MedicaidReimbursementHigh impact
Newsletter Vol. 13, No. 32
New Jersey Medicaid·NJ·Provider Notice
Effective date
May 1, 2003
We identified it
Jun 20, 2026
Summary
New Jersey Medicaid (DMAHS) is establishing interim outpatient hospital rates using 2001 Medicare cost report data and implementing stricter oversight of hospital charge structures. Hospitals must proactively notify DMAHS of any significant changes to charges or cost-to-charge ratios, or face retroactive payment reductions, recovery demands, and potential penalties including interest and false claim prosecution.
Action Required
REQUIREMENTS: Immediately (upon receipt): (1) Hospital billing teams must establish a process to notify the New Jersey DMAHS Hospital Rate Setting Unit of ANY significant changes to outpatient charge structures or cost-to-charge ratios before or immediately upon implementation. Contact: Eileen Stokley, (609) 588-2693. (2) Billing teams must verify that all hospital outpatient charges are accurately tied to actual costs and match cost report filings to prevent overpayments. (3) Compliance officers and billing leadership must audit current charge structures against 2001 Medicare cost report data (used for 2003 rate-setting) to identify any excessive charges that may trigger DMAHS investigation. (4) If discrepancies are discovered, contact DMAHS proactively to coordinate corrective action rather than waiting for investigation. CONSEQUENCES: Failure to report significant charge changes or submission of charges not reflective of costs will result in: retroactive cost-to-charge ratio reductions, recovery of excessive reimbursement already received, interest charges, false claim penalties, and potential criminal prosecution.