According to an audit released Wednesday by the New York Comptroller, four of the state's largest surgical facilities allegedly submitted inflated claims to the state's Empire Plan after they inappropriately waived out-of-pocket costs for medical services provided to state and local government employees at an overall cost of $8 million. Under New York State law, submitting an insurance claim with false information may constitute insurance fraud.

“These medical facilities engaged in abusive practices and inflated their bills, causing the state to incur significantly higher costs," says Mr. DiNapoli in a statement. "These providers hurt taxpayers and must be held accountable for their actions. After only a handful of completed audits, I am very concerned about the abuse that we have found in this program. My office will continue to partner with the Department of Civil Service to ensure that taxpayers aren't paying a dollar more than they should."

As part of an effort to examine whether medical providers were complying with reimbursement requirements under the New York State Health Insurance Program (NYSHIP), auditors examined medical claims submitted from Jan. 2001 to Dec. 2006 for four of the state's largest ASCs. Auditors found that these providers routinely waived out-of-pocket costs for Empire Plan members, allegedly because they would not otherwise accept a referral to a non-participating provider and incur significant out-of-pocket costs, says an Office of the State Comptroller release. Instead, the release says, the providers inappropriately billed United HealthCare, the state’s insurance administrator, and the state therefore incurred substantially higher costs for services, a total of $8 million.

Auditors have recommended that United HealthCare recover the money from the four ASCs and work with the state Department of Civil Service to develop methods to "prevent providers from taking advantage of the system and inappropriately waving patients' out-of-pocket costs," says the release. One of the major concerns about this action, aside from the claims themselves, is the potential for copycat suits by other states' payors.