New findings indicate New Jersey has failed to revalidate thousands of Medicaid providers as required by federal law; Federal government has already withheld more than $1 billion in Medicaid payments from other states amid heightened fraud enforcement

PARSIPPANY, N.J. — The New Jersey Policy Institute (NJPI) is raising concerns that reported failures in New Jersey’s Medicaid provider oversight could expose the state to increased federal scrutiny and potentially put significant federal funding at risk.

New findings reported by the Foundation for Government Accountability indicate that New Jersey has failed to revalidate approximately one-third of its 106,982 Medicaid providers within the required five-year period. The findings were based on information obtained from the state through an Open Public Records Act request.

Federal regulations require state Medicaid agencies to revalidate the enrollment of all Medicaid providers at least once every five years, an important safeguard designed to ensure providers remain legitimate and eligible to participate in the program.

The issue carries potentially significant financial consequences for New Jersey. Medicaid is one of the largest sources of federal funding flowing through state government, with billions of federal dollars supporting NJ FamilyCare each year.

The federal government has also demonstrated that it is willing to withhold Medicaid dollars when questions arise over whether state claims comply with federal requirements. In July, the U.S. Department of Health and Human Services announced that it was deferring approximately $867.5 million in Medicaid payments to California and $199 million to Minnesota pending additional documentation for high-risk claims.

“These findings should be a wake-up call for the Sherrill Administration,” said Wells Winegar, Executive Director of the New Jersey Policy Institute. “This is about more than waste and fraud. New Jersey relies on billions of dollars in federal Medicaid funding every year, and the federal government has made clear that it is taking program integrity seriously. Failing to perform basic oversight required by federal law creates an unnecessary risk for taxpayers, patients and the state budget.”

The reported findings indicate that some providers have gone substantially longer than five years without revalidation, including one provider that reportedly had not been checked in more than 12 years. The state indicated that approximately 200 providers could be in a similar situation.

The concerns come as federal officials intensify efforts to identify fraud, waste and improper payments across Medicaid. The U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services have increased scrutiny of state Medicaid expenditures and have demonstrated a willingness to defer federal payments while questionable claims are reviewed.

NJPI is calling on the Sherrill Administration and the New Jersey Department of Human Services to provide a full accounting of the state’s Medicaid provider revalidation backlog, including how many providers are currently overdue, the amount of Medicaid payments made to those providers while their revalidations were overdue, and the administration’s plan for bringing the state into compliance with federal requirements.

“New Jersey taxpayers send enormous sums to Washington and depend on billions coming back to support critical programs,” Winegar continued. “The state should not put those dollars in jeopardy because it failed to perform required oversight. The Sherrill Administration should move quickly to determine the scope of this problem and ensure New Jersey is meeting every federal requirement.”

NJPI is urging state officials to immediately address overdue provider revalidations, strengthen safeguards against improper payments and publicly demonstrate that New Jersey is meeting federal Medicaid program-integrity requirements.