Author: WorkCompAcademy

Under the Medicare law, as enacted in 1965, Medicare was the primary payer for services except those covered by Workers’ Compensation (WC). In 1980, Congress enacted the first of a series of provisions that made Medicare the secondary payer to certain additional primary plans. The purpose was to shift costs from the Medicare program to private sources of payment. These provisions are known as the Medicare Secondary Payer (MSP) provisions.

A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease. These funds must be depleted before Medicare will pay for treatment related to the workers’ compensation injury, illness, or disease.

When Medicare is the secondary payer, the provider, physician, or other supplier, or beneficiary must first submit the claim to the primary payer. The primary payer is required to process and make primary payment on the claim in accordance with the coverage provisions of its contract.

A recent change to a Medicare Secondary Payer Manual brings Medicare Set-Asides into play for doctors and other medical service providers, who as of March 24 are obligated to direct bill those trusts.

According to an Allen Koba blog article on this development, just a year after Medicare’s Workers’ Compensation Medicare Set-Aside Reference Guide update strenuously emphasized the utility of MSAs in protecting Beneficiary entitlements post settlement, the Centers for Medicare and Medicaid Services now put MSA policy in motion with this recent directive.

This change is consistent with Medicare’s WCMSA policy and previous guidance that allocations of future medical expenses should be properly funded and spent down in order to protect entitlements. Previous versions of this Manual illustrated primary insurance as opposed to secondary insurance, but made no specific reference to Medicare Set-Asides.

Paramount to this change is the obligation to identify which Beneficiaries should have a Medicare Set-Aside, which can be accomplished through a series of direct inquiries to the patient as well as a review of the Common Working File for an indicator of a WCMSA’s existence. Medicare added Section 30.2.2.1 to chapter 3 of the Medicare Secondary Payer Manual, which includes the following:

– – Specific questions providers must ask every Medicare Beneficiary to determine whether a Medicare Set-Aside exists.
– – Details to check the HETS 270/271 response for a “w.” This indication notifies providers that a WCMSA record exists.
– – The process for billing Medicare as primary insurance upon Medicare Set-Aside exhaustion.

The key takeaway from this update is that providers are required to determine whether Medicare is a primary or secondary payer for each inpatient admission of a Medicare beneficiary and outpatient encounter with a Medicare beneficiary prior to submitting a bill to Medicare. It must accomplish this by asking the beneficiary about other insurance coverage.

Section 20.2.1 of the Update provides and outline of questions which provides important points of data to gather from Medicare beneficiaries that are helpful for providers to determine who has primary payment responsibility for a claim or set of claims by asking the questions upon each inpatient and outpatient admission

For more information or questions on this topic, please contact info@allankoba.com.

A Southern California couple has been arrested after running a YouTube channel that had videos of them allegedly committing insurance fraud.

Christopher Phelps, 40, of Yucaipa, and his wife, Kimberly Phelps, 40, were arrested on multiple felony counts of insurance fraud, assault with a deadly weapon and child endangerment after the couple allegedly caused collisions in an attempt to collect insurance payouts. Christopher Phelps was previously arrested last month on similar charges.

The California Department of Insurance began an investigation after the San Bernardino County Sheriff’s Department became aware of a YouTube channel where dashcam videos of traffic collisions and rage road incidents were posted.

The investigation connected the channel to Christopher Phelps under the name “BLU3 GHO57.” The channel had approximately 162 dashcam videos of vehicle collisions, attempted or near collisions, road rage incidents, and other content involving the couple. In multiple incidents Christopher Phelps’ child is also in the vehicle.

The investigation discovered approximately 23 collisions documented on the channel which were linked to 17 insurance claims filed by Christopher Phelps and 42 videos related to road rage incidents and attempted collisions involving him. Several of the videos appeared to be intentional acts. The Department’s investigation included numerous search warrants, collecting and reviewing hours of videos, and attempting to locate additional victims through videos posted to Department social media accounts.

Last month, the Department was contacted by the San Bernardino County Sheriff’s Department after Christopher Phelps was involved in a suspicious collision, appearing to stop for no apparent reason and causing a truck pulling a trailer to rear-end his vehicle.

Shortly after the collision, he posted to YouTube a rear-facing dashcam video of the moments leading up to the collision. Department detectives responded to the area of the collision in Yucaipa and canvased the area for surveillance video and witnesses, which led to the earlier arrest. Following that arrest he posted bail and was released.

Christopher Phelps has been charged with six felony counts of assault with a deadly weapon, 11 felony counts of insurance fraud, and five felony counts of child endangerment. Kimberly Phelps has been charged with two counts of felony child endangerment and one count of felony insurance fraud. Christopher Phelps was previously charged with one felony count of assault with a deadly weapon and one felony count of causing a vehicle collision for the purpose of presenting a false claim following his arrest last month.

Department detectives arrested the couple in San Bernardino. Christopher Phelps was booked at the West Valley Detention Center and is being held on $500,000 bail. Kimberly Phelps was booked at the Central Detention Center and is being held on $500,000 bail.

The San Bernardino County District Attorney’s Office is prosecuting this case.

Cal/OSHA issued 18 citations, including six citations for willful-serious violations, to Parter Medical Products, Inc. for failing to protect its employees from overexposure to ethylene oxide (EtO), a toxic chemical. A willful violation is issued when evidence shows that the employer committed an intentional and knowing violation. The penalties total $838,800 to date, and the status of the ongoing investigation remains “open.”

“Our inspection showed this was not an isolated incident of chemical overexposure to workers,” said Cal/OSHA Chief Jeff Killip. “The employer failed to take action to protect employees even after it knew that some of them were exposed to dangerous levels of ethylene oxide.”

Parter Medical Products, Inc. dba Parter Sterilization Services was founded in 1984, and uses ethylene oxide gas to sterilize medical devices. Chronic exposure to ethylene oxide is associated with cancer, reproductive effects and neurotoxicity. Its odor is undetectable to humans until the concentration exceeds hazardous levels.

On August 5, 2022, Cal/OSHA’s Process Safety Management (PSM) Unit opened an inspection at the Parter facility in Carson. The PSM Unit is responsible for inspecting refineries and chemical plants that handle large quantities of toxic and flammable materials. PSM’s inspection followed an investigation by South Coast Air Quality Management District, which referred the matter to Cal/OSHA.

Parter shut down its facility in August 2022 for several months while it made modifications to reduce outdoor ethylene oxide emissions.

However, Parter’s remediation efforts did not solve the employee-exposure issues indoors. When Cal/OSHA resumed its inspection in December 2022, it found that one employee was overexposed to ethylene oxide his entire shift. Under Cal/OSHA regulations, the permissible exposure limit for eight hours is no more than 1 ppm (parts per million). The employee’s exposure averaged 5 ppm during the shift and averaged 9 ppm during a three-and-a-half-hour period. Tests show Parter employees were exposed to ethylene oxide above the permissible limit from 2019 until 2022.

Cal/OSHA’s citations include violations for the employer’s failure to have an effective safety plan to evaluate and develop controls for hazards, failure to develop a respiratory protection plan as required, failure to monitor employee exposure, and failure to notify workers of exposure over the permissible limit for ethylene oxide.

Parter is located at 17015 Kingsview Avenue in Carson California. The Carson City Council unanimously voted in early 2022 to request air monitors be placed in various locations of the city to monitor air quality.

The City of Carson was advised by South Coast Air Quality Management District (AQMD) that an air pollutant discharge by Parter may constitute a health hazard late in July in the nearby industrial area.

South Coast AQMD has conducted multiple on-site inspections at the facility and conducted field operations in the surrounding area. On July 29, 2022, a Notice of Violation was issued to Parter for Public Nuisance in violation of agency Rule 402 and California Health & Safety Code § 41700. This violation was based on elevated EtO emissions detected through air monitoring efforts outside of the facility at an adjacent business.

South Coast AQMD is further investigating EtO emissions in the nearby residential communities and the agency is working with the City of Carson to identify additional locations to collect 24-hour samples in the nearest community and school. So far, data from residential monitors show EtO levels to be within typical background levels.

Parter had indicated their EtO equipment will remain shut down until additional air pollution controls can be implemented including the modifications and upgrades to air pollution control equipment and temporary enclosures. The facility has initiated the permitting process for the upgrades and South Coast AQMD will review and approve those applications as quickly as possible.

During South Coast AQMD’s monitoring efforts at several commercial EtO sterilization facilities, the agency became aware of fugitive emissions from sources that were not previously known. South Coast AQMD’s investigation has identified that existing pollution controls will need to be upgraded and measures will be needed to reduce fugitive emissions.

South Coast AQMD is working on amending Rule 1405 – Control of Ethylene Oxide and Chlorofluorocarbon Emissions from Sterilization or Fumigation Processes to strengthen requirements to address fugitive emissions, as well as provisions to further reduce EtO emissions from operations at these facilities.

Kandel & Associates, P.A., a Baltimore-based law firm, and Nelson R. Kandel, Esq., have entered into a settlement agreement with the United States to resolve allegations that they failed to reimburse the United States for certain Medicare payments the Government had previously made to medical providers on behalf of firm clients.

“Plaintiffs’ attorneys cannot simply rely on their clients’ representations about their status as Medicare beneficiaries and ignore their obligations to reimburse Medicare for its conditional payments,” said U.S. Attorney Erek L. Barron. “This is the third matter our office has resolved with attorneys who fail to make good on their obligations to repay Medicare for its conditional payments, and we will continue to investigate these matters, regardless of when settlement distributions are made, and regardless of what clients tell their attorneys regarding their status as Medicare beneficiaries.”

The Government’s investigation arose under the Medicare Secondary Payer (“MSP”) provisions of the Social Security Act, which authorizes Medicare, as a secondary payer, to make conditional payments for medical items or services under certain circumstances.

When an injured person receives a tort settlement or judgment, Medicare law requires persons or entities who receive the settlement or judgment proceeds, including the injured person’s attorney, to repay Medicare for its conditional payments. If Medicare does not receive timely repayment, these same laws and regulations permit the Government to recover the conditional payments from the injured person’s attorney and others who received the settlement or judgment proceeds.

The Government alleged that, over many years, Medicare made conditional payments to healthcare providers to satisfy medical bills for firm clients.

During that period, the firm negotiated for and received settlement proceeds for the firm’s clients, but neither the firm nor its clients repaid Medicare for conditional payments it made to medical providers. The Government alleges that the firm disbursed settlement proceeds to clients without confirming the existence of an MSP debt.

Under the terms of the settlement agreement, the firm and Mr. Kandel agreed to pay the United States $39,828.66 to resolve the Government’s claims. This settlement resolves the Government’s claims that the firm and Mr. Kandel failed to resolve at least twelve MSP debts.

The firm and Mr. Kandel also agreed to designate a person at the firm responsible for paying MSP debts; train the designated employee to ensure that the firm pays MSP debts on a timely basis; and periodically review any outstanding MSP debts with the designated employee to ensure compliance.

The claims resolved by this settlement are allegations. The settlement is not an admission of liability by the firm or Mr. Kandel, nor a concession by the United States that its claims are not well founded.

This settlement should remind attorneys of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients. The attorneys’ obligation to reimburse Medicare for conditional payments exists regardless of whether they disburse settlement proceeds to their clients before the Centers for Medicare & Medicaid Services contacts them about the existence of an MSP debt. When attorneys receive settlement funds in personal injury cases, they have an independent obligation to confirm whether their clients received conditional payments from Medicare.

Greg Evan Lindberg, who was born in 1970 in San Mateo California, is a former business executive and founder of Global Growth, a conglomerate private-equity firm.

In 1991, while still attending Yale University, Lindberg launched Home Care Week, a health insurance compliance and reimbursement newsletter for home health agencies. He later transformed this venture into a conglomerate, Eli Global, based in Durham, North Carolina. The conglomerate operated as a private-equity firm.

In 2012 Lindberg began investigating the possibility of acquiring insurance companies, displaying a particular interest in the large number of assets retained by such companies to fulfill payouts. In 2014 Eli Global made its first insurance acquisition when it purchased a burial-policy insurer based in Alabama.

Lindberg wished to loan the insurer’s assets to other businesses he owned, but the number of the company’s assets he could invest in affiliated enterprises was restricted by Alabama state laws. Lindberg then relocated the insurer to North Carolina, where regulations on such practices were vaguer, and began trading the burial-policy insurer’s investments in treasury bonds for large loans in his own companies.

Though North Carolina regulators usually enforced a cap of affiliated investments on insurers at 10% of their assets, the North Carolina Department of Insurance led by North Carolina Commissioner of Insurance Wayne Goodwin reached a special agreement with Lindberg, allowing his burial-policy insurer to invest as much as 40% of its assets in affiliates, though this limit was also eventually breached.

In 2015 and 2016 Lindberg acquired more insurers and grouped them together as the Global Bankers Insurance Group. Global Bankers Insurance Group, which in turn is part of a larger group of companies known as Global Growth (formerly known as Eli Global), which is owned by Greg Lindberg.

Lindberg ultimately loaned about $2 billion from the insurance companies he had acquired to his affiliated corporations, using much of it to expand his private holdings. By 2019 he had acquired over 100 companies.

On June 27, 2019, the North Carolina Department of Insurance placed several of Lindberg’s insurance companies into “rehabilitation”, citing concerns about their liquidity and ability to meet their obligations to policy holders.

In late July 2019, North Carolina Governor Roy Cooper signed a legislative proposal – created in reaction to Lindberg’s investment strategy and widely dubbed “the Lindberg bill” – into law setting a statutory limit on affiliated investments by insurers at 10% of their assets. Eli Global was re-branded as Global Growth in September and Lindberg resigned as its chief executive officer.

On March 18, 2019, Lindberg, two business associates, John Gray and John Palermo Jr., along with the chair of the North Carolina Republican Party, Robin Hayes, were indicted by a federal grand jury for financial crimes including wire fraud and bribery.

According to the indictment, Lindberg and his associates – coordinating with Hayes – promised to donate millions of dollars to the North Carolina Republican Party in exchange for favorable treatment of Global Bankers Insurance Group by Causey and the dismissal of the deputy insurance commissioner responsible for regulating Lindberg’s businesses.

On March 5, 2020, Lindberg was found guilty of conspiracy to commit honest services wire fraud and bribery by a jury and On August 19, Lindberg was sentenced to seven years and three months in prison. However on June 29, 2022 the U.S. Court of Appeals for the Fourth Circuit overturned his conviction, ruling that the jury instructions supplied by the judge in the original proceedings poorly described what constituted an “official act” and stating that a new trial should be held. He was released from prison on July 15 and a retrial of that case was scheduled to begin in March 2023.

Meanwhile, last month federal prosecutors announced that federal grand jury in Charlotte returned an indictment charging Lindberg with masterminding and directing a massive scheme to deceive state insurance regulators and defraud thousands of policyholders and others in connection with insurance companies he controlled.

Lindberg allegedly deceived the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his insurance companies, and improperly used insurance company funds for his personal benefit.

In particular, the indictment alleges that Lindberg personally benefited from the fraud in part by using insurance company funds to finance his lavish lifestyle, including the purchase and refinancing of personal real estate and “forgiving” more than $125 million in loans from his affiliated companies to himself.

The charged conduct allegedly caused substantial financial hardship to the victims. Lindberg allegedly caused the insurance companies to engage in investments of nearly $2 billion as part of his scheme, most of which remained outstanding as of September 2022.

In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance.

Separately, Lindberg remains under indictment and is awaiting retrial in the earlier case in which he faces several charges stemming from alleged attempts to bribe the Commissioner of the North Carolina Department of Insurance.