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Tag: 2020 News

CMS Implements Penalty Provisions of Rule 111 Reporting

Medicare Secondary Payer (MSP) is the term generally used when the Medicare program does not have primary payment responsibility (that is, when another entity has the responsibility for paying for medical care before Medicare). These entities with primary payment responsibility include GHPs and NGHP entities, such as liability insurers (including self-insured entities), no-fault insurers, and workers’ compensation arrangements.

Section 111 of the Medicare/Medicaid SCHIP Extension Act (MMSEA) of 2007, at its most basic level, requires insurers and self-insureds to both identify Medicare beneficiaries with whom they pay benefits or settlements associated with workers’ comp, no fault or liability claims and – once identified – report data to Medicare as directed by the Secretary of Health & Human Services.

The reporting act originally mandated that failure to comply with the reporting requirements “shall be subject to a civil money penalty of $1,000 for each day of noncompliance” for each individual for which the information should have been submitted.

Enter the SMART Act. On January 10, 2013, President Obama signed into law the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012. The SMART Act, among other things, softened the language relative provide CMS with discretion not only to the imposition of the penalty but also into the amount of the penalty.

Now, civil money penalties “may be (rather than shall be) subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant.” The SMART Act also required the Secretary to quickly solicit proposals determining “specified practices for which such sanctions will and will not be imposed” via the regulatory process.

About a year after the SMART Act was signed into law, CMS kicked off the rulemaking process with an advance notice of proposed rulemaking (ANPRM).  Now, nearly a decade later, CMS has proposed the penalty rules for non-reporting or improper reporting.

This proposed rule will ensure that the appropriate insurers are compliant with their reporting requirements and primary payment responsibilities for healthcare services covered by their healthcare coverage programs. A 60-day public comment period seeks feedback on the proposals.

Here are some highlights of the proposed rule.

— Under the proposed new rule, should a GHP fail to perform the required Section 111 reporting within one year of the coverage effective date, it would be subject to a CMP of $1,000 for each day of noncompliance for each individual whose coverage information should have been reported. A maximum penalty of $365,000 per individual per year would apply.
— Should it fail to perform the required Section 111 reporting at all within one year of the date a settlement or other payment obligation was established, an NGHP would be subject to a CMP of up to $1,000 for each day of noncompliance for each individual whose information should have been reported. A maximum penalty of $365,000 per individual per year applies.
— Entities that have performed Section 111 reporting as required, but subsequently provide information that contradicts reported information in response to MSP recovery efforts, would be subject to a CMP based on the number of days that the entity failed to appropriately report updates to beneficiary records. For GHP entities, penalties would be $1,000 per day of noncompliance per individual. For NGHP entities, the penalty would be up to $1000 per day of noncompliance, for a maximum penalty of $365,000 (365 days) per individual.
— CMS has proposed an error tolerance that would not exceed a 20% threshold. In the public comment period it is seeking feedback on the threshold value for entities that have submitted their Section 111 reporting and Medicare identifies data errors. Reported information that exceeds any of the established error tolerance(s) threshold(s), and exceeds those tolerances for any four out of eight consecutive reporting periods, would be subject to a CMP with the fourth occurrence above the tolerance submission.

The proposed rule can be found online.

NAIC Lists Top Ten Comp Carriers by Market Share

Improving employment conditions and equity markets have driven the workers’ compensation insurance industry’s performance in recent years. IBISWorld reported that the industry saw 2.1% annual growth from 2013 to 2018. Meanwhile, the National Association of Insurance Commissioners (NAIC) reported that the industry amassed $58 billion in direct written premiums in 2018. The cumulative market share of the 10 largest insurance groups stood at 45.2%.

Here are the top 10 workers’ comp insurance providers, according to NAIC, ranked by countrywide premium and market share:

1. Travelers Direct Written Premiums: $4.3 billion Market Share: 7.4%

2. Hartford Direct Written Premiums: $3.4 billion Market Share: 5.9%

3. Berkshire Hathaway Direct Written Premiums: $2.8 billion Market Share: 4.7%

4. Zurich Insurance Direct Written Premiums: $2.7 billion Market Share: 4.7%

5. AmTrust Financial Services Direct Written Premiums: $2.6 billion Market Share: 4.5%

6. Chubb Ltd Direct Written Premiums: $2.5 billion Market Share: 4.3%

7. Liberty Mutual Direct Written Premiums: $2.5 billion Market Share: 4.3%

8. New York State Insurance Fund Direct Written Premiums: $2.3 billion Market Share: 3.9%

9. AIG Direct Written Premiums: $1.7 billion Market Share: 2.9%

10. Blue Cross Blue Shield of Michigan Direct Written Premiums: $1.6 billion Market Share: 2.7%

Coventry Reports Better Claim Outcomes with Nurse Triage

When an on-the-job injury occurs, the initial response can be critical in aiding an employee in making the right decisions about what type of care they need. Injured workers need to trust that their employer will support them with the resources needed to make the best choices.

Coventry had the opportunity to work with a national client who wanted to evaluate its processes and create a solution to help improve the injured worker experience. They turned to Coventry to enhance their program and decrease lag times from the date an injury occurred to the date it was reported.

To do this, Coventry embarked on a mission to make its nurse resources available to their injured workers immediately to help navigate the most appropriate course of action for a sustained injury. They also had a goal to implement nurse triage into their claims administration and reporting process to achieve the following:

— Improve the injured worker experience by eliminating confusion and frustration
— Triage injured workers on a timely basis to the right level of care for the sustained injury
— Convey that they cared for their employees
— Reduce the use of the emergency room as a first level provider for non-emergent injuries
— Offer telemedicine services as a convenient and cost-effective solution for injuries warranting remote assessment — Reduce litigation due to a lack of understanding the system and benefits available

When injuries occur at work, many employees aren’t sure what to do. They may go to their family health care provider, who may not be in-network, or go to an urgent care clinic or the emergency room. This can result in unnecessary costs and aggravated conditions for employees. In addition, without access to a nurse resource, an injured employee often has to rely on a front-line supervisor to know what to do (i.e., whether to call 911 or tell the employee to go to the emergency room or an urgent care clinic). The consequences of such scenarios can be over- or under-treatment, employees who don’t follow a treatment plan, or an employer/employee relationship that may be on shaky ground. To assist in addressing these concerns,

Coventry developed a nurse triage solution to fit the client’s specific needs, and in 2017 they launched their program with key clients. Here are the results they recently published for this program.

— Average reporting lag for non-traumatic cases from injury to time of reporting declined from 7.4 days to 1 day
— Injured employees are put in immediate contact with a nurse and receive the most appropriate course of action
Litigation rates dropped 3% and NT24 is considered to be the main attributing factor
The experience modification of the program is expected to improve due to fewer medical-only claims being reported — Average 31% decline annually in medical-only claims resulted in savings in both administrative and medical costs

The program has been a complete success. Not only did it achieve the initial goals of improving the injured worker experience by providing a timely, trusted resource, it also delivered amazing results in the form of reduced reporting lag time, reduced litigation, more appropriate utilization, and financial savings.

Researchers Improve Design of Robotic Surgery Controller

Robotics has weaved its way into many different fields, and medicine is no exception; robot-assisted surgery has advanced dramatically over the past decade in almost every surgical subspecialty.

Robot-assisted surgery is usually performed using surgical robot systems that involve a master-slave configuration, in which the “master” is a controller device that the surgeon manipulates to control a robotic arm. Such systems improve the dexterity and precision of surgeons by filtering out hand tremors and scaling their hand motions into smaller movements. They also reduce the risk of common surgical complications such as surgical site infection.

However, robot-assisted surgery comes with its own disadvantages, especially for the person performing the surgery. Robotic surgeons sometimes feel physical discomfort during surgery, with finger fatigue being common.

This discomfort is associated with the way in which they grip the master controller. Two types of grips are usually used to control surgical robots: the “pinch grip” and “power grip.” The pinch grip has been used in conventional surgeries for centuries; it involves using the thumb, middle, and index fingers to achieve high-precision movements.

On the other hand, the power grip involves grabbing a handle with the entire hand and is more suitable for forceful work and large movements.

Because the pinch grip puts tension on certain muscles of the hand and fingers, it is more likely to cause fatigue. And although the power grip does not seem to cause such discomfort, it offers less precise control. Therefore, there is a trade-off between the discomfort caused by the pinch grip and the lack of fine control of the power grip.

Fortunately, Mr. Solmon Jeong and Dr. Kotaro Tadano, a pair of researchers from Tokyo Institute of Technology found a clever solution to this problem. In a study published in The International Journal of Medical Robotics and Computer Assisted Surgery , the researchers speculated that a master controller that combines both types of gripping can be designed.

Dr. Tadano explains, “In robotic surgery, the limitations of the two conventional gripping methods are strongly related to the advantages and disadvantages of each gripping type. Thus, we wanted to investigate whether a combined gripping method can improve the manipulation performance during robotic surgery, as this can leverage the advantages of both gripping types while compensating for their disadvantages.”

After a proof-of-concept experiment that yielded promising results, the researchers designed a robotic surgery system with a modular master controller that could be adjusted to employ either pinch, power, or combined gripping. The system was tested through a pointing experiment, in which 15 participants had to control a robotic arm to bring the tip of a needle into target holes in the least amount of time without touching obstacles.

The findings showed that the combined grip yielded better performance in the pointing experiment on various fronts, including number of failures (touching an obstacle), time required, and overall length of the movements performed to reach the targets. Many participants also reported to prefer the combined gripping method over the other two, owing to the ease and comfort in using this method.

This new master controller design could be a step in the right direction in robot-assisted surgery. “The manipulating method of master controllers for robotic surgery has a significant influence in terms of intuitiveness, comfort, precision, and stability.

In addition to enabling precise operation, a comfortable manipulating method could potentially benefit both the patient and the surgeon,” remarks Dr. Tadano. Although future work is needed to analyze other variables involved in robotic arm manipulation, this work surely paves the way for advanced surgical robot systems.

Sandoz Executive Pleads Guilty in Drug Price Fixing Case

Amid an industrywide price-fixing probe that has roped in some of the largest generics players, three executives have faced federal charges for their alleged roles. Now, the wide-ranging probe has snared another former exec – this time a big fish at Novartis’ generics unit.

Hector Armando Kellum, a former senior executive at Sandoz, pleaded guilty to federal conspiracy charges for his role in a scheme to fix prices for a range of the drugmaker’s products, including topical steroid clobetasol and antifungal nystatin triamcinolone cream.

Kellum faces 10 years in prison and a $1 million fine, prosecutors said in a release. In exchange for his plea, Kellum agreed to cooperate with the ongoing federal investigation.

Kellum’s plea has now confirmed Sandoz’s role in the scheme – easily the biggest company so far – but more generics giants could be in the firing line as the lineup of cooperating witnesses expands.

Kellum’s deal comes just two weeks after prosecutors charged Ara Aprahamian, a former sales executive at Taro Pharma. Aprahamian was charged Feb. 4 to three counts of conspiring to fix prices for the company’s generic drugs and lying to investigators.

Aprahamian was targeted for his stints as vice president of marketing and VP of sales and marketing between 2013 and 2016, during which he spearheaded two separate price-fixing campaigns with unnamed drugmakers in New Jersey and Pennsylvania then later lied about his role in the schemes, prosecutors said.

Federal prosecutors called Kellum and Aprahamian “co-conspirators” in the price-fixing scheme, with Kellum’s role falling between March 2013 and at least June 2015.

The report in FiercePharma also notes that in addition to Aprahamian, Jeffrey Glazer and Jason Malek, the former CEO and president of Heritage Pharmaceuticals, respectively, inked deals in 2017 to settle charges leveled the month before.

Prosecutors have also brought cases against two New Jersey-based drugmakers – including Heritage – for their roles in price-fixing schemes. In those cases, Rising Pharmaceuticals agreed in December to pay $3 million in exchange for a guilty plea in a scheme to set prices for hypertension med Benazepril HCTZ. Heritage reached a deal in March to pay $7 million to cooperate with the feds in their probe.

Kellum’s plea has now confirmed Sandoz’s role in the scheme – but more generics giants could be in the firing line.

In May, 44 states launched a mammoth case against 20 generic drug makers that Connecticut Attorney General William Tong called “the largest cartel case in the history of the United States.”

The suit directly named Maureen Cavanaugh, Teva’s former SVP and chief commercial officer in North America, and three lower-level executives who no longer work at the company. Aside from Teva, the lawsuit implicated Sandoz, Mylan, Pfizer and several other leading generic drug makers. It names current and former executives from Lupin, Glenmark and other companies.

National Safety Council Launches ” Work to Zero” Safety Report

Since 1913, the National Safety Council has used data, expertise and innovation to solve some of the toughest workplace safety problems. Yet over the past decade, as workplace injuries have declined, the number of fatalities has remained relatively flat, even increased in some years.

The Council’s Work to Zero initiative, supported by a grant from the McElhattan Foundation, aims to make workplace deaths a thing of the past.

Using decades of insight, data and an unparalleled network of safety leaders, it will identify the most promising technological innovations for eliminating workplace fatalities in our lifetime. In short, Work to Zero will serve as a hub of digital transformation in safety.

Work to Zero launched its first research report, Safety Technology 2020: Mapping Technology Solutions for Reducing Serious Injuries and Fatalities in the Workplace, at its inaugural Summit. The paper reviews the current state of safety technology, provides insight from interviews with more than 40 EHS professionals, and maps major sources and causal factors of workplace deaths to promising safety technologies.

The report looks at 18 different non-roadway hazardous situations in which workers are most likely to die and provides anywhere from five to eight potential technology solutions for each situation.

The Work to Zero Advisory Council is a volunteer group of EHS and technology experts composed of industry, academic, government and other thought leaders who strategically advise the Council on efforts to eliminate workplace deaths. Its primary responsibilities are to inform Work to Zero research projects by providing expertise, insight and access to networks that enrich the initiative, shape outreach and event projects, and engage external parties to broaden the initiative’s reach and knowledge.

The Advisory Council meets via bi-monthly teleconference meetings and bi-annual face-to-face meetings, such as at the NSC Congress & Expo, Campbell Institute Symposium and/or Annual Work to Zero Summit. If you are interested in learning more, email

IHOP Cook Arrested for Fraudulent Comp Claim

California Department of Insurance detectives arrested Jonathan Quezada, 28, on multiple felony counts of insurance fraud and workers’ compensation insurance fraud after he allegedly falsified an insurance claim to receive unearned workers’ compensation benefits costing Californians over $22,000.

Quezada was working as a cook at an IHOP in La Mesa when he fractured his clavicle. He filed a workers’ compensation claim with his employer stating he got hurt at work while performing his normal job duties and told his employer and insurance representatives that he was cleaning grill grates in the IHOP kitchen when he slipped and fell.

After receiving a referral from the Preferred Employers Insurance Company, the California Department of Insurance launched an investigation which revealed Quezada lied about the circumstances of his injury.

Surveillance video showed he was injured at work, but that his injury was a result of play wrestling with a coworker, not performing his normal job duties as he claimed.

Quezada’s allegedly false statements allowed him to receive workers’ compensation benefits he was not entitled to, which cost Californians $22,781.

“The workers’ compensation system is intended to help honest workers who get hurt while doing their jobs get the benefits and assistance they need to support themselves and their families while they recover,” said Insurance Commissioner Ricardo Lara. “When people file fraudulent workers’ compensation claims they take advantage of this system and cost Californians millions of dollars every year in higher premiums.”

Quezada was arrested on February 12, 2020, and was booked at the Sacramento County Jail. Bail was set at $25,000. The San Diego District Attorney’s Office is prosecuting this case.

GEICO Uses RICO Statutes to Combat Vendor Fraud

Following several lawsuits in Arizona and Florida, GEICO has filed a federal lawsuit in California alleging an auto glass repair shop submitted fraudulent glass repair bills.

GEICO seeks to recover damages alleging violations of the Civil RICO statute and the California Business and Professional Code as well as claims for common law fraud and unjust enrichment.

GEICO alleges that owners Tal Elzari and Navid Vatankhahan used their business, Winaffix Auto Glass, in a fraudulent scheme to overbill for windshield glass replacement.

Their alleged scheme involved creating false glass invoices designed to mimic those from legitimate car dealerships in order to fraudulently claim they were using expensive original equipment glass rather than less expensive alternative glass. In fact, it is alleged that Winaffix never purchased the glass their invoices claimed. They are also alleged to have performed glass replacement services without a license to do so.

GEICO says it intends to file future lawsuits in California and around the country in its continuing efforts to protect its customers and the public from fraudulent glass repair operators.

“GEICO is committed to protecting our customers from the negative effect that insurance fraud has on premiums,” said James Jones, assistant vice president of claims in GEICO’s Poway, California, office. “These incidents of fraud hurt consumers in California because they cause premiums to increase, and we will continue to pursue them with a zero tolerance.”

Jones went on to say that GEICO has a long history of seeking out individuals and companies willing to commit fraud.

GEICO filed its case – Government Employees Insurance Company, et al. v. Winaffix Auto Glass, et. al. (2:20-cv-01401) – in the U.S. District Court for the Central District of California.

GEICO also seeks a declaration that any pending claims are not owed. GEICO is represented by Barry Levy and Steven Henesy of Rivkin Radler, LLP and Jean M. Daly and Tyler E. Sanchez of Murchison & Cumming, LLP.

Supreme Court Rules Workers Must be Paid for Security Checks

In a unanimous decision, the California Supreme Court in the case of Frlekin v. Apple Inc., just held that the time spent by employees waiting for and undergoing security checks of bags and other personal items is compensable time under California law, even when the policy only applies to employees who choose to bring personal items to work.

In California, employees in most industries must be paid for the time they are subject to the control of their employer, not just the time spent doing work. This is so because, since 1947, California has specifically departed from federal law and has provided greater protection to working employees.

Fisher Phillips points out that over the last several years, the question of whether the time employees spent having their bags checked at work is compensable has arisen in several different contexts, in California and across the country:

— In late 2014, the U.S. Supreme Court held that security checks are not compensable time under federal law because they are not part of the actual workday.
— However, because California law requires employees to be compensated not only when they are working but also when they are subject to their employer’s control, the trial court in this case certified a statewide class on Apple’s security check policy in 2015.
— A few months later, the trial court found in Apple’s favor finding that, because employees can choose whether or not to bring a bag into work, the application of the security check policy depended entirely the employees’ choice.
— Last year, the 9th Circuit Court of Appeals found that the time spent on mandatory security checks at Nike and Converse stores was likely compensable under California law, since California law no longer follows the federal “de minimis” doctrine that allows employers to not compensate for tasks that take only a short amount of time.

The California Supreme Court agreed in it’s new decision, that employee choice is a consideration but ruled that it was not the only consideration. Instead, the court provided a multi-factor test within which to analyze the employee-choice issue. Particularly with respect to “onsite employer-controlled activities,” whether the time is compensable depends on a number of factors, which include:

— The mandatory nature of the activity;
— The location of the activity;
— The degree of the employer’s control;
— Whether the activity primarily benefits the employee or employer; and
— Whether the activity is enforced through disciplinary measures.

In this case, the Supreme Court found that the time spent on bag checks at Apple cut in favor of compensable time under several of these factors: it occurred on the employer’s premises, employees subject to the policy were prevented from leaving the premise while waiting for and undergoing the security check; it was enforced through disciplinary measures; and, rejecting Apple’s argument that security checks benefit employees, the court found that the security check policy primarily benefited the employer as a theft prevention measure.

WCAB Allows Non-Comp Evaluations Into Evidence

Elisha Harden claimed injury to her cervical spine, lumbar spine and psyche on November 14, 2012 while employed as a probation assistant by the County of Sacramento.

The parties agreed to use Peter Mandell, M.D., as the orthopedic AME. Dr. Mandell evaluated applicant and issued reports addressing her industrial injury.

Joseph McCoy, M.D., evaluated applicant in 2016 as an orthopedic independent medical examiner (IME) in relation to her application for disability retirement. Richard Lieberman, M.D., evaluated applicant in 2016 as a psychiatric IME also for her claim for disability retirement. As part of Dr. Lieberman’s examination, applicant was given psychological testing, which was independently scored by psychologist Bernard Bauer. All reports were addressed to the Sacramento County Employees Retirement System.

On April 24, 2019, defendant served applicant with a copy of the reports of Dr. McCoy, Dr. Lieberman and Dr. Bauer. Defendant’s cover letter with these enclosures stated: “We will be providing these medical reports to QME Dr. Wantuch and AME Dr. Mandell in 20 days absent a timely objection from your office.”

On May 8, 2019, applicant sent a response to defendant’s letter objecting to providing these reports to the AME.

The sole issue at the trial held on July 10, 2019 was “Whether the reports of Dr. Joseph McCoy, Dr. Richard Lieberman, and Dr. Bernard Bauer obtained in the disability retirement proceeding shall be provided to the QME Dr. Elizabeth Wantuch and Dr. Peter Mandell over Applicant’s objection.

These reports were ordered inadmissible and defendant was ordered not to provide the reports to Dr. Wantuch and Dr. Mandell. Reconsideration was granted in the case of Harden v County of Sacramento.The WCJ order was rescinded, and the reports of Dr. McCoy, Dr. Lieberman and Dr. Bauer may be provided to the orthopedic AME Dr. Mandell and the psychiatric QME. The panel also ordered applicant’s objection to provision of these reports to the medical-legal evaluators to be overruled.

“In determining whether to admit evidence, we are governed by the principles of section 5708, which states that the Appeals Board “shall not be bound by the common law or statutory rules of evidence and procedure, but may make inquiry in the manner, through oral testimony and records, which is best calculated to ascertain the substantial rights of the parties and carry out justly the spirit and provisions of this division.” (Lab. Code, § 5708.) The right to present evi,dence implicates the right to due process. (Hegg/in v, Workmen’s Comp. Appeals Bd. (1971) 4 Cal.3d 162, 175 [36 Cal.Comp.Cases 93]; Pence v, Industrial Acci. Com. (1965) 63 Cal.2d 48, 51 [30 Cal.Comp.Cases 207].)”

Commissioner Razo dissented. “The parties may not circumvent the requirements of section 4062.2 in order to admit into evidence medical reporting that was not prepared in compliance with the Labor Code. Defendant cannot backdoor into the record evidence that implicitly addresses applicant’s level of permanent impairment and limitations from her industrial injury, and is therefore inadmissible under section 406l(i). (See Batten v. Workers ‘ Comp. Appeals Bd (2015) 241 Cal.App.4th 1009, 1014 [80 Cal.Comp.Cases 1256].) The majority view allows parties to circumvent the legislative intent to disallow privately retained medical experts.

The current workers’ compensation system in California is designed to provide two separate and structured medical evaluation paths to obtaining medical-legal evaluations. For medical treatment disputes, the Legislature created the utilization review (UR) process and independent medical review (IMR). For other disputes regarding AOE/COE, injury, causation, disability, etc., the Legislature enacted the agreed medical evaluator (AME) and the panel qualified medical evaluator (QME) selection process to enable parties to obtain medical-legal evaluations on these issues.

The legislative intent is to avoid “doctor shopping” and to keep litigation costs down. To allow the parties in this case to deviate from the procedures outlined in sections 4062-4062.2 opens the door to enable other types of medical- legal reports to be admissible outside of the legislative mandated process.”