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NJ among states with most Medicare waste and billing mistakes, report finds

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New Jersey was among the states with the highest levels of Medicare billing errors in 2015, though mistakes were actually at their lowest level in four years, according to government data and an analysis by a group representing the auditors.

The mistakes were made by providers such as hospitals, not the state. They weren’t fraud, said Council for Medicare Integrity spokesperson Kristin Walter – but at $22.6 million in overpayments take a toll on the program’s long-term viability, she said.

It amounted to $18.09 for each of the roughly 1.25 million Medicare beneficiaries in New Jersey, which was fourth highest among the states.

“Anything from billing a surgery twice to billing a higher paying billing rate within Medicare for a particular service, to just very simple typographical errors that cause something to be billed to the wrong place or not shown to have sufficient documentation,” Walter said.

Glossed over in the critique is that New Jersey hospitals had actually been underpaid by nearly $2.3 million that was restored by auditors, after providers mistakenly billed for less than they were eligible to receive, said Kerry McKean Kelly, a vice president at the New Jersey Hospital Association.

“This report is missing a lot of important details from this audit program,” McKean Kelly said. “It does not account for underpayments to providers, and that’s part of this process, too.”

“Hospitals take the accuracy of their billing of Medicare very seriously, and they do have processes in place to make sure billings are accurate,” she said. “But Medicare regulations are incredibly complex and honest mistakes can occur. The audit process is intended to find those errors when they occur and ensure the program is made whole.

The debate between Medicare vs. long-term insurance

Walter said all Medicare providers “need to take a very serious look” at their billing accuracy.

“Let’s be less sloppy. Let’s tighten up how we bill Medicare,” Walter said. “And perhaps even implement the recovery audit program prior to paying providers for the services. Have somebody be auditing these bills before paying them out.”

Only California and Texas had more overpayments than New Jersey’s $22.6 million. In other recent years, New Jersey hadn’t ranked among the top 10.

McKean Kelly said that was influenced by an opportunity Medicare offered providers to settle appeals of payments flagged by auditors for 68 cents on the dollar. She said the auditor for the region that includes New Jersey had a 52 percent overturn rate but that many hospitals opted to settle.

“In New Jersey, a lot of providers took them up on that offer. They didn’t want to wait two years or more to have this adjudicated through the appeals process,” McKean Kelly said.

The $22.6 million total was the least in New Jersey in four years, but the program had been essentially paused last year, driving down recoveries by 91 percent nationwide.

New contracts for recovery auditors were awarded in October.


New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.


Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com.

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