Albany provider among 20 accused of inflating insurance costs

State Comptroller Thomas DiNapoli says 20 medical providers - including one based in Albany - cost N
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Categories: Schenectady County

State Comptroller Thomas DiNapoli says 20 medical providers cost New York nearly $14 million between 2001 and 2007 by intentionally not collecting out-of-pocket payments state workers should have made to the state health insurance program.

Because the physician groups weren’t participants in the Empire Plan — the primary health insurance plan for state employees — workers were responsible for paying a greater share of their out-of-network medical bills, according to a report DiNapoli issued Monday.

But doctors waived collecting those higher payments to attract more patients and to receive reimbursements up to 80 percent higher than providers in the plan are paid.

DiNapoli says the problem is likely widespread. His office started evaluating 22 providers in June 2007, and only two hadn’t inappropriately waived patient costs.

“Even in good fiscal times, abuse of taxpayer dollars is unacceptable. But now, when every dime counts, we have to crack down even harder on anyone who tries to manipulate the system and scam tax dollars,” DiNapoli said.

The state Department of Insurance and the Department of Civil Service joined in the investigation.

“If nonparticipating providers are allowed to waive out-of-pocket costs and charge higher fees than those who play by the rules, the state’s health insurance costs will explode, hurting everyone,” said Insurance Superintendent Eric Dinallo.

Despite the harsh warnings from DiNapoli and Dinallo, officials declined to label the abuse as fraud, saying only that it may constitute fraud.

The agencies are not pursuing any criminal charges against physician groups at this time. Instead they are working on settlements with each of them, and have collected more than $9 million in refunds and more than $78,000 in fines from five providers. The Capital Region Ambulatory Surgery Center paid $2,225,015 in reimbursement and $22,250 in fines, according to the state Insurance Department.

The agencies may work together in future audits to root out more the same abuse, DiNapoli said.

Four of those five providers have signed agreements to participate in the state’s health insurance plan. Negotiations are ongoing with the others.

UnitedHealthcare, which operates the Empire Plan, is working with the state to eliminate the problem.

“We have worked diligently to recover significant over-billed amounts,” said Mary McElrath-Jones, a company spokeswoman. “Abusive billing practices such as the ones identified by the audit impact all consumers’ health costs, and UnitedHealthcare is committed to working with authorities to ensure these types of activities are investigated and eliminated.”

The New York state Health Insurance Plan provides health insurance to more than 1.2 million current and former state and local government employees.

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