New Jersey OSC Medicaid Fraud Division · October 23, 2026 · Primary source
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Summary
The New Jersey Office of the State Comptroller's Medicaid Fraud Division issued a final audit report finding that Bonnie Brae, a nonprofit residential treatment provider for emotionally disturbed youth, failed to maintain documentation supporting contractually required services and must repay more than $1.5 million in Medicaid overpayments from $34.4 million paid during the July 2019 to June 2021 audit period. Key findings include documentation of clinical coordinator hours significantly exceeding timesheet records, claims for on-site services when youth were documented as off-site, failure to provide required clinical therapy and case management frequencies, 93 duplicated progress notes across two therapists that were identical for all youth over seven sessions, and employment of two unlicensed clinical coordinators. The audit covered DCF contracts totaling approximately $91.2 million over five years under N.J.A.C. requirements for residential treatment centers serving youth with behavioral health and substance use needs.
What this may mean
Bonnie Brae is required to repay more than $1.5 million to the Medicaid program and must institute significant recordkeeping reforms to meet Medicaid and DCF contract requirements. The findings create enforcement and contract-termination risk for residential treatment providers billing Medicaid under per-diem DCF contracts, particularly those operating RTC-BH/SU programs serving youth with co-occurring behavioral health and substance use disorders. The audit's identification of duplicated progress notes and unlicensed staff as specific deficiencies signals that NJ OSC is applying heightened scrutiny to staffing documentation and service-delivery verification at youth residential treatment facilities.
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