Case Study

Unearthing Overpayments: Penstock Recovers $60M+ in HCRA Surcharges for NY Insurer

Company Profile
NY Not-for-Profit Health Plan

New York State (NYS)
Public Health Law § 2807 (HCRA)

2014-2017 surcharge overpayments
2018-2020 surcharge overpayments


A large not-for-profit New York health plan faced challenges with compliance in relation to the New York State (NYS) Public Health Law § 2807 (HCRA). The Plan partnered with Penstock to evaluate and correct HCRA surcharge assessments for member claims processed January 2014 through December 2020.

How We Helped

To ensure compliance with the NY State HCRA regulations, a health plan reached out to Penstock, based on our expertise in this area. As a result, we performed a detailed analysis of the insurer’s client membership files and medical claims to assess compliance with NYS HCRA for the 2014-2017 and 2018-2020 time periods.

Our analysis included review of provider documentation for exemption status, medical claims validation, coordination with insurer representatives for acquiring missing documentation, and development of required reports and back-up documentation to support our findings. Additionally, our claim-level evaluation, based on complex coding and billing requirements, included individual claim-level exclusions under New York State Public Health Law §2807.

The Penstock regulatory team also provided coding and billing guidance, industry-standard policies, guidelines and regulatory references to support operational or system changes required for ensuring the accuracy of assessment obligations.

Based on the findings from the initial look-back analysis of HCRA surcharges, which uncovered significant overpayments by the health plan, the client decided to complete a full assessment for an additional three years. HCRA regulations allow for a six-year look-back.

What We Uncovered

For the 2014-2017 review period, Penstock identified $27,445,615 in surcharge overpayments.

For the 2018-2020 review period, Penstock identified $32,804,290 in surcharge overpayments.

Looking forward

Penstock’s expertise and thorough analysis helped one of the largest not-for-profit health insurers in New York identify over $60M in overpaid HCRA surcharges. In addition to the 7-year review period, the client also wanted to ensure that their plan was accurately assessed for the HCRA surcharge on a go-forward basis. As a result of this collaboration, the health plan has engaged Penstock to conduct retrospective reviews from 2021 to present and to conduct ongoing monthly prospective reviews to ensure accurate HCRA payments, lower the cost of healthcare and reduce administrative burden that comes with recouping overpaid surcharges from the state.


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