The $2.7 million settlement government contractor Insight Global LLC, (“Insight”) is paying to settle a Justice Department (“DOJ”) False Claims Act civil suit for lax cybersecurity shows government contractors now must add possible False Claims Act prosecution to the already substantial and ever-widening potential consequences all organizations and leaders when their organizations experience a cyber incident.
Supplementing the strength and reach of existing cybersecurity laws by using the False Claims Act, federal securities, employee benefit fiduciary responsibility. and other laws as tools to pressure organizations and their leaders to strengthen their cybersecurity compliance and defenses is a key component of the National Cybersecurity Strategy the Administration announced in March, 2023 to battling the ongoing pandemic of cyber incidents. As National Cybersecurity Strategy states, “Continued disruptions of critical infrastructure and thefts of personal data make clear that market forces alone have not been enough to drive broad adoption of best practices in cybersecurity and resilience. … We must hold the stewards of our data accountable for the protection of personal data; drive the development of more secure connected devices; and reshape laws that govern liability for data losses and harm caused by cybersecurity errors, software vulnerabilities, and other risks created by software and digital technologies.
The National Cyber Security Strategy goes on to warn, “We will use Federal purchasing power and grant-making to incentivize security.”
With holding businesses and their leaders accountable a key component of the Federal government’s National Cybersecurity Strategy, government contractors specifically and all businesses and their leaders generally should heed the use of the DOJ’s use of the False Claims Act as another tool in its expanding arsenal for holding businesses experiencing cyber breaches accountable as proof of their own growing imperative to manage their own cyber security and liability in response to exploding strains of cyber threats and liabilities.
Government Contractor False Claims Act Cyber Risk
DOJ’s adoption of the False Claims Act as a tool for imposing liability against government contractors experiencing a cyber breach is part of a broader effort to persuade organizations and their leaders to tighten their cyber security defenses and responses by ratcheting up the liability and other consequences organizations and their leaders face when their organizations experience a cyber incident. The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States.
A Civil Cyber-Fraud Initiative announced by DOJ on October 6, 2021 adds potential False Claims Act civil lawsuits by DOJ or private whistleblowers to the already significant and expanding consequences government contractors and grant holders can face for failing to fulfill requirements to properly secure protected health information or other sensitive data as required in their government contracts.
According to DOJ’s May 1, 2024 announcement, Insight will pay $2.7 million to resolve DOJ False Claims Act charges for failing to have adequate cybersecurity measures to protect health information obtained during COVID-19 contact tracing under the new of the Settlement shows DOJ is following through on its promise.
$2.7 Million Insight FCA Cyber Settlement
The $2.7 million Settlement settles a whistleblower lawsuit, United States ex rel. Seilkop v. Insight Global LLC, No. 1:21-cv-1335 (M.D. Pa.). Filed under the whistleblower provisions of the False Claims Act that permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to receive a share of any recovery, DOJ intervened in the suit. Whistleblower, Terralyn Williams Seilkop, a former Insight Global staff member who worked on the contact tracing at issue, will receive a $499,500 share of the $2.7 million settlement amount.
The lawsuit alleged the Pennsylvania Department of Health hired Insight to provide staffing for COVID-19 contact tracing and paid Insight using federal funds from the U.S. Centers for Disease Control and Prevention. Although keeping personal health information of contact tracing subjects confidential and secure was part on its contractual duties, Insight failed to secure the protected health information. Instead, DOJ claimed, for example, Insight transmitted certain personal health information and/or personally identifiable information of contact tracing subjects in the body of unencrypted emails, stored and transmitted the information using Google files not password protected, making them potentially accessible to the public via internet links and allowed staff to use shared passwords to access that information.
DOJ additionally alleged that from November 2020 through January 2021, Insight managers received complaints from Insight staff that protected health information was unsecure and potentially accessible to the public, but failed to start remediating the issue until April 2021 after deficiencies came to light.
When Insight eventually began remediating these cybersecurity breaches and deficiencies in 2021, the announcement states Insight cooperated with the DOJ investigation of the cause and scope of the incident. It also took steps to remedy cybersecurity deficiencies by strengthening internal controls and procedures, adding more data-security resources and issuing a public notice regarding the scope of the potential exposure and offering free credit monitoring and identity protection services to those affected. FOJ also reports Insight also cooperated with the United States’ investigation.
DOJ’s Insight settlement announcement warns other government contractors of DOJ’s “continuing commitment to ensure that government contractors fulfill their cybersecurity obligations.” Its announcement quotes Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division as stating, “The Justice Department will hold accountable those contractors who knowingly fail to satisfy cybersecurity requirements.”
Meanwhile, Special Agent in Charge Maureen R. Dixon of the Department of Health and Human Services Office of Inspector General (HHS-OIG) is quoted as stating “Contractors for the government who do not follow procedures to safeguard individuals’ personal health information will be held accountable.”
Cyber Risk Implications For Government Contractor & Other Organizations
Potential False Claims Act liability under the DOJ False Claims Act Civil Cyber-Fraud Initiative add additional liability risks for government contractors to already substantial and growing federal and state regulatory, contractual, and civil and criminal liabilities and other consequences that cyber breaches and other cybersecurity weaknesses create for business and other organizations, their health plans and their leaders. Examples of these other exposures that lax privacy, data security, data breach and other cybersecurity practice may create include:
Business operating losses from resulting operational disruptions and damages to customer, business partner, shareholder and public trust;
Federal Sentencing Guidelines organizational criminal liability arising from violations of electronic crime and other federal criminal data privacy and security laws;
Federal Trade Commission Act and state unfair business practices liability for deceiving customers about privacy practices;
Security and Exchange Commission (“SEC”) criminal and civil actions and shareholder lawsuits under the Security and Exchange Act;
Health Insurance Portability & Accountability Act civil monetary penalty and criminal exposures for health plans, health care providers, health care clearinghouses and their business associates;
Employee Benefit Security Act fiduciary liability for health fiduciaries;
Liability for violation of Fair and Accurate Transaction Act, Internal Revenue Code, or other federal privacy or confidentiality laws;
damages and other penalties and judgments arising under state identity theft, data security, privacy and other state statutory, contractual and tort laws; and
More.
These and other constantly emerging exposures show the imperative for government contractors and all other organizations and their leaders to ensure their organizations take adequate, well-documented efforts to protect their systems and data and fulfill all otherwise applicable cybersecurity rules.
With new cyber attacks and strains of cyber liability, emerging constantly, organizations, and their leaders increasingly must change the way they think about and address their own cyber security and other technology, budgets and management. The escalation of cyber incidents and risks necessitates that organizations and their leaders to treat cybersecurity as critical components of their operational and business plans and priorities.
Amid the pandemic of constantly evolving cyber threats, even the most diligent efforts to secure systems and data cannot guarantee the prevention of a breach or other cyber incident. Given this challenge, organizations and their leaders must focus both on taking meaningful steps to adequately secure their systems and data against a cyber breach or incident as well as position their organizations and leaders to defend their actions and mitigate exposures through appropriate strategic planning, documented oversight and risk assessment, monitoring and response of threats and safeguards; preparation and timely response to cyber events using attorney-client privilege and other evidentiary tools to promote the defensibility of pre-breach, breach investigation and post-breach investigation and decision-making.
As the availability of funding can radically impact the effectiveness of these and other risk mitigation efforts when a cyber incident occurs, these preparations also should incorporate insurance and other arrangements to provide for breach investigation funding and response.
If you need have questions or need assistance with this or other cybersecurity, health, benefit, payroll, investment or other data, systems or other privacy or security related risk management, compliance, enforcement or management concerns, to inquire about arranging for compliance audit or training, or need legal representation on other matters, contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of cybersecurity, workforce, technology and other compliance, risk management and mitigation, incident and other investigations,regulatory and government affairs, and other strategic, operational, regulatory and legal and consulting management work for government contractors and other public and private businesses; managed care and other health and life science, insurance, technology, and other performance and data dependent organizations,
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership with healthcare and life sciences, employment and employee benefits, managed care and insurance, data and technology and other related industries and organizations. Known for her skill combined use of her extensive legal and operational knowledge to help these and other clients develop, operationalize and defend employment, employee benefits, compensation and other staffing and workforce; data, systems and other technology; heath benefit and other healthcare and life science, managed care and insurance; employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational actions and practices. She speaks and publishes extensively on these and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Laws Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Departments of Health and Human Services, Labor, and the Treasury (collectively, the Departments) today announced changes to the requiredprocess for resubmitting Independent Dispute Resolution (“IDR”) disputes originally improperly batched or bundled in the Federal IDR portal.
According to the Departments’ May 1 announcement, resubmission requests for disputes originally improperly batched or bundled will come directly from the Federal IDR portal instead of from the certified IDR entity, and initiating parties now will have a unique web form they can access via a link in their resubmission email notification to complete the resubmission process.
Starting on May 1, 2024, certified IDR entities will notify parties through an email from the Federal IDR portal that a dispute is eligible for resubmission due to improper batching or bundling from auto-reply-federalidrquestions@cms.hhs.gov. If the recipient initiated the dispute, the resubmission email notification will contain a unique link to a new form called the Notice of IDR Initiation – Resubmission web form and instructions on the next steps. If the recipient did not initiate the original dispute, the email notification will be informational and will not have a link.
Initiating parties have four business days from the date of the resubmission email notification to resubmit a dispute. The resubmission link will no longer work after the four business day window has passed.
If a certified IDR entity notified the party that a dispute submitted was eligible for resubmission due to improper batching or bundling before May 1, 2024, the Departments state the recipient should resubmit the dispute as instructed in the email from its certified IDR entity through the Notice of IDR Initiation web form by May 6, 2024. For information on how to resubmit these disputes, refer to the Notice of Initiation Web Form Job Aid.
The Departments state the Notice of IDR Initiation web form will accept resubmitted disputes through May 6, 2024. After May 6, 2024, the Notice of IDR Initiation web form will no longer accept resubmitted disputes, and all resubmissions must be submitted via the Notice of IDR Initiation – Resubmission web form, as described in the paragraph below.
The following resources provide additional information and instructions on how to complete and submit the new Notice of IDR Initiation – Resubmission web form, following
Health care providers and health plans using the new IDR processes should update their processes immediately to avoid forfeiting surprise billing rights. Recipients of e-mails purportedly from the portal are cautioned to include and follow appropriate procedures to guard against malware or other cyber threats.
For More Information
We hope this update is helpful. For more information about these or other health or other legal, management, or public policy developments, please get in touch with the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health, employee benefits, insurance, hospitality, retail, construction and other industry management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair and Chair Elect of its International Employment Law Committee, Chair of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer has decades of experience advising employers, investigating and helping employers to defend wage and hour, worker classification, discrimination and other labor and employment, employee benefits and other compliance.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Her experience includes extensive involvement advising clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination; EBSA, IRS, and PBGC employee benefit; WHD, CAS, Davis-Bacon and other federal and state wage and hour and other compensation; OSHA and other investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Laws Press, Inc.™
Solutions Law Press, Inc.™ provides health care, human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here, such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
UnitedHealthcare Group (UHG) plans to resume certain key health benefit and payment function this week that it turned off in response to a February 21, 2024 cyberattack.
Health plans, their fiduciaries, health plan sponsors and insurers, and their administrative and other service providers may find these updates helpful to plan and communicate with plan members, providers and others as part of their efforts to fulfill their own Health Insurance Portability and Accountability Act (HIPAA) Privacy, Security, and Breach Notification Rules, the claims, notice and fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (ERISA), state contract, prompt pay and other duties to health care providers or other responsibilities in response to disruptions created by UHG’s Blackcat1234 ransomware attack subsidiary Change Healthcare.
UHG Attack
On February 21, 2024, a ransomware attack executed by the Blackcat1234 ransomware group took control of and shut down the payment, revenue cycle management and related tools and systems of UHG Subsidiary Change Healthcare. Well-known for stealing sensitive data and demanding ransom for not publishing it, and other public and private cybersecurity monitoring and tracking organizations have warned heath care and other system operators to guard against Blackcat1234 and related ransomware attack risks since at least 2022. See, e.g., #StopRansomware: ALPHV Blackcat | CISA.
The Choice Health shutdown resulting from the Blackcat1234 ransomware attack has created widespread disruptions to key care authorization, billing and other pharmacy, provider and other plan and provider transactions within health care and health benefit systems nationwide due to the widespread use of the Choice Health tools.
Due to the widespread use of the Change Healthcare tools and systems as a financial clearinghouse for connecting pharmacy benefit managers, health care providers, and other key plays and health plans throughout the health care and health benefits industry, the attack has and continues to disrupt key billing, care-authorization, payment and other transactions between health care payers and pharmacies, physicians and other health care providers and health care payers and their partners across the health care industry.
The resulting shutdown and disruption to electronic payment and medical claims systems incorporating the compromised Change Healthcare tools create various legal and operational headaches for many health plans and other health care payers by preventing or obstructing the submission and processing of health care claims and other transactions between health care providers and health plans.
While UHG works to remediate and restore the operability and security of the Choice Health tools and systems, health plans, and insurers, their fiduciaries, plan sponsors, and fiduciaries should take timely and prudent steps in response to the breach and resulting disruptions to mitigate the exposure of their health plans, and themselves under HIPAA and ERISA. See Manage Health Plan HIPAA, ERISA & Other Exposures From Change Healthcare Ransomware Attack.
Timeline
In its Product Restoration Timeline posted on a UHG website, UhG projects the following timeline for restoration of the following systems:
Clearance: Benefits verification and authorization determination
MedRX: Pharmacy electronic claims for medical
Reimbursement Manager: Claim pricing
Coverage Insight: Coverage discovery
Week of 4/1
Clinical Exchange: Provider workflow enabling electronic prescribing, ordering and resulting integrated into EHR’s
Payer Connectivity Services(PCS): EDI validation and editing
Hosted Payer Services(HPS): Payer hosting service for eligibility responses to providers
Acuity / Pulse: Acuity provides revenue cycle analytics for users of Clearance and Assurance; Pulse provides RCM KPI benchmarks for institutional claims utilizing Assurance client data
Week of 4/8
Risk Manager: Supports clients in managing value-based payment contracts.
Health QX: Retrospective episode-base payment models
No Guarantees
The UHG website warns these dates are projections based on available information. Products will go through a phased reconnection process, including launch, testing and scaled reconnection. The timeline may change as UHG learns more.
Unlisted Services
The Timeline currently does not list all products and services. The UHG website states that the absence of a product from the schedule does not mean that product is more than three weeks away from resumption. Rather, it means that UHG does not yet have line of sight to the week that it expects to restore it. UHG plans to provide updated information as those timelines become clear.
For specific product updates, UHG invites interested persons to subscribe to the products of interest here.
Restoration Webinars
UHG also has shared the following series of webinary providing more information about its restoration efforts:
If you need have questions or need assistance with this or other cybersecurity, health, benefit, payroll, investment or other data, systems or other privacy or security related risk management, compliance, enforcement or management concerns, to inquire about arranging for compliance audit or training, or need legal representation on other matters, contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of employee benefit, managed care and other health and insurance industry, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Laws Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Attorney Cynthia Marcotte Stamer and Allison Moody are scheduled to present a “Health Plan Claim Denials Update” for the American Bar Association Real Property Probate and Trust Section Employee Benefits and Executive Compensation Group on Friday, January 19, 2024 from 11:30 AM – 12:30 PM Central Time. Group members and other interested persons are invited to join this complimentary Zoom call.
Employee Retirement Income Security Act (“ERISA”)-covered group health and disability plan participants and beneficiaries increasingly successfully overcome health plan benefit denials and receive ERISA § 502(c) awards based on federal court’s rulings plan fiduciaries or administrators failed to fulfill the Employee Benefit Security Administration (“EBSA”) adverse benefit determination regulations.
During the “Health Plan Claims Denials Update, attorneys Cynthia Marcotte Stamer and Allison Moody will share an update on the precedent driving this emerging trend, how the new No Surprises Act rules interface with ERISA adverse benefit determination regulations, and discuss implications and best practices for health plan fiduciaries, administrators, and their advisors should consider to strengthen the defensibility of their plans’ adverse benefit determinations and mitigate risks in light of this trend to the American Bar Association Real Property Probate and Trust Section Employee Benefits and Executive Compensation Group monthly membership Zoom call on Friday, January 19, 2024.
Participation in this and other RPTE Section Employee Benefit and Other Compensation Group calls is complimentary. Members and other interested persons can join the call using the following Zoom credentials:
One tap mobile: +13126266799,,91796395033# US (Chicago)
About the Presenters
Allison Moody. Allison Moody is a highly experienced legal consultant, licensed to practice law, specializing in advising on complex health and welfare benefit laws. With a deep understanding of the legal and regulatory landscape, Allison provides expert guidance to employers, brokers, and members in various states, ensuring their compliance with ever-evolving requirements. Allison has built a reputation for helping organizations navigate the intricacies of employee benefits laws and delivering practical and effective solutions. She also negotiates contracts, provides legal review of proposed legislation, regulations, and bulletins, and assists with audits and investigations.
Allison previously served as Vice President and General Counsel of a third-party administrator. In her position there, she advised organizations on legal and business issues and finding ways to minimize risk. She also represented the company in various administrative and legal proceedings and hired and managed Outside Counsel in matters involving litigation or arbitration.
Allison has served in leadership roles in many benefits organizations over her career, including the Society of Professional Benefit Administrators (SPBA), Texas Professional Benefit Administrators (TPBA), RPTE Employee Benefits and Executive Compensation Committee, and the National Association of Health Insurance Professionals (NAHIP). She is also a member of the ABA Tort and Insurance Practice Section, where she serves on the Medicine and Law and Life, Health and Disability, and Cybersecurity Committees. In her spare time, she volunteers for Brother Bills Helping Hand and enjoys her French bulldogs.
Allison received her Juris Doctorate degree from Tulane Law School and graduated Magna Cum Laude in Communications/Political Science from Texas Tech.
Cynthia Marcotte Stamer. Cynthia Marcotte Stamer is a Fellow in the American College of Employee Benefits Counsel and Board Certified in Labor and Employment law by the Texas Board of Legal Specialization, recognized for her decades of prolific legal and operational work, legislative and regulatory advocacy, scholarship, and thought leadership on insured and self-insured managed care and other health care, disability and other employee benefit, insurance, health care and workforce programs, practices, and policies as a “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; “Best Lawyer” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “HealthCare” and “Business and Commercial Law.”
For 35-plus years, “Cindy” has guided and represented self-insured and insured health and managed care, disability, and other employee benefit plans; employers; plan sponsors; fiduciaries’ administrative services, technology, and other vendors; insurers; brokers and consultants; health care providers;; governments; and others on the design, administration, and defense of claims and appeals and other plan provisions, practices, systems and technologies; the prevention, evaluation, mitigation, and defense of fiduciary, participant and beneficiary, health care provider, government and other claims, disputes, and other enforcement actions arising out of the operation of these programs; contracting, technology and product development; fiduciary responsibility, market conduct and other operating standards; health care fraud; privacy and data security; innovation and change management; government relations and investigations; and a diverse range of other employee benefits, insurance, employment, compensation, and health care operations, risk management, and compliance concerns.
Cindy also contributes her knowledge and leadership as the American Bar Association (“ABA”) RPTE Employee Benefits and Executive Compensation Group Chair and current Welfare Committee Co-Chair; current ABA Joint Committee on Employee Benefits (“JCEB”) HHS Agency Meeting Scribe and former JCEB Council Representative and Marketing Committee Chair; current ABA TIPS Section Medicine and Law Committee Chair, Employment Committee Diversity Vice Chair, and former Employee Benefits Committee Vice Chair; current ABA International Section International Life Sciences and Health Committee Chair and International Employment Committee Vice Chair; former ABA Health Law Section Managed Care & Insurance Group Chair; former SHRM National Consultant’s Board and Regional Chair; former board member, Programs Committee Chair and Treasurer of the Southwest Benefits Association; founding Board Member and Past President of the Alliance for Health Care Excellence and founder of its Health Care Heroes and Patient Empowerment Programs; past National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Texas Association of Business BACPAC Chair, Board Member, Regional Chair, Dallas Chapter Chair and Health Care Task Force Leader; and in many other professional and civic leadership roles.
A continuous learner, prolific author, and popular public speaker, Cindy also has authored hundreds of highly regarded publications on employee benefits and other workforce, health care, managed care, privacy and data security, technology, and other related compliance, risk management, and public policy concerns. Her thought leadership on these and other concerns often is quoted in the professional and public media and sought out by legislative, regulatory, and industry leaders.
About The Employee Plans and Executive Compensation Group
The January 19, 2024 Zoom call is part of a monthly series of membership calls hosted over Zoom by the Employee Benefits and Executive Compensation Group as a free member benefit. The Employee Plans & Executive Compensation Group is comprised of 249 attorneys with an interest in or focus on employee benefits, ERISA and executive compensation issues. The Group includes six substantive committees: Fiduciary Responsibility, Administration, and Litigation; Welfare Benefit Plans; Plan Transactions and Terminations; Qualified Plans; Non-Qualified Deferred Compensation; and IRAs and Plan Distributions. Membership in the Group and the American Bar Association is open to attorney and other interested individuals
[1]The purpose of this discussion is to enable individuals to share and exchange their personal views on topics and issues of importance to the legal profession. All comments that appear are solely those of the individual, and do not reflect ABA positions or policy. The ABA endorses no comments made herein.
Health plans, health care providers and health care clearinghouses (“Covered Entities”) treat the Department of Health and Human Service Office of Civil Right (“OCR”) announcement of its 46th enforcement action under the Health Insurance Portability & Accountability Act (“HIPAA”) Right of Access Rule as a warning to confirm their own organization’s timely delivery of records and other compliance with the Rule. Coupled with OCR’s Right of Access Rule settlement agreement with United Health Insurance Group last August, the latest settlement agreement sends a strong message to health plans and other Covered Entities about the risks of failing to deliver protected health information as required by the Right of Access Rule.
HIPAA Right of Access Rule
The HIPAA Right of Access Rule guarantees individuals the right to access a broad array of health information about themselves maintained by or for health plans and other Covered Entities. Under the Right of Access Rule, Covered Entities generally must provide individuals or their personal representatives copies or other acceptable access to the individual’s protected health information in a Covered Entity’s “designated record set” for a reasonable cost as soon as possible and within 30 days of receiving a request for a reasonable cost. However, the Right of Access Rule does not grant any right for an individual to access protected health information that is not part of a designated record set because the information is not used to make decisions about individuals.
The request for protected health information triggering the duty for a Covered Entity to provide access to the protected health information may come from the individual who is the subject of the protected health information or from the “personal representative” of that individual. When considering a request for protected health information from an individual other than the subject of the protected health information, health plans and other Covered Entities also must use care to verify that the requesting party, in fact, qualifies as the individual’s “personal representative” as defined for purposes of HIPAA.
Once a health plan or other Covered Entity receives a request protected health information from the individual or his personal representative, the Right of Access Rule requires the Covered Entity to provide access to all requested protected health information within any “designated record set” within 30 days unless the requested information falls within one of two exceptions to the Rule.
For this purpose, a “designated record set” generally is defined at 45 CFR 164.501 as any item, collection, or grouping of information that includes protected health information that is maintained, collected, used, or disseminated by or for a Covered Entity that comprises the:
Medical records and billing records about individuals maintained by or for a covered health care provider;
Enrollment, payment, claims adjudication, and case or medical management record systems maintained by or for a health plan; or
Other records that are used, in whole or in part, by or for the covered entity to make decisions about individuals. This last category includes records that are used to make decisions about any individuals, whether or not the records have been used to make a decision about the particular individual requesting access.
However, the Right of Access Rule only requires the delivery of protected health information that is part of a designated record set. It does not require health plans or other Covered Entities to provide protected health information that the Covered Entity does not use to make decisions about the individual, since this information is not considered part of a designated record set. Examples of such records of protected health information might include protected health information in certain quality assessment or improvement records, patient safety activity records, or business planning, development, and management records the Covered Entity uses for business decisions more generally rather than to make decisions about the subject individual. Before refusing to provide information not part of a designated record set, however, the health plan or other Covered Entity does not also use or possess that information for making decisions about the subject individual or that disclosure is not otherwise required under another law. For example, even if the Right of Access Rule does not require disclosure of protected health information because it is not considered part of a designated record set, a health plan still be required to disclose the record if required by the adverse benefit determination rules of the Patient Protection and Affordable Care Act (“ACA”), claims and appeals rules of the Employee Retirement Income Security Act or other applicable law, regulation or another law.
Even where the information falls within the definition of a designated record set, however, HIPAA expressly excludes two categories of information from the Right of Access right:
Psychotherapy notes, which are the personal notes of a mental health care provider documenting or analyzing the contents of a counseling session maintained separately from the rest of the patient’s medical record as described in 45 CFR 164.524(a)(1)(i) and 164.501.
Information complied in reasonable anticipation of, or for use in, a civil, criminal, or administrative action or proceeding described under 45 CFR 164.524(a)(1)(ii).
However, it is critical that Covered Entities not overestimate the reach of either of these two exceptions. The exception only applies to the narrow range of records meeting the requirements of the exception. The underlying protected health information from the individual’s medical or payment records or other records used to generate the above types of excluded records or information remains part of the designated record set and is subject to access by the individual under the Right of Access Rule. Providers and other Covered Entities should use care to comply with the Right of Access Rule without providing more information than allowed as HIPAA liability can arise from failing to timely deliver access to all protected health information required by the Right of Access Rule or from sharing protected health information with an individual who is not either the individual or personal representative when the disclosure otherwise is not allowed by HIPAA To help negotiate these requirements, Covered Entities should become familiar with and process all requests for protected health information following the latest Right of Access Rule guidance. When in doubt, Covered Entities should seek the advice of experienced legal counsel within the scope of attorney-client privilege about proper fulfillment of their obligations under the Right of Access Rule in coordination with any other applicable responsibilities the Covered Entities has to provide access, disclose, or prevent disclosure of the requested information under otherwise applicable federal or states laws and regulations, ethical or other professional standards, contractual or other medical, insurance, financial, employee benefit or other rules relating to the requested records.
Optum Settlement 46th Right Of Access Enforcement Settlement
The Optum settlement resulted from OCR’s investigation of six complaints in the Fall of 2021 that Optum violated the Right of Access Rule by failing to provide timely access to medical records when requested by an adult patient or by the parents of minor patients.
In February 2022, OCR initiated investigations of these Right of Access complaints. The investigation revealed that patients received their requested records between 84 and 231 days after submitting their respective requests. Since the Right of Access Rule requires that Covered Entities deliver the records no later than 30 days from receiving the individual’s requests, those timeframes fell well outside of the deadline for delivery required by the HIPAA Right of Access Rule. Accordingly, OCR concluded that Optum’s failure to provide timely access to the requested medical records was a potential violation of HIPAA.
Under the Resolution Agreement reached with Optum, Optum agreed to pay $160,000 to OCR as well as implement a corrective action plan that requires workforce training, reporting records requests to OCR, and reviewing and revising as necessary its right of access policies and procedures to provide timely responses to requests. Under the plan, OCR will monitor Optum Medical Care for one year.
Right Of Access Remains OCR Investigation & Enforcement Priority
While health care providers are the most common target of OCR’s Right Of Access complaints and enforcement, OCR’s August, 2023 Right of Access settlement against United Health Insurance Group (“UHIG”) confirms health plans also are targets. That settlement arose from OCR’s investigation of a March 2021 complaint alleging that UHIC did not respond to an individual’s request for a copy of their medical record. The investigation showed the individual first requested a copy of their records on January 7, 2021, but did not receive the records until July 2021, after OCR initiated its investigation. Movrover, the March, 2021 complaint was the third complaint OCR received from the complainant against UHIC alleging failures to respond to his right of access. These findings led OCR to conclude UHIC’s failure to provide timely access to the requested medical records was a potential violation of the HIPAA right of access provision. In OCR’s announcement of UHIG’s agreement to pay $80,000 to resolve these potential charges, OCR Director, Melanie Fontes Rainer warned, “Health insurers are not exempt from the right of access and must ensure that they are taking steps to train their workforce to ensure that they are doing all they can to help members’ access to health information.” See, UnitedHealthcare Pays $80,000 Settlement to HHS to Resolve HIPAA Matter over Patient Medical Records Request.
Manage Right of Access Rule Exposure
Despite OCR’s warnings about the responsibility to comply with the Right of Access Rule, many health plans and other Covered Entities continue to violate the Rule. OCR has and continues to receive thousands of Right of Access Rule complaints each year. In response to these persistent compliance issues, OCR continues to make enforcement of the Right of Access Rule a key enforcement priority through its Right Of Access Initiative.
In light of OCR’s commitment to continue to investigate and enforce compliance with the Right of Access Rule, health care providers and other Covered Entities and their business associates are urged to review their existing practices for receiving and processing patient record requests to confirm their own organizations’ compliance with the Right of Access Rule and other applicable federal and state statutory regulatory and contractual requirements. To reduce risks of violations, all health care providers and other Covered Entities should seek assistance from experienced legal counsel within the scope of attorney-client privilege to audit their past and current Right of Access Rule compliance for any necessary or advisable steps to prevent future violations and mitigate potential liabilities arising from potential past or future violations of the Right of Access Rule. Aside from confirming documented timely responses to past requests for protected health information, among other things, most Covered Entities will want to consider:
Verifying that their current policies, privacy practices notices, training and other materials are updated to comply with all applicable policies and properly identify and provide current contact information for the Privacy Officer or other party responsible for receiving and responding to protected health information requests;
Appropriate procedures are in place to ensure that the Covered Entity can produce required documentation showing the individuals are appropriately notified of the Right of Access and other HIPAA rules, and that the Covered Entity captures the necessary documentation to show its receipt of all requests, and timely investigation and response to such requests;
Appropriate and documented processes for collecting, investigating, or resolving any potential concerns, complaints, or other issues, their evaluation, and resolution;
Appropriate workforce, business associates, and other policies, training, oversight, and enforcement to require and enforce compliance with applicable laws and policies; and
Appropriate processes, procedures, and training to ensure that staff fully understands and complies with both the specific processes and procedures of the Covered Entity for complying with the Right of Access Rule, as well as related procedures necessary to manage risks and responsibilities arising under verification of identity, personal representative, disclosure, recordkeeping or other HIPAA’ rules; medical, insurance, financial, or other data or privacy; licensure and market conduct; civil rights and nondiscrimination; fiduciary; licensure; marketing or other rules.
Aside from the direct exposures for these and other HIPAA violations arising under HIPAA, health plans, their fiduciaries, insurers, plan sponsors and administrators should keep in mind that the Employee Benefit Security Administration views potential data breaches and other HIPAA violations as a potential source of fiduciary liability under the Employee Retirement Income Security Act.
While involving outside consultants or other service providers generally is valuable if not required to conduct some of these tasks, Covered Entities are encouraged to use experienced outside legal counsel to help plan, conduct, evaluate and decide, and implement responses to findings from these compliance and risk management activities both to benefit from legal counsel’s substantive legal expertise and experience and to take advantage of the opportunity to conduct sensitive discussions within the protection of attorney-client privilege or other evidentiary rules. Experienced outside legal counsel can guide Covered Entities about the best way to work with consulting and other vendors to maximize these benefits. Where legal advice is provided to health plan fiduciaries, health plans, their fiduciaries, insurers, sponsors, and service providers also should keep in mind that advice and work product performed on behalf of a health plan or plan fiduciary may not enjoy the same protection against discovery under attorney-client privilege and work product rules.
For More Information
We hope this update is helpful. For more information about these or other health or other legal, management, or public policy developments, please get in touch with the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here, such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Got issues with the most recent articulation of the proposed rule on “Federal Independent Dispute Resolution (IDR) Operations” (“Rule”) that governs the independent dispute resolution process for resolving to disputes over out-of-network claims between health plans and heath care providers under the No Surprises Act?
The Departments of Health and Human Services, Labor, and the Treasury (the “Departments”) and the Office of Personnel Management intend to reopen the comment period for submitting comments on the proposed rule “Federal Independent Dispute Resolution (IDR) Operations.”
Concerned persons should begin preparing comments to submit while awaiting the Departments publication of official notice in the Federal Register of the reopening of the comment period.
For More Information
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
The Internal Revenue Service (“IRS”) issued a series of updates and tips on the use of the Voluntary Correction Program (“VCP”) to correct eligible defects in qualified employee benefit plans.
Check the Status of your VCP Submission
VCP applicants frequently wonder about the status of their VCP Submission. Applicants may not check if their VCP submission has been assigned to a specialist by comparing the date of the submitter’s confirmation email to the date of the most recent VCP submissions that have been assigned to a specialist at at IRS.gov/VCPstatus.
Revised VCP Model Compliance Statement and Schedules
The IRS updated several fill-in VCP forms to revise outdated information, provide clarity, and make it easier to present some late amender failures that impact 401(a) and 403(b) retirement plans.
Plan sponsors can use the model compliance statement and schedules to make an IRS Voluntary Correction Program (VCP) submission. The model schedules (Forms 14568- A to 14568-I) contain standardized methods plan sponsors can use to correct common mistakes using VCP.
The IRS recently changed the following fill-in forms:
Form 14568, Model VCP Compliance Statement to update enforcement section language;
Form 14568-A, Model VCP Compliance Statement – Schedule 1: Plan Document Failures for 403(b) Plans for late amender failures only to provide a framework to present late amender failures that involve IRC 403 plans and standardized descriptions for some very common 403(b) plan document failures;
Form 14568-B, Model VCP Compliance Statement – Schedule 2: Nonamender Failures for 401(a) Plans for use only for late amendment failures to group failures pre-approved plans vs individually designed plans and failure descriptions for pre-approved plans to include the latest failures; to provide a framework to present failures involving individually designed plans not timely to comply with the Required Amendments List, or the Cumulative List (prior to 2017) and to allow for legit late interim amendment failures affecting a pre-approved plan to be presented as an “Other” failure in Section I C;
Form 14568-C, Model VCP Compliance Statement – Schedule 3: SEPs and SARSEPs is updated to include a direct link to the DOL VFCP calculator and increased to $250 the standardized narrative involving small excess amounts;
Form 14568-D, Model VCP Compliance Statement – Schedule 4: SIMPLE IRAs includes an pdated direct link to the DOL’s VFCP calculator and increased to $250 the standardized narrative involving small excess amounts.
No changes have been made to the other forms in the Form 14568 series (Form 14568-E through Form 14568-I).
Interim Guidance on EPCRS: Notice 2023-43
The IRS released guidance in the form of Q&A’s on changes made by the SECURE 2.0 Act to the Employee Plans Compliance Resolution System of voluntary correction programs for retirement plans. Notice 2023-43 provides interim guidance for taxpayers in advance of an update to EPCRS as outlined in Revenue Procedure 2021-30.
For more information on the correction programs available to correct mistakes in your retirement plan, go to IRS.gov/FixMyPlan.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employer and other plan sponsors, administrators, fiduciaries, and insurers of employment-based life and disability insurance programs requiring evidence of good health or other insurability should ensure their administrator or insurer timely makes and notifies participants of any insurability-based limitations or denials on eligibility or coverage in light of a new Department of Labor settlement with United of Omaha Life Insurance Co. (“United”) and United’s parent company — Mutual of Omaha Insurance Co. — and United’s subsidiary, Companion Life Insurance Co. (the “United Companies”) announced September 29, 2023. The settlement sends a strong message to insurers, fiduciaries, administrators and sponsors of life, disability of insurance plans and policies covered by the Employee Retirement Income Security Act of 1974 (“ERISA”) requiring evidence of insurability to ensure their own programs also timely decide and notify participants whether their plans’ insurability requirements are met after receiving enrollment applications.
While the Health Insurance Portability & Accountability Act (“HIPAA”) and Patient Protection & Affordable Care Act (“ACA”) generally prohibit insurability or other evidence of good health requirements in health plans, many ERISA-covered life, disability and other insurance programs continue to condition coverage on evidence of good health or other insurability requirements.
The United settlement requires the United Companies to revise their processes for administering requirements that participants in employer-sponsored life insurance plans provide proof of good health — referred to as evidence of insurability — before obtaining coverage in certain instances.
The settlement resolves a lawsuit filed by the Labor Department after an Employee Benefits Security Administration (“EBSA”) investigation into how United administered proof of good health eligibility requirements in ERISA-covered life insurance plans. The investigation found that United denied numerous claims based on a participant’s failure to provide evidence of insurability after accepting premiums for years without determining if insurability requirements were satisfied. The delayed determinations caused participants and their beneficiaries to believe they had coverage until after the participant died, United denied claims for benefits on the grounds United never received the participant’s evidence of insurability, leaving beneficiaries without life insurance benefits for which their loved one had paid.
United has advised the department that it has voluntarily reprocessed claims dating back to February 2018 to provide benefits for claims denied based solely on a participant’s failure to provide evidence of insurability. The settlement reached by the Labor Department’s Office of the Solicitor also requires the United Companies to decide insurability within 90 days after it receives a participant’s first premium payment. After the 90-day period expires, the United Companies cannot deny a claim for life insurance benefits for reasons related to evidence of insurability.
The Labor Department’s announcement of the settlement warns the Department stands ready to take similar enforcement action against other group plans that fail to decide insurability promptly and notify applicants promptly following enrollment. For instance, the announcement quotes Assistant Secretary for EBSA Lisa M. Gomez as saying, “The Employee Benefits Security Administration will take appropriate action against insurance companies that collect regular premium payments from plan participants without ensuring up front that participants have satisfied eligibility requirements like insurability, and later cite those requirements to deny benefits after the participant passes away.”
In light of this, and a prior similar enforcement action against another insurer in 2022, all sponsors, fiduciaries, administrators, and insurers of ERISA-covered group life, disability, or other insurance programs requiring insurability should verify the timeliness of insurability determinations made by their programs currently, and within the applicable statute of limitation period for claims.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
An $80,000 penalty paid by UnitedHealthcare Insurance Company (“UHIC”) warns other insurers and other health plans, their fiduciaries and plan sponsors that failing to timely deliver requested protected health information triggers substantial Health Insurance Portability and Accountability Act (HIPAA) fines in addition to Employee Retirement Income Security Act (“ERISA”) Section 502(c) penalties and other related exposures and costs.
HIPAA Right Of Access Rule
The Department of Health & Human Services Office of Civil Rights (“OCR”) recently announced health insurance giant UHIC agreed in a resolution agreement to pay $80,000 to resolve a potential violation HIPAA’s access provision that requires health plans, health care providers and health care clearinghouses (“covered entities”) to provide patients access certain protected health information in a within 30 days of a request. In addition to the $80,000 payment, UHIC agreed to implement a corrective action plan and submit to OCR monitoring for a year.
The HIPAA Privacy Rule generally requires health plans and other covered entities to provide individuals, upon request, with access to the protected health information (PHI) about them in one or more “designated record sets” maintained by or for the covered entity after verifying the identity of the person requesting access. This right of access generally applies to all PHI other than:
PHI that is not part of a designated record set because the information is not used to make decisions about individuals;
Psychotherapy notes, which are the personal notes of a mental health care provider documenting or analyzing the contents of a counseling session, that are maintained separate from the rest of the patient’s medical record;; and
Certain information compiled in reasonable anticipation of, or for use in, a civil, criminal, or administrative action or proceeding.
Even for categories of excluded PHI, however, the right of access rule requires access to the underlying PHI from the individual’s medical or payment records or other records used to generate the excluded records or information remains part of the designated record set and subject to access by the individual.
Where applicable, the right of access requirement includes the right to inspect or obtain a copy, or both, of the PHI, as well as to direct the covered entity to transmit a copy to a designated person or entity of the individual’s choice. Individuals have a right to access this PHI for as long as the information is maintained by a covered entity, or by a business associate on behalf of a covered entity, regardless of the date the information was created; whether the information is maintained in paper or electronic systems onsite, remotely, or is archived; or where the PHI originated (e.g., whether the covered entity, another provider, the patient, etc.).
The Privacy Rules encourage health plans and other covered entities to offer individuals multiple options for requesting access. Covered entities may offer individuals the option of using electronic means (e.g., e-mail, secure web portal) to request access. Section 164.524(b)(1) of the Privacy Rule also generally allows a health plan or other covered entity subject to the right of access rule to require individuals to request access in writing, and if use of the covered entity’s form does not create a barrier to or unreasonably delay an individual’s access to his PHI, even to require individuals to use the entity’s own supplied form to make the request. However, the Privacy Rule prohibits health plans and covered entities from imposes unreasonable measures on an individual requesting access that serve as barriers to or unreasonably delay the individual from obtaining access.
While the Privacy Rule permits a covered entity to impose a reasonable, cost-based fee if the individual requests a copy of the PHI (or agrees to receive a summary or explanation of the information), Privacy Rule Section 164.524(c)(4) limits how much health plans and other covered entities can charge for copies. The fee may include only the cost of: (1) labor for copying the PHI requested by the individual, whether in paper or electronic form; (2) supplies for creating the paper copy or electronic media (e.g., CD or USB drive) if the individual requests that the electronic copy be provided on portable media; (3) postage, when the individual requests that the copy, or the summary or explanation, be mailed; and (4) preparation of an explanation or summary of the PHI, if agreed to by the individual. Section 164.524(c)(4) prohibits a covered entity from including costs associated with verification; documentation; searching for and retrieving the PHI; maintaining systems; recouping capital for data access, storage, or infrastructure; or other costs not beyond this specifically allowed in the Rule even if such costs are authorized by State law or other federal or state rules.
UHIC & Other OCR Right Of Access Resolution Agreements
Since OCR began enforcing HIPAA, OCR enforcement data has reflected widespread noncompliance by covered entities with the HIPAA right of access rule. In response to this compliance data, OCR since 2019 has prioritized investigation and enforcement of the right of access under its “Right of Access Initiative.” The UHIC resolution agreement announced August 24, 2023 is the forty-fifth Right of Access voluntary settlement and the first Right of Access case enforcement action involving a health plan covered entity announced by OCR under its Right of Access Initiative. All previously announced Right of Access Initiative resolution agreements involved complaints against health care provider covered entities.
The UHIC resolution agreement resolves charges arising from an OCR investigation into a March 2021 complaint that UHIC failed to provide required records in response to an individual’s request for a copy of their protected health information in the plan records. The individual first requested a copy of their records on January 7, 2021, but did not receive the records until July 2021, after OCR initiated its investigation. This was the third complaint OCR received from the complainant against UHIC alleging failures to respond to his right of access. OCR’s investigation determined that UHIC’s failure to provide timely access to the requested medical records was a potential violation of the HIPAA right of access provision.
Based on these findings, OCR found UHIC violated the right of access rule. To resolve exposure to potentially more substantial civil monetary sanctions authorized by HIPAA, UHIC agreed in the resolution agreement to pay an $80,000 monetary settlement and implement a corrective action plan that includes one year of monitoring by OCR. UHIC also incurred and is expected to incur substantial legal and other expenses in responding to the investigation, negotiating the resolution agreement, and to fulfill its obligations under the corrective action plan.
When announcing the results of the UHIC investigation and resolution agreement, OCR Director warned other health plans to ensure their right of access compliance. “Timely access to health information is one of the cornerstones of HIPAA. OCR will continue to ensure that covered entities with a record of delaying or denying access requests will be subject to enforcement,” said OCR Director, Melanie Fontes Rainer. “Health insurers are not exempt from the right of access and must ensure that they are taking steps to train their workforce to ensure that they are doing all they can to help members’ access to health information.”
ERISA Section 502(c) Penalty For Failing To Timely Respond To Member Information Request
Apart for the HIPAA right of access rule, failing to timely respond to member requests for plan information and records also can trigger substantial liability for ERISA-covered health plans and their plan administrators under ERISA.
In addition to the HIPAA Right of Access disclosure obligations ERISA-covered health plans and insurer also generally are required to disclose certain plan information when notifying plan members of adverse benefit determinations and within 30 days of a member’s request. ERISA’s claims and adverse benefit determination rules expressly obligate plan administrators to disclose certain information to plan participants and beneficiaries when providing notification of adverse claims determinations. Additionally, Section 104(b)(4) of ERISA requires plan administrators to provide participants with a copy of certain documents if the participant requests them in writing.
Evidence that an ERISA-covered health plan administrator or insurer violated these requirements when administering claims or other obligations frequently prevent or undermine the defensibility of health plan claim denials against ERISA investigations and participant or beneficiary claims related lawsuits. Beyond these litigation effects, ERISA Section 502(c) authorizes the Employee Benefit Security Administration (“EBSA”) to impose administrative penalties of $110 per day. Concurrently, ERISA Section 502(c) also empowers federal courts in the court’s discretion to hold a plan administrator that fails to provide the participant with information within the scope of the ERISA disclosure provision after 30 days from the request”, the plan administrator “may be personally liable to that participant or beneficiary for up to $110 a day from the date of such failure or refusal and “the court may in its discretion order “such other relief as it deems proper.” Both the adverse effects of noncompliance with claims and other disclosure requirements on the defensibility of claims denials and the potential significance of triggering Section 502(c) penalties is illustrated by the federal court’s ruling M.S. v. Premera Blue Cross, 553 F. Supp. 3d 1000 (D. Utah 2021). In addition to the undeniable role disclosure deficiencies played in the court’s decision to overturn the plan administrator’s denial of benefits, the District Court also imposed a statutory penalty of under Section 502(c) of $123,100 ($100 per day from the date of the participant’s first written request through the date of the court’s order finding Premera Blue Cross prejudiced the plan participants by failing to make required disclosures) pending its determination of the damages, attorney’s fees and costs, and equitable relief to award to the participants. The court imposed the Section 502(c) penalty against Premera Blue Cross in its capacity as a third-party administrator contracted with the plan sponsor that the plan documents named as the plan administrator based on the functional exercise by Premera of fiduciary duties in handling the claims and disclosures. It bears noting, however, that employers and others serving in named plan administrator or other fiduciary capacities frequently are held liable for acts or omissions of their contract administrators either by direct orders under ERISA or indirectly pursuant to contractual duties to defend and hold harmless the contract administrator plan vendors providing these services commonly include in administrative services contracts.
Plans Must Assure Timely Access & Disclosure
Health plans and health insurers must provide protected health information as required by HIPAA; plan disclosures required by ERISA. Plan sponsors, fiduciaries and administrators wishing to avoid liabilities for violation of either of these requirements should make the necessary contractual, policy and oversight arrangements to provide for timely delivery. Where administration if these duties is outsourced to an insurer or other service provider, the plan sponsor should serk contractual agreements that the vendor will pay costs and liabilities for untimely delivery and refuse to accept contractual language that might obligate the plan sponsor, plan fiduciaries l, or the plan to pay or reimburse those penalties.
If despite efforts to comply an impermissible delay in delivery happens, the responsible party should contact qualified legal counsel about pursuing prompt correction and other steps to mitigate or resolve exposures.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
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Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Group health plans and individual and group health insurance subject the federal No Surprises Act (“NSA”) are likely to experience continued delays in their ability to finalize certain claims liability determinations and pay providers for health claims submitted for arbitration under the NSA-established Federal Independent Dispute Resolution (“IDR”) medical claims review process as a result of an August 3, 2023 federal court ruling even as the federal agencies responsible for implementing and enforcing those rules announce new fees for seeking IDR dispute resolution under those rules.
The current rules governing the IDR process are defined by regulations implementing the NSA jointly issued by the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (collectively, the “Departments”). These rules define the process for out-of-network providers, facilities, and providers of air ambulance services, and group health plans, health insurance issuers in the individual and group markets, and Federal Employee Health Benefits (“FEHB”) carriers (“disputing parties”) to determine the out-of-network rate for out-of-network emergency services and certain items and services provided by out-of-network providers at in-network facilities and out-of-network air ambulance services under the NSA.
IDR Process Suspended
The IDR process currently is suspended following the August 3 , 2023 ruling by the United States District Court for the Eastern District of Texas in Texas Medical Association v. United States Department of Health and Human Services, Case No. 6:23-cv-59-JDK, vacating certain portions of 45 C.F.R. § 149.510, 26 C.F.R. § 54.9816-8T, and 29 C.F.R. § 2590-716-8, which are parallel provisions governing the Federal IDR.
The Court granted summary judgement on August 3, 2023 to the Texas Medical Association and other provider plaintiffs challenging these federal IDR rules for arbitration of health coverage disputes between payers and providers under the No Surprises Act. The Court agreed with the health care providers that the rules violated federal law by failing to take into account the full range of factors Congress directed be considered when enacting the IRO rules as part of the NSA.
Immediately following the Court’s entry of the order, the Departments temporarily suspended the federal IDR medical claims review process including the ability to initiate new disputes and directed certified IDR entities to pause all IDR-related activities in response an the ruling. As a result of the suspension, the Patient-Provider Dispute Resolution Portal also temporarily ceased accepting new initiated disputes.
When announcing the suspension, the Departments said they would review the court’s decision to evaluate changes to current IDR processes, templates, and system updates necessary to comply with the court’s order. The Departments said they will issue updates to these processes in the near future and will provide specific directions to certified IDR entities for resuming all IDR-related activities in a manner consistent with the court’s judgment and order “soon.” Until then, arbitration of disputes between payers and providers under covered employment based group health plans and individual and group health insurance subject to the law will be delayed.
The FAQs are not announcing the reopening of the Federal IDR portal to initiate new disputes. Accordingly, the IDR process remains in suspension pending further action by the Departments. In the meantime, however, the FAQs clarify the administrative fee amount that each disputing party will be required to pay to engage in the Federal IDR process when the IDR process suspension resumes as a result of the Texas Medical Association opinion and order.
What To Do Now
For health plans and their sponsors and administrators, for example, delays due to the suspension obviously delay payments to providers as many self-insured health plans, their sponsors, fiduciaries, administrators and stop-loss reinsurers approaching year end. Many stop-loss policies and other funding arrangements limit or exclude coverage for plan claims not paid with the policy period or, if the policy includes run off coverage, that brief period following the policy year end. Delays in payment also could complicate year end underwriting for renewals. Employers and unions, their brokers, administrators, fiduciaries and reinsurers should evaluate, monitor and begin strategizing about their response to these developments to prepare for their upcoming renewals and enrollment seasons.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
For More Information
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pregnancy, disability and other discrimination, leave, health and safety, and other workforce, employee benefit, health care and other operations planning, preparedness and response for more than 35 years. As a part of this work, she regularly advises businesses and government leaders on an on-demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to complaints, investigations and enforcement.
Author of a multitude of other highly regarded publications and presentations on MHPAEA and other and health and other benefits, workforce, compliance, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with health plans, employers, insurers, government leaders and others on these and other health benefit, workforce and performance and other operational and tactical concerns throughout her adult life.
A former lead advisor to the Government of Bolivia on its pension privatization project, Ms. Stamer also has worked domestically and internationally as an advisor to business, community and government leaders on health, severance, disability, pension and other workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organization’s workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Chair-Elect of the ABA TIPS Medicine and Law Committee, Chair of the ABA International Section Life Sciences Committee, and Past Group Chair and current Welfare Plan Committee Chair of the ABA RPTE Employee Benefits & Other Compensation Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Group health plans and individual and group health insurance subject the federal No Surprises Act may experience delays in their ability to finalize liability determinations and pay providers for health claims submitted for arbitration under federal surprise billing rules as a result of an August 3, 2023 federal court ruling.
Effective August 3, 2023, the Departments of Health and Human Services Centers for Medicare and Medicaid Services, Department of Labor Employee Benefit Security Administration and Department of Treasury (“Departments”) temporarily suspended the Federal Independent Dispute Resolution (IDR) medical claims review process including the ability to initiate new disputes and directed certified IDR entities to pause all IDR-related activities in response an August 3, 2023, federal court ruling. As a result of the suspension, the Patient-Provider Dispute Resolution Portal also temporarily ceased accepting new initiated disputes.
Earlier in the day, the U.S. District Court for the Eastern District of Texas issued a judgment and order in Texas Medical Association, et al. v. United States Department of Health and Human Services, Case No. 6:23-cv-59-JDK (TMA IV), vacating certain portions of 45 C.F.R. § 149.510, 26 C.F.R. § 54.9816-8T, and 29 C.F.R. § 2590-716-8, which are parallel provisions governing the Federal IDR.
The order of the Court grants summary judgement to the Texas Medical Association and other provider plaintiffs challenge to federal rules for arbitration of health coverage disputes between payers and providers under the No Surprises Act. The Court agreed with the health care providers that the rules violated federal law by failing to take into account the full range of factors Congress directed be considered when enacting the IRO rules as part of the No Surprises Act.
When announcing the suspension, the Departments said currently they are reviewing the court’s decision and evaluating current IDR processes, templates, and system updates necessary to comply with the court’s order. The Departments say they will issue updates in the near future and will provide specific directions to certified IDR entities for resuming all IDR-related activities in a manner consistent with the court’s judgment and order.
Until then, arbitration of disputes between payers and providers under covered employment based group health plans and individual and group health insurance subject to the law will be delayed.
A lengthy delay in the Departments’ correction of their rules could spell headaches for both payers and providers. Delays in claim resolutions due to the suspension obviously delays determination of plan liabilities can particularly impact self-insured health plans, their sponsors, fiduciaries, administrators and stop-loss reinsurers of plans approaching year end. Many stop-loss policies and other funding arrangements limit or exclude coverage for plan claims not paid with the policy period or, if the policy includes run off coverage, that brief period following the policy year end. Delays in payment also could complicate year end underwriting for renewals. Employers and unions, their brokers, administrators, fiduciaries and reinsurers should evaluate, monitor and begin strategizing about their response to these developments to prepare for their upcoming renewals and enrollment seasons.
For More Information
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pregnancy, disability and other discrimination, leave, health and safety, and other workforce, employee benefit, health care and other operations planning, preparedness and response for more than 35 years. As a part of this work, she regularly advises businesses and government leaders on an on-demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to complaints, investigations and enforcement.
Author of a multitude of other highly regarded publications and presentations on MHPAEA and other and health and other benefits, workforce, compliance, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with health plans, employers, insurers, government leaders and others on these and other health benefit, workforce and performance and other operational and tactical concerns throughout her adult life.
A former lead advisor to the Government of Bolivia on its pension privatization project, Ms. Stamer also has worked domestically and internationally as an advisor to business, community and government leaders on health, severance, disability, pension and other workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organization’s workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Chair-Elect of the ABA TIPS Medicine and Law Committee, Chair of the ABA International Section Life Sciences Committee, and Past Group Chair and current Welfare Plan Committee Chair of the ABA RPTE Employee Benefits & Other Compensation Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Out-of-state employers, insurers, employee benefit plan vendors, and other businesses registered to do business in Pennsylvania, Georgia, Iowa, Kansas, Minnesota, or another state that requires that out-of-state businesses consent to jurisdiction as a condition of their registration to do business in the state face a heightened risk of getting hauled into court in the consent to jurisdiction state following last month’s Supreme Court decision in Mallory v. Norfolk Southern Railway Company, 600 U. S. ____ (2023) even if none of the events giving rise to the lawsuit took place in that state.
The Mallory ruling arose from a state lawsuit filed in Pennsylvania state court seeking damages by Robert Mallory (“Mallory”) to recover damages for cancer the argued was caused by the negligence of his former employer, Norfolk Southern Railroad (“Norfolk”) pursuant to the Federal Employers’ Liability Act workers’ compensation scheme that permits railroad employees to sue for injuries caused by employer negligence. Mallory filed the suit in Pennsylvania, a jurisdiction with no real connection to the claims but noted for its favorability to plaintiffs even though he never worked for Norfolk in Pennsylvania. Mallory only worked for Norfolk in Ohio and Virginia, was a Virginia resident at the time of the suit, and only briefly lived in Pennsylvania after leaving Norfolk’s employment before returning to live in Virginia. Given the lack of connection of Pennsylvania to the parties and events giving rise to the claim, Virginia-based Norfolk Southern moved for the dismissal of the Pennsylvania lawsuit for lack of the requisite “substantial minimum contacts” generally required to support personal jurisdiction.
While courts generally recognize and enforce contractual agreements by a party to consent to jurisdiction, mere registration of an out-of-state business to do business in a state historically has not been recognized as creating the necessary “substantial minimum contacts” that the Due Process clause of the United States Constitution generally requires exist to provide the general personal jurisdiction that must exist for a state court to possess jurisdiction to decide a lawsuit over the out-of-state business under the Supreme Court precedent first articulated in International Shoe Co. v. Washington, 326 U. S. 310 (1945)
Because Pennsylvania is one of five states that currently requires all out-of-state businesses registering to do business in the State to consent to be sued in the state as a condition of registration, however, Mallory argued and the Supreme Court agreed in Mallory that Norfolk waived its ability to object to personal jurisdiction when it registered to do business in the Commonwealth.
In Mallory, the Supreme Court Majority ruled that any corporation registered to do business in a state which requires out-of-state businesses to consent to general personal jurisdiction waives its right to assert a Due Process challenge to jurisdiction in that state. Accordingly, businesses registering to do business in a consent-to-jurisdiction registration state should anticipate that their mere registration with the state likely subjects the business to the jurisdiction of courts in that state even if the business has not entered into a contractual agreement to submit to that state’s jurisdiction or otherwise engage in other actions establishing the required substantial minimum contacts to satisfy the International Shoe Due Process standards even if none of the events underlying the lawsuit took place in that state.
Given the Supreme Court’s Mallory decision, businesses should take into account the potential risks of being subjected to out-of-state litigation and regulation anytime the business expands operations into, registers to do business as an out-of-state business or signs an agreement consenting to jurisdiction into a state other than their primary place of business. As evidenced by Mallory, businesses generally should consider and take steps to manage the risks of allowing the creation of jurisdiction against their business in states other than the primary location in which the business operates. Businesses subject to jurisdiction in a state generally become subject to laws, regulations, and lawsuits in that state. Aside from added obligations and costs associated with being subject to the laws of another state and conducting litigation in an unfamiliar state, businesses subject to the jurisdiction of laws in courts in multiple states open the door for opposing parties to strengthen their position by foreign shopping. Like Mallory, disgruntled current or former employees, plan members, or other opposing parties in disputes may choose to file their lawsuit in the state with the laws, rules, or precedent most favorable to their position even where the dispute does not arise out of events occurring in the chosen state. Along with assessing when their organization may be subject to liability in other states, businesses should review their insurance coverage and applications to ensure that their insurance and other risk management arrangements take into account the added risks and liabilities that could arise from the additional state law jurisdiction. Consequently, businesses choosing to operate, to register to do business in a consent-to-jurisdiction state, or contractually to agree to submit to jurisdiction in any states should be prepared for the possibility that their organization could subject themselves to regulations, lawsuits, investigations and enforcement actions in that state.
More Information
We hope this update is helpful. For more information about these or other health or other legal, management, or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government, and community leaders to prepare for and deal with pregnancy, disability, and other discrimination, leave, health and safety, and other workforce, employee benefit, health care and other operations planning, preparedness and response for more than 35 years. As a part of this work, she regularly advises businesses and government leaders on an on-demand and ongoing basis about the preparation of workforce, health care, and other business and government policies and practices to deal with management in a wide range of contexts ranging from day-to-day operations, through times of crisis or change, and in response to complaints, investigations and enforcement.
Author of a multitude of other highly regarded publications and presentations on MHPAEA and other health and other benefits, workforce, compliance, workers’ compensation and occupational disease, business disaster and distress, and many other topics, Ms. Stamer has worked with health plans, employers, insurers, government leaders and others on these and other health benefit, workforce and performance and other operational and tactical concerns throughout her adult life.
A former lead advisor to the Government of Bolivia on its pension privatization project, Ms. Stamer also has worked domestically and internationally as an advisor to business, community, and government leaders on health, severance, disability, pension, and other workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration, and defense of their organization’s workforce, employee benefit and compensation, safety, discipline, and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Chair-Elect of the ABA TIPS Medicine and Law Committee, Chair of the ABA International Section Life Sciences Committee, and Past Group Chair and current Welfare Plan Committee Chair of the ABA RPTE Employee Benefits & Other Compensation Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training, and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls, and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The U.S. District Court for the Western District of Kentucky ordered the co-founder of a that Yesdel Acosta Perez to time served of 14 months in prison and to pay $258,507 in restitution for his role in causing health care clinics he cofounded to bill 15 self-funded health plans for $4.7 million in medical services never provided. The conviction reminds health plans, health care providers and others that fraudulently billing self-insured or other private health plans can result in criminal conviction punishable as felony under multiple provisions of the United States Criminal Code. Acosta Perez’ sentencing coincides with the Justice Department’s announcement of its March 2, 2023 filing of similar criminal charges against the operator of a chain of substance abuse clinics and others for their alleged involvement in millions of dollars of false charges billed to private health plans, Medicare and Medicaid for substance abuse addition treatment not provided.
The conviction and sentencing of Acosta Perez and the newly announced charges against operators of a chain of addiction treatment clinics in Massachusetts and Rhode Island and others for alleged ahealth care fraud aggravated identity theft, money laundering and obstruction in relation to alleged billing of millions of dollars of false charges to private health plans, Medicare and Medicaid for substance abuse treatment by clinics highlight the continuing threat fraudulent actors present for self-insured and other private health plans, Medicare and Medicaid, as well as the potential criminal prosecution and consequences those individuals convicted of these crimes risk from their criminal activity.
Acosta Perez Conviction & Sentencing
The co-founder of Romero Rehabilitation Physical Therapy Inc. and Empire USA Inc. in Louisville and Imaging Group Center Inc. in Atlanta plead guilty to one count of conspiracy to commit healthcare fraud in February, 2023, after the U.S. Department of Labor found the operators collected $258,000 from 15 self-funded healthcare benefit programs for services they never provided based on fraudulent claims made between 2016 and 2018.
In June, 2018, a federal grand jury indicted Acosta Perez and fellow co-founder Eduardo Chinea-Martinez and others on multiple counts of Health Care Fraud in violation of 18 U.S.C. §1347, Theft from a Health Care Benefit Program in violation of 18 U.S.C. §669, Aggravated Identity Theft in violation of 18 U.S 8 U.S.C. §1028A, Money Laundering in violation of 18 U,S,C. §1956, Mail Fraud in violation of 18 U.S.C Chapter 63 and aiding and abetting in the commission of these violations under 18 U.S.C. §1349. billing various healthcare benefit programs through claims administrators Humana, CIGNA and United Healthcare for $4.7 million for services never provided. The U.S. Criminal Code authorized potential sentences of between 10 to 20 years of imprisonment as well as subjected charged defendants to asset forfeiture upon conviction.
The grand jury inditement and subsequent prosecution of Acosta Perz and a fellow co-founder resulted from an Employee Benefit Security Benefit Administration investigation that found that, between May 2015 and January 2016, Acosta Perez and Eduardo Chinea-Martinez co-founded three companies to intentionally defraud various healthcare benefit programs. Investigators also determined Acosta Perez opened bank accounts for the fictitious businesses at JPMorgan Chase Bank, Wells Fargo Bank and Bank of America. Acosta Perez and Chinea-Martinez. The indictment charges that Acosta Perez and Chinea-Martinez misappropriated and used patients’ names, dates of birth, insurance/policy numbers, addresses, and patient IDs/Social Security Numbers, without the patients’ knowledge and names and National Provider Numbers (“NPIs”) from uninvolved doctors without the doctors’ knowledge to create claims for payment by representing these uninvolved doctors and clinics allegedly ordered or performed the services in the false and fraudulent billings submitted by defendants for payment to submit fraudulent claims. The fraudulent claims directed the plans to send payment for the billed services to a Regus virtual office location in Louisville, Kentucky. Acosta Perez then directed Regus via email to forward all mail to Romero Rehabilitation Physical Therapy. According to the indictment, using this process to submit claims for payment for the fraudulent services, Chinea-Martinez and Acosta Perez billed approximately $4,700,000 in fraudulent medical services to the self-insured plans and received payment for $258,000.
In March 2020, the court sentenced Chinea-Martinez to 42 months in prison and three years of supervised release for his part in the scheme. However, before his in June 2018, Acosta Perez fled the U.S. On July 22, 2022, however, the Italian government granted the request of the U.S. for the extradition of Acosta Perez and surrendered him to U.S. authorities. Acosta-Perez was arrested in June 2022.
New Health Care Fraud Charges Against Rhode Island and Massachusetts Addiction Treatment Chain Operators
Acosta-Perez’s sentencing coincides with the Justice Department’s March 2, 2023 announcement of its filing of a host of similar charges in Rhode Island against the operator of a chain of addiction treatment clinics and others for alleged aggravated identity theft, money laundering and obstruction in relation to theft of the identities and other patient and provider information and using their information to file false charges billed to private health plans, Medicare and Medicaid for substance abuse treatment by clinics.
Michael Brier, Mi Ok Bruining and Recovery Connections Centers of America, Inc. (RCCA) are charged in a federal criminal complaint with health care fraud and Michael Brier also is charged with aggravated identity theft, money laundering and obstruction. In addition, the treatment center and its former supervisory counselor were also charged with health care fraud. The Justice Department announcement of these charges reminds readers that its federal criminal complaint is merely an accusation and that the defendants are presumed innocent unless and until proven guilty.
The Justice Department alleges in court documents that, Brier, Bruining, and RCCA shortchanged Rhode Island and Massachusetts substance abuse disorder patients out of much needed counseling and treatment services, while defrauding Medicare, Medicaid, and other health insurers out of millions of dollars.
According to the charging documents, Brier, Bruining and RCCA operated a chain of addiction treatment centers but failed to provide the patients with the required counseling sessions and treatment, while simultaneous billing Medicare, Medicaid and other health care payors for 45-minute counseling sessions on a routine basis even though the sessions were not more than 15 minutes, and often only 5-10 minutes or less. At times, so many counseling sessions were billed at this level that the total amount of time would be impossible for the available therapist to have provided in any 24 hours period.
Brier and RCCA are also alleged to have caused a fraudulent application to be submitted to Medicare which, among other things, misrepresented and concealed the role that Brier was playing in the business and failed to disclose Brier’s 2013 criminal conviction for federal tax crimes, which was relevant to Medicare’s consideration of the application.
The Complaint also alleges that Brier purported to practice medicine and wrote and caused to be filled fraudulent prescriptions using the names and prescriber information, including Drug Enforcement Administration numbers, of doctors without their permission.
Brier is also alleged to have falsified a document in a matter within the jurisdiction of an agency of the United States by causing the Medical Director to sign a false and back-dated document.
The complaint alleges that defendants caused millions of dollars in fraudulent billings to be submitted to Medicare and millions more in fraudulent billings to other health care payors. The government is also seeking to forfeit thirteen bank accounts, two buildings, and two vehicles allegedly realized by the defendants as a result of the alleged criminal conduct.
The two prosecutions highlight the continuing challenge health plans and other health care payers face from fraudulent claims submitted by criminal actors intent on deliberately defrauding health plans through schemes to knowingly defraud plans by creating and filing false claims. Health plans and their fiduciaries and administrators should be vigilant in their efforts to identify and protect their health benefit programs against these schemes and if victimized or presented with evidence of these schemes, should work with experienced legal counsel to prudently investigate these concerns and report relevant findings to the EBSA, the Department of Justice Health Care Fraud Task Force or both.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35+ years of workforce and other management work, public policy leadership and advocacy, coaching, teachings, scholarship and thought leadership.
A Fellow in the American College of Employee Benefit Counsel, Vice Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer’s work throughout her 35 year career has focused heavily on working with employer and other staffing and workforce organizations, health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As an ongoing component of this work, she regularly advises, represents and defends businesses on FLSA, CAS, SCA, Davis-Bacon, Equal Pay Act and other wage and hour, compensation and benefit and other Human Resources, Guideline Program and other compliance, risk management and other internal and external controls in a wide range of areas and has published and spoken extensively on these concerns.
Ms. Stamer also is widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on workforce, compensation, and other operations, risk management, compliance and regulatory and public affairs concerns.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving, and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The U.S. Department of Labor Employee Benefits Security Administration, the Internal Revenue Service (“IRS”) and the Pension Benefit Guaranty Corporation (“PBGC”) announcing changes to the 2023 Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form in February 23.
The “Phase III” announcement released this week are set forth in the following:
The Phase III announcement implements the third and final phase of implementation of a September, 2021 regulatory proposal, which included changes related to provisions in the Setting Every Community Up for Retirement Enforcement Act, commonly known as the SECURE Act, which affected annual reporting requirements under the Employee Retirement Income Security Act and the Internal Revenue Code.
The first two phases of implementation included publication of Federal Register notices in December 2021 for Phase I and May 2022 for Phase II, respectively, to adopt changes for the 2021 and 2022 Form 5500 Returns/Reports.
The Phase III announcement features a Notice of Final Forms Revisions from the EBSA, IRS and PBGC for the 2023 plan year forms and instructions and a Notice of Final Rulemaking by the department that makes corresponding changes to annual reporting regulations under Title I of ERISA.
The 2023 plan year reports – which generally will be filed beginning in July 2024 for calendar year plans – include the following changes:
A consolidated Form 5500 reporting option for certain groups of defined contribution retirement plans, improved reporting by pooled employer plans and other multiple employer plans.
A change in the participant-counting methodology for determining eligibility for simplified reporting alternatives available to “small plans,” which are generally plans with fewer than 100 participants.
A breakout of reporting on administrative expenses paid by the plan on the plan’s financial statements.
Further improvements in financial and funding reporting by PBGC-covered defined benefit plans.
The addition of selected Internal Revenue Code compliance questions to improve tax oversight and compliance of tax-qualified retirement plans.
Technical and conforming changes as part of the annual rollover of forms and instructions.
Additionally, technical adjustments were made to the Federal Register notices to address certain provisions in SECURE Act 2.0 of 2022 on Code section 403(b) multiple employer plans, including pooled employer plans, minimum required distributions and audit requirements for plans in defined contribution group reporting arrangements.
The Federal Register notices, Document #2023-02653 for the Notice of Final Forms Revision and Document #2023-02652 for Notice of Final Rulemaking, also include appendices that describe the changes to the forms and instructions as well as a regulatory impact and paperwork burden analyses. A more detailed summary of the annual reporting changes is included in a fact sheet posted on the department’s website today. Mock-ups of the forms and instructions will be available at reginfo.gov as part of the Paperwork Reduction Act clearance process. The release of “for information-only” copies of the forms and instructions will happen later in 2023.
More Information
When investigating and responding to a violation, it is critically important to document the timing and details of the discovery of a potentially concern
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35+ years of workforce and other management work, public policy leadership and advocacy, coaching, teachings, scholarship and thought leadership.
A Fellow in the American College of Employee Benefit Counsel, Vice Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer’s work throughout her 35 year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As an ongoing component of this work, she regularly advises, represents and defends businesses on Guideline Program and other compliance, risk management and other internal and external controls in a wide range of areas and has published and spoken extensively on these concerns.
Ms. Stamer also is widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on workforce, compensation, and other operations, risk management, compliance and regulatory and public affairs concerns.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving, and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
As companies that purchased health insurance and their employees or other individuals who received health insurance from certain Blue Cross Blue Shield entities wait to hear how to claim their share of the $2.67 billion In re: Blue Cross Blue Shield Antitrust Litigation private federal class action civil antitrust lawsuit settlement (“Settlement”) finally approved August 9, 2022 against the Blue Cross Blue Shield Association (“BCBSA”) and other settling individual Blue Cross Plans, employers and other plan sponsors, health care systems and providers, health insurers, pharmacy benefit managers, brokerages, and other health and health insurance market participants need to keep in mind that the private antitrust judgements are not their only exposure under federal antitrust laws. Health insurance and health industry market participants that engage in anticompetitive conduct or business transactions also risk investigation and prosecution under federal antitrust laws by the U.S. Department of Justice, the Federal Trade Commission and state regulators or attorneys general.
Market participants and others with health or health insurance industry market competitiveness concerns or interests should register and attend the September 8, 2022 Justice Department Health Industry Antitrust Enforcement Update to learn about key federal antitrust statutes regulating or prohibiting anticompetitive conduct and business transactions and hear how the Department of Justice uses these laws to promote market competition in the health care and health insurance marketplaces.
Hosted by the American Bar Association Joint Committee on Employee Benefits, the webinar will feature a discussion by U.S. Department of Justice Civil Division Healthcare and Consumer Products Section Antitrust Attorney Natalie Melada of basic federal antitrust rules and principles the Justice Department relies upon to safeguard market competitiveness and discusses selected Justice Department antitrust litigation and other compliance and enforcement initiatives the Department of Justice has undertaken to protect competition in the healthcare industry. Attorney and Solutions Law Press, Inc. editor and author Cynthia Marcotte Stamer also will provide an update on the In re: Blue Cross Blue Shield Antitrust Litigation and resulting $2.67 billion settlement approved August 9.
For more details and to register for the program, see here.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Vice Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and managed care industry legal, public policy and operational concerns.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Her experience includes substantial work, publications and presentations on health care, health and managed care, employee plan and purchasing groups, noncompetition and other antitrust compliance concerns.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Agency for Healthcare Research and Quality (AHRQ) issued a brief called “Evaluation of Mental Health Mobile Applications” to help healthcare experts pick out mental health mobile health applications. Along with choosing mental Health applications and other health plan mental health benefit design, plan sponsors, fiduciaries, administrators and insurers also must ensure their overall plan design and all features comply with federal mental health parity mandates.
The report covers three areas: risk and mitigation strategies, functions, and mental health app features.
AHRQ hopes the tips will help providers, patients, and payers in selecting mental health mobile applications and seeking the best fit based on various features.
The report is part of a growing list of resources and enforcement efforts federal and state agencies have initiated over the past year as part of growing concerns about mental health.
Along with educational outreach and tools, the Employee Benefit Security Administration and Department of Health and Human Services also are ratcheting up audits and enforcement of federal mental health parity mandates. Given this heightened scrutiny, employer and other health plan sponsors, fiduciaries, administrators and insurers using mobile applications or other virtual mental health solutions in their health plans should arrange for a compliance review of their health plan compliance with these mandates within the scope of attorney client privilege to mitigate liability risks.
In a recent American Bar Association Joint Committee on Employee Benefits webinar moderated by Cynthia Marcotte Stamer, the EBSA’s Director of Health Plan Compliance and Enforcement Amber Rivers emphasized her agency is prioritizing mental health parity compliance a free recent audits showed widespread noncompliance with the requirement for parity in nonqualitative mental health conditions.
More Information.
For additional information about the requirements or concerns discussed in this article, republication or other related matters, please contact the author, employment lawyer Cynthia Marcotte Stamer via e-mail, via telephone at (214) 452 -8297 or on LinkedIn.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, well-known for her extensive work with health and other employee benefits, health care and life sciences, insurance, financial services, technology, and other highly regulated and performance reliant organizations and their leadership, Ms. Stamer works with these and other businesses and their management, employee benefit plans, insurers, health care and life sciences, governments and other organizations deal with all aspects of health care, human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, Form I-9 and other compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, internal controls, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. her more than 30 years’ of experience encompasses domestic and international businesses of all types and sizes.
Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a practicing attorney, as well as as an industry, policy management consultant, and policy strategist as well through her leadership participation in professional and civic organizations. Examples of her many leadership involvements include service as the Vice President and Executive Director of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; Vice Chair of the ABA International Law Section Life Sciences and Health Committee; Vice Chair of the ABA Tort & Insurance Practice Section Medicine and Law Committee and former Vice Chair of its Employee Benefits Committee and its Worker’s Compensation Commitee; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, current Welfare Committee Co-Chair and past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com including the following:
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
June 6, 2022 is the deadline for health plans, their sponsors, fiduciaries, administrative and other business associates and others to provide input to the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) that OCR says it seeks to help shape how it defines and implements the “recognized security standards” requirements of the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act), as amended in 2021 for purposes of its administration and enforcement of civil monetary penalty and other provisions of of the Health Insurance Portability and Accountability Act (“”HIPAA”). The regulatory and enforcement decisions that OCR makes could significantly impact the civil monetary penalty liability, compliance, audit and recordkeeping responsibilities that health plans, health care providers, health care clearinghouses and their business associates (“Covered Entities”) face under the HIPAA Security and Breach Notification Rules.
The definition and administration of the “recognized security practice” factor the HITECH Act requires OCR to consider when assessing audit results, civil monetary penalty and settlement amounts and other HIPAA Security and Breach Rule enforcement; and
The rules that OCR will follow to determine when and how OCR will share portions of amounts it receives from civil monetary penalties or settlements with individuals harmed by breaches of electronic protected health information,
Recognized Security Practices
Section 13412 of the HITECH Act requires HHS to take into consideration certain recognized security practices of covered entities (health plans, health care clearinghouses, and most health care providers) and business associates1 when determining potential fines, audit results, or other remedies for resolving potential violations of the HIPAA Security Rule pursuant to an investigation, compliance review, or audit.
A primary goal of the requirement, which took effect January 5, 2021, is to encourage covered entities and business associates to do “everything in their power to safeguard patient data.”
The RFI solicits comment on how covered entities and business associates are implementing “recognized security practices,” how they anticipate adequately demonstrating that recognized security practices are in place, and any implementation issues they would like OCR to clarify through future guidance or rulemaking.
Civil Money Penalty (CMP) and Settlement Sharing
Section 13410(c)(3) of the HITECH Act requires HHS to establish by regulation a methodology under which an individual harmed by a potential violation of the HIPAA Privacy, Security, and/or Breach Notification Rules may receive a percentage of any CMP or monetary settlement collected with respect to that offense.
Section 13140(d)(1) of HITECH requires that OCR base determinations of appropriate penalty amounts on the nature and extent of the violation and the nature and extent of the harm resulting from such violation. The HITECH Act does not define “harm,” nor does it provide direction to aid HHS in defining the term.
The RFI solicits public comment on the types of harms that should be considered in the distribution of CMPs and monetary settlements to harmed individuals, discusses potential methodologies for sharing and distributing monies to harmed individuals, and invites the public to submit alternative methodologies.
Comments Due 6/6
Health plan and other Covered Entity input could significantly impact how OCR implements and administers these two important aspects of the HIPAA Security Rule going forward. As these decisions are likely to significantly impact the policies, practices, recordkeeping, breach investigation and other obligations that Covered Entities would need to meet in the event of an audit, breach or other investigation or enforcement, timely, thoughtful input from all Covered Entities and affected stakeholders is important. In addition, its decisions on how to distribute CMPs.
For more information about the RFI or instructions for submitting comments, see here.
Health Plan Security & Breach Exposures Beyond HIPAA
These are just some of the emerging health plan compliance risks and responsibilities that health plan, their fiduciaries, sponsors, administrators, service providers and insurers need to watch and manage. Amber M. Rivers, Director of the Employee Benefit Security Administration Office of Health Plan Standards and Compliance will discuss these and other risks during the “Department of Labor Health Plan Compliance and Enforcement Update” at a virtual program hosted by the American Bar Association Joint Committee on Employee Benefits from Noon to 1:30 p.m. Central Time on May 5, 2022 to be moderated by Solutions Law Press, Inc. author and publisher, attorney Cynthia Marcotte Stamer will moderate the program.
For additional information about or to register for this program, see here.
More Information.
For additional information about the requirements or concerns discussed in this article, republication or other related matters, please contact the author, employment lawyer Cynthia Marcotte Stamer via e-mail, via telephone at (214) 452 -8297 or on LinkedIn.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, well-known for her extensive work with health and other employee benefits, health care and life sciences, insurance, financial services, technology, and other highly regulated and performance reliant organizations and their leadership, Ms. Stamer works with these and other businesses and their management, employee benefit plans, insurers, health care and life sciences, governments and other organizations deal with all aspects of health care, human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, Form I-9 and other compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, internal controls, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. her more than 30 years’ of experience encompasses domestic and international businesses of all types and sizes.
Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a practicing attorney, as well as as an industry, policy management consultant, and policy strategist as well through her leadership participation in professional and civic organizations. Examples of her many leadership involvements include service as the Vice President and Executive Director of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; Vice Chair of the ABA International Law Section Life Sciences and Health Committee; Vice Chair of the ABA Tort & Insurance Practice Section Medicine and Law Committee and former Vice Chair of its Employee Benefits Committee and its Worker’s Compensation Commitee; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, current Welfare Committee Co-Chair and past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
As part of these involvements, Ms. Stamer is scheduled to moderate the discussion of “Department of Labor Health Plan Compliance and Enforcement Update” with Amber M. Rivers, Director of the Employee Benefit Security Administration Office of Health Plan Standards and Compliance that the ABA Joint Committee on Employee Benefits is hosting on May 5, 2022. For additional information about or to register for this program, see here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com including the following:
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The U.S. Department of Justice along with the Minnesota and New York Attorneys General (collectively “Justice Department”) have filed a civil antitrust lawsuit to stop UnitedHealth Group Incorporated (“United”) from acquiring Change Healthcare Inc. (“Change”) on February 24, 2022 in an announced $13 billion transaction that the Justice Department claims will harm self-insured employer health plan innovation and competition in the commercial health insurance market. The suit is the latest in a series of Justice Department suits that seek to prevent continued consolidation of the health industry giants following decades of industry consolidation.
United, headquartered in Minnetonka, Minnesota, is an integrated health care enterprise that includes, among other subsidiaries, UnitedHealthcare, the largest health insurer in the United States; Optum Health, a large network of health care providers located throughout the country; OptumRx, a large pharmacy benefit manager; and OptumInsight, a health care technology business. United’s revenues were $288 billion in 2021.
Change Healthcare Inc. headquartered in Nashville, Tennessee, is a leading independent health care technology company providing health care analytics, software, services and data to health care providers, health insurers and other software and services firms in the health care industry. Today, Change markets itself as a partner to a wide variety of other health care ecosystem organizations including United’s major health insurance competitors as providing vital software and services need for innovation and problem solving. These services include electronic data interchange (EDI) clearinghouse services, which transmit claims and payment information between insurers and providers, and first-pass claims editing solutions, which review claims under the health insurer’s policies and relevant treatment protocols. Change’s revenues were $3.4 billion in 2021.
In the civil antitrust complaint filed in the U.S. District Court for the District of Columbia on February 24, 2022, the Justice Department charges United’s acquisition of this neutral player would allow United to tilt the playing field in its favor, harming current competition and allowing United to control and distort the course of innovation in this industry for the foreseeable future.
Among other things, the Justice Department alleges allowing United to eliminate a significant independent and innovative competitor firm by acquiring Change will undermine competition in the commercial health insurance market, stifle innovation in the employer health insurance markets and suppress competition in the market for a vital technology used by health insurers to process health insurance claims and reduce health care costs by giving United control of a critical data highway through which about half of all Americans’ health insurance claims pass each year.
As alleged in the complaint, the proposed transaction would give United, a massive company that owns the largest health insurer in the United States, access to a vast amount of its rival health insurers’ competitively sensitive information. Post-acquisition, United would be able to use its rivals’ information to gain an unfair advantage and harm competition in health insurance markets. The Justice Department also claims the proposed transaction would eliminate United’s only major rival for first-pass claims editing technology — a critical product used to efficiently process health insurance claims and save health insurers billions of dollars each year — and give United a monopoly share in the market.
A Justice Department press release about the lawsuit quotes Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division as saying, “Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology. The department’s lawsuit makes clear that we will not hesitate to challenge transactions that harm competition by placing so much control of data and innovation in the hands of a single firm.”
The suit is the latest in a series of civil antitrust lawsuits challenging proposed mergers or acquisitions of between health insurance industry giants as anticompetitive in recent years. Stay tuned for more details.
More Information
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively on pandemic, business and other crisis planning, preparedness and response for more than 30 years.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EHR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
The American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. These include hundreds of highly regarded articles and workshops on health and other benefits, workforce, health care and insurance concerns.
For more information about these requirements, Ms. Stamer or her experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication. Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans, their employer and other health plan sponsors, fiduciaries and vendors as well as health care providers, healthcare clearinghouses, their vendors that are business associates covered by the Privacy, Security and Breach Notification Rules of the Health Insurance Portability & Accountability Act (“HIPAA”) are urged to act promptly to take well-documented steps to confirm and protect electronic protected health information and systems against the increasingly common hacking and other common cybersecurity threats in light of the rising cyber-hacking and other cybersecurity threats and exposures.
As implemented and enforced by the Department of Health & Human Services Office of Civil Rights (“OCR”), HIPAA generally requires that health plans, health care providers, healthcare clearinghouses and their service providers that qualify as business associates (hereafter “covered entities”) safeguard the privacy and security of individually identifiable protected health information (“protected health information”) in paper, electronic or other form against use, access or disclosure other than as allowed by HIPAA. Along with its general restrictions upon use, access or disclosure of protected health information, HIPAA also requires that covered entities and their business associates take the special precautions to protect electronic protected health information (“ePHI”) against improper access, use, disclosure or loss required by the OCR HIPAA Security Rule. Meanwhile, the OCR HIPAA Breach Notification Rule requires that covered entities notify affected individuals, OCR and in the case of breaches involving records of more than 500 individuals, the media in accordance with the OCR Breach Notification Rule following breach of unsecured protected health information.
A review of the OCR data base of unsecured electronic protected health information breaches reveals that OCR has received a wave of required unsecured electronic health information breach notifications impacting 500 or more individuals arising from hacking of electronic systems or e-mail since January 1, 2021, including notices from Apple Blossom Family Practice VA Healthcare Provider (500 individuals/Network Server Hacking/IT Incident); Network Server; Texas ENT Specialists TX Healthcare Provider (535,489 individuals/ Network ServerHacking/IT Incident0; Eduro Healthcare, LLC UT Healthcare Provider (8059 individuals/Hacking/IT Incident Email); Sacramento County Department of Health Services CA Healthcare Provider (2096 individuals/Hacking/IT Incident Email); Weddell Pediatric Dental Specialists, LLC IN Healthcare Provider (5356 individuals/Hacking/IT Incident Email); Javery Pain Institute MI Healthcare Provider (1387 individuals/Hacking/IT Incident Email); OSR Physical Therapy AZ Healthcare Provider (714 individuals/Hacking/IT Incident Email}; Nippon Life Insurance Company of America NY Health Plan (4109 individuals/Unauthorized Access/Disclosure Email); Bansley and Kiener, LLP IL Business Associate (50119 /Hacking/IT Incident Network Server) Baylor Scott & White Medical Center – Waxahachie TX Healthcare Provider (883 individuals/Unauthorized Access/Disclosure Electronic Medical Record); Bansley and Kiener, LLP IL Business Associate (2297 individuals/Hacking/IT Incident Network Server); Bansley and Kiener, LLP IL Business Associate (2711/Hacking/IT Incident Network Server); Bansley and Kiener, LLP IL Business Associate (15,814/Hacking/IT Incident Network Server); Mertz Manufacturing Inc Health Insurance Plan OK Health Plan (868 individuals/Hacking/IT Incident Network Server); Department of Behavioral Health and Developmental Services VA Healthcare Provider (4037 individuals/Unauthorized Access/Disclosure Other) Great Plains Manufacturing, Inc KS Health Plan (4110 individuals/Hacking/IT Incident Network Server); and Roy Varughese, M.D. TX Healthcare Provider (2916 individuals/Hacking/IT Incident Email). These recent breach notifications represent only the latest in a rising tide of hacking associated data breach notifications that OCR has received in recent years.
While provider breach reports still are the most common, health plan data breaches are becoming increasingly common. Between January 1 and December 20, 2021, for instance, OCR reported having open investigations arising from health plan breaches of unsecured protected health information reported after December 31, 2021 by Mertz by Manufacturing Inc Health Insurance Plan OK Health Plan; Great Plains Manufacturing, Inc KS Health Plan; Region IV Area Agency on Aging MI Health Plan; Kaiser Permanente MD Health Plan; Iowa Total Care, Inc. IA Health Plan; Maritz Holdings Inc. MO Health Plan; State of TN Finance & Administration TN Health Plan; Providence Health Plan OR Health Plan as well as a plethora of previously health plan associated breaches reported prior to 2021.
In January, 2021, OCR announced New York health insurer, Excellus Health Plan, Inc., would pay $5.1 million to settle potential HIPAA violations related to a breach affecting over 9.3 million people. The settlement resulted from OCR’s investigation of a September 9, 2015 breach report that cyber-attackers gained unauthorized access to its information technology systems. Excellus Health Plan reported that the breach began on or before December 23, 2013 and ended on May 11, 2015. The hackers installed malware and conducted reconnaissance activities that ultimately resulted in the impermissible disclosure of the protected health information of more than 9.3 million individuals, including their names, addresses, dates of birth, email addresses, Social Security numbers, bank account information, health plan claims, and clinical treatment information. The resolution payment is the second largest collected by OCR to date.
In October, 2020, OCR announced a resolution agreement with Aetna Life Insurance Company and affiliated covered entity (Aetna) where Aetna paid a $1 million resolution payment to settle potential HIPAA violations that arose from Aetna’s filing of hacking related breach reports in 2017 and OCR’s September 2021 announcement of a resolution agreement where Premera Blue Cross (PBC) agreed to pay $6.85 million to OCR (the second largest in OCR history) to settle potential HIPAA violations related to a breach affecting over 10.4 million people. This resolution represents the third largest payment to resolve a HIPAA investigation in OCR history.
The magnitude of these three recordbreaking resolution agreements sends a strong signal that health plans and other covered entities impacted by hacking incidents should expect little sympathy or quarter from OCR. OCR Director Roger Severino drove this point home when he warned in OCR’s announcement of the Aetna resolution agreement, “Hacking continues to be the greatest threat to the privacy and security of individuals’ health information. In this case, a health plan did not stop hackers from roaming inside its health record system undetected for over a year which endangered the privacy of millions of its beneficiaries. …. We know that the most dangerous hackers are sophisticated, patient, and persistent. Health care entities need to step up their game to protect the privacy of people’s health information from this growing threat.”
Coupled with these warnings, the series of alerts issued by OCR urging health plans and other HIPAA covered entities to guard their electronic systems and electronic protected health information against various hacking, malware and other cybersecurity threats send a clear message to health plans and other HIPAA regulated covered entities and business associates to constantly monitor and reconfirm the adequacy of their own HIPAA privacy, security, breach notification and other procedures and protections or be prepared to face similar sanctions from OCR.
Along side the OCR warnings, employment and union sponsored health plans, their insurers, business associates and fiduciaries also now face additional pressure to take prudent steps to secure their health plans’ protected health information and electronic data systems against improper use, access, destruction or disclosure under April, 2021 Employee Benefit Security Administration (“EBSA”) guidance package that for the first time officially recognizes cybersecurity as included in the fiduciary responsibilities of employee benefit plan fiduciaries under the Employee Retirement Income Security Act (“ERISA”) and addition of cybersecurity to its plan audits. As a result, in addition to complying with HIPAA, ERISA-covered health plan fiduciaries and sponsors also should be prepared to demonstrate that plan fiduciaries have taken the steps prudently necessary to guard health and other employee benefit plan data and systems against cybersecurity threats. In light of this guidance health plan fiduciaries and sponsors generally will want to ensure that at minimum, they can demonstrate that the health plan and health plan vendor cybersecurity safeguard meet or exceed the recommendations included in the following guidance materials published by EBSA as part of this cybersecurity announcement and any other steps that are prudent to guard against cybersecurity threats:
Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries prudently select a service provider with strong cybersecurity practices and monitor their activities, as ERISA requires.
Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss.
In light of this OCR and EBSA guidance, health plan sponsors, fiduciaries and vendors and other HIPAA covered entities and business associates are urged to take documented steps to audit and strengthen as needed their safeguards against hacking and other cybersecurity threats including:
In the case of any health plan or health plan vendor, taking well documented steps to assess and tighten as necessary their health plan systems and data security to meet or exceed the recommendation outlined in the EBSA cybersecurity guidance or otherwise necessary to prudently guard their plans and plan data and systems against cybersecurity threats.
Reviewing and monitoring on a documented, ongoing basis the adequacy and susceptibilities of existing practices, policies, safeguards of their own organizations, as well as their business associates and their vendors within the scope of attorney-client privilege taking into consideration data available from OCR, data regarding known or potential susceptibilities within their own operations as well as in the media, and other developments to determine if additional steps are necessary or advisable.
Updating policies, privacy and other notices, practices, procedures, training and other practices as needed to promote compliance and defensibility.
Renegotiating and enhancing service provider agreements to detail the specific compliance, audit, oversight and reporting rights, workforce and vendor credentialing and access control, indemnification, insurance, cooperation and other rights and responsibilities of all entities and individuals that use, access or disclose, or provide systems, software or other services or tools that could impact on security; to clarify the respective rights, procedures and responsibilities of each party in regards to compliance audits, investigation, breach reporting, and mitigation; and other relevant matters.
Verifying and tightening technological and other tracking, documentation and safeguards and controls to the use, access and disclosure of protected health information and systems.
Conducting well-documented training as necessary to ensure that members of the workforce of each covered entity and business associate understand and are prepared to comply with the expanded requirements of HIPAA, understand their responsibilities and appropriate procedures for reporting and investigating potential breaches or other compliance concerns, and understand as well as are prepared to follow appropriate procedures for reporting and responding to suspected violations or other indicia of potential security concerns.
Tracking and reviewing on a systemized, well-documented basis actual and near miss security threats to evaluate, document decision-making and make timely adjustments to policies, practices, training, safeguards and other compliance components as necessary to identify and resolve risks.
Establishing and providing well-documented monitoring of compliance that includes board level oversight and reporting at least quarterly and sooner in response to potential threat indicators.
Establishing and providing well-documented timely investigation and redress of reported violations or other compliance concerns.
Establishing contingency plans for responding in the event of a breach.
Establishing a well-documented process for monitoring and updating policies, practices and other efforts in response to changes in risks, practices and requirements.
Preparing and maintaining a well-documented record of compliance, risk, investigation and other security activities.
Pursuing other appropriate strategies to enhance the covered entity’s ability to demonstrate its compliance commitment both on paper and in operation.
Because susceptibilities in systems, software and other vendors of business associates, covered entities and their business associates should use care to assess and manage business associate and other vendor associated risks and compliance as well as tighten business associate and other service agreements to promote the improved cooperation, coordination, management and oversight required to comply with the new breach notification and other HIPAA requirements by specifically mapping out these details.
Leaders of covered entities or their business associates also are cautioned that while HIPAA itself does not generally create any private right of action for victims of breach under HIPAA, breaches may create substantial liability for their organizations or increasingly, organizational leaders under state data privacy and breach, negligence or other statutory or common laws. In addition, physicians and other licensed parties may face professional discipline or other professional liability for breaches violating statutory or ethical standards. Meanwhile, the Securities and Exchange Commission has indicated that it plans to pursue enforcement against leaders of public health care or other companies that fail to use appropriate care to ensure their organizations comply with privacy and data security obligations and the Employee Benefit Security Administration recently has issued guidance recognizing prudent data security practicces as part of the fiduciary obligations of health plans and their fiduciaries.
Finally, health plans and other covered entities are reminded that appropriate strategic planning and use of attorney-client privilege and other evidentiary tools can critically impact the defensibility of pre-breach, breach investigation and post-breach investigation and decision-making. Because HIPAA, EBSA and other rules typically require prompt investigation and response to known or suspected hacking or other cybersecurity threats, health plans and other covered entities or business associates should seek the assistance of experienced legal counsel to advise and assist in these activities to understand the potential availability and proper use of these and other evidentiary rules as part of the compliance planning process as well as to prepare for appropriate use in the event of a known or suspected incident to avoid unintentional compromise of these protections.
For Additional Information Or Assistance
If you need have questions or need assistance with health, benefit, payroll, investment or other data, systems or other privacy or security related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help. Longtime scribe for the American Bar Association Joint Committee on Employee Benefits agency meeting with OCR and author of leading publications on HIPAA and other privacy and data security concerns, Ms. Stamer also regularly assists clients and provides input to Congress, OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. Her insights on HIPAA risk management and compliance frequently appear in medical privacy related publications of a broad range of health care, health plan and other industry publications. She also is a highly-sought out speaker on privacy and data security who serves on the planning faculty and speaks for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here. If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters, e-mail Ms. Stamer or call (214) 452-8297.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employer-based health plans, health insurance issuers, and other group health plans should begin preparing to report prescription drug and health coverage costs data for prescription drugs covered by their programs after December 31, 2021 required by an interim final rule with request for comments issued by the Departments of Health and Human Services (HHS), Labor, the Treasury (collectively, the Departments), and the Office of Personnel Management today. Since the new rule requires covered plans and insurers to report data for prescription expenditures in 2020 and 2021 by December 27, 2022 and annually thereafter, covered plans and insurers will want complete the necessary arrangements to collect the data as soon as possible to minimize the cost and burdens of collecting and preparing the reports required at the end of the year.
The rule requires health plans, health insurance issuers offering group or individual health insurance coverage, and health benefits plans offered to federal employees to submit key data to the Departments, which will work through the HHS Assistant Secretary for Planning and Evaluation (ASPE) to publish a report on prescription drug pricing trends and rebates, as well as their impact on premiums and consumers’ out-of-pocket costs.
The interim final rule also requires plans and health insurers to provide the Departments with an annual overview of their top 50 drugs across key areas of concern annually, including:
General information regarding the plan or coverage;
Enrollment and premium information, including average monthly premiums paid by employees versus employers;
Total health care spending, broken down by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs, including wellness services), including prescription drug spending by enrollees versus employers and issuers;
The 50 most frequently dispensed brand prescription drugs;
The 50 costliest prescription drugs by total annual spending;
The 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.
The rule provides that plan sponsors, issuers, and FEHB carriers generally will be required to submit this information aggregated at the state/market level, rather than separately for each plan. To ensure that the Departments and Office of Personnel Management are able to conduct meaningful data analysis and identify prescription drug trends, the rule also provides uniform standards and definitions, including for identifying prescription drugs regardless of the dosage strength, package size, or mode of delivery.
A CMS fact sheet published along with the rule Shares more details about how data will be collected and analyzed and other information on the data submission requirements.
The new data submission requirements will apply starting with data from the 2020 calendar year. However, the Departments are deferring enforcement of the new requirements until December 27, 2022, to give regulated entities time to come into compliance. This means the required information for 2020 and 2021 is due by December 27, 2022, although it may be submitted sooner.
The extended deadline for reporting is the result of an exercise of discretion by the Departments. Technically, the CAA requires plans and issuers to begin submitting the required information to the Departments by December 27, 2021, and to submit this information by June 1 of each year thereafter. However, the Departments are exercising discretion to provide temporary deferral of enforcement with regard to the December 27, 2021 and June 1, 2022 deadlines. Consequently, the Departments say they will not initiate enforcement action against a plan or issuer that submits the required information for 2020 and 2021 by December 27, 2022. OPM also will allow its FEHB carriers to report information for 2020 and 2021 by December 27, 2022.
The Departments anticipate releasing their first report in June 2023 and biennially thereafter.
Along with publishing the rules, the Department invited public comments on its provisions. Comments on this IFC are due at 5 p.m. on January 24, 2022.
The Departments say additional information on prescription drug rebates, fees, and other remunerations paid by drug manufacturers to plans, issuers, and pharmacy benefit managers—including the top 25 drugs generating the highest rebate amounts—will help the Departments understand and report on prescription drug costs, and how they fluctuate over time.
In addition to preparing to meet the requirements in today’s rules, plans and insurers also need to prepare to comply with two earlier interim final rules (published on July 13, 2021and October 7, 2021, respectively) and a notice of proposed rulemaking (published on September 16, 2021).
More Information
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively on pandemic, business and other crisis planning, preparedness and response for more than 30 years.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EHR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
The American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. These include hundreds of highly regarded articles and workshops on health and other benefits, workforce, health care and insurance concerns.
For more information about these requirements, Ms. Stamer or her experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication. Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Businesses, their employee benefit plan fiduciaries, their employer and other sponsors, their record keepers, financial advisors and other service providers and other business partners face growing pressure to shore up cyber security and cyber breach compliance and other safeguards to defend against a slew of new and ongoing federal cyber security and breach regulatory and enforcement the Biden-Harris Administration is rolling out in its effort to stem the rising tide of cybersecurity incidents.
Agencies Targeting Businesses, US Entities & Their Leaders For CyberSecurity & CyberBreach Regulation & Enforcement
The DOJ Civil Cyber-Fraud Initiative is the latest in a growing list of new regulatory and enforcement programs placing pressure on U.S. businesses and their leaders to get serious about cybersecurity. Examples of some of the more far reaching of these new or continuing programs include:
Government Contractors.
Under the Civil Cyber-Fraud Initiative, DOJ plans to use the False Claims Act to prosecute pursue cyber security related fraud by government contractors and grant recipients. According to DOJ, the initiative will hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cyber security products or services, knowingly misrepresenting their cyber security practices or protocols, or knowingly violating obligations to monitor and report cyber security incidents and breaches. Federal contractors and grant recipients submitting claims for federal funds will be considered to have filed a false claim in violation of the False Claims Act if their cyber security and cyber breach practices are not compliant with applicable federal requirements when the payment is requested.
Federal Health Program Participating Health Care Providers And Plans.
The DOJ Cyber-Fraud Initiative follows a similar interpretation of the Department of Health & Human Services (“HHS”) Office Inspector General (“OIG”) about the cybersecurity and cyberbreach compliance requirements health care providers and health plan issuers participating in Medicare and certain other federally funded health care programs (“Medicare Participating Providers”) are accountable to meet under the Conditions of Participation for those programs. HHS OIG’s construction of these Conditions of Participation as including cybersecurity and cyberbreach compliance signs that Medical Participating Providers with deficient cybersecurity practices now may risk program disqualification and False Claims Act liability along with their already well-known exposure to civil monetary penalties under the Health Insurance Portability & Accountability Act (“HIPAA”) protected health information privacy, security and data breach rules.
Health & Other Employee Benefit Plans.
Health plans and other employee benefit plans, their fiduciaries, record keepers and service providers also face growing cybersecurity responsibilities and risks. While HHS Office of Civil Rights (“OCR”) continues to clarify and expand its interpretation, investigation and enforcement of HIPAA privacy, security and data breach rules against health plans, health care providers, health care clearinghouses and their business associates, the Department of Labor Employee Benefit Security Administration is turning up the heat on employee benefit plan fiduciaries to prudently protect their employee benefit plan assets and participants against cyberthreats.
On April 14, 2021, the Department of Labor Employee Benefit Security Administration (“EBSA”) made official its interpretation of the duty of prudence applicable to employee benefit plan fiduciaries under Section 404 of the Employee Retirement Income Security Act (“ERISA”) includes a duty for ERISA-covered employee benefit plan fiduciaries to take “appropriate precautions” to mitigate risks to plan participants and assets from both internal and external cybersecurity threats. The April 14 announcement makes official EBSA’s interpretation of the duty of prudence applicable to fiduciaries of ERISA-covered employee benefit plans as extending to a duty to act prudently to safeguard plan assets and plan participants against cybersecurity threats.
Concern about cyberthreats to private employee benefit plans covered by ERISA, their participants and beneficiaries has soared as massive data breaches Federal Thrift Savings Plan, Anthem, Capital One, the Public Employees Retirement Association of New Mexico and other employee benefit plans, their vendors and service providers increasingly have impacted millions of employee benefit plans, their accounts and participants.
While Congress chose to subject health plans to the detailed health privacy, security and breach rules of HIPAA and financial and certain other employee benefit plan service providers to consumer financial disclosure and data information security requirements of laws like Gramm-Leach-Bliley Act and the Fair and Accurate Credit Transactions Act, and even employers and others conducting background and other credit checks to the Fair Credit Reporting Act, growing awareness of the cyberthreat to employee benefits has not prompted Congress to date to extend those laws or otherwise to enact express statutory requirements for employee benefit plans and their fiduciaries. However, private litigants and others increasingly have speculated that a fiduciary duty to safeguard plan asset against cyberthreats might be subsumed in the obligation of fiduciaries under Section 404 of ERISA at all times to act with “the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” See, e.g., See Record $16M Anthem HIPAA Settlement Signals Need to Tighten Your Health Plan HIPAA Compliance & Risk Management.
While EBSA has worked to formulate its recently announced positions, private litigants increasingly have begun debating the applicability and effect of ERISA on cyberbreaches involving ERISA regulated plans. See e.g., In re Anthem, Inc. Data Breach Litig., No. 15-CV-04739-LHK, 2015 WL 7443779, at *1 (N.D. Cal. Nov. 24, 2015)(holding Anthem entitled under ERISA to remove claims to federal court and refusing employee benefit plan participants’ motion to remand to state court state claims arising from data breach); In re Anthem, Inc. Data Breach Litig., No. 15-MD-02617-LHK, 2016 WL 3029783 (N.D. Cal. May 27, 2016)(refusing to dismiss participant claims against non-Anthem defendants for lack of standing), motion reconsideration denied In re Anthem, Inc. Data Breach Litig., No. 15-CV-04739-LHK, 2016 WL 324386 (N.D. Cal. Jan. 27, 2016); Bartnett v. Abbott Lab’ys, No. 20-CV-02127, 2021 WL 428820, at *5 (N.D. Ill. Feb. 8, 2021) (dismissing breach of fiduciary duty claim based on inadequate evidence); In re: Premera Blue Cross Customer Data Sec. Breach Litig., No. 3:15-MD-2633-SI, 2017 WL 539578, at *21 (D. Or. Feb. 9, 2017). While mostly unsuccessful to date for procedural or factual sufficiency reasons, the preemption issues argued in many of these cases support concerns that under the proper circumstances ERISA could apply to breaches involving plans or their participants. As these and other actions continue to wind their way through the courts, EBSA also has begun to acknowledge that ERISA plan fiduciaries duties of prudence include cybersecurity responsibilities.
EBSA’s first official recognition of a cybersecurity responsibility by plan fiduciaries appears in the Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA Final Rule (the “Electronic Disclosure Rule”), which took effect July 27, 2020 . In the discussion of its requirements regarding website-based electronic disclosures in Subpart (e)(3), the Electronic Disclosure Rule requires that “[T]he administrator must take measures reasonably calculated to ensure that the website protects the confidentiality of personal information relating to any covered individual.” Similarly, the requirements for using e-mail to provide electronic disclosures in Subsection (k)(4) of the Electronic Disclosure Rule require the plan administrator to take “measures reasonably calculated to protect the confidentiality of personal information relating to the covered individual.” While recognizing these cyber security responsibilities in the Electronic Disclosure Rule, however, EBSA explained in the Preamble to the Electronic Disclosure Rule that it decided not to include more cumbersome cybersecurity requirements in the Electronic Disclosure Rule out of concern over the cost and other burdens of such requirements. Nevertheless, the Electronic Disclosure Rule imposed a responsibility by plan fiduciaries of employee benefit plans making electronic disclosures to ensure that electronic recordkeeping systems have in place reasonable controls, adequate records management practice, and other measures calculated to protect Personally Identifiable Information.
EBSA’s April 14, 2021 reflects EBSA now views the fiduciary responsibilities of ERISA-covered employee benefit plan fiduciaries generally as including the responsibility to take “appropriate precautions” to mitigate risks to plan participants and assets from both internal and external cybersecurity threats. Beyond acknowledging a duty to take prudent steps to protect plans assets and participants against internal and external cybersecurity threats, EBSA also shared the following three resources to help plan sponsors, fiduciaries and participants to safeguard benefit plans and personal information against emerging cyber threats:
Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries prudently select a service provider with strong cybersecurity practices and monitor their activities, as ERISA requires.
Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss.
Participants in Securities Markets, Market Infrastructure Providers & Vendors.
Meanwhile the Securities and Exchange Commission (“SEC”) also has made clear its expectation that all firms participating in the securities markets, market infrastructure providers and vendors will appropriately monitor, assess and manage their cybersecurity risk profiles, including their operational resiliency. Consistent with the shared understanding of best cybersecurity practices shared with the agencies, the SEC guidance makes clear its market involved and impacting regulated entities are accountable for maintaining and enforcing appropriate internal and external controls to prevent, detect and redress cybersecurity threats, including appropriate board governance and risk management, access rights and controls, data loss prevention,mobile security, incident response and resiliency, vendor management, training and awareness and other practices. See SEC Office of Compliance Inspections and Examinations Cybersecurity and Resiliency Observations. Recently announced enforcement actions demonstrate that the SEC is acting on its promise to go after SEC regulated entities that breach these expectations. See, e.g., SEC Announces Three Actions Charging Deficient Cybersecurity Procedures.
These and other recently announced federal regulatory and enforcement developments send a clear message to businesses and their leadership, employee benefit plan sponsors, fiduciaries, record keepers and other vendors, SEC securities market involved organizations and others to clean up their cybersecurity compliance and risk management. Beyond the governmental enforcement risks these developments signal, these and other emerging regulatory developments provide added fuel for the already substantial private litigant and government complaints, investigations and prosecutions against businesses, their leaders, their employee benefit plan fiduciaries, record keepers and other service providers,and others. and their leaders unable to defend the adequacy of their cybersecurity related practices.
Raise Cybersecurity Compliance & Defenses To Mitigate Risks & Liabilities
In the face of these developments, all businesses, employee benefit plan fiduciaries, their employer and other sponsors, record keepers and other vendors and their leaders should prioritize cybersecurity compliance, risk management, oversight and controls. As part of these efforts, organizations and their leaders should move quickly to position themselves to defend against potential investigation and enforcement risks created by these emerging policies. These efforts should seek to ensure compliance with all applicable statutory, regulatory and contractual requirements as well as institutionalize the necessary operational controls to protect systems, data and operations from cyber breaches and other threats, to detect and redress cyber events promptly, and to ensure that the organization otherwise can demonstrate both their compliance efforts, as well as their timely prudent detection, investigation, reporting, mitigation and remediation in response to actual or suspected cyber threats or other compliance breaches.
Efforts should begin by taking carefully crafted, well-documented documented steps to prudently evaluate and strengthen cybersecurity and breach safeguards and compliance, as well as prudently to assess and verify those of their vendors and others involved with their employee benefit plans or their administration within the scope of attorney-client privilege.
Assessments should take into account all existing required statutory, regulatory, and contractual controls and practices, documentation and other procedures. In addition, organizations should consider the advisability of adopting other “best practice” safeguards or actions taking into account relevant agency guidance and resources, government or other contracts, other industry or related standards, known and suspected breaches, “red flags” and threats, their own, their vendor and business partner and other risk profiles and experience, and other factors likely to be viewed as prudent under the circumstances.
In assessing, designing and administering the cybersecurity processes, organizations and their leaders should give due attention to assessing and addressing the adequacy of their internal and external controls to ensure the adequacy of their systems, processes, oversight and response practices and capabilities as of the time of the assessment and on an ongoing basis. Beyond establishing required policies and formal controls, organization should ensure that their organizations have in place the necessary policies and practices to monitor and control cyberthreats arising from conduct and risks created by employees and other internal workforce, vendors and other parties interacting with the business and its operations. As part of these efforts, most organizations will need to evaluate their contractual obligations and requirements for vendors, suppliers and others interacting with their businesses. Beyond general contractual compliance obligations, organizations should weigh requiring contractors, suppliers and other business partners to make specific commitments to maintain and monitor compliance and other risks, to provide timely notice and reports, to cooperate with audits and investigations necessary or advisable to respond to private or government complaints, government or other investigation, reporting or other requirements, their own compliance and risk assessments, audits and investigations and other compliance and risk management efforts. Organizations also should give careful attention and review the adequacy of protections and responsibilities arising from contractual cybersecurity and breach notice, investigation, cooperation, indemnification, insurance and other associated protections and cooperation.
Organizations also should consider establishing and administering processes for independent monitoring of regulatory, news, and other reports that could provide early warning of potential cybersecurity weaknesses, threats and breaches.
All processes should include appropriate governance, oversight and reporting to provide for ongoing monitoring and oversight necessary to identify and respond to evolving risks arising in the course of their operations as well as consistent practices for carefully documenting their compliance and risk management compliance efforts.
Because of the frequently high cost of breach investigation, response and mitigation, most organizations will want to consider securing cyber liability or other coverage, require vendors and other business partners to provide cyber liability indemnifications backed up with insurance or other adequate assurance of their ability to fulfill these financial responsibilities.
More Information
We hope this update is helpful. For more information about or assistance with these or other workforce, internal controls and compliance or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, and author of the “Medical Privacy” Chapter in the BNA/ERISA Litigation Treatise, the “Other Torts Chapter” in the BNA/ABA E-Heath & Other Torts Treatise, “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other highly regarded data privacy and security, workforce and health care change and crisis management and other highly regarded publications and presentations, Ms. Stamer is widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with private and public employer, health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. In the course of this work, she has had extensive involvement in the design, administration and defense of payroll, employee benefit, insurance, securities, trade secret and other confidential information and other internal and external record and data systems and processes as well as investigation, reporting, redress and mitigation of cyber and other incidents.
As a part of this work, she has continuously and extensively worked with domestic and international health and other employee benefit plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies. She also has extensive experience dealing with OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, current RPTE Welfare Benefit Committee Co-Chair and former Chair of its Fiduciary Responsibility, Plan Terminations and Distributions and Defined Contribution Plan Committees, a former JCEB Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former SHRM Consultants Board and Region IV Chair, former Texas Association of Business Board, BACPAC Board and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas.
Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
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Group health plans, their plan administrators and fiduciaries, employer or other sponsors, administrative services providers and insurers should act quickly to distribute required notices using the regulatory guidance just released today (April 7, 2021) and take other actions needed to comply with the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) coverage and premium subsidy notification, enrollment and coverage continuation requirements created by Section 9501 (the “COBRA Premium Assistance Rules”) of the American Rescue Plan Act of 2021 (“ARP ”) enacted last month.
The guidance package released today by the Employee Benefit Security Administration includes model notices and other preliminary guidance on the COBRA Premium Assistance Rules, which among other things require group health plans to notify “assistance eligible individuals” no later than May 31, 2021 of right under ARP Section 9501 to enroll in free COBRA Coverage during the ARP Premium Subsidy Period that began April 1, 2021.
As the deadline for providing notification to qualified beneficiaries is May 31, 2021 and the 60 day period for enrolling in COBRA coverage under the ARP COBRA Subsidy Rules does not begin until proper notification is provided, group health plan should move quickly to prepare and distribute the notifications and make other necessary plan arrangements.
This article provides an general overview of the ARP COBRA Premium Subsidy Rules and the Model Notices published by the Department of Labor Employee Benefit Security Administration (“EBSA”) on April 7, 2021 to assist group health plans and their administrators to comply with their notification obligations under these Rules. For a more comprehensive discussion of these requirements, see here.
New COVID COBRA Premium Subsidy Rules Overview
Section 9501 of the ARP seeks to help “assistance eligible individuals” continue their health benefits by providing assistance to maintain enrollment in covered group health plans by allowing them to enroll and maintain COBRA coverage under those plans without paying their COBRA continuation coverage premiums.
Covered group health plans generally include all group health plans sponsored by private-sector employers or employee organizations (unions) subject to the COBRA rules under the Employee Retirement Income Security Act of 1974 (ERISA); group health plans sponsored by State or local governments subject to the continuation provisions under the Public Health Service Act and group health insurance required to comply with state mini-COBRA laws.
In addition to mandating the provision of COBRA Coverage at no cost, no later than May 31, 2021, the ARP requires covered group health plans to notify certain former covered employees or dependents that qualify to enroll in COBRA coverage as “assistance eligible individuals” of their right within 60 days of notification to enroll in COBRA Coverage under the group health plan at no cost from April 1, 2021 through September 30, 2021 or, if earlier, the date their COBRA eligibility otherwise end (the “Premium Subsidy Period”).
From April 1 to September 31, 2021, group health plans cannot require an assistance eligible individual to pay any premiums for COBRA Coverage during his Premium Subsidy Period. ARP requires group health plans to provide COBRA Coverage without charge to assistance eligible individuals who qualify for and elect to enroll in COBRA Coverage with premium subsidy unless individual’s eligibility for COBRA or COBRA premium assistance ends before that date. Specific notifications to qualified beneficiaries also are required.
To implement these rules, ARP also requires that no later than May 31, 2021, covered group health plan administrators notify eligible qualified beneficiaries eligible to obtain COBRA coverage with premium assistance by applying for enrollment within the 60 day period following notification.
Assistance eligible individuals who timely enroll in COBRA Coverage with premium assistance generally must receive COBRA Coverage free of charge from the group health plan for any coverage period during the period that begins on or after April 1, 2021 until the earliest of the following dates (the “Premium Subsidy Period”):[1]
The date the qualified beneficiary is eligible[2] for coverage under any other group health plan (other than coverage consisting of only excepted benefits,[3] coverage under a health flexible spending arrangement under Code Section 106(c)(2), coverage under a qualified small employer health reimbursement arrangement under Code Section 9831(d)(2) or eligible for benefits under the Medicare program under title XVIII of the Social Security Act;
The date of the expiration of the otherwise applicable maximum period of COBRA continuation coverage under Code Section 4980B (other than due to a failure to elect or discontinuation of coverage for nonpayment of COBRA premium that occurred before April 1, 2021).
Assistance eligible individuals generally are qualified beneficiaries who lost coverage under the group health plan due to an involuntary reduction in hours or termination of employment enrolled in COBRA Coverage between April 1, 2021 and September 31, 2021 including those qualifying event was an involuntary employment loss occurring during the 18-month period (29-months for individuals qualifying for extended COBRA eligibility due to disability) prior to April 1, 2021 not enrolled in COBRA as of April 1, 2021. This generally includes COBRA qualified beneficiaries whose loss of group health coverage results from an involuntary employment reduction or loss for a reason other than gross misconduct after ARP’s enactment on March 11, 2021 as well as qualified beneficiaries whose involuntary employment loss happened before the effective date who but for their previous failure to elect COBRA or to maintain COBRA Coverage would still be entitled to COBRA Coverage because less than 18 months (29 months for qualified beneficiaries disabled on the date of coverage loss who qualify for extension of the disability coverage period) has elapsed since their employment loss and an event has not occurred following the coverage termination that would terminate their COBRA eligibility before the end of such otherwise applicable maximum COBRA eligibility period. Group health plans must offer a second opportunity to enroll in COBRA Coverage with COBRA premium assistance to qualified beneficiaries eligible for premium assistance not enrolled in COBRA Coverage as of April 1, 2021.
Sponsoring employers or other plan sponsors may qualify to claim an employment tax credit for COBRA premiums paid on behalf of assistance eligible individuals. Guidance on these tax rules is pending.
Required Group Health Plan Notifications To Assistance Eligible Individuals
ARP requires group health plans to provide certain written notifications to qualified beneficiaries entitled to qualify to enroll in COBRA coverage with premium assistance. This generally includes a requirement to provide an initial notification of the availability of premium assistance for COBRA coverage to assistance eligible individuals by the later of May 31, 2021 and subsequently to provide notice of the impending termination of eligibility for the COBRA Premium Subsidy during the 30 day period that begins 45 days before eligibility for COBRA Premium Subsidy ends. ARP dictates the minimum required content of such notices. Failure to provide the required notification is a failure to meet the notice requirements under the applicable COBRA continuation provision that subjects the group health plan administer and its sponsor to liability.
While ARP allows plan administrators the option of designing their own notices and forms to fulfill this requirement, it also directed the Department of Labor in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services to develop model notices for plans to use for this purpose. In response to this directive, the Department of Labor EBSA on April 7, 2021 published the following model notices and forms for group health plans to use to fulfill their ARP COBRA Premium Subsidy Rule notification requirements:
The ARP COBRA Premium Subsidy Rules are only one of a plethora of COVID health care emergency driven regulatory and enforcement changes impacting employers and their employee benefit plans. If you need assistance or would like additional information about these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. also invites you receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with workforce, health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other federal and state wage and hour and other compensation, discrimination, performance management, and other related human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other risk management, compliance, public policy and performance concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Group health plans, their plan administrators and fiduciaries, employer or other sponsors, administrative services providers and insurers should act quickly to distribute required notices using the regulatory guidance just released today (April 7, 2021) and take other actions needed to comply with the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) coverage and premium subsidy notification, enrollment and coverage continuation requirements created by Section 9501 (the “COBRA Premium Assistance Rules”) of the American Rescue Plan Act of 2021 (“ARP ”) enacted last month.
The guidance package released today by the Employee Benefit Security Administration includes model notices and other preliminary guidance on the COBRA Premium Assistance Rules, which among other things require group health plans to notify “assistance eligible individuals” no later than May 31, 2021 of right under ARP Section 9501 to enroll in free COBRA Coverage during the ARP Premium Subsidy Period that began April 1, 2021.
As the deadline for providing notification to qualified beneficiaries is May 31, 2021 and the 60 day period for enrolling in COBRA coverage under the ARP COBRA Subsidy Rules does not begin until proper notification is provided, group health plan should move quickly to prepare and distribute the notifications and make other necessary plan arrangements.
This article provides an general overview of the ARP COBRA Premium Subsidy Rules and the Model Notices published by the Department of Labor Employee Benefit Security Administration (“EBSA”) on April 7, 2021 to assist group health plans and their administrators to comply with their notification obligations under these Rules. For a more comprehensive discussion of these requirements, see here.
New COVID COBRA Premium Subsidy Rules Overview
Section 9501 of the ARP seeks to help “assistance eligible individuals” continue their health benefits by providing assistance to maintain enrollment in covered group health plans by allowing them to enroll and maintain COBRA coverage under those plans without paying their COBRA continuation coverage premiums.
Covered group health plans generally include all group health plans sponsored by private-sector employers or employee organizations (unions) subject to the COBRA rules under the Employee Retirement Income Security Act of 1974 (ERISA); group health plans sponsored by State or local governments subject to the continuation provisions under the Public Health Service Act and group health insurance required to comply with state mini-COBRA laws.
In addition to mandating the provision of COBRA Coverage at no cost, no later than May 31, 2021, the ARP requires covered group health plans to notify certain former covered employees or dependents that qualify to enroll in COBRA coverage as “assistance eligible individuals” of their right within 60 days of notification to enroll in COBRA Coverage under the group health plan at no cost from April 1, 2021 through September 30, 2021 or, if earlier, the date their COBRA eligibility otherwise end (the “Premium Subsidy Period”).
From April 1 to September 31, 2021, group health plans cannot require an assistance eligible individual to pay any premiums for COBRA Coverage during his Premium Subsidy Period. ARP requires group health plans to provide COBRA Coverage without charge to assistance eligible individuals who qualify for and elect to enroll in COBRA Coverage with premium subsidy unless individual’s eligibility for COBRA or COBRA premium assistance ends before that date. Specific notifications to qualified beneficiaries also are required.
To implement these rules, ARP also requires that no later than May 31, 2021, covered group health plan administrators notify eligible qualified beneficiaries eligible to obtain COBRA coverage with premium assistance by applying for enrollment within the 60 day period following notification.
Assistance eligible individuals who timely enroll in COBRA Coverage with premium assistance generally must receive COBRA Coverage free of charge from the group health plan for any coverage period during the period that begins on or after April 1, 2021 until the earliest of the following dates (the “Premium Subsidy Period”):[1]
The date the qualified beneficiary is eligible[2] for coverage under any other group health plan (other than coverage consisting of only excepted benefits,[3] coverage under a health flexible spending arrangement under Code Section 106(c)(2), coverage under a qualified small employer health reimbursement arrangement under Code Section 9831(d)(2) or eligible for benefits under the Medicare program under title XVIII of the Social Security Act;
The date of the expiration of the otherwise applicable maximum period of COBRA continuation coverage under Code Section 4980B (other than due to a failure to elect or discontinuation of coverage for nonpayment of COBRA premium that occurred before April 1, 2021).
Assistance eligible individuals generally are qualified beneficiaries who lost coverage under the group health plan due to an involuntary reduction in hours or termination of employment enrolled in COBRA Coverage between April 1, 2021 and September 31, 2021 including those qualifying event was an involuntary employment loss occurring during the 18-month period (29-months for individuals qualifying for extended COBRA eligibility due to disability) prior to April 1, 2021 not enrolled in COBRA as of April 1, 2021. This generally includes COBRA qualified beneficiaries whose loss of group health coverage results from an involuntary employment reduction or loss for a reason other than gross misconduct after ARP’s enactment on March 11, 2021 as well as qualified beneficiaries whose involuntary employment loss happened before the effective date who but for their previous failure to elect COBRA or to maintain COBRA Coverage would still be entitled to COBRA Coverage because less than 18 months (29 months for qualified beneficiaries disabled on the date of coverage loss who qualify for extension of the disability coverage period) has elapsed since their employment loss and an event has not occurred following the coverage termination that would terminate their COBRA eligibility before the end of such otherwise applicable maximum COBRA eligibility period. Group health plans must offer a second opportunity to enroll in COBRA Coverage with COBRA premium assistance to qualified beneficiaries eligible for premium assistance not enrolled in COBRA Coverage as of April 1, 2021.
Sponsoring employers or other plan sponsors may qualify to claim an employment tax credit for COBRA premiums paid on behalf of assistance eligible individuals. Guidance on these tax rules is pending.
Required Group Health Plan Notifications To Assistance Eligible Individuals
ARP requires group health plans to provide certain written notifications to qualified beneficiaries entitled to qualify to enroll in COBRA coverage with premium assistance. This generally includes a requirement to provide an initial notification of the availability of premium assistance for COBRA coverage to assistance eligible individuals by the later of May 31, 2021 and subsequently to provide notice of the impending termination of eligibility for the COBRA Premium Subsidy during the 30 day period that begins 45 days before eligibility for COBRA Premium Subsidy ends. ARP dictates the minimum required content of such notices. Failure to provide the required notification is a failure to meet the notice requirements under the applicable COBRA continuation provision that subjects the group health plan administer and its sponsor to liability.
While ARP allows plan administrators the option of designing their own notices and forms to fulfill this requirement, it also directed the Department of Labor in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services to develop model notices for plans to use for this purpose. In response to this directive, the Department of Labor EBSA on April 7, 2021 published the following model notices and forms for group health plans to use to fulfill their ARP COBRA Premium Subsidy Rule notification requirements:
The ARP COBRA Premium Subsidy Rules are only one of a plethora of COVID health care emergency driven regulatory and enforcement changes impacting employers and their employee benefit plans. If you need assistance or would like additional information about these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. also invites you receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with workforce, health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other federal and state wage and hour and other compensation, discrimination, performance management, and other related human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other risk management, compliance, public policy and performance concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Solutions Law Press, Inc.™ invites employers, employee benefit plan fiduciaries and vendors and other impacted business leaders participate in a complimentary briefing on the employer and employee benefit requirements of the H.R. 6379, Take Responsibility for Workers and Families Act as approved by the Ways & Means Committee as of February 12, 2021. The live Zoom briefing now will begin at 9:00 a.m. Central Time on Thursday, February 18, 2021 to avoid potential weather-related power and other disruptions associated with winter storms at its originally scheduled presentation time on Monday, February 15.
Employers and employee benefit plan fiduciaries and vendors should get up to speed on a new mandate to subsidize health coverage continuation and other requirements of the Act that the House Ways & Means Committee voted on February 11, 2021 to include in the lasted COVID-19 relief package the Democrat Majority plans to fast track through Congress. By the end of February if not before, Congress is expected to pass a final COVID-19 relief package including these employer and employee benefit plan mandates in substantially the same form as approved by the Ways and Means Committee. As these provisions will require quick action by employers and plans, employers, employee benefit plans, their fiduciaries and plan vendors should begin preparing now to comply with the anticipated new requirements
Registration & Program Details
Solutions Law Press, Inc. will host the 30-minute Zoom briefing beginning at 9:00 a.m. Central Time on Thursday, February 18, 2021 on the current provisions of the Act. The briefing will be conducted attorney Cynthia Marcotte Stamer. Participation is complimentary, but space is limited. Accordingly, registration is required and registration and participation will be granted on a first come, first serve basis here.
About Presenter Cynthia Marcotte Stamer
A Fellow in the American College of Employee Benefits Counsel, Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney, 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, employee benefit plan, health care, insurance, financial service, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce, employee benefits and compensation, performance management, internal controls, governance, regulatory and operational compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns. Best known for her leading edge work and thought leadership on workforce management and reengineering and health and other employee benefits concerns, Ms. Stamer regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions. Along with advising and representing management organizations, Ms. Stamer also has worked continuously throughout her career internationally and domestically as an advisor to business, community and government leaders on health care, savings and retirement, workforce, and other legislative and regulatory design, drafting, interpretation, enforcement and other domestic and international public policy.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mailhere.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Employers and employee benefit plan fiduciaries and vendors should prepare to face a new mandate to subsidize health coverage continuation and other requirements included in the H.R. 6379, Take Responsibility for Workers and Families Act that the House Ways & Means Committee approved for inclusion in the COVID-19 relief package the Democrat Majority plans to fast track to enactment.
The proposed COBRA subsidy mandate is one of several COVID-19 relief provisions impacting employers and their benefit programs the Ways & Means Committee marked up and reported out of committee the week ending February 12, 2021. Other provisions include:
Additional direct assistance that would increase the COVID direct payment for qualifying working families by an additional direct payment of $1,400 per person, bringing their total relief to $2,000 per person;
Extend temporary federal unemployment and benefits with increased weekly benefits;
Significantly enhanced Earned Income Tax Credits for workers without children;
Raising the Child Tax Credit to $3,000 per child ($3,600 for children under 6), and makes it fully refundable and advanceable;
Expanding the Child and Dependent Tax Credit (CDCTC) to allow families to claim up to half of their child care expenses;
Reducing health care premiums for low- and middle-income families by increasing the Affordable Care Act’s (ACA) premium tax credits for 2021 and 2022;
Creating health care subsidies for unemployed workers who are ineligible for COBRA;
A program to bail out insolvent and distressed multiemployer (union) pension plans; and
More.
Revised legislative language of these and other proposals before the Ways and Means Committee markup this week is emerging and could face further changes as Congressional Democrats continue to work to enact their latest COVID-Relief package. Employers and employee benefit leaders and advisors should monitor carefully and begin preparing to respond to these proposals.
Register & Attend Complimentary 2/15 Briefing
Solutions Law Press, Inc. will host the 30-minute Zoom briefing beginning at 9:00 a.m. Central Time on Monday, February 15, 2020 on the current provisions of the Act. The briefing will be conducted attorney Cynthia Marcotte Stamer. Participation is complimentary, but space is limited. Accordingly, registration is required and registration and participation will be granted on a first come, first serve basis here.
For more information contact the author of this update, Texas Board of Legal Specialization Board Certified Labor and Employment Lawyer, Cynthia Marcotte Stamer here.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and federal and state discrimination, affirmative action and accommodation and other related human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other risk management and compliance concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Earlier this week, the Internal Revenue Service (“IRS”) announced that employee benefit plan participants that already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity through August 31, 2020 to roll those funds back into a retirement account following the Coronavirus Aid, Relief, and Economic Security (CARES) Act RMD waiver for 2020. The announcement of this relief covers one of a long and growing list of special tax and other COVID-19 responsive special rules and requirements that may change requirements, provide special relief or both for businesses and individuals that every business leader and individual should carefully monitor and respond to appropriately.
Retirement Plan Rollover Relief
On July 23, 2020, the IRS announced its extension of the 60-day rollover period for any RMDs already taken this year to August 31, 2020 to give taxpayers time to take advantage of this opportunity in Notice 2020-51 (PDF). The Notice also answers questions regarding the waiver of RMDs for 2020 under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act.
The CARES Act enabled any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, to skip those RMDs this year. This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. This waiver does not apply to defined-benefit plans.
In addition to the rollover opportunity, an IRA owner or beneficiary who has already received a distribution from an IRA of an amount that would have been an RMD in 2020 can repay the distribution to the IRA by August 31, 2020. The notice provides that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.
The notice provides two sample amendments that employers may adopt to give plan participants and beneficiaries whose RMDs are waived a choice as to whether or not to receive the waived RMD.
Other COVID-19 Tax Rules & Relief
The guidance and relief in Notice 2020-51 highlights only one of a long list of special COVID-19 associated tax rules and relief that could apply to a business, its employees or employee benefit plan participants or both including the following:
Along with these tax rules, businesses and their employees also may be impacted by a broad range of special federal and state labor and employment and other rules adopted in response to the continuing COVID-19 health care emergency and its fallout. Businesses and their leaders should carefully review and monitor these and other COVID-19 specific rules to ensure that their businesses don’t trigger unanticipated liability by failing to meet critical requirements or to ensure that they take full advantage of all available relief.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with health industry, health plan and insurance and other businesses of all types, government and community organizations and their leaders, spoken and published extensively on workforce and other services, compensation and benefits, and related tax; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other management concerns.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has extensive experience advising, representing, defending and training health care providers, health plans and insurers, employers, community organizations and others about HIPAA and other privacy concerns and has published and spoken extensively on these concerns.
Her involvement with HIPAA and other privacy and data concerns has taken place as part of her more than 30 years involvement working with with public and private health industry, health insurance and other employers and organizations of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on crisis preparedness and response, privacy and data security, workforce, health care and other policy and enforcement, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
While most COVID-19 test results won’t draw the widespread coverage and public interest that Elliott’s diagnosis did, businesses generally and health care providers, health plans, health care clearinghouses specifically need to recognize that coverage of the Elliott outrage will heighten awareness and therefore their need to properly handle and protect COVID-19 or other infectious disease and other testing, diagnosis, treatment and other medical and disability information collected or encountered in the course of their operation through the current COVID-19 health care emergency and otherwise in their own organizations.
ADA Responsibilities of Employers In Handling Medical Information
Protecting COVID-19 testing and other medical information isn’t just a concern for covered entities and their business associates, however. Businesses that are not covered entities also generally should use care in their collection, use, protection and disclosure of COVID-19 testing and other medical information to mitigate their potential liability under the disability discrimination requirements of the ADA, the Rehabilitation Act and other laws. For instance, along with prohibiting employers covered by the ADA from discriminating against qualified individuals with disabilities and requiring those employers to provide reasonable accommodations to such employees, the ADA also regulates the ability of covered employers to perform or require medical testing and imposes specific medical confidentiality requirements on all covered employers. See e.g., What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.
The ADA’s medical confidentiality requirements dictate that covered employers maintain medical information and records about employees and applicants in separate, confidential files. Covered employers are responsible for maintaining the confidentiality of medical information and records and cannot disclose it without authorization from the subject employee except under the specific conditions allowed by the ADA.
EEOC guidance provided in its publication entitled Pandemic Preparedness in the Workplace and the Americans With Disabilities Act as updated as of March 19, 2020 emphasizes that covered employers remain accountable for complying with the requirements of the ADA and Rehabilitation Act during the current COVID-19 health care emergency and other pandemics.
While the EEOC Technical Assistance Questions and Answers in its publication What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws
Technical Assistance Questions and Answers as updated on June 11, 2020 recognizes temperature checks and certain other COVID-19 inquiries to screen for COVID-19 exposure or infection might be permitted under the safety exception to the ADA during the current COVID-19 health care emergency, that and other EEOC guidance makes clear that covered employers remain responsible for ensuring that the ADA medical confidentiality requirements are met with regarding to testing and related medical information. As a result, all ADA-covered employers generally and health care employers specifically are urged to use care both in the administration and collection of information regarding COVID-19 testing and diagnosis, and the protection of the confidentiality of COVID-19 and other medical information and records collected in the course of administering employment, safety, medical leave or other absence or other operations throughout the COVID-19 health care emergency.
Added HIPAA & Texas HIPAA Concerns For Health Plans & Other HIPAA Covered Entities
Assuming that the disclosure of Elliott’s information is traced to a testing provider, laboratory or other health care provider, health plan or insurer, health care clearing house subject to HIPAA (“covered entity”), a service provider acting as a business associate to a covered entity, or a member of their workforce, the unauthorized release of Elliott’s test results, that he underwent the testing, or other medical information, Elliott’s complaint about a possible HIPAA violation could be well-founded as both HIPAA and the somewhat broader provisions of the Texas Medical Privacy Act (“Tex-HIPAA”) (hereafter collectively the “HIPAA Laws”) both generally prohibit unauthorized disclosure of protected medical information such as his COVID-19 test or test results to the media.
The COVID-19 test results and of “individually identifiable personal health information” about Elliott and his encounter created, used, access or disclosed by the testing facility or other health care provider, a health plan, health care clearinghouse (“covered entity”) or a member of its workforce or a subcontractor acting as a business associated qualify as “protected health information subject to HIPAA’s privacy, security, breach and privacy rights protections of HIPAA and Tex-HIPAA.
The HIPAA and Tex-HIPAA prohibition against unauthorized disclosure of protected health information to the media stem from the HIPAA Laws’ broader requirement that covered entities and business associates affirmatively safeguard protected health information against unauthorized use, access or disclosure and sweeping prohibition against their disclosing or allowing the disclosure of protected health information without a HIPAA-compliant authorization except under the narrow and specifically delineated exceptions identified in the rule, none of which appear relevant to the media disclosure objected to by Elliott from the currently available public information.
Both HIPAA Laws expressly prohibit unauthorized disclosure of protected health information by covered entities or their business associates except under the specifically detailed conditions specified in one or more exceptions to this general rule. Assuming all relevant conditions to qualify for the exception are met, HIPAA does allow covered entities and business associates treatment, payment, operations, public health activities or another situation meeting all applicable requirements of an express exception to the HIPAA prohibition against disclosure.
The federal agency primarily responsible for the implementation and enforcement of HIPAA, the Department of Health & Human Services Office of Civil Rights (“OCR”) regulatory guidance and enforcement history clearly communicates OCR’s view that covered entities or business associates violate HIPAA by disclosing protected health information to the media or other third parties without first obtaining a HIPAA-compliant authorization from the subject of the information except under the specific circumstances described in an applicable Privacy Rule exception.
In its May 5, 2020 Guidance on Covered Health Care Providers and Restrictions on Media Access to Protected Health Information about Individuals in Their Facilities (“5/5 Guidance”), for instance, OCR specifically reminded HIPAA covered health care providers that the HIPAA Privacy Rule does not permit them to give media and film crews access to protected health information including access to facilities where patients’ protected health information will be accessible without the patients’ prior authorization. has made clear that testing facilities and other health care providers generally remain accountable for complying with the HIPAA Privacy Rule that prohibits unauthorized use, access or disclosure of test results and other protected health information except as specifically allowed in the applicable HIPAA Law.
The 5/5 Guidance specifically states, “The COVID-19 public health emergency does not alter the HIPAA Privacy Rule’s existing restrictions on disclosures of protected health information (PHI) to the media.’ Additionally, it states confirmed that even during the current COVID-19 public health emergency, covered health care providers remain required to obtain a valid HIPAA authorization from each patient whose PHI will be accessible to the media before the media is given access to that PHI. In this regard, the 5/5 Guidance states, As explained in prior guidance,1 HIPAA does not permit covered health care providers to give the media, including film crews, access to any areas of their facilities where patients’ PHI will be accessible in any form (e.g., written, electronic, oral, or other visual or audio form), without first obtaining a written HIPAA authorization from each patient whose PHI would be accessible to the media. 2 Additionally, covered health care providers may not require a patient to sign a HIPAA authorization as a condition of receiving treatment. The guidance clarifies that masking or obscuring patients’ faces or identifying information before broadcasting a recording of a patient is not sufficient, as a valid HIPAA authorization is still required before giving the media such access. Additionally, the guidance describes reasonable safeguards that should be used to protect the privacy of patients whenever the media is granted access to facilities.
OCR’s positions on disclosures to the media in the 5/5 Guidance reaffirm OCR’s longstanding interpretation and enforcement of HIPAA as prohibiting disclosures of PHI and media access to areas where patients or their protected health information might be visible or accessible is long standing.
In June, 2013, for instance, OCR sent a clear message to covered entities and business associates not to make unconsented disclosures of protected health information to or allow media access to areas where patients or their protected health information could be accessed or observed when it required Shasta Regional Medical Center (SRMC) to pay $275,000 to resolve OCR HIPAA charges stemming from SRMC’s unauthorized disclosure of protected health information to multiple media outlets as part of a public relations effort to mitigate damage from fraud and misconduct allegations made against it by the patient. See HIPAA Sanctions Triggered From Covered Entity Statements To Media, Workforce.
OCR subsequently reinforced its warning to covered entities and business associates about unauthorized disclosures of protected health information in a 2016 Frequently Asked Question (Media FAQ) that discussed covered entities HIPAA responsibilities when dealing with the media. The Media FAQ was issued in conjunction with OCR’s collection of its $2.2 million settlement with New York-Presbyterian Hospital and a series of other settlements totaling $999,000 from three other health care providers accused of violating HIPAA by allowing media personnel into treatment or other areas where patients or patient protected health information was accessible without first obtaining a HIPAA compliant written authorization from each patient or other subject present or whose protected health information otherwise would be accessible to the media. See $999K Price Hospitals Pay To Settle HIPAA Privacy Charges From Allowing ABC To Film Patients Without Authorization.
In the Media FAQ, OCR stated HIPAA required covered entities to obtain prior written authorization before disclosing protected health information to the media or allowing media to film or access exam rooms or other areas where patients or protected health information could be observed or accessed. The Media FAQ also stated that masking or blurring the identity of the patient or their specific information was not an adequate substitute for written authorization and that covered entities also were responsible for ensuring that reasonable safeguards were in place to protect against impermissible disclosures or to limit incidental disclosures of other PHI in areas where media is allowed access where prior authorization has not been obtained. While stressing the importance of compliance with these requirements, however, the Media FAQ clarified that the HIPAA Privacy Rule does not require health care providers to prevent members of the media from entering areas of their facilities that are otherwise generally accessible to the public like public waiting areas or areas where the public enters or exits the facility In addition, the Media FAQ states a health care provider or other Covered Entity also highlighted certain other limited circumstances where HIPAA might allow limited disclosure of protected health information to the media in accordance with specific provisions of the Privacy Rule about an incapacitated patient when in the patient’s best interest; or disclose a patient’s location in the facility and condition in general terms that do not communicate specific medical information about the individual to the media or any other person any person where the individual has not objected to his information being included in the facility directory and the media representative or other person asks for the individual by name.
In the intervening years, OCR periodically has issued additional reminders to covered entities about HIPAA’s general prohibition against unconsented disclosures to the media as well as sanctioned harshly various covered entities for violating these prohibitions. In 2017, OCR required the largest not-for-profit health system in Southeast Texas, Memorial Hermann Health System (MHHS), to pay OCR $2.4 million to settle charges it violated HIPAA by issuing a press release to the media that shared the name and other protected health information about a patient suspected of using a fraudulent insurance card to obtain care at a clinic without the patient’s prior HIPAA-compliant authorization. While OCR concluded a report made MHHS made to law enforcement about the patient was allowable under the Privacy Rule, OCR found MHHS violated the Privacy Rule by issuing the press release disclosing the patient’s name and other PHI without authorization from the patient and also by failing to timely document the sanctioning of its workforce members for impermissibly disclosing the patient’s information. See $2.4M HIPAA Settlement Warns Providers About Media Disclosures Of PHI.
Minimize Exposures By Preventing Unauthorized Media & Other Disclosures
Even without Mr. Elliott’s outrage heightening awareness about HIPAA’s prohibitions against unauthorized disclosures of protected health information to the media, the recent warning about HIPAA’s restrictions on media disclosure and access to protected health information and patient treatment areas in OCR’s 5/5 Guidance alone should serve as a strong incentive for covered entities and business associate promptly to reverify that the adequacy of their current policies, practices and training to prevent inappropriate media disclosures of protected health information and otherwise defend their compliance with OCR’s interpretation of HIPAA’s requirements for dealing with the media. Predictable heightened patient and public awareness and expectations about these and other HIPAA responsibilities fueled by the widespread media coverage of Mr. Elliott’s COVID-19 test results and his outrage about the unauthorized disclosure of his test results makes it more important than ever that health care providers and other covered entities and business associates take steps to prepare to respond to foreseeable complaints and questions by other patients, their families and others.
As part of these efforts, most covered entities and business associates may want to consider, at minimum, reconfirming the adequacy and understanding of their current media and other disclosure policies and practices, as well as sending strategic communications to their business associates and members of their workforce reminding them of the covered entity’s policies regarding media access and disclosures.
As part of these activities, covered entities should consider conducting a well-documented assessment of their current policies, practices and workforce training on disclosure of information to the media and other parties generally, as well as policies on allowing media or other parties to enter, film, photograph or record within their facilities or otherwise disclosing or allowing media access to their facilities. Along with these efforts, most covered entities also may want to consider also reminding workforce members that their patient privacy responsibilities also requires that they not share or discuss patient protected health information, film, photograph, or otherwise record, patients or areas where patients or patient protected health information is or might be present without prior written consent of the patient and the consent of their organization.
Since covered entities and members of their workforce also are likely to be subject to other statutory, ethical, contractual or other privacy or confidentiality requirements beyond those imposed by the HIPAA Laws such as medical confidentiality duties applicable to physicians and other health care providers under medical ethics, professional licensure or other similar rules, contractual responsibilities, as well as common law or statutory privacy, theft of likeness or other statutory or common law tort claims and exposures. Covered entities and business associates generally should consider whether other steps are advisable to manage these exposures along with managing their HIPAA Law compliance.
Given the high incidence of COVID-19 exposure and infection within their workplace, covered entities, business associates and other employers should use care fulfill their HIPAA Law relevant employment law confidentiality responsibilities when dealing with testing or other medical information about employees. In this respect, along with any HIPAA Law obligations that a covered entity or business associate has in handling medical information about a patient who also is an employee or family member of an employee, covered entities also should use care to ensure that medical confidentiality requirements of the Americans With Disabilities Act (“ADA”) and other applicable employment laws are met.
Since this analysis and review in most cases will result in the uncovering or discussion of potentially legally or politically sensitive information, Covered Entities should consider consulting with or engaging experienced legal counsel for assistance in structuring and executing these activities to maximize their ability to claim attorney-client privilege or other evidentiary protections against discovery or disclosure of certain aspects of these activities.
Finally, covered entities should keep in mind that HIPAA and other medical privacy compliance and risk management is an ongoing process requiring constant awareness and diligence. Consequently, covered entities and business associates also should use care both to monitor OCR and other regulatory and enforcement developments as well as exercise ongoing vigilance to monitor and maintain compliance within their organizations.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with health industry, health plan and insurance and other business, government and community organizations and their leaders, spoken and published extensively on HIPAA and other privacy and data security concerns, as well as other health care and health benefits; human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other management concerns.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has extensive experience advising, representing, defending and training health care providers, health plans and insurers, employers, community organizations and others about HIPAA and other privacy concerns and has published and spoken extensively on these concerns.
Her involvement with HIPAA and other privacy and data concerns has taken place as part of her more than 30 years involvement working with with public and private health industry, health insurance and other employers and organizations of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on crisis preparedness and response, privacy and data security, workforce, health care and other policy and enforcement, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
IRS Notice 2020-33 released indexing the permissible health FSA carryover. As a consequence, the permissible amount immediately increases from $500 to $550.
IRS Notice 2020-29 released to provide temporary flexibility under cafeteria plans for new or changed health coverage and dependent care and health FSA elections, and extensions in certain circumstances of claims periods before use-or-lose must be applied, in response to the changed circumstances many have experienced with respect to availability of childcare and availability of elective health procedures. And a few other HDHP nuggets in there as well.
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We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with business, government and community organizations and their leaders, spoken and published extensively on human resources, employee benefits and other workforce and services, tax, health care and health benefits, insurance, workers’ compensation and occupational disease, business disaster and distress and many other management topics, As a key focus of this work, Ms. Stamer has worked with public and private employers of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
The financial effects of the COVID-19 pandemic and containment efforts has many businesses flailing to reconfigure their staffing and other business models even as Congress is preparing to impose paid COVID related leave mandate on employers with less than 500 employees. With the sharp falloff in business threatening their current liquidity and operations, many business leaders understandably feel pressure to substantially reduce their workforces or make other radical changes in business operations to stem their business’ resulting COVID-19 created financial crisis. When choosing and implementing their options, however, business leaders should carefully weigh all of their options and use care when designing and implementing their workforce and other business adjustments strategically to best position their businesses to survive the current crisis without triggering unanticipated employment, employee benefit, compensation or other liabilities as well as to best position their organizations and its leaders to retain the trust and respect their business will need to regain the customer, vendor, workforce and other business respect and loyalty their business will need to recover once the crisis has past.
Many business owners and leaders understandably feel the COVID-driven economic downturn forces them to act quickly to implement workforce reductions, close plants, or shut down all or portions of their business operations. Where a distressed business contemplates a plant closing, mass layoff or other substantial change, however, the business and its leaders need to fully understand the various financial and legal effects and costs of the proposed workforce and other business changes and act strategically to manage their resulting obligations and obligations. Businesses owners and leaders dealing with these issues are invited to check out the COVID-19 Workforce Change Planning & Implementation Process Flow tool and other resources available here.
While financial and other business exigencies unquestionably makes speedy action critical for many businesses, owners and management need to recognize that poorly chosen or improperly implemented strategies or actions raises significant risks that unanticipated costs and liabilities will undermine or wipe out anticipated benefits of the contemplated actions, undermine, the business future recovery opportunities, expose the business, its ownership and management to substantial liability and other risks.
While the current economic freefall may tempt many business leaders to see shutting down their operations or other mass layoffs as the best option for protecting their businesses, it is important to keep in mind that layoffs and other employment terminations as well as early terminations of other services contracts typically trigger legal and finanncial exposures. Businesses leaders need to recognize and account for these obligations and their financial and operational costs when weighing their options and plan to manage the obligations and costs and other liabilities when implementing the strategy chosen by their business. This can be particularly important where a realistic likelihood exists that the business may file for bankrutpcy protection and/or fail to meet certain of these obligations as some obligations may create personal liability for business owners or leaders if not fulfilled by the company.
When anticipating or executing potential employment terminations, businesses and their leaders should recognize and address properly the employment, unemployment, employee benefit, compensation and other responsibilities attendant to any employment termination. Whether planning to furlow workers for a short period or planning a longer term layoff or shutdown, businesses leaders must fully understand their probable fixed obligations including any accellerated or added liabilities and costs likely to be triggered by the workforce action. Accordingly businesses should prepare to handle the fallout from COVID-19 impacts to their workforce and other business operations by on their existing or contemplated voluntarily imposed and legally mandated employment, compensation, benefit, safety, contractual and other related obligations obligations.
While planning for workforce or other actions, businesses and leaders also should are urged to confirm the availability of their cash flow to meet current requirements to timely fund payroll and associated taxes, health, disability and defined benefit pension, and other costs where nonpayment or untimely payment carries substantial entity and/or personal exposure to penalties or other liabilities likely to survive bankruptcy or other restructuring. In the case of health and pension benefit liabilities, for instance, nonpayment of premiums and other required funding could carry fiduciary liability for business owners, board members and other management with responsibility or discretion over these programs and their funding. Accordingly, if a business anticipates any risk of inability to fund already accrued or impending funding obligations, management should contact experienced legal counsel for immediate assistance with addressing these potential risks.
Additionally, businesses and their leaders contemplating offering special leave to workers absent or furloughed during leave need to take into account and handle properly both applicable federal, state and local mandated benefits and other rights, the legal requirements for adopting and implementing paid or other voluntarily provided leave, the benefit benefit, recall and other rights of workers terminated, furloughed or absent due COVID-related illness or other events.
COVID-19 Related Since Leave Or Other Absences From Ongoing Workforce
Regardless of whether a business plans additional workforce changes, all businesses need to be prepared to deal with absences resulting from contractions or exposures of COVID-19 by employees or their families or other COVID-19 associated absences.
Employees taking voluntary or involuntary leave likely already are entitled to certain paid or unpaid leave and associated benefit, reinstatement and other rights under a hodgepodge of voluntarily established company policies and other federal, state and even local regulations. Beyond any existing accrued rights to paid or unpaid leave due an employee under voluntary company policies and/or federal, state or local mandates, businesses need to understand and be prepared to meet their obligations to provide continued health benefit coverage and reinstatement to benefits as mandated by the Family & Medical Leave Act (“FMLA”) for FMLA covered workers, health plan continuation coverage rights for employees experiencing reductions in hours triggering losses of health plan eligibility as required by the Consolidated Omnibusiness Budget Reconciliation Act (“COBRA”). These obligations are expected to be expanded later this week if the “Families First Coronavirus Response Act,” (H.R. 6201) passed by the House of Representatives last week passes the Senate and is signed into law by President Trump as expeted later this week as part of efforts to mitigate impacts of disruptions of the COVID-19 containment disruptions. While H.R. 6201 is expected to include tax credits for employers to help mitigate the financial effects of its paid leave mandates for covered employers, employers will want to understand and take into account these requirements and the potential tax credits when deciding what leave to offer beyond the mandated paid leave and properly plan for, anticipate costs of and integrate those obligations with their other leave obligations.
Aside from the likely increase in the frequency of the occurence of these usual employment absence, termination, unemployment, compensation, and benefit liabilities and costs, businesses planning or contemplating some or all of their employees will termiinate employment due to long-term illnesses, employer layoffs or other COVID-related events need to anticipate and prepare to deal with other likely additional consequences. For instance:
Illness and other absences generally trigger added potential exposure for discrimination, retaliation, privacy and other employment claims and risks if not properly recognized and managed;
The selection and implementation of workers to be affected by furloughs, layoffs and other workforce actions should be conducted carefully to manage potential Relatively small declines in the size of a business’ workforce can trigger pricing changes or even termination rights for vendors providing coverage or services for group health or other insurance, stop-loss insurance coverage on self-insured health plans or other human resources, payroll, benefits or other related services or coverage;
Changes in workforce size and compensation can affect whether an employer sponsored health, 401(k) or other savings or retirement plan or other benefit program fulfills applicable coverage, participation and nondiscrimination requirements resulting in tax consequences for the employer and in some instances, key or highly compensated employees, obigations for the business to make additional funding contributions, in the case of employers with health plans covered by Internal Revenue Code Section 4980H, mandatory contributions for health insurance exchange coverage for uncovered employees or other consequences.
Reductions in hours or terminations of employment that reduce participation in 401(k) and other savings or retirement programs by 20 percent or more generally trigger obligations to fully vest and for retirement plans, accellerate funding of benefts of terminating workers under the “partial termination” rules applicable to those programs.
Severance, paid or unpaid leave, and other arrangements voluntarily adopted in response to the COVID-19 disruptions or covered by other voluntarily adopted programs or practices need to be appropriately documented and administered in accordance with the Employee Retirement Income Security Act (“ERISA”) or other applicable federal law as well as properly integrated with other federal, state, and local leave or other mandates to manage unanticipated costs and avoid unanticipated fiduciary and financial liability for the business, its management or both.
Financial disruptions that prevent a business from timely making required contributions to fund defined benefit or other pension plans insured by the Pension Benefit Guarantee Corporation can trigger funding notice, excise tax penalty and other obligations for the employer and its fiduciaries.
For certain employers, reductiions of all or a significant portion of a workforce companywide or at certain locations by a distressed or other business usually triggers a host of special obligations and attendant costs for businesses. Businesses anticipating these changes need to take into account the financial costs and legal obligations and expossures of proposed workforce or other actions and where applicable, make appropriate arrangements to comply or implement their workforce and other business restructurings to restructuring to minimize and meet these obligations.
Of course, For instance, layoffs and other reductions in force or closings by businesses often trigger a host of legal and financial obligations. at certain businesses or business locations often trigger obligations to provide advance notifications under the Worker Adjustment and Retraining Notification Act (WARN) or other statutes or contracts. Where these obligations are triggered, the business not only will need to arrange to provide required notitications but also needs to take into account their business’ likely financial exposure for payment of pay in lieu of notice or other costs and liability arising from the employment. WARN, business contemplating or implementing a plan closing, mass layoff or other reductions in force also should evaluate and make appropriate arrangements to address potential obligations under state plant closing laws, the ARRA Stimulus Bill Extension Rules amended and extended earlier this month and other requirements of COBRA, voluntary or contractually obligated termination pay or other severance obligations, employee benefit, unemployment, and other laws.
The COVID-19 Workforce Change Planning & Implementation Process Flow tool provides an overview of the type of process flow tthat business owners and leaders dealing with these issues may find useful to help guide their process for planning their business’ workforce management response to the unexpected business exigencies created by the ongoing COVID-19 outbreak.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability. She also has been heavily involved in advocating for the Trump Administration’s restoration of more historical principles for determining and enforcing joint employer liability over the past several years.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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Defined benefit and other plan sponsors, fiduciaries, administrators, and their legal counsel and other service providers should review a new Pension Benefit Guarantee Final Regulation on Miscellaneous Corrections, Clarifications, and Improvements scheduled for publication tomorrow (February 4, 2020) that will make various key changes to the PBGC’s current regulations on n Reportable Events and Certain Other Notification Requirements, Annual Financial and Actuarial Information Reporting, Termination of Single-Employer Plans, and Premium Rates.
Generally scheduled to take effect March 5, 2020, the key changes implemented by the Final Regulations will include:
Reportable Events – eliminating possible duplicative reporting of active participant reductions, clarifying when a liquidation occurs, and providing additional examples for certain events;
Financial and Actuarial Information Reporting (“4010 filings”) – eliminating a requirement to submit individual financial information for each controlled group member;
Standard Terminations – providing more time to file a post-distribution certification; and
Premium Rates – clarifying the date on which participants are counted for premium calculations and emphasizing that a plan doesn’t qualify for the variable rate premium exemption for the year in which it completes a standard termination if it engages in a non-de minimis spinoff in the same year.
Highlights of Regulatory Changes
The rule changes generally take effect on March 5, 2020 (i.e., 30 days after publication, but certain provisions have different applicability dates (e.g., the changes first impact 4010 filings due on or after April 15, 2020). However, some requirements have later effective dates. For instance:
The changes in 29 CFR 4006.5(f)(3), which deal with premium proration for short plan years where the plan’s assets are distributed in a termination, are applicable to plan years beginning in or after 2020;
The changes in 29 CFR 4010.7(a)(2), § 4010.9(b)(2), and § 4010.11(a)(1)(i), which deal with identifying legal relationships of controlled group members, consolidated financial statements, and calculating the funding target for purposes of the 4010 funding shortfall waiver, respectively) are applicable to 4010 filings due or amended on or after April 15, 2020;
The changes in § 4010.8(d)(2) for valuing benefit liabilities in cash balance plan account conversions are applicable to plan years beginning on or after January 1, 2020;
The changes in 29 CFR 4041.29 are applicable to plan terminations for which, as March 5, 2020, the statutory deadline for certifying that plan assets have been distributed as required, has not passed; and
The changes in 29 CFR 4043.23, § 4043.27(d)(3), § 4043.29, § 4043.30, 4043.31(c)(6), § 4043.32(c)(4), and § 4043.35(b)(3) (which deal with active participant reductions, changes in contributing sponsor or controlled group, liquidation, insolvency or similar settlement, and the public company waiver) are applicable to post-event reports for those reportable events occurring on or after March 5, 2020.
The PBGC says revised forms, instructions, and e-filing portal (reflecting the changes) are under review by OMB, which PBGC expects to be available for use by the effective date. (02/03/2020)
Required Action
With many of the changes in the Final Regulation slated to take effect on March 5, 2020, employer and other sponsors of defined benefit and other pension plans covered by the PBGC’s rules and their fiduciaries, plan administrators, actuaries and other service providers will want to evaluate the potential implication of the regulatory changes on their programs, its documentation, design, administration, reporting and other requirements and make any adjustments in a timely fashion. Employer and other plan sponsors, fiduciaries, administrators, advisors and service providers also will want to consider the advisability of modifying budget estimates, data collection and recordkeeping practices or other related activities and plans to account for the modified rules and responsibilities.
More Information
We hope this update is helpful. For more information about the Coix Order or other health or other employee benefits, human resources, or health care developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, the current Co-Chair of its Welfare Benefit Committee and former Chair of its Welfare Benefit, Plan Terminations, Fiduciary Responsibility and Defined Compensation Plan Committees; former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for combining extensive legal and industry knowledge and experience with pragmatic creativity to help clients find and implement workable client-centric solutions, Ms. Stamer advises, represents and defends employers and other management clients and organizations; employer, union, multi-employer, association and other employee benefit plan plans, their sponsors, insurers and fiduciaries, plan administrators, administrative services, technology and other service providers, foreign and domestic governments, and others about employment and other services; health and welfare, pension, profit sharing other employee benefit and insurance program and policy management, administration, design and innovation, compliance, funding, documentation, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts. Beyond her RPTE leadership involvements, these include her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Chair of the ABA Intellectual Property Section Law Practice Management Committee, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President and Executive Director of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
February 28, 2020 is the new deadline for employers to comment on a National Labor Relations Board (“NLRB”) proposal to exempt undergraduate and graduate students performing services for financial compensation in connection with their studies from the NLRB’s definition of “employee” for purposes of the National Labor Relations Act (NLRA) and other collective bargaining and union organizing and representation laws under the NLRB’s jurisdiction.
The original notice of proposed rulemaking published here on September 23, 2019 would exempt ”every student performing teaching, research and any services for compensation, at a private college or university in connection with his or her studies from treatment as an “employee” for purposes of Section 2(3) of the NLRA. The extended deadline unofficially announced by the NLRB on January 28, 2020 is the NLRB’s second extension of the comment deadline. The official announcement from the NLRB of its extension of the comment submission window for responses to initial comments to Friday, February 28, 2020 is expected to be published in the Federal Register the week of February 3, 2020. The NLRB previously extended the comment deadline on October 17, 2019. That first extended comment deadline expired in December, 2019.
The NLRB says this proposed rulemaking t exempt students from employees covered by the NLRA “is intended to bring stability to an area of federal labor law in which the NLRB, through adjudication, has reversed its approach three times since 2000. The NLRB has stated this proposed standard on the exclusion of students from the NLRA definition of employee is consistent with the purposes and policies of the NLRA, which contemplates jurisdiction over economic relationships, not those that are primarily educational in nature.
The proposed regulation to exclude students from NLRA coverage is one of several regulatory projects that the now Trump-appointee dominated NLRB has undertaken in the past year in its effort to undue a host of pro-labor changes to NLRB policy changes initiated and enforced during the Obama Administration when President Obama appointees dominated the NLRB and its policies. Another example of these regulatory efforts include the NLRB’s current efforts to reverse a change in interpretation and enforcement of the “joint employer” rules of the NLRA and Fair Labor Standards Act that substantially expanded the imputation of liability for collective bargaining and other labor-management and wage and hour law violations by treating companies as joint employers that received the benefit of work performed even when the recipient company did not control the details of the work or the nominal employer. Aside from submitting any relevant feedback to the student rule, business leaders and organizations generally will want to carefully monitor developments to update their policies and practices as well as to provide appropriate input on these and other developments.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The $65,000 payment and corrective action plan commitments West Georgia Ambulance, Inc. (“West Georgia”) is making to settle Department of Health & Human Services Office for Civil Rights (“OCR”) charges it recurrently violated the Health Insurance Portability and Accountability Act (“HIPAA”) Security Rule and other 2019 HIPAA enforcement sends a clear warning to other HIPAA-covered health plans, health care providers, health care clearighouses and their business associates (“covered entities”) to maintain and be prepared to defend their own HIPAA compliance.
The Western Georgia Resolution Agreement and Corrective Action Plan(“Resolution Agreement”) OCR announced on December 30, 2019 resolves charges resulting from an OCR investigation initiated in response to a HIPAA breach report the Georgia based ambulance company filed in 2013 in which the company, which provides emergency and non-emergency ambulance services in Carroll County, Georgia, disclosed the loss of an unencrypted laptop containing the protected health information (PHI) of 500 individuals. The breach occurred when an unencrypted laptop fell off the back bumper of an ambulance. The laptop was not recovered. West Georgia reported that exactly 500 individuals were affected by the breach.
In the course of its investigation of the breach report, OCR’s investigation uncovered long-standing noncompliance with the HIPAA Rules, including failures to conduct a risk analysis, provide a security awareness and training program, and implement HIPAA Security Rule policies and procedures. Specifically, the Resolution Agreement states that West Georgia:
Did not conduct an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. See 45 C.F.R. § 164.308(a)(1)(ii)(A);
Failed to have a HIPAA security training program, and failed to provide security training to its employees. See 45 C.F.R. § 164.308(a)(5);
Failed to implement Security Rule policies or procedures. See 45 C.F.R. § 164.316; and
Despite OCR’s investigation and technical assistance, “did not take meaningful steps to address their systemic failures.”
To resolve its exposure to the substantially higher civil monetary penalties that OCR could impose for violations of this nature, West Georgia agreed to pay a $65,000 resolution payment to OCR and implement and comply with a corrective action plan that in addition to requiring West Georgia to correct the compliance deficiencies, also subjects West Georgia to two years of OCR monitoring and oversight.
The Resolution Agreement and corrective action plan carry a number of important messages for other health care providers and other Covered Entities. First, the OCR enforcement action against West Georgia coming at the end of yet another heavy HIPAA enforcement year by OCR reminds Covered Entities that OCR is serious about HIPAA enforcement on the heels of its 2018 HIPAA record setting collection of $28.7 million in civil monetary penalties and resolution payments including the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc. SeeOCR Concludes 2018 with All-Time Record Year for HIPAA Enforcement. While not topping this record, OCR during 2019 now has collected civil monetary penalties and resolution payments totaling more than $15 million from HIPAA Covered Entities and their business associates including:
Second, the Resolution Agreement and various other smaller settlements during the year show HIPAA compliance and enforcement is a concern for smaller provideres and other covered entities, not juswt the huge ones. While the $65,000 settlement payment required by the Resolution Agreement is substantially smaller than the amounts of the civil monetary penalties and many of resolution payments OCR collected in its other 2019 enforcement actions, the West Georgia and other 2019 enforcement actions demonstrate the teeth behind the warning in the OCR Press Release announcing the West Georgia Resolution Agreement from OCR Director Roger Severino that“All providers, large and small, need to take their HIPAA obligations seriously.” With OCR promises to keep up its vigorous investigation and enforcement of the HIPAA requirements, every Covered Entity and business associate should take the necessary steps to verify and maintain their HIPAA compliance and to be prepared to defend their compliance under the Privacy, Security, Breach Notification and HIPAA access and other individual rights mandates of HIPAA.
Third, OCR’s statement in the Resolution Agreement about the failure by West Georgia to meaningfully act to correct compliance deficiencies and cooperate in other corrective action during the period following the breach report highlights the importance for covered entities involved in a breach or other dealings with OCR on a potential compliance concern to behave appropriately to express and exhibit the necessary concern OCR expects regarding the compliance issue to position themselves to request and receive the clemency OCR is empowered under HIPAA to extend when deciding the sanctions for any noncompliance.
Of course meeting the requirements of HIPAA is not the only concern that covered entities should consider as they review and tightened their HIPAA and other privacy and data security procedures. Health care providers and other covered entities also should keep in mind their other obligations to protect patient and other confidential information under other federal laws, the requirements of which also are ever-evolving. For instance, on January 1, 2020 Texas providers like other Texas businesses will become subject to a shortened deadline for providing notice of data breaches under a new law enacted by the Texas Legislature in its last session. Arrangements should be designed to fulfill all of these requirements as well as any ethical or contractual.
Covered entities also should keep in mind that violations of HIPAA can have implications well beyond HIPAA.ramifications beyond HIPAA itself. For instance, heath care providers can face disqualification from federal program participation, licensing and ethics discipline and other professional consequences. Health plans and their fiduciaries also may face Department of Labor and other fiduciary claims, while insurers can face licensing and other regulatory consequences. The Labor Department followed up on previous warnings that health plan fiduciaries duties include a fiduciary duty to protect health plan data by adding HIPAA compliance to certain health plan audits. Insurers, third of art administrators and others also can face duties and liabilities under state insurance and data privacy laws from regulator or private litigant actions.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at(214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with the Department of Health & Human Services Office of Civil Rights, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer has extensive legal, operational, and public policy experience advising and representing health care, health care and other entities about HIPAA and other privacy, data security, confidentiality and other matters.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, public and private primary, secondary, and other educational institutions, and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has recurrently worked extensively with public school districts and public and private primary and secondary schools, colleges and universities, academic medical, and other educational institutions, insured and self-insured health plans; domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, employers; and federal and state legislative, regulatory, investigatory and enforcement bodies and agencies on health care, education, and other data privacy, security, use, protection and disclosure; disability and other educational rights; workforce, and a host of other risk management and compliance concerns.
Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at(214) 452-8297or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance.The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
A civil health care fraud lawsuit filed by the Department of Justice (“DOJ”) in the U.S. District Court for the Southern District of New York today (December 17, 2019) against the nation’s largest long term care pharmacy provider, Omnicare, and its parent, CVS Healthcare Corporation may signal the advisability for insurers, fiduciaries, administrators and sponsors of insured and self-insured health and other benefit plans providing pharmacy benefits to tighten claims and audit past claims payments for prescription drug claims submitted by Omnicare and other CVS pharmacy providers as well as other pharmacy claims to the pharmacy possessed a valid, current prescription to dispense the drug.
Omnicare Complaint Highlights Potential Prescription Drug Fraud By Billing For Filling Expired Prescriptions
In its U.S. ex rel Bassan complaint in intervention (Omnicare and CVS) complaint DOJ joined by 29 states and the District of Colombia filed suit against Omnicare, and its parent company, CVS Healthcare Corporation for damages and civil penalties under the False Claims Act for fraudulently billing federal healthcare programs for hundreds of thousands of non-controlled prescription drugs that DOJ claims Omnicare illegally dispensed to elderly and disabled individuals in assisted living facilities, group homes, independent living communities, and other non-skilled residential long-term care facilities (“LTC facilities”) without a valid, current prescription.. The States of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, Wisconsin, and the District Of Columbia are joining the DOJ in the complaint as co-plaintiffs.
Omnicare is the country’s largest provider of pharmacy services to LTC facilities. It currently operates approximately 160 pharmacies in 47 states across the United States, which dispense tens of millions of prescription drugs to LTC facilities that serve elderly and disabled individuals. CVS acquired Omnicare in May 2015, and shortly thereafter assumed an active role in overseeing Omnicare’s operations, including pharmacy dispensing practices and systems.
The DOJ complaint in the Federal District Court in Manhattan, New York charges that Omnicare illegally dispensed and billed the federal government and patients for antipsychotics, anticonvulsants, and antidepressants Omnicare dispensed to elderly and disabled residents in LTC facilities without proper prescriptions. According to the DOJ complaint from 2010 until 2018, Omnicare and CVS allowed Omnicare pharmacies to dispense non-controlled prescription drugs to tens of thousands of elderly and disabled individuals living in LTC facilities based on prescriptions that had expired, were out of refills, or were otherwise invalid. Omnicare repeatedly disregarded prescription refill limitations and expiration dates that required doctor visits to reevaluate whether the drug should be renewed. Instead of requesting new prescriptions when old ones expired, Omnicare allowed prescriptions to “roll over.” At Omnicare, “rolling over” a prescription meant that when a prescription expired, Omnicare’s computer systems would assign the old prescription a new number and the pharmacy would continue to dispense the drug indefinitely without the need for a prescription renewal. Depending on the computer system used, DOJ claims Omnicare also sometimes assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling. DOJ claims that Omnicare pharmacies “rolled over” prescriptions for elderly and disabled individuals living in more than 3,000 residential long-term care facilities, including assisted living facilities operated by the largest long-term care providers in the country, such as Brookdale Senior Living, Atria Senior Living, Sunrise Senior Living Services, and Five Star Senior Living. DOJ charges that Omnicare used these practices to refill prescriptions for patients after the required prescription for refill expired for months, and sometimes years, after the prescriptions expired. The complaint alleged that Omnicare internally referred to these renumbered expired prescriptions as “rollover” prescriptions.
Many of the prescription drugs dispensed by Omnicare without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease. They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients.
DOJ says these Omnicare practices of illegally dispensing drugs to elderly and disabled individuals living in LTC facilities exposed these vulnerable individuals to a significant risk of harm. In contrast to traditional skilled nursing homes, where residents have access to 24-hour medical care supervised by doctors, assisted living and other non-skilled residential facilities offer more limited medical care, or none at all. In particular, these LTC facilities generally do not have doctors on staff to oversee and monitor residents’ drug therapy. By repeatedly dispensing potent drugs without current and valid prescriptions, Omnicare jeopardized the health and safety of tens of thousands of individuals who continued to take the same drugs for months, and sometimes years, without consulting their doctors to determine whether the medications were still clinically appropriate.
A large percentage of the long-term care residents served by Omnicare are beneficiaries of federal healthcare programs. The complaint charges that along with illegally filling the expired prescriptions, Omnicare knowingly transmitted false information to these federal healthcare programs that made it appear that drug dispensations were supported by current, valid prescriptions from physicians when in fact they were not. By dispensing drugs without valid prescriptions, Omnicare presented, or caused to be presented, hundreds of thousands of false claims to Medicare, Medicaid, and TRICARE that were ineligible for payment in violation of the False Claims Act. In fact, the complaint charges that Omnicare managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that Omnicare could submit claims and collect payments on these rollover claims.
Moreover, DOJ says that it possesses evidence that senior management at Omnicare and CVS knew of the practices. The DOJ complaint charges among other things that the Omnicare’s Compliance Department succinctly acknowledged the problem in an internal April 2015 email in which one Regional Compliance Officer stated: “An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention.” A compliance officer then forwarded the email to the head of Omnicare’s Third Party Audit group, who responded that she had a “potential solution (programmed last year) but no one is rolling it out now.”
In today’s announcement of the lawsuit, Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors. A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies. Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money. This Office will continue to hold accountable those who put at risk people’s health and safety just to turn a profit.”
Meanwhile, HHS-OIG Special Agent in Charge Scott J. Lampert said: “Failing to consult doctors as to whether prescriptions should be refilled places patients’ health and medical care at serious risk. These automatic rollover refills could have significant consequences for vulnerable people in long term-care facilities. We will continue working with law enforcement partners to protect people depending on these taxpayer-funded government health programs.”
Charges Suggest Potential Advisability For Plan Audit of Prescription Drug Charges To Confirm Supported By Valid Prescription For Dispensed Drugs
The charges made in the complaint filed against Omnicare highlight an area of claims payment eligibility not regularly verified by many pharmacy benefit and other health claims administrators when administering pharmacy benefit claims- the existence of a current valid prescription to support the dispensation of the billed prescription medication. Except for pain management and certain other medications flagged by regulators or benefit systems as subject to heightened abuse risks, many plan administrators regularly take for granted existence of a current, valid script for many common, frequently issued and renewed, low cost prescriptions issued within frequency and other guidelines based upon the assumption that legal and ethical obligations of pharmacists and pharmacies under licensing, Drug Enforcement Agency and other rules generally provides adequate deterrence against abuses like those the DOJ accuses Omnicare of engaging in its complaint. However, growing corporate or other nonprofessional ownership or management of pharmacies and their management coupled with very limited, virtually all complaint driven oversight of federal and state regulatory and ethical agencies is diminishing the frequency and effectiveness of such oversight. As evidenced by the Omnicare complaint, scrupulous pharmacies may leverage opportunities allowed by this limited oversight to dispense and bill for commonly renewed prescription medication without proper orders in a manner that potentially places patients at risk at the expense of plans and their participants, beneficiaries, sponsors and insurers. Plans, insurers, fiduciaries, plan sponsors and administrators concerned about these risks may want to use the Omnicare lawsuit announcement as an opportunity to educate plan members and their caregivers about the importance of monitoring prescriptions, their refills and claims for abuse; audit and encourage plan members and their caregivers of members with claims paid with respect to Omnicare and other pharmacy claims’ and take other steps to assess the adequacy and tighten as appropriate their existing pharmacy benefit review procedures for verification of the existence of a current, valid prescription to mitigate these exposures. These exposures are further heightened by the widespread practice of outsourcing of pharmacy claims to prescription benefit management or other speciality pharmacy claims providers in many health plan designs including vendoirsand service providers owned or managed by parents or related companies of the pharmacy filling and billing for the scripts.
Health plan fiduciaries, administrators and sponsors that discover potential deficiencies in the validity of a prescription or other elements of a received or previously paid prescription benefit or other claim are cautioned to review and follow the applicable ERISA and for insured plans, state insurance, Patient Protection and Affordable Care Act (“ACA”) and contractual claims and appeals timelines and processes. Failure to follow these requirements can undermine the enforceability of plan remedies as well as expose the plan, its insurer or fiduciary to administrative penalties and other liabilities. Additionally, violations of the ACA mandated procedures also in the case of employment based plans also could expose the sponsoring employer or ubnion to liability for self reporting, self-assessment and payment of penalties under Internal Revenue Code Section 6039D. Where relevant regulatory or contractual time periods for denial have already expired either because the claim already was paid or the analysis otherwise was not timely completed in time to meet the deadline, plans may need to rely upon filing health care fraud or other avenues of relief in lieu of attempting to retroactively deny and recoup the questioned amounts in order to avoid violating the ACA and other rules. Plan fiduciaries and administrators also may need to consider the applicability of offering review by an independent medical review organization to fulfill ACA or other similar mandatesfor medical judgement based determinations.
More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Ten former National Football League (NFL) players face prosecution for their alleged roles in a nationwide health care fraud scam that Justice Department prosecutors allegedly defrauded the Gene Upshaw NFL Player Health Reimbursement Account Plan (the “Plan)” by submitting more than $3.9 million in false and fraudulent claims between June 2017 and December 2018.
According to the charges brought in two separated indictments filed December 12, 2019 in the Eastern District of Kentucky, the charged players participated in a nationwide conspiracy that resulted in the submission of more than $3.9 million in false claims to the Plan, for which the Plan paid out over $3.4 million between June 2017 and December 2018. See Buckhalter and Rogers Indictment; McCune et al Indictment. The Plan established pursuant to the 2006 collective bargaining agreement between the NFL and payers provides a health care reimbursement account to reimburse up to a maximum of $350,000 per player of out-of-pocket medical care expenses a former player, his wife or dependents incurs not covered by insurance.
The indictments charge that the scheme to defraud involved the submission of false and fraudulent claims to the Plan for expensive medical equipment – typically between $40,000 and $50,000 for each claim never purchased or received. The expensive medical equipment described on the false and fraudulent claims included hyperbaric oxygen chambers, cryotherapy machines, ultrasound machines designed for use by a doctor’s office to conduct women’s health examinations and electromagnetic therapy devices designed for use on horses. The indictments reflect that no health care providers participated in the scheme. Rather the players submitted these allegedly false charges without any health care provider participation.
Charged in the two separated indictments include the following former NFL players including five former Washington Redskins. Those charged and the charges brought include the following:
Charges of one count of conspiracy to commit wire fraud and health care fraud, nine counts of wire fraud and nine counts of health care fraud brought against former NFL linebacker Robert McCune, McCune’s career included stints with the Washington Redskins, Miami Dolphins, Baltimore Ravens and Cleveland Browns between 2005 and 2009;
Charges of one count of conspiracy to commit wire fraud and health care fraud, two counts of wire fraud and two counts of health care fraud made against:
Former Washington Redskins cornerback John Eubanks who was draft but only played as a practice squad player with the Washington Redskins in 2006-2017 season before going on to play in the Canadian Football League between 2009 and 20011;
Tamarick Vanover, a former NFL wide receiver the Kanas City Chiefs, San Diego Chargers and Las Vegas Posse who was the Atlantic Coast Conference Rookie of the Year while playing for Florida State in 1992; and
Carlos Rogers, a former NFL cornerback drafted by the Washington Redskins, who also played for the San Francisco 49ers and Oakland Raiders;
Charges of one count of conspiracy to commit wire fraud and health care fraud, one count of wire fraud and one count of health care fraud against:
Clinton Portis, a former NFL running back best known for his years as a starting running back for the Washington Redskins, for seven seasons, who also played with the Denver Broncos during his 10 year NFL career;
Ceandris “C.C.” Brown, a former safety drafted by the Houston Texans in 2005 who after three seasons with Houston was signed by the New York Giants, Detroit Lions and Jacksonville Jaguars;;
James Butler, a former NFL safety for the New York Giants from 2005-2008 Seasons and with the St. Louis Rams from 2009-2012; and
Fredrick Bennett, a grid iron defensive back drafted by the Houston Texans in 2007 before being traded to the San Diego Chargers in 2010, the Cincinnati Bengals in 2010, and the Arizona Cardinals in 2011 before going on to play in the Canadian Football League from 2012 to 2016. Bennett is currently a NFL free agent; and
Charges of one count of conspiracy to commit wire fraud and health care fraud against:
Correll Buckhalter, a former NFL running back who played with the Philadelphia Eagles from 2001 to 2008 and the Denver Broncos from 2009 to 2010;
Etric Pruitt, a former NFL special teams and safety who after having little playing time for most of his NFL career played a major role in Super Bowl XII while signed to the Seattle Seahawks. In addition to his Seahawks stink in 2005, Pruitt also was signed with the Atlanta Falcons and Detroit Lions during his NFL career.
In addition to the charges brought Thursday, the Justice Department also has filed notice that it intends to file criminal charges alleging conspiracy to commit health care fraud in the Eastern District of Kentucky against the following individuals:
Joseph “Joe” Horn, a former NFL wide receiver who played with the Kansas City Chiefs, New Orleans Saints, and Atlanta Falcons between 1996 and 2007. Horn made the Pro Bowl team four times and is a member of the New Orleans Saints Hall of Fame. In 2001, Horn made headlines when he and 11 other former NFL plays sued the NFL alleging it failed to properly diagnose and treat head injuries that led to changes in the NFL policies regarding diagnosis and treatment of players for potential brain injuries and the establishment of a traumatic brain injury fund; ;and
Donald “Reche” Caldwell a former NFL wide receiver who during his six seasons in the NFL played with the Sand Diego Chargers, New England Patriots, Washington Redskins and St. Louis Rams.
According to allegations in the indictments, McCune, Eubanks, Vanover, Buckhalter, Rogers and others recruited other players into the scheme by offering to submit or cause the submission of these false and fraudulent claims in exchange for kickbacks and bribes that ranged from a few thousand dollars to $10,000 or more per claim submitted. As part of the scheme, the defendants allegedly fabricated supporting documentation for the claims, including invoices, prescriptions and letters of medical necessity. After the claims were submitted, McCune and Buckhalter allegedly called the telephone number provided by the Plan and impersonated certain other players in order to check on the status of the false and fraudulent claims.
The indictments reflect the Justice Department’s continuing commitment to investigate and prosecute health care fraud, including fraudulent dealings by plan members and others.of private employeer or union sponsored health plans. If convicted, the defendants could face significant prison sentences and probation and fines.
The Justice Department press release concerning the indictments quotes U.S. Attorney for the Eastern District of Kentucky Robert M. Duncan Jr.,the Justice Department has “prioritized the investigation and prosecution of health care fraud in our office.” Meanwhile, FBI Special Agent in Charge of the Miami Field Office George L. Piro is quoted as stating that “This investigation serves as an illustration of the rampant and deliberate scams against health care plans occurring daily throughout the country…” in this case, these fraudsters pocketed money from the Gene Upshaw National Football League Health Reimbursement Account Plan that was intended for former NFL players who are ill or infirm. Over 20 FBI field offices participated in this investigation which demonstrates the level of commitment we have to rooting out this type of fraud.”
In addition to the additional costs that employers can incur to fund health plan liabilities, taking prudent steps to detect, prevent and redress fraudulent health plan claims is considered part of the fiduciary duies of heatlh plan fiduciaries under the Employee Retirement Income Security Act. Fiduciaries found to have failed to take such prudent actions risk personal liability fo rplan losses resulting from fraud committed against their health plans.
The NFL player indictments show taht prosecutions Alone or coupled with the hundreds of other fraud investigations and prosecuations that the Department of Justice and other federal and state agencies pursue each year, send a strong message that the Justice Department and other fedederal agencies stand ready to investigate nad prosecute health care fraud against private employer or union sponsored health plans, as well as fraud against Medicare, Mdicaid and other government programs.
More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press Health Care Risk Management & Operations Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, as a primary focus of this work, Ms. Stamer has worked extensively with employer and union sponsored health and other employee benefit plans, insurers, third party administrators, plan fiduciaries and other health and other insured and self insured welfare plan, severance plans, defined contribution and other savings plans, defined benefit and other pension plans, incentive pay and deferred compensation programs and other employee benefit industry clients, employers and other plan sponsors, domestic and international health care providers, and as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, the ABA RPTE Employee Benefits & Other Compensation Group and its Welfare Benefits, Fiduciary Responsibiity and other Commitees, Ms. Stamer is noted for her decades-long leading edge work, scholarship and thought leadership on health,care, managed care and insurance, employee benefits, human resources and other workforce and related compliance and internal controls, policy and regulatory affairs, design and operations, and defense including 30 plus years experience working with clients on ERISA, insurance, STARK, antikickback, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Department of Justice, Department of Labor, Department of Health and Human Services, Department of Insurane, Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of a multitude of highly regarded publications and programs on health and managed care fraud,and other health care, health plan and other health benefit, health care, employee benefits and other related matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Total U.S. national healthcare spending in 2018 grew 4.6 percent according to a study conducted by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS). CMS reports this growth rate was slower than the 5.4 percent overall economic growth as measured by Gross Domestic Product (GDP). Consequently, the share of the economy devoted to health spending decreasedfrom 17.9percent in 2017 to 17.7 percent in 2018.
Growth in overall healthcare spending has averaged 4.5 percent for 2016-2018, slower than the 5.5 percent average growth for 2014-2015, that was affected by expanded Medicaid and private insurance coverage and increased spending for prescription drugs, particularly for drugs used to treat hepatitis C.
The growth in total national healthcare expenditures was approximately 0.4 percentage point higher than the rate in 2017 and reached $3.6 trillion in 2018, or $11,172 per person.
According to the report, private health insurance, Medicare, and Medicaid experienced faster growth in 2018. The faster growth for these payers was influenced by the reinstatement of the health insurance tax which was applied to private health insurance, Medicare Advantage, and Medicaid Managed care plans. The health insurance tax was a fee imposed on all health insurance providers beginning in 2014 as a part of the funding for the Affordable Care Act (ACA) and was subsequently amended to institute a one-year moratorium on the fee for 2017.
Private health insurance spending(34 percent of total health care spending) increased 5.8 percent to $1.2 trillion in 2018, which was faster than the 4.9 percent growth in 2017. The acceleration was driven in part by an increase in the net cost of private health insurance, which was a result of the reinstatement of the health insurance tax in 2018 following a one-year moratorium in 2017.
Medicare spending(21 percent of total health care spending) grew 6.4 percent to $750.2 billion in 2018, which was faster than the 4.2 percent growth in 2017. The faster growth in Medicare spending in 2018 was influenced by faster growth in the net cost of insurance of Medicare private health plans (mostly Medicare Advantage plans) due to the reinstatement of the health insurance tax in 2018, faster growth in Medicare spending for medical goods and services, and an increase in government administration spending after a reduction in 2017.
Medicaid spending(16 percent of total health care spending) increased 3.0 percent to $597.4 billion in 2018. This was faster than the rate of growth in 2017 of 2.6 percent. The faster rate of growth in 2018 was driven by faster growth in the net cost of insurance for Medicaid managed care plans, also due in part to the reinstatement of the health insurance tax.
Out-of-pocket spending(10 percent of total health care spending) includes direct consumer payments such as copayments, deductibles, and spending not covered by insurance. Out-of-pocket spending grew 2.8 percent to $375.6 billion in 2018, which was faster than the 2.2 percent growth in 2017. Faster out-of-pocket spending growth for retail prescription drugs, durable medical equipment, and dental services more than offset a slowdown in out-of-pocket spending for hospital care.
Health care spending growth was mixed in 2018 for the three largest goods and service categories – hospital care, physician and clinical services, and retail prescription drugs.
Hospital spending(33 percent of total healthcare spending) increased at about the same rate in 2018 as in 2017, growing 4.5 percent and 4.7 percent, respectively, to reach $1.2 trillion in 2018. The steady growth in 2018 was driven by an acceleration in hospital price growth that was offset by slower growth in the use and intensity of hospital services.
Physician and clinical services spending(20 percent of total healthcare spending) increased 4.1 percent to reach $725.6 billion in 2018. This was slower than the rate of growth in 2017 of 4.7 percent. The deceleration in 2018 was driven by slower growth in the use and intensity of physician and clinical services, as physician and clinical price growth accelerated in 2018.
Retail prescription drug spending(9 percent of total healthcare spending) grew 2.5 percent in 2018 to $335.0 billion following slower growth of 1.4 percent in 2017. This faster rate of growth was driven by non-price factors, such as the use and mix of drugs consumed, which more than offset a decline of 1.0 percent in prices for retail prescription drugs.
Additional highlights from the report include:
Sponsors of Healthcare.In 2018, the federal government’s spending on health care increased 5.6 percent, accelerating from growth of 2.8 percent in 2017, and was driven by faster growth in the federally-funded portions of Medicare and Medicaid expenditures. Private businesses’ health care spending increased 6.2 percent in 2018 due primarily to faster growth in employer-sponsored private health insurance premiums. The federal government and households accounted for the largest shares of spending (28 percent each), followed by private businesses (20 percent), state and local governments (17 percent), and other private revenues (7 percent).
The National Health Expenditure estimates have been revised to reflect the most recent and up-to-date source data that is available (and may not have been available for last year’s vintage of the National Health Expenditure Accounts).
The 2018 National Health Expenditures data and supporting information will appear here.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamervia e-mailor via telephone at(214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our LinkedIn Solutions Law Groups and registering for updates on ourSolutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
As a primary focus of this work, Ms. Stamer has worked extensively with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, insurers, self-insured health plans and other payers, health industry advocacy and other service providers and groups and other health industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is noted for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at(214) 452-8297or via e-mailhere.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources availablehere.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profilehere
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility for the suitability, completeness, accuracy or other content or to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Slides from the presentations made at Office of the National Coordinator for Health Information Technology (ONC) September 6, 2019 symposium on Patient Matching for Prescription Drug Monitoring Programs (PDMPs) are now available on line. This one-day symposium brought together PDMP administrators, standards development groups, health IT developers, representatives from pharmacies, and a number of other stakeholders to discuss patient matching challenges and opportunities to support the interoperability of prescription data.Access that data here.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our LinkedIn Solutions Law Groups and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
As a primary focus of this work, Ms. Stamer has worked extensively with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, insurers, self-insured health plans and other payers, health industry advocacy and other service providers and groups and other health industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is noted for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
IAbout Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility for the suitability, completeness, accuracy or other content or to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Small Business Administration (“SBA”) Advocacy Office will is host an Employee Benefits Roundtable on Thursday, Nov. 21 from 10:00 AM until 12:00 noon at the SBA Headquarters in Washington, D.C. with the following agenda:
Welcome and Introductions (10:00 am – 10:15 am)
Charles G. Jeane, Assistant Chief Counsel, SBA Office of Advocacy
Discussion of Small Business Use of Cafeteria Plans (10:15 am – 10:45 am)
Gary Kushner, President and CEO of Kushner & Company
Discussion of MEPs and Open MEPs (10:45 am – 11:15 am)
Sandra Turner, President of Retirement Plan Specialists, Inc.
Discussion of Adding Annuities as An Option for Plan Participants (11:15 am – 11:45 am)
Chantel Sheaks, Executive Director, Retirement Policy, U.S. Chamber of Commerce
Open Discussion/Other Small Business Issues (11:45 am – 12:00 pm).
The purpose of these roundtable meetings is to exchange opinions, facts, and information and to obtain the attendees’ individual views and opinions regarding small business concerns. The meetings are not intended to communicate or achieve any consensus positions of the attendees.
Roundtable meetings are open to all interested persons, except the press. Press are excluded in order to facilitate an open and frank discussion about small business-related issues.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters.
Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies.
She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life.
In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations.
Ms. Stamer also is a highly popular public speaker, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com.
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Lanier Technical College, a unit of the Technical College System of Georgia, will pay $53,000 in back pay and compensatory damages and revise its policies and procedures to settle a Justice Department lawsuit alleging the College violated the Americans with Disabilities Act (ADA) by terminating along-time College employee based on her multiple sclerosis filed in the Northern District Of Georgia on November 4, 2019. In addition to this disability discrimination allegation, the Justice Department complaint also alleges the removed the employee from the teaching schedule for an entire school semester, thus reducing her hours and pay to zero, due to her multiple sclerosis after the employee took three days of sick leave one summer. The lawsuit and its settlement reminds academic health care and other public and private employers about the need to use appropriate care to avoid inappropriate discrimination against individuals with disabilities in employment and other operations.
The College had employed the terminated employee as a part-time emergency medical technician (EMT) lab assistant for over three years before the events prompting the lawsuit took place. The essential functions of her job involved assisting instructors in the classroom and in the lab, and perform “check offs” to authorize and certify that the students mastered particular technical competencies (e.g., properly taking blood pressure, starting a patient’s I.V., assessing a patient’s vital signs). In addition to her employment with the College, the former employee also worked as a paramedic for an unrelated employer. She continued to work as a full-time paramedic for nearly three years after the College terminated her employment as a part-time lab assistant.
Less than a year into her employment at the College, the former employee was diagnosed with multiple sclerosis (MS) in 2010. Shortly after her diagnosis the former employee notified among others, notified the Director of the Lanier Paramedicine Technology (PMT) Department, Sam Stone, of her condition and Mr. Stone subsequently discussed her MS and treatment with her over the course of her employment with the College. According to the Justice Department complaint, the former employee did not require any reasonable accommodations for her disability, remained qualified to perform the essential functions of the part-time lab assistant job, and did so successfully until College discharged her or otherwise altered her compensation, terms, conditions, or privileges of employment.
In 2012, the former employee assisted with classes and labs taught by Instructor Andy Booth. Instructor Booth managed the work schedule for all the part-time EMT lab assistants who assisted with his classes, including that of the former employee. This included the ability to remove lab assistants from any shifts they requested. Director Stone then completed a final review of the semester and approved the schedule and any changes to it.
During the summer of 2012, the former employee had to miss her assigned workdays on two or three occasions due to her MS and its treatment. She also was on disability leave from her paramedic job for a period during that summer, returning to work full-time in early August. Following these absences, Instructor Booth on August 30, 2012 sent an email to lab assistants, including the former employee requesting that lab assistants sign up for open shifts on the work schedule, as he was “still short on help.” The schedule with available shifts was posted for September through December 2012. The former employee signed up for seven or eight four-hour shifts over the course of the fall semester that same day and emailed Instructor Booth the evening of August 30 to inform him of this. In her email, she indicated that she was no longer on disability leave from her other job.
Two weeks later, on September 12, 2012, the College removed the former employee from the work schedule for the entire fall semester schedule on the written instructions of Instructor Booth with the approval of Director Stone. Instructor Booth’s September 12 email instructions to his assistant provided a link to the online work schedule for the lab assistants and stated: “Any day you see [the former employee], just take her off.” Director Stone was copied on this email. That same day, Director Stone replied to Instructor Booth’s email, stating that he had reviewed all of the dates up to December and approved the schedule. The College knew that, by removing the former employee from the schedule, it was terminating her employment with Lanier.
When the former employee realized that someone removed her from the schedule for the entire semester, she contacted Instructor Booth. He told the former employee, by text message, that it was Director Stone’s decision and that Director Stone wanted to give the former employee “some time to heal.” Instructor Booth also stated that Director Stone seemed upset about the former employee missing a few days in the summer due to her MS. Instructor Booth then directed the former employee to speak to Director Stone. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Thereafter, on September 26, 2012, the former employee contacted Director Stone by email. After telling Director Stone i her email that Instructor Booth said Director Stone was managing the schedule and had wanted to give her “some time to heal,” she reassured him that she appreciated his concern but that she felt she was “OK.” When Director Stone responded on September 23, he confirmed the correctness of Director Stone’s email and also confirmed that he was concerned with the former employee’s health. He offered to discuss these concerns further with her in private. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Later that day, the former employee called Director Stone. On the call, Director Stone expressed concern about legal and liability issues and whether the former employee was fit to work because of her MS. He said that he, as the Department Director, had to be concerned about her health and medical issues, because a student could challenge a grade on the basis that her MS made her unfit to evaluate students. Director Stone also referenced a couple days that the former employee missed work due to her MS during the summer, and stated that she was less reliable than other lab assistants were at that point. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Approximately six months later, College removed the former employee from the payroll and changed her payroll status to “terminated.”
On September 26, 2012, the former employee filed a timely charge of discrimination with the United States Equal Employment Opportunity Commission (EEOC), alleging that College terminated her because of her disability in violation of the ADA. The Justice Department filed the lawsuit after the EEOC referred the former employee’s complaint to it.
Title I of the ADA prohibits covered entities including the College from discriminating against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. 42 U.S.C. § 12112(a); 29 C.F.R. § 1630.4.
The Justice Department complaint against the College charged that the College violated the ADA by discriminating against her on the basis of her disability by:
Removing her from the lab assistant work schedule for a semester and reducing her work hours and compensation to zero; and
Terminating her on the basis of her disability
As a consequence of these discriminatory actions, the complaint charged the former employee suffered lost earnings, benefits and job advancement opportunities, as well as substantial emotional distress, pain and suffering and other nonpecuniary losses. The complaint asked the District Court to redress these injuries by:
Declaring the College in violation of the Title I of the ADA and its accompanying regulation;
Enjoining the College and its agents, employees, successors, and all persons in active concert or participation with it, from engaging in discriminatory employment policies and practices that violate Title I of the ADA;
Requiring the College to modify its policies, practices, and procedures as necessary to bring its employment practices into compliance with Title I of the ADA and its implementing regulation;
Ordering the College to train its supervisors and human resource staff regarding the requirements of Title I of the ADA; and
Awarding the former employee back pay with interest; the value of any lost benefits with interest; and compensatory damages, including damages for emotional distress, for injuries suffered as a result of Defendant’s failure to comply with the requirements of the ADA;
Under the settlement agreement announced November 7, 2019 by the Justice Department, the College must pay the former employee $53,000 in back pay and compensatory damages, revise its policies and training staff on the ADA to ensure compliance with the ADA, train staff on the ADA, and report to the Justice Department on implementation of the settlement agreement.
Reaching this settlement allowed the College to eliminate its exposure to potentially much greater liability. In addition to actual lost compensation and benefit damages, a loss at trial could have resulted in a jury award that also ordered the College to pay attorneys’ fees and other costs, interest and exemplary damages of up to $300,000.
For More Information
We hope this update is helpful. For more information about employment discrimination or other labor and employment, compensation, benefits or other related management and compliance concerns or developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website..
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, health care, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications including extensive work with businesses on compliance, risk management and defense.
Author of numerous highly regarding publications on disability and other discrimination and other employment, employee benefit, compensation, regulatory compliance and internal controls and other management concerns affecting health care, education, insurance, housing and other operations, Ms. Stamer’s clients include health care, insurance and financial services, educational and other employer and services organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. In addition to her legal and management operations work. Ms. Stamer’s experience includes 30 plus years’ of legislative and regulatory policy advocacy and drafting, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures as well as advice, representation, advocacy and testimony to and before and other work with various foreign governments, Congress, state legislatures, and a multitude of federal, state and local agencies.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her work, services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Business owners and operators and the business’ tax, accounting and other service providers increasingly risk criminal prosecution when involved with a business caught shirking its obligations under the Internal Revenue Code (the “Code”) to report wages and withhold and pay federal income tax and employees’ share of social security and Medicare taxes (collectively known as “FICA taxes”) from employees’ wages and to pay the employer’s share of FICA taxes in addition to the substantial civil tax penalties that the business faces for these actions.
While various Internal Revenue Service (“IRS”) educational and enforcement initiatives across the past decade have expanded awareness among business leaders and their accounting and tax advisors more aware of the the potentially significant civil tax penalties risks aggressive employment tax practices can create for the business, many business owners and operators, and the tax, accounting and payroll service providers often overlook or fail to take seriously their potential personal exposure to civil and increasingly, even criminal liability that can arise from management, consulting or other involvement with businesses engaged in aggressive employment tax practices under the Code. With the Justice Department now increasingly using criminal prosecution of individuals as well as businesses involved in employment tax evasion a key weapon in its effort to combat the “substantial problem” of employment tax fraud, however, business owners, operators, tax counsel, accounting, payroll, staffing and others increasingly must exercise care to avoid subjecting themselves to criminal prosecution and other personal liability when dealing with businesses engaged in aggressive employment tax practices.
Employment Tax Compliance Now High Enforcement Priority
Business noncompliance with their employment tax obligations is a widespread and persistent problem in the United States for a multitude of reasons, not the least of which is budgetary. Employment taxes on employee wages represent nearly 70% of all revenue collected by the IRS and, as of June 30, 2016, more than $59.4 billion of tax reported on Employer’s Quarterly Federal Tax Returns (Forms 941) remained unpaid. When last measured prior to the Justice Department’s kickoff of its current enforcement initiative in 2018, uncollected employment tax violations represented more than $91 billion of the gross Tax Gap and, after collection efforts, $79 billion of the net Tax Gap in the U.S. See Employment Tax Enforcement.
Aside from the budgetary concerns created by the widespread business noncompliance with employment tax responsibilities, the Justice Department considers nonpayment of employment taxes a serious crime. According to its Employment Tax Enforcement page states, “When employers willfully fail to collect, account for and deposit with the IRS employment tax due, they are stealing from their employees and ultimately, the United States Treasury. In addition, employers who willfully fail to comply with their obligations and unlawfully line their own pockets with amounts withheld are gaining an unfair advantage over their honest competitors.”
To stem employment tax violations and encourage greater business compliance with these requirements, the IRS and Justice Department are using a variety of taxpayer outreach, voluntary compliance resolution, and civil and criminal enforcement tools. Along with ongoing educational outreach, for instance, the IRS tries to encourage businesses to voluntarily clean up outstanding employment tax compliance issues by making available various voluntary resolution programs. For instance, the IRS Voluntary Closing Agreement Process – Employment Tax (VCAP – ET) program offers an administrative process businesses not currently under audit may use to “permanently and conclusively” resolve outstanding IRS employment tax liabilities not involving worker classification while its Voluntary Classification Settlement Program (VCSP) for businesses not under audit and Classification Settlement Program for businesses under examination offer options for businesses may use to resolve worker classification associated employment tax liabilities.
Employment Tax Prosecution Rising
Coupled with efforts to obtain greater voluntary compliance through these voluntary resolution programs, however, the IRS and Justice Department Tax Division increasingly partner to investigate and prosecute aggressively businesses and their owners, operators and tax and other service providers for employment tax violations. As the agency responsible for conducting the civil and criminal prosecutions necessary to enforce these rules, the Justice Department brings both civil suits and criminal prosecutions against both businesses and the owners, operators and others that participate or assist businesses to willfully violate the Code’s employment tax rules. While in the past, IRS and Justice Department employment tax enforcement generally focused on high dollar employment tax fraud cases, since making employment tax fraud enforcement a priority in May 2018, the IRS and Justice Department no longer place a dollar threshold on the amount of unpaid employment taxes that could trigger more severe enforcement action. Since this change, Justice Department civil and criminal employment tax fraud prosecutions and convictions have risen significantly, resulting in the Justice Department achieving a long and growing list of civil money judgements to recover unpaid taxes, interest and penalties, permanent injunctions and criminal convictions against businesses and individuals involved in employment tax fraud over the past year.
On the civil front, the Justice Department brings litigation on behalf of the United States to enforce the IRS’ authority to collect unpaid taxes and penalties and pursues permanent injunctions against businesses, payroll and tax advisors and others for violating the Code’s employment tax requirements.
Criminal Employment Tax Fraud Prosecutions & Convictions Show Justice Department Ready To Nail Businesses & Individuals Cheating On Employment Taxes
While these and other civil enforcement successes are powerful tools in the arsenal of the Justice Department and IRS employment tax enforcement efforts, however, it is the Justice Department’s growing prosecution and success in securing criminal convictions resulting in prison sentences against business owners and operators, tax advisors and others for employment tax fraud that most clearly demonstrates the Justice Department’s announced commitment to employment tax fraud enforcement has real teeth. Over the past year, the Justice Department as racked up an impressive and growing number of federal grand jury criminal tax fraud indictments, convictions and sentences, many of which include prison sentences ordered against business owners, operators, advisors and other individuals convicted of employment tax fraud. See e.g., North Carolina Office Manager Sentenced to Prison for Employment Tax Fraud; see also Recent Criminal Employment Enforcement News.
The criminal employment tax prosecution actions reported by the Justice Department during the just ended month of October 2019 are typical of this prosecutorial trend over the past year. Among others, during October the Justice Department Tax Division announced its employment tax enforcement efforts resulting in it securing separate federal grand jury criminal indictments against staffing business operators in New York and North Carolina.
October Criminal Employment Tax Indictments
On October 24, for instance, the Justice Department announced that a New York grand jury had issued criminal tax indictments against the owner/operator of a Long Island City, New York temporary employment staffing businesses including PTP Staffing Associates Inc. (PTP), and PPS Associates Inc. (PPS). The indictments charge that as the alleged sole owner of PTP and PPS, Heppenheimer was required to collect, account for, and pay to the IRS federal employment taxes withheld from the wages of PTP and PPS employees, but from 2013 through 2017, failed to report more than $270,000 in employment taxes to the IRS. If convicted, Heppenheimer faces a statutory maximum sentence of five years imprisonment for each count charged, plus substantial monetary penalties, supervised release, and restitution. Owner of New York City Temporary Staffing Firms Indicted for Employment Tax Fraud
Mere days later, the Justice Department also announced that a North Carolina federal grand jury had indicted Rebecca Adams and her daughter Elizabeth Wood with conspiring to defraud the United States government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service (IRS). See e.g., Owners of Greensboro Temporary Staffing Firms Indicted for Employment Tax Fraud. The indictment alleges Adams and Wood created Forms W-2 for the staffing business employees but failed to file these forms with the government as required. Instead of paying the taxes withheld from employees, the indictment alleges that Adams and Wood used the funds to pay for personal expenses, such as a personal maid, personal landscaping services, and pet spa services. The staffing business allegedly changed names twice, even though it did not otherwise change its actual business operations. Adams was also charged with tax evasion based on her allegedly evading payment of more than $400,000 in previously assessed employment taxes and penalties to the IRS. If convicted, both defendants face significant punishment. If convicted on these charges both Adam and Woods can expect their punishment will include prison time. Adams and Wood each face a statutory maximum sentence of five years in prison for each charge of conspiracy, employment tax fraud, and tax evasion, plus probation and monetary penalties.
October Criminal Employment Tax Convictions
Along with securing these new criminal tax indictments, the Justice Department also was successful in obtaining new criminal tax convictions against business owners in West Virginia and Florida for employment tax violations.
On October 21, two West Virginian business owners plead guilty today to conspiring to defraud the United States regarding their employment taxes and individual income taxes in a Federal District Court in West Virginia. According to court documents, Russell and Karen Rucker, a married couple, operated Rucker, Billups and Fowler Inc. (RBF), an insurance agency located in Huntington, West Virginia. Russell Rucker was the president of RBF and since approximately late 2013, Karen Rucker served as a financial officer. Between September 2015 and September 2018, the Ruckers withheld approximately $143,226 in payroll taxes from the wages of RBF’s employees, which they did not pay over to the IRS. Instead, the Justice Department charged the Ruckers diverted portions of the withheld funds for their own personal benefit. For instance, from 2014 through 2016 the Ruckers continued to pay themselves over $500,000 in salary. The Justice Department also charges that in response to IRS collection efforts in an attempt to conceal funds from the IRS, the Ruckers deposited money into the bank account of another individual, attempted to evade IRS levies by using a series of bank accounts that they did not disclose to the IRS, and by paying their mortgage and many other bills in cash. The Justice Department also claims the Ruckers also attempted to evade payment of $114,911 of Russell Rucker’s 2001, 2002, and 2005 individual income taxes by disguising paychecks issued to Russell Rucker as non-taxable “note proceeds and failed to file their individual income tax returns and RBF’s corporate returns for 2014 through 2017. The Justice Department valued the intended tax loss caused to the IRS by their conduct is more than $250,000. Currently awaiting sentencing scheduled on January 27, 2020, the Ruckers each face a statutory maximum sentence of five years in prison as well as monetary penalties, a period of supervised release, and restitution. See West Virginian Business Owners Plead Guilty to Failing to Pay Employment Taxes and Individual Income Taxes.
Less than a week later, the Justice Department achieved another prosecutorial success when Miami, Florida business owner Ricardo Betancourt plead guilty on October 29 to causing the multiple parcel delivery businesses he owned and operated in South Florida to fail to pay over employment taxes. According to the Justice Department, Betancourt’s multiple South Florida parcel delivery businesses earned gross revenues of more than $100 million and employed hundreds of employees. Betancourt as the owner and operator of these businesses was responsible for ensuring the businesses collected and paid over to the IRS the employment taxes withheld from employees’ paychecks. The Justice Department charged that Betancourt withheld payroll taxes from his employees, but deliberately failed to pay over those withholdings and other associated taxes to the IRS. The Justice Department claimed that in 2013 and 2014, Betancourt did not pay over approximately 97 percent of the federal employment taxes he withheld from his employees. In 2015 and 2016, Betancourt did not pay over any of the federal employment taxes he withheld from his employees. For the quarter ending December 2016, Betancourt admitted that he failed to truthfully account for and pay over payroll taxes of approximately $727,478. In his sentencing currently scheduled for February 12, 2020, Betancourt faces a statutory maximum sentence of five years in prison as well as a period of supervised release, restitution, and monetary penalties. See Miami Business Owner Pleads Guilty to Employment Tax Fraud.
October Criminal Employment Tax Prison Sentencings
The prison sentences imposed during October against individuals convicted of employment tax fraud also show business owners, operators and others criminally convicted on employment tax related tax evasion and tax fraud charges should expect to serve time in prison. Take the sentencing of Gail Cooper, who was sentenced for the employment tax crimes she committed as owner of a commercial and residential glass installation company, Greenville Architectural Glass (GAG). According to the Justice Department, as the owner of GAG responsible for GAG’s finances, Cooper was legally responsible for ensuring that GAG properly withheld and paid over to the IRS federal income, Social Security and Medicare taxes on the wages GAG paid to its employees during the years 2013 through 2015. Cooper was also required to file quarterly employment tax returns with the IRS. Although Cooper caused GAG to withhold taxes from employees’ wages, the Justice Department shared she neither filed the required quarterly returns for the first quarter of 2013 through the second quarter of 2015, nor paid the withheld amounts over to the IRS. Cooper also failed to pay over to the IRS unemployment taxes. In all, Cooper caused more than $280,000 in payroll taxes not to be paid. Furthermore, the Justice Department also charged Cooper filed false individual income tax returns for 2008, 2009, and 2010, on which she understated GAG’s gross receipts and overstated its expenses. Cooper caused GAG’s bookkeeper to manipulate and delete entries in the company’s accounting records. Specifically, she directed the bookkeeper to delete invoices from the software after GAG received payment from a client to make it appear as if GAG had not received the payment. Cooper also paid personal expenses with business funds, including utility bills for her residence and rental properties, and caused these to be classified as business expenses. After filing fraudulent returns for 2008-2010, Cooper did not file any individual income tax returns for the next several years. In total, the Justice Department charged Cooper’s conduct caused a tax loss of $587,516 to the United States. As punishment for these criminal convictions, U.S. District Judge Thomas M. Rose on October 29th ordered Cooper to serve 14 months in prison, two years of supervised release and pay restitution to the IRS in the amount of $659,262.39. Ohio Glass Company Owner Sentenced to Prison For Not Paying Employment Taxes.
That same day, Justice Department Tax Division prosecutors also obtained a 24-month prison sentence against a Tulsa, Oklahoma computer software development company owner for his criminal conviction on failing to account for and pay over employment taxes withheld from his employees’ wages. According to documents and information provided to the Court, as the owner and operator of Tulsa-based Zealcon Corporation, Earnest J. Grayson Jr. was responsible for withholding, and paying over to the IRS payroll taxes on the wages paid to Zealcon employees. For the period January 2014 through June of 2016, Justice Department prosecutors showed Grayson caused a tax loss of approximately $1 million by intentionally not paying to the IRS income and social security taxes withheld from Zealcon employees’ wages and the employer portion of social security taxes due from Zealcon on those wages. As punishment for these crimes, Grayson was sentenced to serve a 24 month prison sentence, ordered to pay restitution to the IRS in the amount of $904,091, and to serve three years of supervised release. Owner of Tulsa Software Company Sentenced to Prison for Employment Tax Fraud.
With the Justice Department promising to continue to pursue ongoing enforcement effort, businesses, individuals with ownership or management authority over the collection and payment of employment taxes, and their tax, accounting, payroll, staffing and other service providers need to use care to avoid exposing themselves to liability when advising, assisting or dealing with a business engaged in aggressively classifying workers as contractors rather than employees, or otherwise failing to properly track, account for, report and pay over income tax and employment taxes properly.
When evaluate these potential risks, businesses and business leaders responsible for income and employment tax withholding, reporting and payment and those negotiating, reviewing or engaging in transactions with them should be particularly careful when participating in arrangements that the IRS might consider employment tax fraud schemes such as:
“Pyramiding” of employment taxes, which the IRS views as a fraudulent practice where a business withholds taxes from its employees but intentionally fails to remit them to the IRS. Businesses involved in pyramiding frequently file for bankruptcy to discharge the liabilities accrued and then start a new business under a different name and begin a new scheme.
Abusive employee leasing arrangements where the business contracts with outside businesses to handle all administrative, personnel, and payroll concerns for employees where the leasing entity fails to properly report wages and withhold and payover income or employment taxes to the IRS. The IRS and other agencies often pursue tax collection and other enforcement actions against businesses that have used leasing or other staffing businesses when the leasing or staffing company fails to properly report, withhold or pay over income and employment taxes to the IRS.
Paying workers in whole or partially, in cash without properly accounting for, withholding and paying income or employment taxes due on a worker’s wages where the facts and circumstances indicated the worker qualified as a common law employee of the business; or
Filing false payroll tax returns understating the amount of wages on which taxes are owed, or failing to file employment tax returns to evade employment or other taxes.
When evaluating the adequacy of employment tax compliance, proper worker classification is a critical starting point. Business owners, operators and others in the scope of employment tax liability risk should scrutinize the defensibility of how a business classifies those performing services or other work as employees versus independent contractors, employees or contractors of another business or in some other status and document the evidence supporting these characterization and other compliance efforts.
When performing these activities, business owners and operators are encouraged to resist the urge to assume that they can rely upon the contractual or labels of workers as contractors or employed by a staffing, leasing or other service provider to avoid characterization and resulting liability for employment and income tax obligations as the employer of workers. Under the Code the defensibility of these characterizations of workers generally is determined based on whether the facts and circumstances reflect that the business in operation possessed the requisite control to qualify as a common law employer with little or no deference to how the parties have labeled the arrangement or the historical duration of the practices within the organization or its respective industry. Rather, the analysis must focus on evaluating these and other potentially suspect arrangements to realistically assess the likelihood that the IRS or Justice Department could challenge the business’ employment tax practices as willful or other violations of the Code’s employment tax requirements. Wise individuals and businesses operating or dealing with businesses involved in arrangements or practices identified as potentially suspect by the IRS and Justice Department also should pursue contractual, audit and other operational safeguards to document their efforts to require, enforce and monitor compliance and to capture and retain records and other evidence that would be helpful to defend the business’ or their own action in the event the IRS or Justice Department audits or initiates enforcement action with respect to the arrangements in the future.
Tax preparers, tax and other attorneys, accountants and others that participating in operations, preparation of returns, transactions or other activities also should be sensitive to special ethical and legal requirements and standards that can attach to advice or involvement in operations, transactions or providing advice or representation potentially involving practices that might raise employment tax fraud or other employment tax withholding and payment, wage reporting, or related employment tax concerns might arise. See, e.g., IRS Circular 230. Along side of the Justice Department’s civil and criminal employment tax enforcement, tax practitioners, tax preparers, and other third parties expose themselves to discipline for failing to properly report, pay and file employment tax or other returns or other violations of professional standards of tax practice when giving advice or other engaging in other activities adhere to professional standards and follow the law.
Additionally, tax and other professionals are reminded that tax return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Leaders, legal and other advisors, and service providers of businesses involved in these arrangements generally should use care to critically evaluate these should react to the growing enforcement risks and acting to mitigate their own and their organization’s potential exposure to criminal or civil tax or other enforcement. These efforts should start by assessing realistically the likely defensibility of their arrangements and risks of liabily from their own or other associated businesses employment tax or worker classification practices in the event of a challenge based on a realistic assessment of the real acts and circumstances within the scope of attorney-client priviledge as well as seek contractual, audit and other operational safeguards to require and document compliance and to capture and retain records and other evidence that the business might need to defend itself against a future audit or enforcement action associated with these suspect arrangements.
Businesses leaders, advisors and service providers also should keep in mind that aggressive worker classification and employment tax practices generally also extend to a business’ other relationships with workers and service providers such as minimum wage, over time, recordkeeping and other wage and hour; I-9 eligibility to work verification, occupational heath and safety, workers’ compensation, employment discrimination and other worker associated legal obligations also currently subject to heavy worker misclassification and other enforcement. As a consequence, businesses, legal counsel, accounting and other service providers should recognize the need for a holistic review and assessment of risk and planning to manage these risks, as well as the need to use care to safeguard attorney-client privilege and avoid unprotected discussion of sensitive facts and analysis outside the scope of attorney-client privilege with other parties without prior approval of their legal counsel.
For More Information
We hope this update is helpful. For more information about worker classification and employment tax compliance and enforcement or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine.
Author of numerous highly regarding publications on worker classification and other employment, payroll, and employee benefit tax compliance publications, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or herexperience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans and insurers and their service providers should heed as a warning of the potential perils they could face for violating the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security and Breach Notification Rules the just-announced $2.15 million plus civil monetary penalty that Jackson Health System (JHS) paid the Department of Health & Human Services Office of Civil Rights (OCR).
While the HIPAA-covered entity that paid the $2,154,000 civil monetary penalty, JHS, is a Florida-based nonprofit academic medical system, rather than a health plan, the $1,500,000 HIPAA resolution payment OCR previously collected from Blue Cross Blue Shield of Tennessee (BCBST) in 2012 for its breaches of HIPAA make clear that health plans and insurers risk similar penalties for HIPAA violations. Consequently, health plans, health insurers and other health care providers and their business associates should construe the JHS civil monetary penalty as evidence of the need to re-verify and remain constantly vigilant about maintaining compliance with HIPAA’s privacy, security and breach notification rules currently and on an ongoing basis.
JHS HIPAA Breaches Found By OCR
The $2.1 million plus payment was required to satisfy a civil monetary penalty assessment OCR imposed in a Notice of Proposed Determination and Notice of Final Determination made public by OCR on October 23, 2019 in response to findings from a series of investigations of HIPAA breach and compliance concerns raised between 2013 and 2016 raised by various HIPAA-mandated breach reports and media reports that raised concerns about improper access disclosure and use of patient PHI between 2013 and 2016. When JHS did not challenge the findings or determination became final. OCR reports JHS has paid the specified $2.154,000 civil monetary penalty.
JHS operates six major hospitals, a network of urgent care centers, multiple primary care and specialty care centers, long-term care nursing facilities, and corrections health services clinics, provides health services to approximately 650,000 patients annually, and employs about 12,000 individuals.
On August 22, 2013, JHS submitted a breach report to OCR stating that its Health Information Management Department lost paper records containing the protected health information (PHI) of 756 patients in January 2013. JHS’s internal investigation determined that an additional three boxes of patient records also were lost in December 2012; however, JHS did not report the additional loss or the increased number of individuals affected to 1,436, until June 7, 2016.
In July 2015, OCR initiated an investigation following a media report that disclosed the PHI of a JHS patient. A reporter had shared a photograph of a JHS operating room screen containing the patient’s medical information on social media. JHS subsequently determined that two employees had accessed this patient’s electronic medical record without a job-related purpose.
On February 19, 2016, JHS submitted a breach report to OCR reporting that an employee had been selling patient PHI. The employee had accessed inappropriately over 24,000 patients’ records since 2011.
According to OCR Director Roger Severino, “OCR’s investigation revealed a HIPAA compliance program that had been in disarray for a number of years. …This hospital system’s compliance program failed to detect and stop an employee who stole and sold thousands of patient records; lost patient files without notifying OCR as required by law; and failed to properly secure PHI that was leaked to the media.”
These and other findings led to the OCR determination in the Notice of Proposed Determination and Notice of Final Determination that JHS failed to provide timely and accurate breach notification to the Secretary of HHS, conduct enterprise-wide risk analyses, manage identified risks to a reasonable and appropriate level, regularly review information system activity records, and restrict authorization of its workforce members’ access to patient ePHI to the minimum necessary to accomplish their job duties. OCR assessed the $2.1 million civil monetary penalty based on these determinations.
The JHS civil monetary penalty is The latest in a growing series of OCR enforcement and regulatory actions that drive home the perils HIPAA-covered health care providers, health plans and insurers, healthcare clearinghouses and business associates risk by failing to responsibly and effectively manage their HIPAA compliance including the one against mega-health plan and business associate, BCBST, that resulted in its payment of a $1,500,000 resolution payment. For details of the BCBS Resolution Agreement and Settlement payment, see here.
OCR enforcement data documents a steady rise in OCR investigation and enforcement activity. OCR set all-time records for HIPAA Enforcement in 2018. Heavy enforcement activity has continued in 2019. Before its October 23, 2019 announcement of the JHS civil monetary penalties, OCR already had announced:
Its first HIPAA right of access resolution agreement against a health care provider for violating HIPAA’s right of access rules on September 9, 2019 as part of its recently announced HIPAA access rule enforcement initiative;
The collection of a $3 million resolution payment collected from a Tennessee diagnostic medical imaging services company to settle HIPAA civil monetary penalty exposures arising from a breach that exposed the protected health information of more than 300,000 patients; and
A multitude of other audits and enforcement activities resolved through corrective action without collection of any resolution payment or civil monetary penalties.
Given these and other previously announced enforcement initiatives and actions, all HIPAA covered entities and their business associates are urged to maintain hypervigilance about their own HIPAA compliance with long standing as well as emerging HIPAA requirements taking into account old, recent, and emerging guidance and enforcement activities of OCR. Of course health plans and other covered entities also need to additionally weigh their exposure under various other state and federal law likely to arise from such breaches and the investigation, mitigation and public and customer trust consequences that almost always accompany and frequently exceed the actual HIPAA liability imposed. Considered together, these and other consequences of HIPAA vioations or other sloppy dealings with protected health inforamtion or ther sensitive health care or financial information make a clear case for investing appropriately in HIPAA and related compliance.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Monday, December 16, 2019 is the new comment deadline for providing feedback to the National Labor Relations Board (NLRB) ion a proposed rule that would exempt undergraduate and graduate students performing services for financial compensation in connection with their studies from the NLRB’s definition of “employee” for purposes of the National Labor Relations Act (NLRA) and other collective bargaining and union organizing and representation laws under the NLRB’s jurisdiction. The extended comment deadline was announced here October 17, 2019.
The original notice of proposed rulemaking published here on September 23, 2019 would exempt ” every student performing teaching, research and any services for compensation, at a private college or university in connection with his or her studies from treatment as an “employee” for purposes of Section 2(3) of the NLRA.
The NLRB says this proposed rulemaking “is intended to bring stability to an area of federal labor law in which the NLRB, through adjudication, has reversed its approach three times since 2000. The NLRB has stated this proposed standard on the exclusion of students from the NLRA definition of employee is consistent with the purposes and policies of the NLRA, which contemplates jurisdiction over economic relationships, not those that are primarily educational in nature.
The proposed regulation is one of several regulatory projects that the now Trump-appointee dominated NLRB has undertaken in the past year in its effort to undue a host of pro-labor changes to NLRB policy changes initiated and enforced during the Obama Administration when President Obama appointees dominated the NLRB and its policies. Another example of these regulatory efforts include the NLRB’s current efforts to reverse a change in interpretation and enforcement of the “joint employer” rules of the NLRA and Fair Labor Standards Act that substantially expanded the imputation of liability for collective bargaining and other labor-management and wage and hour law violations by treating companies as joint employers that received the benefit of work performed even when the recipient company did not control the details of the work or the nominal employer. Employers generally will want to carefully monitor and provide appropriate input on these and other developments.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
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Posted by Cynthia Marcotte Stamer 
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