Weiss Zarett Brofman | Sonnenklar & Levy, P.C. | Attorneys At Law

High Quality Services And Personal Attention


On Behalf of | Jun 1, 2011 | Healthcare Law

MSSNY has received permission from the New York State Supreme Court, Appellate Division, Third Department to file an amicus curiae brief in Marvin H. Handler, MD., P.C., v. Thomas DiNapolo Comptroller of the State of New York and United Healthcare Insurance Company of New York. The issue that is pending in this appeal concerns whether the Comptroller of the State of New York has the constitutional authority to audit private medical practices that provide out-of-network services to participants in the New York State Empire Plan. The Empire Plan is a health benefit plan that provides health insurance coverage to active and retired State employees, as well as participating local government and school district employees, and their dependents.

The Comptroller has audited several physician practices including the practice of Dr. Handler (the “Petitioner’). The audit of the Comptroller primarily focused on whether the medical practice had “routinely waived” Empire Plan members’ out-of-pocket costs. The Comptroller’s audit report concluded that the petitioner had routinely waived Empire Plan members’ out-of pocket obligations and asserted that, as a result, the medical practice was overpaid at a cost of $903,563 to the State. The Petitioner instituted a legal proceeding seeking to set aside the Comptroller’s audit. On June 18, 2010 New York State Supreme Court Justice Michael C. Lynch (Albany Co.) issued an order to set aside the Comptroller’s audit. Justice Lynch held that the New York State Comptroller had no constitutional authority to conduct an audit of the Petitioner. In this appeal MSSNY’s amicus curiae brief urges the Appellate Division to affirm Justice Lynch’s ruling and to hold that the New York State Comptroller has no constitutional authority to audit private physician offices.



The State of New York contracts with United Healthcare to insure and administer the Empire Plan. Under the contract, the State makes premium payments to United to cover the cost of the claims and the cost of administering the program. Participants in the Empire Plan may see either “participating providers” or “non-participating providers” (or “NPPs”). Participating providers enter into a written agreement with United to accept payments at rates established by United. United pays participating providers directly based on claims they submit for services rendered. Members are required to pay a nominal co-payment to the participating provider for certain services rendered.

In accordance with the Empire Plan benefit plan design, United pays NPP claims based on the “reasonable and customary” charge for the services provided, which is the lowest of the actual amount of the provider’s billed charges, the provider’s usual charge for the same or similar service, or the usual charge of other providers in the same or similar geographic area. As required by the Empire Plan, when United pays a claim from an NPP, the payment is made to the Empire Plan member. The member is then expected to use the funds to compensate the NPP.

The Empire Plan requires members to pay higher out-of-pocket costs, in the form of deductibles and co-insurance, when they use NPPs. After the member meets an annual deductible, United pays the member 80% of the amount United determines to be “reasonable and customary”. The member is then responsible to pay the remaining 20% portion of the amount determined to be “reasonable and customary”, as well as any amount that the NPP charges in excess of the amount determined by United to be “reasonable and customary”.


On April 16, 2009, the Comptroller conducted an audit. The audit focused on 3,364 claims totaling $4.9 million that Petitioner’s medical practice charged for Empire Plan members for the period January 1, 2004 through December 31, 2008. The audit