ALBANY – Twenty medical providers, including two in Westchester County, inappropriately waived out-of-pocket costs for patients, then submitted nearly $14 million in inflated claims to the state Health Insurance Program, a state audit released yesterday found.
Ambulatory Surgery Center of Westchester, in Mount Kisco, and Eye Surgery Center of Westchester, in New Rochelle, were listed as having total billing that was inflated. Ambulatory Surgery Center had $140,656 of $1.22 million total billing that was inflated and Eye Surgery Center had $104,202 of $718,369 total billing that was inflated.
Colleen Hocking, assistant to the administrator at the Ambulatory Surgery Center, said yesterday that the organization had not received the audit, “and until we do, we cannot comment.” No one from the Eye Surgery Center could be reached for comment yesterday afternoon.
Using the findings of the audit from Comptroller Thomas DiNapoli’s office, the departments of Insurance and Civil Service have since recovered more than $9 million from five of the providers and put it back into the health plan. The plan covers 1.2 million state and local government and school-district employees, retirees and their families. It costs $5.4 billion a year.
When health plan members go to out-of-network providers, they have to pay more than they would if they went within the network. The 20 providers, most of which are ambulatory surgery centers, were waiving those out-of-network costs for patients.
In submitting claims, the providers overstated what they actually charged patients, which inflated their reimbursements by $13.8 million between January 2001 and December 2007, the audit found.
“These medical providers misled patients and engaged in abusive practices, significantly driving up costs for the state,” DiNapoli said.
In general, patients were not aware this was going on or that the providers did not participate in the state plan, the audit said. Reimbursement rates for out-of-network providers are typically 77 percent to 83 percent higher than for participating ones.
“Numerous medical providers appear to be deliberately waiving fees in order to attract patients who would not otherwise pay higher costs to see non-participating providers,” DiNapoli said.
The audited companies comprise a small portion of nonparticipating providers in the state insurance program, and the abuse could be more widespread, the comptroller said.
The Insurance Department has received more than $78,000 in fines as part of civil settlements with the five providers, including four on Long Island and one in Albany. Four of the five have agreed to stop waiving out-of-pocket costs and will join the provider network, state Insurance Superintendent Eric Dinallo said. They agreed not to pursue patients for the costs that had been waived, he said.
The fifth facility repaid the state but has not agreed to stop waiving out-of-pocket expenses and may face further enforcement action, state officials said. Settlements have not yet been reached with the other 15 providers.
Submitting insurance claims with false information may constitute fraud under state insurance law, but officials stopped short of saying the providers committed fraud.
Cara Matthews is a reporter with Gannett News Service. Reach her at
. Sean Gorman of The Journal News contributed to this report.