ALBANY - A Nassau County medical practice took in an extra $787,134 in payments by routinely waiving the required out-of-pocket costs for services provided to members of the New York State Health Insurance Plan, according to an audit released Tuesday by State Comptroller Thomas DiNapoli.  

When members of the Empire Plan, NYSHIP’s primary health benefits plan, receive services from a non-participating provider, they are responsible for paying a larger portion of their medical bill.

Auditors found South Island Orthopedic Group of Cedarhurst waived out-of-pocket costs for patients and passed those costs onto the state by submitting inflated bills to the Empire Plan.

The state Department of Civil Service contracts with United HeathCare to process and pay medical claims submitted for Empire Plan members.

DiNapoli’s auditors found that from January 1, 2001 through October 31, 2008, South Island apparently waived the fees to attract patients who would not otherwise pay higher costs to see non-participating providers. This practice allowed South Island to remain a non-participating provider and collect significantly higher reimbursement rates.

The practice drives up costs for the state because it increases the likelihood that plan members will use non-participating providers.

The audit recommends United:

• Recover the $787,000 overpaid to South Island;
• Formally advise South Island of the advantages of becoming a participating provider;  
• Work with Civil Service to prevent South Island from waiving out-of-pocket costs in the future.