Objective

To determine the extent of implementation of the eight recommendations included in our initial audit report, UnitedHealthcare Insurance Company of New York – Overpayments for Physician-Administered Drugs (Report 2021-S-32).

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 about 1.2 million active and retired State, local government, and school district employees, and their dependents. The Empire Plan is the primary health insurance plan for NYSHIP, providing over 1 million members with four types of health insurance coverage: prescription drug, medical/surgical, hospital, and mental health and substance abuse coverage.

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 a drug (other than a vaccine) that is administered by a health care provider in a physician’s office or other outpatient clinical setting.

The objective of our initial audit, issued on September 13, 2023, was to determine whether United appropriately reimbursed physician-administered drugs. The audit covered the period from January 2017 through December 2021. We identified over $5.5 million in actual and potential overpayments for physician-administered drugs: $4,019,329 was paid under both the Medical/Surgical and Prescription Drug Programs; $1,194,719 was paid in excess of provider-contracted rates; $179,190 was paid in excess of maximum allowable dosage limits; and $143,299 in duplicate United payments were made.

The objective of our follow-up was to assess the extent of implementation, as of March 18, 2025, of the eight recommendations included in our initial audit report.

Key Findings

United officials made some progress in addressing the problems we identified in the initial audit. United recovered about $501,000 of the overpaid claims and was taking steps to make more recoveries. We analyzed more recent claims to evaluate if the causes of the overpayments identified in the original audit were still occurring and, while we found some improvement had been made, there had not been a significant decrease in the level of overpayments when the Medical/Surgical and Prescription Drug Programs both made payments for the same physician-administered drugs, or when providers billed incorrectly for no-cost drugs. United officials stated they were working with Civil Service to develop a process to prevent overpayments on claims where both the Medical/Surgical and Prescription Drug Programs made payments. Of the initial report’s eight audit recommendations, one was implemented, six were partially implemented, and one was not implemented.

Key Recommendation

United officials are requested, but not required, to provide information about any actions planned to address the unresolved issues discussed in this follow-up within 30 days of the report’s issuance.