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Providers Pay Fines and Agree to Discontinue Improper Waivers

The New York State Insurance Department today announced that six medical providers have reimbursed the state more than $2.4 million to cover the cost of inflated billings they submitted to the New York State Health Insurance Program (NYSHIP).

The medical providers also paid fines and agreed to discontinue the practice of inappropriately waiving out-of-pocket fees that should have been charged state and local government employees filing health insurance claims.

The inflated billings resulted when the medical providers, located in New York City, Westchester County and Nassau County, passed on to the state the cost of the out-of-pocket fees, waived to attract patients who would not otherwise pay higher costs.

The improperly handled claims were uncovered as the result of audits conducted by State Comptroller Thomas P. DiNapoli. 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 uncovered widespread problems. These problems included some providers routinely waiving out-of-pocket costs for patients and passing those costs onto the state by submitting inflated bills to the Empire Plan.

Over the last two years, the state has recovered approximately $11.4 million from providers who were inappropriately submitting inflated claims.

Auditors are continuing to work with the New York State Insurance Department’s Frauds Bureau and United Healthcare, which administers the Empire Plan, to recover potential overpayments to other providers who may have submitted inflated bills.

NYSHIP is the largest public employer health insurance program in the nation, aside from the federal government, providing health insurance to more than 1.2 million current and former state and local government employees.

These are the medical providers which agreed to reimburse claims charges to the state:

Provider Cost of Inflated Claims Reimbursed to State Fine
Edward Fryman, DPM $1,088,966 $10,889
3650 Merrick Rd., Seaford    
South Shore Ambulatory Surgery $821,834 $8,218
Center, LLC    
444 Merrick Rd., Lynbrook    
Fifth Avenue Surgery Center $178,633 $5,000
994 Fifth Ave., New York City    
Mount Kisco Surgery Center, LLC $137,340 $5,000
d/b/a The Ambulatory Surgery    
Center of Westchester    
34 S. Bedford Rd., Mount Kisco    
Mount Kisco Medical Group, PC $130,645 $5,000
34 S. Bedford Rd., Mount Kisco    
Eye Surgery Center of Westchester, Inc. $115,934 $5,000
838 Pelhamdale Ave., New Rochelle    
Total $2,473,352  



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