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Bryant Introduces Medicaid Inspector General Bill

TRENTON – Senator Wayne R. Bryant today introduced a bill to create a full-time Medicaid Inspector General to crack down on fraud and wasteful spending in what has grown to be a $9 billion-a-year health care delivery program.

“Unfortunately, nobody has been watching the books effectively,” said Senator Bryant, Chairman of the Senate Budget & Appropriations Committee. “Over the last year, our research and a committee hearing has led us to conclude that the current system is broken and needs to be fixed by a Medicaid Inspector General.”

Senator Bryant said the State’s Medicaid Division is too busy serving the needs of people who rightfully deserve help to devote enough attention to rooting out fraud and wasteful spending.

“I have no doubt that an independent Inspector General will be in a position to save hundreds of millions of dollars a year and put the pieces back together for a broken system,” Senator Bryant said. “The magnitude of the potential for saving taxpayer dollars is rooted in the fact that Medicaid funding consumes one out of every seven dollars spent in the State budget.”

Senator Bryant’s bill being introduced today includes a $3 million startup spending section and a provision to apply 25 percent of all future recoveries to ongoing operations of the Medicaid Inspector General’s office.

With a team of accountants and investigators, Senator Bryant said he envisions the Medicaid Inspector General’s Office replacing the many privately retained accountants who currently do Medicaid audits for waste, fraud and abuse as well as an in-house fraud detection unit operating within the Medicaid Division.

“We found that the current system of monitoring the integrity of the Medicaid program is overly reliant on outside vendors, lacks accountability and has provided meager results,” Senator Bryant said. “A Medicaid Inspector General will be able to focus on investigations of fraud and waste, whether it’s by a hospital, an insurer or a recipient.”

Senator Bryant said his blueprint for Medicaid reform will “more than meet” the Corzine Administration’s call for a $50 million savings through Medicaid fraud detection efforts in its current budget proposal.

“This new office will consolidate New Jersey’s efforts to root out waste and fraud and address the current fragmentation of fraud investigations,” Senator Bryant said. “Consolidating all Medicaid fraud efforts into one unit will ensure that fraud is the focal point of authority and generate the highest levels of federal reimbursement.”

The Senate budget panel held a hearing on Medicaid fraud detection in March after nearly a year-long review of the State’s current system of rooting out wasteful spending. The federal Government Accounting Office estimates that loss of Medicaid funds due to fraud could be as high as 10 percent of program expenditures.

The measure calls for the new Medicaid Inspector General’s Office to be in the Department of Human Services, but independent of it.