State comptroller orders youth treatment center in Somerset County to repay $1.5 million to Medicaid

A residential treatment provider for vulnerable youth in Somerset County failed to adequately document required mental health and case management services under its Medicaid contracts and must repay more than $1.5 million to the state, according to a new audit released Thursday by the New Jersey Office of the State Comptroller.

The audit found that Bonnie Brae, which provides residential treatment services for adolescents with emotional and behavioral challenges, maintained unreliable and sometimes implausible records related to therapy, psychiatric care, and case management services billed to Medicaid.

State auditors said the organization failed to maintain documentation supporting required service hours and, in some cases, appeared to document services that could not have occurred as recorded. The report cited overlapping therapy sessions, duplicated progress notes across multiple patients, and records showing services provided to youths who were reportedly absent at the time.

The Office of the State Comptroller’s Medicaid Fraud Division also found that Bonnie Brae employed two unlicensed clinical coordinators and failed to provide or document the minimum required levels of therapy and psychiatric services for some youths in its care.

“Accountability matters, especially when it comes to the care of some of New Jersey’s most vulnerable youth,” Acting State Comptroller Shirley Emehelu said in a statement announcing the findings.

Bonnie Brae operates a 100-acre campus in Liberty Corner with residential cottages, a school, and recreational facilities, along with three transitional living homes. The nonprofit has provided residential treatment services for adolescents since 1916.

The audit covered the period from July 2019 through June 2021, during which Medicaid paid Bonnie Brae about $34.4 million through contracts with the New Jersey Department of Children and Families’ Children’s System of Care. Over a five-year period, the organization received roughly $91.2 million in Medicaid payments, according to the report.

Auditors said discrepancies between employee timesheets and documented service hours were so significant that they would have required roughly 10 additional full-time staff members to account for the gap.

The comptroller’s office concluded that Bonnie Brae failed to demonstrate compliance with Medicaid regulations and contractual requirements and recommended the organization repay $1,528,109 to the Medicaid program.

The Office of the State Comptroller also recommended that Bonnie Brae improve its recordkeeping, verify staff licensing, comply with contract requirements, and retain an independent third-party monitor to oversee compliance efforts.

Bonnie Brae submitted a corrective action plan outlining steps it said it has taken or plans to take, but the organization did not address repayment of the identified overpayment, according to the report.