Buono-Karcher-Vitale Bill To Protect Against Fraud In Charity Care Approved By Senate

TRENTON – A bill sponsored by Senators Barbara Buono, Ellen Karcher and Joseph F. Vitale which would improve State oversight over the hospital charity care subsidy program, which provides funding for emergency health care for the uninsured, was approved by the Senate today by a vote of 36-0, receiving final legislative approval.

“New Jersey’s charity care subsidy program is fraught with loopholes and lax oversight, and has become a magnet for abuse and fraud,” said Senator Buono, D-Middlesex, a member of the Senate Health, Human Services and Senior Citizens Committee. “We need to step up efforts to ensure the State’s investment in hospital charity care is going to the people who need it most – those New Jerseyans who are legitimately uninsured and cannot afford the high cost of health care in the Garden State.”

The bill, a Senate Committee substitute for S-2702, s-2727, and S-3007, known as the “Charity Care Fraud Prevention and Detection Act,” would establish greater oversight over the State’s charity care subsidy program. The bill would require the Commissioner of Health and Senior Services to require uniform procedures for hospitals acquiring information from charity care applicants, and would require the Commissioner and the Medicaid Inspector General to establish an inter-agency agreement to root out charity care fraud and recover money related to fraudulent claims. The bill would also allow the Commissioner of Health to reduce a hospital’s annual charity care funding if it is determined that the hospital sought State funding for claims where they should have had reasonable cause to suspect the claim was fraudulent.

The Senate originally approved the bill in June, but it was returned for concurrence with the Governor’s recommendation to allow the Department of Health to work with the Department of Treasury and the Medicaid Inspector General to perform random checks of the personal State income tax returns of charity care applicants to ensure that they are truly eligible for subsidized health care.

“The current charity care system has absolutely no oversight mechanism, and millions of New Jersey’s health care dollars are lost every year to fraudulent charity care claims,” said Senator Karcher, D-Monmouth, the Vice Chair of the Senate Health Committee. “This bill would be a huge step forward in terms of needed oversight, and make sure that the appropriate resources are directed to uncovering waste and fraud within charity care, and recovering misspent funds. Additionally, the Governor’s recommendations would further expand our fraud-prevention tools and provide a greater deterrent to abusing the system.”

The bill was first proposed after the State Commission of Investigation (SCI) issued a report in April of this year, “Charity Care: An Ailing System.” The report detailed fiscal fraud and operational lapses which allowed for many fraudulent charity care claims to slip through the system unchallenged. The report concluded that the State loses tens of millions of dollars every year through fraud the failure to recover funds from fraudulent claims.

“The SCI report was a wake-up call to health policy makers who, for years, have been funding charity care without looking to see where our investment ended up,” said Senator Vitale, D-Middlesex, the Chair of the Senate Health Committee. “In the next fiscal year, we’re looking to overcome some serious budgetary hurdles, just to continue providing the level of government service that the people of New Jersey have come to expect. We need to ensure responsible spending and fraud prevention in New Jersey’s charity care program, to make the most of the State’s precious tax dollars.”

The bill now heads to the Governor to be signed into law. The Assembly adopted the Governor’s recommendations last week.

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