claims Unit are MFCU staff.  
 
** The Chief of Detectives and Deputy Chief of Detectives are not MFCU staff; however, they oversee the 
MFCU detectives and Private Insurance detectives. 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   25 
   
   
 
APPENDIX E 
Confidence Intervals for Estimates 
 
Table D-1: Confidence Intervals for Key Data from Case File Review  
 
Estimate Description   Sample Size  Point Estimate  95-Percent 
   
Confidence Interval  
Case Files With Opening  100  91.0%   84.095.1%  
Documents 
Case Files With Closing 
68  97.1%   89.599.2%  
Documents 
Case Files With No 
Documentation Indicating at 
Least One Supervisory  
Review  (Does Not Include  50  50.0%   36.963.1%  
Global Cases or Cases 
Opened and Closed on the 
Same Day)  
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   26 
  APPENDIX F 
Unit Comments 
State ofNew JorSf}J' 
OFFICE OF TilE ATl1.lRI'\IOY OFNI'RAL 
Ctlt<ls cmusnt:  DEPARTMENT" OF LA\V AND PUBLIC' SA!'E-TY  .IOHN l. HOFI'M.'LN 
GmYJrnar  1'0 llOX OR(!  A('rt~J? Atlonwy t rr!.nerd 
TRENTOK N! 08625-002!0 
KIM G!IAilAONO  .IENNIF"R E. FRADEL 
U. Guwmor  4rlmitri..v(rolor 
AugLJst 19, 2013 
Mr. Stuart Wright 
Deputy Inspector Ge11eral For Evaluations and Inspections 
Oftlce of the Inspector General 
Room 5660, Cohen Building 
330 Independence Avenue, SW 
Washington, DC 20201 
Rc: .1\cw Jersey :\1edicaid Fraud Cnit 2<113 On site Review, OFI-0?.-13-00020 
Dear 1-.fr. \Vri ght, 
Thank yon for the opportunity to respond to the Office of the Inspector General (OIG) 2013 Onsite 
Review, OI:I-02-13-00020.  The New Jersey Office of the Attorney G<::neral recognizes and greatly 
rcsputs the role of the OIG, and has taken thi:> review as an opportunity to improve our Unit as a whole, 
with emphasis on the areas recommended in the report.  We appreciate the diligence and insight the OIG 
staJJ has ~how11 during this review process, and we look forv.'ard to continuing the professional and 
constrL!ctive relationship we have developed. 
The Office of the Inspector General has requested our comments on each of the recommendations in the 
report.  It has been asked that our comments include whether we concur with the recommendation and 
statements in the report, along with the w;tions and any timelines associated with actions taken as a resuli 
ofthe recommendations. 
In the enclosed respollile, we have included the summ.aT)' recommendation from the Onsite Review; our 
plan  to  comply  with  the  recommendation;  and  our  plan  t<'  implement  the  changes  for  each 
recommendation noted.  Please do not hesitate to contact me if you have any questions or need additional 
infol1lliltion. 
Sincerely, 
l6hn J. 1-fofiman 
Atlng Attorney General 
HlJGHES JUSTICE C01fPLEX  TBI,RPIIONR: (609)2929C.<l0 FAX: (009l292-4299 
N"e;.J .le.rt:r)' ill mr Equal Oppitrtunit\' Emplc1)<t'r  fNntR<l on R.erJ._;.'(;fl!d Paper a.rtd &t.-,..'CJahi<'" 
New Jersey State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00020)  27   
   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   28 
   
   
 
 
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   29 
   
   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   30 
   
   
 
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   31 
   
   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   32 
   
   
   
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   33 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 

Inspector General for Evaluation and Inspections in the New  York regional 

office, and Nancy Harrison and Meridith Seife, Deputy Regional 

Inspectors General.  

Judy Kellis and Vincent Greiber served as the team leaders for this study.  

Other Office of Evaluation and Inspections staff from the New York 

regional office who conducted the study include Lucia Fort and  

Jennifer Karr.  Central office staff who provided support include  

Thomas Brannon, Kevin Farber, Christine Moritz, and Sherri Weinstein. 

Office of Audit Services staff who provided support include Julio Agosto, 

Paul Lee, and Dain Wisdom.  Office of Investigations staff who provided 

support include Kerri Navarro. 

 
 
 
New Jersey State Medicaid Fraud Control Unit:  2013 Onsite Review  (OEI-02-13-00020)   34 
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.