Tag: 2023 News

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released the next report in its Industry Profile series. This series examines an industry sector in California’s workers’ compensation system and provides insights into key characteristics and cost drivers in the industry. The latest report gives a comprehensive overview of the healthcare industry in California.

The healthcare industry is a significant and growing part of California’s economy and one of the largest sectors in the workers’ compensation system. Its workers’ compensation exposure covers a wide variety of occupations, ranging from physicians to nurses to home health aides with disparate average wages and levels of workers’ compensation risks.

In California’s Standard Classification System, there are a number of classifications that encompass healthcare operations. In this report, the healthcare industry is categorized into five segments that provide medical care: Physician Practices, Dental Offices, Hospitals, Nursing Facilities and Home Health Care. These segments are defined based on the locations of the services provided.

The Physician Practices and Dental Offices segments provide outpatient medical services and comprise the majority of workers’ compensation policies for the industry. The Hospitals segment includes both inpatient and outpatient services. The Nursing Facilities and Home Health Care segments may provide less medical care but more physical assistance in short-term and long-term patient care than other segments.

Key findings in the WCIRB Industry Profile: Healthcare report include:

– – The healthcare industry is one of the largest in California, with over 48,000 workers’ compensation policies, and has operations in five distinct healthcare segments that provide medical care (Physician Practices, Dental Offices, Hospitals, Nursing Facilities and Home Health Care). These segments generate 6% of all California workers’ compensation insurance premiums.
– – The advisory pure premium rates approved by the Insurance Commissioner for the healthcare industry are on average about 20% below the statewide average, driven by Physician Practices and Hospitals.
– – Within the healthcare industry, the pure premium rates for Physician Practices and Dental Offices are relatively low, while those for Home Health Care and Nursing Facilities are higher. The differences in pure premium rates by segments are mainly driven by differences in average wage levels (Chart 8) and claim frequency – potentially related to higher risk exposure from hands-on physical assistance provided to patients.
– – Hospitals experienced the largest reduction in payroll and the highest increase in indemnity claim frequency of all healthcare segments during the pandemic.
– – Dental Offices have a much higher share of Cumulative Trauma claims than other healthcare segments, potentially driven by repetitive movements and long duration of dental procedures.
– – Dental Offices have the highest share of claims involving cut, puncture and scrape injuries,likely resulting from the use of dental instruments.
– – Nursing Facilities and Home Health Care have higher shares of claims involving strain, struck and fall injuries than Physician Practices, likely due to the higher level of physical assistance provided in those segments.
– – Home Health Care has the largest share of claims involving motor vehicle injuries as care providers often drive patients to doctor appointments and perform other driving duties for their patients.
– – Overall, the healthcare industry has a lower-than-average claim severity, driven by the higher share of medical-only claims and the lower share of permanent disability claims.

The full report is available in the Research section of the WCIRB website.  

February 28 marks the end of California’s COVID State of Emergency, almost three years since California Gov. Gavin Newsom declared COVID-19 a public health emergency, giving his administration broad power to issue mandates and use state funds to fight the virus.

It also enabled the governor to enter into nearly $12 billion dollars worth of no-bid emergency response contracts with testing facilities, personal protective equipment suppliers and temporary workforce agencies. Some of those contracts were with untested vendors who failed to deliver services.

Newsom has extended the state of emergency five times over the course of the pandemic, most recently last June.

The duration of the state of emergency has been controversial among state Republican leaders who attempted to overturn the governor’s power during a Senate emergency meeting last March. The resolution to terminate the state of emergency was voted down 8-4, with senators voting along party lines.

The SMARTER plan’s rollout has been a key component in eliminating the need for emergency provisions, officials said.

Last year the administration unveiled the SMARTER plan, its $3.2 billion long-term strategy for combating COVID-19. The strategy outlined preparedness measures such as stockpiling 75 million masks, increasing testing capacity to half a million tests per day and investing in the health care workforce and local community health organizations.

But some disagree it’s the right time to end the state’s emergency powers. Carmela Coyle, head of the California Hospital Association, told The New York Times earlier this month that February was “a terrible time to end the public health emergency,” because of ongoing strain on California’s hospitals.

In January, the White House announced that the federal state of emergency for COVID will end on May 11 – over two months after California ends its own. And to complicate matters a little more, there are actually two federal emergencies ending May 11: the national emergency, and the public health emergency.

California has recently enacted several laws that force insurers to keep covering COVID care even after the state and federal states of emergency wind down.

Senate Bill 510 requires insurers in California to keep covering COVID costs like testing and vaccination after the national emergency ends. On the national level, the White House’s COVID-19 Response Coordinator Dr. Ashish K. Jha has promised that COVID vaccines will remain free in the U.S. for insured people as a preventive service covered under the Affordable Care Act of 2010.

Meanwhile, another California law – Senate Bill 1473 – requires insurers to not only keep covering the costs of COVID therapeutic treatments like Paxlovid, but also to keep reimbursing their members for the costs of up to eight over-the-counter COVID tests a month. But this law only keeps the current situation in place until six months after the end of the federal emergency on Nov. 11.

San Francisco had its own Public Health Emergency Declaration for COVID in effect, and several programs for San Francisco residents. San Francisco officials announced that the city’s public health emergency would be coming to an end at the same time as the state’s, on Feb. 28.

And on Feb. 3 the California Department of Health finally announced that the state’s schoolkids would not now have to get a COVID vaccine, and that the department was “not currently exploring emergency rulemaking to add COVID-19 to the list of required school vaccinations,” adding, “but we continue to strongly recommend COVID-19 immunization for students and staff to keep everyone safer in the classroom.”

Amazon has closed its multibillion-dollar deal to buy One Medical to further its ambitions to offer medical services and expand its growing healthcare business to employers.

The tech giant officially announced the closing of the deal last Wednesday morning. The news comes as The Wall Street Journal reported that the Federal Trade Commission (FTC) won’t sue in time to block the $3.9 billion deal, including debt.

The deal expands Amazon’s reach into primary care as it now officially operates 188 clinics in 29 markets. The deal also gives Amazon rapid access to the lucrative employer market as One Medical works with 8,000 companies and has a trove of member health data.

One Medical, which is not yet profitable, launched in 2007 and markets itself as membership-based, tech-integrated, consumer-focused primary care platform.

At the end of 2022, One Medical had 836,000 members with the bulk of those, 796,000 among consumer and enterprise members and 40,000 at-risk members. The company reported 2022 revenue of $1.046 billion, up 68% from 2021 and fourth-quarter revenue came in at $274.2 million, up 19%, according to its 2022 earnings report.

Amazon predicts that ‘If you fast forward 10 years from now, people are not going to believe how primary care was administered. For decades, you called your doctor, made an appointment three or four weeks out, drove 15-20 minutes to the doctor, parked your car, signed in and waited several minutes in reception, eventually were placed in an exam room, where you waited another 10-15 minutes before the doctor came in, saw you for five to ten minutes and prescribed medicine, and then you drove 20 minutes to the pharmacy to pick it up – and that’s if you didn’t have to then go see a specialist for additional evaluation, where the process repeated and could take even longer for an appointment,” said Amazon CEO Andy Jassy. “Customers want and deserve better, and that’s what One Medical has been working and innovating on for more than a decade. Together, we believe we can make the health care experience easier, faster, more personal, and more convenient for everyone.”

Amazon says One Medical sets a high bar for human-centered primary care experiences: Access to primary care where, when, and how people prefer, with:

– – Around-the-clock access through the One Medical app, giving people more control of how they seek care and the ability to do so from home or on-the-go
– – On-demand virtual care services, like 24/7 video chats and easy in-app messaging, which are included in membership at no extra cost; for other services, such as in-office appointments, One Medical accepts most major insurance health plans
– – Same and next-day in-office or remote visits, so people can quickly get the care they need
– – Thoughtfully designed and welcoming One Medical offices, offering care close to where people work, live, and shop
– – Walk-in availability for on-site laboratory services, making it easy to get lab work done where and when it’s most convenient

A comprehensive approach to make health care easier to navigate by offering:

– – A health care home base with primary care providers that help manage a person’s full health picture; from preventive and acute care needs, to chronic disease and mental health concerns
– – Pediatricians and family care providers available in a growing number of locations, serving children and families
– – Providers trained to address both physical and mental health needs, which may include lifestyle recommendations, medications, or referrals to appropriate specialists
– – Clinical and digital integrations with leading hospital networks across the U.S. for more seamless access and coordinated care across primary and specialty care services
– – Easy access to vaccine and medical records, prescription renewals, specialty referrals, and lab results in the One Medical app
– – Outstanding care for seniors in a growing number of locations, with teams specialized in serving people on Medicare

A more human health care experience enabled by:

– – Highly engaged clinicians focused on meeting the whole needs of people, thinking about health care comprehensively, and taking time to treat people as people and not solely as diagnoses
– – More time in appointments to engage with providers for more personalized and comprehensive health care
– – Proactive app reminders for follow-up care and referral needs, facilitating better prevention and coordination of care so the dots are better connected for people to get and stay healthier
– – A human-centered and technology-powered approach, offering an easy-to-use app and innovative clinician tools to simplify the experience for both the patient and the provider

FTC spokesman Douglas Farrar told the WSJ that the commission “will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards, or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

Non-Group Health Plan reporting entities have been waiting for over a decade for clarification on when and how civil monetary penalties (CMPs) for non-compliance with the Section 111 reporting guidelines will be assessed. The proposed rule that will specify how and when CMS must calculate and impose CMPs was published on February 18, 2020.

On February 17, 2023, CMS announced that they will be extending the time for publication of the final rule until February 18, 2024. In sum, it was noted that additional data analysis and predictive modeling need to be done to better understand the economic impact of the rule on different insurer types. The official announcement for the delay will be published in the Federal Registrar on February 22, 2023.

And according to an article on this topic written by attorney and former nurse Ciara Koba, one of the nation’s foremost authorities on Medicare Mandatory Insurer Reporting, this undoubtedly allowed Responsible Reporting Entities (RREs) to take a breath and focus on continuing to improve and streamline processes to ensure they are compliant.

She said that “It was a relief that there has been an acknowledgement of how grave the potential economic impact could be if the max penalties were to be imposed.”

For illustrative purposes, she pointed out that “if an RRE failed to report 100 claims for a period of 90 days. The proposed penalty could reach a staggering $9,000,000 without even accounting for the inflationary daily penalty which would be closer to $1,200 per day per claim.”

With this new timeframe in mind, she went on to say that it is important for responsible reporting entities to pay close attention to any guidance that CMS distributes and take this extra year to implement any necessary improvements to Section 111 reporting systems and processes. On December 6, 2022, CMS presented a webinar on Section 111 reminders and best practice, additional resources and allowed for an open question and answer session.

CMS uses the term TPOC to refer to the dollar amount of the total payment obligation to, or on behalf of, the injured party in connection with the settlement, judgment, award, or other payment in addition to/apart from Ongoing Responsibility for Medicals (ORM). CMS stressed that accurate Section 111 reporting of TPOCs and ORM assists CMS and their contractors with accurate recovery.

CMS discussed how to calculate the TPOC and what is included with specific focus on the fact that indemnity only settlements do not get reported. Logically, this makes sense because the injured Medicare beneficiary is not being compensated for medical damages, and as such, the indemnity only settlement is not reportable because CMS cannot assert a recovery claim for conditional payments against an indemnity only settlement.

CMS also discussed the Event Table contained in Section 6.6.4 of Chapter 4 of the NGHP User Guide for Section 111 reporting. This Event Table can be useful to reporting entities when trying to determine when, what and how to report a particular beneficiary and their claim data. It covers a wide array of event scenarios and CMS reviewed two common issues and reviewed the appropriate action per the User Guide. The second scenario CMS reviewed is as follows:

ORM ends for one body part due to TPOC, but ORM continues for another body part for the same claim. The recommended action for this scenario is to send an update record for the open ORM report (Action Type 2) and remove the diagnoses codes for the body parts that have settled. Then the reporting entity should send an Add record to report the TPOC for the body part that settled.

The solution proposed by CMS is logical if you are working in a system where this is something that is possible. For example, what if the RRE has their TPA reporting their claims for them and the only way to submit an “Add” record in this scenario is to open a new claim for which the RRE will be charged a fee by the TPA.

There are a lot of RREs that are unable to open multiple claims in their systems when all of the action for the claim is really under one claim/policy number in their system. As such, The Medicare Secondary Payer Network (MSPN) has been discussing possible solutions to this issue that will allow CMS to obtain the information that they need for recovery efforts and that will allow the RREs to do the reporting accurately without having to open additional claims to report multiple TPOCs and/or ORM timeframes for different body parts/injuries.

CMS also released the top 10 error codes that they have received from July 1, 2022 through October 7, 2022. This data was very interesting, and RREs should pay particularly close attention to this data.

If you would like to analyze your data but don’t know where to start, please reach out to Ciara Koba at info@allankoba.com.

The U.S. Attorney’s Office for the Northern District of California has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy released earlier today.

The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate.

The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations.

The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.

Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation.

A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by – in the absence of any aggravating factor – fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.

The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.

In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.

The Attorney General’s Advisory Committee (AGAC), under the leadership of United States Attorney for the Southern District of New York Damian Williams, requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of United States Attorney for the Eastern District of New York Breon Peace, develop policies in response to the Deputy AG’s memo.

The policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group on which U.S. Attorney Hinds sits. In addition to U.S. Attorney Hinds, the Working Group is comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, U.S. Attorney for the Eastern District of Virginia Jessica Aber, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Western District of Virginia Christopher Kavanaugh, and U.S. Attorney for the District of New Jersey Philip Sellinger. Assistant U.S. Attorney Amanda Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of the policy.