Department of Civil Service

New York State Health Insurance Program: Inappropriate Reimbursement Claims From Island Medical Associates (Follow-Up Report)

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 billion a year.

Island Medical Associates operated a clinic where most of the physicians participated in the Empire Plan. When these physicians provided services to Empire Plan members, the services should have been reimbursed at the agreed upon rates for participating providers. However, in audit 2007-S-54, we found the services were inappropriately reimbursed at the non-participating rates, which were five times higher. The higher rates were paid because of questionable billing practices by Island Medical Associates. During the six years we examined, Island Medical Associates was paid a total of $3.9 million for these services . We recommended these payments be recovered and all further payments suspended until questions about Island Medical Associatesí billing practices were resolved. When we followed up on these matters, we found that our audit recommendations had been partly implemented and Island Medical Associatesí billing practices were being investigated by the State Attorney Generalís Office.

For a complete copy of Report 2008-F-34 click here.