Department of Civil Service

New York State Health Insurance Program: Upcoding of Selected Evaluation and Management Services

In the New York State Health Insurance Program, the Department of Civil Service administers health insurance programs for active and retired State, local government and school district employees and their dependents. The primary such program is the Empire Plan, which provides services costing about $4.0 billion a year.

We examined the major medical claims paid by the Empire Plan during the year 2005 for certain types of evaluation and management services to determine whether the services were provided as billed. For a statistical sample of provider claims, we compared the services in the claims to the services that were documented in the providersí medical records. A medical peer review organization assisted us in our review of the medical records. We found that the providers often billed the Empire Planís insurer for a higher paying service than was actually provided (a practice known as upcoding), and as a result, the providers were often overpaid for these services. We estimated that, in the one-year period reviewed, these overpayments totaled between $5.0 and $6.5 million. We recommended the Department of Civil Service work with the insurer to implement claims processing controls that would identify and correct such erroneous claims.

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