Objective

To determine whether UnitedHealthcare Insurance Company of New York appropriately reimbursed physician-administered drugs. The audit covered the period from January 2017 through December 2021.

About the Program

The New York State Health Insurance Program (NYSHIP), administered by the Department of Civil Service (Civil Service), provides health insurance coverage to over 1.2 million active and retired State, participating local government, and school district employees, and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP, serving about 1.1 million members.

Civil Service contracts with UnitedHealthcare Insurance Company of New York (United) to administer the Medical/Surgical Program of the Empire Plan and to process and pay claims submitted by health care providers. Medical/surgical benefits cover a range of services, including physician-administered drugs, which are also covered under the Empire Plan’s separate Prescription Drug Program. A physician-administered drug is an outpatient drug (other than a vaccine) that is usually administered by a health care provider in a physician’s office or other outpatient clinical setting.

From January 2017 through December 2021, United paid approximately $878 million for physician-administered drugs.

Key Findings

We identified $5,536,537 in actual and potential overpayments for the cost of physician-administered drugs during the audit period, as follows:

• $4,019,329 was paid for physician-administered drugs under both the Medical/Surgical and Prescription Drug Programs of the Empire Plan;
• $1,194,719 was paid for physician-administered drugs in excess of provider-contracted rates;
• $179,190 was paid for physician-administered drugs in excess of maximum allowable dosage limits; and
• $143,299 in duplicate payments for physician-administered drugs was paid.

As of March 29, 2023, United recovered $254,188 of the improper payments.

Key Recommendations

• Review the identified overpayments and make recoveries, as warranted.
• Work with Civil Service to identify physician-administered drugs paid for by both the Medical/Surgical and Prescription Drug Programs and develop a process to prevent future overpayments.
• Enhance controls designed to prevent services from being paid at rates above provider-contracted rates.