Medical Providers Abuse N.Y. Health Program

Twenty medical providers submitted inflated claims to the New York State Health Insurance Program (NYSHIP) after they inappropriately waived out-of-pocket costs for state and local government employees, costing the state nearly $14 million, according to a report released by State Comptroller Thomas DiNapoli.

To date, the New York State Insurance Department and the New York State Department of Civil Service have recovered more than $9 million in over-billings and fines from five of the providers.

The Comptroller’s office conducts regular audits of NYSHIP, which is administered by the Department of Civil Service. Auditors initiated a series of audits in 2007 examining the practices of individual medical providers and have uncovered widespread problems.

DiNapoli’s auditors examined 22 providers that were not participating providers in the Empire Plan, the primary health insurance plan for state and local employees. These providers received reimbursement rates up to 80 percent higher than participating providers. When Empire Plan members receive services from a non-participating provider, they are responsible for paying a larger portion of their medical bill.

Auditors found that 20 of the 22 providers were routinely waiving out-of-pocket costs for patients and passing those costs onto the state by submitting inflated bills to the Empire Plan. These providers apparently waived the fees to attract patients who would not otherwise pay higher costs to see non-participating providers. In addition, this practice allowed providers to remain non-participating providers and collect significantly higher reimbursement rates. Patients were generally unaware that providers were billing the state at a higher rate or that the providers did not participate in the Empire Plan.

Under New York State law, submitting an insurance claim with false information may constitute insurance fraud.

The Comptroller’s office previously referred six of the providers to the Insurance Department after those audits were completed, and is now referring the other 14. To date, the Insurance Department has received more than $9 million in refunds and $78,551 in fines from five providers. Four providers have agreed to stop waiving out-of-pocket costs, reimburse the state for overpayments and pay civil fines. The four also have signed agreements to become participating providers in the Empire Plan. The providers are:

• Endoscopy Center of Long Island, which reimbursed the state $3,135,834 and paid a civil penalty of $31,358;
• Capital Region Ambulatory Surgery Center, Albany, which paid $2,225,015 in reimbursement and $22,250 in fines;
• Digestive Health Center of Huntington, Huntington, which repaid $1,332,120 and paid $13,321 in fines; and
• Day Op of North Nassau, Great Neck, which repaid $1,162,232 and paid a fine of $11,622.

One facility, Day-Op Center of Long Island Inc., Mineola, repaid the state $1.165 million, but has not agreed to discontinue its practice of waiving out-of-pocket expenses and may still be subject to further enforcement action. The other 15 providers identified in the audits are still under review.

Other DiNapoli audits of NYSHIP have found that individual providers have billed for services not provided or submitted duplicate bills, as well as other billing problems.

DiNapoli’s auditors are also working with the New York State Insurance Department’s Frauds Bureau and United Healthcare, which administers the Empire Plan, to recover any overpayments from providers who have submitted inflated bills. Additional audits of NYSHIP are currently underway.

For a copy of the report visit:
http://www.osc.state.ny.us/audits/allaudits/093008/08s130.pdf