Bill > A562

Introduced Session

This bill establishes certain penalties on clinical laboratories regarding the receipt of Medicaid overpayments, and on entities engaged in business with such clinical laboratories. As defined in the bill, "clinical laboratory" means any facility used for the performance of chemical, bacteriologic, virologic, parasitologic, serologic, hematologic, immunohematologic, biophysical, cytologic or other examinations of materials derived from the human body for the purpose of yielding information for: the diagnosis, prevention, or treatment of disease; the assessment of a medical condition; or the testing of drugs. Any facility used for the collection, processing, and transmission of specimens to another facility for the performance of clinical tests falls within the purview of this bill. "Medicaid overpayment" means any Medicaid funds provided to a clinical laboratory due to the clinical laboratory's administration of contracts, cost reports, claims, bills, or any other expenditures of Medicaid funds in such a manner that does not comply with applicable laws, regulations, and guidelines. Specifically, the bill bars a clinical laboratory for a period of ten years from entering into or renewing a public contract, or engaging in any form of business, with any State-funded entity, and from receiving any State funds, grants, or loans, when: (1) the Office of the State Comptroller, Medicaid Fraud Division seeks a recovery of Medicaid overpayments totaling $100,000 or more from the clinical laboratory; or (2) an employee, officer, or agent of the clinical laboratory is convicted of a violation of section 3 of the "New Jersey False Claims Act," P.L.2007, c.265 (C.2A:32C-1 et seq.) or section 3 of P.L.1997, c.353 (C.2C:21-4.3), informally known as the New Jersey Health Care Claims Fraud Act, or section 17 of P.L.1968, c. 413 (C. 30:4D-17), which provides for penalties regarding Medicaid fraud, due to $100,000 or more in Medicaid overpayments. When the Medicaid overpayment increase to $1 million or more, the Department of Health is directed to permanently revoke the license of the clinical laboratory. Furthermore, a clinical laboratory that is reimbursing the State for Medicaid overpayments totaling $100,000 or more pursuant to an investigation, audit, or report issued by the Office of the State Comptroller, Medicaid Fraud Division upon the effective date of the bill is barred from entering into or renewing a public contract or engaging in any form of business with any State-funded entity, and from receiving any State funds, grants, or loans, during the time period in which the clinical laboratory is providing for such reimbursements, plus an additional three year period commencing on the date on which the final reimbursement is made to the State. Under the bill, "State-funded entity" is defined as any department, agency, or instrumentality of the State; any department, agency, or instrumentality of a county or municipality located in the State; or any contractor, grantee, or other recipient of State funds. The bill also directs the Department of Health to establish on the department's website a searchable database of the clinical laboratories subject to the penalties of the bill. The database is to include, at a minimum, the name and address of each clinical laboratory, and the length of time the clinical laboratory is subject to the penalties under the bill. Any entity that enters into or renews a public contract, or engages in any form of business, with a clinical laboratory listed in the database is to be barred from receiving any State funds, grants, or loans, or from engaging in any form of business with a State-funded entity, for five years.

Committee Categories

Robert Karabinchak (D)*, 

Introduced, Referred to Assembly Health Committee (on 01/11/2022)

Official Document