$243 Million Gone From UMDNJ

After yet another brief hiatus, UMDNJ is back in the news once again. The university now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see most recent posts here, here, here and here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See post here, with links to previous posts.)

Per the Newark Star-Ledger, The federal monitor has just released another report, which included an updated estimate of the price-tag of the mismanagement at UMDNJ. The price-tag is staggering. The report said, "At this stage of our review, losses due to 'overbilling,' 'double-billing,' and 'waste' could exceed $243 million," and also, "It must be emphasized that we anticipate that this amount may increase as we continue to do our work."

Among the reports findings were:

- The initial figure of $4.9 million in Medicaid fraud at the university represents 'a mere fraction of the potential fraud, waste and financial abuse that has occurred at UMDNJ.'

- The amount that was double-billed to federal and state Medicare and Medicaid programs by UBHC in the last five years totals more than $35.5 million, and is in excess of $49 million prior to 2001.

- The state's charity care program, which reimburses hospitals for services for the indigent, was double-billed by UBHC for $11.7 million since 2001.

- UMDNJ could face a reimbursement charge of more than $52 million for overpayments from state and federal governments.

- The university's board had virtually no oversight over $104 million awarded in outside contracts in the last five years.

- Between 1999 and 2006, UMDNJ spent $3.9 million on lobbying and government-relations firms, 'all of which was improperly authorized.'

- In the last five years, more than $88 million was paid to outside contractors without the proper paperwork.

- Medicaid was overbilled more than $155,000 for food services to patients at University Hospital in Newark.

One of the most flagrant examples of over-billing for you computer buffs out there was "that $301,660.77 was billed for the simple removal of two malicious software programs -- one so-called 'Trojan horse' and one Spyware protocol -- that were found on just one desktop computer."

Some pithy comments by John Inglesino, counsel to the federal monitor:

There's certainly a fraud component, but there's a tremendous amount of waste. We have found numerous instances where vendors were paid large sums and we found no evidence that any work was ever done. [in the Philadelphia Inquirer]

There’s a culture of entitlement there dating back 20 years. Some of the people there seem to think that the money should go into their pockets or for perks for themselves and their friends. There’s a sense that people don’t have to do their jobs very well in order to remain gainfully employed and they can waste taxpayer dollars and not be held accountable. [in the New York Times]

$243 million - wasted by a single health care university? - And people wonder why health care is so expensive? And academic physicians wonder why there never seems to be sufficient money to pay for teaching and teaching programs (see post here)?

Yet Transparency International's 2006 Global Corruption Report cited corruption as an important, but often ignored drain on health care world-wide.

Will anyone take it seriously now?

By the way, as we mentioned earlier, the debacle at UMDNJ has gone on out of sight of most physicians, and health care and policy researchers, at least those outside of New Jersey. This story has gone unmentioned in any medical or health care journal, as best as I can tell from repeated PubMed searches. The anechoic effect continues. And those who are kept ignorant of history may be doomed to repeat it.