Tag: 2021 News

What happens when the enhancement is in more demand than the original product? That was the quandary faced a few years ago by entrepreneurs operating an insurance agency. And, like all good entrepreneurs, they followed the money, right into a whole new business.

Dino Carbone, executive vice president for sales and marketing at SmartPay Solutions LLC, tells the story published by Hartford Business Journal, of the firm’s inception.

He and his partners had set out to make it easier for clients to pay their insurance bills. Their pay-as-you-go software was a hit. Soon, clients wanted to buy the software as well as the insurance. The partners hung a “for sale” sign on the agency and set up shop in the emerging field of insurtech.

In 2013, Connecticut Innovations became an investor. In 2014, a Series A round closed with $1.4 million, including investments from Tennant Capital Partners and Stonehenge Growth Capital. But in 2015, the partners changed course and took the firm private again. Robert Conerly, who had joined the firm as CFO, was named CEO. Dino Carbone

Today, SmartPay has more than 10,000 businesses on its platform. There, payroll information is massaged against the client’s workers’ compensation insurance needs. SmartPay shops more than 30 carriers, including many of the best-known firms, for the best rates and coverage matches.

But the element that sets SmartPay apart from competitors is that its software can make changes in 24 to 48 hours, as staffing levels change.

And during a pandemic, that ability is an asset. Keeping pace with ever-changing workers’ comp rates has been a selling point for SmartPay. But times change. Carbone leaves no doubt the pandemic has been a boon for SmartPay’s business.

Through furloughs and layoffs, Paycheck Protection Program-funded rehiring and false starts at reopening, clients always had their workers’ comp coverage right. No gaps in coverage. No over or under payments.

The underlying software logic makes it applicable to any insurance situation where coverage is based on variables like headcount or pay rate.

And Carbone says major expansion is ahead, as quickly as the staff of 24 can manage it. First up is a new website, to be launched within weeks. Then it’s on to new lines of coverage.

Carbone says SmartPay is on course to double its revenue. He’s cautious about dropping names and numbers but says about $14 billion in payroll data crosses the platform. He also said Liberty Mutual is one of the large firms offering workers’ comp insurance through SmartPay’s platform and his firm has done “a lot” of work with The Hartford.

Carbone says SmartPay works with “thousands” of independent insurance agents.

He sees the firm’s main competitors as large national payroll providers, which are moving into the bill payment space. And that’s part of SmartPay’s pitch to recruit smaller payroll providers to its team.

SmartPay lets payroll providers add workers’ comp pay-as-you-go as a service, improving their competitive position as well as SmartPay’s.

Farm labor company owners and siblings Elias Perez, 40, of Greenfield, and Alejandra Perez, 37, of Soledad, were arraigned on over 20 felony counts of insurance and tax fraud after allegedly underreporting payroll by over $17 million resulting in a loss of over $1.42 million to their insurance companies.

The Department of Insurance discovered the alleged fraud after learning that an injured employee was treated out of a garage by an unlicensed professional.

The Perezes are owners of farm labor contracting companies in Greenfield called PFL Contracting Inc., Future Ag Management, Inc. (FAM) and Future Harvesters and Packers, Inc., (FHP), which primarily hire farm labor employees to harvest crops.

An investigation found on June 28, 2016, an employee of one of the Perezes’ businesses, FAM, sustained a work-related injury to their back when they tripped and fell while harvesting crops. The Perezes along with a FAM supervisor allegedly did not provide the injured employee with the required professional medical treatment. For two weeks, the FAM supervisor took the injured worker to seek treatment from an unlicensed professional who operated a business out of their garage.

More than two weeks after the employee’s injury, Elias Perez filed a workers’ compensation claim with their insurance company and stated the employee’s injury occurred on July 7, 2016.

FAM and FHP obtained workers’ compensation policies from two different insurance companies. A comparison of records from the insurance companies and the California Employment Development Department (EDD) showed large discrepancies in the payroll reported by the Perezes. From July 2014 to August 2017, they reported to EDD that FAM and FHP paid $28,521,347 in wages while reporting only $23,246,922 to their insurance companies for the same time period.

Investigators served bank search warrants and conducted a thorough review and audit of the payroll checks, which determined that FAM and FHP from July 2014 to August 2017 actually paid over $41 million in wages. They allegedly underreported over $17 million in wages, which resulted in approximately $1.42 million in premium owed to their insurance companies.

In addition, the Perezes underreported PFL, FAM and FHP’s wages by approximately $12.8 million to EDD resulting in potentially $1.28 million in unpaid taxes.

FAM also maintained a workers’ compensation policy with another insurance company for the Perezes’ farm labor contracting operation in Arizona. Records obtained from that insurance company and the Arizona Department of Economic Security indicated additional discrepancies in their reporting and was included in this audit and investigation.

Elias Perez was charged with five felony counts and Alejandra Perez was charged with 21 felony counts. Both were arraigned in Monterey County Superior Court.

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

After patiently waiting for COVID-19 vaccine guidance in California, employers now have some clarification from California’s Department of Fair Employment and Housing (DFEH). As somewhat expected, the DFEH’s guidance issued early this month aligns with the EEOC’s Guidance issued in December 2020.

The firm of Fisher Phillips has commented on the top five takeaways for employers about COVID-19 vaccines according to the DFEH’s recent guidance regarding COVID-19 vaccines:

1. An employer may require employees to receive COVID-19 vaccines.

Consistent with the EEOC’s guidance, the DFEH states that, with certain exceptions, employers may require at-will employees to receive vaccines issued under the FDA’s Emergency Use Authorization (EUA) procedures.

2. If an employer requires vaccination against COVID-19 in its workforce, the employer must reasonably accommodate employees with disabilities or with sincerely held religious beliefs or practices.

Even if an employer may mandate vaccines amongst its employees, it does not mean you have free reign to require the vaccine for all workers. In accordance with the guidance from the EEOC, the DFEH states that if an employee objects to vaccination on the basis of disability or sincerely held religious belief or practice, you must engage in the interactive process to identify options for reasonable accommodations that do not cause undue hardship.

3. An employer is not legally required by the FEHA to reasonably accommodate all employees who refuse the vaccine.

The DFEH says that if an employee does not have a reason based on a disability or sincerely held religious belief for not being inoculated with a vaccine issued under the EUA procedures, you are not legally required to reasonably accommodate the employee.

The DFEH goes on to state that you are permitted to enforce reasonable disciplinary policies and practices if you are not retaliating against any employee for engaging in protected activity, such as opposing practices prohibited by FEHA.

4. If an employer administers a COVID-19 vaccination program, an employer may ask employees for medical information relevant to vaccination.

The DFEH indicates that you may ask for medical information, such as whether an employee is experiencing COVID-19 symptoms or a pre-vaccination screening questionnaire, so long as the inquiry is “job-related and consistent with business necessity.”

5. An employer may require its employees to provide proof of vaccination.

The DFEH specifies that simply asking employees or applicants for proof of vaccination is not a disability-related inquiry, or religious creed-related inquiry, or a medical examination.

Despite the wording of this Guidance, the five takaways require caution and guidance before implementation. The DFEH material should be read in its entirety.

Chiropractor Joserodel Zavala Candelario, an Irvine resident, was sentenced in federal court to 36 months in federal custody for his participation in two huge health care fraud schemes, one involving the California Worker’s Compensation system, and for concealing income he received from those multi-million dollar schemes.

He was the owner of Candelario Chiropractic, a Professional Corporation, and R.I.S.E. Medical Center, a Professional Corporation, dba R.I.S.E. Wellness Center, which operated at multiple locations in the Southern District of California, including at 5030 Bonita Road, Suite B, in Bonita and at 3231 Waring Road, Suite N, in Oceanside.

Candelario pleaded guilty on January 21, 2020 to a three-count superseding information, charging Conspiracy in violation of 18 U.S.C. § 371, Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349, and False Statement on Tax Return in violation of 26 U.S.C. § 7206(1).

In addition, between March 2012 and November 2015, Candelario carried on an unlawful cross-referral scheme, in which he would receive new Workers’ Compensation patients for RISE Wellness. In return for new patients, Candelario agreed to meet a quota for the “value” of ancillary services and DME he was expected to prescribe for each patient sent to him by co-conspirators, with a “value” — such as $30-$50 per MRI referral — set by those conspirators.

As part of the scheme, Candelario, who could function as a WC primary care provider, dictated the same treatment plan for all WC patients, regardless of their individual medical needs, so he could fraudulently bill WC insurers.

Candelario admitted that he violated his duty of honest services to his patients. He received approximately 529 new WC patients as a result of the scheme, and he submitted approximately $6,605,364 in bills to insurers for services rendered to those patients. Of those billed amounts, he was paid $771,000 by WC insurers

Separately, he has been charged and has pleaded guilty in San Diego Superior Court case SCD281328 to Concealing an Event Affecting an Insurance Claim, in a violation of California Penal Code 550(b)(3).

Candelario carried out a scheme to defraud Medicare and TRICARE out of millions of dollars by using physical therapy codes to bill for supposed physical therapy services performed on patients by individuals who were not licensed to provide physical therapy, including chiropractors, massage therapists, physical therapy aides, and an acupuncturist.

Candelario and his co-conspirators told patients that RISE Wellness offered an “integrated” approach to wellness, to convince patients to accept physical therapy, acupuncture, chiropractic, and diagnostic services at RISE Wellness, in order to fraudulently bill for non-covered services provided by unauthorized individuals, and collect as much money as possible from health care benefit programs.

Once patients came in the door, the defendant pushed his staff to conduct diagnostic tests on every patient, regardless of medical necessity, to increase billing and payment, and he also demanded that staff meet quotas for the minimum number of diagnostic tests, and recommendations for durable medical equipment, or DME, massages and other services, regardless of whether specific patients needed the items and services.

He also imposed quotas for the minimum number of patients with specific types of insurance coverage at RISE Wellness, e.g., “60 Tricare patients per day,” regardless of whether those patients needed treatments.

For example, on June 6, 2014, Candelario instructed a staff member, “I need you to do 5 axonii [diagnostic tests] a day no matter what for now on.” The following month, on July 7, 2014, Candelario texted, “OK team you are receiving 2 new diagnostic testing devices this month. I need 20 patients to be tested on each one this month no matter What [sic].”

To increase billing and payment, the defendant pushed the schedulers to cram in as many as 50 patients per day for each provider. He complained when staff fell short of this goal, noting, on June 11, 2015, certain “front desk issues” including: “No[one] has called any patients to fill empty slots in provider schedules or grab patients in lobbies to put into provider schedules.”

If a patient failed to show up for an appointment, Candelario directed staff to bill the health care benefit program for the visit, even though no visit had occurred and no service had been provided. For example, on March 9, 2015, Candelario wrote, about late reimbursements, that “the only solution is to start billing the missed appointments like i asked following the system.”

It was part of the scheme that, using the mean and manners described above, and others, the co-conspirators submitted and caused to be submitted at least $7,260,327.20 in false and fraudulent bills to TRICARE and Medicare. Of those fraudulent bills, TRICARE paid a total of $3,450,596.43 and Medicare paid $37,843.04.

Candelario failed to pay his fair share of taxes on the funds he fraudulently took, resulting in $505,000 in tax losses just for tax year 2013.

In this time of uncertainty, one thing is for sure: the workplace of the future will look different than it does today. For some companies, offering telecommuting continues to be a viable option. At the other end of the spectrum, some employers will likely continue to require high physical proximity working environments for the foreseeable future.

NCCI conducted interviews with several industry professionals to better understand what the future workplace might look like and how new challenges are being addressed.

In speaking with interviewees, NCCI consistently heard that employers have taken similar measures and developed multifaceted risk mitigation strategies, such as:

– – Working remotely when possible
– – Applying social distancing
– – Conducting health/symptom screenings
– – Cleaning and disinfecting
– – Implementing workspace layout changes
– – Limiting visitors

Some employers were able to move to a full telecommuting model within a very short time, while others used what might be called a “hybrid” approach; that is, implementing safety controls for jobs that must be performed onsite, while encouraging telecommuting for employees who can effectively perform their jobs from home.

Employers are looking for ways to reduce travel and human-to-human contact, which may impact workplace congestion, shift work, group training, overnight travel, and the use of cleaning chemicals and tools/equipment. New technologies are enabling more physical distancing to address infectious disease prevention.

Examples include virtual meetings and training sessions, as well as touchless transactions, touchless printing, and wearable technology that supports contact tracing and signaling to prevent close physical proximity.

Insurance companies have many interactions with their customers in various ways, which are critical in this time. Insurers’ roles involve exposure assessment, claims mitigation, loss prevention, audits, etc. Insurers indicated that they are taking similar proactive approaches and have already started to develop new evaluation methods to address physical proximity exposures, while simultaneously providing education and services to their customers.

Examples include using telesurveys and virtual visits for analysis, loss prevention, and audit services to cut back on in-person activity. One insurer noted that policyholders have expanded the duties of their employees to an all-hands-on-deck approach due to workforce cutbacks.