New Jersey Fails to Vet Medicaid Providers, Raising Fraud Concerns

New Jersey is failing to keep up with federally mandated oversight procedures for Medicaid recipients, creating an environment in which welfare fraud can thrive undetected.

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Federal law requires New Jersey to revalidate its 106,982 Medicaid providers at least once every five years. But data shared exclusively with National Review by the Foundation for Government Accountability (FGA) reveal the state failed to conduct oversight on 32 percent of its Medicaid providers over the last five years.

FGA researchers say the data, which it obtained via an Open Public Records Act request, suggests the state is “turning a blind eye to welfare fraud.”

“Federal law requires states to revalidate each Medicaid provider at least once every five years,” FGA senior research fellow Trevor Carlsen told National Review. “This basic check confirms that those billing taxpayers are still who they say they are, still in business, and still eligible to participate.”

“But records from New Jersey show that roughly one-third of providers have not been revalidated for at least that long. That’s tens of thousands of providers sitting in a blind spot. This is more than a paperwork issue. It’s a gap in the basic gatekeeping that keeps fraud out of a program taxpayers fund to serve the truly needy,” he added.

FGA estimates Medicaid fraud and improper payments will cost taxpayers $2 trillion nationally over the next decade. In the last few months alone, the Trump administration has charged nearly 300 people with over $500 million in false Medicaid claims.

The new data suggest New Jersey — like Minnesota — has an oversight problem. The Garden State not only failed to revalidate a third of its Medicaid providers over the last five years, it failed to conduct required oversight on at least one Medicaid provider for more than twelve years. Though that situation is “extremely rare,” the state Department of Human Services acknowledged about 200 providers could be in a similarly overdue position. 

Thirty-seven percent of the state’s providers were enrolled in the last five years and are not yet due for revalidation, while another 31 percent have been revalidated within the required time frame. Ninety-five percent of the providers who have been revalidated in the last five years, have been validated in the past year. The state Department of Human Services said this “reflects the fact that after pauses due to both the COVID-19 pandemic and the need to refresh / enhance state and vendor technological and staff capacity, New Jersey (in consultation with CMS) has fully ramped up efforts to ensure all providers have been revalidated in a timely manner.”

Of the 34,715 providers that are overdue for revalidation, 10,484 providers were most recently revalidated more than five years ago, while another 24,231 have never had their first revalidation.

“As part of New Jersey’s recently initiated push to ensure all providers are revalidated timely, we expect all providers in these groups to have completed revalidation by the first half of 2027,” the NJDHS said in its response to FGA’s records request.

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The NJDHS did not respond to a request for comment from National Review.

The state previously revealed shortly before the Covid-19 pandemic that it was also failing to keep Medicaid recipients from abusing the system; the state government found over 50 percent of Medicaid recipients in a random sample were actually completely ineligible for the program, were placed in the wrong assistance category, or their accounts contained some other type of error. 

State governments — particularly in blue states — have faced increased pressure to address welfare fraud in recent months after authorities uncovered billions of dollars in fraud in Minnesota. The scandal surrounding the fraud — and the failure of the state’s leaders to properly investigate and implement guard rails — led Minnesota Governor Tim Walz to suspend his campaign for reelection earlier this year.

More than 90 people, the majority of whom belong to Minnesota’s Somali community, have been accused of defrauding public assistance programs. Federal prosecutors have said that the fraud scandal could end up costing taxpayers around $9 billion. In May alone, authorities charged 15 defendants in connection with over $90 million in fraudulent Medicaid schemes in Minnesota.

President Trump created a White House Task Force to Eliminate Fraud in March. The task force is withholding federal funding from states that it says aren’t doing enough to fight fraud. 

FGA’s previous investigative efforts have uncovered similarly lackluster oversight in several other blue states, including Illinois, where more than a quarter of Medicaid providers had not been properly reviewed in the past five years. The state failed to revalidate one Medicaid provider for nearly a decade. Georgia, meanwhile, has revalidated only 10 percent of providers a year, making it impossible to review all of its providers every five years.

New York has failed to respond to FGA’s request for revalidation data altogether. Despite having first received the group’s records request five months ago, the state says the earliest it can send any information is November — and FGA researchers are doubtful the state plans to comply at that time, as it has previously requested several similar extensions.

And California has completely denied a records request from FGA.

In June, the Trump administration suspended 800 Los Angeles hospice and home health providers from receiving federal funding after finding that half the city’s hospices are fraudulent.

While Los Angeles County is home to just 3 percent of the national population, it encompasses a third of the country’s hospice providers.

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