NJ Medicaid contingency fees deemed improper
Healthcare Auditing Weekly, February 12, 2008
The state of New Jersey improperly claimed nearly $16 million in Medicaid contingency fees for work done by Deloitte Consulting LLP and Health Care Resources, Inc. (HCR), according to an OIG audit.
The state contracted with the two companies to identify unclaimed state expenses. The companies were paid contingency fees based on the amount of federal funds they recovered. Deloitte received $19,681,538 in contingency fees for its work and HCR was paid $1,336,356.
According to the OIG, Office of Management and Budget Circular A-87 prohibits federal reimbursement for consultant services when those services are contingent on recovery of costs from the federal government. The OIG recommended New Jersey refund $7,978,278 to the federal government for its share of the contingency fees.
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