N.J. audit finds major HMO made little effort to detect fraud

A state audit has found that one of the largest HMOs in New Jersey did not do enough to lower insurance costs by detecting fraud.

United Healthcare Community Plan of New Jersey gets more than $800 million a year to provide health-care services to state Medicaid recipients.

But United did not comply with state requirements to aggressively monitor how the money was spent and recovered a low percentage of improper payments made to providers, according to state comptroller Matt Boxer.

“What we found is that on average they were recovering about $800,000 in misspent funds,” he said Wednesday. “So that’s less than one-tenth of 1 percent of what they get and pay out.”

Boxer says Medicaid is a $10 billion program in New Jersey and it’s critical to make sure the funds are used properly.

“It of critical importance that the state’s Medicaid HMOs work aggressively to fight fraud in their networks because the program is so big that we can’t do it all alone in this office,” he said. “We need their help.”

Boxer is recommending the HMO increase the number of employees dedicated to detecting fraud and give them additional training.

United Healthcare officials say they’re in the process of making the necessary changes.