ASSEMBLY SPEAKER ROBERTS CHARITY CARE ANTI-FRAUD ACT SIGNED INTO LAW BY GOVERNOR

ROBERTS CHARITY CARE ANTI-FRAUD ACT SIGNED INTO LAW BY GOVERNOR

Measure Will Crack Down on People Who Lie about Incomes to Receive Free Care; Impose 2-for-1 Penalty if Hospital Is Culpable for Processing a Fraudulent Claim

(TRENTON) - Legislation Assembly Speaker Joseph J. Roberts, Jr., sponsored to curtail waste, fraud, and abuse in the state subsidy program that reimburses hospitals for services provided to patients who do not have health insurance or who cannot afford to pay for care was signed into law today by Governor Jon S. Corzine.

Roberts' measure - "The Charity Care Fraud Prevention and Detection Act" - previously passed the Senate and Assembly in June but was returned to the Legislature for concurrence with recommended changes from Governor Corzine, who conditionally vetoed the original bill.

The measure (A-4295/SCS will address problems cited in an April State Commission of Investigation (SCI) report that found millions of dollars in "charity care" funds being given each year to hospital patients who are actually covered by medical insurance or who lie about their incomes to qualify for free care.

"New Jersey's hospital subsidy system is hemorrhaging taxpayer dollars," said Roberts (D-Camden).  "For the sake of hospitals, patients and taxpayers, intensive care is needed to ensure that charity care money is properly accounted for and gets used to help people who truly lack the means to pay their hospital bills."

Among the provisions in the new law is a proposal to penalize hospitals that fail to do their part to prevent charity care fraud and abuse.  Under the measure, hospitals will lose $2 in charity care subsidy payments for each $1 of subsidy payments they received in the previous year on any claims a hospital was complicit in and should have known was fraudulent.  Hospitals found in violation also will be liable for any other additional penalties permitted under law.

Roberts said the 2-for-1 penalty will motivate hospitals to work in partnership with state authorities in identifying fraudulent charity care claims and will help put downward pressure on state charity care costs, which have climbed to $1.1 billion annually for the state's 78 hospitals.

"Our hospitals do a good job of looking out for the interests of patients," said Roberts.  "Now we want hospitals to put the same kind of effort into looking out for taxpayers."

"Hospitals should be working with state authorities to fight waste, fraud and abuse," said Roberts.  "A 2-for-1 penalty will give them a vested interest for weeding out fraudulent claims."

Other provisions in the Roberts bill will do the following:

Create a uniform statewide charity care application and submission process, including a requirement that patients provide demographic, financial, and other vital information to help administrators weed out fraudulent claims.

Direct state health officials and the Office of the Medicaid Inspector General to improve coordination when investigating suspicious charity care claims; recovered funds will be returned to the state's Health Care Subsidy Fund to pay for legitimate charity care cases;

Allow the state Division of Taxation to work with the Medicaid Inspector General and the state Department of Health and Senior Services to conduct random checks of personal state income tax returns filed by residents seeking charity care claims to determine their validity.

Establish a confidential toll-free telephone hotline or e-mail address for people to report suspected incidents of charity care fraud;

Require a feasibility study of a potential centralized electronic charity care eligibility registry and identification card system;

Mandate a review of the administration of the hospital charity care subsidy program by the state auditor to identify other ways for preventing and detecting waste, fraud, and abuse in the system.

Allow hospitals to recover the difference between the amount of the charity care claim and the amount a patent would have otherwise been charged from patients who file false claims.

Make a presumption that a claim is non-fraudulent if a hospital complied with all regulations unless determined otherwise by the Commissioner of Health.

Several of the provisions in Roberts' bill, which also is sponsored by Assemblywoman Joan M. Quigley (D-Hudson), are based on recommendations found in the SCI's April investigatory report - "Charity Care: An Ailing System."  Other provisions augment the SCI's findings.  Roberts said he worked on the bill in conjunction with Assembly Health Committee Chairman Herb Conaway, M.D. (D-Burlington) and Assembly Budget Committee Chairman Louis D. Greenwald (D-Camden).

The law takes effect in 30 days but the Commissioner of Health and Senior Services may take anticipatory administrative action for purposes of implementing of various provisions of the new law.
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