New Jersey has not revalidated roughly one-third of its 106,982 Medicaid providers within the federally required five-year window, and one provider has gone more than 12 years without review. A pre-pandemic audit found fewer than half of sampled recipients were correctly deemed eligible, while enrollment rose to nearly 2.3 million during the pandemic. The Foundation for Government Accountability warns these gaps invite large-scale fraud and notes similar problems in other states; federal authorities may withhold funds if compliance does not improve.
New Jersey's Medicaid Oversight Lapses Raise Fraud Risks — A Trend Seen In Several Blue States
AP
New Jersey faces significant gaps in its Medicaid oversight that create opportunities for fraud and improper payments, according to research from the Foundation for Government Accountability (FGA).
The FGA obtained state records under New Jersey's open public records law and found the state has not revalidated roughly one-third of its 106,982 Medicaid providers within the federally required five-year window. The state acknowledged one provider has gone unchecked for more than 12 years and that approximately 200 providers may be in a similar situation.
Why Revalidations Matter
Provider revalidations — required at least once every five years by federal rules — are intended to ensure that enrolled providers are legitimate and that taxpayer funds are not claimed fraudulently. Without regular checks, providers can overbill or bill for services that were never delivered. National projections estimate Medicaid fraud and improper payments could cost taxpayers roughly $2 trillion over the next decade.
Recent Enforcement And Audits
Federal enforcement recently has targeted large-scale provider fraud: prosecutors have charged nearly 300 people in recent months with more than $500 million in alleged false Medicaid claims, and federal actions have led to funding cuts for about 800 hospices and home-health agencies suspected of fraud. The FGA argues those national trends underscore the risks of weak state-level oversight.
New Jersey's oversight of recipients also shows concerning results. A pre-pandemic random audit completed in early 2020 found fewer than half of sampled Medicaid enrollees were correctly determined eligible: more than 50% were either ineligible, placed in the wrong assistance category, or had other classification errors. Since then, there has been no comprehensive follow-up audit, even as enrollment grew by more than 400,000 people during the pandemic to nearly 2.3 million.
How New Jersey Compares To Other States
The FGA requested similar revalidation records from every state. Their findings and related reporting highlight problems beyond New Jersey: a pre-pandemic federal audit found more than half of beneficiaries reviewed in California were not eligible; Michigan revalidated roughly 10% of providers last year; and Hawaii revalidated fewer than 1%.
New York has reportedly asked for repeated extensions after receiving the FGA's records request on March 30, 2024; California denied the group's request and previously sought to charge over $180,000 for similar Medicaid data. Critics have also raised concerns about California legislation known as the "Stop Nick Shirley Act," which some say reduces oversight by citizen journalists.
Implications And Recommendations
Key implication: Inconsistent revalidation and recipient audits make states more vulnerable to fraud and increase the risk of federal penalties or funding actions.
The FGA and other observers urge state officials to prioritize routine provider revalidation, conduct reliable audits of recipient eligibility, and increase transparency around oversight practices. The White House Anti-Fraud Task Force has signaled it may withhold federal funds from states that do not demonstrate sufficient efforts to combat fraud.
Byline: Trevor Carlsen is a senior research fellow and Amelia Kuntzman is a data investigator at the Foundation for Government Accountability.
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