$$ga0523mxravi 10 BROWNBudget Story: 1 BROWN

A year after the state comptroller found millions in state benefits going to ineligible inmates, new measures now flag those incarcerated in county correctional facilities like the Middlex County jail, shown here in a file photo.

(Jennifer Brown/The Star-Ledger)

A year after an audit found New Jersey inmates collected $23.6 million in unemployment, Medicaid, food stamps and other assistance payments, state officials say they have cut the losses, but recovered only a small portion of the improperly paid-out funds.

So far, the state has gotten back about $800,000, according to the Office of the State Comptroller. Several of the agencies that were the focus of the audit have implemented measures to flag the payments to those behind bars, but say there is no easy fix.

“We won’t be able to recover every dollar that went out to the inmates,” said Peter McAleer, a spokesman for the comptroller’s office. “The key is new procedures being put in place that will be stopping money from going out to inmates in the future.”

Nicole Brossoie, a spokeswoman for the state Department of Human Services, said managing Medicaid benefits for those in county jails was a complex issue. A person collecting state benefits who is charged with a crime may still qualify for those benefits if they are never locked up, and may be eligible for all benefits until the moment of incarceration.

The audit by the state comptroller, which examined payments made through various federal and state assistance programs — including Medicaid, unemployment insurance, pensions paid to retired public employees, the Supplemental Nutrition Assistance Program, and state rental subsidies — looked at payments made over a 22-month period, from July 1, 2009, to April 30, 2011. That data were then matched against lists of state and county incarcerated individuals, and found millions went to inmates who may not have been entitled to the money.

The audit blamed the payments on a lack of adequate internal controls at the agencies administering the assistance programs, including a failure to make use of county incarceration data. One department simply reviewed newspaper stories to determine if any of its program participants had been arrested or convicted of a crime.

The money went mostly to county inmates, according to McAleer.

“They did not have access to the same data as they could with state inmates,” he said of the state agencies administering the benefit programs. “They’re doing that now.”

The audit identified $10.6 million in unemployment insurance checks that went out to more than 7,600 inmates — one who received $39,631 while he was jailed for more than a year on a drug-related offense.

In order to receive unemployment benefits in New Jersey, an applicant must certify that they are “able to work, available for work, and actively seeking work,” ruling out anyone being held in prison.

The state Department of Labor and Workforce Development said it already had been cross-checking lists of state prisoners when approving unemployment benefits. However, spokesman Brian Murray said the logistics of checking the county lockup inmates turned out to be a bigger issue.

“The main problem was, due to the short-term nature of county jail sentences, the department had no certain means to determine if someone was actually locked up in a county jail or on a release program assigned to a county jail,” said Murray.

The payment of unemployment benefits is strictly guided by federal and state laws so the department cannot just stop benefits because it finds a match on county inmate lists and suspects wrongdoing, he said.

The Administrative Office of the Courts ultimately developed a database to make information on the county lockups searchable to be cross-checked against unemployment insurance rolls, he said. Since the inception of the system, the department has stopped 2,161 unemployment insurance claims from being paid to people identified as county inmates.

“We conservatively place the savings at $1.92 million,” Murray said.

At the same time, the department said it is working with the Attorney General’s Office to go after those who wrongfully collected unemployment benefits, but could not discuss any specifics.

SNAP FUNDS

Separately, the comptroller’s audit found $4.2 million went to jailed individuals through the Supplemental Nutrition Assistance Program, once known as food stamps. Those administering the program said the state has also begun matching the file of active food stamp recipients against the lists of those in county or state prison, to make sure benefits are not issued to recipients incarcerated for more than 30 days.

The audit found about $7.1 million in Medicaid payments were also made to inmates. Much of it, $5.3 million, involved “capitation” payments — fixed, monthly amounts paid to managed care organizations on behalf of enrolled individuals. An additional $1.7 million was paid to pharmacies, hospitals, health clinics and other individual health care providers, which examiners believed may have been the result of the fraudulent use of Medicaid cards.

Brossoie said the Department of Human Services has cut capitation overpayments, but could not provide estimates on savings.

“Since the audit report, we receive a daily report from the Department of Corrections identifying inmates in state prisons, which we then match with the Medicaid eligibility file,” she said. “We also are working on a similar system for county inmates.”

The comptroller’s office, which includes the state’s Medicaid Fraud Division, responsible for recovering improperly expended Medicaid funds, has recouped about $800,000 in payments made to inmates, said McAleer.

“That work will continue,” he said.

RELATED COVERAGE

• Audit says 20,000 inmates were mistakenly paid nearly $24M in state and federal benefits

• Prisoner benefits scandal: N.J. senators try to patch loophole that cost millions



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