New York State Health Insurance Program


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NYS Comptroller


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New York State Health Insurance Program
Empire Blue Cross and Blue Shield Payments Made to Hudson Valley Hospital Center (Follow-Up)

Issued: August 13, 2012
Link to full audit report 2012-F-12
Link to the 30-day response

To determine the extent of implementation of the two recommendations included in our initial audit report, Payments Made to Hudson Valley Hospital Center (Report 2009-S-99).

Our initial audit report, which was issued on October 28, 2010, examined whether the payments made by Empire BlueCross BlueShield to the Hudson Valley Hospital Center were made in accordance with Empire’s Certificate of Insurance and Empire’s hospital agreement with Pinnacle HealthCare, a health-care alliance that includes Hudson Valley. We also reviewed the payments to determine if they were reasonable based on Empire’s expectations for payment of certain special items.  We found claims were reimbursed in accordance with the written language of the contract.  However, the resulting reimbursement far exceeded the cost of the items and Hudson Valley made a profit of $885,680; 385 percent above cost.

Key Findings

  • Empire officials have made progress in correcting the problems we identified in the initial report.  Empire amended their agreement with Hudson valley to specify the basis of payment for special items.  Furthermore, Empire has implemented a new initiative to audit higher risk payments to certain providers; although Empire has not yet performed any audits of payments to Hudson Valley.

Key Recommendations

  • Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review.

Other Related Audits/Reports of Interest
New York State Health Insurance Program: Payments Made to Hudson Valley Hospital Center Report 2009-S-99

State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone: (518) 474-3271; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236