For several years, the New York State Comptroller has been auditing private, out-of-network medical providers who treat patients covered by New York’s Empire Plan, the health insurance program available to state employees. For out-of-network providers, the Empire Plan reimburses up to 80% of the normal and customary rate. The patient is responsible for the balance. The purpose of the Comptroller’s audit is to determine if the provider “routinely waives” patients’ out-of-pocket costs and, therefore, accepts the insurance proceeds as payment in full. If so, the state considers the provider to have overstated the value of its services and recommends that United Healthcare, the insurer and administrator of the Empire Plan, collect the overpayments from the provider. Based upon these audits, the state has collected millions of dollars from out-of-network providers.
An orthopedic group retained RMF to challenge a final audit report through an Article 78 proceeding. Despite the prevalence of the state’s audits, there were surprisingly no reported decisions on point. RMF set out to create new legal precedent.
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