ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 1427

STATE OF NEW JERSEY

DATED: NOVEMBER 6, 1997

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 1427 (1R).

      Assembly Bill No. 1427 (1R) requires that when the Division of Medical Assistance and Health Services in the Department of Human Services or its fiscal agents seek to recover a claim asserted against a Medicaid provider which is contested by the provider, the division or its fiscal agents shall place the State portion of the disputed recovery claim in escrow, to be released with interest only after final agency adjudication if the provider prevails.

      The bill also requires the Commissioner of the Department of Health and Senior Services to pay or credit a Medicaid long-term care facility for any net amount found to be owing to the facility as a result of an audit. Under current law, the commissioner's reimbursement of any underpayment is discretionary. If the reimbursement is not made within 60 days, of the notice of underpayment to the facility the reimbursement shall include interest on the amount due. The bill applies to an audit performed for any fiscal year ending after November 30, 1996.

FISCAL IMPACT:

      The Department of Health and Senior Services has informally provided information that the reimbursement cost for an underpayment identified in an audit would be approximately $100,000 annually, or $50,000 State share, as stated in the legislative fiscal estimate.