Final Audit Report of Caring Counselors, Inc. An Intensive In-Community Mental Health and Behavioral Assistance Service Provider

Final Audit Report of Caring Counselors, Inc. An Intensive In-Community Mental Health and Behavioral Assistance Service Provider

Table of Contents

Executive Summary

As part of its oversight of the New Jersey Medicaid program (Medicaid), the New Jersey Office of the State Comptroller, Medicaid Fraud Division (OSC) conducted an audit of Medicaid claims submitted by and paid to Caring Counselors, Inc. (Caring Counselors), for the period from January 1, 2018 through August 31, 2022 (audit period).

OSC's audit sought to determine whether Caring Counselors billed for intensive in-community mental health rehabilitation and behavioral assistance services in accordance with applicable state requirements. OSC's audit found that in over fifteen percent (15.8%) of the claims it reviewed, Caring Counselors failed to meet Medicaid program requirements. Among the failures that OSC identified, OSC found that Caring Counselors billed for services without possessing supporting documentation or with inaccurate supporting documentation. In several instances, Caring Counselors billed for services that were "upcoded" - billed for a higher-level, higher-cost service than Caring Counselors' documentation supported.

OSC also identified instances in which Caring Counselors failed to comply with regulatory requirements that are designed to safeguard the health and safety of Medicaid beneficiaries. Specifically, OSC found instances in which Caring Counselors employed personnel who lacked the necessary training required to perform their job functions, which led to Medicaid beneficiaries receiving care from staff who were not properly trained prior to performing services. OSC also found that Caring Counselors failed to ensure that a servicing provider possessed a valid driver's license.

To arrive at its overpayment findings, OSC selected a statistical sample of 211 claims totaling $39,064 paid to Caring Counselors. Of these sampled claims, OSC found that 33 claims failed at least one test criterion, resulting in an overpayment of $2,211. OSC extrapolated the error dollars for the sampled claims ($2,211) to the total population from which the sample was drawn and calculated that Caring Counselors received an extrapolated overpayment of at least $905,533.^[1] In addition, OSC placed the four highest paid claims, totaling $3,144 in Medicaid payments, in a "take-all" stratum (i.e., a stratum for which OSC reviews 100 percent of the claims). Of these four claims, one failed at least one test criterion for an overpayment of $168. In total, Caring Counselors received an overpayment of at least $905,701 (an extrapolated overpayment of $905,533 plus a direct recovery of $168).

OSC's review of Caring Counselors highlights oversight failures by an organization serving a vulnerable population. Caring Counselors did not consistently meet regulatory requirements designed to ensure that providers utilize proper billing practices and employ appropriately qualified personnel. Although OSC did not design this audit to evaluate whether Caring Counselors' failure to comply with training and certification requirements caused beneficiaries harm, its failure to consistently meet these requirements increased the risk that Caring Counselors may have provided suboptimal care to Medicaid beneficiaries. Caring Counselors must address these shortcomings, and it must reimburse the Medicaid program for the above-referenced overpayments.

Background

The Division of Medical Assistance and Health Services, within the New Jersey Department of Human Services, administers New Jersey's Medicaid program. Medicaid is a program through which individuals with disabilities and/or low incomes receive medical assistance. The Medicaid program provides intensive in-community mental health rehabilitation and behavioral assistance services to improve or stabilize the level of functioning of children and young adults within their homes and communities. These services, which are overseen by the State Department of Children and Families (DCF) when provided to youth and children, seek to prevent, decrease, or eliminate behaviors or conditions that may place the individual at an increased clinical risk or may otherwise negatively affect a person's ability to function. These services are provided in accordance with an approved plan of care.

Caring Counselors, which is located in Mount Laurel, New Jersey, has participated in the Medicaid program as an intensive in-community mental health rehabilitation and behavioral assistance services provider since January 1, 2005. Caring Counselors billed the Medicaid program for intensive in-community mental health rehabilitation and behavioral assistance services under Healthcare Common Procedure Coding System (HCPCS) codes H0036 and H2014. During the audit period, for the audit sample, Caring Counselors billed for services provided by 102 contracted behavioral healthcare professionals.

Audit Objective, Scope, and Methodology

The audit objective was to evaluate claims billed by and paid to Caring Counselors to determine whether Caring Counselors billed these claims in accordance with applicable state regulations.

The scope of the audit was January 1, 2018 through August 31, 2022. OSC conducted this audit pursuant to its authority set forth in N.J.S.A. 52:15C-1 to -23, and the Medicaid Program Integrity and Protection Act, N.J.S.A. 30:4D-53 to -64.

OSC reviewed 215 claims, totaling $42,208 paid to Caring Counselors, from a population of 113,420 claims, totaling $21,032,707 paid to Caring Counselors under HCPCS codes H0036 and H2014.

OSC reviewed Caring Counselors' records related to 215 claims to determine whether the documentation provided complied with the requirements of New Jersey Administrative Code (N.J.A.C.) 10:49-9.8(a); N.J.A.C. 10:49-9.8(b)(1) to (4); N.J.A.C. 10:77-4.8(b); N.J.A.C. 10:77-4.9(e); N.J.A.C. 10:77-4.9(f) and (g); N.J.A.C. 10:77-4.12(d)(1) to (5); N.J.A.C. 10:77-4.12(e)(6); N.J.A.C. 10:77-4.14(c)(1), (2), and (4); N.J.A.C. 10:77-4.14(d)(1) and (2); N.J.A.C. 10:77-5.7(c) to (e); N.J.A.C. 10:77-5.9(f); N.J.A.C. 10:77-5.10(b); N.J.A.C. 10:77-5.12(d)(1) to (5); N.J.A.C. 10:77-5.12(e)(6); and N.J.A.C. 10:77-5.14(b) and (d)(1).

Compliance Framework

Medicaid regulations for intensive in-community mental health rehabilitation and behavioral assistance services establish safeguards to ensure program integrity and prevent fraud, waste, and abuse. These rules establish requirements to ensure provision of high-quality, medically necessary services and appropriate billing of these services as authorized by DCF. Understanding the broader framework provides essential context for these regulations.

The regulations governing intensive in-community mental health rehabilitation and behavioral assistance services in New Jersey emerged from broader efforts to reform the state's children's health system. In the early 2000s, New Jersey established the Children's System of Care (CSOC) to provide a comprehensive, community-based approach to supporting youth with emotional and behavioral needs. This shift aimed to reduce reliance on institutional and out-of-home placements to in-community based services. The initiative was focused on delivering care in the least restrictive environment possible, emphasizing family involvement, individualized services, and community integration.

In support of these reforms, New Jersey adopted regulations to formalize service delivery standards and ensure program integrity. Specifically, N.J.A.C. 10:77-4 and -5, along with guidance issued by DCF, impose requirements on intensive in-community and behavioral assistance providers relating to service authorization, provider qualifications, documentation, and billing practices, among other things. These rules are designed to ensure that youth receive appropriate and effective services and to protect the Medicaid program from fraud, waste, and abuse. By establishing standards, the regulations promote accountability, transparency, and the responsible use of Medicaid funds.

Discussion of Auditee Comments

The release of this Final Audit Report concludes a process during which OSC afforded Caring Counselors multiple opportunities to provide input regarding OSC's findings. Specifically, OSC provided Caring Counselors with a Summary of Findings (SOF) and offered Caring Counselors an opportunity to discuss the findings at an exit conference. OSC and Caring Counselors held an exit conference during which the parties discussed the SOF. Caring Counselors subsequently provided OSC with additional records. After considering Caring Counselors' submission, OSC provided Caring Counselors with a Draft Audit Report (DAR) that contained recommendations and instructed Caring Counselors to provide a Corrective Action Plan (CAP) as part of its formal response to the DAR. Caring Counselors submitted a formal response to the DAR and a CAP outlining steps it states it has taken and intends to take to address the identified failures, which is attached as Appendix A.

OSC took into consideration in this report all of the documentation and arguments raised by Caring Counselors, and OSC formally addresses each argument raised by Caring Counselors in more detail in Appendix B to this report.

Audit Findings

A. Failures to Follow Proper Billing Practices

According to state regulations, N.J.A.C. 10:49-9.8(a) and (b), providers are required to certify that claim information is true, accurate, and complete and must maintain records sufficient to fully disclose the extent of services provided. OSC found that Caring Counselors submitted claims that it could not support through its documentation, and it failed to obtain and maintain required documentation. To perform this portion of the review, OSC focused on the Service Delivery Encounter Documentation (SDED) form, which DCF requires intensive in-community and behavioral health providers to complete. The SDED is a two-page document that records each service encounter and thereby facilitates proper verification of services provided in support of a provider's billing. The first page of the SDED form includes fields for the beneficiary's name, date of birth, address, the name and signature of the servicing provider, and an agency (provider) signatory certification. This page also contains fields for service authorization information, as well as the name and license number of the clinical supervisor. The second page includes fields for the service encounter date, time, and delivery location; the name of the guardian or responsible party, their address, and signature; and the date of service. This form aligns with the state Medicaid regulations that require providers to maintain records for each encounter, including the name and address of the beneficiary; the exact date, location and time of service; the type of service; and the length of time for the face-to-face encounter. In sum, the SDED form not only documents and verifies the services provided and frequency of such services but also ensures that appropriately credentialed providers rendered services and that they met at least the minimum qualifications required to provide such services.

1. Billing for Unsubstantiated Services and/or Inaccurate and Incomplete Records

OSC requested the two-page SDED forms to determine whether Caring Counselors accurately completed and maintained required documentation for all intensive in-community and behavioral assistance provider encounters. OSC found that for 10 of 215 sample claims, totaling $992 in reimbursement, Caring Counselors billed for services for which it failed to possess adequate documentation. Specifically, OSC found the following:

• For 7 of 10 claims, the hours of service on the SDED form conflicted with hours billed and paid. For example, one SDED form documented that one servicing provider rendered services on February 2, 2018 from 4:15 PM to 5:15 PM (one hour), but Caring Counselors billed and was reimbursed by Medicaid for two hours for the same service, a difference of one hour.
• For 3 of 10 claims, Caring Counselors failed to provide SDED forms that would support the claims for which Caring Counselors billed and was paid.

Maintaining accurate and complete SDED forms (both pages) is essential for ensuring that a beneficiary received appropriate services by a qualified professional for a sufficient duration and frequency.

By failing to maintain and produce the appropriate records for these claims, Caring Counselors violated N.J.A.C. 10:49-9.8(a), N.J.A.C. 10:49-9.8(b)(1), N.J.A.C. 10:49-9.8(b)(2), and N.J.A.C. 10:49-9.8(b)(3).

Pursuant to N.J.A.C. 10:49-9.8(a), "providers shall certify that the information furnished on the claim is true, accurate, and complete."

Pursuant to N.J.A.C. 10:49-9.8(b)(1), providers are required "[t]o keep such records as are necessary to disclose fully the extent of services provided."

Pursuant to N.J.A.C. 10:49-9.8(b)(2), providers agree "[t]o furnish information for such services as the program may request."

Further, pursuant to N.J.A.C. 10:49-9.8(b)(3), providers who fail to maintain appropriate records that document the extent of services billed agree that "payment adjustments shall be necessary."

2. Billing for Upcoded Services

According to state regulations, N.J.A.C. 10:49-9.8(a), N.J.A.C. 10:49-9.8(b)(4), and N.J.A.C. 10:77-5.7(e), providers must certify that claim information is true, accurate, and complete; ensure that amounts billed are in accordance with Medicaid requirements; and assess and evaluate each Medicaid beneficiary receiving intensive in-community services to determine the appropriate level and type of medically necessary services. Intensive in-community services include three levels of service: supportive services, professional services, and clinical services. Providers must develop a service plan for those needing behavioral assistance services, based on an evaluation of the beneficiary's needs. The provider must obtain prior authorization to bill specific services in accordance with the plan. Upcoding, or billing for services at a higher level than authorized, results in overbilling the Medicaid program and is considered wasteful and abusive.

OSC reviewed Caring Counselors' records to determine whether it billed for services at the appropriate level using the proper billing procedure code. OSC found that for 20 of 215 claims, totaling $1,023 in reimbursement, Caring Counselors billed for services using a higher reimbursed procedure code and/or modifier than appropriate, which resulted in Caring Counselors receiving overpayments. For example, on July 19, 2021, a Licensed Clinical Social Worker (LCSW) who provides "clinical level" services rendered services to a Medicaid beneficiary who was authorized to receive "lower level" services. In this case, according to the requirements, a LCSW must bill at the authorized level of service. However, Caring Counselors billed this encounter as a higher reimbursement clinical level even though the service was authorized at the lower reimbursement professional service level. Similarly, on March 18, 2020, a Licensed Social Worker (LSW) (professional level) rendered services to another Medicaid beneficiary who was authorized to receive "higher level" clinical services. In this case, according to the requirements, the LSW should have billed services at their non-clinical professional level, but instead billed at the higher clinical level, which was not appropriate. In both instances, the billing resulted in Caring Counselors receiving reimbursement that it was not entitled to receive.

By billing an inappropriate level of services and/or by upcoding for these claims, Caring Counselors violated N.J.A.C. 10:49-9.8(a), N.J.A.C. 10:49-9.8(b)(4), and N.J.A.C 10:77-5.7(e).

Pursuant to N.J.A.C. 10:49-9.8(a), "providers shall certify that the information furnished on the claim is true, accurate, and complete."

Pursuant to N.J.A.C. 10:49-9.8(b)(4), providers agree "[t]hat the services billed on any claim and the amount charged therefore, are in accordance with the requirements of the New Jersey Medicaid and/or NJ FamilyCare programs."

Further, pursuant to N.J.A.C. 10:77-5.7(e), "[s]ervices may be provided at any level by professionals whose credentials exceed the minimum requirements for that service level; however, increased reimbursement shall not be provided."

3. Billing for Services Without Progress Notes

According to N.J.A.C. 10:49-9.8(b)(1), N.J.A.C. 10:77-4.12(e)(6), and N.J.A.C. 10:77-5.12(e)(6), providers are required to maintain progress notes that fully disclose the extent of services provided and demonstrate progress toward the goals identified in the beneficiary's plan of care. For both intensive in-community mental health rehabilitation and behavioral assistance services, providers must document services through progress notes. These notes detail the treatment provided, the beneficiary's response, significant events affecting their condition, and other relevant information for their care plan. Progress notes are vital for continuity of care and evaluating service effectiveness. Inadequate notes can lead to incomplete documentation, impacting care quality and raising concerns about the legitimacy of the services for which the provider billed. Unlike the SDED form, which the parent or guardian signs to attest to the session's date, duration, and location, the servicing provider alone completes the progress note.

OSC reviewed Caring Counselors' records to determine whether Caring Counselors maintained progress notes that supported services billed. OSC found that for 2 of 215 claims, totaling $304 in reimbursement, Caring Counselors failed to document services with a progress note. Moreover, for one of the sampled claims in question, Caring Counselors failed to provide any other documentation substantiating the services, such as an SDED form.

By failing to maintain appropriate records for these claims, Caring Counselors violated N.J.A.C. 10:49-9.8(b)(1), N.J.A.C. 10:77-4.12(e)(6), and N.J.A.C. 10:77-5.12(e)(6).

Pursuant to N.J.A.C. 10:49-9.8(b)(1), providers are required "[t]o keep such records as are necessary to disclose fully the extent of services provided."

Pursuant to N.J.A.C. 10:77-4.12(e)(6), the provider shall maintain, "[w]eekly quantifiable progress notes toward defined goals as stipulated in the child/youth or young adult's BASP [Behavioral Assistance Service Plan]."

Pursuant to N.J.A.C. 10:77-5.12(e)(6), the provider shall maintain "[f]or each discrete contact with the child/family, progress notes which address the defined goals stipulated in the child/youth or young adult's plan of care must be completed."

B. Failures to Obtain and/or Maintain Records

OSC found lapses in Caring Counselors' regulatory compliance, indicating areas where it could improve its oversight to reduce the risk of inconsistent or inadequate care for Medicaid beneficiaries. OSC identified the following oversight deficiencies requiring prompt corrective action.

1. Behavioral Assistance Training Certifications

Pursuant to state regulation, N.J.A.C. 10:77-4.14(c)(4), Caring Counselors was required to maintain written documentation showing that behavioral assistants (BAs) who provided services on its behalf successfully completed the Behavioral Assistance Training Certifications required by DCF. As part of the Behavioral Assistance Training Certification process, every BA must attend live trainings, meet 13 core competencies, and successfully pass a 30-question multiple-choice review. BAs are required to obtain the certification within six months of the BA's hire date, and every BA must be recertified annually.^[2]

OSC's audit found that Caring Counselors failed to satisfy this requirement. Specifically, Caring Counselors did not possess proof of training certifications or re-certifications and provided certifications it had obtained after services were rendered. These deficiencies show a lack of oversight by Caring Counselors, which increased the risk that inadequately trained BAs provided care to Medicaid beneficiaries.

OSC requested that Caring Counselors provide the Behavioral Assistance Training Certifications for BAs in OSC's sample claims to determine whether Caring Counselors satisfied the requirement that it verified and maintained this documentation. OSC found that Caring Counselors allowed 3 of the 24 BAs in the audit sample selection to provide behavioral assistance services to beneficiaries without obtaining the required certification within six months of their hire date and/or obtaining re-certifications annually thereafter. Caring Counselors allowed these BAs to provide behavioral assistance services without ensuring and/or maintaining required BA training certifications and inappropriately billed for 3 of 215 claims, totaling $263 in reimbursement.

• For 1 of 3 BAs, which accounted for 1 of 3 claims, Caring Counselors failed to provide documentation showing that the BA obtained their certification within the required six-month period. Additionally, the BA provided services to a new patient after the six-month certification period had passed, in violation of DCF's guidance.
• For 2 of 3 BAs, which accounted for 2 of 3 claims, Caring Counselors provided a BA training certification that the BAs had obtained after the encounter date. For example, one BA performed services on April 12, 2018, but Caring Counselors did not obtain the BA Certification until November 6, 2018, over six months after the service date. Caring Counselors did not obtain subsequent recertification until four years later on November 7, 2022. Additionally, these BAs continued providing services to new patients after the certification and recertification period had passed, in violation of DCF's guidance.

By failing to obtain such certificates within six months of hire date and re-certifications annually thereafter, Caring Counselors violated N.J.A.C. 10:77-4.14(c)(4).

Pursuant to N.J.A.C. 10:77-4.14(c)(4), the provider must maintain "[v]erified written documentation of the direct care staff person's successful completion of any Behavioral Health Assistance Rehabilitation Services training required by the Department of Children and Families." DCF guidance requires BAs to obtain initial certification within six months of their hire date.

2. Documentation of a Current and Valid Driver's License for a Servicing Provider

According to state regulations, N.J.A.C. 10:77-4.9(f), N.J.A.C. 10:77-4.14(d)(1), N.J.A.C. 10:77-5.9(f), and N.J.A.C. 10:77-5.14(d)(1), to perform intensive in-community and behavioral assistance services, all employees shall have a current and valid driver's license if their job functions include the operation of a vehicle. Behavioral assistance and intensive in-community services provided to beneficiaries, up to 21 years of age, may occur outside of their place of residence, in playgrounds and in other in-community settings. For such services, providers may drive beneficiaries to the service location. As such, state regulations require all servicing providers whose job functions include operating a vehicle used to transport children, youth, or young adults or their family or caregiver, to have a current and valid driver's license. State regulations further require providers to maintain a copy of each servicing provider's current and valid driver's license.

Caring Counselors' progress notes referenced BAs having transported beneficiaries for services. Moreover, Caring Counselors explained that it verified each BA's driver's license. To verify whether each BA possessed a current and valid driver's license and whether Caring Counselors obtained and maintained these licenses, OSC requested driver's license documentation from Caring Counselors. OSC found that for one BA in the audit sample, which accounted for 1 of 215 claims, totaling $78 in reimbursement, Caring Counselors failed to maintain a copy of the servicing provider's current and valid driver's license. Specifically, Caring Counselors maintained a copy of a driver's license that had expired at the time services were provided to a Medicaid beneficiary. In this instance, Caring Counselors did not ensure that its BA had a valid driver's license when the BA rendered services to a Medicaid beneficiary, which increased the risk to the safety and/or well-being of the Medicaid beneficiary.

By failing to maintain a copy of a current and valid driver's license, Caring Counselors violated N.J.A.C. 10:77-4.9(f), N.J.A.C. 10:77-4.14(d)(1), N.J.A.C. 10:77-5.9(f), and N.J.A.C. 10:77-5.14(d)(1).
Pursuant to N.J.A.C. 10:77-4.9(f), "[a]ll employees shall have a valid driver's license if his or her job functions include the operation of a vehicle used in the transportation of the children/youth or young adults. Transportation is not a covered behavioral assistance service."

Pursuant to N.J.A.C. 10:77-4.14(d)(1), "[a] copy of [a BA's] current valid driver's license, if driving is required to fulfill the responsibilities of the job," is required to be maintained by the provider.

Pursuant to N.J.A.C. 10:77-5.9(f), "[a]ll employees shall have a valid driver's license if [their] job functions include the operation of a vehicle used in the transportation of the children, youth or young adults or their family or caregiver."

Pursuant to N.J.A.C. 10:77-5.14(d)(1), "[a] copy of [a BA's] current valid driver's license, if job duties include transportation of children, youth or young adults or their families/caregivers" is required to be maintained by the provider.

Summary of Medicaid Overpayment

OSC determined that Caring Counselors incorrectly billed 34 (36 total exceptions) of 215 claims reviewed, which resulted in an overpayment of $2,379. To ascertain the total overpayment Caring Counselors received, OSC extrapolated the error dollars from the 211 sampled claims, totaling $2,211, to the total population from which the sample was drawn, which was 113,416 claims, with a total payment amount of $21,029,563. From this extrapolation, OSC calculated that Caring Counselors received an overpayment of at least $905,533 that Caring Counselors must repay to the Medicaid program.^[3] OSC also determined that from the four additional claims in the take-all stratum it reviewed, Caring Counselors submitted one deficient claim for which it received an overpayment of $168, which means that Caring Counselors received a total overpayment of at least $905,701 (an extrapolated overpayment of $905,533 plus a direct recovery of $168).

Recommendations

Caring Counselors shall:

1. Reimburse the Medicaid program the overpayment amount of $905,701.

2. Adhere to state regulations and guidance for Medicaid services provided by Caring Counselors and its health care professionals.

3. Obtain and maintain required documentation (e.g., valid driver's licenses) before assigning servicing providers case referrals to ensure compliance with state regulations.

4. Ensure that all BAs successfully complete their initial behavioral assistance training certification within six months from the date of hire, complete recertification annually thereafter, and maintain proof of all such certifications as required by DCF.

5. Ensure that all professionals employed by Caring Counselors receive training to foster compliance with applicable state regulations and guidance.

6. Provide OSC with a CAP indicating the steps Caring Counselors will take to implement procedures to correct the deficiencies identified herein.

OSC Note: Caring Counselors submitted a CAP outlining steps it states it has taken and intends to take to address the identified deficiencies, but its CAP did not address repayment of the identified overpayment.