Audit of Medicaid In-Community Services Claims Submitted by Family Therapy and Consultation Services, LLC/United Family Services

Audit of Medicaid In-Community Services Claims Submitted by Family Therapy and Consultation Services, LLC/United Family Services

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) audited Medicaid claims submitted by and paid to Family Therapy and Consultation Services, LLC and United Family Services (Family Therapy), for the period from August 1, 2017 through April 30, 2022 (audit period).

OSC's audit sought to determine whether Family Therapy 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 thirteen percent (13.15 percent) of the claims it reviewed, Family Therapy failed to meet Medicaid program requirements, including ones designed to protect the health and safety of Medicaid beneficiaries. OSC found, among other things, that Family Therapy allowed employees to perform services for Medicaid beneficiaries even though Family Therapy could not demonstrate that these employees successfully had completed Behavioral Assistance (BA) training certifications and failed to show that it had verified that employees satisfied their education requirements prior to performing their job functions.

OSC also found that Family Therapy failed to accurately document the services it provided. Family Therapy billed for services without possessing the necessary supporting documentation, and in some instances the documentation it possessed was inaccurate or included conflicting information.

To arrive at its overpayment findings, OSC selected a statistical sample of 202 claims totaling $30,987 paid to Family Therapy. Of these sampled claims, OSC found that 22 claims failed at least one test criterion, resulting in an overpayment of $2,545. OSC extrapolated the error dollars for the sampled claims ($2,545) to the total population from which the sample was drawn and calculated that Family Therapy received an extrapolated overpayment of at least $1,070,771.^[1] In addition, OSC placed the 11 highest paid claims, totaling $9,546 in Medicaid payments, in a "take-all" stratum (i.e., a stratum for which OSC reviews 100 percent of the claims). Of these 11 claims, 6 failed at least one test criterion for an overpayment of $5,850. In total, Family Therapy received an overpayment of at least $1,076,621 (an extrapolated overpayment of $1,070,771 plus a direct recovery of $5,850).

OSC's review of Family Therapy highlights numerous oversight failures by an organization serving a vulnerable population. Despite regulations designed to ensure that Family Therapy performed proper qualification checks, Family Therapy did not consistently meet these requirements, which increases the risk that unqualified Family Therapy staff members provided services to Medicaid beneficiaries. That, in turn, increased the risk that Medicaid beneficiaries could have been harmed or received lower quality care than they were entitled to receive. While OSC did not identify any direct adverse consequences to Medicaid beneficiaries resulting from Family Therapy's failings, Family Therapy 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.

Family Therapy, which is located in Woodbury, New Jersey, has participated in the Medicaid program as an intensive in-community mental health rehabilitation and behavioral assistance services provider since January 1, 2004 (Family Therapy and Consultation Services) and June 1, 2008 (United Family Services). Family Therapy 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, Family Therapy billed for services provided by 103 contracted behavioral healthcare professionals.

Audit Objective, Scope, and Methodology

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

The scope of the audit was August 1, 2017 through April 30, 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 213 claims, totaling $40,533 paid to Family Therapy, from a population of 119,521 claims, totaling $18,936,868 paid to Family Therapy under HCPCS codes H0036 and H2014.

OSC reviewed Family Therapy's records related to 213 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), (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 and encourage 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 the intensive in-community and behavioral assistance providers relating to service authorization, provider qualifications, documentation, 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 Family Therapy multiple opportunities to provide input regarding OSC's findings. Specifically, OSC provided Family Therapy with a Summary of Findings (SOF) and offered Family Therapy an opportunity to discuss the findings at an exit conference. OSC and Family Therapy, represented by counsel, held an exit conference during which the parties discussed OSC's findings in the SOF. After the exit conference, Family Therapy provided OSC with additional records. After considering Family Therapy's submission, OSC provided Family Therapy with a Draft Audit Report (DAR) that contained recommendations and instructed Family Therapy to provide a Corrective Action Plan (CAP) as part of its formal response to the DAR. Family Therapy submitted a formal response to the DAR and a CAP, which is attached as Appendix A.

OSC addresses each argument raised by Family Therapy in more detail in Appendix B to this report. After reviewing Family Therapy's submission, OSC determined that there was no basis to revise any of its findings presented in this audit report.

Audit Findings

A. Family Therapy Increased the Risk of Harm to Medicaid Beneficiaries

OSC found lapses in Family Therapy's regulatory compliance, revealing systemic shortcomings that increased the risk of harm to the vulnerable Medicaid population it serves. Family Therapy's oversight failures created unnecessary risks that highlight the need for corrective action. The following sections outline specific failures identified in the audit.

1. Family Therapy Failed to Maintain Behavioral Assistance Training Certifications for Behavioral Assistants

Pursuant to state regulation, N.J.A.C. 10:77-4.14(c)(4), Family Therapy 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 Family Therapy failed to ensure that multiple BAs had received proper training. Specifically, it lacked proof of training certifications or re-certifications, submitted certifications obtained after services were rendered, or provided expired certifications. As a result, unverified BAs delivered services to Medicaid beneficiaries, increasing the risk that beneficiaries could have received inadequate care from BAs who lacked required training.

OSC requested that Family Therapy provide the Behavioral Assistance Training Certifications for BAs in OSC's sample claims to determine whether Family Therapy satisfied the requirement that it verified and maintained this documentation. OSC found that Family Therapy allowed 7 of the 30 BAs in the audit sample selection to provide behavioral assistance services to beneficiaries without having obtained the required certification within six months of their hire date and/or having obtained re-certifications annually thereafter. Family Therapy allowed BAs to provide behavioral assistance services without ensuring and/or maintaining required BA training certifications and inappropriately billed for 10 of 213 claims, totaling $956.51 in reimbursement.

• For 4 of 7 BAs, which accounted for 4 of 10 claims, Family Therapy failed to provide documentation showing that the BAs obtained their certification within the required six-month period. Additionally, the BAs provided services to a new patient after the six-month certification period had passed, which violates DCF's guidance.
• For 2 of 7 BAs, which accounted for 5 of 10 claims, Family Therapy provided a BA training certification that the BAs had obtained after the encounter date. For example, one BA performed services on January 24, 2021, but Family Therapy did not obtain the BA re-certification until November 7, 2022, over 21 months after the service date (prior re-certification expired on February 29, 2020). Additionally, these BAs continued providing services to new patients after the recertification period had passed, which violates DCF guidance.
• For 1 of 7 BAs, which accounted for 1 of 10 claims, Family Therapy provided a copy of a BA training certification that had expired more than 7 months prior to the encounter date and provided no re-certification documentation. Additionally, this BA continued providing services to a new patient after the recertification period had passed, which violates DCF's guidance.

By failing to obtain such certificates within six months of hire date and re-certifications annually thereafter, Family Therapy 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. Family Therapy Failed to Maintain Proof of Education for Behavioral Assistants

According to state regulations, N.J.A.C. 10:77-4.9(e) and N.J.A.C. 10:77-4.14(c)(1), to perform behavioral assistance services, a BA must have, at a minimum, a high school diploma or equivalent. A provider must verify and maintain documentary proof that BAs satisfy this educational requirement.

Family Therapy failed to ensure that certain BAs met the minimum educational requirement before they rendered services. Specifically, Family Therapy did not verify and maintain copies of diplomas or other proof of education at the time of hire. After receiving the Summary of Findings, Family Therapy subsequently requested and obtained diplomas from former BAs, highlighting its initial lapse in verifying, obtaining, and retaining proof of education. By not meeting this requirement at the outset, Family Therapy increased the risk of employing BAs with inadequate education, thereby exposing Medicaid beneficiaries to services from personnel who may not have been qualified to provide care.

OSC requested that Family Therapy provide copies of high school diplomas or equivalents for BAs to determine whether qualified individuals performed services and to determine whether Family Therapy maintained proof that these BAs had satisfied the minimum educational requirement. OSC found that Family Therapy failed to maintain the requisite documentation from the outset for 2 of the 30 BAs in the audit sample, which accounted for 2 of the 213 claims, totaling $156 in reimbursement.

By failing to maintain proof of education for BAs from the outset, Family Therapy violated N.J.A.C. 10:77-4.9(e) and N.J.A.C. 10:77-4.14(c)(1).

Pursuant to N.J.A.C. 10:77-4.9(e), "[a]ll direct care staff shall, at a minimum, have a high school diploma or equivalent, be 21 years old and have a minimum of one year relevant experience in a comparable environment and shall be supervised by appropriate clinical staff in accordance with this subchapter."

Pursuant to N.J.A.C. 10:77-4.14(c)(1), the provider must maintain "[a] copy of the direct care staff person's high school diploma or equivalent."

B. Family Therapy Failed to Follow Proper Billing Practices

According to state regulation, 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 to maintain records sufficient to fully disclose the extent of services provided. OSC found deficiencies in Family Therapy's billing practices and documentation oversight. 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, and 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 certify that the services were rendered and they met at least the minimum qualifications required to provide such services, as indicated on the SDED form.

1. Family Therapy Billed Unsubstantiated Services and/or Maintained Inaccurate and Incomplete Records

OSC requested the two-page SDED forms to determine whether Family Therapy accurately completed and maintained required documentation for all intensive in-community and behavioral assistance provider encounters. OSC found that for 16 of 213 sample claims, totaling $5,137 in reimbursement, Family Therapy billed for services for which it failed to possess adequate documentation. The 16 failed claims contained 19 total exceptions. Specifically, OSC found the following:

• For 7 of 16 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 August 31, 2020, from 2:00 PM to 3:00 PM (one hour), but Family Therapy billed and was reimbursed by Medicaid for ten hours and fifteen minutes for the same service, a difference of nine hours and fifteen minutes.
• For 2 of 16 claims, the supporting documentation contained conflicting information. The SDED form documented services performed virtually; however, the progress note denoted services performed in-person, which calls into question the legitimacy of the services Family Therapy billed.
• For 6 of 16 claims, Family Therapy submitted SDED forms on which the service delivery date noted on the second page was outside of the prior authorization date (start and end date) specified on the first page of the SDED form. This discrepancy undermines the integrity of the provider attestation on page 1, as the certifying provider's certification will not correspond to the actual service date in return, signifying that page one was not related to page two.
• For 2 of 16 claims, Family Therapy provided SDED forms that were missing signatures of the servicing providers attesting that the services were rendered.
• For 2 of 16 claims, Family Therapy failed to provide SDED forms that would support the claims for which Family Therapy billed and was paid.

Maintaining accurate and complete SDED forms (both pages) is essential to ensure that each beneficiary received appropriate services from a qualified professional for a sufficient duration and frequency. The prior authorization information and servicing provider attestation on the first page of the SDED form must align with the service date and guardian signature on the second page. This alignment confirms that the servicing provider, who certified meeting the minimum qualifications, delivered the services as indicated on page two of the SDED form. When this information was inconsistent, OSC could not determine whether the information contained on the first page corresponded to the date of service on the second page. For example, in one instance, the first page of an SDED form contained a prior authorization date range of September 12, 2018 through December 10, 2018. However, the service date on the second page was February 8, 2019 - almost two months after the specified date range. This discrepancy indicated that the first page did not correspond to the service date on the second page. In this case, OSC determined that the claim was deficient because the mismatch between pages prevented OSC from determining whether Family Therapy confirmed that the servicing provider met the required qualification and that the services were delivered as certified for the service date indicated on the second page of the SDED form.

By failing to maintain and produce the appropriate records, Family Therapy 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. Family Therapy Failed to Document Services with a Progress Note

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 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 Family Therapy's records to determine whether Family Therapy maintained progress notes that supported services billed. OSC found that for 1 of 213 claims, totaling $226 in reimbursement, Family Therapy failed to document services in a progress note. Moreover, for the sampled claim in question, Family Therapy failed to provide any other documentation substantiating the services, such as an SDED form.

By failing to maintain appropriate records for this claim, Family Therapy 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."

Summary of Medicaid Overpayment

OSC determined that Family Therapy incorrectly billed 28 (32 total exceptions) of 213 claims reviewed, which resulted in an overpayment of $8,395. To ascertain the total overpayment Family Therapy received, OSC extrapolated the error dollars from the 202 sampled claims, totaling $2,545, to the total population from which the sample was drawn, which was 119,510 claims, with a total payment amount of $18,927,322. From this extrapolation, OSC calculated that Family Therapy received an overpayment of at least $1,070,771 that Family Therapy must repay to the Medicaid program.^[3] OSC also determined that Family Therapy submitted six deficient claims for which it received an overpayment of $5,850 in the take-all stratum, which means that Family Therapy received a total overpayment of at least $1,076,621 (an extrapolated overpayment of $1,070,771 plus a direct recovery of $5,850).

Recommendations

Family Therapy shall:

1. Reimburse the Medicaid program the overpayment amount of $1,076,621.
2. Adhere to state regulations and guidance for Medicaid services provided by Family Therapy and its health care professionals.
3. Obtain and maintain required documentation (i.e., proof of education) 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 Family Therapy receive training to foster compliance with applicable state regulations and guidance.
6. Provide OSC with a CAP indicating the steps Family Therapy will take to implement procedures to correct the deficiencies identified herein.

[1] OSC can reasonably assert, with 90% confidence, that the total overpayment in the universe is greater than $1,070,771 (28.89% precision) with the error point estimate as $1,505,725. By using the lower limit as the recovery amount, OSC has high confidence that the actual overpayment amount is at least the lower limit, $1,070,771, but likely closer to the point estimate, $1,505,725. Program oversight bodies commonly use this approach to ensure a fair and conservative recovery amount and to factor in any uncertainty inherent in the statistical sampling/extrapolation process.

[2] N.J.A.C. 10:77-4.14(c) states that "[f]or the direct care staff employed by the agency, the following information shall be maintained" and lists five categories of documentation, including "[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." This regulation is supplemented by DCF's written policy that details how BAs should obtain their certification and recertification, including specific timelines for completion. DCF modified its policy through informal (oral) communication to providers allowing BAs who do not obtain their initial certification within the required six months, or fail to complete their annual recertification on time, to continue to provide services to established patients. Established patients are defined as those who are initially served within the six-month certification timeframe or before the BA's annual certification expired. However, in such cases, BAs are prohibited from providing services to new patients until they have obtained the required certification or recertification.

[3] See Footnote 1.