New Jersey Charity Care System Fraudulent, Wasteful, Investigation Finds

New Jersey's Charity Care Hospital system is wasting "tens of millions of dollars" in part by providing care to state residents who fraudulently claim they have low incomes and are uninsured to obtain no-cost health care, according to a New Jersey State Commission of Investigation report released on Wednesday, the Newark Star-Ledger reports. SCI spokesperson Lee Seglem said the state Department of Human Services, which oversees the Charity Care program, between 2001 and 2006 failed to respond to 11 tips regarding approximately $1 million in potentially fraudulent claims. A yearlong investigation by SCI found that the state has no effective mechanism for detecting fraud and does not pursue credible fraud reports. SCI also found that budget and grant "manipulations" by the state Legislature have "skewed" state payments from urban hospitals that provide the most charity care to hospitals that are experiencing fewer charity care cases. SCI recommended that the state:
Create an aggressive fraud unit to recover payments made by ineligible patients;

Properly distribute Charity Care funds without budget manipulation; and

Create a registry of eligible charity care recipients.

Comments
Brendan Gilfillan, a spokesperson for Gov. Jon Corzine (D), said, "Gov. Corzine recognized the problems with the Charity Care formula and his budget recommends important reforms that would ensure a more equitable distribution of funding." Acting Gov. Richard Codey (D) said, "We're reviewing the SCI's recommendations and what's needed now is a thoughtful examination of how best to overhaul this system in light of these glaring failures." State Health and Senior Services Commissioner Fred Jacobs said individuals who lie about their income levels to obtain no-cost care are defrauding hospitals, not the state, and it is the responsibility of medical facilities to pursue those payments. Jacobs said, "There is an underlying misunderstanding the SCI has about the recovery of these 'tens of millions'" (Hester, Newark Star-Ledger, 4/19).


The report is available online. Note: You must have Adobe Acrobat Reader to view the document.

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