Purpose

On September 30, 2014, we issued report 2012-0063, entitled the Long Island Association for AIDS Care, Inc. (LIAAC). Based on information obtained subsequent to that report, we questioned the authenticity of the documents LIAAC submitted to support the reimbursement for employee health insurance (i.e., medical and dental expenses). As a result, we continued our examination of medical and dental expenses claimed for reimbursement by LIAAC under their contracts with the Department’s AIDS Institute.

This report summarizes the results of ourexamination of LIAAC’s claims for payment totaling $120,293 for employee medical and dental expenses for the period February 2014 through May 2015. This report also identifies the results of our examination of refunds and reimbursements totaling $195,791 received from other entities for covered individuals’ medical and dental expenses.

During the period of this examination LIAAC purchased group medical benefits from the Long Island Network of Community Services (LINCS), which is self-insured for medical and dental insurance. The CEO of LIAAC also served as the CEO of LINCS. Each month, LINCS paid its third party administrator for covered individuals’ medical and dental claims, as well as stop-loss insurance to cover LINCS in the event claims liabilities reach a specific threshold. In addition, LINCS voluntarily paid an additional amount above the cost of the medical and dental claims so that the third party administrator would have a cash reserve on hand to hasten payments to the medical providers. LINCS then passed the total amount of medical and dental costs, as well as the cost of the cash reserve, to LIAAC. LIAAC then received reimbursement from the Department for a portion of the stop-loss insurance expenses and the cash reserve.

Key Findings

We found the claims for payment LIAAC submitted for medical and dental expenses contained overbillings of $15,777. The claims were returned to the Department. We also identified $95,918 in refunds and reimbursements from other entities for medical and dental expenses paid to LIAAC’s related entity and group medical benefits provider, LINCS, which should have been remitted to the Department.

Key Recommendations

• Ensure LIAAC provides sufficient, appropriate evidence to support expense reimbursements.
• Review the disallowances identified and take appropriate actions to recover the disallowed expenses, as appropriate.
• Assess the authenticity of the altered business records LIAAC submitted to support employee medical and dental expenses and take appropriate action.