Tag: 2022 News

3-2 decision, in a closely followed employment law case, the National Labor Relations Board reinstated its prior 2011 standard, which applied a more expansive right of off-duty contractor employees to access publicly accessible areas of the primary employer’s workplace, for the purpose of engaging in organizing activity. The new decision overturns Bexar County I, 368 NLRB No. 46 (2019)

In this newest case, (Bexar County II) the San Antonio Symphony leases performance space from the Bexar County Performing Arts Center Foundation d/b/a Tobin Center for the Performing Arts.

On the evening of February 17, 2017, about a dozen Symphony employees sought to peacefully leaflet on the sidewalk in front of the main entrance to the Tobin Center. The Symphony employees had been distressed to learn that Ballet San Antonio had opted to use recorded music, rather than live music, for its production of Tchaikovsky’s Sleeping Beauty. The use of recorded music denies the Symphony employees the opportunity to work at the performance by playing the score. Because of financial difficulties, the Symphony had already had to furlough the Symphony employees for 3 weeks during the 2016–2017 season.

To raise awareness among Ballet San Antonio’s patrons about the use of recorded instead of live music, the Union decided to leaflet before the performances.

Event staff and San Antonio police officers at the Respondent’s direction immediately informed the Symphony employees that they could not distribute the leaflets anywhere on the Respondent’s property, including the sidewalks. The Symphony employees were forced to relocate across the street off the Tobin Center grounds onto a public sidewalk where there were fewer patrons.

This reaction lead to litigation before the NLRB, and two decisions, Bexar I – and after remand from an appellate court –  Bexar II.

Congress passed the National Labor Relations Act in 1935, during the New Deal era. Under section 7 of the NLRA employees’ rights include more than just the right to form a union. The NLRA protects any concerted employee activity undertaken for mutual aid. Employee actions have to meet several standards to deserve protection.

At issue in both Bexar I and II is the application of section 7. An underlying problem central to these two cases is that Section 7 only confers rights directly to employees, not to unions or their nonemployee organizers. The off-duty employees who work for a contractor of a property owner do not fit neatly into these categories.They are neither employees of the property owner nor are they nonemployees with no relationship to the property owner’s property where they work.

Precedent for the problem in the Bexar cases dates back to 2011, when the Board in New York New York considered whether off-duty food service employees had the right to engage in organizational leafleting of customers outside their employer’s place of business – not on their employer’s property, but in the public areas of a hotel-casino for which they and their employer provided services integral to the property owner’s business. (New York New York Hotel & Casino, 356 NLRB 907 (2011)).

In Bexar County I, the Board acknowledged that the New York New York test – which had been approved by the D.C. Circuit – controlled this case. Nonetheless, the Board overruled New York New York and announced a new standard to govern off-duty contractor employees’ access to the property where they regularly work (but that is not owned by their employer) to engage in Section 7 activity.

On appeal of Bexar I, the D.C. Circuit held that the Board’s new access standard was arbitrary. The court permitted the Board on remand to “decide whether to proceed with a version of the test it announced and sought to apply in this case or to develop a new test altogether.

On remand the NLRB noted its “agreement with the D.C. Circuit’s conclusion that the Bexar County I standard it established “is arbitrary in the way that it implements its new standard.” Part of the Board’s task in devising an access standard for off-duty contractor employees is to ensure that it only reaches those contractor employees with a sufficient connection to the property to merit Section 7 access rights.

The NLRB concluded in Bexar County II, that it would return to the New York New York Hotel & Casino, 356 NLRB 907 standard, which held that a “property owner may lawfully exclude [off duty contractor] employees only where the owner is able to demonstrate that their activity significantly interferes with his use of the property or where exclusion is justified by another legitimate business reason, including, but not limited to, the need to maintain production and discipline (as those terms have come to be defined in the Board’s case law).”

Applying the New York New York test here, the NRLB affirmed the judge’s finding that Bexar County violated Section 8(a)(1) by excluding the Symphony employees from the Respondent’s property to distribute union leaflets to the Respondent’s patrons about an issue affecting the Symphony employees’ terms and conditions of employment, specifically their number of hours of work. “They had a Section 7 right to inform the public about Ballet San Antonio’s use of recorded instead of live music, which directly affected the Symphony employees’ working conditions.”

“In order to protect contractor employees’ Section 7 rights, we believe that it is appropriate for us to apply the New York New York test to this case and to all pending cases.”

A Los Angeles Superior Court Jury ordered Health Net to pay $14.42 million, including $6.92 million in compensatory damages and $7.5 million in punitive damages, to a woman who alleged the health care giant caused her to become addicted to opiate pain medication, which she was prescribed only after she had already unnecessarily waited months for Health Net to provide timely referrals to specialists.

The Los Angeles Superior Court jury reached its verdict on Monday, after only a few hours of deliberations.The case is Elaine Courtney v. Health Net, Los Angeles Superior Court, Case No. 18STCV05327.

“The fundamental defect in plaintiff’s claims is that Health Net Inc. was not responsible for providing or authorizing plaintiff’s care and, when plaintiff raised issues about her treatment through the grievance process of her health plan, Health Net … responded promptly and authorized the requested treatment,” the Health Net attorneys maintained.

But plaintiff’s attorney Travis Corby called the case an important one for the health insurance industry and for Medi-Cal recipients. According to a press release by her attorneys, Ms. Courtney needed urgent medical care for a pelvic prolapse issue that was causing her extreme pain.

In February 2017, Ms. Courtney received an urgent referral to a colorectal specialist for a surgical consult. According to the health plan, an appointment should have been made available within 96 hours. But she was told that the correct specialist was not available to her under her Health Net Medi-Cal plan and she was instead sent back to a general surgeon that she had already seen that was admittedly not specialized to fix her problem.

Meanwhile, Health Net had 25 colorectal surgeons available in its Southern California network but refused to allow access to any of them.

As a result, Ms. Courtney was made to wait until August 22, 2017 to see a qualified specialist. Even then, she experienced additional delays from the health plan. The specialist doctor’s surgical request were then denied on five separate occasions over four months, because of issues with the network. Again, Ms. Courtney repeatedly reached out to Health Net, pleading for help, but it did nothing to overturn the denials.

Ms. Courtney was not able to get in for surgery until December 13, 2017 – a ten-month delay. As a result, Ms. Courtney became dependent on opioid pain medication that was only first prescribed to her months into the delay while she waited to Health Net to arrange and provide access to specialists.

During that year, Ms. Courtney suffered immense pain and was given the runaround by Health Net’s bureaucracy. All the while, Health Net was on notice that she was unable to care for her four children, that her condition prevented her from using the bathroom without intervention, that she was in extreme pain, and that she had been prescribed the opioid pain medication to manage the pain while waiting for surgery.

“Hopefully this verdict sends a message to Health Net and other health plans,” Corby said.

Under the Medicare Secondary Payer (MSP) law, first enacted in 1980 and updated many times since then, Medicare may not pay claims when another payment is available or reasonably expected to be available, such as workers’ compensation paid medical care for an industrial injury.

When a primary-payer plan doesn’t or can’t pay “promptly” – say, for instance, when it is contesting liability – Medicare can make a conditional payment on behalf of a beneficiary, for which it can later seek reimbursement from the primary plan. If revise 42 CFR section 405.980 and corresponding manual instructions Medicare pays and then seeks reimbursement, only to be refused, the United States can sue the primary plan (or a medical provider) to recover its payment.

The Centers for Medicare & Medicaid Services (CMS) must protect the fiscal integrity of Medicare trust funds. And the Office of the Inspector General (OIG) is responsible for the oversight of that process.

An OIG audit which took place more than a decade ago determined that CMS had not recovered $332 million of the $416 million of Medicare overpayments that it had identified in audit reports issued during the 30-month period ended March 31, 2009.

And now, a new OIG audit published this summer, reflects that CMS conditional payment collection results remain inadequate, even after a decade of efforts to improve its track record.

OIG verified that CMS collected $120 million of the $498 million in sustained Medicare overpayments identified in HHS-OIG audit reports issued during its audit period. Of this sustained amount, CMS reported that it had collected $272 million (55 percent) and that it had not collected $226 million (45 percent).

In addition, CMS did not take corrective action in response to all of the recommendations made in prior audit report published a decade ago. The Report concluded that the “combination of a substantial balance of uncollected overpayments, inadequate policies and procedures, and unimplemented recommendations increases the risk that CMS will not collect millions of dollars owed to the Medicare Trust funds.” Thus, in this 2022 report, a number of recommendations were again made.

CMS officials gave various reasons for not collecting sustained overpayments, such as provider appeals and CMS/MAC redeterminations of overpayment amounts.

One of the recommendations this year by OIG is for CMS to “revise 42 CFR section 405.980 and corresponding manual instructions” which is an invitation for a rulemaking process that will likely make changes to payer appeals of WCMSA settlement set-aside proposals.

Under this regulation as it is currently written, party may request that a CMS contractor reopen its initial determination or redetermination within 1 year from the date of the initial determination or redetermination for any reason, or within 4 years from the date of the initial determination or redetermination for good cause in accordance with § 405.986. Some industry experts expect that the time frame for appeals is likely to be shortened.

Additionally, CMC announced its intent to solicit applicants for a new Workers’ Compensation Review Contractor (WCRC) that will evaluate workers’ compensation Medicare set-aside arrangement (WCMSA) proposals and project the future medical costs, including prescription drugs, related to the workers’ compensation (WC) injury, illness, or disease that would be otherwise reimbursable by Medicare.

Desert Regional Medical Center (DMRC) is an acute care hospital owned and operated by a subsidiary corporation of Tenet Healthcare Corporation. DRMC provides healthcare services and is engaged in interstate commerce within the meaning of the Federal Arbitration ACT (FAA). Nurses Leah Miller, Lynn Fontana, and Renita Romero have been employed by them pursuant to a collective bargaining agreement (CBA) negotiated between DRMC and the Union.

Article 11 of the CBA includes provisions governing RN rest breaks, meal periods, and payment of missed break premiums. Article 9 of the CBA sets forth mandatory grievance and arbitration procedures which must be followed when processing disputes involving interpretation or application of the CBA. Article 9E of the CBA states that individual RNs and DRMC may voluntarily agree to arbitrate “any dispute not otherwise arbitrable under the [CBA]” under the Tenet Fair Treatment Process (FTP), which provides dispute resolution procedures for employment related disputes.

Each of them signed a DRMC employment document, entitled “Acknowledgement,” which referred to an Employment Arbitration Agreement. Under the agreement, they agreed to submit non-CBA covered claims or disputes to final and binding arbitration before the American Arbitration Association (AAA).

In March 2015, the Union filed with DRMC, on behalf of DRMC’s RNs, a meal and rest break grievance. The Union group grievance alleges that DRMC was committing ongoing violations of the CBA and California state law. It was not resolved, so In May 2015, the Union sent DRMC a letter requesting arbitration of the unresolved meal and rest period grievance under the CBA.

The DRMC RNs in this case each filed their own claims with the Labor Commissioner, alleging violations of Labor Code sections 203, 226.7, and 517, and Wage Order 5.In February 2019, DRMC filed with the Labor Commissioner a brief entitled “Defendant’s Jurisdictional Objections,” arguing that the Labor Commissioner lacked jurisdiction to hear and decide Respondents’ individual claims because they had to be resolved in another forum.

However, in February and March 2019, the Labor Commissioner heard under Labor Code section 98, Respondents’ individual claims. During the hearing, which lasted several days, the hearing officer heard testimony and the parties presented documentary evidence and arguments. After submission, DRMC was ordered to pay Miller $64,120.64; Romero $58,835.87; and Fontana $51,156.97 for unpaid wages and interest.

On August 7, 2019, DRMC filed in the Riverside County Superior Court a notice of filing a de novo appeal of the Labor Commissioner’s order awarding unpaid wages. On August 26, 2019, DRMC filed notices of removal of DRMC’s action appealing the Labor Commissioner’s Order, to the federal district court, which later remanded the case back to state court. On July 23 and 24, 2020, DRMC filed petitions to compel arbitration of Respondents’ individual claims and stay the trial court action. At that point there were difficulties in proceeding due to the pandemic.

On August 12, 2020 the Union and Tenet, on behalf of DRMC, had agreed to arbitrate the Union group grievance regarding “Missed Meals-Time Sheets,” and appoint Michael Prihar as arbitrator.

The trial court denied DRMC’s petitions to compel arbitration on the individual nurses actions based on a finding DRMC waived the right to arbitrate. The Court of Appeal affirmed the order denying DRMC’s amended petitions to compel arbitration and request for a stay in the unpublished case of Desert Regional Medical Center v. Miller et. al – E076058 (December 2022.

The principal question on appeal is whether DRMC waived its contractual right, if any, to arbitrate the nurses individual claims.

The Court of Appeal concluded that, even assuming DRMC met its burden of establishing there was an applicable written contract requiring arbitration of Respondents’ individual claims, DRMC waived any such right by delaying filing the Petition to compel arbitration until July 23 and 24, 2020.

There is no single test under state or federal law that delineates the nature of the conduct that will constitute a waiver of arbitration. In the past, California courts have found a waiver of the right to demand arbitration in a variety of contexts, ranging from situations in which the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration, to instances in which the petitioning party has unreasonably delayed in undertaking the procedure.

Here, DRMC did not timely raise its right to arbitrate Respondents’ individual claims or take affirmative steps to implement the process. DRMC delayed filing its Petition to compel arbitration for over four years, which included at least three years from when Respondents submitted their individual claims against DRMC with the Labor Commissioner, until the Labor Commissioner decided the claims in July 2019.

In August 2019, DRMC attempted to remove to federal court its state court action appealing the Labor Commissioner’s decision without success.

DRMC invoked the litigation machinery, including filing a de novo appeal of the Labor Commissioner’s decision in state court, and DRMC delayed petitioning to compel arbitration for a substantial period of time, which was prejudicial to Respondents. The trial court therefore did not err in ruling that DRMC waived any right DRMC may have had to arbitrate Respondents’ individual claims.

The National Council on Compensation Insurance (NCCI) just published the results of its annual survey of top insurance executives. The summary of responses is intended to provide a general sense of the most frequently mentioned items in our survey and the underlying questions that these executives have regarding the future. The 100 respondents provided clear insight into the concerns that are front-of-mind for them as we head into 2023.

Rate adequacy – Rate adequacy is always a concern. Although premium rates and loss costs have been declining for years in most states, the workers comp line has retained an historically low combined ratio.Carriers expressed uncertainty about what the next five years will look like, including whether this downward trend will change and whether a change will result in loss cost/rate level increases.

Many factors are in play that affect a carrier’s ability to maintain underwriting profitability, such as medical cost concerns, labor market dynamics, emerging risks, reserving practices, and general inflation. Executives expressed concerns that when trends – which have driven rates down for many years – eventually turn, the industry may not be able to react quickly.

A related consideration was also raised: will the collective unfamiliarity of what an environment with rate level increases looks like affect the industry’s ability to adequately address rate level needs?

Medical inflation – Carriers noted concerns about the rising cost of medical treatments, especially continuous advancement in medical technology and treatments.

When carriers do not see an associated rise in premium rates it can be disconcerting, in the sense that rates and costs could get too far out of sync.

Trends in WC medical costs reflect changes in the mix of injuries and the types of services used to treat them, as well as changes in the prices of those services. And while medical prices contribute to general inflation, they do not grow at the same rate.

The economy – Uncertainty surrounding things like the labor market, an economic slowdown or recession, interest rates, and investment returns, all point to a challenging economic landscape for carriers. The possibility of a recession weighs on some respondents considering the impact that unemployment and stagnant job growth could have on industries they serve.

Shifting workforce/workplace – This topic can be characterized by two major trends that carriers are watching:

– – Worker shortages and inexperienced workers. The labor market continues to be tight, forcing some employers to hire inexperienced workers with less focus on safety training and pushing seasoned workers to work additional hours. Carriers are concerned with how this could affect the frequency and severity of on-the-job injuries.

– – Remote and hybrid workers. Changes in work patterns following the pandemic are creating work environments with which the industry has little experience. How much lower is injury frequency for employees who are working from home? What new WC risks are there when working from home? How might payroll and premiums be impacted, as well as classifications of workers? Carriers are waiting for new data to gain insight.

NCCI Chief Actuary Donna Glenn and NCCI Chief Customer Operations Officer Mark Mileusnic will take a deeper dive into the top concerns in an upcoming Virtual Carrier Education Series webinar Thursday, January 26, 2023, at 2:00 p.m. ET. You don’t need to be an insurance carrier to attend – the webinar is free and open to all. Registration details are coming soon to ncci.com.