Article: U.S. Monitor to Oversee Largest Health Care School in Nation

New York Times, Dec. 29, 2005

"The New York Times reported accusations in April that the university might have double-billed Medicaid for millions of dollars. According to university records, its lawyers were warned in 2001 that the university's clinics had overcharged Medicaid by more than $1 million in the previous year, and that its billing practices since the mid-1990's had probably been illegal. Under those practices, the university billed Medicaid for its doctors' services to patients while the doctors were billing Medicaid for the same services."

By DAVID KOCIENIEWSKI and MARIA NEWMAN

Trustees at the University of Medicine and Dentistry of New Jersey today appointed a federal monitor to oversee its troubled financial management to avoid federal prosecution for Medicaid fraud that would have shut it down.

University officials agreed to the federal monitor last week after a threat from United States Attorney Christopher J. Christie that he would prosecute the school criminally for intentionally overbilling the Medicaid program by millions of dollars if the board did not allow federal oversight.

Trustees voted, 5-0, to appoint as its monitor Herbert J. Stern, a former judge and federal prosecutor, who won convictions against a former Newark mayor and two mayors from Jersey City in the 1970's.

"Today we're putting an end to this chapter and a beginning to real reform," acting Gov. Richard J. Codey, who attended the trustees' meeting, said in a statement. "We need to do this for the university's sake, for the state's sake and for the taxpayers' sake."

He said he fully supported the agreement with Mr. Christie to have a federal monitor oversee the medical system's finances, primarily because it would avoid an indictment.

"My staff and I have worked closely with U.S. Attorney Chris Christie and we fully support the agreement that has been approved today," Mr. Codey said. "First and foremost, it will prevent UMDNJ from facing indictment.

"And ultimately, it will help the university get back to focusing on its real mission - providing vital health care and educating our future doctors and nurses."

UMDNJ effectively becomes the first public university in the nation to be placed under federal oversight, according to a Justice Department spokesman in Washington. With its five regional campuses, more than 4,500 students and a $1.6 billion annual budget, UMDNJ is the nation's largest health care university.

If criminal charges had been brought, the university would be disqualified from receiving the federal aid that makes up much of its budget.

For nearly a year, federal agents have been investigating accusations that administrators at the university doled out patronage jobs and tens of millions of dollars in no-bid contracts to their political allies, sometimes for work that was not performed.

Last week, Mr. Christie met with the trustees in a closed-door meeting to tell them of his ultimatum. In his 90-minute presentation, he called the university's financial practices "a public embarrassment and a public disgrace," according to two people at the meeting. Mr. Christie also told the trustees that he intended to charge an unspecified number of university employees with Medicaid fraud, saying they overcharged the federal health care program for the poor by $10 million since 2000.

Mr. Christie also said that he was troubled by the mysterious disappearance of some paper and computer records that his investigators had sought with a subpoena, but it was unclear if he had enough evidence to charge anyone with obstruction of justice.

Last week, three of the university's trustees resigned because they work for companies that do business with the school, a practice that was forbidden by an executive order signed by Governor Codey. The week before, the school's chief financial officer quit, after refusing to sign an affidavit vouching for the accuracy of the university's Medicaid bills. Also, Christy Davis Jackson, the vice president for governmental affairs, resigned from her job last week.

The New York Times reported accusations in April that the university might have double-billed Medicaid for millions of dollars. According to university records, its lawyers were warned in 2001 that the university's clinics had overcharged Medicaid by more than $1 million in the previous year, and that its billing practices since the mid-1990's had probably been illegal. Under those practices, the university billed Medicaid for its doctors' services to patients while the doctors were billing Medicaid for the same services.