Author: WorkCompAcademy

It may be that Uber type competition is about to challenge the medical transportation industry in California, hopefully bringing lower prices and better service.

EMS Find, Inc. announced the launch of its updated website. The on-demand medical transportation mobile application developed by the Company is now available for download in Google Play Store and the updated version of it is now offered in Apple App Store.

Within one month the Company plans to release the desktop version of its software for scheduling and tracking of medical transport. Availability of iOS, Android and Desktop versions will facilitate the seamless integration between medical transporters and health care providers.

The Company says it is engaging in several strategic partnerships with the leading industry peers with focus to provide the ultimate solution to manage medical transportation fleet scheduling tasks as well as integration with the Uber Platform to allow any Uber Driver to assist in transportation to medical appointments of the patients who are not requiring ambulances or other specialized medical equipment.

The Company is also working on expanding its B2B solution by implementing the claim billing functionality along with an automatic verification of patient’s eligibility to receive medical insurance compensation for transportation. EMS Find’s solution offers many important features such as verification of validity of drivers’ certifications to deliver the trip.

EMS Find App is designed to dramatically reduce the paper load and the time, currently burdening the social workers, case managers and other health care professionals in charge of scheduling, fraud reduction and elimination of the unpaid and empty trips by the ambulance companies.

The Company says it has been making progress with practical implementation of its business plans along with continuing its software development, . The recently announced pilot testing of its mobile app in California is expected to involve about 50 ambulances and other special medical vehicles interacting with several skilled care facilities in and around Los Angeles County with the goal of launching and growing commercial service in the greater Los Angeles and surrounding counties in 2-3 months.

The revenue model under development there will include per booked trip fees as well as principal transportation brokerage fees.

The Patient Protection and Affordable Care Act (ACA) created the Consumer Operated and Oriented Plan Program – known as the CO-OP Program. Under the CO-OP Program, the Department of Health and Human Services (HHS) distributed loans to consumer-governed, nonprofit health insurance issuers. A new Majority Staff Report of the U.S. Senate Permanent Subcommittee on Investigations says that HHS ultimately received $2.4 billion of taxpayer money to fund 23 CO-OPs that participated in the program. Twelve of those 23 CO-OPs have now failed, leaving 740,000 people in 14 states searching for new coverage and leaving the taxpayer little hope of recovering the $1.2 billion in loans HHS disbursed to those failed insurance businesses.

Congress initially allocated $6 billion for the Obamacare CO-OP program, with the goal of establishing CO-OPs in all 50 states as well as the District of Columbia. Subsequent legislation slashed some of this funding. The CO-OPs ultimately suffered $376 million in losses in 2014 and more than $1 billion in losses in 2015. By the end of 2014, the 12 collapsed insurance nonprofits had already exceeded their projected worst-case-scenarios by more than $263 million, four times more than what they initially projected.

None of the failed CO-OPs have repaid a single dollar, principal or interest, of the $1.2 billion in federal solvency and start-up loans they received. In addition, there remains substantial liability for unpaid claims including fully processed 2015 claims as well as incurred but unprocessed 2015 claims. The CO-OPs report that they continue to receive some 2015 medical claims through the first quarter of 2016, and many received claims are still being processed to determine coverage.

Based on the most recent balance sheets provided to the Subcommittee, the failed CO-OPs currently owe an estimated $742 million to doctors and hospitals for plan year 2015, including incurred claims. An insolvent health insurer’s debt to providers takes priority over other liabilities, so those claims are likely to be the first to be paid out of remaining assets. But if a CO-OP’s medical claims alone exceed assets, payment to providers can be in doubt. Based on their submissions, at least six CO-OPs currently owe more in medical claims alone than they hold in assets. Three of those CO-OPs – the Colorado CO-OP, the South Carolina CO-OP, and CoOportunity – have access to guaranty associations capable of paying some or all unpaid medical claims.

Guaranty associations serve as a mechanism to pay covered claims occurring as a result of an insurer’s insolvency. Associations were created to alleviate these problems and ensure the stability of the insurance market. The Colorado CO-OP projects that substantially all of its $96.6 million in unpaid medical claims will be paid by the state’s guaranty fund. Similarly, the South Carolina CO-OP estimates that all of its $48 million in unpaid claims will be paid by the state’s guaranty fund. The first CO-OP to close, CoOportunity, reports that $114.1 million of its unpaid medical claims have now been paid by the Iowa and Nebraska guaranty associations.

The other three CO-OPs with serious shortfalls, however, will not be bailed out by guaranty funds. The New York CO-OP reports that it had $379.5 million in unpaid medical claims and $157.54 million in assets as of December 31, 2015 – a $222 million shortfall, excluding any other liabilities. No portion of that shortfall will be covered by New York’s guaranty fund. Most of the New York CO-OP’s unpaid claims are owed to doctors and hospitals, and a non-negligible share – $373,000 as of January 31, 2016 – is owed directly to patients.

Similarly, the Louisiana CO-OP reports $34.4 million in assets and $43.3 million in unpaid medical claims as of January 31, 2016, and none of that $9 million shortfall will be covered by a guaranty fund. The same is true of the $7 million shortfall on the Kentucky CO-OP’s January 2016 balance sheet, which shows $77.5 million in unpaid claims and only $70.5 million in assets.

It is likely that some of the cost of these losses will translate to cost drivers in workers’ compensation claims.  Certainly, the guarantee funds will distribute the cost by way of assessments to other insurers who will in turn pass the costs to policyholders everywhere.  Medical providers who are not paid in one system, will demand higher fees to compensate them in another system.  The epic failure of the CO-OP Program is not good news for anyone.

A federal judge in California granted the United States’ motion to dismiss portions of CIGA’s complaint regarding Medicare payments, holding that California’s insurance codes are preempted by federal law in the case of California Insurance Guarantee Association v. Sylvia Mathews Burwell, et al., No. 15-cv-1113, C.D. Calif..

CIGA is currently paying several claims under various workers’ compensation policies issued by now-insolvent insurers. Some of these claimants also received payments from Medicare for items and services that were otherwise covered by these policies. Where Medicare pays benefits for a loss that is also covered by another insurer, the Medicare Secondary Payer statute, 42 U.S.C. § 1395y, designates Medicare as the “secondary payer” and generally requires those other insurance plans (called “primary plans”) to reimburse Medicare for all benefits it paid. Concluding that the workers’ compensation policies were “primary plans” within the meaning of the statute, the United States demanded that CIGA reimburse it for the Medicare benefits paid to these claimants. CIGA refused, prompting the United States to commence collection proceedings.

CIGA filed a declaratory and injunctive relief action against Defendants Sylvia Mathews Burwell, United States Department of Health and Human Services, and the Centers for Medicare and Medicaid Services contending that it was not required to reimburse the United States for Medicare benefits paid to individuals whose losses may also be covered by CIGA.

The United States argued that claims made by the United States could never be defeated by a state-imposed time limit, CIGA argued that the California Guarantee Act is a state law that regulates the business of insurance, and thus supersedes any general federal law allowing claims to be filed outside the Guarantee Act’s filing deadline. In reply, the United States argued that McCarran-Ferguson does not apply because (1) the Guarantee Act’s claims filing statute does not regulate the “business of insurance,” and (2) that the Medicare Secondary Payer statute is at any rate a federal statute that specifically regulates the business of insurance.

Ultimately, the California District Court for the Central District of California held that the McCarran-Ferguson Act did not subject the United States to California’s claims filing deadline because the Act was never intended to waive the federal government’s sovereign immunity. CIGA’s claims against the United States were dismissed to the extent that they were based on the United States’ failure to file timely proofs of claim under California’s Guarantee Act.

The Court cited the familiar rule that “[w]hen the United States becomes entitled to a claim, acting in its governmental capacity and asserts its claim in that right, it cannot be deemed to have abdicated its governmental authority so as to become subject to a state statute putting a time limit upon enforcement.” United States v. Summerlin, 310 U.S. 414, 417 (1940); see also Bresson v. C.I.R., 213 F.3d 1173, 1176 (9th Cir. 2000). This common law rule has its origins in the concept of sovereign immunity; just as the states cannot sue the federal government without its consent, the states cannot enact laws that purport to bind the federal government without its consent.

Roza Lopez sustained a cumulative injury while employed as a grocery clerk by Superior Center Concepts. Two insurers, Care West Pegasus Modesto (Care West) and Ullico Casualty Company (Ullico), were jointly and severally liable for claims arising from this injury. In a compromise and release agreement, they settled the employee’s claims and the insurers stipulated they would “pay, adjust, or litigate all liens of record,” and would “share equally for liability for med-legal charges,” and would allocate 52 percent of liability for the treatment charges to Care West and 48 percent to Ullico.

When Ullico became insolvent and was liquidated, responsibility for third party claims against it was assumed by the California Insurance Guarantee Association (CIGA), which the Legislature established in 1969 to protect against loss to insureds “arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.” CIGA moved to be dismissed from the instant workers’ compensation cases on the ground that it was authorized to pay only “covered claims,” from which the Legislature expressly excluded any “claim to the extent it is covered by any other insurance.” CIGA argued Care West’s policy constituted “other insurance” that covered third party claims. The Workers’ Compensation Appeals Board denied CIGA’s motion on the ground that the Care West/Ullico agreement limited Care West’s liability to roughly half of any third party claims, thereby rendering Care West’s insurance unavailable as to the remaining half.

The Court of Appeal summarily denied the petition for review filed by CIGA, but the Supreme Court granted review and remanded the case with directions to hear the matter on the merits. After review of the record, the Court of Appeal ruled that the order denying CIGA’s petition for reconsideration be annulled and the matter is remanded to the Appeals Board with directions to enter an order dismissing CIGA from these proceedings in the published case of CIGA v Workers’ Compensation Appeals Board.

The Appeals Board argued that the approved compromise and release was a final judgment that may not be relitigated, and after entry of that judgment Care West’s and Ullico’s liability was no longer joint and several. The Court of Appeal disagreed. “The argument reflects a basic misunderstanding of the nature of “several” liability, which is not, strictly speaking, a rule of liability at all – it is a rule of joinder.” Several liability has nothing to do with, and cannot be changed by, apportionment of an obligation between promissors.”

The Court concluded that the Care West/Ullico compromise and release agreement did not relieve Care West of its several liability for third party claims.The judgment merely apportioned liability; it did not change the joint and several nature of the now-apportioned liability.

A Rancho Mirage cosmetic surgeon pleaded guilty to a scheme to defraud health insurance companies by submitting bills for more than $3.4 million for procedures that he claimed were “medically necessary” but in fact were cosmetic procedures such as “tummy tucks”, “nose jobs” and breast augmentations.

In a plea agreement filed in United States District Court, Dr. David M. Morrow, 71, of Rancho Mirage, a cosmetic surgeon and dermatologist who was the owner of the Morrow Institute (TMI) in Rancho Mirage, admitted that he participated in a scheme to obtain money from insurance companies by false or fraudulent pretences, which included submitting altered documents to the insurance companies. Morrow admitted that cosmetic surgeries were billed to insurance companies under the pretence that the procedures were “medically necessary” so that insurers would pay for them.

Morrow also pleaded guilty to one count of filing a false tax return for 2008. Morrow admitted that he failed to report to more than $100,000 of income on his 2008 tax return and more than $1.5 million on his 2009 tax return.

Morrow, his wife, and TMI were charged in this case last fall when a federal grand jury returned a 27-count indictment that outlined a scheme in which patients were lured to the Coachella Valley surgery center with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP), and Cigna.

To trick insurance companies into paying for the cosmetic procedures, Morrow and others at TMI completely fabricated diagnoses such as a “hernia” in the patients’ official medical records. According to the indictment, they also fabricated test results and symptoms on medical records to cover up the actual medical procedures being performed – tummy tucks were fraudulently billed as hernia repair or abdominal reconstruction surgeries, rhinoplasties (“nose jobs”) were fraudulently billed as deviated septum repair surgeries, and breast lifts and augmentations were fraudulently billed as “tuberous breast deformity.” A document filed as part of Morrow’s plea agreement shows that TMI billed insurance as much as $150,750 for a single cosmetic procedure.

Morrow faces a statutory maximum sentence of 20 years of in federal prison for the conspiracy count and three years of imprisonment for filing the false tax return. Morrow is scheduled to be sentenced by United States District Judge Josephine L. Staton on September 23. Morrow has also agreed to pay full restitution to the victims. Charges against Morrow’s wife, Linda Morrow, 63, are currently pending.