More than $132 Million in New Jersey Medicaid funds recovered, watchdog says

New Jersey recovered more than $132 million in misspent Medicaid funds in fiscal year 2025, an 11 percent increase over the previous year, the state Office of the State Comptroller announced this week.

The $132,475,474 recovered is the second-highest amount recouped in the past decade, behind only 2022’s $144.8 million. In the last ten years, the Office of the State Comptroller has recovered or helped reclaim more than $1 billion in Medicaid funds for state and federal taxpayers.

“OSC takes very seriously its responsibility to protect the integrity of New Jersey Medicaid,” said Josh Lichtblau, director of the agency’s Medicaid Fraud Division. “Every dollar misspent is money that should have been going towards the care of some of our state’s most vulnerable residents.”

The OSC’s Medicaid Fraud Division identifies improper payments through audits, investigations, and data reviews. Working with outside contractors, the office examines claims that were wrongly billed to Medicaid, including instances where other insurers should have paid or where beneficiaries lived outside of New Jersey.

Much of the money recovered stems from these reviews, which flag cases where Medicaid covered costs that should have been billed elsewhere. Federal law requires Medicaid to be the payer of last resort, meaning it should only cover services not paid for by another insurer.

In a sign of growing compliance, ten healthcare providers voluntarily reported improper payments to the OSC in fiscal 2025, returning about $1.8 million to the Medicaid program.

The watchdog agency encourages providers to self-report overpayments, noting that those who come forward generally face fewer penalties. Between 2019 and 2025, 80 healthcare providers self-disclosed inappropriate payments, returning more than $10 million to the state and federal government.

Beyond recovering funds, the Office of the State Comptroller also issues policy recommendations aimed at reducing future waste. One such reform — curbing the use of unnecessary and duplicative laboratory tests — has saved the state an estimated $102 million since 2021, according to the office.

The watchdog’s findings underscore both the scale of Medicaid spending in New Jersey and the persistent challenge of safeguarding public dollars. Medicaid serves roughly 2.3 million residents statewide, including low-income families, people with disabilities, and seniors.