U.S. employers should reassess their existing policies on workplace drug use and testing and disability accommodation decision-making for Federal Drug Administration (“FDA”)-approved and state licensed medical use of marijuana in response to Drug Enforcement Agency (“DEA”) rescheduling orders under the Controlled Substances Act (“CSA”) implemented last April while closely monitoring for DEA action on a DEA proposal to reclassify marijuana from a Schedule I to a Schedule III substance under the CSA. The proposed marijuana rescheduling would significantly affect the consequences of marijuana use by individuals in the United States, including the testing and consequences of marijuana use under Department of Transportation (“DOT”) and other federal drug testing mandates.
Where the Rescheduling Stands Today
The recently completed ALJ hearing traces back to a Notice of Proposed Rulemaking published May 21, 2024, proposing to move marijuana from Schedule I to Schedule III of the CSA. After more than a year of procedural DEA delay holding hearings or taking other material action on the proposed rule, President Trump’s December 18, 2025 executive order directed the Attorney General to expedite completion of the rulemaking. In response, on April 23–24, 2026, Acting Attorney General Todd Blanche issued a final order that:
immediately moved FDA-approved marijuana drug products into Schedule III;
immediately moved marijuana subject to a qualifying state medical marijuana license into Schedule III; and
That broader hearing opened June 29, 2026 at DEA headquarters in Arlington, Virginia, before Chief ALJ Derek C. Julius, ran (with a recess for the July 4th holiday period) through mid-July, and formally concluded on July 15, 2026 following closing presentations from a group of participating states. See DEA press release; Notice of Hearing, 91 Fed. Reg. 22777 (Apr. 28, 2026). Because DEA and DOJ are the proponents of the rule, the hearing’s structure permitted testimony only from designated participants opposing rescheduling — including Smart Approaches to Marijuana (SAM), the National Drug & Alcohol Screening Association, and the States of Nebraska, Idaho, Indiana, Louisiana, and Tennessee (through its Bureau of Investigation), among others. Pro-reform organizations including NORML sought and were denied participant status. ALJ Julius also ordered that the hearing would not be televised, livestreamed, or otherwise broadcast, limiting observation to in-person attendance.
As if this ambiguity isn’t enough, the Acting Attorney General’s April 2026 final order reclassifying to Schedule III FDA-approved and state licensed marijuana now faces legal challenges such as the one brought by Smart Approaches to Marijuana and the National Drug & Alcohol Screening Association, seeSAM Inc., et al. v. U.S. Department of Justice, et al., No. 26-1106 (D.C. Cir., petition filed May 4, 2026), and another brought by the Attorneys General of Indiana and Nebraska, seeNebraska, et al. v. U.S. Department of Justice, et al., No. 26-1130 (D.C. Cir., petition filed May 22, 2026). While the fate of these consolidated challenges awaits resolution by the U.S. Court of Appeals for the D.C. Circuit, employers and health plans must deal with the currently effective policy change that, for now, has made a Schedule I drug FDAA-approved medical and state-licensed marijuana.
Pending the resolution of challenges to the currently effective change of FDA-approved medical and state licensed marijuana and DEA action on its broader rescheduling proposal, however, employers and plan sponsors should review their existing marijuana use and testing policies for the already effective FDA approval of FDA-approved marijuana drug products and marijuana subject to a qualifying state medical marijuana license that took effect under the final rescheduling orders issued by Acting Attorney General Todd Blanche on April 23–24, while continuing to monitor the Federal Register and other FDA and Congressional comments and actions signaling when and the likely direction the FDA intends to take on the broader proposal to reschedule marijuana generally from Schedule I to Schedule III.
What Already Changed — Independent of the Proposed DEA Rescheduling Rule Change
It is important for compliance purposes to separate what is already final from what remains pending:
Already in effect (April 2026 Final Order)
FDA-approved marijuana-containing drug products are in Schedule III.
Marijuana handled under a qualifying state medical marijuana license is in Schedule III, with a new expedited DEA registration pathway for state licensees.
State-licensed medical marijuana businesses are relieved of the Internal Revenue Code § 280E deduction disallowance, which applies only to Schedule I and II trafficking.
Recreational/adult-use marijuana, unlicensed marijuana, and synthetically derived THC remain in Schedule I and are unaffected by the April order.
Still pending (record closed; awaiting ALJ recommendation and DEA final decision)
Whether marijuana as a category — including adult-use/recreational marijuana not tied to an FDA-approved product or state medical license — moves to Schedule III.
The government has been explicit throughout that this proceeding is not about legalizing recreational use; it concerns whether marijuana has a “currently accepted medical use” sufficient to satisfy the CSA’s scheduling criteria.
Post-hearing briefs are due August 17, 2026; the ALJ’s recommendation and DEA’s final decision will follow on an unannounced timeline.
Why This Matters for Employers — and Why It Doesn’t Change as Much as Headlines Suggest
A move from Schedule I to Schedule III would be historically significant, but it would not legalize recreational marijuana use, and it would not, by itself, require employers to change drug-free workplace policies. Marijuana would remain a controlled substance requiring a valid prescription for lawful use under federal law; unauthorized possession or use would remain a federal offense. HR and employment counsel should calibrate client and internal expectations accordingly while continuing to monitor the following areas:
Drug testing and drug-free workplace policies
The scheduling change could impact your current workplace drug use and drug testing policies by expanding legally permitted use and requiring the collection of added documentation for those claiming permitted use. Employers, insurers and others concerned about impairment by workers consuming marijuana in accordance with its new scheduling will need to consider the need for and advisability of adopting policies tailored to their concerns and ensuring their testing and other administrative practices meet applicable legal requirements.
For purposes of this analysis, the changes adopted last April can make medicinal use in accordance with FDA-approved or state-licensed uses legal in the applicable workplace jurisdiction. However, the proposed schedule III classification would not convert a positive marijuana test into evidence of lawful drug use in the ordinary case, since off-label recreational use would remain unauthorized under federal law absent a valid prescription.
Employers should nonetheless review testing panels, medical review officer (MRO) protocols, and policy language for currency, and confirm policies still align with applicable state law, which increasingly diverges from federal scheduling on off-duty use protections.
DOT and other safety-sensitive/federally regulated testing
The recently adopted and additional proposed rescheduling of marijuana to a Schedule III classification are unlikely to change U.S. Department of Transportation drug testing requirements, as its 49 C.F.R. Part 40 rules operate independently of CSA scheduling. DOT has previously confirmed that rescheduling marijuana would not, by itself, change safety-sensitive testing requirements. Employers with DOT-covered or other federally regulated safety-sensitive positions should watch for any DOT or agency-specific guidance issued in response to a final rescheduling decision. Nevertheless, the rescheduling likely foreseeably could encourage even broader unauthorized use by employees or others reading the rescheduling as eliminating prohibitions, reflecting a further decline in enforcement, or both.
ADA and disability-related considerations
The recent DEA rescheduling of FDA-approved use of medicinal marijuana to a Schedule I drug classification will expand legally available options for medicinal marijuana use by employees in accordance with appropriately prescribed and used medicinal marijuana. Also, forty states now authorize medical marijuana under state law, many with employment protections for off-duty medical use that already operate independently of federal scheduling. Federal rescheduling will not harmonize this patchwork, and multistate employers should continue maintaining state-by-state policy matrices rather than assuming a federal fix is coming.
These changes can create new Americans with Disabilities Act (“ADA”) implijcations by, among other things:
Requiring employers to consider requests for accommodation of medically prescribed marijuana by broadening the availability and medicinal use of FDA-approved and state-licensed medicinal marijuana. Rescheduling does not change the ADA’s treatment of current illegal drug use as outside the definition of a protected disability while such use continues.
Requiring employers to consider the convergence between ADA’s mental/psychological impairment prong and MHPAEA parity classification issues when designing substance use disorder treatment benefits — a distinct analysis from current-use accommodation questions, and one worth continuing to track alongside this rulemaking.
Health and welfare plan sponsors and fiduciaries
The reclassification of FDA-approved medicinal marijuana also can create new design questions for health and disability benefit plan sponsors and claims and appeals health challenges for health and disability plan fiduciaries. For instance,
Health, AD&D, disability, life and other benefit plan sponsors and fiduciaries should recognize that the rescheduling adopted last April expands the legally allowed prescription and use of marijuana.
While Schedule III status does not itself create a coverage mandate, the approval could affect how FDA-approved uses are treated by removing exclusions or rules that previously denied coverage based on their more restricted DEA Schedule III status. While formulary and coverage decisions for any FDA-approved cannabinoid product remain a plan design and medical-necessity determination for the plan sponsor and its PBM or other fiduciaries, previously relied upon exclusions may no longer operate in the same way to restrict coverage.
Plan sponsors, their prescription benefit managers, insurers and other service providers should reevaluate current formularies and coverage provisions and exclusions for MHPAEA and other implications. They also should watch the FDA approval pipeline for cannabinoid drug products for potential formulary impact, should evaluate the need for changes in coverage or benefit exclusions and added fiduciary or other risks relating to benefit coverage and limitations potentially impacted by marijuana use. Health, disability, accident and dismemberment, and life insurance plan fiduciaries and insurers should use care to consider prudently the potential implications of rescheduling on any claims or appeals including special concerns and considerations likely to arise with respect to health benefits impacted byh MHPAEA. Fiduciaries should use care to coordinate any MHPAEA comparative analysis work touching substance use disorder benefits with counsel already tracking that parity exposure.
Cannabis-industry and cannabis-adjacent employers
State-licensed medical marijuana operators already qualify for § 280E relief under the April 2026 order; HR and finance functions at these employers should confirm payroll tax treatment reflects the change and monitor the expedited DEA registration pathway for state licensees.
Recommended Action Items
For HR and Employment Counsel
Review (but do not overhaul) drug-testing and drug-free workplace policies now; hold substantive revisions pending a final DEA decision, which — with post-hearing briefs not even due until August 17 — remains months away at minimum.
Confirm state-law policy variations are current, independent of the federal rescheduling timeline.
Flag DOT-covered positions for a separate compliance check once DOT issues any post-rulemaking guidance.
For Health, AD&D, Disability and & Other Welfare Plan Sponsors and Fiduciaries
Task PBM and plan counsel with monitoring FDA’s cannabinoid drug approval pipeline for formulary implications.
Coordinate substance use disorder benefit design review with pending MHPAEA comparative analysis obligations.
For General Counsel and Risk Management
Track the consolidated D.C. Circuit challenges to the April 2026 Final Order alongside the ALJ’s post-hearing process; a reversal on appeal could unwind the medical/state-licensed rescheduling already in effect.
Maintain rescheduling-tracking analysis as privileged work product where prepared to inform litigation or enforcement-risk posture.
For State-Licensed Medical Marijuana Employers
Confirm § 280E tax treatment has been updated and pursue the expedited DEA registration pathway using existing state licensure as supporting evidence.
Stay Tuned and Share Your Input
While the DEA’s proposed rescheduling is a self-initiated proposal, the ALJ’s post-hearing recommendation and what action, if any, the DEA ultimately will take on its proposal to reschedule marijuana more broadly remain uncertain. Although the DEA hearing on the proposed ruling is complete, communications to the DEA and Congress still offer opportunities to influence the direction and outcome of these decisions. Concerned employers and others should consider communicating any input or concerns to the DEA and Congress promptly to ensure their input receives consideration. Meanwhile, employers, health and disability plans and other interested parties should reevaluate their policies in response to the already adopted rescheduling as they monitor for future developments.
For Help or More Information
The author of this update, Cynthia Marcotte Stamer is an attorney Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization with decades of experience advising and assisting health industry and other employers to design, audit, and defend their employment and other risk management and compliance practices, including conducting audits and investigations, designing and updating compliance and risk management programs, responding to government investigations, conducting transaction, governance, and other due diligence, and assisting with other legal and operational compliance and risk management and legislative and regulatory affairs. She is available to assist your organization in assessing the impact of these developments and navigating the compliance and strategic steps that follow. For more information about these concerns or Ms. Stamer, contact Ms. Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel and a Martindale-Hubble “AV-Preeminent” (Top 1%) attorney and advisor board certified in labor and employment law by the Texas Board of Legal Specialization peer peer celebrated as “Top Rated Lawyer” and “LEGAL LEADER™ “Top Rated Lawyer” and “Best Lawyer” for her work in ERISA & Employee Benefits Law, Health Care Law, Labor and Employment Law, and Business and Commercial Law.
Nationally recognized for her decades of leading-edge workforce, health and other employee benefits and insurance, compensation, regulatory affairs and compliance, and other management work, public policy leadership and advocacy, coaching, teachings, and publications, she is the publisher of Solutions Law Press, Inc.® practitioner-focused compliance publications for employers, plan sponsors, HR professionals, health care, insurance, technology and data industry leaders, and legal counsel and risk management advisors.
Along with these activities, Ms. Stamer also has earned national recognition for her authorship of thousands of highly regarded works, presentations as a knowledgeable speaker, testimony and other input of regulators and legislators, and media interviews on health and other benefits, human resources and other workforce, health care, insurance, data privacy and security and other related concerns.
For more information about Ms. Stamer, engaging her services or to speak, her work, credentials, experience and involvements, or other matters, see the About the Author page, her website at www.cynthiastamer.com, or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
Employers and plan fiduciaries should audit contracts, conduct due diligence to assess potential added costs and other liabilities from past and future service provider NSA missteps
Group health plans, their employer or union plan sponsors, and fiduciaries update their processes for handling out-of-network provider charge disputes in response to the CMS, Federal Independent Dispute Resolution Operations; Final Rules (CMS-9897-F, full text PDF) released on May 28, 2026 to implement the No Surprises Act (“NSA”). See also CMS, Federal Independent Dispute Resolution Operations Final Rule (Fact Sheet); HHS, Federal Rule Takes Aim at Health Care Bureaucracy, Reducing Dispute Fees, and Boosting Transparency (Press Release, May 28, 2026). along with reading their plans for upcoming changes, plans sponsors in fiduciaries also should audit their third-party administrator or other service providers handling prior out of network coverage disputes to identify unnecessary costs and other mishandling liabilities attributable to potential funding by the service provider of out of network claims under existing independent dispute, resolution rules.
The final rule issued by the Departments of Health and Human Services, Labor, and the Treasury (the “Departments”), acting through the Centers for Medicare & Medicaid Services (“CMS”) and joined by the Office of Personnel Management (“OPM”), overhauls the operational mechanics of the federal arbitration process that the NSA requires group health plans, issuers, Federal Employees Health Benefits carriers (“payers”), and out-of-network providers, facilities, and air ambulance providers (“providers”) use to resolve out-of-network payment disputes. (CMS Fact Sheet; HHS Press Release). Also see CMS, No Surprises Act — Overview of Rules & Fact Sheets.
According to the Departments, the Federal IDR process has received more than 5 million disputes since launching in April 2022—far beyond projections, generating delays, backlogs, and unnecessary cost. (HHS Press Release). Much of the rule targets a recurring problem: ineligible disputes clogging the pipeline because parties cannot readily tell, early on, which claims actually qualify for federal arbitration.
Below is a practical summary of the key changes and, importantly, the staggered dates on which they take effect.
IDR Administrative Fee Lowered
For parties weighing whether to use the process, the most immediate change is cost. The per-party, per-dispute administrative fee falls from $115 to $15—a reduction of more than 85%—while the program remains self-sustaining as the statute requires. The $15 fee applies regardless of the amount in dispute or whether the dispute is ultimately found eligible. (HHS Press Release; CMS Fact Sheet). since providers overwhelmingly initiate most of the IDR processes currently, the lower fee could encourage even more provider filings.
The rule also codifies existing guidance: if a party fails to pay the administrative fee or the certified IDR entity fee by the time its offer is due, that offer will not be considered received—but the party remains liable for the fees. The Departments further clarified their authority to pursue unpaid administrative fees consistent with federal debt collection laws. (CMS Fact Sheet).
Improving Up Front Communication
A central theme of the final rule is forcing better information exchange before a dispute ever reaches arbitration. The rule requires payers to use specific claim adjustment reason codes (“CARCs”) and remittance advice remark codes (“RARCs”) on any paper or electronic remittance advice sent to an entity with which the payer has no contractual relationship, signaling whether a claim is or is not subject to the NSA’s surprise-billing provisions and the federal IDR process. (CMS Fact Sheet).
Payers must also disclose additional identifying information with the initial payment or notice of denial of payment, including:
The legal business name of the plan, issuer, or FEHB carrier,
The plan sponsor’s legal business name where applicable, and
The new IDR registration number (discussed below), and
Include a statement explaining that providers must notify the Departments to initiate open negotiation. (CMS Fact Sheet).
Restructured Open Negotiation
The final rule meaningfully tightens the 30-business-day open negotiation period. Under the final rule, a party must submit an open negotiation notice through the Federal IDR portal to both the other party and the Departments, with expanded required content elements. The 30-business-day clock now begins when that notice and the payment remittance or denial are submitted through the portal. The rule also creates a new open negotiation response notice, which the receiving party must furnish by the 15th business day of the negotiation period. (CMS Fact Sheet).
These mechanics are designed to document clear start and end dates in the portal and cut down on disputes advancing to arbitration without genuine negotiation.
New Batching Rule With 50-Item Cap
The rule revises when items and services may be combined into a single “batched” dispute. Batching is permitted where the items and services are:
Furnished to a single patient on the same or consecutive dates of service and billed on the same claim form (a patient encounter);
Furnished to one or more patients and billed under the same service code or a comparable code under a different procedural code system (e.g., CPT and HCPCS); or
Anesthesiology, radiology, pathology, and laboratory services furnished to one or more patients under service codes within the same Category I CPT code section, as specified in Departmental guidance.
Critically, the rule imposes a hard ceiling of 50 qualified IDR line items per batched dispute, so certified IDR entities can make timely determinations and forecast their costs. (CMS Fact Sheet).
Hard Deadline on Eligibility Determinations
Eligibility review has been the single biggest source of delay. The rule now requires certified IDR entities to determine eligibility within five business days of final entity selection and to notify both parties and the Departments.
To support eligibility, conflict-of-interest, and payment determinations, parties must respond to a certified IDR entity’s request for additional information within 5 business days. If a party does not respond, the entity proceeds without the information where possible, or closes the dispute where it is not. (CMS Fact Sheet).
While the agencies how did this rule to address payer concerns about the volume of provider IDR submissions for in eligible claims, the short deadline for response spells trouble for employer and other health plan sponsors since many third-party administrator or other IDR service providers to their plans are not responding in a timely fashion to the 30 day negotiation and other key IDR deadlines.
New Payer IDR Registry
Plans and their fiduciaries and surface providers also must prepare to meet new registration requirements. Since the original IDR responsibilities took a fact, many plan, notices contained ambiguous or incorrect information failed to provide the required identifying information for providers to use to provide IDR notices.
To solve the persistent problem of providers being unable to identify the correct payer or contact, the final rule requires payers subject to the federal IDR process to register with the Departments and supply general information about how the process applies to their coverage.
The registry is part of the broader IDR Gateway—a centralized platform for starting, tracking, and managing disputes that the Departments will roll out in phases beginning in 2026. (HHS Press Release).
Each registrant receives an IDR registration number that parties can use to confirm eligibility, and that the Departments, OPM, and certified IDR entities can access for enforcement and eligibility purposes. (CMS Fact Sheet).
Extenuating Circumstances
The final rule expands the extenuating circumstances under which IDR timeframes may be extended to include events causing systemic processing delays, such as an unforeseen volume of disputes or portal system failures, and commits the Departments to posting public notice of any such system-wide extensions. Parties also may still request individual extensions through the portal. (CMS Fact Sheet).
Staggered Effective Dates
Covered parties must mind the staggered effective dates of the various components of the final rule. Compliance planning here is complicated by a phased rollout. Based on the Departments’ applicability discussion:
CARC/RARC communication and the QPA disclosure modifications take effect on the rule’s effective date, with implementing guidance to follow.
The lower $15 administrative fee applies to disputes initiated on or after 5 business days after publication of the final rule (the Departments invoked good cause to waive the APA’s delayed-effective-date requirement).
The fee-nonpayment procedures apply on the effective date.
The revised batching definition applies to disputes with open negotiation periods beginning 90 days after the effective date.
Most IDR process changes (open negotiation, IDR initiation, certified IDR entity selection, eligibility review, batched/bundled treatment, offer and payment-determination deadlines, and certain withdrawals) apply to disputes with open negotiation periods beginning 90 days after the Departments issue guidance that the supporting functionality is available.
The IDR Registry provisions become applicable 90 business days after the Departments announce that the registry functionality is available. (CMS Fact Sheet)
Litigation Backdrop: Payers Losing In IDR & Payer Appeals
The final rule arrives against a wave of litigation in which insurers, third party administrators and their group health plans, and others responsible for plan IDR administration are losing in the IDR process and so judicial challenges to unfavorable IDR outcomes. This means many health plans are paying significantly more for out of network claims than projected. A review of the IDR unfavorable outcomes reveals the problem lies in two areas:.
Insurers, plans or their service providers responsible for carrying out the IDR responsibilities aren’t following the process in a timely fashion; and
Data used by payers for projecting out of network costs at the beginning of plan years and used in the IDR process is not holding up as credible.
Although payers largely pushed for the NSA IDR process, today’s, providers have used the rules more effectively than payers. Payers have struggled to effectively operationalize their response to the NSA IDR process. often unbeknownst to employers and other plan sponsors and fiduciaries, service providers often are unable to provide credible data to sustain reference based charge numbers used to deny provider charges, fail to timely respond to IDR negotiation requests or otherwise are unsuccessful in defending out-of-network denials under the IDR process, resulting in health plans being obligated to pay claims much higher than budgeted. Payers have brought suits complaining that providers and their billing intermediaries have overwhelmed the system by submitting large numbers of allegedly ineligible disputes, inflating out-of-network reimbursement at plans’ (and ultimately consumers’) expense. Providers have disputed these allegations.
The most recent decision came on May 22, 2026, when the U.S. District Court for the Eastern District of Texas dismissed, with prejudice, all seven claims that Blue Cross Blue Shield of Texas (a division of Health Care Service Corporation) brought against HaloMD, the largest filer of IDR disputes, and affiliated provider defendants. BCBS Texas accused HaliMD and the providers in that suit of RICO, fraud, fraudulent inducement, negligent misrepresentation, and related state-law claims, alleging that the defendants gamed the federal and Texas IDR processes by attesting to eligibility on disputes that were not eligible—seeking, by the defense’s account, to unwind tens of thousands of binding IDR awards.
The court treated those Blue Cross claims as damages tethered to the IDR awards themselves and therefore an impermissible collateral attack on determinations Congress made binding and largely insulated from judicial review. The court also declined to read the injunctive-relief request as a freestanding cause of action. Blue Cross Blue Shield of Texas v. HaloMD, LLC, No. 5:25-cv-00132-RWS (E.D. Tex. May 22, 2026).
The Blue Cross Blue Shield of Texas v. HaloMD, LLC ruling tracked a nearly identical outcome weeks earlier in the April 2026 suit by Anthem Blue Cross (Elevance Health’s California subsidiary) against HaloMD and affiliated providers. In Anthem Blue Cross Life & Health Ins. Co. v. HaloMD LLC, No. 8:25-cv-01467-KES (C.D. Cal. 2026), the U.S. District Court for the Central District of California dismissed without leave to amend the payer’s suit, reasoning that the No Surprises Act forecloses judicial review of IDR payment determinations on all but narrow grounds, and that a certified IDR entity’s payment determination necessarily incorporates the threshold eligibility determination—closing the door on the payer’s theory that it was challenging “eligibility” rather than the award.
These were not isolated results. With the Blue Cross Blue Shield of Texas Eastern District of Texas decision, four federal courts already rejected comparable insurer attempts to relitigate IDR awards within roughly six weeks, with parallel dismissals also reported in the Middle District of Florida and the Eastern District of Pennsylvania. The statutory anchor running through the decisions is the NSA’s limitation on judicial review of IDR determinations in 42 U.S.C. § 300gg-111.
The practical lesson is twofold.
For providers and their billing partners, the binding nature of IDR awards remains a meaningful shield, but the same volume-and-eligibility concerns driving this litigation are now embedded in the regulatory framework, which is designed to keep ineligible disputes out of the process in the first place.
For payers, courts are signaling that collateral litigation is a poor substitute for fixing eligibility and communication problems at the front end—precisely what the new operational rule attempts to do through CARCs/RARCs, portal-documented open negotiation, the five-business-day eligibility deadline, the 50-item batching cap, and the IDR Registry.
Key Takeaways for Plans, Payers, and Employers
For plan sponsors, self-insured employers, issuers, and their third party administrators, the action items are concrete. Payers must begin mapping the CARC/RARC requirement into their remittance and EDI workflows, confirm that initial-payment and denial disclosures will carry the new legal-name and registration-number elements, and prepare to register in the IDR Registry once functionality opens.
Concurrently, plan sponsors and fiduciaries also should assess the reasonability and appropriateness of processes and compensation used by their third party administrators and brokers in forecasting plan out-of-network costs for defensibility in the IDR process, audit the adequacy of their service providers handling of IDR response to provider requests for negotiation and IDR challenges under the IDR rules to identify potential costs resulting from missteps in the performance of these functions, and review contracts to ensure contracts appropriately assign and hold service providers responsible and accountable for performing these functions.
Many employer and other plan sponsors and fiduciaries conducting these reviews are surprised to discover their plans and they are exposed to or actually have already paid significantly higher than projected out-of-network costs due to the use or cost data undefesible under these rules, failures by their vendors to timely handle or other bungling of IDR rules responsibilities or both. Employers and plans with these issues are at risk for facing stop loss denials for bungled claims handling, higher stop loss and other renewal costs and other unexpected liabilities. Keeping in mind that the Labor Department views NSA administration and selection, oversight and management, and compensation of vendors as fiduciary conduct, employers also should verify that vendors handling these duties assume named fiduciary status for these responsibilities and document the efforts of the employer or plan fiduciary that selects these vendors and their compensation under ERISA’s fiduciary responsibility rules.
Both payers and providers should revisit internal protocols so open negotiation notices and responses are submitted through the portal within the new deadlines, and so requests for additional information from certified IDR entities are answered within the five-business-day window. Given the staggered applicability dates, organizations should watch for the Departments’ implementing guidance, which will control when several of the operational changes actually bind.
As this provides only a high-level summary of a lengthy and technical rulemaking, plans, their sponsors, fiduciaries and vendors, payers, and providers should review the full final rule and consult counsel before relying on any single provision, particularly given the phased effective dates and forthcoming guidance.
For Help or More Information
The author of this update, Cynthia Marcotte Stamer advises health care providers, employer and union sponsored self-insured group heath plans, their sponsors and fiduciaries, insurers, their service and technology providers, and other health industry clients on NSA and other coverage and payment, enrollment, compliance programs, government investigations, transaction due diligence, reimbursement compliance and disputes, audits and investigations, and other legal and operational compliance and risk management and legislative and regulatory affairs. She is available to assist your organization in assessing the impact of these developments and navigating the compliance and strategic steps that follow. For more information about these or other health care, managed care and other health benefits, or other health care developments, please contact Ms. Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel and a Martindale-Hubble “AV-Preeminent” (Top 1%) attorney and advisor board certified in labor and employment law by the Texas Board of Legal Specialization peer peer celebrated as “Top Rated Lawyer” and “LEGAL LEADER™ “Top Rated Lawyer” and “Best Lawyer” for her work in ERISA & Employee Benefits Law, Health Care Law, Labor and Employment Law, and Business and Commercial Law.
Nationally recognised for her decades of leading edge health and other employee benefits and insurance, compensation, human resources and other management work, public policy leadership and advocacy, coaching, teachings, and publications, Ms. Stamer is well known for her decades of pragmatic, leading edge work, scholarship and thought leadership on health benefit and other health and managed care, privacy and data security and other employee benefit, insurance, and health industry legal, public policy and operational concerns.
Ms. Stamer’s work throughout her 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 a key focus 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; third party administrators and other health benefit service providers; hospitals, health care systems and other health care providers, 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.
Her experience includes more than 35 years of leading edge work for employer and other plan sponsors, plans and their fiduciaries, insurers, third party administrators, health care clearinghouses and other health care, insurance and other data and technology providers, and others on health and other employee benefits design, administration, compliance, and policy including decades of work on fiduciary compliance and risk management; eligibility, coverage and other plan mandates; administrative simplification and transparency; PBM, pharmacy and pharmaceutical management and regulation; surprise billing and other non-par provider; direct provider, vendor and other credentialing, contracting and management; and other managed care and insurance; high deductible, minimum or level premium, captive and other non traditional funding; and agency and private audits, investigations and enforcement; and other insured and self-insured health benefit contracting, design, administration, regulation, fiduciary and other liability managment, and other design, compliance, risk management, defense, and operations solutions.
She also has extensive experience 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, Section 504, 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 Department of Insurance, Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, trucking, alcohol and firearm, 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.
Former lead advisor to the Government of Bolivia on its Social Security Privatization reform, miss Stamer also has extensive legislative and regulatory affairs experience on federal, state and international employee benefits, healthcare, workforce, education, insurance, data privacy and security, antitrust, and other regulations and reforms.
In addition, Ms. Stamer contributes her time and leadership to numerous policy, professional, civil and other organizations, Ms. Stamer currently or previously served as the Scribe leading annual agency meetings on HIPAA and other issues with the Department of Health and Human Services; leadership Council Representative, speaker, author and faculty lead for the American Bar Association (“ABA”) Joint Committee on Employee Benefits; the ABA International Section International Employment Law Committee and International Life Sciences Committee Chair; the ABA Tort Trial and Insurance Practice Section Medicine and Law Committee Chair and Employee Benefits and Worker’s Compensation Committees Vice Chair; the ABA Health Law Section Managed Care & Insurance Interest Group Chair and Risk Management Interest Group Chair; the ABA RPTE Employee Benefits & Other Compensation Group Chair and Welfare Benefit, Fiduciary Responsibility, and Plan Terminations and Transactions Committees Chair; Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association; a Southwest Benefits Association Board Member; a SHRM Consultants National and Region IV Board Chair; WEB National Board Member and Dallas Chapter President; National Kidney Foundation of North Texas Board Member and Compliance Chair; Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency Board President; a North Texas United Way Long Range Planning Committee Member; and other leadership involvement in a broad range of other professional and civic organizations.
Author of hundreds of highly regarded works on health and other benefits, human resources, health care, insurance, data privacy and security and other related concerns, examples of these publications include “Transparent PBM Contracting,” “ACOs, Direct Contracting: Legal & Practical Challenges For Employers, Providers & TPAs,” “The Medicare Advantage Contracting Manual,” “Third Party Administrator (TPA) Contracting Principles and Strategies and a multitude of other publications and presentations.
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™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could change the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
The U.S. Department of Health and Human Services (HHS) May 18, 2026 announcement of its reorganization of its Office for Civil Rights (OCR) signals employer and other health plan sponsors, health care providers and others funded or regulated by HHS experiencing discrimination or other conflicts with conscience or religious objections may expect greater protection from HHS, even as it warns federal health care exchange, Medicare and Medicaid Advantage health plans, and other health payers; health care providers; housing and education providers, states and other organizations and individuals receiving HHS funding to ensure their practices and policies comply with current HHS policies on federal conscience and religious freedom rights.
The reorganization of the HHS agency charged with enforcing HHS-administered laws protecting civil rights, conscience and religious freedom, and health information privacy and security, returns OCR to a program-based structure that reelevates conscience and religious freedom protection enforcement by realigning OCR into three distinct subject-matter divisions:
The Conscience and Religious Freedom Division,responsible for enfocing federal rights of conscience and religious freedom;
The Civil Rights Division, responsible for enforcing Section 1557 and other civil rights and disability laws implemented and enforced by HSS; and
The Health Information Privacy, Data, and Cybersecurity Division, responsible for implementing and enforcing the privacy, data security, data breach and privacy rights of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Genetic Information Nondiscrimination Act (GINA) and other privacy and data security requirements implemented and enforced by HHS.
Historical Background Leading To Reorganization
HHS originally established a separate OCR Conscience and Religious Freedom Division (CRFD) to handle federal enforcement of the nation’s laws that protect the rights of conscience and religious freedom protected under the United States Constitution and other federal laws in January 2018 during President Trump’s first presidency. That division enforced and raised public awareness of conscience and religious freedom laws in health and human services, underscoring that violations are serious infractions that transgress basic human dignity and fundamental rights.
CRFD operated until March of 2023, when the Biden administration dissolved the division in 2023. Although OCR maintained jurisdiction over conscience and religious freedom authorities in health and human services after 2023, the Biden Administration combined the Conscience and Religious Freedom Division and the then-Civil Rights Division into the Policy Division.
According to the announcement, the intake and processing of complaints filed with OCR, and the review of reported breaches involving unsecured protected health information, will continue to be handled by an Enforcement Division that supports centralized intake and field-office execution. The reorganization is not expected to result in a reduction of OCR’s workforce.The OCR reorganization announcement reports OCR will publish more information about the reorganization in a Federal Register notice next month. Scribe and stay tuned for more developments.
Reorganization Part of HHS Actions To Enhance Conscience Rights and Religious Freedom Protections
OCR intends for the reorganization to strengthen its enhanced efforts to protect federal rights of conscience and religious freedom undertaken in response to Trump Administration directives. OCR’s announcement responds builds upon the Trump Administration policy and HHS’ resulting recent efforts to enforce federally protected right of conscience protections and protect human life.
Since President Trump began his second administration, he has made protection of rights of conscience, freedom of religion and protection of human life policy priorities. See Fact Sheet: HHS Takes Comprehensive Action to Enforce Conscience Rights and Protect Human Life, and OCR’s conscience and religious freedom webpage. Since returning to office in January 2025, President Trump has issued several executive orders and presidential directives designed to expand protections for religious liberty, conscience rights, and faith-based participation in federal programs since beginning his second term in office by among other things:
Establishing the White House Faith Office within the Executive Office of the President and ordering all executive agencies to protect religious liberty, coordinate with faith-based organizations, and identify barriers affecting religious groups seeking participation in federal programs under Executive Order 14205;
Creating a federal “Task Force to Eradicate Anti-Christian Bias,” led by the Department of Justice and involving multiple agencies charged with reviewing federal policies, investigations, and enforcement activities allegedly discriminating against Christians or religious organizations. DOJ Task Force Report on Anti-Christian Bias and Religious Liberty;
Establishing the Religious Liberty Commission, declaring it federal policy to “vigorously enforce” protections for religious liberty under federal law, and directing the Commission to study threats to and recommend safeguards for religious exercise including conscience protections, free exercise rights, religious education, and the role of faith-based organizations in public life under Executive Order 14291; and
Proclaiming January 26. 2026, Religious Freedom Day, 2026.
OCR’s announced restructuring is part of a broader set of activities OCR is undertaking to strengthen its oversight and enforcement of conscience and religious freedom rights in response to these Trump Administration directives. Before announcing the restructuring, OCR already has taken enforcement action to protect health care workers, support whistleblowers, and reinforce adherence to religious and conscience exemptions in the Vaccines for Children Program as part of these policies. For example, OCR previously has:
Repudiated a 2021 Biden Administration era letter that excluded employers and plan sponsors from the scope of health care entities protected by the Weldon Amendment and notified states and other regulated entities no longer rely on the now-repudiated legal position;
Repudiated other Biden Administration era policies on reproductive rights, diversity equity and inclusion and other policies considered outdated or inconsistent with the Trump Administration’s interpretation of federal conscience and religious freedom rights;
Issued public notices describing OCR deregulatory actions to align with President Trump’s E.O. 14182, Enforcing the Hyde Amendment;
Issued a nationwide Dear Colleague Letter explaining OCR’s right of conscious policy under the Trump Administration;
Issued a Notice of Violation that found an Illinois state law violated the Weldon and the Coats-Snowe Amendments, which are among two dozen federal health care conscience protection statutes that HHS enforces. The Illinois Notice of Violation charges the Illinois law unlawfully ties health care provider conscience protections to referral requirements in the case of abortion;
OCR announced its investigation of 13 states for allegedly violating the Weldon Amendment federal health care conscience law by coercing health care entities, health insurers, and employers and their health plans to provide coverage of, or pay for, abortion contrary to conscience;
To educate the public, OCR also released a nationwide Dear Colleague Letter summarizing federal health care conscience protection statutes, including those laws specific to abortion, sterilization, and assisted suicide; and
Undertaken high profile investigations and enforcement actions against academic medicine and other health, education or other HHS funding recipients perceived to have discriminated or violated rights of conscience or religious freedoms of individuals of Christian or Jewish faith.
OCR’s announcement of the reorganization makes clear it intends for the reorganization to strengthen its ability to enforce these and other interpretations and policies for the protection and defense of rights of conscience and religious freedom in accordance with the Trump Administration directives. The announcement quotes HHS Office for Civil Rights Director Paula M. Stannard as saying, “This reorganization reinstitutes a structure that rightly prioritizes civil rights and conscience and religious freedom alongside health information privacy and security,” and that “All three areas are deserving of subject-matter expertise and distinct senior executive leadership for OCR to best serve the American people.” HHS’ announcement also states the reorganized structure will improve OCR’s effectiveness and efficiency to advance the protection of conscience rights, address race-based discrimination in a color-blind manner, eradicate antisemitism and anti-Christian bias, and restore biological truth.
Given the current emphasis of OCR and other federal agencies on protection and enforcement of federally protected rights of conscience and religious freedom under current Trump Administration policies, employers, health care providers, health insurers and plans, academic medicine and other education, housing and other entities funded or participating in HHS programs specifically should contact qualified legal counsel for assistance in evaluating and ensuring that their policies and procedures properly align with OCR right of conscience and religious freedom enforcement policies. Along with generally reviewing policies or practices that might raise right of conscience or religious discrimination or freedom concerns, these entities also should tread carefully and seek the assistance of legal counsel with identifying and responding to requests or other potential right of conscience, religious discrimination, or religious freedom concerns arising in their dealings with employees, service providers, customers and others.
Meanwhile employer and other plan sponsors and other organizations that feel that they are suffering discrimination or other violations of their rights of conscience or religious freedom may wish to evaluate their ability to secure accommodations or other relief under the religious freedom and right of conscience policies from HHS or other applicable federal agencies, the courts, or both.
For Help or More Information
The author of this update, Cynthia Marcotte Stamer has decades of experience advising and assisting health industry clients to design, audit, and defend their organizations and practices including conducting audits and investigations, designing and updating compliance and risk management programs, responding to government investigations, conducting transaction, governance, and other due diligence, and assisting with other legal and operational compliance and risk management and legislative and regulatory affairs. She is available to assist your organization in assessing the impact of these developments and navigating the compliance and strategic steps that follow. For more information about these or other health care, managed care and other health benefits, or other health industry laws or concerns, contact Ms. Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel and a Martindale-Hubble “AV-Preeminent” (Top 1%) attorney and advisor board certified in labor and employment law by the Texas Board of Legal Specialization peer peer celebrated as “Top Rated Lawyer” and “LEGAL LEADER™ “Top Rated Lawyer” and “Best Lawyer” for her work in ERISA & Employee Benefits Law, Health Care Law, Labor and Employment Law, and Business and Commercial Law.
Nationally recognised for her decades of leading edge health and other employee benefits and insurance, compensation, human resources and other management work, public policy leadership and advocacy, coaching, teachings, and publications, Ms. Stamer is well known for her decades of pragmatic, leading edge work, scholarship and thought leadership on health benefit and other health and managed care, privacy and data security and other employee benefit, insurance, and health industry legal, public policy and operational concerns.
Ms. Stamer’s work throughout her 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 a key focus 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; third party administrators and other health benefit service providers; hospitals, health care systems and other health care providers, 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.
Her experience includes more than 35 years of leading edge work for employer and other plan sponsors, plans and their fiduciaries, insurers, third party administrators, health care clearinghouses and other health care, insurance and other data and technology providers, and others on health and other employee benefits design, administration, compliance, and policy including decades of work on fiduciary compliance and risk management; eligibility, coverage and other plan mandates; administrative simplification and transparency; PBM, pharmacy and pharmaceutical management and regulation; surprise billing and other non-par provider; direct provider, vendor and other credentialing, contracting and management; and other managed care and insurance; high deductible, minimum or level premium, captive and other non traditional funding; and agency and private audits, investigations and enforcement; and other insured and self-insured health benefit contracting, design, administration, regulation, fiduciary and other liability managment, and other design, compliance, risk management, defense, and operations solutions.
She also has extensive experience 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, Section 504, 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 Department of Insurance, Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, trucking, alcohol and firearm, 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.
Former lead advisor to the Government of Bolivia on its Social Security Privatization reform, miss Stamer also has extensive legislative and regulatory affairs experience on federal, state and international employee benefits, healthcare, workforce, education, insurance, data privacy and security, antitrust, and other regulations and reforms.
In addition, Ms. Stamer contributes her time and leadership to numerous policy, professional, civil and other organizations, Ms. Stamer currently or previously served as the Scribe leading annual agency meetings on HIPAA and other issues with the Department of Health and Human Services; leadership Council Representative, speaker, author and faculty lead for the American Bar Association (“ABA”) Joint Committee on Employee Benefits; the ABA International Section International Employment Law Committee and International Life Sciences Committee Chair; the ABA Tort Trial and Insurance Practice Section Medicine and Law Committee Chair and Employee Benefits and Worker’s Compensation Committees Vice Chair; the ABA Health Law Section Managed Care & Insurance Interest Group Chair and Risk Management Interest Group Chair; the ABA RPTE Employee Benefits & Other Compensation Group Chair and Welfare Benefit, Fiduciary Responsibility, and Plan Terminations and Transactions Committees Chair; Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association; a Southwest Benefits Association Board Member; a SHRM Consultants National and Region IV Board Chair; WEB National Board Member and Dallas Chapter President; National Kidney Foundation of North Texas Board Member and Compliance Chair; Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency Board President; a North Texas United Way Long Range Planning Committee Member; and other leadership involvement in a broad range of other professional and civic organizations.
Author of hundreds of highly regarded works on health and other benefits, human resources, health care, insurance, data privacy and security and other related concerns, examples of these publications include “Transparent PBM Contracting,” “ACOs, Direct Contracting: Legal & Practical Challenges For Employers, Providers & TPAs,” “The Medicare Advantage Contracting Manual,” “Third Party Administrator (TPA) Contracting Principles and Strategies and a multitude of other publications and presentations.
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.
Human resources and other business leaders, using or allowing workforce members to CHAT-GPT or other artificial intelligence (“AI”) tools to research, make decisions or to support other activities should ensure that their organizations and their teams understand and manage the resulting evidentiary consequences and responsibilities these activities create.
In today’s AI age, Human Resources directors and other business leaders in increasingly are encouraged to turn to AI tools for a quick understanding of the law, drafting of documents, and a host of other human relations and business functions traditionally performed with the assistance of legal counsel. Although AI tools can be valuable under the right situations and properly used, the use of AI tools, along side of or as a substitute for legal advice obtained within the scope of attorney client privilege can carry a number of inherent risks and challenges. Human Resources and other leaders and their organization should carefully evaluate and manage these consequences before using AI.
AI Searches May Be And Create Evidence
AI prompts, outputs, and related metadata often qualify as discoverable electronically stored information (“ESI”) in litigation, regulatory audits, and enforcement proceedings.
Under the Federal Rules of Civil Procedure, discoverable information includes electronically stored information (ESI”) relevant to claims or defenses. See Fed. R. Civ. P. 26(b)(1); 34(a)(1)(A). Once litigation is reasonably anticipated, organizations must preserve relevant ESI under Federal Rules of Civil Procedure. See e.g.,Hoffer v. Tellone, 128 F.4th 433 (2d Cir. 2025).
AI searches and other interactions and the information and other outputs they produce generally qualify as ESI for purposes of the Federal Rules of Civil Procedure, Federal Rules of Evidence, (hereafter collectively the “Federal Rules”) and comparable federal and state litigation procedural rules.
Likewise, federal and state regulatory and enforcement agencies tend to consider AI and other ESI evidence covered by document retention and discovery rules.
Where applicable, these Federal Rules and agency rules generally include AI and other ESI evidence organizations must preserve, identify, and subject to discovery or other production like traditional evidence in litigation and agency audits and investigations.
ESI evidence generally includes any data stored in electronic form—such as emails, texts, spreadsheets, social media, and Internet of Things (“IoT”) data. As broadly construed by the courts, courts already long have admitted:
Internet search histories;
Internal chats and Slack messages;
Draft documents; and
Deleted files.
AI searches are simply the next evolution of this evidence category. AI records and information considered ESI can include;
AI prompt histories;
Generated outputs;
Embedded AI-assisted drafts;
Platform logs (if accessible); and
Other records.
Organizations that fail to fulfill requirements for AI or other ESI early identification, data authentication and other requirements of Federal Rule of Evidence 902, the requirements of Federal Rule of Civil Procedure 37(e) regarding lost evidence, or other applicable requirements to preserve and produce ESI may result in sanctions, adverse inferences, and penalties under the Federal Rules. Similarly, organizations may incur evidentiary sanctions, regulator penalties, and other adverse consequences for failing to identify, retain and produce ESI from AI or other sources in government audits and investigations. Common sanctions include:
Monetary sanctions;
Evidence preclusion;
Adverse inference jury instructions; and
Other authorized sanctions.
See, e.g., Jones v. Riot Hosp. Grp. LLC, 95 F.4th 730 (9th Cir. 2024) (affirming dismissal as sanction for intentional destruction of ESI); Maziar v. City of Atlanta, No. 1:21-cv-02172, 2024 WL 197561 (N.D. Ga. June 10, 2024) (denying summary judgment and awarding fees based on loss of text messages); McBride v. Moore, No. 2:23-cv-02904, 2024 WL 1136429 (C.D. Cal. Feb. 23, 2024) (denying sanctions where ESI not shown lost or duty not triggered). Gregory v. State of Montana, No. 22-____ (9th Cir. 2024) (reversing sanctions imposed outside Rule 37(e); emphasizing Rule 37(e) as exclusive remedy for ESI spoliation); DR Distribs., LLC v. 21 Century Smoking, Inc., 513 F. Supp. 3d 839 (N.D. Ill. 2021) (recognizing financial prejudice from spoliation and awarding fees); Bistrian v. Levi, 448 F. Supp. 3d 454 (E.D. Pa. 2020) (Rule 37(e) provides exclusive framework for ESI spoliation); Fast v. GoDaddy.com LLC, 340 F.R.D. 326 (D. Ariz. 2022) (failure to preserve mobile device data warranted sanctions).
These and other related cases alert organizations that AI and other modern data sources are squarely within ESI. Courts treat AI, texts, mobile data, and app-based communications as discoverable ESI.
The precedent reflects that the best opportunity to position your organization to show the reasonability of the actions taken is through the existence and enforcement of policies before and during the use of the AI tool.ESI preservation obligations depend on foreseeability, control, and access to data. When deciding the consequences of the unavailability or failure to produce ESI, the determination regarding failure to take “reasonable steps” is fact-intensive. Of course, the failure to retain the documentation will be particularly likely to be found unreasonable where the party was under a statutory, regulatory, ethical, contractual, or other pre-existing obligation to preserve the evidence.
Also, courts require proof of intent to deprive before imposing the most severe adverse inference or dismissal sanctions, a lack of proof of intent to deprive the request requesting party of evidence does not mean there will not be consequences for the non-producing party. Negligent failure to retain and produce ESI and other evidence still carries consequences. Even without bad faith, courts may impose curative measures, fees, or evidentiary limitations.
Among other things, organizations should be prepared to routine and produce documentation and data obtained, utilized, or otherwise interacting with AI tools and it’s associated meta-data and other components to respond to litigation and regulatory request for a broad range of data and information. Optimally the data captured and retained should include, but it’s not necessarily limited to:
AI usage policies;
Employee and other agent AI interaction records;
Evidence of AI and other relevant governance and training; and
Data protection controls.
Consequently, failure to govern, identify, preserve and produce AI-generated and AI-assisted records appropriately can expose organizations to spoliation sanctions, adverse inference instructions, regulatory penalties, loss of privilege protections, and expanded liability exposure.
In recognition of the possibility that AI tool interactions may give rise to obligations to retain and produce ESI evidence created as a consequence of that interaction, or organization should work with legal counsel to develop an administer appropriate practices to monitor, identify, retain, manage, and where necessary produce this ESI evidence.
AI Tools Create Evidence
Beyond considering and meeting documentation and other evidently protection, preservation, and production responsibilities, organizations and their human resources and other leaders need to recognize that the use of the tool itself and its outputs creates evidence that may give rise to legal opportunities, risks, and obligations for the organization.
Organizations should keep in mind that the use of AI tools creates legal evidently risks because AI tools typically generate synthesized responses (not just links) that often incorporate user inputs into outputs that may reflect user intent, knowledge, biases and opinions, and decision-making. This often makes AI interactions particularly valuable evidence for:
Intent (e.g., “how to terminate employee without legal risk”) Knowledge (awareness of compliance obligations) State of mind (deliberate vs. negligent conduct);
Knowledge (awareness of compliance obligations);
State of mind (intentional, willful, or deliberate vs. negligent conduct)
The potential risks of this and other evidence is heightened by the fact that the evidence created may arise not only from the actions taken by the user of the AI tool, but also may be inherently built into the design of the AI tool itself or the databases or other reference materials that it accesses, not all of which may be transparent to the user or the organization that employs the user. These risks are further heightened when the AI tool use is not conducted internally within the organization by its employee, but rather is a tool utilized by a consultant or other third-party provider conducting activities of a sensitive nature on behalf of the organization, such as a recruiting company, investigation, company, or other service provider.
These unique characteristics of AI make it advisable that organizations recognize and manage potentially heightened exposures that employee or other agent use AI tools can produce for the organization in a wide range of sensitive areas.
Examples of queries that can become “smoking gun” evidence include but are not limited to:
In employment or other workforce administration searches, AI queries such as “How to terminate employee with medical condition,” ‘How to avoid claims when, terminating older, disabled, complaining, injured or other employee with protected status, or the like can be evidence of discriminatory or other adverse intent;” or “How to beat a union organizing campaign;”
Compliance & Regulatory searches such as “How to structure payments to avoid reporting requirements,” “HIPAA penalties for disclosure; searches about compliance or looking for compliance loophole; searches where company researched sanctions for noncompliance in areas involved in litigation or enforcement; or searches on risk management that could be evidence the organization saw but chose not to follow rules or standards or otherwise looked for or acted to circumvent compliance or disregarded interpretations less favorable to chosen challenged course of action;
Litigation or Other Defense Strategy searches or tools such as “How to defeat a whistleblower claim,” “Ways to minimize damages in lawsuit” “Protecting your assets from IRS or in bankruptcy,” “How to conceal” or How to hide” orthe like can harm the organization’s interest by showing adverse intent, willfulness, or other motive or state of mind;
Litigation case law, enforcement, argument drafting, or other actions that could reveal or provide insight on sensitive litigation strategies or their strengths or weaknesses;
Financial & Tax searches such as “Aggressive tax strategies unlikely to be audited,” or “contract terms to reclassify employee to contractor,” “Structure transaction to avoid disclosure” or the like; and
Other searches or tool uses that could reflect improper, intent, or document improper activities, such as how to hide evidence, how to create a bomb, how to poison somebody or that creates a record of conduct such as edits to revise data or documentation in reports or records, where the changes are tracked and retained.
Given these other risks, organizations should carefully consider and manage these and other risks when deciding whether, when, how and what AI tools their organizations allow their people to use, who gets to use what tools, designate and train those authorized to use these tools appropriately, and design and implement appropriate tools to track, capture, retain and manage these records of AI use and their implications. Optimally, the planning should identify and work to manage the creation and preservation of evidence and related AI ESI required or otherwise helpful to meet, applicable, regulatory, contractual, statutory, or other requirements in a manner that minimizes the creation of evidence that could call into question the compliance or other appropriateness of the organizations actors.
Privilege and Confidentiality Risks
Asking AI tools to answer legal questions or provide guidance in legal advice obtained within the scope of attorney. Client privilege also can enhance the exposure for the organization and it’s actors because of the implications of that Youts on the availability of attorney-client privilege for the activities and information obtained. Using AI tools and output also can have implications on the ability of an organization to protect legal advice and work product developed and shared within the scope of attorney privileges from discovery in judicial or regulatory actions. Organizations need to recognize risk to the confidentiality of legal advice or work product that entering sensitive legal questions or information into public AI tools not specifically designed and used outside the scope of the attorney-client relationship to avoid creating problematic evidence, disclosing discussions or work product that otherwise might qualify for protect against discovery in litigation or agency proceedings under the attorney-client privilege or attorney work product rules, or both.
Searches conducted by organization employees, consultants, or other agents or representatives about the law, strategies, or legal risks and consequences without or outside the scope of an attorney-client relationship generally can be discovered and used as evidence. Consequently, organizations should regulate the use by officers, directors, compliance officers, human resources directors, consultants, non-legal investigators and auditors and others of AI tools, internet or other searches to investigate the law or legal strategies independent of or outside the scope of attorney-client privilege.
Particularly risky scenarios include:
In-house counsel, Human Resources, risk management or compliance staff using public AI tools;
Consultants, contractors, and other vendors use of AI in performing tasks or tools;
Embedded AI in software or other tools; or
Uploading contracts, PHI, or proprietary data into AI systems.
Additionally, organizations and others communicating or working with legal counsel on behalf of the organization within the scope of attorney-client privilege to design strategies or investigate or defend actions generally should not use AI tools to conduct their own legal research or analysis without authorization and direction of the legal counsel to avoid forfeiting attorney-client privilege and work product protections.
If the required confidentiality is preserved, the attorney-client privilege and work product privileges rules can protect confidential communications between a client and its attorney and work product prepared for risk management, defense or other purposes of the legal engagement against disclosure in litigation or other proceedings in many circumstances. However these protections are lost if the communication or work product is disclosed to or discussed with third parties outside the attorney-client relationship. Entering factual information, conducting legal searches, or using AI tools outside the attorney-client relationship, not specifically designed to preserve confidentiality, or both to draft or evaluate legal documents, research, drafts, or strategies generally is considered a third party disclosure that can waiver or undermine the privilege for the specific information input to the AI tool as well as potentially related communications or work product.
For these and other reasons, organizations and individuals generally should resist the temptation to use AI tools to evaluate legal strategies, advice or work product.
Trade Secret, HIPAA and Other Data Privacy and Use Exposures
Human Resources and other leaders also must keep in mind their organization’s responsibilities to respect other organizations, intellectual property, to safeguard the confidentiality and security of data, and their organization’s need to protect its own intellectual property.
AI tool enthusiasts promote AI tools as substitutes for legal advice and other paid services. While asking AI to write a “free” policy or contract may seem a great way to save legal or other consulting, licensing or other costs, human resources and other leaders and their organizations must keep in mind that not all data, information and resources obtained through a ChatGPT or other AI search is shareware. Most nongovernmental data bases, contractual firms, tools, templates and other materials accessed through AI searches are or incorporate materials owned or subject to copyrights or other intellectual property protections of third parties. Unlicensed use of these resources can expose their organizations to copyright and other intellectual property infringement liability.
Furthermore, human resources and other executives choosing to use materials drafted using AI tools or otherwise acquired off of the Internet or other sources without legal advice to recognize that acquired materials and resources may not be currently compliant, appropriately tailored to their use, or contain other deficiencies for utilization in their organizations. These deficiencies can arise from a number of sources. For one thing, the queries input by the user may not be sufficiently tailored to adequately represent all of the material considerations necessary to tailor he organizations, questions, and the AI response to the needs of the organization. Also, because AI databases often times include a broad range of historical data, AI responses may rely upon outdated, legal or operational presumptions incorporated into these historical policies when they no longer are appropriate for use in your organization. Additionally, the response of AI may draw from a wide range of sources, including many of which may be sample policies not drafted by qualified individuals with adequate expertise to fully understand the legal and operational implications of the policy and properly draft a policy appropriate for use in the organization, acquiring the form or materials off of the Internet.
Beyond suitability of the information where tool obtained through the AI search itself, unlicensed use of the response, may expose your organization to liability for violating other organizations or authors, intellectual property rights. AI searches can and often do access and incorporate data and other resources protected by third party copyright,trade secrets, HIPAA or other confidentiality, or other safeguards. Accordingly, accessing or using data bases, sample language or forms, or other materials without proper licensing or attribution may trigger liability to individuals and organizations for breaches of these intellectual property rights.
A separate concern arising from the use of AI tools in HR and other business operations to evaluate, formate or otherwise process sensitive data also creates potentially serious risks when theof these tools involves allowing the AI tool to access or uploading the confidential or other sensitive information into the tool. Human resources and other leaders must exercise care not to share inappropriately and to help their organizations use policies and processes to prevent their people’s use of AI tools to avoid violating statutory, regulatory or contractual confidentiality requirements, compromising confidential information, their own or business partner’s trade secrets, proprietary information and other intellectual property, or both.
Furthermore, uploading or sharing trade secrets, Health Insurance Portability and Accountability (“HIPAA”) protected health information, confidential employee, tax or other regulated information, trade secrets or other confidential or sensitive data into AI tools or searches without proper controls may itself breach of HIPAA, trade secret, federal or state privacy laws (e.g., biometric, consumer data laws) or other statutory, regulatory, ethical or contractual data privacy or confidentiality obligations. Additionally, allowing AI tools to access and interact with electronic data or systems frequently triggers data and systems security obligations under HIPAA, the Fair and Accurate Credit Transactions Act, Equal Employment Opportunity and other Human Resources and benefits data, electronic crimes, federal and state government contract, and a broad range of international, federal and state cybersecurity laws and regulations, and other government and private contractual and program participation, statutes, and regulations.
Given these concerns, organizations should avoid using AI tools that require uploading customer, financial, sales, or other data or information that the organization considers its own trade secrets or proprietary information into AI data bases or tools that do not adequately safeguard the ownership and confidentiality of that information.
AI Tool Hallucinations and Other Output Deficiency Risks
AI tools and the output they produce are not always reliable. Among other things, certain AI tools are known to:
Lack the ability to distinguish between more and less credible information sources;
Create plausible-sounding but entirely fabricated facts, news articles, legal authorities, or academic citations;
Create biased, false, incomplete, or inaccurate responses when models lack complete training data, are subjected to biased data, have limited context, ir under other circumstances;
Create false positives such as I dentifying a threat (e.g., in fraud detection) that is not actually present.
Fail to detect a real threat (e.g., in medical imagery) or report other false positives;
Fabricate non-existent, fake information or other incorrect or inaccurate information; and
Engage in hallucinations or other errors
The quality of the response, at best, often varies based on the quality and precision of the question asked. Lack of experience and careful structuring of the questions and inquiries made, lack of specialized knowledge necessary to structure the inquiry to be tailored to the specific needs at hand, and other limitations and concerns about the searches can undermine the accuracy, completeness and relevance of the AI tools output. Accordingly, response obtained by AI tools, often are unreliable and must be validated by a person experienced and skilled. The validation process should be conducted in such a matter that it preserves evidence that changes and responses are made based on thoughtful and reasonable determinations that the evidence obtained was not applicable or reliable, to minimize susceptibility to claims that decisions and actions were cherry picking based on improper intent rather than appropriate quality assurance processes. Organizations allowing the use of the tools and the individuals utilizing them need to understand and appropriately manage the very operational, legal in other risks of these deficiencies and error errors when utilizing AI tools.
Adopt And Enforce AI Policies To Manage AI Tool Use Responsibilities and Risks
Considering these and other responsibilities, human resources and other leaders and their organizations should use care to decide when, how, why, and by whom it allows AI tools to be used in or on behalf of its organization and provide appropriate steps to manage those uses in the resulting ESI to fill its legal obligations and manage its legal and operational risks. Because this process of itself could be evidence impacting, the organizations, legal exposures, organizations generally should work with qualified legal counsel within the scope of attorney-client privilege to work define and enforce policies and practices, to promote the organization’s legal and operational interests and manage the resulting legal obligations.
The author of this update, Cynthia Marcotte Stamer has decades of experience advising and representing governmental and private entities, AI and other technology, workforce and other legal and operational compliance, risk management and other operational and enforcement matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about these or other legal, contractual or operational compliance or risk management, 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 her more than 35 years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications including leading edge work on workforce and other risk management and compliance.
Ms. Stamer’s work throughout her career has focused heavily on working with businesses domestically and internationally on employment, benefits, technology, data confidentiality, privacy, and security, and other Federal Sentencing Guidelines and other workforce management, regulatory and public policy and other legal and operational concerns.
Author of many highly regarded compliance, training and other resources on these and other operations, risk management, compliance and government affairs concerns, Ms. Stamer is widely recognized for her thought leadership and advocacy on these matters.
In addition, Ms. Stamer currently or previously served as the American Bar Association (“ABA”) Joint Committee on Employee Benefits OCR annual agency scribe and a Council Representative, International Section International Employment Law Committee Chair and International Life Sciences and Health Committee Chair, ABA TIPS Medicine and Law Committee Chair, ABA Health Law Section Managed Care & Insurance Interest Group 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, and a host of other professional and civic leadership roles. She is 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™
Solutions Law Press™ 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 health care, leadership, governance, human resources, employee benefits, data security and privacy, insurance, 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™ resources.
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 information 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 the particular time. No comment or statement in this publication is to be construed as legal advice or 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 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 16, 2026, is the deadline for health care providers, group health plans and health insurers to update and redistribute their Health Insurance Portability and Accountability (“HIPAA”) Notice of Privacy Practices (“Privacy Notice”) to comply with recent federal rule changes strengthening protections certain Part 2 substance use disorder (“SUD”) records (the “SUD Rules”). Timely update of Privacy Notices and compliance with these related requirements is particularly critical for the following organizations, who regularly receive and handle SUD records:
Behavioral health providers;
Integrated delivery systems;
Health plans receiving SUD claims data; and
Third party administrators, utilization management, and other health plan service providers involved in the administration of behavioral health or substance abuse benefits.
HIPAA Privacy Notice Generally
The HIPAA regulations require most health care providers, group health plans and health care clearinghouses (“Covered Entities”) to provide a Privacy Notice that meets the content and distribution requirements of the HIPAA rules. See 45 C.F.R. § 164.520. Health plans generally must deliver the Privacy Notice to their members at enrollment. Health care providers generally must present the Privacy Notice to patients at least once a year, try to obtain acknowledgement of receipt, display it at their service locations and “prominently post” it on their websites.
Noncompliance with these and other HIPAA requirements can trigger a wide range of adverse consequences, including:
Complicate the administration and defense of HIPAA compliance;
Fuel HIPAA complaints from PHI subjects or others;
Trigger OCR enforcement and the potential civil monetary penalties and corrective action plans;
Expose noncompliant health plan fiduciaries to fiduciary investigation and liability under the Employee Retirement Income Security Act;
Expose health care providers to licensure, ethical or other professional investigations and sanctions;
Expose health care providers and insurers to licensing or other state regulatory enforcement actions;
Violate stop-loss, liability or other contracts;
Expose health plans, their fiduciaries and other covered entities to added expense to respond to and defend complaints and investigations; and
Create reputational risk.
Privacy Notice Updates Due February 16, 2026
The Privacy Notice updates currently due by February 16, 2026, arise from the 2024 Final Rule aligning 42 CFR Part 2 with HIPAA jointly published by the Substance Abuse and Mental Health Services Administration (“SAMHSA”) and OCR to align the substance abuse privacy rules in 42 CFR Part 2 more closely with HIPAA.
While most of the SUD rules operational provisions already are in effect, Covered Entities that maintain SUD records subject to Part to have until February 16, 2026, to update and timely distribute their Privacy Notices to:
Explain how Part 2 records may be used and disclosed.
Describe patients’ rights to obtain an accounting of disclosures, request restrictions, file complaints and describe potential penalties for misuse.
Along with updating their Privacy Notices content, health plans and other Covered Entities also need to update their Privacy Notice postings and distributions. Health plans generally are encouraged to follow best practices by treating the revisions as material revisions impacting their health plans and err in favor of broad distribution. Health plans generally should distribute the updated notice to plan participants within 60 days of a material revision or include notice of its availability in its next annual mailing and post an updated copy on the plan’s website. In contrast, health care providers must meet slightly broader distribution requirements, that generally require a health care provider:
Ensure the updated notice is provided to new patients at check-in and request a signed acknowledgement of receipt from the patient at least once a year;
Post the revised Privacy Notice in a clear and prominent locations in treatment areas as required by the Privacy Rule;
Make copies available upon request; and
Post electronically on websites
Beyond these specific actions in response to the 2024 Final Rule aligning 42 CFR Part 2, self-insured ERISA plans, their employer or other plan sponsors, fiduciaries, and service providers should take the following steps:
Update the plan’s HIPAA Notice;
Review and update as necessary plan documents and other policies to ensure language complies with the new rule;
Plan fiduciaries and sponsors should coordinate with third party administrators and other service providers, behavioral health and other medical management vendors, stop loss carriers, prescription benefit management organizations, and other service providers to verify their process and practices are updated to comply with the new requirements;
Conduct any necessary training and education for workforce members and business associates; and
Take steps to monitor compliance on an ongoing basis.
Covered Entities Also Should Reconfirm Adequacy of Existing Other Privacy Notice Content Adequacy
Along with implementing the changes necessary to ensure their Privacy Notices comply with the SUD Rules of 42 CFR Part 2 alignment, group health plans and other Covered Entities also should review and update their Privacy Notices to confirm other content continues to meet OCR’s Privacy Notice requirements.
Since OCR has not substantively revised the content requirements for Privacy Notices or its model Notice of Privacy Practices for many years, many group health plans and other covered entities take for granted that the existing content of their Privacy Notices remains compliant. While OCR’s rules have not changed, group health plans and other Covered Entities often have experienced changes in staffing, addresses or other operational details that may make updates to their Privacy Notices required or advisable. Failing to update Privacy Notices to reflect these changes can both violate HIPAA and fuel a wide range of potentially costly miscommunications and disagreements. Consequently, group health plan sponsors, fiduciaries and service providers, as well as other Covered Entities also are encouraged to review their existing Privacy Notices for any updates required in response to these and other changes.
HIPAA Privacy Rule to Support Reproductive Health Care Privacy No Longer Required
Covered Entities currently do not have to change their Privacy Notices to add disclosures about new requirements for the disclosure of protected health information (“PHI”) relating to reproductive rights that OCR sought to require under its HIPAA Privacy Rule to Support Reproductive Health Care Privacy (“Reproductive Rights Rule”), as the U.S. District Court for the Northern District of Texas vacated those requirements in Purl v. United States Department of Health and Human Services, No. 2:24-CV-228-Z, (N.D. Tex. June 18, 2025).
Had the District Court not struck down the Reproductive Rights Rule last June, Covered Entities also would have been required by February 16, 2026, to revise their Privacy Notices to discuss OCR HIPAA rules restricting disclosures of protected health information (“PHI”) related to lawful reproductive health care.
OCR adopted the Reproductive Rights Rule as part of a broader series of actions by the Biden Administration intended to mitigate the effect of the Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization, 597 U.S. 215 (2022). Dobbs restored state power to regulate abortion by reversing the Supreme Court’s decades-old decision in Roe v. Wade, which had recognized a woman’s right to abortion as part of a fundamental right to reproductive privacy.
In furtherance of these broader efforts to limit state efforts to regulate abortion and other reproductive rights, the Reproductive Rights Rule prohibited Covered Entities from using or disclosing PHI:
For criminal, civil, or administrative investigations into lawful reproductive health care
To identify a person for such investigations
For proceedings related to lawful reproductive health care
It also required Covered Entities and their business associates to:
Obtain a signed attestation before disclosing reproductive health information for certain law enforcement or oversight requests
Revise their Privacy Notice to describe these new protections
The federal district court’s ruling makes these updates unnecessary at this time.
If you have questions about these health plan exposures or other health care, workforce employee benefits or other regulatory compliance or investigations concerns, contact the author.
For More Information
We hope this update is helpful. For more information about the 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.
Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on health and other employee benefits, insurance, healthcare, workforce, HIPAA and other data and technology and other compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.
Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer has more than 35 years of experience advising and representing, employers, employee benefit plans and their fiduciaries and administrators, their administrative services, technology and other business associates and other vendors, managed care and insurance, health care and other clients about these and other workforce, employee benefits, internal controls and other operations and compliance concerns.
Ms. Stamer is nationally sought out for her decades of leading-edge experience in the design, sponsorship, administration, and defense of health and other employee benefit, workforce, insurance, healthcare, data and technology, and other operations to promote legal and operational compliance, reduce regulatory and other liability, and advance other operational goals. This experience includes decades of work on HIPAA and other medical and other data and technology privacy, security and other management, including years of service as the Scribe leading the American Bar Association Joint Committee on Employee Benefits Annual Agency Meeting with the Department of Health and Human Services Office of Civil Rights, extensive advice to health plans and insurers, their sponsors, fiduciaries and service providers; managed care organizations, health care organizations, health care clearinghouses and other health data and technology providers; and others about HIPAA and other Federal, state and international privacy and data security; and extensive speaking and publications on these and related concerns.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is valued and celebrated for her decades of policy advocacy and charitable, pro bono, community and other service and leadership to promote understanding and strengthening health care, workforce, saving, disability, aging and retirement and other key policies and challenges through her PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also often speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry, health and other benefits, workforce and other experience and involvements, see the Cynthia Marcotte Stamer P.C. website or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could change the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
Health, retirement and other employee benefit plan fiduciaries, sponsors and service providers should confirm and document that all plan fiduciaries, service providers and other plan workforce members are properly bonded to protect the plan against fraud and dishonesty, as well as avoid incurring liability for breaching the fiduciary responsibility requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).
ERISA Requires Fidelity Bonding
ERISA imposes fidelity bonding requirements under ERISA §412 and 29 C.F.R. Part 2580 to protect plan assets against loss due to fraud or dishonesty. ERISA §412(a) requires that every fiduciary of an employee benefit plan and every person who ‘handles funds or other property’ of the plan must be bonded against loss resulting from fraud or dishonesty. The Department of Labor (“DOL”) regulations at 29 C.F.R. §2580.412‑6 define handling of funds to include physical contact, power to transfer, ability to sign checks, or supervisory authority over those who handle plan assets.
As ERISA’s bonding requirements are part of ERISA’s fiduciary responsibilities, failure to maintain bonding required by ERISA §412 constitutes a fiduciary breach under ERISA §404(a)(1)(A)-(B), which exposes fiduciaries breaching these obligations to DOL civil penalties, personal liability for losses arising from non‑compliance, and other liabilities.
Who Must Be Bonded
ERISA’s fidelity bonding requirement applies to two categories of persons:
Plan fiduciaries, and
Non‑fiduciaries who ‘handle’ plan funds within the meaning of 29 C.F.R. §2580.412‑6.
For purposes of determining the individuals and entities subject to ERISA’s bonding requirement, keep in mind that ERISA functionally defines a “fiduciary” as including any person that:
Exercises any discretionary authority or discretionary control respecting management of the plan or the management or disposition of its assets,
Renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or
Has any discretionary authority or discretionary responsibility in the administration of such plan. See ERISA Section 3(21).
Consequently, if an individual or entity functionally possesses or exercises authority or responsibility over the plan or its assets, it is a fiduciary subject to the bonding and other fiduciary requirements of ERISA regardless of whether that party is a named fiduciary or disclaims fiduciary status in an agreement.
Likewise, the ERISA bonding requirement for parties that handle funds also is based on the functional realities. Under DOL Regulations, a person is deemed to handle plan assets if their role creates a risk of loss due to fraud or dishonesty. Examples include:
Physical possession of cash, checks, or assets.
Power to transfer assets or negotiate instruments.
Authority to sign checks or initiate electronic fund transfers.
Supervisory authority over individuals who handle assets.
Non‑fiduciary service providers and other members of the plan workforce who do not handle plan funds are not subject to ERISA §412. For instance, DOL Field Assistance Bulletin 2008‑04 states that third‑party administrators that do not control or possess plan assets and cannot authorize disbursements are not required to be bonded. Similarly, other nonfiduciary contractors providing legal, actuarial, consulting, claims‑processing, or IT services fall outside the bonding requirement unless they have direct authority over plan assets. See also 29 C.F.R. §2509.75‑8 without discretionary authority over plan assets generally does not ‘handle’ funds and therefore are not subject to ERISA §412 bonding unless they otherwise are named or function as fiduciaries.
When applying these distinctions for purposes of ERISA’s bonding rules, plan fiduciaries and service providers should look beyond contractual characterizations of the character and nature of the service provider and based their decision regarding whether to require and acquire a bond based on the functional realities. While non‑fiduciary service providers are only required to be bonded if they handle plan funds as defined by ERISA §412 and the DOL regulations, functionally evaluated, certain non‑fiduciary service providers sometimes become subject to bonding if their activities constitute functional “handling” of plan funds. For example:
A payroll vendor that transmits employee contributions is handling assets.
A recordkeeper with authority to initiate distributions must be bonded.
Conversely, a TPA adjudicating claims but without power to pay benefits is not required to be bonded. service providers and others granted functional authority that exposes plan assets to risk of loss are required to be bonded as individuals that handle funds.
When evaluating whether a service provider or other party “handles funds” for purposes of assessing the applicability of the ERISA bonding requirement in investigations or audits, the DOL usually asks if the party or its employees have:
Physical possession of Plan assets?
The power to obtain physical possession of plan assets?
The power to transfer assets?
The authority to disburse Plan funds directly or indirectly?
The authority to endorse checks?
The authority to make investments?
The DOL Enforcement Manual indicates that “handling” of Plan funds is indicated and bonding is required for each individual or party that (a) has any of these authorities or (b) if the assets are held by a corporate trustee, for any service provider or other party that can direct the payment of benefits or direct the investments to be made by the corporate trustee.
Bond Amount and Coverage Requirements
Where ERISA requires a fidelity bond, ERISA §412(a) and 29 C.F.R. §2580.412‑11 require that the fidelity bond must be at least 10% of the amount of plan funds handled by the individual in the preceding plan year, with a minimum of $1,000 and a default maximum of $500,000 per plan (or $1,000,000 for plans holding employer securities under §412(g)).
An ERISA fidelity bond is a specific type of insurance that protects the plan against losses caused by acts of fraud or dishonesty. The fidelity bond required under ERISA specifically insures a plan against losses due to fraud or dishonesty (e.g., theft) by persons who handle plan funds or property. Fraud or dishonesty includes, but is not limited to, larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, wrongful conversion, willful misapplication, and other acts. Deductibles or other similar features are prohibited for coverage of losses within the maximum amount for which the person causing the loss is required to be bonded. While obtaining fiduciary liability insurance also generally is recommended, the bonding requirement is not satisfied by the purchase of fiduciary liability.
The fidelity bond purchased must fulfill the specific requirements of ERISA. For instance, the bond should be issued by a bonding company listed in Treasury Circular 570 and must cover the Plan for loss due to fraud or dishonesty as defined in 29 C.F.R. §2580.412‑9. Fiduciaries should confirm the bond provides for payment to the Plan in the event of loss, name the Plan as an “insured” and have the pay over rider attached unless the Plan is the sole insured under the bond. The definition of employee in the bond must cover all persons who “handle” funds including officers, directors, trustees, employees and the other parties required to be covered by the bond. If the bond contains a deductible, an elimination of deductible rider with the respect to the plan also is needed. Since bonds purchased by third party administrators, financial advisors or other plan service providers to meet state law or professional standards generally do not fulfill these and other ERISA requirements, plans generally should require specific contractual assurances to comply with the ERISA bonding requirements and should obtain and confirm the adequacy of the bonds for service providers and others subject to ERISA bonding requirements.
Liability For ERISA Bonding Violations
Failure to secure a fidelity bond under ERISA can lead to significant legal and financial consequences. Plan sponsors and fiduciaries are required by ERISA to obtain a fidelity bond to protect employee benefit plans from losses due to fraud or dishonesty. Noncompliance can lead to a range of consequences, including auditors’ admonitions, court mandates for removal as plan fiduciaries, plan fiduciary personally liability for losses that should have been covered by a fidelity bond, and EBSA administrative penalties for breach of fiduciary duty. See DOL’s Protect Your Employee Benefit Plan With A Fidelity Bond; Getting It Right: Know Your Fiduciary Responsibilities.
Managing Bonding And Bonding Risks
To avoid violating the bonding requirements, fiduciaries and service providers should both review service agreements and the functional realities to confirm whether any party “handles” funds and to ensure compliance with ERISA bonding requirements.
Service providers that engage in the performance of activities that involve or are likely to be recharacterized as involving the exercise of discretion or the handling of funds should give serious consideration to arranging to maintain a fidelity bond that meets ERISA’s requirement, whether or not the service provider acknowledges or disclaims its status as a fiduciary or handler of plan funds.
Since noncompliance with the bonding requirement is a breach of the fiduciary responsibility requirements of ERISA that could render the fiduciary personally liable for unbonded losses, plan fiduciaries generally should conduct and retain a documented analysis capturing their consideration of whether they and other fiduciaries, service providers, and other members of the plan workforce ar required to be bonded and if so, the actions taken to require and monitor compliance with applicable bonding requirements. Examples of best practices include:
Include bonding requirements in plan documents and contracts;
Conduct and maintain a documented assessment of the applicability of the bonding requirements when appointing or renewing the appointment of a fiduciary, third party service provider or workforce member to participate in the management or operations of the plan or its assets; and
Obtain and review bonds obtained to cover fiduciaries and service providers to verify their currency and adequacy;
When the factual realities raise the possibility that an individual or a party might possess or exercise fiduciary discretion or handle funds, fiduciaries generally will want to err in favor of requiring bonding to protect the plan and to protect themselves against the personal liability that can arise under ERISA Section 502(l) for violation of the bonding requirements, unbonded plan losses arising from fraud or loss by the service provider or both.
About the Author
Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on health and other employee benefits, insurance, healthcare, workforce, HIPAA and other data and technology and other compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.
Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer is nationally recognized for her decades of leading edge experience on the design, sponsorship, administration and defense of health and other employee benefit, workforce, insurance, healthcare , data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
The Department of Justice is suing three of the nation’s largest health insurance companies — Aetna Inc. and affiliates, Elevance Health Inc. (formerly known as “Anthem”), and Humana Inc., CVS Health Corporation, and three large insurance broker organizations — eHealth, Inc. and an affiliate, GoHealth, Inc., and SelectQuote Inc. for violating the False Claims Act (“FCA”) and Antikickback Statute. In the second complaint of its kind in recent months, the Justice Department complaint in ex rel. Shea v. eHealth, et al., No. 21-cv-11777 (D. Mass. May 5, 2025) accuses the defendants of paying or receiving kickbacks to steer Medicare Advantage enrollees to the defendant insurers.
Under the Medicare Advantage (“MA”) Program, also known as Medicare Part C, Medicare beneficiaries may choose to enroll in health care plans (MA plans) offered by private insurance companies, like defendants Aetna, Anthem, and Humana. Many Medicare beneficiaries rely on insurance brokers to help them choose an MA plan that best meets their individual needs.
Under the FCA, private parties can file an action on behalf of the United States and receive a portion of the recovery. The FCA permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the FCA, the United States may recover three times the amount of its losses plus applicable penalties
In a lawsuit originally filed by a former eHealth employee as a qui tam whistleblower complaint, the Justice Department charges that the defendant insurers paid hundreds of millions of dollars in illegal kickbacks to the defendant brokers in exchange for enrollments into the insurers’ Medicare Advantage plans from 2016 through at least 2021. Rather than acting as unbiased stewards, the Justice Department charges that the defendant brokers allegedly directed Medicare beneficiaries to the plans offered by insurers that paid brokers the most in kickbacks, regardless of the suitability of the MA plans for the beneficiaries.
According to the complaint, the broker organizations incentivized their employees and agents to sell plans based on the insurers’ kickbacks, set up teams of insurance agents who could sell only those plans, and at times refused to sell MA plans of insurers who did not pay sufficient kickbacks.
The Justice Department also alleges that Aetna and Humana each conspired with the broker defendants to discriminate against Medicare beneficiaries with disabilities whom they perceived to be less profitable. Aetna and Humana allegedly did so by threatening to withhold kickbacks to pressure brokers to enroll fewer disabled Medicare beneficiaries in their plans.
The Justice Department further alleges that, in response to these financial incentives from Aetna and Humana, the defendant brokers or their agents rejected referrals of disabled beneficiaries and strategically directed disabled beneficiaries away from Aetna and Humana plans.
Commonwealth Care Alliance Prior Kickback Settlement
The eHealth suit against the defendants is not first of its kind. In January, 2025, the Justice Department announced that MA Program insurer Commonwealth Care Alliance, Inc. (“CCA”) agreed to pay $520,355.65 to resolve allegations that Reliance HMO, Inc. (“Reliance”), a company CCA acquired in 2022, violated the FCA by providing cash payments to induce the referral of Medicare beneficiaries to enroll in Reliance’s Medicare Advantage Plan in violation of the Anti-Kickback Statute after CCA voluntarily self-disclosed the conduct to the U.S. Attorney’s Office.
In April 2019, CMS authorized Reliance to operate a MA plan for Medicare beneficiaries in Michigan, with beneficiaries receiving coverage starting in January 2020. On March 31, 2022, CCA announced the completion of its acquisition of a 70% stake in Reliance. After the acquisition, CCA identified concerns regarding certain marketing-related outreach and payments that Reliance agents had made to personnel at physician practices. In particular, CCA disclosed two schemes.
First, from April 12, 2019, through December 22, 2020, Reliance provided cash payments to healthcare professionals and administrative staff in physician practices, in exchange for providing Reliance with the contact information for patients who had agreed, through executing so-called “permission to contact” cards, to be contacted by Reliance regarding its MA plan offerings.
Second, in November 2019, prior to Reliance’s MA plan becoming active, Reliance paid each of four physicians and physician practices $2,500, which Reliance characterized as advances on “coordination of care” services to be provided by the physicians to beneficiaries when the MA plan became active in 2020.
The Justice Department alleged these payments were intended to induce the referral, recommendation, or arrangement of enrollment of Medicare beneficiaries in Reliance’s MA plan. Such payments, the United States alleges, were impermissible kickbacks in violation of the False Claims Act.
The CCA settlement resolved these charges. The settlement gave CCA credit for voluntarily self-disclosing this conduct to the Justice Department; taking remedial measures, including terminating the employees directly involved with the decision to offer the prohibited payments; and providing the United States with a detailed written statement describing its investigation, along with other supplemental information to assist the United States in its investigation.
Medicare Advantage insurers also are under investigation by the Justice Department for other alleged abuses. The Justice Department recently has investigated certain Medicare Advantage insurers for alleged manipulation of risk data to increase their capitated payments from Medicare. For Instance, the Justice Department recently sued MA Program insurer Independent Health Association and its affiliate, Independent Health Corporation (collectively, “Independent Health”) for allegedly illegally manipulating risk data used to set risk adjustment rates paid by Medicare to their Medicare Advantage plans in United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S) (WDNY). To settle the litigation, Independent Health agreed to pay up to $98 million to resolve allegations that it violated the False Claims Act by knowingly submitting or causing the submission of invalid diagnosis codes to Medicare for Medicare Advantage Plan enrollees to increase payments that Independent Health received from Medicare. Under the terms of the settlement, Independent Health promised to make guaranteed payments of $34,500,000 and contingent payments of up to $63,500,000 on behalf of itself and DxID, which ceased operations in 2021. Its Chief Executive Officer separately agreed to pay $2,000,000. In addition, Independent Health entered into a five-year corporate integrity agreement (“CIA”) with HHS-OIG that requires among other things, that Independent Health hire an Independent Review Organization to annually review a sample of Independent Health’s Medicare Advantage patients’ medical records and associated internal controls to help ensure appropriate risk adjustment payments.
The Justice Department touts all of these and other investigations and enforcement actions against Medicare Advantage insurers as demonstrating its commitment to hold Medicare Advantage insurers and brokers accountable for kickbacks or other misconduct. In the Justice Department’s press release about the e-Health litigation, Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division. “We are committed to rooting out illegal practices by Medicare Advantage insurers and insurance brokers that undermine the interests of federal health care programs and the patients they serve.”
Risks For Insurers, Brokers, Health Plans & Fiduciaries
These and other actions send a strong warning to insurers and brokers to abstain from prohibited risk adjustment, kickbacks, or other prohibited conduct. Brokers and insurers also should keep in mind that these activities- whether in connection with the sale of Medicare Advantage or other insurance products Past history demonstrates that these activities carry risks beyond the Antikickback Statute and False Claims Act. They also can create exposures under other federal or state laws. The 2004 bid rigging prosecution of Marsh & McClennon by then New York Attorney General Elliott Spitzer is illustrative. On October 14, 2004, then New York State Attorney General Eliot Spitzer sued Marsh & McClennan and Marsh, Inc. (“Marsh”) for bid rigging and violation of various other state laws through its compensation arrangements between Marsh and several insurance companies, and bidding manipulation by Marsh. The largest U.S. insurance broker at the time, Marsh agreed in January 2005 to pay $850 million and end improper bid-rigging in a civil settlement with Spitzer. Attorney General Spitzer also brought criminal charges against individuals involved, some of which produced several guilty pleas. The last of these criminal prosecutions dragged on until 2011, when the New York Attorney General finally dismissed the remaining criminal charges against former Marsh executive marketing director William Gilman and former Marsh global placement director Edward McNenney. Marsh and others also faced charges in other states and private litigation from the scandal.
Kickbacks or other inappropriate compensation arrangements between insurers, brokers or other plan service providers also can create issues for health plan fiduciaries, sponsors, brokers and advisors. Self-insured health plan sponsors, fiduciaries, administrators and their consultants, brokers and insurers also should keep in mind that practices like those challenged in the Justice Department actions also are likely to raise concerns under the fiduciary responsibility and prohibited transaction rules of the Employee Retirement Income Security Act of 1974 (“ERISA”). Consequently, employer and other plan sponsors, their fiduciaries, and their brokers and advisors may wish to visit with experienced legal counsel about the advisability of conducting due diligence into the past, current, or future plan vendor relationships with their own programs.
The Justice Department is touting the lawsuit as an example of its commitment to hold Medicare Advantage insurers and brokers accountable for kickbacks or other misconduct. In the Justice Department’s press release about the action, Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division. “We are committed to rooting out illegal practices by Medicare Advantage insurers and insurance brokers that undermine the interests of federal health care programs and the patients they serve.”
More Information Or Help
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, insurance, or health care legal developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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 in 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
Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on health and other employee benefits, insurance, healthcare, workforce, HIPAA and other data and technology and other compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.
Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer is nationally recognized for her decades of leading edge experience on the design, sponsorship, administration and defense of health and other employee benefit, workforce, insurance, healthcare , data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
The Internal Revenue Service (“IRS”) published advanced notice of the 2026 inflation adjusted amounts for Health Savings Accounts (“HSAs”) § 223 of the Internal Revenue Code (“Code”) and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under § 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.
In calendar year 2026, these amounts are as follows:
The annual limitation on deductions under § 223(b)(2) for an individual with coverage under a high deductible health plan for self-only is $4,400 and for family coverage under a high $8,750.
A “high deductible health plan” under § 223(c)(2)(A) will be defined as a health plan with an annual deductible that is not less than $1,700 for self-only coverage or $3,400 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,500 for self-only coverage or $17,000 for family coverage.
For plan years beginning in 2026, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA under Code § 54.9831-1(c)(3)(viii) is $2,200.
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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 in 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
Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on HIPAA and other data and technology use, security and compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.
Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer is nationally recognized for her decades of leading edge experience on the design, sponsorship, administration and defense of health and other employee benefit, workforce, data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
Conduct an appropriate risk analysis and take the required steps to protect your electronic health records from phishing and other hacking threats by conducting a thorough risk analysis and otherwise cleaning up your Health Insurance Portability and Accountability Act of 1996 compliance! That’s the clear message to the Department of Health and Human Services Office of Civil Rights (“OCR”) warns health plans and insurers, health care providers, health care clearinghouses (“Covered Entities”) and their business associates (collectively “Regulated Entities”) to learn from the $600,000 HIPAA Privacy, Security, and Breach Notification Rules (“HIPAA Rules”) settlement with Southern California health care network PIH Health, Inc. (“PIH”) the Department of Health & Human Services Office of Civil Rights (“OCR”) announced on April 23, 2025 and the deluge of other ongoing hacking-related HIPAA investigations OCR still is working to resolve.
Phishing & Other Hacking Events Common Cause of Health Plan Breaches
Hacking incidents present a significant cybersecurity threat to health plans and other Regulated Entities’ electronic health and other data. Phishing and other hacking attacks are among the most common types of large breaches reported to OCR every year. Over the past five years, there has been a 256% increase in large breaches reported to OCR involving hacking and a 264% increase in ransomware. In 2023, hacking accounted for 79% of the large breaches reported to OCR.
Look for more of these enforcement actions to emerge soon. Between January 1 and April 23, 2025 alone, OCR received 161 hacking-related breach reports from Regulated Entities. OCR’s Breach Portal indicates that on April 23, 2025, OCR had a total of 554 open hacking-related breach investigations, 506 involving health care providers, 47 involving health plans, and one involving a health care clearinghouse.
Health plans and other Regulated Entities will want to take appropriate actions to avoid becoming subject to breaches subjecting them to these investigations and enforcement actions, particularly with OCR Acting Director Anthony Archeval warninghealth plans and other Regulated Entities:
Ransomware and hacking are the primary cyber-threats to electronic protected health information within the health care industry. Failure to conduct a HIPAA risk analysis puts this information at risk and vulnerable to future ransomware attacks and other cyber-threats[.]
Duty To Analyze & Manage Hacking & Other Susceptibilities
The HIPAA Privacy, Security, and Breach Notification Rules require Regulated Entities to take specific actions as warranted by their threat susceptibility to protect the privacy and security of electronic protected health information (“ePHI”) from hacking and other improper access, destruction, or disclosure. At the heart of these requirements is the requirement that health plans and other Regulated Entities conduct documented risk analyses of their assessment of the susceptibility information of their ePHI to hacking and other threats. As reflected in the following table of current HIPAA sanctions, violation of these HIPAA requirements exposes a Regulated Entity to significant civil monetary penalties or criminal sanctions.
The HIPAA Security Rule requires a Regulated Entity to conduct an “accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI” and “[i]mplement policies and procedures to prevent, detect, contain, and correct security violations.” Meanwhile, the HIPAA Breach Notification Rule requires in 45 CFR § 164.402 that a Regulated Entity that experiences an impermissible acquisition, access, use, or disclosure (“breach”) of unsecured ePHI to conduct a documented risk assessment to determine whether the Regulated Entity must notify affected individuals, OCR and in the case of breaches involving the ePHI of 500 or more individuals, the media. OCR interprets these Rules together also to require Regulated Entities experiencing a breach of ePHI or having evidence putting the Regulated Entity on notice of a potential susceptibility creating a risk of a breach as triggering a duty by the Regulated Entity to conduct a Risk Assessment to assess the susceptibility of its ePHI to the risk and the actions reasonably necessary to mitigate it under the Security Rule.
OCR views Risk Analysis as foundational to the protection of ePHI. Consequently, OCR constantly has urged Regulated Entities to fulfill their Risk Analysis obligations since the earliest days of HIPAA in its guidance and educational outreach, as well as by regularly discussing the requirement and role of Risk Analysis deficiencies in creating the circumstances leading to enforcement actions against Regulated Entitles in its civil monetary penalty assessments and HIPAA settlement announcements.
Despite OCR’s constant and ever-rising efforts to promote compliance with the Risk Analysis requirements, however, OCR consistently has found deficiencies in Regulated Entities’ Risk Analysis in its breach investigations and audit findings since these rules became effective. As the number and magnitude of reported breaches of ePHI skyrocketing and massive breaches like those experienced in 2024 by UnitedHealthcare subsidiary Change Health, Ascension and others demonstrating the serious consequences ransomware and other cyberattacks can inflict on health care delivery, payment, and patient privacy, OCR is placing new emphasis on tightening both the requirements for Risk Analysis and its enforcement of compliance with the Risk Analysis requirements.
Look for OCR both to continue zealously to enforce the Risk Analysis and other HIPAA Security Rule compliance and to tighten thesed requirements. On December 27, 2024, for instance, OCR published a notice of proposed rulemaking that proposes to clarify and tighten significantly the Risk Analysis requirements and other elements of the HIPAA Security Rule. Along with proposing these heightened Risk Analysis requirements, OCR announced and now is zealously enforcing the current Risk Analysis requirements through its Risk Analysis Initiative to hold Regulated Entities accountable for failing to fulfill their Risk Analysis responsibilities as part of its heightened efforts to improve Regulated Entities’ fulfillment of their Risk Analysis obligations. Prior to its announcement of the PIH settlement, OCR in recent months announced seven Risk Analysis Initiative settlements, including three in April.
Breaches & Other Security Rule Violations Carry Substantial Liability Risks
Reasonable Cause or No Knowledge of Violation: Up to 1 year imprisonment
2
Reasonable Cause: $1,424 – $71,162 per violation
PHI Obtained Under False Pretenses: Up to 5 years imprisonment
3
Willful Neglect (corrected within 30 days): $14,232 – $71,162 per violation
PHI Obtained for Personal Gain or with Malicious Intent: Up to 10 years imprisonment
4
Willful Neglect (not corrected within 30 days): $71,162 – $2,134,831 per violation
Most Regulated Entities that OCR accused of violating the HIPAA requirements avoid paying the full amount of authorized civil monetary penalties by accepting OCR settlement offers. As the $600,000 PIH and other settlements demonstrate, however, settlement with OCR allows Regulated Entities to avoid much greater potential civil monetary penalties by paying a much smaller, but still generally significant, settlement amount. As significant as these penalties and settlement costs are, they typically reflect only a small portion of the true cost organizations suffer from a breach. With the average financial consequences suffered by organizations that experience a data breach now approaching $5 million, costs of investigation and recovery from a breach and the associated operational and business disruptions experienced inflict a heavy toll even where OCR allows the health plan or other Regulated Entity to resolve its exposures with no financial settlement or penalty.
Breaches & Other Security Rule Violations Create Substantial Liability For Plans & Their Fiduciaries
Although OCR’s PIH settlement announcement does not label the settlement as a Risk Analysis Initiative, OCR’s discussion makes clear OCR considered PIH’s failure to fulfill the Risk Analysis requirements a core failure contributing to the breach. The PIH settlement resolves an investigation that OCR conducted after receiving a breach report from PIH in January 2020 about a June 2019 phishing attack. The report stated the attack compromised forty-five of its employees’ email accounts, resulting in the breach of 189,763 individuals’ unsecured ePHI. PIH reported that the ePHI disclosed in the phishing attack included affected individuals’ names, addresses, dates of birth, driver’s license numbers, Social Security numbers, diagnoses, lab results, medications, treatment and claims information, and financial information.
OCR’s investigation found multiple potential violations of the HIPAA Rules, including:
Failure to use or disclose protected health information only as permitted or required by the HIPAA Privacy Rule.
Failure to conduct an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by PIH.
Failure to notify affected individuals, the HHS Secretary, and the media of a breach of unsecured protected health information within 60 days of its discovery.
Under the terms of the resolution agreement, PIH has agreed to implement a corrective action plan that OCR will monitor for two years and pay a $600,000 settlement to OCR. Under the corrective action plan, PIH is obligated to take definitive steps toward resolving potential violations of the HIPAA Rules, including:
Conducting an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of its ePHI.
Developing and implementing a risk management plan to address and mitigate security risks and vulnerabilities identified in its risk analysis.
Developing, maintaining, and revising, as necessary, its written policies and procedures to comply with the HIPAA Rules.
Training its workforce members who have access to PHI on its HIPAA policies and procedures.
The findings of deficiencies in PIH’s risk analysis and requirements that PIH conduct an accurate and thorough risk analysis and implement a risk management plan to address and mitigate identified security risks and vulnerabilities are a recurrent theme in OCR breach investigations. OCR’s recent addition of a Risk Analysis Initiative to its compliance and enforcement priorities heightens the significance of OCR’s inclusion of these findings and requirements in the PIH settlement.
Previous Health Plan Enforcement Actions Confirms Health Plan Face Similar HIPAA Exposures
In January 2021, for instance, 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.
In each of these and all subsequent breach enforcement announcements and other guidance, OCR also persistently urges health plans and other regulated entities to perform the required documented risk assessments and take the required actions necessary to guard their ePHI from hackers and other susceptibilities.
Required & Recommended Actions To Promote Defensibility Of Risk Analysis Compliance
With cyberattacks targeting health care and other Regulated Entities soaring and OCR stepping up its scrutiny of Regulated Entities’ Risk Analysis compliance in audits and enforcement actions, each health care provider and other Regulated Entity should review and tighten its Risk Analysis practices and documentation to reduce its susceptibility to potential breaches and to promote its ability to defend its compliance with the Risk Analysis requirements in the event of a breach investigation or audit.
Fulfill Current Risk Analysis Standards
To fulfill the “Risk Analysis” implantation specification, the Security Management Process Standard requires Regulated Entities enforce appropriate administrative, physical, and technical safeguards for the confidentiality, integrity, and security of electronic protected health information (“ePHI”) based on an up-to-date conduct of an up-to-date accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by that organization (“Risk Analysis”).
The Security Rule requires Regulated Entities to document each Risk Analysis in writing, to keep Risk Analysis documentation for six years, and to provide Risk Analysis documentation to OCR upon request.
Among other things, the Risk Analysis implementation standard requires regulated entities adequately to:
Identify where ePHI is located in the organization, including how ePHI enters, flows through, and leaves the organization’s information systems.
Integrate Risk Analysis and risk management into the organization’s business processes.
Ensure that audit controls are in place to record and examine information system activity.
Implement regular reviews of information system activity.
Utilize mechanisms to authenticate information to ensure only authorized users are accessing ePHI.
Encrypt ePHI in transit and at rest to guard against unauthorized access to ePHI when appropriate.
Incorporate lessons learned from incidents into the organization’s overall security management process.
Provide workforce members with regular HIPAA training that is specific to the organization and to the workforce members’ respective job duties.
Follow Proposed Rules & Enforcement Actions To Mitigate Risks
The proposed rule published by OCR on December 27, 2024, seeks to clarify and expand the original requirements of the Risk Assessment implementation standard based on OCR’s past HIPAA Security and Breach Rule investigation and enforcement experience. Under the proposed rule, a Regulated Entity’s Risk Analysis also would be required to include:
Require the development and revision of a technology asset inventory and a network map that illustrates the movement of ePHI throughout the regulated entity’s electronic information system(s) on an ongoing basis, at least once every 12 months and in response to a change in the regulated entity’s environment or operations that may affect ePHI.
Require greater specificity for conducting a risk analysis, including a written assessment that contains, among other things:
A review of the technology asset inventory and network map;
Identification of all reasonably anticipated threats to the confidentiality, integrity, and availability of ePHI;
Identification of potential vulnerabilities and predisposing conditions to the regulated entity’s relevant electronic information systems;
An assessment of the risk level for each identified threat and vulnerability, based on the likelihood that each identified threat will exploit the identified vulnerabilities; and
A review of the technology asset inventory and network map.
Other changes included in the proposed rule would further heighten the Risk Analysis and other Security Standard requirements for Regulated Entities. For instance, the proposed rule would require Regulated Entities:
To establish written procedures to restore the loss of certain relevant electronic information systems and data within 72 hours;
To perform an analysis of the relative criticality of their relevant electronic information systems and technology assets to determine the priority for restoration;
To establish written security incident response plans and procedures documenting how workforce members are to report suspected or known security incidents and how the regulated entity will respond to suspected or known security incidents;
To implement written procedures for testing and revising written security incident response plans;
To conduct a compliance audit at least once every 12 months to ensure their compliance with the Security Rule requirements;
To require business associates to verify at least once every 12 months for covered entities (and that business associate contractors verify at least once every 12 months for business associates) that they have deployed technical safeguards required by the Security Rule to protect ePHI through a written analysis of the business associate’s relevant electronic information systems by a subject matter expert and a written certification that the analysis has been performed and is accurate;
To encrypt ePHI at rest and in transit, with limited exceptions;
To establish and deploy technical controls for configuring relevant electronic information systems, including workstations, in a consistent manner including deployment of anti-malware protection, removal of extraneous software, and disabling network ports in accordance with the regulated entity’s risk analysis;
Use of multi-factor authentication, with limited exceptions;
Vulnerability scanning at least every six months and penetration testing at least once every 12 months;
Network segmentation;
Separate technical controls for backup and recovery of ePHI and relevant electronic information systems;
To review and test the effectiveness of certain security measures at least once every 12 months, in place of the current general requirement to maintain security measures;
Business associates to notify covered entities (and subcontractors to notify business associates) upon activation of their contingency plans without unreasonable delay, but no later than 24 hours after activation;
Group health plans to include in their plan documents requirements for their group health plan sponsors to: comply with the administrative, physical, and technical safeguards of the Security Rule; ensure that any agent to whom they provide ePHI agrees to implement the administrative, physical, and technical safeguards of the Security Rule; and notify their group health plans upon activation of their contingency plans without unreasonable delay, but no later than 24 hours after activation.
To help Regulated Entities understand and fulfill these responsibilities, OCR alone and in conjunction with the Office of the National Coordinator for Health Information Technology (“ONC”) also has published guidance like the HIPAA Security Risk Assessment (SRA) Tool. OCR guidance reflects that fulfillment of the Tool can help Regulated Entities may help defend but does not guarantee fulfillment of the Risk Assessment requirements, as the adequacy of the Risk Assessment always depends upon the unique facts and circumstances of the Regulated Entity at a particular time. This guidance confirms the importance of conducting timely and appropriate Risk Analysis in a manner that shows the Regulated Entity appropriately evaluated the risks to its e-PHI and acted reasonably in designing, administering, and updating that Risk Analysis to reasonably defend its e-PHI against breaches or other susceptibilities.
Since OCR’s guidance makes clear that the adequacy of a Regulated Entity’s Risk Analysis and other HIPAA Security compliance based on its evaluation and response to known and suspected susceptibility threats as conducted and documented pursuant to the Risk Analysis rule, health care providers and other Regulated Entities should view Risk Analysis as an ongoing process. While the Security Rule does not currently dictate how frequently a regulated entity must perform Risk Analysis, a proposed rule published by OCR on December 27, 2024 seeks to amend the existing Security Rule to expand the requirement to require regulated entities to develop and revise a technology asset inventory and a network map that illustrates the movement of ePHI throughout the regulated entity’s electronic information system(s) on an ongoing basis, at least once every 12 months and in response to a change in the regulated entity’s environment or operations that may affect ePHI. Although OCR has not officially adopted this and other changes contained in the proposed rule, substantial evidence exists that it already regularly administers the Risk Analysis requirement with the expectation that regulated entities will perform Risk Analysis at least this frequently. For instance, current OCR resolution agreements require impacted organizations to conduct Risk Analysis to identify and address vulnerabilities at least annually, and more frequently as needed in response to signs of potential breach or susceptibility. Likewise, since OCR developed the proposed rule from its past enforcement experience, wise Regulated Entities also will recognize the value of drawing upon the changes set forth in the proposed rule for helpful insights to strengthen the security of their ePHI generally and promoting the defensibility of the adequacy of their Risk Assessments.
Additional Responsibilities & Risks For Health Plan Fiduciaries & Sponsors
Along side the OCR warnings, employment and union sponsored health plans, their sponsors, insurers, business associates and fiduciaries also now face additional pressure to take appropriate steps to security health plan data and timely investigate and report breaches.
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.
Appropriate Processes Can Prevent Breaches & Enhance Defensibility
With the continued explosion in ransomware and other cyberthreats heightening the risk of experiencing a breach or other incident likely to draw the attention of OCR, each health plan or other Regulated Entity should take assess and confirm the adequacy of their current Risk Analysis, both to protect its ePHI and to promote its ability to defend its compliance with the HIPAA Security Rule’s Risk Analysis and other requirements in light of OCR’s heightened emphasis on Risk Analysis compliance and enforcement. For purposes of conducting this analysis, Regulated Entities generally will want to use a process like the following to structure their evaluation of their existing Risk Analysis to take advantage of the opportunity to use attorney-client privilege and other evidentiary rules to help protect discoverability of sensitive discussions about possible deficiencies in their existing Risk Analysis and discussions about potential tradeoffs considered in current or future Risk Analysis response:
Engage legal counsel experienced with HIPAA and other cybersecurity-related risks and liabilities to advise and assist your organization in designing and administering your Risk Analysis processes and response within the scope of attorney-client privilege;
Appoint and designate leadership and technical leadership for team responsible for design and administration of your organization’s initial and ongoing cybersecurity Risk Analysis and response (“Cyber-Risk Team”) and process for board and senior management reporting of the Cyber-Risk Team;
Select and engage outside consulting service providers, cyber-liability insurers and other risk service providers expected to participate in the process; work with qualified legal counsel to contract with these business associates to include the business associate agreement and other reassurances required by the HIPAA Privacy, Security and Breach Notification Rule and other performances, cooperation to provide and back services in accordance with agreed-upon protocols in the contract;
Train Cyber-Risk Team in the appropriate processes for working with internal teams, outside service providers, leadership, and designated legal counsel to conduct Risk Analysis, investigation and response using attorney-client privilege and other evidentiary tools and processes to maximize defensibility;
Require the Cyber-Risk Team conduct an updated, document assessment of cyber-risk within scope of attorney-client privilege and work with legal counsel to develop a documented cyber-risk policy that captures analysis and determinations for your justification for the size, scope and timing of your periodic Risk Analysis and rules and processes for interim risk identification, reassessments and response in reaction to potential cyber-risk signs between periodic Risk Analysis for presentation and approval by the Board taking into account the insights from published final and proposed guidance, enforcement actions and industry standards;
Require, oversee and enforce Cyber-Risk Team’s documented administration of the initial and subsequently required Risk Analysis and response pursuant to the adopted cyber-risk policy to identify vulnerabilities and work with legal counsel within the scope of privilege to document your analysis and justifications for addressing identified vulnerabilities and other required actions in response to identified susceptibilities or event;
Review adequacy of incident detection and response arrangements, including reporting and response mechanisms, insurance and indemnification protection, and other critical elements for mitigation and recovery; and
Other actions as warranted based on advice of counsel taking into account emerging threats, guidance, and risk susceptibility.
Although civil monetary penalties or settlements are the most common sanction imposed for HIPAA Security and Breach Notification rule violations, willful and certain other violations of HIPAA can trigger criminal liability subject to the Federal Sentencing Guidelines. Consequently, beyond fulfilling the specific requirements of HIPAA, an adequate Risk Assessment also can be an invaluable tool for helping mitigate Federal Sentencing Guideline exposures of a Regulated Entity and its leaders under the Federal Sentencing Guidelines Organizational Liability rules.
Beyond these specific HIPAA-associated exposures, Regulated Entities and their leaders should keep in mind that HIPAA is likely only one of many laws that define their responsibilities to secure, report, and respond to breaches of ePHI or other sensitive data. Depending on the location, nature and other circumstances, Regulated Entities and their leaders also may have additional responsibilities and liability exposures under a variety of other federal and state laws, ethical or other professional standards, and contractual obligations in addition to those imposed under HIPAA and ERISA. For instance, inadequate data safeguards for ePHI also can trigger liability under the Fair and Accurate Credit Transactions Act, the Federal Trade Commission Act, and various electronic crimes statutes. The Securities and Exchange Commission rules can trigger disclosure and other obligations for publicly traded hospital or other health care providers, insurers, or their business associates. Health care providers, payers and others are likely to face specific additional health care or insurance-specific licensing and ethics rules, as well as other confidential information privacy, cybersecurity and breach reporting obligations and liability under various state statutes and regulations. Regulated Entities and their leaders generally will want to fully evaluate and manage these risks in conjunction with their compliance with the Risk Analysis and other requirements of the HIPAA Security and Breach Notification Rules.
Finally, health plans and other Regulated Entities are reminded that appropriate strategic planning, ongoing diligence in monitoring and responding to security events and susceptibility, and timely and appropriate use of appropriate evidentiary and procedural 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.
The author of this update, Cynthia Marcotte Stamer is nationally known and celebrated for her experience providing advice and representation to health care providers, health insurers, employers and other health plan sponsors, health plans, health plan fiduciaries and administrators, third party administrators, human resources and health plan technology, and other businesses about HIPAA and other compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information Or Help
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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 in 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
Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on HIPAA and other data and technology use, security and compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.
Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer works with these and other highly regulated or data and performance reliant businesses to design, risk manage, and defend their employment and other workforce, data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee.
Additionally, more her ABA involvements include than a decade of service as a Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or admission. Solutions Law Press and its authors 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 constantly and often evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
The $350,000 paid by Northeast Radiology, P.C. (“NERAD”) provides the latest warning to health plans, health care providers, healthcare clearinghouses (“Covered Entities”) and their business associates (collectively “Regulated Entities”) they risk costly fines and other costs for failing to maintain the up-to-date risk assessments required by the Health Insurance Portability & Accountability Act (“HIPAA”).
Following up on the five other previous Risk Analysis Initiative enforcement actions and settlements recently announced by the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) and OCR’s publication of proposed rules to significantly tighten HIPAA’s Risk Analysis and other requirements, the settlement with medical imaging center NERAD sends a strong warning to health plans and other Regulated Entities to clean up and strengthen their Risk Analysis and other HIPAA Security Rule compliance.
$350,000 NERAD Risk Analysis Settlement Latest Product Of New Enforcement Initiative
The sixth Risk Analysis Initiative enforcement action announced by OCR in recent months, the NERAD settlement resolves an OCR Risk Analysis Initiative enforcement action arising from OCR’s investigation of a breach of ePHI stored on NERAD’s Picture Archiving and Communication System (“PACS”) server for storing, retrieving, managing, and accessing radiology images.
OCR initiated its investigation of NERAD after receiving a NERAD breach report about a breach of unsecured ePHI in March 2020. NERAD reported that between April 2019 and January 2020, unauthorized individuals accessed radiology images stored on NERAD’s PACS server. NERAD notified the 298,532 patients whose information was potentially accessible on the PACS server of this breach. OCR’s investigation found that NERAD had failed to conduct an accurate and thorough Risk Analysis to determine the potential risks and vulnerabilities to the ePHI in NERAD’s information systems.
To avoid potentially much greater HIPAA civil monetary penalties under the terms of the resolution agreement, NERAD paid OCR $350,000 and agreed to implement a corrective action plan that OCR will monitor for two years. Under the corrective action plan, NERAD will take steps to improve its compliance with the HIPAA Security Rule and protect the security of ePHI, including:
Conducting an accurate and thorough Risk Analysis to determine the potential risks and vulnerabilities to the confidentiality, integrity, and availability of its ePHI;
Developing and implementing a risk management plan to address and mitigate security risks and vulnerabilities identified in its Risk Analysis;
Developing and implementing a written process to regularly review records of information system activity, such as audit logs, access reports, and security incident tracking reports;
Developing, maintaining, and revising, as necessary, its written policies and procedures to comply with the HIPAA Rules; and
Augmenting its existing HIPAA and security training program to all of its workforce members who have access to PHI.
OCR Turns Up Heat On HIPAA Risk Analysis Requirements & Enforcement
The HIPAA Privacy, Security, and Breach Notification Rules set forth the requirements that Regulated Entities must follow to protect the privacy and security of protected health information. Since the HIPAA Security Rule first took effect, risk analysis is one of the four required implementation specifications the Security Rule requires to fulfill its Security Management Process Standard’s requirement that regulated entities “[i]mplement policies and procedures to prevent, detect, contain, and correct security violations.”
Written Risk Analysis Longstanding Requirement
Although OCR only recently formally adopted a Risk Analysis Initiative, OCR’s regulatory guidance and enforcement actions have communicated clearly the necessity for each Regulated Entity to possess and maintain an adequate documented Risk Analysis. OCR guidance since has required Regulated Entities to conduct and document the required Risk Analysis to safeguard ePHI and avoid liability under the HIPAA Rule. The importance of fulfillment of the Risk Analysis requirement is driven home by OCR’s recent identification of Risk Analysis inadequacies as a basis for its assessment of civil monetary penalties or required resolution payments to settle HIPAA Security Rule violations following a breach of ePHI.
While the Security Rule does not currently dictate how frequently a regulated entity must perform Risk Analysis, a proposed rule published by OCR on December 27, 2024 seeks to amend the existing Security Rule to expand the requirement to require regulated entities to develop and revise a technology asset inventory and a network map that illustrates the movement of ePHI throughout the regulated entity’s electronic information system(s) on an ongoing basis, at least once every 12 months and in response to a change in the regulated entity’s environment or operations that may affect ePHI. Although OCR has not adopted this and other changes contained in the proposed rule, substantial evidence exists that it already regularly administers the Risk Analysis requirement with the expectation that regulated entities will perform Risk Analysis at least this frequently. For instance, current OCR resolution agreements require impacted organizations to conduct Risk Analysis to identify and address vulnerabilities at least annually, and more frequently as needed in response to signs of potential breach or susceptibility.
To fulfill the “Risk Analysis” implantation specification, the Security Management Process Standard requires Regulated Entities maintain appropriate administrative, physical, and technical safeguards for the confidentiality, integrity, and security of electronic protected health information (“ePHI”) based on an up-to-date conduct of an up-to-date accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by that organization (“Risk Analysis”).
The Security Rule requires Regulated Entities to document each Risk Analysis in writing, to maintain their Risk Analysis documentation for six years, and to make available Risk Analysis documentation to OCR upon request.
Among other things, the Risk Analysis implementation standard requires regulated entities adequately to:
Identify where ePHI is located in the organization, including how ePHI enters, flows through, and leaves the organization’s information systems.
Integrate Risk Analysis and risk management into the organization’s business processes.
Ensure that audit controls are in place to record and examine information system activity.
Implement regular reviews of information system activity.
Utilize mechanisms to authenticate information to ensure only authorized users are accessing ePHI.
Encrypt ePHI in transit and at rest to guard against unauthorized access to ePHI when appropriate.
Incorporate lessons learned from incidents into the organization’s overall security management process.
Provide workforce members with regular HIPAA training that is specific to the organization and to the workforce members’ respective job duties.
OCR Heightens Risk Analysis Enforcement While Proposing Heightened Risk Analysis And Other Security Requirements
The proposed rule published by OCR on December 27, 2024 seeks to significantly broaden these original requirements of the Risk Assessment implementation standard. Under the proposed rule, a Regulated Entity’s Risk Analysis also would be required to include:
Require the development and revision of a technology asset inventory and a network map that illustrates the movement of ePHI throughout the regulated entity’s electronic information system(s) on an ongoing basis, at least once every 12 months and in response to a change in the regulated entity’s environment or operations that may affect ePHI.
Require greater specificity for conducting a risk analysis, including a written assessment that contains, among other things:
A review of the technology asset inventory and network map;
Identification of all reasonably anticipated threats to the confidentiality, integrity, and availability of ePHI;
Identification of potential vulnerabilities and predisposing conditions to the regulated entity’s relevant electronic information systems;
An assessment of the risk level for each identified threat and vulnerability, based on the likelihood that each identified threat will exploit the identified vulnerabilities; and
A review of the technology asset inventory and network map.
Other changes included in the proposed rule would further heighten the Risk Analysis and other Security Standard requirements for Regulated Entities. For instance, the proposed rule would require Regulated Entities:
To establish written procedures to restore the loss of certain relevant electronic information systems and data within 72 hours;
To perform an analysis of the relative criticality of their relevant electronic information systems and technology assets to determine the priority for restoration;
To establish written security incident response plans and procedures documenting how workforce members are to report suspected or known security incidents and how the regulated entity will respond to suspected or known security incidents;
To implement written procedures for testing and revising written security incident response plans;
To conduct a compliance audit at least once every 12 months to ensure their compliance with the Security Rule requirements;
To require business associates to verify at least once every 12 months for covered entities (and that business associate contractors verify at least once every 12 months for business associates) that they have deployed technical safeguards required by the Security Rule to protect ePHI through a written analysis of the business associate’s relevant electronic information systems by a subject matter expert and a written certification that the analysis has been performed and is accurate;
To encrypt ePHI at rest and in transit, with limited exceptions;
To establish and deploy technical controls for configuring relevant electronic information systems, including workstations, in a consistent manner including deployment of anti-malware protection, removal of extraneous software, and disabling network ports in accordance with the regulated entity’s risk analysis;
Use of multi-factor authentication, with limited exceptions;
Vulnerability scanning at least every six months and penetration testing at least once every 12 months;
Network segmentation;
Separate technical controls for backup and recovery of ePHI and relevant electronic information systems;
To review and test the effectiveness of certain security measures at least once every 12 months, in place of the current general requirement to maintain security measures;
Business associates to notify covered entities (and subcontractors to notify business associates) upon activation of their contingency plans without unreasonable delay, but no later than 24 hours after activation;
Group health plans to include in their plan documents requirements for their group health plan sponsors to: comply with the administrative, physical, and technical safeguards of the Security Rule; ensure that any agent to whom they provide ePHI agrees to implement the administrative, physical, and technical safeguards of the Security Rule; and notify their group health plans upon activation of their contingency plans without unreasonable delay, but no later than 24 hours after activation.
To help Regulated Entities understand and fulfill these responsibilities, OCR alone and in conjunction with the Office of the National Coordinator for Health Information Technology (“ONC”) also has published guidance like the HIPAA Security Risk Assessment (SRA) Tool. OCR guidance reflects that fulfillment of the Tool can help Regulated Entities may help defend but does not guarantee fulfillment of the Risk Assessment requirements, as the adequacy of the Risk Assessment always depends upon the unique facts and circumstances of the Regulated Entity at a particular time. This guidance confirms the importance of conducting timely and appropriate Risk Analysis in a manner that shows the Regulated Entity appropriately evaluated the risks to its e-PHI and acted reasonably in designing, administering, and updating that Risk Analysis to reasonably defend its e-PHI against breaches or other susceptibilities.
Recommended Actions For Health Plans & Other HIPAA-Regulated Entities
With the continued explosion in ransomware and other cyberthreats heightening the risk of experiencing a breach or other incident likely to draw the attention of OCR, each health plan or other Regulated Entity should take assess and confirm the adequacy of their current Risk Analysis, both to protect its ePHI and to promote its ability to defend its compliance with the HIPAA Security Rule’s Risk Analysis and other requirements in light of OCR’s heightened emphasis on Risk Analysis compliance and enforcement. For purposes of conducting this analysis, Regulated Entities generally will want to use a process like the following to structure their evaluation of their existing Risk Analysis to take advantage of the opportunity to use attorney-client privilege and other evidentiary rules to help protect discoverability of sensitive discussions about possible deficiencies in their existing Risk Analysis and discussions about potential tradeoffs considered in current or future Risk Analysis response:
Engage legal counsel experienced with HIPAA and other cybersecurity-related risks and liabilities to advise and assist your organization in designing and administering your Risk Analysis processes and response within the scope of attorney-client privilege;
Appoint and designate leadership and technical leadership for team responsible for design and administration of your organization’s initial and ongoing cybersecurity Risk Analysis and response (“Cyber-Risk Team”) and process for board and senior management reporting of the Cyber-Risk Team;
Select and engage outside consulting service providers, cyber-liability insurers and other risk service providers expected to participate in the process; work with qualified legal counsel to contract with these business associates to include the business associate agreement and other reassurances required by the HIPAA Privacy, Security and Breach Notification Rule and other performances, cooperation to provide and back services in accordance with agreed-upon protocols in the contract;
Train Cyber-Risk Team in the appropriate processes for working with internal teams, outside service providers, leadership, and designated legal counsel to conduct Risk Analysis, investigation and response using attorney-client privilege and other evidentiary tools and processes to maximize defensibility;
Require the Cyber-Risk Team conduct an updated, document assessment of cyber-risk within scope of attorney-client privilege and work with legal counsel to develop a documented cyber-risk policy that captures analysis and determinations for your justification for the size, scope and timing of your periodic Risk Analysis and rules and processes for interim risk identification, reassessments and response in reaction to potential cyber-risk signs between periodic Risk Analysis for presentation and approval by the Board taking into account the insights from published final and proposed guidance, enforcement actions and industry standards;
Require, oversee and enforce Cyber-Risk Team’s documented administration of the initial and subsequently required Risk Analysis and response pursuant to the adopted cyber-risk policy to identify vulnerabilities and work with legal counsel within the scope of privilege to document your analysis and justifications for addressing identified vulnerabilities and other required actions in response to identified susceptibilities or event;
Review adequacy of incident detection and response arrangements, including reporting and response mechanisms, insurance and indemnification protection, and other critical elements for mitigation and recovery; and
Other actions as warranted based on advice of counsel taking into account emerging threats, guidance, and risk susceptibility.
The author of this update, Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel Fellow and attorney board certified in Labor and Employment Law by the Texas Board of Legal Specialization, nationally known and celebrated for her experience providing advice and representation on HIPAA and other risk management and compliance to employers and other health plan sponsors, health plans, health plan fiduciaries and administrators, health and other insurers, third party administrators, health care and other managed care providers and organizations, human resources and health plan technology, and other businesses about health plan design, administration, and other compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Cynthia Marcotte Stamer is an attorney board certified in labor and employment law by the Texas Board of Legal Specialization, management consultant, author, public policy advocate and lecturer sought out by clients and industry and government leaders for her more than 35 years of health, insurance, employment and employee benefits and other industry management work, thought leadership, public policy and regulatory affairs advocacy, coaching, teaching, and publications on health and other employee benefits, health care, insurance, workforce and other risk management and compliance.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. Along with currently serving as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, her previous ABA leadership roles include more than a decade of service as a Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or an admission. Solutions Law Press and its authors 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 constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
The $200,000 civil monetary penalty [paid by Oregon Health & Science University (“OHSU”) for failing to provide requested medical records shows health plans, health care providers, and health care clearinghouses (“covered entities”) the perils of violating an individual’s Health Insurance Portability & Accountability Act of 1996 (“HIPAA”) right to timely access. As the 53rd Department of Health and Human Services Office of Civil Rights (“OCR”) announced HIPAA right of action enforcement action, the penalty reaffirms OCR’s continued strong commitment to the enforcement of HIPAA rights of access against covered entities and demonstrates the potential high cost covered entities can face for noncompliance with these requirements. Like the 52 prior enforcement actions, the OHSU penalty warns health plans and other covered entities to confirm their compliance to avoid incurring similar liabilities.
Thie HIPAA Privacy Rule’s ”Right of Access” provisions require covered entities give requesting individuals or their personal representatives with timely access to requested protected health information. Generally, this means the covered entity must provide protected health information access within 30 days, with the possibility of one 30-day extension if certain requirements are met. HIPAA also prohibits covered entities from charging more than a reasonable, cost-based fee for this record access. This requirement is in addition to any otherwise applicable duty to provide timely access to records imposed by otherwise applicable laws such as rules applicable to health plans and health insurers covered by the adverse benefit determination rules of the Patient Protection and Affordable Care Act (“ACA”) or the Employee Retirement Income Security Act of 1974 (“ERISA”) or health insurers or health care providers under applicable state medical privacy and records laws state insurance laws, and health care providers under applicable state medical practice laws The Privacy Rule also contains specific rules for determining the allowable fees, which typically are more restrictive than often concurrently applicable state laws applicable to health care providers or insurers.
Covered entities also should recognize that covered entities violating the right of access rule face a high likelihood of enforcement by OCR. Patients and other individuals and their personal representatives typically are well informed about their access rights due to HIPAA’s notice of privacy practices and posting requirements. Since right of access violations are one of the most common complaints and OCR frequently finds violations when investigating these complaints,
The $200,000 civil monetary penalty against OHSU along with the undisclosed legal fees and other expenses it incurred in responding to the investigation and enforcement action show the HIPAA liability covered entities can incur for violating the right of assess rule. In September 2024, OCR issued a Notice of Proposed Determination seeking to impose a $200,000 civil monetary penalty. OHSU waived its right to a hearing and did not contest OCR’s imposition of a civil monetary penalty. Accordingly, in December 2024, OCR imposed the $200,000 civil monetary penalty against OHSU in a December 2024 Notice of Final Determination. The OHSU civil monetary penalty arose from OCR’s investigation of a second complaint filed by an individual’s personal representative in January 2021 from the individual’s personal representative. The complaint was one of two OCR received on this matter. In September 2020, OCR resolved the first complaint received in May 2020 after OCR notified OHSU of its potential noncompliance with the Privacy Rule Right of Access provisions. Although OHSU provided part of the requested records in April 2019, OHSU did not provide all of the requested records in August 2021. This was 16 months after the first request for records in April 2019 and nearly a year after OCR previously warned OHSU about its HIPAA obligations in response to the initial complaint. Based on these findings, OCR determined OHSU violated the right of access rule by failing to take timely action in response to the right of access requests.
Along with showing the importance of overall timely compliance with the right of access rule, the OHSU civil monetary penalty also shows covered entities the importance of promptly and completely correcting any violation and their causes that results in a failure by the covered entity (including an employee or business associate responsible for responding to requests) has violated the right of access rule. OCR’s right of access rule investigation and enforcement history against covered entities, including the original complaint against OHSU, demonstrates that OCR seeks settlement with substantially smaller or even no financial payment required if the covered entity promptly and completely fixes the violation in response to OCR’s notice and technical assistance.
The author of this update, Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel Fellow and attorney board certified in Labor and Employment Law by the Texas Board of Legal Specialization, nationally known and celebrated for her experience providing advice and representation on HIPAA and other risk management and compliance to employers and other health plan sponsors, health plans, health plan fiduciaries and administrators, health and other insurers, third party administrators, health care and other managed care providers and organizations, human resources and health plan technology, and other businesses about health plan design, administration, and other compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Cynthia Marcotte Stamer is an attorney board certified in labor and employment law by the Texas Board of Legal Specialization, management consultant, author, public policy advocate and lecturer sought out by clients and industry and government leaders for her more than 35 years of health, insurance, employment and employee benefits and other industry management work, thought leadership, public policy and regulatory affairs advocacy, coaching, teaching, and publications on health and other employee benefits, health care, insurance, workforce and other risk management and compliance.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. Along with currently serving as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, her previous ABA leadership roles include more than a decade of service as a Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or an admission. Solutions Law Press and its authors 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 constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
New Guidance Broadens Availability Of Website Alternative To All Health Plans
All health insurers and health plan administrators can now fulfill their obligation under the Patient Protection and Affordable Care Act (“ACA”) to send annual minimum essential coverage statements (“MEC Statements”) by timely posting a notice of the availability of the statements in lieu of providing the MEC statements by sending Internal Revenue Service (“IRS”) Forms 1095-B and 1095-C” to covered persons under guidance issued in IRS Notice 2025-15 on February 21, 2025.As part of the ACA minimum essential coverage mandates, Internal Revenue Code (“Code”) Section 6055 generally requires each health plan providing minimum essential coverage to any individual during a calendar year to notify the covered person named on an application who enrolls one or more individuals in the minimum essential coverage a statement that identifies each covered individual and the individual’s months of coverage. See Treas. Reg. § 1.6055–1(b)(11). While Section 6055 sets the statutory deadline to provide the MEC Notice as the January 31 immediately following the close of the plan year when the plan provides the coverage, Treasury Regulation § 1.6055-1(g)(4) provides an automatic 30-day extension of time in which to furnish these statements. As a result, covered health plans and health insurers must fulfill the annual MEC Statement requirement within 61 days of the close of the calendar year to which the MEC statement applies.
Internal Revenue Service (“IRS”) regulations generally require health plans to use Forms 1095-B and 1095-C to provide the MEC Statement to responsible individuals unless the health plan qualifies under Treasury Regulation § 1.6055-1(g)(4)(ii)(B) to provide the statement in the “alternative manner” of a qualifying website posting described in that Regulation.
Before February 21, 2025, Treasury Regulation § 1.6055-1(g)(4)(ii)(B) only allowed health plans to use the website posting alternative to fulfill their MEC Statement obligations if the individual shared responsibility payment amount under Code section 5000A(c) for the calendar year in which minimum essential coverage is provided is zero. Under IRS Notice 2025-15, however, all health plans and health insurers are permitted to use the alternative manner of a website posting to fulfill the MEC Statement mandate for all post-2023 plan years including the 2024 calendar notices without regard to the amount of the individual shared responsibility payment.
Health plans and health insurers wishing to use the to use the “alternative manner” of a website posting in lieu of Forms 1095-B and 1095-C to fulfill the MEC Statement requirement for 2024 or a subsequent calendar year must post in a location reasonably accessible to all responsible individuals a clear and conspicuous notice stating that responsible individuals may receive a copy of their statement upon request. Additionally, if an individual requests a statement, the health plan must deliver the requested statement within 30 days of the date the health plan receives the request.
The author of this update, Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel Fellow and attorney board certified in Labor and Employment Law by the Texas Board of Legal Specialization, with decades of experience advising employers and other health plan sponsors, health plans, health plan fiduciaries and administrators, health and other insurers, third party administrators, managed care organizations, health plan technology, and other businesses about health plan design, administration, and other compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Cynthia Marcotte Stamer is an attorney board certified in labor and employment law by the Texas Board of Legal Specialization, management consultant, author, public policy advocate and lecturer sought out by clients and industry and government leaders for her more than 35 years of health, insurance, employment and employee benefits and other industry management work, thought leadership, public policy and regulatory affairs advocacy, coaching, teaching, and publications on health and other employee benefits, health care, insurance, workforce and other risk management and compliance.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. Along with currently serving as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, her previous ABA leadership roles include more than a decade of service as a Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press™
Solutions Law Press™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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™ resources or training.
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 information 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 circumstances at the particular time. No comment or statement in this publication is to be construed as legal advice or an admission. Solutions Law Press and its authors 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 constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. Solutions Law Press and its authors 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.
Solutions Law Press publisher and attorney Cynthia Marcotte Stamer will discuss tobacco cessation class actions, health plan PBM, excessive fee, antitrust and other selected emerging health and disability plan litigation trends to watch in 2025 as part of the Welfare Plan Update at the American Bar Association Real Property, Probate and Trust Section Employee Plans and Executive Compensation Group will host during its free committee call on January 17, 2025, at 11:30 AM Central Time.
Along with Ms. Stamer’s comments, the Update also will include updates on the mental health partiy final rules and implications of the January 1, 2025 expiration of high deductible health plan telemedicine relief by her fellow Welfare Benefit Committee Co-Chair Jacquelyn M. Abbott and Committee Vice Chair Julia Mader.
Members interested in the meeting are invited to use the following Zoom credentials to connect to the meeting:
Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Stamer is recognized for her decades of work on leading edge employee benefits, employment, health care and insurance concerns with recognition as a Martindale Hubble “Top Rated Lawyer” and “Legal Leader” in Health Care and Labor and Employment Law; as among the D Magazine “Best Lawyers In Dallas” in Labor & Employment, Tax: ERISA & Employee Benefits, Health Care and Business and Commercial Law.
Stamer has more than 35 years of experience guiding employers, health and other employee benefit and insurance programs and their fiduciaries, managed care, TPAs, PBMs, health care clearinghouses and their service providers; and other managed care and other health and health plan industry clients on program, product, systems and process design, administration, and defense; government and regulatory investigations and affairs; HIPAA and other data and systems privacy, cybersecurity and other integrity; workforce and other service provider credentialing, contracting, and management; government and private investigations, disputes, audits and enforcement; and other compliance, risk management and operations concerns in a wide range of contexts. Her work, and the interests of her clients are enhanced by her continuous involvement in federal and state legislative advocacy, regulatory affairs and government relations on these and other related concerns throughout her career.
In the course of this work, Stamer frequently advises and represents and defends health and other employee benefit plans, their fiduciaries, third party administrators, brokers, insurers, trustees and other plan service providers, debtor plan sponsors and their leaders, auditors, creditors and creditor committees, bankruptcy trustees, on prevention and mitigation of claims, fiduciary, licensing, prompt pay and other contractual, regulatory and other risks and liabilities arising from underfunded or distressed companies and employee benefit plans. She also advises employers, their boards, investors and management, third party administrators, preferred provider organizations, insurers and other plan service providers and others in fiduciary, claims and other audits, investigations and enforcement actions by private litigants, the Department of Labor, Department of Health & Human Services, Internal Revenue Service, Department of Justice, Federal Trade Commission, state insurance, attorneys’ general or other regulator, contractual arising out of workforce and staffing, employee benefit and insurance practices and programs in ongoing operations, corporate or credit transactions, bankruptcy or other situations and serves as special or consulting counsel for bankruptcy and other human resources, benefits, insurance, health care and regulatory compliance and investigation concerns. Stamer also counsels, represents and defends third party administrators, preferred provider and other managed care organizations, brokers and other regulated parties in state insurance and other regulators notice and reporting, investigations, audits, discipline and other enforcement actions.
Past Chair of the ABA RPTE Employee Benefit and Other Compensation Group, the Health Law Section Managed Care and Insurance Interest Group, and the Tort Trial and Insurance Section Medicine and Law Committee, Stamer also contributes her experience and knowledge by serving as Scribe for the American Bar Association (“ABA) Joint Committee on Employee Benefits (“JCEB”) annual agency meeting with the Department of Health and Human Services as well as a leader of employee benefits, human resources, health as an industry thought leader, Stamer also publishes and speaks extensively on health and other employee benefits, compensation, workforce, health care and related regulatory compliance and risk management matters.Her insights on these and other matters appear in publications of the American Bar Association, Bloomberg/BNA, Modern Healthcare, Aging In Place, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Stamer, her speaking, legal, consulting and other experience and services, or to access other publications by Stamer see CynthiaStamer.comor contact Stamer directly via e-mailor telephone (214) 452-8287.
For more details about the Real Property Probate and Trust Section Employee Benefits and Other Compensation Committee or other employee benefits related committees and activities of the American Bar Association, see the American Bar Association website here.
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 or updating your profile hereand connect with Stamer on Linkedin. For important information concerning this communication click here. If you do not wish to receive these updates in the future, unsubscribe by updating your profile here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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.
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 information 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 circumstances at the 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.
THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 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, health care providers and other Southern California organizations impacted by the California fires may qualify for temporary waivers or modification of certain Department of Health and Human Services (“HHS”) regulatory requirements under the Declarations of a Public Health Emergency (“PHE”) published by HHS today.
An extensive list of resources and guidance to help health plans, health care providers and others to understand and cope with HHS requirements in disaster or other emergency situations such as:
Health plans and other regulated entities impacted by the fire or other disasters should carefully review this guidance to understand the scope and availability of the current relief. Additionally, health plans, health care providers, business associates and other HHS-regulated entities and providers not currently impacted by today’s or another public health emergency declaration should use this guidance to plan and adopt policies and arrangements in advance of a disaster to provide for their continued ability to fulfill HHS regulatory obligations in the event of an emergency.
Health plans and other HHS-regulated entities should keep in mind the limited duration and scope of the relief provided by this PHE or any other HHS public health emergency declaration. Entities planning to rely on the PHE relief must review the scope, conditions and duration requirements and ensure their ability to defend their continued compliance taking into account these limited waivers and modifications.
Also the PHE guidance documents are not a final agency action, do not legally bind persons or entities outside the Federal government, and may be rescinded or modified in the Department’s discretion. Noncompliance with any voluntary standards (e.g., recommended practices) contained in these documents will not, in itself, result in any enforcement action.
Furthermore, health plans and other HHS regulated entities typically face a myriad of responsibilities beyond those imposed by the HHS. Health plans and other regulated entities should check other agencies disaster declaration webpages to determine whether the agency has issued any specific relief impacting their emergency in response to the broader disaster declaration issued by the Administration. Except to the extent covered by other declared disaster relief, coverage by or compliance with the HHS PHE guidance and policies does not insulate the health plan from potential liability for violating the requirements of the Employee Retirement Income Security Act or other laws creating responsibilities to plan members, providers, the Employee Benefit Security Administration or other agencies or parties other than HHS with respect to the HHS regulatory obligations for which the specific relief is provided in the PHE declaration. Accordingly, health plans, their fiduciaries, plan sponsors and service providers are urged to take necessary steps before, during and after any disaster to position themselves to demonstrate fulfillment of duties of prudence and other applicable responsibilities.
The author of this update, Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel Fellow and attorney board certified in Labor and Employment Law by the Texas Board of Legal Specialization, who has decades of experience advising health care providers, health plans and insurers, third party administrators, managed care and other health care payers and providers, technology, and other businesses about crisis preparedness and response and other compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or 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 her more than 35 years of health, insurance, employment and employee benefits and other industry management work, public policy leadership and advocacy, coaching, teachings, and publications including leading-edge work on crisis preparedness, response and recovery.
Author of many highly regarded compliance and risk management tools, training and other resources on health and other employee benefits, health care, insurance, workforce and other risk management and compliance, Ms. Stamer is widely recognized for her thought leadership and advocacy on these matters.
In addition, Ms. Stamer serves as a Scribe for the American Bar Association (“ABA”) Joint Committee on Employee Benefits annual agency meetings with OCR and shares her thought leadership as International Section Life Sciences Committee Vice Chair, 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 health care, insurance, human resources and employee benefit, data and technology, regulatory and operational performance, and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education. These include extensive resources 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.
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 information 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 circumstances at the 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.
2025 surprise billing independent dispute resolution fees applicable to health plans, health insurers and health care providers will remain are holding steady.
The IDR Fees Final Rule, effective as of January 22, 2024, set forth the 2024 IDR entity fee ranges. The Departments announced these fees will remain unchanged for 2025.
The 2025 IDR entity fees now published on the NSA website are effective for disputes initiated on or after January 1, 2025. For these disputes, the administrative fee amount is $115 per party per dispute, and the certified IDR entity fee ranges are $200-$840 for single determinations and $268-$1,173 for batched determinations. The website now includes information on the fee set by each certified IDR entity within these ranges.
Along with confirming the 2025 fees, the Departments caution plans and providers to monitor the website for updates to the IDR web form to accommodate guidance-related and system enhancements. The Departments ask plans and providers who have initiated an IDR dispute previously, to clear their computer’s cache or open the IDR initiation web form in a private or incognito window at least once a week to see all the new features. The Departments warn to clear the cache or open this form in private/incognito mode could result in additional follow-up with certified IDR entities or system errors.
The author of this update, Cynthia Marcotte Stamer is an American College of Employee Benefits Counsel Fellow and attorney board certified in Labor and Employment Law by the Texas Board of Legal Specialization, who has decades of experience advising health plans and insurers, third party administrators, managed care and other health care payers and providers with surprise billing and other claims, payment and other design, administration, regulatory and other enforcement, dispute resolution, compliance, risk management and operational matters. If you have questions or need advice or help evaluating or addressing these or other compliance, risk management, or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about the 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.
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 her more than 35 years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications including leading edge work on workforce and other risk management and compliance.
Ms. Stamer’s work throughout her career has focused heavily on working with businesses domestically and internationally on employment, benefits, Federal Sentencing Guidelines and other workforce management, regulatory and public policy and other legal and operational concerns.
Author of many highly regarded compliance, training and other resources on health and other employee benefits, health care, insurance, workforce and other risk management and compliance, Ms. Stamer is widely recognized for her thought leadership and advocacy on these matters.
In addition, Ms. Stamer serves as a Scribe for the American Bar Association (“ABA”) Joint Committee on Employee Benefits annual agency meetings with OCR and shares her thought leadership as International Section Life Sciences Committee Vice Chair, 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.
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 information 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 the 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.
With this week’s Thanksgiving celebrations kicking off the 2024 year-end holiday festivities, wise businesses will proactively act to reduce the risk that their business will start 2025 with a post-holiday workforce liability hangover.
Responsibly managed, company-sponsored and other social celebrations and activities can promote team building, morale, goodwill and other rewards. However, holiday celebrations, staffing disruptions, behaviors and their fallout also can often create attendance, discipline, compliance, safety and other legal and operational responsibilities, risks and costs. Wise business leaders act proactively to mitigate these risks as the nation enters holiday season begins.
Health & Safety
Gatherings, food, game playing, toasting with alcohol, travel and other aspects of company-sponsored and off-duty celebrations can enhance usual or create new accident and illness risks. Holiday socialization, presentism, distractions, staffing disruptions, operational changes and other factors can increase illness and accident risks. Injuries and illnesses suffered on or off the job can create added occupational health and safety and worker’s compensation responsibilities, costs and liabilities, disrupt staffing and productivity, and fuel health care, medical leave, disability, worker’s compensation and other responsibilities and expenses long after the holiday season ends. To help workers enjoy the Holidays safely and avoid these business costs and disruptions, businesses should confirm that their occupational health, safety and injury policies, practices, and staffing fulfill applicable occupational health and safety and workplace accident and injury laws, as well as consider encouraging workers to follow good health and safety practices on and off the job throughout the holiday season.
Employers generally have a duty of care under the Occupational Safety and Health Act (“OSH Act”) and other occupational health and safety laws to provide a safe work environment. The OSH Act requires businesses to recognize and take appropriate steps to keep their workplaces safe. The OSH Act, worker’s compensation, leave and other laws. OSH Act and other workplace safety laws generally require employers to promptly report and investigate workplace accidents and injuries, ensure workers receive timely treatment, and trigger occupational injury and other leave and other duties.
Workplace injuries resulting from unsafe workplace conditions generally trigger expensive penalties and damages, in addition to worker’s compensation or other occupational injury coverage liabilities. The holiday season often exacerbates or adds to the ongoing challenges employers face in maintaining workplace safety and responding to workplace injuries and accidents. Some common sources of additional risks associated with the holiday season include decreased oversight from management holiday absences, heightened worker fatigue and distraction, demand-driven, vacation or illness-related understaffing, expanded use of temporary or contract staffing, and holiday season-associated intoxication. See Holiday Workplace Safety. OSHA offers various recommendations to aid employers in recognizing and managing heightened workplace safety risks during the holiday season. Keeping Workers Safe This Holiday Season. To mitigate their risks from workplace injuries and accidents caused by safety violations and associated violations of investigation, reporting, benefit and other requirements, business leaders should ensure that their organizations identify and manage these additional risks, as well as ensure appropriate staffing and other arrangements are in place to ensure timely response, investigation and reporting of any workplace accidents or injuries during the holiday season.
With outbreaks of the flu, respiratory illnesses and other communicable or infectious diseases that spread from person to person common during the holidays, and holiday gatherings heightening the potential for transmission of the flu or other contagious diseases, businesses also should consider their responsibilities under the OSH Act or other laws to manage contagious disease exposures and spread. For instance, health care and certain other industries may be subject to laws or regulations that impose specific requirements for preventing and responding to contagious diseases, many of which may have been added or changed since the COVID-19 pandemic. Businesses should verify their policies meet or exceed current federal, state, local and contractual requirements as well as are designed to meet their business’ need to manage other contagious disease costs, absences and other disruptions.
Whether or not a business is subject to specific contagious disease management mandates, all businesses generally will benefit from reviewing and communicating their existing contagious disease and related leave and other workforce policies to workers and management to help protect their operations against the costs, operational disruptions and liabilities that often result from contagious disease outbreaks within their workplace. To enhance efforts to deter worker injuries and illnesses, businesses should consider using free resources like the Centers for Disease Control’s Healthy Habits to Prevent Flu and 8 Tips for a Safe and Healthy Holiday Season flyers, workplace posters, payroll stuffers and other communications to remind workers and their families to follow best safety and contagious disease prevention practices during the holidays.
Along with encouraging workers to stay healthy and safe during the Holidays, businesses should also consider providing documented reminders and take other steps to encourage workers to provide timely notice of illnesses and injuries and verify appropriate management coverage and arrangements to ensure that management team absences don’t disrupt the business’ timely delivery of Family and Medical Leave Act, occupational injury and other notifications, coverage for absences, provision of benefits, and other performance of other responsibilities in response to injury and illness reports despite holiday associated absences or hours of operation impacting the employing business or its responsible vendors.
Businesses also should verify their workplace safety, contagious disease and leave policies are designed and administered to prevent and mitigate exposure for unlawful OSH Act and worker’s compensation retaliation, disability discrimination against legally protected employees with chronic or other disabilities under the Americans with Disabilities Act (“ADA”), denial of leave or other violations of the Family and Medical Leave Act leave, notice and other requirements; and ADA and other privacy and confidentiality laws.
Alcohol & Other Conscious Altering Substance Consumption
The increased prevalence of holiday season celebrations and vacations often fuels an increase in consumption of alcohol, marijuana, and other consciousness-altering substances. This consumption can fuel a host of risks and headaches for businesses. Businesses concerned about these risks should act proactively to mitigate these risks.
When addressing business-related alcohol consumption, many businesses will want to consider not only alcohol and other conscious altering consumption at business-related events as well as potential costs that may arise from off-duty excess alcohol consumption. Whether resulting from on or off-duty consumption, excess alcohol, marijuana or other conscious altering consumption, whether on or off duty, can undermine productivity, create attendance and discipline issues, and fuel a host of other risks even when it does not result in a specific accident or injury.
Impaired judgment from alcohol or other intoxication in the workplace or at other events often fuels or contributes to employees or others exhibiting or subjecting employees to inappropriate sexual advances or other discriminatory statements, violent behavior, suicidal behavior or other problematic conduct requiring workplace investigations and discipline.
Most businesses also recognize that accidents caused by alcohol or other intoxication at work or work-related functions create substantial liability exposures for the company under the OSH Act and other occupational safety laws, as well as to workers and any third parties injured by a drunken employee, business associate, client or guest.
Businesses risk “dram shop” or other claims or other liability if employees or guests impaired by alcohol or other substances consumed at company-sponsored or associated events or operating company vehicles or equipment injure others.
Beyond this third-party liability, businesses also may incur significant worker’s compensation, health or disability benefit-related benefit costs if an employee is injured or injures another worker in an alcohol-related accident.
The potential headaches are even greater where the business is a health care, education, automobile sales, trucking and other transportation, or another business subject to or that has voluntarily adopted specific drug and alcohol-free, drug and alcohol testing and other related regulatory or contractual requirements. Businesses subject to these requirements should ensure appropriate arrangements for timely drug and alcohol testing, reporting, and other compliance with these requirements during the holiday season to avoid regulatory or contractual penalties for noncompliance. Companies administering substance abuse testing must comply with applicable mandates while also ensuring that their processes incorporate appropriate protocols to comply with disability discrimination, accommodation and confidentiality requirements of the Americans With Disabilities Act (“ADA”). See, e.g., ADA May Require Employers To Accommodate Employees Testing Positive For Legally Prescribed Medications
Also, because workers engaged in these industries generally risk loss of licensure, certification or other credentials required to perform their jobs for engaging in or failing to report certain alcohol or substance-related offenses or conduct, even off-duty consumption can create staffing headaches for an employer if a worker becomes temporarily or permanently disqualified to work as a result of a substance-related infraction. Consequently, businesses in industries affected by these heightened requirements have a heightened interest in educating and reminding workers to behave legally and responsibly when deciding if and when to consume alcohol or other conscious-altering substances.
Accordingly, virtually all businesses can benefit from encouraging employees to be responsible when consuming alcohol in both business and non-business functions and in planning and hosting holiday functions.
Businesses that serve alcohol at company functions or anticipate that employees will attend other business functions where alcohol will be served need to consider the potential liability risks that may result if the alcohol-impaired judgment of an employee or other guest causes him to injure himself or someone else. A company anticipates an employee or guest might consume alcohol at a company-sponsored or another business event and should adopt and enforce clear policies to prohibit and prevent individuals from over-imbibing and from driving under the influence. Many businesses also find it beneficial to suggest, require or offer at company expense alternate transportation for employees to use when leaving a company or business-related event where the employee consumed alcohol.
Businesses concerned with these liability exposures should take steps to manage the potential risks that commonly arise when employees, clients or other guests consume alcohol at company-sponsored events or while attending other business-associated festivities. To minimize these risks at company-sponsored events, many companies elect not to serve or limit alcohol consumed by workers and served to guests at company sponsored events and other business functions.
To help prevent intoxication from fueling inappropriate behavior at company celebrations where alcohol might be consumed or present, businesses, at a minimum, should remind employees that company policies prohibiting intoxication apply to company-sponsored social and business events. Some practical tips for hosting safe holiday gatherings include:
Management and other leaders should communicate expectations and set a good example.
Reduce opportunities for intoxication by prohibiting or restricting and monitoring the amount of alcohol available and served.
Offer a plentiful supply of a variety of nonalcoholic drinks—water, juices, sparkling sodas. Nonalcoholic drinks provide guests with alternatives to alcohol. They also may help counteract the dehydrating effects of alcohol, slow the rate of alcohol absorption into the body and may reduce the peak alcohol concentration in the blood.
Provide a variety of healthy foods and snacks. Food consumption can slow the absorption of alcohol and reduce the peak level of alcohol in the body by about one-third. Food can also minimize stomach irritation and gastrointestinal distress the following day.
Encourage guests to help keep each other safe by monitoring and assign a team to monitor attendees for potential overconsumption or other signs of intoxication. With appropriate pre-consumption notification to attendees, some businesses even require or encourage attendees consuming alcohol to take a breathalyzer test before departure to minimize the risk that an intoxicated guest will be arrested or involved in an accident after departing the party.
Help your guests get home safely by arranging reliable transportation by using designated drivers and taxis. Anyone getting behind the wheel of a car should not have ingested any alcohol.
Because holiday-associated alcohol consumption and other stresses also tend to fuel increased depression, domestic violence and other stress-associated behaviors, many businesses also find it beneficial to redistribute information about employee assistance programs (EAPs).
Businesses also may want to review the adequacy of existing health, disability, accident and dismemberment, group legal services and other benefit programs, liability insurance coverage and employment policies to protect and promote the company’s risk management and workforce coverage objectives. Businesses can experience unfortunate surprises if they don’t anticipate the implications of these provisions on their employment policies, leave and benefit, safety and other workplace programs and liability insurance and indemnification obligations and costs. Maintaining and reminding workers about policies regarding alcohol consumption or intoxication, accident and traffic offense notifications, privacy waivers, or other policies enhancing accident investigation and response, or other strategic policies can help deter and facilitate investigation and response to on and off-duty accidents or other risk-creating events.
Many employee assistance (“EAP”) health and disability programs incorporate special provisions affecting injuries arising from inappropriate alcohol use as well as offer coverage and benefits to aid employees and family members affected by mental health or substance abuse-related conditions. Changes in regulatory mandates and expanded enforcement of federal group health plan mental health and substance abuse coverage mandates make it important to ensure that employment-based health coverage complies with these requirements. Similarly, many businesses increasingly qualify for preferential rates or discounts on liability policies based upon representations that the business has in effect certain alcohol and drug use or other risk management policies and practices. Reviewing these policies now to become familiar with any of these requirements and conditions can also be invaluable in helping a business respond effectively if an employee or guest is injured in an alcohol-related accident.
Discrimination & Harassment Liability Risks
Businesses should also manage exposures to religious, sex and other discrimination risks linked with the holiday season.
Businesses should critically review their scheduling and other holiday season plans and practices for potential prohibited discrimination or other insensitivity. Businesses should use care to handle carefully requests for religious-based scheduling changes, particularly in light of changes in judicial precedent and regulations in recent years. Leave policies should disclose policies for scheduling and holiday leave clearly and include appropriate, updated policies and procedures for requesting religious accommodation. Companies also should consider seeking advice from legal counsel before denying a faith-based request for a schedule change in light of the latest guidance or recent court decisions precedent.
Business-sponsored or connected holiday or year-end parties, communications, gifts, and other December festivities and observances should be designed to reflect appropriate sensitivity to sexual harassment and religious and other cultural diversity risks. Businesses should exhibit sensitivity and alert their workforce to their expectation that members of their workplace exhibit respect and sensitivity to differences in religious practices and observances among their employees, business associates and friends. Management and other workers should use care to plan social gatherings to be inclusive and to accommodate differences in cultural, religious and other differences. Businesses also should be sensitive to the potential that workers of alternative faiths may feel discriminated against if holiday observances focus unduly on a particular religion to exclude their faith. Businesses also should use care to manage other discrimination exposures in the planning of holiday festivities, gift exchanges, and other activities. Businesses also should be vigilant in watching for signs of inappropriate patterns of discrimination in the selection of employees invited to participate in company-connected social events and off-duty holiday gatherings sponsored by managers and supervisors.
A good starting point is reminding employees, business partners and customers that the company expects employees, business partners and other guests to adhere to company rules against sexual harassment, religious and cultural and other inappropriate discrimination at company-sponsored and other gatherings involving other employees or business associates. Businesses also should remind employees that the company does not expect or require that employees submit to unwelcome sexual, religious, or other inappropriate harassment or discrimination when participating in parties or other social engagements with fellow employees, customers or other business partners and of the procedures to follow to report any concerning events. Even a simple e-mail reminder to employees that the company expects them to be familiar with and comply with these policies and can help promote compliance and provide helpful evidence if an employee or other celebrant steps over the line.
To enhance the effectiveness of these reminders, a business should consider adopting and sharing specific guidance to educate workers about its policies, including examples to illustrate company-sponsored and other off-duty holiday-associated activities of particular concern.
Businesses also should recognize that whether or not company-sponsored, the fraternization inherent in holiday parties and other celebrations where employees celebrate with other employees, clients, suppliers or other business associates can lower inhibitions and obscure the line between appropriate and inappropriate social and business behavior. With or without alcohol, some employees, clients or business associates may misinterpret the festive social atmosphere of holiday celebrations. Some employees, clients or business associates make unwelcome sexual advances, make sexually suggestive or other inappropriate statements, or engage in other actions that expose the business to sexual harassment or other employment discrimination, harassment or retaliation liability. To help deter inappropriate or risky conduct, businesses should consider providing reminders that company prohibitions and rules about sexual harassment, discrimination, fraternization and other inappropriate conduct remain in effect during the holiday season, including when planning or attending holiday celebrations or other events hosted by the business, business partners and clients, and even private management sponsored events and observances.
Gift Giving, Gratuities & Social Entertainment
The exchange of social invitations, gifts and gratuities during the holiday season or at other times throughout the year also can raise various concerns. Businesses should adopt and communicate clear policies and procedures governing both giving and receiving social invitations, gifts, and other benefits. Businesses should review applicable governmental regulations, contractual requirements, and customer and vendor policies for requirements that could impact the offering, receipt, reporting or other handling of gifts, social invitations or other activities. Businesses also should design policies to ensure that they collect and retain sufficient documentation from employees, officers, consultants, customers, and vendors to monitor compliance and other legal and operational risks associated with social entertainment, gifts, and other similar benefits, to report tax deductions and income arising from these activities appropriately, and to meet other compliance obligations. Businesses should review and update current business policies affecting social entertainment, gifting and other similar activities for opportunities to promote compliance and mitigate risks.
As with other holiday observances, all gifts, gratuities and social entertainment must adhere to applicable laws, regulations and company policies regarding bribery, conflict of interest or other inappropriate inducements or rewards. Companies should implement and enforce appropriate policies for the offering and provision of and recordkeeping and reporting of these perks.
Gifts, gratuities and entertainment practices also must not discriminate inappropriately based on sex, religion or other protected status and must reflect appropriate sensitivity to potential religious, sex, race, or other protected status. A business that anticipates workplace or work-connected private festivities might include white elephant or other gift exchanges may wish to specifically include a reminder to exercise care to avoid selecting a gift that may be sexually suggestive, insensitive to religious, cultural or other differences or otherwise offensive.
Businesses also should confirm that all applicable tax implications arising from the giving or receiving of gifts are appropriately characterized, documented and reported in accordance with applicable tax, referral, conflict of interest and other requirements.
In addition to ensuring proper tax documentation and reporting, businesses also need to ensure and retain documentation of the propriety of invitations, gifts and other benefits. Social entertainment and gift-giving activities intended to show appreciation or support marketing efforts can create significant legal or relationship risks if not properly tailored to avoid regulatory or contractual prohibitions or appearances of impropriety. Government contractors, government officials, health care providers, nonprofits, public companies and an amazingly broad range of other entities often must comply with specific statutory, regulatory, contractual or ethical requirements affecting the giving or receiving of invitations, gifts or other preferences. An ill-conceived social invitation, gift, or other benefit that violates these restrictions may expose both givers and recipients to legal prosecution, program disqualification and other serious legal risks.
In addition to these externally imposed legal mandates, many businesses have established their own conflict of interest, social entertainment, gift giving or other policies to minimize the risk that employee loyalty or judgment will be comprised by gifts offered or received from business partners or other outsiders. Employees, officers and contractors of businesses maintaining these policies may face termination or other significant discipline for violating these requirements. Accordingly, businesses offering social invitations, gifts and other benefits to valued vendor or customer relationships risk must be sensitive to these organizationally imposed requirements.
Timekeeping, Performance, Attendance & Time Off
Businesses also commonly face a range of year-end timekeeping, attendance and time off, pay, compensation and productivity concerns. The winter cold and flu season and other post-celebration illnesses, vacations, and winter weather inevitably combine to fuel a rise in absenteeism and competing requests for time off during the holiday season. Improperly designed or out-of-date timekeeping and reporting, leave and attendance, investigations, privacy and other workplace policies can exacerbate management of these challenges and their costs. Further complications can arise when dealing with employees suspected of mischaracterizing the reason for their absence or otherwise gaming the company’s time off policies. Meanwhile, performance and productivity concerns also become more prevalent as workers allow holiday shopping, personal holiday preparations, and other personal distractions to distract their performance.
Managing staffing needs and tracking and administering timekeeping, overtime and other pay, paid and unpaid time off and other attendance, compensation and absence administration while maintaining compliance with legally protected or other legitimate requests for excused time off by employees can present major headaches for businesses and their management. Recent changes in federal, state and local paid and other protected leave mandates add additional traps for the unprepared. Businesses concerned with these challenges ideally will review their policies and practices to ensure their organizations have in place well-designed policies and practices concerning timekeeping, overtime and other pay, attendance and time off, productivity and performance that comply with the Fair Labor Standards Act and other compensation, timekeeping, leave, reporting, investigations, privacy and other federal, state and local laws. Businesses should exercise care when addressing productivity and attendance concerns to investigate and document their investigation before imposing discipline. Businesses also should ensure that their policies are appropriately and even-handedly administered. They also should exercise care to follow company policies, to maintain time records for non-exempt workers, to avoid inappropriately docking exempt worker pay, and to provide all required notifications and other legally mandated rights to employees taking medical, military or other legally protected leaves. In the event it becomes necessary to terminate an employee during December, careful documentation can help the business to defend this decision. The increasing prevalence of worker classification challenges by federal and state agencies and plaintiff’s attorneys also makes it important for businesses to take steps to require and preserve access to documentation be able to demonstrate compliance with these and other applicable legal obligations by staffing and other contract labor suppliers.
Timely Investigation, Notification & Reporting
Businesses faced with allegations of discrimination, sexual harassment or other misconduct or potential business liabilities arising during holiday seasons should also take steps to ensure that appropriate staffing and other arrangements to ensure their organization’s ability to promptly investigate, if necessary, take appropriate corrective action to address complaints or other concerns arising during the holiday season around management or other time off.
Delay in investigation or redress of accidents, discrimination or other concerns can increase the liability exposure of a business presented with a valid complaint and complicate the ability to defend charges that may arise against the business. Additionally, delay also increases the likelihood that a complaining party will seek the assistance of governmental officials, plaintiff’s lawyers or others outside the corporation in the redress of his concern.
If a report of an accident, act of discrimination or sexual harassment or other liability related event arises, businesses should take steps to ensure that management responsible for responding to these and other occurrences are property trained or otherwise supported to carry out these responsibilities in an appropriate, defensible manner as well as to provide timely notification as needed to any government entities, contract partners, insurers, agencies or other parties. Injuries occurring at company related functions often qualify as occupational injuries subject to worker’s compensation and occupational safety laws. Data breaches and various other events may trigger notification or other disclosure obligations to meet statutory, contractual or other requirements. Likewise, automobile, cyber, employment practices and other liability policies often require covered parties to notify the carrier promptly upon receipt of notice of an event or claim that may give rise to coverage, even though the carrier at that time may not be obligated to tender a defense or coverage at that time. Ensuring appropriate, timely response can play a critical role in promoting defensibility, mitigating liability or preserving coverage or indemnification rights.
For Help With Investigations, Policy Updates Or Other Needs
If your organization would like to learn more about the concerns discussed in this update or seeks assistance auditing, updating, administering or defending its human resources, compensation, benefits, corporate ethics and compliance practices, or other performance-related concerns, please contact management attorney and consultant Cynthia Marcotte Stamer.
An attorney Board-Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Ms. Stamer’s work focuses on helping management manage performance, legal compliance and operational risks.
For more than 35 years, Ms. Stamer’s work has advised businesses and business leaders about enhancing the effectiveness and defensibility of their operations using employment and other workforce and services management, employee benefits, compensation, performance management, contracting, Federal Sentencing Guideline and other compliance and risk management, investigations, and other legal and operational tools and solutions. While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others with compliance with federal and state equal employment, compensation, health and other employee benefits, workplace safety, leave, and other labor and employment, privacy and data security, and other laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and IRS, Department of Labor, Department of Justice, SEC, Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, Department of Health, Department of Agriculture and other federal and state regulators.
Ms. Stamer also speaks, coaches management and publishes extensively on these and other related matters.
Her work, thought leadership and scholarship on helping organizations manage people, operations and risk have earned her recognition as a Fellow in the American College of Employee Benefit Counsel, a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Labor and Employment Law and Health Care Law; a “Best Lawyers” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law.”
For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.
Other Helpful Resources & Information
If you found this article of interest, you also may be interested in reviewing other Breaking News, articles and other resources like:
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 or updating your profile here. For important information concerning this communication, click here. If you do not wish to receive these updates in the future, unsubscribe by updating your profile here.
The $100,000 penalty paid by a mental health facility alerts health plans, health care providers and health care clearinghouses (“covered entities”) to the perils of failing to timely deliver health records access as required by the Health Insurance Portability and Accountability Act (“HIPAA”).
The $100,000 civil monetary penalty against California mental health provider Rio Hondo Community Mental Health Center (“Rio Hondo”) announced by the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) on October 19, 202 is the fifty-first OCR enforcement action under its HIPAA Right of Access enforcement initiative.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rules’ right of access provisions generally require covered entities to provide individuals access to their protected health information within 30 days, with the possibility of one 30-day extension and prohibits charging more than a reasonable, cost-based fee for this access.
The penalty against Rio Hondo resolves an OCR investigation into Rio Hondo over a failure to provide a patient with timely access to their medical records. OCR enforces the right of access and other requirements of the HIPAA Privacy Rule.
OCR launched an investigation after receiving a complaint from a patient that Rio Hondo did not provide timely access to their medical records, despite multiple requests in writing and by telephone.
OCR’s investigation found that it took nearly seven months from the time the patient first requested the records until Rio Hondo provided them.
The patient made multiple telephone calls in July and August 2020, regarding the status of her request, but still did not receive the requested records until it produced the records in response to the investigation.
The late delivery of the records access did not end the enforcement action. Based on the facts, OCR found that Rio Hondo failed to take timely action in response to the patient’s right of access in accordance with the HIPAA Privacy Rule.
In July 2024, OCR issued a Notice of Proposed Determination to impose a $100,000 civil monetary penalty. After Rio Hondo waived its right to a hearing and did not contest the findings of OCR’s Notice of Proposed Determination, OCR issued a Notice of Final Determination imposing the penalty.
OCR’s announcement of the penalty includes a strong warning to other covered entities to comply with HIPAA’s access requirements. It quotes OCR Director Melanie Fontes Rainer. As stating:
Ensuring patients’ rights to timely access to medical information continues to be a HIPAA enforcement priority. Healthcare providers are legally obligated to provide patients with timely access to their medical records. If they fail to provide that access, OCR will not hesitate to do everything in its power, including imposing civil monetary penalties, to ensure compliance with the law.”
While this penalty applied to a health care provider, health plans also are required to comply with the right of access rules.
With OCR promising to continue to prioritize enforcement, all covered entities should take documented steps to confirm the adequacy of their existing processes to ensure compliance with OCR’s Right of Access guidance and other applicable federal and state legal and ethical requirements like the Employee Retirement Income Security Act (“ERISA”) claims and appeals and Patient Protection and Affordable Care Act (“ACA”) adverse benefit procedures applicable to health plans and State ethical and statutory medical records delivery requirements applicable to providers. Health care providers also should consider including processes for tracking and monitoring access requests in these processes that provide for review every 30 days.Covered entities should keep records of these efforts for the six-year period required by HIPAA’s record retention rules.
Covered entities that receive follow up access requests or otherwise discover a potential failure to timely provide access should engage a HIPAA knowledgeable attorney for help and advice. Obviously, covered entities should correct any oversight promptly by delivering the records access. However legal counsel can assist by helping the covered entity assess if a violation actually occurred, avoid added violations or inflammatory communications or actions that could enhance exposures to complaints or penalties and suggest actions to help mitigate risks of an OCR investigation and penalties. For instance, past enforcement actions suggest a covered entity should consider foregoing requiring payment of charges HIPAA otherwise might allow for the records access to avoid further delay of access that could heighten penalty exposures. Covered entities also should document their delivery of access and their investigation and corrective actions addressing the source of the compliance failure.
The author of this update, Cynthia Marcotte Stamer has worked extensively with health plans on HIPAA, ERISA, the ACA on these and other HIPAA and other compliance and risk management. If you have questions or need advice or help evaluating or addressing your HIPAA compliance or other concerns, contact her.
For More Information
We hope this update is helpful. For more information about the 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.
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 her more than 35 years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications including leading edge work on PBM, pharmacy and pharmaceutical and other health care, managed care, insurance, and insured and self-insured contracting, design, administration and regulation..
Author of numerous highly regarded works on PBM and other health plan contracting and design, Immediate Past Chair of the ABA International Section Life Sciences Committee and the Tort Trial and Insurance Practice Section Medicine and Law Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and past Group Chair and current Welfare Benefit Committee Co-Chair of 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 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 HIPAA and other 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; third party administrators and other health benefit service providers; hospitals, health care systems and other health care providers, 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.
Author of many highly regarded compliance, training and other resources on HIPAA and other risk management and compliance, Ms. Stamer is widely recognized for her thought leadership on HIPAA and many other health care, health plan and other health industry matters.
In addition, Ms. Stamer serves as a Scribe for the American Bar Association (“ABA”) Joint Committee on Employee Benefits annual agency meetings with OCR and shares her thought leadership as International Section Life Sciences Committee Vice Chair, 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.
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 information 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 the 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.
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.
What Health Plans, Their Fiduciaries, Vendors & Sponsors Should Be Doing Now
Health plans, their fiduciaries, health plan sponsors and insurers, and their administrative and other service providers should move quickly to understand and act to mitigate the exposures likely to arise under the 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 the Blackcat1234 ransomware attack (CH/UHG Attack) experienced by UnitedHealthcare Group (UHG) subsidiary Change Healthcare.
Change Healthcare Ransomware 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 Change 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 Change 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 plans, health care payers and pharmacies, physicians and other health care providers and health care payers and their partners across the health care industry.
As UHG has worked to recover from the Change Health attack, 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.
While most health care providers and health plans expect Change Health and other UHG entities to face potential data breach and breach notification responsibilities and liabilities under HIPAA and other federal and state data privacy and cybersecurity laws, many health plan fiduciaries, sponsors, insurers, and administrative or other service providers have given limited consideration to how the February 21, 2024, cyber event impacted their HIPAA responsibilities and exposures. Guidance published by the U.S. Department of Health and Human Services Office for Civil Rights (OCR) on March 13, 2023, alerts health plans and health insurers, their fiduciaries and plan sponsors, health care providers, health care clearinghouses, and their business associates (covered entities) against overlooking their own potential HIPAA responsibilities arising from the February 21 Choice Health attack or other similar events.
HIPAA requires covered entities and their business associates to protect the privacy and security of protected health information, to have and enforce HIPAA-compliant business associate agreements, to conduct timely documented risk assessments in response to known or foreseeable security threats, and to provide notice of a breach to OCR, affected individuals and for breaches affecting more than 500 individuals.
Under the HIPAA Security Rule, covered entities must conduct documented risk assessments to evaluate and monitor their electronic personal health information (EPHI) and associated systems for potential breaches and other threats that expose EPHA to unauthorized use, access, disclosure, destruction or other compromise.
To fulfill this requirement, the Security Rule requires covered entities and business associates to conduct documented risk assessments impacting their EPHI and to update these risk assessments in response to internal or external events impacting the adequacy of their risk assessments or security safeguards.
While the responsibility of covered entities and business associates to protect EPHI against unauthorized use, access and disclosure from cybercriminals and others receives the most attention, the Security Rule also includes often less discussed responsibility to protect EPHI and related operating systems against destruction or other disruptions from a wide range of threats including ransomware attacks.
OCR guidance makes clear that OCR views safeguarding EPHI against ransomware and other cybersecurity threats as encompassed in this duty. As part of these efforts, OCR and other cybersecurity agencies have recommended among other things that covered entities and business associates:
Routinely take inventory of assets and data to identify authorized and unauthorized devices and software;
Prioritize remediation of known exploited vulnerabilities’
Enable and enforce multifactor authentication with strong passwords;
Close unused ports and remove applications not deemed necessary for day-to-day operations.
Furthermore, when a breach of results in an unauthorized use, access, disclosure or destruction of EPHI, the HIPAA Breach Notification Rule requires covered entities and their business associates to provide timely notification of the breach to subjects of the breached EPHI and OCR, and if the breach affects more than 500 subjects, to the media. Concurrently, the HIPAA Security Rule requires health plans and other covered entities to evaluate through documented risk assessments and take appropriate timely action to update their EPHI security as necessary to respond to breaches, potential breaches and other evolving threats to their EPHI and related systems.
On March 13, 2024, the Office of Civil Rights (OCR) released a “Dear Colleague letter” that warns the February 21, 2024 CH/UHG data breach is likely to trigger HIPAA obligations and investigations for Choice Health and UHG as well as other HIPAA-covered health plans, heath care providers, heath care clearinghouses and business associates. While stating the investigation currently focuses on Change Healthcare and UHC, for instance, the Dear Colleague Letter warns that OCR anticipates that its response to the February 21, 2024 CH/UHG Attack eventually also will include “secondary” investigations of other health plans, health care providers, health care clearinghouses and business associates “tied to or impacted by this attack.”
In light of these anticipated secondary investigations, OCR’s Dear Colleague letter warns health plans, health care providers, health care clearinghouses, business associates to ensure they timely and properly handle their own potential HIPAA responsibilities arising from the CH/UHG Attack. The Dear Colleague letter expressly alerts health plans, health care providers and other covered entities and business associates “that have partnered with Change Healthcare and UHG” in anticipation of OCR’s expected secondary investigations to ensure that their own ability to demonstrate their organization meet all required HIPAA responsibilities including that:
All required “business associate agreements are in place;
All required breach notifications are provided to HHS, affected persons and in the event of a large breach affecting more than 500 individuals, to the media; and
All security and other HIPAA responsibilities are met.
The Dear Colleague Letter also directed covered entities and their business associates to the following previously released OCR resources for assistance in understanding their responsibilities for guarding EPHI against ransomware and other cybersecurity threats:
The OCR HIPAA Security Rule Guidance Material webpage;
OCR Video on How the HIPAA Security Rule Protects Against Cyberattacks;
OCR Webinar on HIPAA Security Rule Risk Analysis Requirement;
HHS Security Risk Assessment Tool;
Factsheet: Ransomware and HIPAA; and
Healthcare and Public Health (HPH) Cybersecurity Performance Goals.
Standing alone, the Dear Colleague Letter makes clear that all covered entities partnered with or impacted by disruptions from the CH/UHG attack need to take documented steps to reevaluate and tighten the adequacy of their existing security safeguards as well as their processes for monitoring and responding to evolving ransomware and other cybersecurity threats in anticipation of becoming the target of potential “secondary” OCR investigations arising from the CH/UHG Attack.
While the Dear Colleague Letter specifically references covered entities and business associates “partnered” with Choice Health, OCR’s previously issued guidance warning all covered entities and their business associates to safeguard their EPHI against ransomware and other cybersecurity threats, strongly suggest that all covered entities and business associates should consider the advisability of reevaluating the adequacy of their own EPHI safeguards in light of the heightened ransomware and other cyber threat illustrated by the CH/UHG Attack. Consequently, all covered entities and business associates partnered with or impacted by the CH/UHG Attack or its resulting distributions specifically, as well as covered entities and business associates generally should work with experienced legal counsel to conduct documented risk assessments of their systems, exposures, responsibilities and risks taking into account these developments as soon as possible in anticipation of complaint or audit driven investigations arising from the Choice Health and other malware events and threats.
ERISA-Covered Health Plan Data Security & Breach Related Fiduciary Duties
In addition to any applicable HIPAA responsibilities, fiduciaries and sponsors of employer or union sponsored health plans subject to the Employee Retirement Income Security Act (ERISA) also should consider whether the CH/UHG Attack or the heightened ransomware and other cyber security threats any additional actions are prudently necessary to protect the health plan data, assets or operations.
ERISA generally requires individuals or entities named as fiduciaries or otherwise possessing functional discretionary authority or responsibility or authority over a plan or its assets (fiduciaries) to act prudently to protect and administer the plan and its assets. Department of Labor Employee Benefit Security Administration (EBSA) guidance published in April, 2021 first officially confirmed its interpretation of ERISA’s duty of prudence as including a duty to utilize prudent cybersecurity safeguards. Since EBSA published this cybersecurity guidance EBSA also has also added cybersecurity inquiries to its plan fiduciary audits. As a result, in addition to complying with HIPAA, ERISA-covered health plan fiduciaries and sponsors also should be prepared to demonstrate plan fiduciaries acted prudently to comply with HIPAA as well as the following actions to safeguard health and other employee benefit plan data and systems 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.
Furthermore, while the preemption provisions of ERISA generally insulate health plans and their sponsors from responsibility or liability for complying with state insurance, data security, breach notification or other state law cybersecurity and cyber breach and breach notification laws and rules, health insurers and other health plan service providers generally remain subject to these state law requirements. Consequently, health insurers, administrative service providers and other health plan vendors also should act promptly to evaluate and ensure their fulfillment of all applicable cybersecurity and data breach mandates under relevant state law.
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 practices 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.
ERISA & Other Risks From Untimely Timely Acceptance & Processing of Health Plan Eligibility & Benefit Provisions
Since Change Health shut down its tools and systems CH/UHG Attack has created and continues to cause nationwide disruptions in the ability of pharmacy, physician and other health care providers to submit, and health plans and insurers to receive and process a wide range of health care billing, claims and other transactions because of the widespread integration and use of Choice Health tools in systems health care providers and payers use for the submission, receipt, and processing of health care provider eligibility, billing and other health benefits.
Along with the liabilities and headaches that the ransomware attack and resulting disruptions create for Choice Healthcare and UHG, delays and other disruptions in the handling of health benefit eligibility, claims processing, notifications and payment by health plans and their administrative services providers arising from can create a host of additional liability headaches health plans, health insurers, their fiduciaries and administrative services providers in addition to those arising directly from the HIPAA and other cybersecurity breach itself.
For ERISA-covered health plans, ERISA generally holds health plans and their fiduciaries accountable for the prudent, timely administration of health plan eligibility, claims and other administrative functions in accordance with the terms of the plan and within the applicable time frames and other requirements of ERISA’s reasonable claims procedure and adverse benefit determination rules. Health plans and their ERISA plan administrators generally must receive and process claims transactions required by the adverse claim determination regulations and provide participants or beneficiaries with detailed written notifications for any claims not processed and paid within the relevant 72-hour, 15-day or 30-day time period specified by the adverse claim determination rules. Noncompliance with these requirements both undermines the defensibility of the health plan’s denial of coverage and subjects the plan administrator to liability for EBSA penalties and/or discretionary awards of penalties plus attorneys’ fees and other costs of enforcement to plan participants or beneficiaries for failures to deliver timely notification of the denial. To the extent that EBSA or a court determines that the failure to timely and appropriately process and pay benefits resulted from a lack of prudence or other breach of ERISA fiduciary duties, fiduciaries are at risk for incurring personal liability for actual damages to the plan or its participants plus attorneys’ fees and other costs of enforcement; EBSA penalties for engaging in a breach of fiduciary duty under ERISA section 502(l); or both.
Beyond these ERISA-related risks, delays in processing and payment of health care provider claims also create potential additional liability for health insurers, health plans and their administrators to the extent the disruptions prevent the timely payment and processing of health benefit claims in violation of health care provider rights under managed care or other provider contracts, prompt pay and surprise billing or other provider legal rights. Unlike member claims assigned to providers, ERISA generally does not preempt these nonderivative provider rights and claims or the additional state law damages, penalties or other remedies arising under state law against health insurers, health plans and plan administrators found to violate these rules. Consequently, delays in payments to providers also could substantially increase the costs and liabilities that health insurers, health plans, their fiduciaries, administrators, and employers and other sponsors obligated under the plan terms or vendor contracts to pay these costs.
In light of these and other potential risks, health insurers and health plans, their employer, union and other sponsors, fiduciaries, administrative services providers and other vendors should act quickly to investigate and ensure proper management of the fallout from the CH/UHG Attack and the heightened ransomware and other cybersecurity threats it represents.
Along with working with qualified legal counsel to address the potential HIPAA, ERISA and other responsibilities the health plan or insurer, its fiduciaries, service providers and sponsor bear from the CH/UHG Attack and other cyber risks, most parties also will want to evaluate obligations to notify cybersecurity and other liability insurers, seek indemnification from Choice Healthcare, UHG or other potentially culpable parties and evaluate other sensitive data and strategies for mitigation of their health plan and their own resulting liabilities, costs and other consequences.
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 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 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, 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.
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.
Pandemic’s End Doesn’t End COVID-19 Employer Headaches
Children’s Healthcare of Atlanta, Inc. (“CHOA”) is paying $45,000 to settle a religious discrimination lawsuit arising from its failure to grant a religious exemption from its COVID-19 vaccination requirements for a maintenance worker. The lawsuit highlights the continuing importance of all employers to use care when handling request for religious accommodation to vaccine or other workplace requirements.
The lawsuit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”) arises from the 2019 denial of a request for a religious exemption to CHOA’s COVID-19 vaccine mandate made by a maintenance worker. CHOA previously had granted the same employee a religious exemption for vaccine mandates in 2017 and 2018. In 2019, however, CHOA denied the employee’s request for a religious accommodation and fired him, despite the employee working primarily outside and his position requiring limited interaction with the public or staff the EEOC said.
The EEOC alleged the denial of the vaccine exemption violated Title VII of the Civil Rights Act of 1964, which prohibits firing an employee because of their religion and requires that employers reasonably accommodate the sincerely held religious beliefs of their employees.
Under the consent degree entered in Ciil Action No. 1:22-CV-04953-MLB-RDC in U.S. District Court for the Northern District of Georgia, CHOA will pay $45,000 in monetary damages to the former employee. CHOA will also adjust its influenza vaccine religious exemption policy to presume the exemption eligibility of employees with remote workstations or who otherwise work away from the presence of other employees or patients, and to protect the ability of such employees to seek alternative positions within CHOA if their religious exemption request is denied. The decree further provides that CHOA will train relevant employees on religious accommodation rights under Title VII.
The EEOC announcement of the consent degree alerts employers of the continuing need to use care when handling religious accommodation requests to vaccine or other workplace policies. “ It is the responsibility of an employer to accommodate its employees’ sincerely held religious beliefs,” the announcement quotes Marcus G. Keegan, the regional attorney for the EEOC’s Atlanta District Office. “Unless doing so would require more than a minimal cost, an employer may not deny requested religious accommodations, let alone revoke those previously granted without issue. The EEOC is pleased that the employee has been compensated and that CHOA has agreed to take steps to ensure that it meets its obligation to evaluate religious accommodation requests in a manner consistent with federal law.”
Likewise, the announcement quotes Darrell Graham, district director of the Atlanta office, as saying , “The arbitrary denial of religious accommodations drives religious discrimination in the workplace. The EEOC remains committed to enforcing the laws that protect employees’ religious practices.”
While the federal COVID-19 vaccine mandate is gone, many healthcare and other employers continue to impose mandate requirements with appropriate disability and religious exemptions as part of their workplace safety and patient safety protocols. Additionally, beyond the Covid – 19 vaccination protocols, many workplace vaccination and other rules also can create conflicts with certain religious beliefs that prompt religious accommodation requests.
Employers administering these vaccination, and other policies must keep in mind that the duty to offer religious accommodation and the EEOC emphasis on enforcing accommodation rights for workers whose deeply held religious beliefs conflict with workplace rules lives on. The perils remain, even if the requirement is supported by well, established patient or workplace safety protocols. Employers need to evaluate and be prepared to defend their inability to accommodate the safety and other concerns underlying the workplace mandate against a potential religious discrimination challenge.
Employers must remain diligent in their management of responses to request for accommodations keeping in mind that EEOC COVID-19 – era guidance imposes a heavy burden on an employer to justify its refusal of a request. For this reason, employers that receive a request for religious of accommodation from an employee should seek the advice of experienced legal counsel as soon as possible if any question exists about whether the employer will grant the request. Employers also should ensure their policies clearly communicate the availability of religious and disability accommodation from these other requirements, establish clear protocols for requesting and processing those requests and prohibit and prevent retaliation.
To promote defensibility, employers also should consult with experienced legal counsel about the use of attorney, client, privilege, and other protocols to prevent or minimize the risk that discussions and actions in response to, or following a request for accommodation creates evidence of discrimination or retaliation.
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. At her career, she has worked extensively with healthcare and other employers to manage discrimination and other workplace and employee benefit compliance and risks. 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:
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:
quickly to implement and communicate 2024 health spending account (“HFSA”), high deductible health plan amounts relevant to determining eligibility to contribute to a medical savings account (“MSA”), adoption credit and exclusion limits, and other inflation-adjusted limitations relevant to the annual enrollment, withholding and other year-end tax and benefit planning of workers and their families to assist workers to take into account these adjustments during 2024 benefit enrollment and tax planning.
The Internal Revenue Service announced the 2024 HFSA, MSA and other a multitude of other adjustments likely to impact 2024 benefit elections, withholding and other tax planning for workers in Rev. Proc. 2023-34 (“Revenue Procedure”) on Thursday, November 9, 2023.
HFSA, HDHP & MSA, Adoption & Other Adjustments Impacting Cafeteria Plan Elections
The Revenue Procedure announces a host of inflation adjustments that could impact employee’s 2024 cafeteria plan and health plan elections.
HFSA Limit. For taxable years beginning in 2024, the dollar limitation under Internal Revenue Code § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements (“HFSAs”) is $3,200.
The $3200 HFSA limit for 2024 is a slight increase from the 2023 limit of $3,050.
If the employer’s plan permits the carryover of unused HFSA amounts, employees can carry over up to $640 in 2024. That is $30 over the 2023 carryover amount of $610.
HDHP. The Revenue Procedure also adjusts the deductible required for a health plan to qualify as a “high deductible health plan” (“HDHP”) for which the Code allows tax preferred contributions to Medical Savings Accounts (“MSAs”). As adjusted in the Revenue Procedure, for taxable years beginning in 2024 the term “high deductible health plan” as defined in § 220(c)(2)(A) means:
For self-only coverage, a health plan that has an annual deductible that is not less than $2,800 and not more than $4,150, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $5,550.
For family coverage, a health plan that has an annual deductible that is not less than $5,550 and not more than $8,350, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $10,200.
Qualified Small Employer Health Reimbursement Arrangement
For taxable years beginning in 2024, to qualify as a qualified small employer health reimbursement arrangement under § 9831(d), the arrangement must provide that the total amount of payments and reimbursements for any year cannot exceed $6,150 ($12,450 for family coverage).
For taxable years beginning in 2024, Code § 137(a)(2) caps the amount excludible from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for adoptions by the employee at $16,810, subject to the applicable phase out for taxpayers with adjusted gross income above $252,150.
The amount excludable from an employee’s gross income begins to phase out under § 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $252,150 and is completely phased out for taxpayers with modified adjusted gross income of $292,150 or more.
Similarly, for taxable years beginning in 2024, $16,810 is the maximum credit allowed under § 23 for an adoption of a special needs child as well as for other adoptions. The otherwise available adoption credit begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $252,150 and is completely phased out for taxpayers with modified adjusted gross income of $292,150 or more.
Child Tax Credit
For taxable years beginning in 2024, the amount used in Code § 24(d)(1)(A) to determine the amount of credit under § 24 that may be refundable is $1,700. .06 Earned Income Credit. (1) In general. For taxable years beginning in 2024, the following amounts are used to determine the earned income credit under § 32(b). The “earned income amount” is the amount of earned income at or above which the maximum amount of the earned income credit is allowed. The “threshold phaseout amount” is the amount of adjusted gross income (or, if greater, earned income) above which the maximum amount of the credit begins to phase out. The “completed phaseout amount” is the amount of adjusted gross income (or, if greater, earned income) at or above which no credit is allowed. The threshold phaseout amounts and the completed phaseout amounts shown in the table below for married taxpayers filing a joint return include the increase provided in § 32(b)(2)(B), as adjusted for inflation for taxable years beginning in 2024. The threshold phaseout amounts and the completed phaseout amounts shown in the table below for taxpayers with all other filing statuses also apply to married taxpayers who are not filing a joint return and satisfy the special rules for separated spouses in § 32(d).
Threshold Phaseout Amount (All other filing statuses)
$22,720
$22,720
$22,720
$10,330
Completed Phaseout Amount (All other filing statuses)
$49,084
$55,768
$59,899
$18,591
For taxable years beginning in 2024:
The standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,300, or (2) the sum of $450 and the individual’s earned income; and
The additional standard deduction amount for the aged or the blind is $1,550. This additional standard deduction amount is increased to $1,950 if the individual is also unmarried and not a surviving spouse.
Qualified Transportation Fringe Benefit
For taxable years beginning in 2024, the monthly limitation under § 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $315. The monthly limitation under § 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $315.
Eligible Long-Term Care Premiums & Periodic Payments
For taxable years beginning in 2024, the limitations under § 213(d)(10), regarding eligible long-term care premiums includible in the term “medical care”, as adjusted for inflation, are as follows:
Attained Age Before the Close of the Taxable Year
Limitation on Premiums
40 or less
$470
More than 40 but not more than 50
$880
More than 50 but not more than 60
$1,760
More than 60 but not more than 70
$4,710
More than 70
$5,880
For calendar year 2024, the stated dollar amount of the per diem limitation under § 7702B(d)(4), regarding periodic payments received under a qualified long-term care insurance contract or periodic payments received under a life insurance contract that are treated as paid by reason of the death of a chronically ill individual, is $410.
2024 Income Tax Tables and Standard Exemption amounts just released by the Internal Revenue Service (“IRS”) may help employees and their families in updating their W-4 withholding and planning certain employee benefit or other elections for 2024.
The updated 2024 Income Tax Rate tables included in Revenue Procedure 2023-34, released by the IRS on October 9, 2023 are as follows:
TABLE 2 – Section 1(j)(2)(B) – Heads of Households
If Taxable Income Is:
The Tax Is:
Not over $16,550
10% of the taxable income
Over $16,550 but not over $63,100
$1,655 plus 12% of the excess over $16,550
Over $63,100 but not over $100,500
$7,241 plus 22% of the excess over $63,100
Over $100,500 but not over $191,950
$15,469 plus 24% of the excess over $100,500
Over $191,950 but not over $243,700
$37,417 plus 32% of the excess over $191,150
Over $243,700 but not over $609,350
$53,977 plus 35% of the excess over $243,700
Over $609,350
$181,954.50 plus 37% of the excess over $609,350
TABLE 3 – Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)
If Taxable Income Is:
The Tax Is:
Not over $11,600
10% of the taxable income
Over $11,600 but not over $47,150
$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525
$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950
$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725
$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $609,350
$55,678.50 plus 35% of the excess over $243,725
Over $609,350
$183,647.25 plus 37% of the excess over $609,350
TABLE 4 – Section 1(j)(2)(D) – Married Individuals Filing Separate Returns
If Taxable Income Is:
The Tax Is:
Not over $11,600
10% of the taxable income
Over $11,600 but not over $47,150
$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525
$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950
$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725
$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $365,600
$55,678.50 plus 35% of the excess over $243,725
Over $365,600
$98,334.75 plus 37% of the excess over $365,600
TABLE 5 – Section 1(j)(2)(E) – Estates and Trusts
If Taxable Income Is:
The Tax Is:
Not over $3,100
10% of the taxable income
Over $3,100 but not over $11,150
$310 plus 24% of the excess over $3,100
Over $11,150 but not over $15,200
$2,242 plus 35% of the excess over $11,150
Over $15,200
$3,659.50 plus 37% of the excess over $15,200
For taxable years beginning in 2024, $1,300 is the amount used for purposes of § 1(g)(7) to determine whether a parent may elect to include a child’s gross income in the parent’s gross income and to calculate the “kiddie tax.” For example, one of the requirements for the parental election is that a child’s gross income is more than the amount referenced in § 1(g)(4)(A)(ii)(I) but less than 10 times that amount; thus, a child’s gross income for 2024 must be more than $1,300 but less than $13,000.the amount in § 1(g)(4)(A)(ii)(I), which is used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,300. This $1,300 amount also is the same as the amount provided in § 63(c)(5)(A), as adjusted for inflation.
Filing Status
Standard Deduction
Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A)) Heads of Households (§ 1(j)(2)(B))
$29,200
Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))
$21,900
Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))
$14,600
Married Individuals Filing Separate Returns (§ 1(j)(2)(D))
$14,600
For taxable years beginning in 2024, the standard deduction amounts under § 63(c)(2) are as follows:
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.
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 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 GroupMs. 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, 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 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 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.
2024 Income Tax Tables and Standard Exemption amounts just released by the Internal Revenue Service (“IRS”) may help employees and their families in updating their W-4 withholding and planning certain employee benefit or other elections for 2024.
The updated 2024 Income Tax Rate tables included in Revenue Procedure 2023-34, released by the IRS on October 9, 2023 are as follows:
TABLE 2 – Section 1(j)(2)(B) – Heads of Households
If Taxable Income Is:
The Tax Is:
Not over $16,550
10% of the taxable income
Over $16,550 but not over $63,100
$1,655 plus 12% of the excess over $16,550
Over $63,100 but not over $100,500
$7,241 plus 22% of the excess over $63,100
Over $100,500 but not over $191,950
$15,469 plus 24% of the excess over $100,500
Over $191,950 but not over $243,700
$37,417 plus 32% of the excess over $191,150
Over $243,700 but not over $609,350
$53,977 plus 35% of the excess over $243,700
Over $609,350
$181,954.50 plus 37% of the excess over $609,350
TABLE 3 – Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)
If Taxable Income Is:
The Tax Is:
Not over $11,600
10% of the taxable income
Over $11,600 but not over $47,150
$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525
$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950
$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725
$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $609,350
$55,678.50 plus 35% of the excess over $243,725
Over $609,350
$183,647.25 plus 37% of the excess over $609,350
TABLE 4 – Section 1(j)(2)(D) – Married Individuals Filing Separate Returns
If Taxable Income Is:
The Tax Is:
Not over $11,600
10% of the taxable income
Over $11,600 but not over $47,150
$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525
$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950
$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725
$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $365,600
$55,678.50 plus 35% of the excess over $243,725
Over $365,600
$98,334.75 plus 37% of the excess over $365,600
TABLE 5 – Section 1(j)(2)(E) – Estates and Trusts
If Taxable Income Is:
The Tax Is:
Not over $3,100
10% of the taxable income
Over $3,100 but not over $11,150
$310 plus 24% of the excess over $3,100
Over $11,150 but not over $15,200
$2,242 plus 35% of the excess over $11,150
Over $15,200
$3,659.50 plus 37% of the excess over $15,200
For taxable years beginning in 2024, $1,300 is the amount used for purposes of § 1(g)(7) to determine whether a parent may elect to include a child’s gross income in the parent’s gross income and to calculate the “kiddie tax.” For example, one of the requirements for the parental election is that a child’s gross income is more than the amount referenced in § 1(g)(4)(A)(ii)(I) but less than 10 times that amount; thus, a child’s gross income for 2024 must be more than $1,300 but less than $13,000.the amount in § 1(g)(4)(A)(ii)(I), which is used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,300. This $1,300 amount also is the same as the amount provided in § 63(c)(5)(A), as adjusted for inflation.
Filing Status
Standard Deduction
Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A)) Heads of Households (§ 1(j)(2)(B))
$29,200
Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))
$21,900
Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))
$14,600
Married Individuals Filing Separate Returns (§ 1(j)(2)(D))
$14,600
For taxable years beginning in 2024, the standard deduction amounts under § 63(c)(2) are as follows:
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.
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 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 GroupMs. 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, 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 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 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.
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.
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.
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.
Phoenix-based nonprofit health system Banner Health and its affiliates (“Banner Health”) paid $1.25 million and agreed to take corrective actions to resolve its exposure to potentially much greater Health Insurance Portability and Accountability Act (HIPAA) Security Rule civil monetary penalty exposure for a 2016 cyber hacking breach that compromised the person health information of 2.81 million consumers. OCR used its February 2 announcement of the Banner Health settlement to warn health plans, health care providers, health care clearing houses (“covered entities”) and business associates covered by HIPAA to guard their own system containing protected health information against breach by cyber hacking even as the Department of Labor and other agencies are stepping up their cybersecurity rules, oversight and enforcement.
Banner Health Settlement
Banner Health is one of the largest non-profit health systems in the country, with over 50,000 employees and operating in six states. Banner Health is the largest employer in Arizona, and one of the largest in northern Colorado.
In November 2016, OCR initiated an investigation of Banner Health following the receipt of a breach report stating that a threat actor had gained unauthorized access to electronic protected health information, potentially affecting millions. The hacker accessed protected health information that included patient names, physician names, dates of birth, addresses, Social Security numbers, clinical details, dates of service, claims information, lab results, medications, diagnoses and conditions, and health insurance information.
OCR’s investigation found evidence of long term, pervasive noncompliance with the HIPAA Security Rule across Banner Health’s organization, a serious concern given the size of this covered entity. Organizations must be proactive in their efforts to regularly monitor system activity for hacking incidents and have measures in place to sufficiently safeguard patient information from risk across their entire network.
The potential violations specifically include: the lack of an analysis to determine risks and vulnerabilities to electronic protected health information across the organization, insufficient monitoring of its health information systems’ activity to protect against a cyber-attack, failure to implement an authentication process to safeguard its electronic protected health information, and failure to have security measures in place to protect electronic protected health information from unauthorized access when it was being transmitted electronically.
Under the Resolution Agreement and Corrective Action Plan negotiated to resolve these potential violations, Banner Health paid $1,250,000 to OCR. Banner Health also agreed to implement a corrective action plan, which identifies steps Banner Health will take to resolve these potential violations of the HIPAA Security Rule and protect the security of electronic patient health information that will be monitored for two years by OCR to ensure compliance with the HIPAA Security Rule. Under the corrective action plan, Banner has agreed to take the following steps:
Conduct an accurate and thorough risk analysis to determine risks and vulnerabilities to electronic patient/system data across the organization
Develop and implement a risk management plan to address identified risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI
Develop, implement, and distribute policies and procedures for a risk analysis and risk management plan, the regular review of activity within their information systems, an authentication process to provide safeguards to data and records, and security measures to protect electronic protected health information from unauthorized access when it is being transmitted electronically, and
Report to HHS within thirty (30) days when workforce members fail to comply with the HIPAA Security Rule.
OCR Warns Other HIPAA-Covered Entities
In the health care sector, hacking is now the greatest threat to the privacy and security of protected health information. OCR’sannouncement of the serrlement reports 74 percent (74%) of the breaches reported to OCR in 2021 involved hacking/IT incidents.
The announcement also notesOCR offers an array of resources to help health care organizations bolster their cybersecurity posture and comply with the HIPAA Rules,
The settlement and OCR’s announcement warn other covered entities and business associates to use these and other necessary resources to protect their systems with protected health information from cyber hacking and other breaches.
In conjunction with reminding other covered entities of these resources, the settlement announcement quotes OCR Director Melanie Fontes Rainer as warning, ‘Hackers continue to threaten the privacy and security of patient information held by health care organizations, including our nation’s hospitals, … It is imperative that hospitals and other covered entities and business associates be vigilant in taking robust steps to protect their systems, data, and records, and this begins with understanding their risks, and taking action to prevent, respond to and combat such cyber-attacks. … Cyber security is on all of us, and we must take steps to protect our health care systems from these attacks.”
Alerts issued by OCR regarding heightened security risks in recent months and a growing tide of highly publicized breaches send a strong warning to other covered entities and their business associates to reconfirm the adequacy of their own HIPAA privacy, security, breach notification and other procedures and protections by among other things:
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.
Beyond these HIPAA exposures, breaches and other HIPAA noncompliance carries other liability risks. 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. For instance, the Department of Health & Human Services has warned health care providers participating in Medicare or other federal programs and Medicare Advantage health plans that HIPAA compliance is a program term of participation.
Health care providers and health insurers can face liability 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.
Health plans also face a myriad of other exposures from failing to use appropriate cyber safeguards. Plan fiduciaries of employment based health plans covered by the Employee Retirement Income Security Act (“ERISA”} risk liability under ERISA’s fiduciary responsibility rules. The Department of Labor Employee Benefit Security Administration (“EBSA”) now audits the adequacy of the cybersecurity and other HIPAA compliance of health plans and their third party administrators and other business associates as part of EBSA’s oversight and enforcement of ERISA. Department of Labor Assistant Secretary for EBSA Lisa Gomez confirmed audit and enforcement of cybersecurity obligations is a key priority in EBSA’s current work plan in her February 4, 2023 comments to the American bar Association.
Meanwhile, the Securities and Exchange Commission has indicated that it plans to pursue enforcement against leaders of public health care or other public companies that fail to use appropriate care to ensure their organizations comply with privacy and data security obligations.
Furthermore, appropriate cyber security practices also may be advisable elements for organizations to include in their Federal Sentencing Guideline Compliance Programs to mitigate potential organization liability risks under federal electronic crime and related laws.
In the face of these risks and warnings, all covered entities and their business associates should reassess and confirm the adequacy of their and their business associates’ cyber security defenses and breach response preparations.
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 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, health plan and managed care industry legal, public policy and operational concerns.
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 HIPAA covered entities, business associates and other organizations on HIPAA and other cyber, privacy and data security concerns and has published and spoken extensively on these 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.
With health industry consolidation and competition continuing to draw public and lawmaker scrutiny, the Department of Justice Antitrust Division today (February 3, 2022) signaled the Biden Administration plans to redirect health care antitrust policy by withdrawing three healthcare antitrust policy statements it says are outdated.
The withdrawn policy statements are three statements of antitrust principles adopted more than a decade ago by the DOJ and Federal Trade Commission (“FTC”) defining the agencies principles for interpreting and enforcing antitrust law in the healthcare industry:
The withdrawal of the statements follows growing activity by DOJ in challenging certain other health industry conduct as anticompetitive under Fdderal antitrust laws in recent years as well as new policies challenging noncompetition and other workforce practices used widely within the health care industry. (These developments were discussed in a September, 2022 Joint Committee on Employee Benefits webinar on Department of Justice Enforcement Update webinar moderated by Cynthia Marcotte Stamer.)
Following an uptake in DOJ health care and workforce antitrust enforcement in recent years, the announcement of the antitrust statement withdrawals confirms the Biden Administration led DOJ plans changes to care antitrust and other competition policies and enforcement impacting health care providers, payers, employers and other plan sponsors. In lieu of the principles previously provided by the withdrawn guidelines, DOJ says it will evaluate mergers and conduct in healthcare markets that may harm competition on the case-by-case basis. The announced plan to interpret antitrust law in health care on a case by case basis creates significant uncertainty about the scope of risk and safety of many contracting, business transaction and other activities in the health care industry. All segments of the marketplace should monitor developments and proceed cautiously to avoid inadvertently triggering challenges or liability as a result of the newly created ambiguity.
While employers, providers and others concerned about market power and consolidation among pharmacy benefit management companies (“PBMs”), mega healthcare systems and large health insurers are likely to welcome news of DOJ’s plan to update its policies and enforcement to reflect new market realities, DOJ’s announced plan to proceed on a case-by-case basis raises significant questions about the market participants and practices that will benefit or suffer under this new but undefined policy. Consequently, employer and other health plan sponsors, health industry providers, payers, and others concerned about health industry competition should proceed cautiously and carefully monitor developments at DOJ and FTC. Stay tuned for further developments.
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, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health 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 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 and employer benefits 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 work has included ongoing involvement in health industry and workforce competition and antitrust issues.
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.
A California attorney known for his filing of thousands of disability discrimination lawsuits under the Americans with Disabilities Act of 1990 (“ADA”) with himself as the plaintiff plead guilty November 29 to filing a false tax return on which he underreported the income he earned from many of those lawsuits. Aside from the enjoyment many businesses victimized by the defendant’s or other similar disability lawsuits may experience over seeing the defendant get his own comeuppance, the prosecution and the plea also provide important reminders for businesses paying ADA or other settlements to applicants or former employees.
According to court documents and statements made in court, Scott Norris Johnson owned and operated Disabled Access Prevents Injury Inc (DAPI), a legal services corporation. A quadriplegic and an attorney, Johnson filed more than 4,000 lawsuits in the Eastern District of California and elsewhere under the ADA and related California statutes, naming himself as the plaintiff against businesses he claimed were not in compliance with state and federal disability access laws first using DAPI, and later a law firm,
Under the Small Business Job Protection Act of 1996, payments related to lawsuit settlements or awards are taxable unless paid on account of personal physical injury or physical sickness. Johnson, who worked as an attorney at the Internal Revenue Service (“IRS”) earlier in his career, was required to report the taxable portion of the lawsuit settlements and awards he received. He nonetheless intentionally underreported this income on his 2012, 2013, and 2014 tax returns. By understating the lawsuit settlements and awards, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014. Johnson caused a loss to the IRS of more than $250,000.
Johnson is scheduled to be sentenced on March 7, 2023, and faces a maximum penalty of three years in prison for filing a false tax return. He also faces also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The prosecution and subsequent plea highlight the taxability of disability and certain other settlements and the willingness of the Justice Department and IRS to prosecute individuals and businesses failing to fulfill obligations to recognize and report those payments as income for federal tax purposes.
Businesses and their legal counsel entering into settlements or otherwise making payments to employees or applicants under the ADA or other taxable settlements generally should use care to properly report taxable amounts as income to the recipient. For payments made pursuant to a settlement agreement, the settlement agreement generally should provide both that the employer is authorized to deduct and withhold amounts the employer believes may be due from the employee for taxes as well as obligate the employee to report and pay any additional taxes due on the payment.
Obviously, the business also needs to ensure it properly reports and pays its required share of any employment taxes on the payments. Employees should confirm the current tax rules prior to making any agreement or payment to avoid mistakes.
Businesses also should keep in mind many other developments could impact the interpretation and enforcement of settlements and their resulting responsibilities. Changes to trade secret, noncompete, arbitration, voluntariness and other requirements for release of claims, arbitration, scope of release and other developments could materially affect the effectiveness of previously used settlement language. Wise business leaders will seek qualified legal advice and assistance with their settlements.
For Help With Comments, Investigations Or Other Needs
If your organization would like to learn more about the concerns discussed in this update or seeks assistance auditing, updating, administering or defending its human resources, compensation, benefits, corporate ethics and compliance practices, or other performance related concerns, please contact management attorney and consultant Cynthia Marcotte Stamer.
An attorney Board Certified in Labor & Employment Law by Texas Board of Legal Specialization, Ms. Stamer is recognized for work helping organizations management people, operations and risk as a Fellow in the American College of Employee Benefit Counsel, a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Labor and Employment Law and Health Care Law; a “Best Lawyers” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law.”
For 35 years, Ms. Stamer’s work has focused on advising and assisting businesses and business leaders with these and other employment and other staffing, employee benefit, compensation, risk, performance and compliance management and other operational solutions and concerns. Her experience includes helping management both manage performance and manage legal risk and compliance. While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others about compliance with federal and state equal employment opportunity, compensation, health and other employee benefit, workplace safety, leave, and other labor and employment laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor, Department of Justice, SEC, Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, and other federal and state regulators. Ms. Stamer also speaks, coaches management and publishes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.
Other Helpful Resources & Information
If you found this article of interest, you also may be interested in reviewing other Breaking News, articles and other resources available including:
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 or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, unsubscribe by updating your profile here.
January 30 Deadline To Comment On HHS’ Proposed Changes To Substance Use Confidentiality Rules
Employers, their health plans and issuers, substance abuse, mental health and other healthcare providers, health care professional associations, consumer advocates, community organizations, state and local government entities, patients and caregivers and others concerned with mental health and substance abuse treatment and management should review and comment by January 30, 2023 on proposed changes to rules on unauthorized disclosures the Confidentiality of Substance Use Disorder (SUD) Patient Records under 42 CFR part 2 (“Part 2”) proposed by the U.S. Health and Human Services Department Office for Civil Rights (OCR) and the Substance Abuse and Mental Health Services Administration (SAMHSA) in a Notice of Proposed Rulemaking (NPRM) made public November 28, 2022 here and scheduled for publication in the December 2, 2022 Federal Register. In addition to obvious implications for health care providers and health plans, the proposed changes are likely to impact both the confidentiality requirements for employer-sponsored and other health benefit programs, as well as the ability and responsibilities of businesses seeking to access or use information about prior substance use and abuse in their workplaces or for other legitimate purposes.
Proposed Changes To Substance Abuse Confidentiality Rules
On November 28, 2022, OCR and SAMHSA issued the NPRM to revise the Confidentiality of Substance Use Disorder Patient Records regulations at 42 CFR part 2 (“Part 2”), which seek to address concerns that concerns about discrimination or prosecution might deter people from entering treatment for SUD by protecting “records of the identity, diagnosis, prognosis, or treatment of any patient which are maintained in connection with the performance of any program or activity relating to substance abuse education prevention, training, treatment, rehabilitation, or research, which is conducted, regulated, or directly or indirectly assisted by any department or agency of the United States.”(“SUD Records”).
Currently, the Part 2 protections of patient privacy and records concerning treatment related to substance use challenges from unauthorized disclosures differ from the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Breach Notification, and Enforcement Rules (“HIPAA”) rules. These distinctions reportedly create barriers to information sharing by patients and among health care providers and create dual obligations and compliance challenges for regulated entities. To address this concern, Congress mandated in Section 3221 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that HHS to bring Part 2 into greater alignment with certain aspects of the HIPAA Privacy rule.
Amid these challenges, the NPRM proposes to implement this CARES Act mandate through the following changes to Part 2 that HHS says will help safeguard the health and outcomes of individuals with SUD while creating greater flexibility for information sharing envisioned by Congress in its passage of Section 3221 of the CARES Act:
Permit Part 2 programs to use and disclose Part 2 records based on a single prior consent signed by the patient for all future uses and disclosures for treatment, payment, and health care operations;
Permit the redisclosure of Part 2 records as permitted by the HIPAA Privacy Rule by recipients that are Part 2 programs, HIPAA covered entities, and business associates, with certain exceptions;
Expand prohibitions on the use and disclosure of Part 2 records in civil, criminal, administrative, or legislative proceedings conducted by a federal, state, or local authority against a patient, absent a court order or the consent of the patient;
Create two patient rights under Part 2 that align with individual rights under the HIPAA Privacy Rule:
Right to an accounting of disclosures; and
Right to request restrictions on disclosures for treatment, payment, and health care operations;
Require disclosures to the Secretary for enforcement;
Apply HIPAA and HITECH Act civil and criminal penalties to Part 2 violations;
Require Part 2 programs to establish a process to receive complaints of Part 2 violations;
Prohibit Part 2 programs from taking adverse action against patients who file complaints;
Prohibit Part 2 programs from requiring patients to waive the right to file a complaint as a condition of providing treatment, enrollment, payment, or eligibility for services;
Apply the standards in the HITECH Act and the HIPAA Breach Notification Rule to breaches of Part 2 records by Part 2 programs;
Modify the Part 2 confidentiality notice requirements (“Patient Notice”) to align with the HIPAA Notice of Privacy Practices;
Modify the HIPAA Notice of Privacy Practices requirements for covered entities who receive or maintain Part 2 records to include a provision limiting redisclosure of Part 2 records for legal proceedings according to the Part 2 standards; and
Permit investigative agencies to apply for a court order to use or disclose Part 2 records after they unknowingly receive Part 2 records while investigating or prosecuting a Part 2 program, when certain preconditions are met.
While the Department is undertaking this rulemaking, the current Part 2 regulations remain in effect. However, once the comment period ends, the Biden Administration-led HHS is expected to finalize the proposed changes quickly. Consequently, in addition to sharing any concerns or other input about the proposed changes during the comment period, health care providers, health plans, health care clearinghouses, employers, community agencies, state and local governments, patients and other caregivers and other concerned parties also should begin planning and preparing to respond to the anticipated changes in the requirements.
Implications For Businesses & Their Health Plans
Businesses should carefully assess the potential implications of the proposed changes on their worker and vendor credentialing and workplace safety practices as well as their health and other benefit programs. Assuming the changes are adopted in their current form, businesses sponsoring health benefit programs generally, and health care organizations and providers specifically should prepare to modify their HIPAA required notices of privacy practices and associated practices to comply with the proposed updates.
Businesses required to comply with Department of Transportation Drug Free Workplace or other alcohol and substance abuse requirements also should consider the potential implications of the proposed changes on their ability to secure relevant substance abuse treatment and related history. In assessing these implications, businesses also should be cognizant of a new proactivity on behalf of certain uses of drugs by workers in the workplace under the Americans With Disabilities Act (“ADA”). For instance, the EEOC recently has sued Eagle Marine Services Electrical & Refrigeration, LLC for allegedly violating the ADA by refusing to hire or accommodate a worker because he used medication prescribed by his doctor to treat attention deficit hyperactivity disorder (“ADHD”) without making any individual assessment of the worker’s medication use or whether it would affect his ability to safely perform the marine electrician position, and instead relied on general stereotypes about disability and medication use to justify its decision not to hire him. Businesses seeking to investigate or deny employment opportunities to workers based on the worker’s past or current medication use will want to use care to ensure that their practices are tailored to defend against similar challenges.
Health plan sponsors and insurers also should assure their mental health and substance abuse treatment coverage documents and practices are defensible under the latest mental health and substance abuse parity mandates of the Mental Health Parity and Addiction Equity Act (MHPAEA) and coverage requirements of the Patient Protection and Affordable Care Act (“ACA”). Along with a host of statutory changes since the original parity mandates took effect, implementing regulations and guidance about non-qualitative limitations and exclusions and heightened agency enforcement are ramping up enforcement and liability risks. In addition to exposing the health plan administrators and other fiduciaries to potential claims denial or fiduciary responsibility claims brought by participants or beneficiaries, the Department of Labor or both, administrative penalties by the EBSA, or both, the MHPAEA mental health and substance abuse parity rules are among 40 federal mandates that when violated can trigger the automatic $100 per violation per day employer excise tax penalty under Internal Revenue Code Section 6039D. As a consequence, violations of the MHPAEA are particularly risky and potentially expensive for private employers, their health plans and the plan administrators and fiduciaries that administer it.
For Help With Comments, Investigations Or Other Needs
If your organization would like to learn more about the concerns discussed in this update or seeks assistance auditing, updating, administering or defending its human resources, compensation, benefits, corporate ethics and compliance practices, or other performance related concerns, please contact management attorney and consultant Cynthia Marcotte Stamer.
An attorney Board Certified in Labor & Employment Law by Texas Board of Legal Specialization, Ms. Stamer is recognized for work helping organizations management people, operations and risk as a Fellow in the American College of Employee Benefit Counsel, a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Labor and Employment Law and Health Care Law; a “Best Lawyers” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law.”
For 35 years, Ms. Stamer’s work has focused on advising and assisting businesses and business leaders with these and other employment and other staffing, employee benefit, compensation, risk, performance and compliance management and other operational solutions and concerns. Her experience includes helping management both manage performance and manage legal risk and compliance. While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others about compliance with federal and state equal employment opportunity, compensation, health and other employee benefit, workplace safety, leave, and other labor and employment laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor, Department of Justice, SEC, Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, and other federal and state regulators. Ms. Stamer also speaks, coaches management and publishes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.
Other Helpful Resources & Information
If you found this article of interest, you also may be interested in reviewing other Breaking News, articles and other resources available including:
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 or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, unsubscribe by updating your profile here.
The Centers for Disease Control released updated opiate prescription guidance today, loosening restrictions on prescription of the pain management narcotics under certain conditions.
Ironically the new guidance loosening opiate prescription guidelines comes on the heels of the announcement yesterday of sellements of opiate litigation against CVS and Walgreens brought by multiple states’ seeking to recover states’ costs arising from citizens ‘ addicted to opiates.
Guideline changes are likely to implicate prescribing practices as well as some prescription drug coverages, as well as electronic recordkeeping and prescribing systems.
Among other things, depending on the plan design, the revised restrictions may have implications for prescription drug coverage design and practices. Easing availability even under these new standards also likely will increase access, creating additional concerns for employers and plans about addiction and associated costs. The introduction of potential opportunities for addiction raises particular concerns for health plans and their sponsors because of federal healthcare parity mandates for mental health and substance abuse coverage as well as Biden Administration recently announced expanded expectations of employers to provide accommodation and other changes to welcome individuals impacted by substance-abuse into their workplaces.
Slay tuned for more details about the new guidelines and other health care and life sciences relevant developments.
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 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.
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.
A new Equal Employment Opportunity Commission (“EEOC”) lawsuit that refusing to hire an applicant for testing positive for legally prescribed medications could violate the Americans With Disabilities Act (“ADA”) under certain circumstances.
The EEOC is suing the Princess Martha senior living residence owned and managed by TJM Properties for allegedly violating the ADA by revoking an applicant’s job offer because of her disability, in a lawsuit filed yesterday.
According to the lawsuit, the applicant, a veteran who suffers from post-traumatic stress disorder (PTSD), received an offer of employment from Princess Martha conditioned upon a negative drug test. During her interview, the applicant informed her interviewer she was diagnosed with PTSD and was required to take legally-prescribed medications that would cause her drug test to fail. The applicant subsequently took the drug test and received a “non-negative” result. A few days after taking the drug test, the applicant called Princess Martha to check on the status of her hire and again informed the employer her prescription medications would cause a drug test to fail. The next day, the applicant’s job offer was revoked without explanation.
In its complaint in EEOC v. Princess Martha, LLC, Case No. 8:22-cv-02182) filed in the U.S. District Court for the Middle District of Florida, the EEOC alleges the conduct violates the ADA) prohibitions against discrimination based on disabilities and requires employers to provide reasonable accommodations of disabilities if it does not cause the company an undue hardship. The EEOC seeks back pay and compensatory and punitive damages for the employee, as well as injunctive relief to prevent any further discriminatory practices.
The lawsuit reminds other employers and their drug testing, recruiting, staffing and other business partners that a positive drug test does not always justify refusing to hire, firing, or taking other adverse employment action against an applicant or employee. Applicants and employees testing positive for drugs legally taken to treat a medical or physical condition that qualifies as a disability may qualify as disabled individuals entitled to accommodation unless the employer can prove with evidence collected before the action that he accommodation creates an undue hardship, a legitimate safety risk, or would violate the law.
Employees, recruiters and other workforce service providers using drug testing in their hiring or other processes should review and administer their drug testing practices to include appropriate procedures to invite applicants and employees to disclose legally prescribed medications, to use consistent processes to verify the alleged medical need for the medication and its prescribed use, and where verified, to conduct documented evaluations of accommodation options including where applicable evaluations if evidence the employer intends to rely upon to justify denial of accommodation as an undue hardship, for evidence supported safety reasons that can’t be managed through reasonable accommodation without undue hardship, to comply with a legal mandate or another relevant defense to accommodation under the ADA. Employers and they’re agents also must use care to comply with the ADA requirements for maintaining records and information confidential and in separate confidential medical files, as well as comply with otherwise applicable special rules for keeping confidential drug testing and treatment records.
Because unprivileged discussions of potential responses to positive drug tests and other employment decision-making between employers, recruiters, drug testing or other internal or external parties could be discovered and used to show pretext, willfulness, retaliation or other evidence helpful to prove discrimination or retaliation claims by the EEOC, disgruntled applicants or employees or both, employers and other parties participating in drug testing or other related hiring, recruiting or employment decision -making are cautioned to include, understand and follow appropriate procedures engaging qualified legal counsel for seeking advice and to conduct and keep discussions and other evidence and communications relating to drug testing, accommodation and other hiring, discipline, termination and employment matters within the scope of attorney-client privilege, work-product privilege or both.
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.
Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefits Counsel repeatedly recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” by LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law and among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely known for 30+ years of advising, representing and defending domestic and international public, closely held and government organizations on workforce, employee benefits, internal controls and governance, and other risk management, compliance and government relations concerns as well as her coaching, scholarship, training and legislative and public affairs advocacy on these and related areas.
Ms. Stamer helps health industry and other organizations and their management manage. Ms. Stamer’s legal and management consulting work throughout her nearly 30+ year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. 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 helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns. She also represents and defends clients in investigations, audits, enforcement actions and other dealings with the the Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and a multitude of federal, state, and locate agencies, state attorneys’ general and other federal and state agencies, public and private credentialing, licensing and accreditation bodies, as well as conducts and counsels clients on private litigation, employment and other services disputes, regulatory and public policy advocacy, training and discipline, enforcement and other strategic and operational concerns.
Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, expat and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.
Ms. Stamer also is deeply involved in helping to influence workforce, health care, pension, social security, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, 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 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. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also shares her leadership through her extensive involvement in many professional, community and civic organizations. Currently, she serves as Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR and a representative for its Annual Agency Meeting with the EEOC, Chair of the ABA Intellectual Property Section Law Practice Management Committee, Vice Chair of the ABA International Section Life Sciences Committee, Chair-Elect of the ABA Tort & Insurance Section (TIPS) Medicine and Law Committee, RPTE Section Employee Benefits Committee Welfare Plan Chair, and in various other projects and capacities. She also previously has served as an ABA Joint Committee on Employee Benefits Council Representative, Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, the Society for Human Resources Management Region IV Board Chair and National Consultant’s Board Member; am Editorial Advisory Board Member and author for HR.com, Insurance ThoughtLeaders, BNA CD-Rolm, and Employee Benefits News; the Alliance for Healthcare Excellence Board President, Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, on the North Texas United Way Long Range Planning Committee Member, as a Board Member and Compliance Chair of the National Kidney Foundation of North Texas and many others.
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.
Employer and other health plan sponsors, fiduciaries and plan members hear a lot about about health care quality and its measures. However few understand what the quality data and ratings relied upon by health plans, Medicare or Medicaid, accreditation agencies or others making assertions about health care quality or how that data is measured.
While quality measures and meanings take many forms, one key measure used by Medicare, Medicaid and many other health plans, lawmakers, health quality commentators and others evaluating health care provider “quality” is the Department of Health and Human Services Office of the National Coordinator for Healthcare Information (“ONC”) electronic clinical quality measures (“eCQMs”) that the Centers for Medicare & Medicaid Services (“CMS”) requires many health care providers participating in Medicare or Medicaid to report for purposes of program participation and reimbursement.
eCQMs As Measure of HealthCare Quality
Electronic clinical quality measures or “eCQMs” are tools that ONC develops with stakeholder input to help Medicare and Medicaid measure and track the quality of health care services that eligible hospitals and critical access hospitals (CAHs) provide, as generated by a provider’s electronic health record (EHR). CMS Measuring and reporting eCQMs helps to ensure that our health care system is delivering effective, safe, efficient, patient-centered, equitable, and timely care. CMS’ eCQMs measure many aspects of patient care, including:
Patient and Family Engagement
Patient Safety
Care Coordination
Population/Public Health
Efficient Use of Healthcare Resources
Clinical Process/Effectiveness
To successfully participate in the Medicare and Medicaid Promoting Interoperability Programs, the Centers for Medicare and Medicaid Services (“CMS”) requires eligible providers, eligible hospitals, critical access hospitals and dual-eligible hospitals electronically to report on eCQMs determined by CMS that require the use of data from the provider’s certified electronic health record (“EHR”) technology (CEHRT) or other health information technology systems to measure and report quality measures in a standardized manner. For calendar year (CY) 2022, Medicare Promoting Interoperability Program participants arerequired to report on three self-selected eCQMs and the Safe Use of Opioids – Concurrent PrescribingeCQM from the set of nine available for at least three self-selected quarters of CY 2022 data. To report eCQMs successfully, health care providers must use an EHR and adhere to the requirements identified by the CMS quality program. Failing to meet these eCQM reporting requirements can prevent the provider from meeting meaningful use requirements and trigger reductions in reimbursements for care.
Health care quality, credentialing, accreditation, and other provider, health plan and other organizations also use the eCQMs data alone or with other quality measures and tools to set standards and assess and enforce quality goals and performances.
2022 eCQMs Updates
Each year, CMS makes updates to the eCQMs approved for CMS programs to reflect changes in:
Evidence-based Medicine
Code Sets
Measure Logic
Conducted annually as part of OCN’s eCQM Issue Tracker project, the CRP provides eCQM users the opportunity to review and comment on draft changes to the eCQM specifications and supporting resources under consideration by the measure stewards. The goal of the CRP is for eCQM implementers to comment on the potential impact of draft changes to eCQMs so CMS and measure stewards can make improvements to meet CMS’s intent of minimizing provider and vendor burden in the collection, capture, calculation, and reporting of eCQMs.
Every Fall, health care providers, health plans and insurers and other stakeholders concerned about these eCQMs have the opportunity to review and comment on draft changes to the eCQM specifications and supporting resources under consideration by ONC as part of ONC’s 2022 Change Review Process (CRP) for the ONC Project Tracking System. Interested stakeholders must monitor the posting of issues and act quickly to share their feedback, however, as stakeholders have only two weeks to comment after a ONC posts a new proposed eCQm change.
Stakeholders with an account on the ONC Project Tracking System can monitor, review and comment on proposed eCQM changes through the eCQM Issue Tracker project during the two week period following the date the issue is posted in the eCQM Issue Tracker. To participate in the CRP, users must have an ONC Project Tracking System account. New users can create an account via the ONC Project Tracking System website.
The following table reflects the eCQM issues open on the eCQM Issue Tracker as of September 14, 2022 and their scheduled comment closing dates
Issues Open for Public Comment As of 9/14/2022
CMS eCQM Identifier and Measure Title
CRP Issue Title
Issue Number and Link
Issue Type
Goal of Review
Public Comment Open Date
Public Comment Close Date
Multiple measures
Incorporate ‘Diagnosis’ datatype to capture Hospice Care
CMS128: Anti-depressant Medication Management; CMS136: Follow-Up Care for Children Prescribed ADHD Medication (ADD); CMS156: Use of High-Risk Medications in Older Adults
Update Cumulative Medication Duration function to calculate maximum daily frequency
eCQM Issue Tracker Open Issues As Of September 14, 2022
As proposed eCQM changes are posted for public comment as CRP issues. ONC informs eCQM accountholders of the proposed change or eCQM issue by posting for review in the ONC Project Tracking System. Accountholders only have two weeks after ONC posts a proposed eCQM to comment on the posted issue. Stakeholders interested in commenting on a particular issue must submit their comment in accordance with the directions within this two week period.
Depending on the nature of the proposed change, the proposed changing could impact the meaning, or significance of a eCQM by changing the way it is measured, the level or reporting or other aspects of the data and its magnitude. Consequently, understanding both what a eCQM measures and how that measurement is made and reported is important both to understand what actually is measured and to distinguish between changes in the measure resulting from a change in the actual delivery of the care the measure purports to measure versus changes in the result impacted by changes in measurement or reporting. For this reason, employer and other health plan sponsors, fiduciaries, insurers, administrators and other impacted stakeholders should use care to critically evaluate the eCQM and othe quality claims armed with a clear understanding both of the elements of the measurement and of any changes made to the measures across time that could influence the reported data and its significance in measuring and reporting quality and quality trends.
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 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.
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.
Act Promptly To Comment On Proposed Changes To ONC’s Electronic Clinical Quality Measures
Employer and other health plan sponsors, fiduciaries and plan members hear a lot about about health care quality and its measures. However few understand what the quality data and ratings relied upon by health plans, Medicare or Medicaid, accreditation agencies or others making assertions about health care quality or how that data is measured.
While quality measures and meanings take many forms, one key measure used by Medicare, Medicaid and many other health plans, lawmakers, health quality commentators and others evaluating health care provider “quality” is the Department of Health and Human Services Office of the National Coordinator for Healthcare Information (“ONC”) electronic clinical quality measures (“eCQMs”) that the Centers for Medicare & Medicaid Services (“CMS”) requires many health care providers participating in Medicare or Medicaid to report for purposes of program participation and reimbursement.
eCQMs As Measure of Health Care Quality
Electronic clinical quality measures or “eCQMs” are tools that ONC develops with stakeholder input to help Medicare and Medicaid measure and track the quality of health care services that eligible hospitals and critical access hospitals (CAHs) provide, as generated by a provider’s electronic health record (EHR). CMS Measuring and reporting eCQMs helps to ensure that our health care system is delivering effective, safe, efficient, patient-centered, equitable, and timely care. CMS’ eCQMs measure many aspects of patient care, including:
Patient and Family Engagement
Patient Safety
Care Coordination
Population/Public Health
Efficient Use of Healthcare Resources
Clinical Process/Effectiveness
To successfully participate in the Medicare and Medicaid Promoting Interoperability Programs, the Centers for Medicare and Medicaid Services (“CMS”) requires eligible providers, eligible hospitals, critical access hospitals and dual-eligible hospitals electronically to report on eCQMs determined by CMS that require the use of data from the provider’s certified electronic health record (“EHR”) technology (CEHRT) or other health information technology systems to measure and report quality measures in a standardized manner. For calendar year (CY) 2022, Medicare Promoting Interoperability Program participants arerequired to report on three self-selected eCQMs and the Safe Use of Opioids – Concurrent PrescribingeCQM from the set of nine available for at least three self-selected quarters of CY 2022 data. To report eCQMs successfully, health care providers must use an EHR and adhere to the requirements identified by the CMS quality program. Failing to meet these eCQM reporting requirements can prevent the provider from meeting meaningful use requirements and trigger reductions in reimbursements for care.
Health care quality, credentialing, accreditation, and other provider, health plan and other organizations also use the eCQMs data alone or with other quality measures and tools to set standards and assess and enforce quality goals and performances.
2022 eCQMs Updates
Each year, CMS makes updates to the eCQMs approved for CMS programs to reflect changes in:
Evidence-based Medicine
Code Sets
Measure Logic
Conducted annually as part of OCN’s eCQM Issue Tracker project, the CRP provides eCQM users the opportunity to review and comment on draft changes to the eCQM specifications and supporting resources under consideration by the measure stewards. The goal of the CRP is for eCQM implementers to comment on the potential impact of draft changes to eCQMs so CMS and measure stewards can make improvements to meet CMS’s intent of minimizing provider and vendor burden in the collection, capture, calculation, and reporting of eCQMs.
Every Fall, health care providers, health plans and insurers and other stakeholders concerned about these eCQMs have the opportunity to review and comment on draft changes to the eCQM specifications and supporting resources under consideration by ONC as part of ONC’s 2022 Change Review Process (CRP) for the ONC Project Tracking System. Interested stakeholders must monitor the posting of issues and act quickly to share their feedback, however, as stakeholders have only two weeks to comment after a ONC posts a new proposed eCQm change.
Stakeholders with an account on the ONC Project Tracking System can monitor, review and comment on proposed eCQM changes through the eCQM Issue Tracker project during the two week period following the date the issue is posted in the eCQM Issue Tracker. To participate in the CRP, users must have an ONC Project Tracking System account. New users can create an account via the ONC Project Tracking System website.
Issues Open for Public Comment As of 9/14/2022
The following table reflects the eCQM issues open on the eCQM Issue Tracker as of September 14, 2022 and their scheduled comment closing dates:
CMS eCQM Identifier and Measure Title
CRP Issue Title
Issue Number and Link
Issue Type
Goal of Review
Public Comment Open Date
Public Comment Close Date
Multiple measures
Incorporate ‘Diagnosis’ datatype to capture Hospice Care
CMS128: Anti-depressant Medication Management; CMS136: Follow-Up Care for Children Prescribed ADHD Medication (ADD); CMS156: Use of High-Risk Medications in Older Adults
Update Cumulative Medication Duration function to calculate maximum daily frequency
eCQM Issue Tracker Open Issues As Of September 14, 2022
As proposed eCQM changes are posted for public comment as CRP issues. ONC informs eCQM accountholders of the proposed change or eCQM issue by posting for review in the ONC Project Tracking System. Accountholders only have two weeks after ONC posts a proposed eCQM to comment on the posted issue. Stakeholders interested in commenting on a particular issue must submit their comment in accordance with the directions within this two week period.
Depending on the nature of the proposed change, the proposed changing could impact the meaning, or significance of a eCQM by changing the way it is measured, the level or reporting or other aspects of the data and its magnitude. Consequently, understanding both what a eCQM measures and how that measurement is made and reported is important both to understand what actually is measured and to distinguish between changes in the measure resulting from a change in the actual delivery of the care the measure purports to measure versus changes in the result impacted by changes in measurement or reporting. For this reason, employer and other health plan sponsors, fiduciaries, insurers, administrators and other impacted stakeholders should use care to critically evaluate the eCQM and othe quality claims armed with a clear understanding both of the elements of the measurement and of any changes made to the measures across time that could influence the reported data and its significance in measuring and reporting quality and quality trends.
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 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.
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.
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 Health Insurance Marketplaces 2022 Open Enrollment Report (“Report”) published by the Centers for Medicare and Medicaid Services last month reveals the 2022 Open Enrollment Period (“2022 OEP”) produced the highest enrollment in health care marketplace plans since passage of the Patient Protection and Affordable Care Act (“ACA”) 12 years ago.
A review of the data reveals a number of possible explanations for the increased enrollment including but not limited to Biden Administration emphasis on outreach, the expansion of the enrollment period and availability of subsidies, and more. Businesses sponsoring health plans, insurers and other payers, government and community leaders, taxpayers and other others may wish to evaluate this data and these implications further to assess their short term and long term implications on their health plan concerns and existing and proposed practices, governmental policy proposals and other planning considerations.
Reported Key Findings
The Report found that 14.5 million consumers selected or automatically re-enrolled in marketplace health care coverage through HealthCare.gov during the 2022 OEP, 2.5 million more consumers than signed up for marketplace coverage during the 2021 OEP. This reflects a 21 percent increase in enrollment over 2021 OEP enrollment.
Other findings highlighted in the Report include the following:
In HealthCare.gov states, 10.3 million consumers enrolled in health coverage during the 2022 OEP between November 1, 2021 and January 15, 2022.
Across the 18 SBMs, 4.3 million enrollees signed up for health coverage during the 2022 OEP from November 1, 2021 through the end of their respective reporting periods.
Nationwide, the number of new consumers signing up for Marketplace coverage during the 2022 OEP increased by 20 percent, to 3.1 million, from 2.5 million in the 2021 OEP.
Among consumers who attested to a race or ethnicity, 19 percent identified as Hispanic/Latino in the 2022 OEP, compared to 18 percent in the 2021 OEP, and the percent of consumers with a known race or ethnicity who identified as Black increased to 9 percent in the 2022 OEP, from 8 percent in the 2021 OEP.
Nationwide, 2.8 million more consumers are receiving APTC in 2022 compared to 2021. Additionally, 1.1 million consumers reported household incomes over 400% FPL during the 2022 OEP, who would not have been eligible for APTC without the American Rescue Plan (ARP). The average monthly premium after APTC fell by 19 percent, from $164 in 2021 to $133 in 2022, and 28 percent of consumers selected a plan for $10 or less per month after APTC during the 2022 OEP.
The percentage of all Marketplace consumers who received costsharing reductions (CSRs) increased slightly from the 2021 OEP to the 2022 OEP, from 47 percent to 49 percent, respectively.
The average monthly 2022 premium for HealthCare.gov enrollees was $111. If consumers had not received the additional APTC provided by the ARP, the average monthly premium after APTC for HealthCare.gov consumers would have been 53 percent higher, or $170.
The Report findings summarize data about health plan selections through the individual Marketplaces during the 2022 2022 OEP and includes OEP data for the 33 states with Marketplaces that use the HealthCare.gov eligibility and enrollment platform for the 2022 plan year (HealthCare.gov states), as well as for the 18 State-based Marketplaces (SBMs) that use their own eligibility and enrollment platforms. For purposes of the Report, the 2022 OEP for the Health Insurance Marketplaces ran between November 1, 2021 and January 15, 2021 for the 33 states that used HealthCare.gov. For the 18 State-based Marketplace (SBMs) states using their own platforms, the reporting period reflects plan selection and Marketplace activity from the beginning of OE on November 1, 2021, to the end of each SBM’s respective OEP and any run-out period. Any renewals processed before November 1, 2021, are also included.
Data Underlying Report
For those interested in evaluating the 2022 OEP enrollment results and trends, CMS has prepared a number of Public Use Files (PUFs) summarizing plan selection activity during the applicable OEPs in more detail including:
2022 OEP State-Level Public Use File: The state-level PUF includes total health plan selections in all 50 states plus the District of Columbia. The PUF provides state-level data on metrics such as average monthly premium, financial assistance, age, gender, metal level, self-reported race and ethnicity, rural location, household income as a percent of the federal poverty level (FPL), and plan switching behavior among consumers with a plan selection. In addition, the state-level PUF includes data on dental plan selections and Basic Health Plan (BHP) enrollments. Certain data elements are only available for the 33 HC.gov states in 2022.
2022 OEP State, Metal Level, and Enrollment Status Public Use File: The state, metal level, and enrollment status PUF contains data with stratifications by state, metal level and enrollment status. It includes total health plan selections in all 50 states plus the District of Columbia and state, metal level, and enrollment status-level data on enrollment status, average monthly premium, financial assistance, age, gender, self-reported race and ethnicity, rural location, metal level, and household income as percent FPL. Certain data elements are only available for the 33 HC.gov states in 2022.
2022 OEP County-Level Public Use File: The county-level PUF includes total health plan selections, as well as data such as average monthly premium, financial assistance, age, gender, metal level, self-reported race and ethnicity, household income as a percent of the FPL, and plan switching behavior. In addition, the county-level PUF includes data on dental plan selections. This PUF only includes data for consumers with a plan selection in the 33 states that used the HC.gov platform in 2022.
2022 OEP ZIP Code-Level Public Use File: The ZIP code-level PUF includes total health plan selections, the count of consumers with APTC, and average APTC among consumers with APTC. This PUF only includes data for consumers with a plan selection in the 33 states that used the HC.gov platform in 2022.
2022 OEP Snapshot Public Use File: The Snapshot PUF presents data that CMS released during the 2022 OEP. It includes total health plan selections, including a breakdown of new and returning consumers, consumers on submitted applications, call center volume, and website usage. State-level health plan selection counts are also included.
Supplemental HC.gov Data: Data on availability and plan selections of Health Savings Account (HSA)-eligible plans and average and median deductibles of plans selected during the 2014-2022
Amber M. Rivers, Director of the Employee Benefit Security Administration Office of Health Plan Standards and Compliance will discuss “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. Solutions Law Press, Inc. author and publisher Cynthia Marcotte Stamer will moderate the program.
During the program, Ms. Rivers will the provide updates on the health plan eligibility, COVID emergency orders, surprise billing, mental health parity and other Department of Labor regulatory, compliance, audit, enforcement priorities and other health plan projects and developments.
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 Health Insurance Marketplaces 2022 Open Enrollment Report (“Report”) published by the Centers for Medicare and Medicaid Services last month reveals the 2022 Open Enrollment Period (“2022 OEP”) produced the highest enrollment in health care marketplace plans since passage of the Patient Protection and Affordable Care Act (“ACA”) 12 years ago.
A review of the data reveals a number of possible explanations for the increased enrollment including but not limited to Biden Administration emphasis on outreach, the expansion of the enrollment period and availability of subsidies, and more. Businesses sponsoring health plans, insurers and other payers, government and community leaders, taxpayers and other others may wish to evaluate this data and these implications further to assess their short term and long term implications on their health plan concerns and existing and proposed practices, governmental policy proposals and other planning considerations.
Reported Key Findings
The Report found that 14.5 million consumers selected or automatically re-enrolled in marketplace health care coverage through HealthCare.gov during the 2022 OEP, 2.5 million more consumers than signed up for marketplace coverage during the 2021 OEP. This reflects a 21 percent increase in enrollment over 2021 OEP enrollment.
Other findings highlighted in the Report include the following:
In HealthCare.gov states, 10.3 million consumers enrolled in health coverage during the 2022 OEP between November 1, 2021 and January 15, 2022.
Across the 18 SBMs, 4.3 million enrollees signed up for health coverage during the 2022 OEP from November 1, 2021 through the end of their respective reporting periods.
Nationwide, the number of new consumers signing up for Marketplace coverage during the 2022 OEP increased by 20 percent, to 3.1 million, from 2.5 million in the 2021 OEP.
Among consumers who attested to a race or ethnicity, 19 percent identified as Hispanic/Latino in the 2022 OEP, compared to 18 percent in the 2021 OEP, and the percent of consumers with a known race or ethnicity who identified as Black increased to 9 percent in the 2022 OEP, from 8 percent in the 2021 OEP.
Nationwide, 2.8 million more consumers are receiving APTC in 2022 compared to 2021. Additionally, 1.1 million consumers reported household incomes over 400% FPL during the 2022 OEP, who would not have been eligible for APTC without the American Rescue Plan (ARP). The average monthly premium after APTC fell by 19 percent, from $164 in 2021 to $133 in 2022, and 28 percent of consumers selected a plan for $10 or less per month after APTC during the 2022 OEP.
The percentage of all Marketplace consumers who received costsharing reductions (CSRs) increased slightly from the 2021 OEP to the 2022 OEP, from 47 percent to 49 percent, respectively.
The average monthly 2022 premium for HealthCare.gov enrollees was $111. If consumers had not received the additional APTC provided by the ARP, the average monthly premium after APTC for HealthCare.gov consumers would have been 53 percent higher, or $170.
The Report findings summarize data about health plan selections through the individual Marketplaces during the 2022 2022 OEP and includes OEP data for the 33 states with Marketplaces that use the HealthCare.gov eligibility and enrollment platform for the 2022 plan year (HealthCare.gov states), as well as for the 18 State-based Marketplaces (SBMs) that use their own eligibility and enrollment platforms. For purposes of the Report, the 2022 OEP for the Health Insurance Marketplaces ran between November 1, 2021 and January 15, 2021 for the 33 states that used HealthCare.gov. For the 18 State-based Marketplace (SBMs) states using their own platforms, the reporting period reflects plan selection and Marketplace activity from the beginning of OE on November 1, 2021, to the end of each SBM’s respective OEP and any run-out period. Any renewals processed before November 1, 2021, are also included.
Data Underlying Report
For those interested in evaluating the 2022 OEP enrollment results and trends, CMS has prepared a number of Public Use Files (PUFs) summarizing plan selection activity during the applicable OEPs in more detail including:
2022 OEP State-Level Public Use File: The state-level PUF includes total health plan selections in all 50 states plus the District of Columbia. The PUF provides state-level data on metrics such as average monthly premium, financial assistance, age, gender, metal level, self-reported race and ethnicity, rural location, household income as a percent of the federal poverty level (FPL), and plan switching behavior among consumers with a plan selection. In addition, the state-level PUF includes data on dental plan selections and Basic Health Plan (BHP) enrollments. Certain data elements are only available for the 33 HC.gov states in 2022.
2022 OEP State, Metal Level, and Enrollment Status Public Use File: The state, metal level, and enrollment status PUF contains data with stratifications by state, metal level and enrollment status. It includes total health plan selections in all 50 states plus the District of Columbia and state, metal level, and enrollment status-level data on enrollment status, average monthly premium, financial assistance, age, gender, self-reported race and ethnicity, rural location, metal level, and household income as percent FPL. Certain data elements are only available for the 33 HC.gov states in 2022.
2022 OEP County-Level Public Use File: The county-level PUF includes total health plan selections, as well as data such as average monthly premium, financial assistance, age, gender, metal level, self-reported race and ethnicity, household income as a percent of the FPL, and plan switching behavior. In addition, the county-level PUF includes data on dental plan selections. This PUF only includes data for consumers with a plan selection in the 33 states that used the HC.gov platform in 2022.
2022 OEP ZIP Code-Level Public Use File: The ZIP code-level PUF includes total health plan selections, the count of consumers with APTC, and average APTC among consumers with APTC. This PUF only includes data for consumers with a plan selection in the 33 states that used the HC.gov platform in 2022.
2022 OEP Snapshot Public Use File: The Snapshot PUF presents data that CMS released during the 2022 OEP. It includes total health plan selections, including a breakdown of new and returning consumers, consumers on submitted applications, call center volume, and website usage. State-level health plan selection counts are also included.
Supplemental HC.gov Data: Data on availability and plan selections of Health Savings Account (HSA)-eligible plans and average and median deductibles of plans selected during the 2014-2022
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.
Employers should put managing legal and operational demands for mental health accommodation for youth and other workers and their risk management agenda this year.
The Surgeon General’s recent release of an advisory report, “Protecting Young People’s Mental Health,” is one of a series of studies and guidance that the federal government has released in recent months on the impacts of the pandemic on mental health issues. The recently released Surgeon General report discusses impacts of the pandemic on mental health needs of young people. In connection with these findings, the United States Department of Labor is inviting employers and other interested persons to respond to a brief questionnaire from the National Youth Employment Coalition to help understand how workforce providers are grappling with this crisis. The DOL says this input will provide insight into the youth employment field’s current capacity to screen, connect, and serve youth with mental health needs. however, employers contemplating responding should note that the survey template requests that they respond it be identified by providing their name and other information. It is not clear whether the provision of this information may be used to target the employer for subsequent scrutiny.
The deadline for responding to the survey is March 11, 2022. To learn more, see here.
More Information
Want to know more? The author of this update, employment lawyer Cynthia Marcotte Stamer, conducted a briefing on these and other federal COVID-19 vaccination and other workforce requirements as a panelist on the “COVID-19 Vaccination Mandates & Incentives” virtual seminar the American Bar Association Joint Committee on Employee Benefits hosted on November 12, 2021. To purchase a recording of the program, see here. For information about obtaining Ms. Stamer’s slides, email here.
Solutions Law Press, Inc. also 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. 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
For help developing, administering or defending your organization’s workforce, employee benefits, compensation or compliance practices, contact 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.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of 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, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well-known for her extensive work with health, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes.
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 concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; 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; 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; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate 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 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.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating 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, 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.
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.
Important Information 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.
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.
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.
Vendors and developers of mobile health apps and connected devices (“health apps”) that track or collect fitness or other health information that contain individually identifiable health information created or received by health care providers (“personal health records” or “PHR”) and their service providers (“collectively “PHR Vendors””) should verify their data security and breach notification policies and processes comply with applicable federal data breach rules in light of a September 15, 2021 Federal Trade Commission (“FTC”) policy statement cautioning health app vendors and their service providers that that app providers are responsible for complying with the FTC Health Breach Notification Rule; Final Rule, 16 C.F.R. Part 318 (“Health Breach Rule”) unless the breach is covered by and addressed in accordance with the Health Insurance Portability & Accountability Act (“HIPAA”) Breach Notification for Unsecured Protected Health Information, 45 CFR Parts 160 and 164 (“HIPAA Breach Rule”) applicable to health plans, health care providers, health care clearinghouses and their service provider business associates (“HIPAA Entities”) experiencing breaches of protected health information (“PHI”).
The HIPAA Breach Notification Rule and the Health Breach Rule implement enhanced health information data security and breach notification requirements added to federal law by the Health Information Technology for Economic and Clinical Health Act (HITECH) enacted by Congress as part of the American Recovery and Reinvestment Act (ARRA) of 2009. Widely recognized, the HIPAA Breach Rule adopted and enforced by the Department of Health & Human Services Office of Civil Rights (“OCR”) implements breach notification and other requirements for the protection of electronic PHI applicable to HIPAA Covered Entity. In contrast, the FTC Health Breach Rule implements the HITECH Act’s requirements for breaches not subject to the HIPAA Breach Rule of individually identifiable consumer health information in “personal health records” and falls under the FTC’s jurisdiction to investigate and enforce.
The FTC Health Breach Rule applies to breaches of electronic PHR. For purposes of the Health Breach Rule, “personal health record” or “PHR” generally means an electronic record any information, collected from an individual, that:
Is not subject to the HIPAA Breach Notification rules applicable to HIPAA Entities when a breach of electronic PHI happens;
Is created or received by a health care provider, health plan, employer, or health care clearinghouse;
Relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual; and
Either identifies the individual or with respect to which there is a reasonable basis to believe that the information can be used to identify the individual; and
Is managed, shared, and controlled by or primarily for the individual.
Where applicable, the Health Breach Notification Rule requires that the Health App vendors or related entities notify consumers, the FTC, and, in some cases, the media when that data in a Personal Health Record is disclosed or acquired without the consumers’ authorization. In addition, a third party service provider of such vendors or entities that experiences a breach must notify such vendors or entities of the breach, so that they can in turn notify their customers. Beyond requiring notification of breaches of Personal Health Records, the Health Breach Rule also contains specific requirements governing the timing, method, and contents of the breach notice to consumers. In general, it requires entities to provide breach notices by first class mail, or if specified as a preference by the individual, via e-mail “without unreasonable delay,” and in no case later than 60 calendar days after discovering a breach. Substitute notice, through the media or a web posting, also may be required when there is insufficient contact information for ten or more individuals.
Violations of the Health Breach Rule can be costly. The HITECH Act authorizes the FTC to seek civil penalties for violations. Companies that fail to comply with the rule could be subject to monetary penalties of up to $43,792 per violation per day.
Responding to the explosive growth Health Apps and their use, the Statement notes that Health Apps such as wearable fitness tracking devices that collect consumers’ health information are covered by the Health Breach Notification Rule if they can draw data from multiple sources, and are not covered by the HIPAA Breach Rule. The Statement warns PHR Vendors not covered by HIPAA are responsible for protecting PHRs from unauthorized access and face civil monetary penalties of up to $43,792 per violation per day for failing to provide breach notification in accordance with the Health Breach Notification Rule when their PHRs experience a “breach of security” of PHRs on a Health App.
The Statement also urges PHR Vendors, health app developers, and others involved with the creation, provision or use of mobile devices collecting or accessing fitness or other individually identifiable health information to examine their obligation and recommends using the Developing a Mobile Health Act Tool (the “Tool”) to help determine what laws apply. For example, the Statement states a Health App would be covered under the FTC’s Health Breach Rule if it collects health information from a consumer and has the technical capacity to draw information through an API that enables synching with a consumer’s fitness tracker, but cites to cross references to the HIPAA Breach Rule in the Health Breach Rule to explain that a Health App developer is a “health care provider” subject to the HIPAA Breach Rule because it “furnish[es] health care services or supplies.”
Comments made by FTC Commissioner Lina M. Khan regarding the need for the Statement add weight to the credibility of concerns about impending enforcement. While noting the Health Breach Rule “imposes some measure of accountability on tech firms that abuse our personal information, Ms. Khan identified “the commodification of sensitive health information, where companies can use this data to feed behavioral ads or power user analytics” as an even “more fundamental problem.” She also stated “Given the growing prevalence of surveillance-based advertising, the Commission should be scrutinizing what data is being collected in the first place and whether particular types of business models create incentives that necessarily place users at risk.”
ALL HEALTH APP VENDERS & PROVIDERS SHOULD VERIFY COMPLIANCE WITH APPLICABLE BREACH REQUIREMENTS
In the face of OCR’s ongoing enforcement of HIPAA and the Statement’s signal of the FTC’s new commitment to the Health Breach Rule enforcement PHR Vendors, HIPAA Covered Entitles, and others involved with the development, provision, use or management of mobile apps or other devices that collect or access individually identifiable health information should take documented steps to evaluate their responsibilities and risks and address potential compliance exposures promptly. As PHI Vendors also could face exposure from service providers, this review should include assessment of those compliance risks and exposures. PHR Vendors also may wish to consider reviewing and strengthening contractual requirements for compliance, notification, audit and other vendor safeguarads. Given the potential of enforcement based on current or past practices or events and the likely need for candid discussion of issues and concerns associated with past and present noncompliance risks, HIPAA Covered Entities, PHR Vendors and others dealing with health apps or connected devices also should consider engaging legal counsel familiar with the various rules to help guide this evaluation within the scope of attorney-client privilege.
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. 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.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other health industry matters, workforce and health care change and crisis management and other highly regarded publications and presentations, 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.
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.
Yesterday’s release by the Departments of Labor, Health and Human Services, Treasury and the Office of Personnel Management (“Agencies”) release yesterday (September 30, 2021) an a third interim final rule (“3rd Rule”) implementing requirements applicable to health plans and health care providers enacted under the No Surprises Act (the “Act) warns health plans, their employer and other sponsors, insurers, fiduciaries and service providers time is running out to update their plans, contracts and practices to prepare to meet comply with the Act when its rules take effect in 2022.
The release of the 3rd Rule yesterday follows the Agencies’ issuance of an interim final rule on consumer protections against surprise billing (“1st Rule”) in July and a proposed rule to help collect data on the air ambulance provider industry (“2nd Rule”) earlier in September, both of which take effect on January 1, 2022.The rules implement the Act’s ban on surprise billing for emergency services and ancillary care at in-network facilities, and limit high out-of-network cost sharing for emergency and non-emergency services by prohibiting them from being higher than if such services were provided in-network. In addition to the Act’s requirements implemented by these three rule packages, health plans and health providers also need to begin preparing to comply with new rules regarding prescription drug coverages and various other requirements of the Act, as well as a plethora of regulatory and market changes impacting health plans and their administration that have emerged over the past year.
Solutions Law Press, Inc. is hosting a complimentary briefing by Cynthia Marcotte Stamer on key requirements of the Act expected to impact health plans and their administration on Monday, October 18, 2021 from 11:30 a.m. to 1:00 p.m. Central Time. Registration is limited. Persons interested in attending should e-mail here to request registration as soon as possible.
Act’s Surprise Billing Ban
The Act seeks to protect patients from surprise bills and remove them from the middle of payment disputes between out-of-network providers, facilities, or providers of air ambulance services and health plans or issuers.
The Act seeks to protect patients from surprise bills and remove them from the middle of payment disputes between out-of-network providers, facilities, or providers of air ambulance services and health plans or issuers.
The 1st Rule published on July 1, 2021 states that, beginning in 2022, patients will only be required to pay cost sharing based on in-network rates for certain out-of-network emergency services, out-of-network non-emergency services at in-network facilities and out-of-network air ambulance services.
The 3rd Rule builds on this work and details how the total payment to an out-of-network provider or facility will be determined. In some cases – based on the law – state law or application of a state All-Payer Model Agreement will determine this amount. Where neither applies, the rule sets forth the federal process that will apply for determining the amount. When a payment dispute for items/services that fall under surprise billing protections occur, either a provider, facility, or air ambulance provider or plan/issuer may initiate a 30-day open negotiation period. If open negotiation fails, either party may initiate the federal independent dispute resolution process. This rule details how this process initiates, what is eligible for this process and how independent dispute resolution entities should consider factors when determining a payment amount.
Self Pay Patient’s Good Faith Estimate Requirements
In added consumer protections, today’s 3rd Rule also outlines key requirements related to uninsured (or self-pay) individuals. Self-pay individuals are individuals who have coverage but do not choose to have their care billed to their health plan or issuer. When individuals schedule an item or service with certain providers and facilities, those providers and facilities will be required to inquire about the individual’s health coverage status, and if the individual wants their care billed to their health plan or issuer.
The provider or facility must provide a good faith estimate of expected charges for the care they are scheduling for individuals deemed uninsured (or self-pay). An uninsured (or self-pay) individual may also request a good faith estimate, without scheduling an item or services. The rule also establishes a process for uninsured (or self-pay) individuals to initiate a payment dispute resolution process if they are ultimately billed substantially in excess of the good faith estimate they received.
Time Running Short To Complete Compliance Preparations
The Act’s restrictions on balance billing of out of network and self pay services, along with new rules regarding prescription drug coverage and various other health benefit rules are scheduled to take effect under the Act beginning in January, 2022 as well as a host of other statutory, regulatory and market changes impacting health benefit programs for the upcoming year. Aside from the complexities of meeting the direct requirements of the rules, health plans and their sponsors, fiduciaries, administrators and advisors working to update their plans also will need to determine and decide how to respond to state law regulatory surprise billing and other price transparency and balance billing rules that the Act and its implementing regulations incorporate. Employer and other health plan sponsors, health plan fiduciaries and their service providers need to confirm the necessary arrangement are prepared in a timely fashion to ensure their health plans are designed and administered to comply with these requirements. In addition to updating plan documents, contracts, and processes, health plans, their sponsors, fiduciaries, administrative service providers and others likely need to review budget forecasts, stop loss and other insurance, participant and provider communications, systems, and a host of other operating features of their programs. Given the emerging nature of the guidance, meeting current deadlines are likely to prove challenging. Accordingly health plan sponsors, administrators, fiduciaries, insurers, and advisors should move quickly to begin preparations.
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. 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.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other health industry matters, workforce and health care change and crisis management and other highly regarded publications and presentations, 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.
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.
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.
U.S businesses will face sharply increased wage costs if Senate Democrats succeed in their plan to pass as soon as this week the American Rescue Plan Act of 2021(the “Act”) passed by the House of Representatives on Friday, February 24, 2021.
One of many provisions impacting employers and their employee benefit plans in the Act that Congressional Democrats are pushing through as a COVID-19 relief package, Section 2101 of the Act amends the Fair Labor Standards Act of 1938 (“FLSA”) to increase immediately upon enactment the federal minimum wage employers covered by the FLSA must pay to most non-exempt employees (“regular rate”) by $2.25 per hour from the current rate of $7.25 to $9.50 per hour, then provides for additional annual increases the gradual increase of the federal minimum wage that will raise the regular rate to $15.00 per hour over the next four years. Beginning in 2026, the Act also provides for annual increases in the regular rate based on the median hourly wage of all employees as determined by the Bureau of Labor Statistics rounded up to the nearest multiple of $0.05. This means the regular minimum wage employers must pay most hourly employees would more than double by 2025 and continue to increase thereafter.
In addition, the Act also phases out current rules allowing employers to pay tipped employees, new employees under age 20 and handicapped employees less than the regular minimum wage over the next five years and raises the minimum wage the FLSA allows employers to pay those employees gradually over the intervening period, with the initial increases slated to take effect upon enactment.
As Senate Majority Leader Chuck Schumer has announced plans to bring the Act before the Senate for a vote as early as this week and President Biden committed to promptly sign the Act that is the centerpiece of the Democrats latest COVID-19 relief package, businesses are likely to feel the impact of the increased minimum wage and other mandates within days if not by month’s end.
These amendments will directly and immediately increase labor costs for non-exempt workers as well as employee benefit and fringe benefit costs and obligations tied to compensation or based on FLSA classifications. Other Biden-Harris Administration policies expanding the scope of the FLSA and other federal laws through revisions and enforcement of rules for characterizing workers as employees rather than independent contractors and enforcing expansive joint employer liability rules as well as other announced or expected Biden-Harris Administration proworker regulatory and enforcement changes almost certainly will expand the reach and implications of these changes. The Biden-Harris Administration’s January 20, 2021 Memorandum on Regulatory Freeze Pending Review suspended the implementation of the Trump Administration led Labor Department’s Final Rule: Independent Contractor Status under the Fair Labor Standards Act slated to take effect on March 8, 2021, which sought to restore and clarify historical more employer friendly policies for distinguishing employee versus independent contractor relationships for purposes of the FLSA, the WHD’s withdrawal of previously issued Trump Administration era opinions that applied that Administration’s more expansive view of independent contractor status, and WHD’s issuance of new opinions articulating and apply applying significantly narrower definitions of independent contractor and broader definitions of employees.
Based on the agenda announced by the Biden-Harris Administration, businesses also should expect the Biden-Harris Administration and private plaintiffs to use these more employee friendly interpretation and enforcement policies to attack employer characterizations of workers as contractors to justify nonpayment of minimum wage and overtime to those workers. Along with being forced to pay unpaid wages and overtime with interest, businesses unsuccessful in defending their worker classification characterizations can expect to face liquidated damage awards to private litigants equal to two times the amount of the back pay liability or in the case of WHD enforcement for repeated or willful violations, civil monetary penalties.
In assessing and managing these risks, businesses should evaluate their potential joint employer exposure to liability for unpaid minimum wage and overtime violations by other businesses providing labor or other services as the Biden-Harris Administration also is expected to seek to apply the much more expansive interpretation of joint employment applied during the Obama Administration abandoned during the Trump Administration.
These misclassification mistakes can be particularly costly. FLSA liabilities arising from misclassification of workers as independent contractors carry significant risk both because businesses often fail to pay required minimum wages or overtime as well as don’t keep required time records. The Biden-Harris Administration has made clear that it plans to move quickly to reimplement the regulatory and enforcement practices used during the Obama Administration to aggressively challenge employers’ characterization of workers as exempt from the FLSA’s minimum wage and overtime rules as independent contractors.
Considering these developments, all U.S. businesses and business leaders are well-advised both to begin preparing to comply with anticipated increases in federal minimum wage rates, as well as well as assess and take appropriate steps to mitigate their exposure to anticipated aggressive efforts to reclassify service providers considered to perform work as independent contractors, as contractors or employees of subcontractors or other businesses or both.
More Information
The FLSA reforms are only one of a number of provisions of the Act impacting employers and their employee benefit plans. For more a more comprehensive discussion of the FLSA amendments included in the Act, see here.
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.
Newly sworn in President Joe Biden chose to make an executive order outlining the core principles for his Administration’s policy for fighting COVID-19 the first signed in his new Administration shortly after he was sworn in as President as well as made public the Biden-Harris Administration’s other key policy priorities upon taking office which promise to significantly impact business and other organizations, taxpayers and others. As the Administration and new Congress get to work on these and other policies, American businesses and citizens should stay informed and provide clear and consistent input to the Administration and members of Congress about the policy and enforcement proposals and actions to help shape the law and prepare to deal with the new rules and priorities.
Key Biden-Harris Administration Policy Priorities
Shortly after being sworn into office, the Biden-Harris Administration also announced other key immediate priorities of the Biden-Harris Administration. The announcement posted on TheWhiteHouse.gov website reads as follows:
President Biden will deliver bold action and immediate relief for American families as the country grapples with converging crises. This will include actions to control the COVID-19 pandemic, provide economic relief, tackle climate change, and advance racial equity and civil rights, as well as immediate actions to reform our immigration system and restore America’s standing in the world.
COVID-19
President Biden will move quickly to contain the COVID-19 crisis by expanding testing, safely reopening schools and businesses, and taking science-driven steps to address the communities — especially communities of color — who have been hardest hit by this virus. And, President Biden will launch a national vaccination program to inoculate the U.S. population efficiently and equitably.
Read more about the Biden-Harris plan to beat COVID-19 [See below].
Climate
President Biden will take swift action to tackle the climate emergency. The Biden Administration will ensure we meet the demands of science, while empowering American workers and businesses to lead a clean energy revolution.
Racial Equity
The promise of our nation is that every American has an equal chance to get ahead, yet persistent systemic racism and barriers to opportunity have denied this promise for so many. President Biden is putting equity at the center of the agenda with a whole of government approach to embed racial justice across Federal agencies, policies, and programs. And President Biden will take bold action to advance a comprehensive equity agenda to deliver criminal justice reform, end disparities in healthcare access and education, strengthen fair housing, and restore Federal respect for Tribal sovereignty, among other actions, so that everyone across America has the opportunity to fulfill their potential.
Economy
President Biden will take bold steps to address the inequities in our economy and provide relief to those who are struggling during the COVID-19 pandemic. The President will also work with Congress to pass the American Rescue Plan to change the course of the pandemic, build a bridge towards economic recovery, and invest in racial justice. And, he will build our economy back better from the pandemic and create millions of jobs by strengthening small businesses and investing in the jobs of the future.
Health Care
President Biden will make a renewed commitment to protect and expand Americans’ access to quality, affordable health care. He will build on the Affordable Care Act to meet the health care needs created by the pandemic, reduce health care costs, and make our health care system less complex to navigate.
Immigration
President Biden will reform our long-broken and chaotic immigration system. President Biden’s strategy is centered on the basic premise that our country is safer, stronger, and more prosperous with a fair and orderly immigration system that welcomes immigrants, keeps families together, and allows people across the country—both newly arrived immigrants and people who have lived here for generations—to more fully contribute to our country.
Restoring America’s Global Standing
President Biden will take steps to restore America’s standing in the world, strengthening the U.S. national security workforce, rebuilding democratic alliances across the globe, championing America’s values and human rights, and equipping the American middle class to succeed in a global economy.
COVID-19 Plan To Beat COVID-19
The first Executive Order signed by President Biden in furtherance of these initiatives was his COVID-19: The Biden-Harris plan to beat COVID-19 Executive Oder, the text of which reads as follows:
The American people deserve an urgent, robust, and professional response to the growing public health and economic crisis caused by the coronavirus (COVID-19) outbreak. President Biden believes that the federal government must act swiftly and aggressively to help protect and support our families, small businesses, first responders, and caregivers essential to help us face this challenge, those who are most vulnerable to health and economic impacts, and our broader communities – not to blame others or bail out corporations.
The Biden-Harris administration will always:
Listen to science Ensure public health decisions are informed by public health professionals Promote trust, transparency, common purpose, and accountability in our government President Biden and Vice President Harris have a seven-point plan to beat COVID-19.
Ensure all Americans have access to regular, reliable, and free testing.
Double the number of drive-through testing sites. Invest in next-generation testing, including at home tests and instant tests, so we can scale up our testing capacity by orders of magnitude. Stand up a Pandemic Testing Board like Roosevelt’s War Production Board. It’s how we produced tanks, planes, uniforms, and supplies in record time, and it’s how we will produce and distribute tens of millions of tests. Establish a U.S. Public Health Jobs Corps to mobilize at least 100,000 Americans across the country with support from trusted local organizations in communities most at risk to perform culturally competent approaches to contact tracing and protecting at-risk populations. Fix personal protective equipment (PPE) problems for good.
President Biden is taking responsibility and giving states, cities, tribes, and territories the critical supplies they need.
Fully use the Defense Production Act to ramp up production of masks, face shields, and other PPE so that the national supply of personal protective equipment exceeds demand and our stores and stockpiles — especially in hard-hit areas that serve disproportionately vulnerable populations — are fully replenished. Build immediately toward a future, flexible American-sourced and manufactured capability to ensure we are not dependent on other countries in a crisis. Provide clear, consistent, evidence-based guidance for how communities should navigate the pandemic – and the resources for schools, small businesses, and families to make it through.
Social distancing is not a light switch. It is a dial. President Biden will direct the CDC to provide specific evidence-based guidance for how to turn the dial up or down relative to the level of risk and degree of viral spread in a community, including when to open or close certain businesses, bars, restaurants, and other spaces; when to open or close schools, and what steps they need to take to make classrooms and facilities safe; appropriate restrictions on size of gatherings; when to issue stay-at-home restrictions. Establish a renewable fund for state and local governments to help prevent budget shortfalls, which may cause states to face steep cuts to teachers and first responders. Call on Congress to pass an emergency package to ensure schools have the additional resources they need to adapt effectively to COVID-19. Provide a “restart package” that helps small businesses cover the costs of operating safely, including things like plexiglass and PPE.
Plan for the effective, equitable distribution of treatments and vaccines — because development isn’t enough if they aren’t effectively distributed.
Invest $25 billion in a vaccine manufacturing and distribution plan that will guarantee it gets to every American, cost-free. Ensure that politics plays no role in determining the safety and efficacy of any vaccine. The following 3 principles will guide the Biden-Harris administration: Put scientists in charge of all decisions on safety and efficacy; publicly release clinical data for any vaccine the FDA approves; and authorize career staff to write a written report for public review and permit them to appear before Congress and speak publicly uncensored. Ensure everyone — not just the wealthy and well-connected — in America receives the protection and care they deserve, and consumers are not price gouged as new drugs and therapies come to market.
Protect older Americans and others at high risk.
President Biden understands that older Americans and others at high-risk are most vulnerable to COVID-19.
Establish a COVID-19 Racial and Ethnic Disparities Task Force, as proposed by Vice President Harris, to provide recommendations and oversight on disparities in the public health and economic response. At the end of this health crisis, it will transition to a permanent Infectious Disease Racial Disparities Task Force. Create the Nationwide Pandemic Dashboard that Americans can check in real-time to help them gauge whether local transmission is actively occurring in their zip codes. This information is critical to helping all individuals, but especially older Americans and others at high risk, understand what level of precaution to take. Rebuild and expand defenses to predict, prevent, and mitigate pandemic threats, including those coming from China.
Immediately restore the White House National Security Council Directorate for Global Health Security and Biodefense, originally established by the Obama-Biden administration. Immediately restore our relationship with the World Health Organization, which — while not perfect — is essential to coordinating a global response during a pandemic. Re-launch and strengthen U.S. Agency for International Development’s pathogen-tracking program called PREDICT. Expand the number of CDC’s deployed disease detectives so we have eyes and ears on the ground, including rebuilding the office in Beijing. Implement mask mandates nationwide by working with governors and mayors and by asking the American people to do what they do best: step up in a time of crisis.
Experts agree that tens of thousands of lives can be saved if Americans wear masks. President Biden will continue to call on:
Every American to wear a mask when they are around people outside their household. Every Governor to make that mandatory in their state. Local authorities to also make it mandatory to buttress their state orders. Once we succeed in getting beyond this pandemic, we must ensure that the millions of Americans who suffer long-term side effects from COVID don’t face higher premiums or denial of health insurance because of this new pre-existing condition. The Biden-Harris Administration will work to ensure that the protections for those with pre-existing conditions that were won with Obamacare are protected. And, they will work to lower health care costs and expand access to quality, affordable health care through a Medicare-like public option.
Monitor & Respond To Emerging Developments & Proposals
As the new Administration and Congress get down to work, all U.S. organizations and communities, their leaders, and individual employees and citizens should carefully follow, and share their input to the Administration, members of Congress, and other federal, state and local officials on the actions and proposals taken to implement this and other policy that impact their interests.
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 nationally recognized for her work and thought leadership on health and other health and employee benefit issues.
An attorney board certified in labor and employment law by the Texas Board of Legal Specialization and Fellow in the American College of Employee Benefit Counsel, Ms. Stamer has worked as an on demand, special project, consulting, general counsel or other basis with health and other employee benefit plans, their sponsors, insurers, administrators, providers and others and others has published and spoken extensively on these 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 and advocate for employer and other plan sponsors, fiduciaries, administrators, insurers, technology and other service providers, managed care organizations, direct primary care and other health care providers and others 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. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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:
Lack of clarity in current tax regulations or guidance creating headaches? The Department of the Treasury (“Treasury Department”) and the Internal Revenue Service (“IRS”) are inviting businesses and individuals to submit recommendations about what issues the 2020-2021 Priority Guidance Plan should include. Businesses and individuals with ideas about tax guidance needed to solve vexing issues should consider submitting their proposed guidance to the the Treasury Department and IRS in response to this invitation.
The Treasury Department’s Office of Tax Policy and the Service uses the Priority Guidance Plan each year to identify and prioritize the tax issues that tax regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance should address during the year.
The 2020-2021 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to actively work on as priorities during the period from July 1, 2020, through June 30, 2021.
In reviewing recommendations and selecting additional projects for inclusion on the 2020-2021 Priority Guidance Plan, the Treasury Department and the Service will consider the following:
Whether the recommended guidance resolves significant issues relevant to a broad class of taxpayers;
Whether the recommended guidance reduces controversy and lessens the burden on taxpayers or the Service;
Whether the recommended guidance relates to recently enacted legislation;
Whether the recommendation involves existing regulations or other guidance that is outdated, unnecessary, ineffective, insufficient, or unnecessarily burdensome and that should be modified, streamlined, expanded, replaced, or withdrawn;
Whether the recommended guidance would be in accordance with Executive Order 13771 (82 FR 9339), Executive Order 13777 (82 FR 12285), Executive Order 13789 (82 FR 19317), or other executive orders.
Whether the recommended guidance promotes sound tax administration;
Whether the Service can administer the recommended guidance on a uniform basis; and
Whether the recommended guidance can be drafted in a manner that will enable taxpayers to easily understand and apply the guidance.
While suggestions are submitted throughout the year, Notice 2020-47 encourages individuals or businesses desiring to propose issues or other content to be included in the 2020-2021 Priority Guidance to submit their recommendations for guidance by Wednesday, July 22, 2020, for possible inclusion on the original 2020-2021 Priority Guidance Plan. Taxpayers are not required to submit recommendations for guidance in any particular format. Taxpayers should, however, briefly describe the recommended guidance and explain the need for the guidance. In addition, taxpayers may include an analysis of how the issue should be resolved. For recommendations to modify, streamline, or withdraw existing regulations or other guidance, taxpayers should explain
how the changes would reduce taxpayer cost and/or burden or benefit tax administration.
Notice 20-47 also states that taxpayers suggesting more than one guidance project prioritize the projects by order of importance. If a large number of projects are being suggested, it would be helpful if the projects were grouped by subject matter and then in terms of high, medium, or low priority. Requests for guidance in the form of petitions for rulemaking will be considered with other recommendations for guidance in accordance with the considerations described in Notice 2020-47.
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 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:
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.
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.
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:
Employer and union-sponsored health plans, their sponsors, fiduciaries and administrators should heed the reminder of the importance of ensuring their health plans properly comply in form and operation with the mental health and substance abuse parity mandes of the Mental Health Parity and Addiction Equity Act (MHPAEA) in when the U.S. Department of Labor (“DOL”) Employee Benefit Security Administration (“EBSA”) released its 2020 Report to Congress: Parity Partnerships: Working Together (the”2020 Report”) available for review here.
In addition to exposing the health plan administrators and othr fiduciaries to potential claims denial or fiduciary responsibility claims brought by participants or beneficiaries, the Department of Labor or both, administrative penalties by the EBSA, or both, the MHPAEA mental health and substance abuse parity rules are among 40 federal mandates that when violated can rigger the automatic $100 per violation per day employer excise tax penalty under Internal Revenue Code Section 6039D. As a consequence, violations of the MHPAEA are particularly risky and potentially expensive for private employers, their health plans and the plan administrators and fiduciaries that administer it.
To avoid violation of the MHPAEA, covered health plans generally must cover mental health and substance abuse care and treatment on the same terms in form and in operation as other similar benefits, as well as comply with special notice and claims administration requirements. Comparability of mental health and substance abuse coverage is determined in accordance with complicated federal regulations, Meeting these requirements in operations is often tricky, particularly when health plans attempt to apply tools to manage hospitalization or other treatments. For additional information about MHPAEA, C. Stamer, What Should I Know About the MHPAEA and 21st Century Cures Act (2018).
Along with the 2020 Report, Along with releasing the report, EBSA also is continuing its efforts to educate plan sponsors, fiduciaries, administrators about the importance of compliance with the federally imposed group health plan mental health and substance abuse coverage mandates of the Mental Health Parity and Addiction Equity Act (“MHPAEA”). Consequently, along with its release of the 2020 Report, EBSA reminded plans, employers and other interested parties of the following previously published EBSA guidance about the MHPAEA mandates:
MHPAEA enforcement is split between the EBSA and the Department of Health & Human Services Centers for Medicare & Medicaid Services (“CMS”) depending on the nature and sponsorship of the health program.
Pursuant to its enforcement authority under Title I of the Employee Retirement Income Security Act of 1974 (ERISA), EBSA is responsible for enforcement of the MHPAEA with respect to approximately 2.4 million private employment-based group health plans. In contrast, CMSenforces MHPAEA and other applicable provisions of Title XXVII of the Public Health Service Act (PHS Act) with respect to non-federal governmental group health plans, such as plans for employees of state and local governments. Sponsors of self-funded, nonfederal governmental plans may elect to exempt those plans from (opt out of) certain requirements of Title XXVII of the PHS Act, including MHPAEA. In addition, CMS enforces MHPAEA with respect to health insurance issuers selling products in the individual and fully insured group markets in states that elect not to enforce or fail to substantially enforce MHPAEA. Currently, CMS is responsible for enforcement of MHPAEA with regard to issuers in four states: Missouri, Oklahoma, Texas and Wyoming. In these states, CMS reviews health insurance policy forms of issuers in the individual and group markets for compliance with MHPAEA prior to the products being offered for sale. In addition, CMS has collaborative enforcement agreements with five states: Alabama, Florida, Louisiana, Montana, and Wisconsin. These states perform state regulatory and oversight functions with respect to the federal requirements, including MHPAEA. However, if the state finds a potential violation and is unable to obtain compliance by an issuer, the state will refer the matter to CMS for possible enforcement action. CMS also performs market conduct examinations, where issuers are audited for compliance with applicable federal requirements, including MHPAEA, in states where CMS is responsible for enforcement and in states with a collaborative enforcement agreement when the state requests assistance.
EBSA FY 2019 Enforcement Against Private Employment Based Health Plans
The Fiscal Year (“FY”) 2019 Fact Sheet reports that in FY 2019, EBSA investigated and closed 186 health plan investigations in FY 2019 (and 3,758 health plan investigations since FY 2011). Of these:
24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options).
183 of these closed investigations involved plans subject to MHPAEA, which were reviewed for MHPAEA compliance. Of these, 68 investigations involved fully-insured plans, 91 investigations involved self-insured plans, and 24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options).
EBSA cited 12 MHPAEA violations in 9 of these investigations.
Of these 9 investigations, 1 investigation involved a fully-insured group health plan, 3 investigations involved self-funded group health plans, 2 investigations involved partially self-funded group health plans and 3 were service provider investigations.
EBSA benefits advisors answered 90 public inquiries, including 62 complaints, in FY 2019 related to MHPAEA (and answered 1,445 inquiries related to MHPAEA since FY 2011)
Concerning the focus of the EBSA investigated MHPAEA violations, EBSA reports the investigations focused on the following categories:
Annual dollar limits: dollar limitations on the total amount of specified benefits that may be paid in a 12-month period under a group health plan or health insurance coverage for any coverage unit (such as self-only or family coverage).
Aggregate lifetime dollar limits: dollar limitations on the total amount of specified benefits that may be paid under a group health plan or health insurance coverage for any coverage unit.
Benefits in all classifications: requirement that if a plan or issuer provides mental health or substance use disorder benefits in any classification described in the MHPAEA final regulation, mental health or substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided.
Financial requirements: deductibles, copayments, coinsurance, or out-of-pocket maximums.
Treatment limitations: includes limits on benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. Treatment limitations include both quantitative treatment limitations (QTLs), which are expressed numerically (such as 50 outpatient visits per year), and nonquantitative treatment limitations (NQTLs), which otherwise limit the scope or duration of benefits for treatment under a plan or coverage.
Cumulative financial requirements and QTLs: financial requirements and treatment limitations that determine whether or to what extent benefits are provided based on certain accumulated amounts including deductibles, out-of-pocket maximums and annual or lifetime day or visit limits.
Other ERISA violations (such as claims processing and disclosure violations) affecting mental health and substance use disorder benefits.
Along with the EBSA enforcement, private participants and beneficiaries of private employer sponsored health plans also can bring lawsuits to recover benefits and other relief for violatons of MHPAEA. Along with the actual damages, attorneys’ fees and other costs of enforcement, a successful MHPAEA enforcement also typically will reveal the sponsoring employer or union’s failure to make the required self-disclosure and excise tax payments mandated for violations under Internal Revenue Code Section 6039D, triggering added penalties beyond the initial penalties triggered by the uncorrected violation. Furthermore, delayed discovery of these violations also makes correction particularly costly for self-insured plans and their sponsors as deadlines for submitting expenses to qualify for stop loss reimbursement often will have passed by the time the liability comes to light. Accordingly, employer and other health plan sponsors, their fiduciaries and adminstrators generally will want to audit and monitor their health plan’s compliance with the MHPAEA throught the calendar year and as plan year or stop loss filing deadlines approach to mitigate these exposures.
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.
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 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 pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an 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 operational, health care, natural disaster, economic and other crisis and change.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government 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 privaitization 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 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.
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:
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.
Following up on the White House’s announcement yesterday that by major health insurers, Medicare and Medicaid to cover medically necessary testing and expand coverage for treatment of 2019 Novel Coronavirus (“coronavirus), without applying deductibles or coinsurance and offer expanded telemedicine and other coverage for coronavirus care, the Internal Revenue Service (“IRS”) today issued guidance giving health plans confirming health plans waiving deductibles won’t violate the Internal Revenue Code health savings account high deductible health plan rules. However many employer or other sponsors of self-insured health plans may need to amend their health plans and take other steps if they want their health plans to provide similar coverage. Meanwhile the Centers for Disease Control (“CDC”) released updated guidance to help businesses, schools, and other organizations to operate safely during the current outbreak.
Coronavirus Testing & Other Health Coverage
Major health insurers agreed in a Whitehouse Coronavirus Taskforce meeting yesterday to cover medically necessary testing and extend coverage to medically necessary treatment. The agreement only technically binds Medicare, Medicaid and other government programs and private insurers participating in the meeting. It does not automatically extend coverage or waive deductibles for self-insured employer or union sponsored health plans which provide coverage for an estimated 61 percent of covered U.S. worker and their families. Self-insured plan sponsors wishing to provide similar coverage and waive deductibles generally will need to take specific action to amend their plans and related contractracts and communications.
Vice President Pence announced the agreement with insurers yesterday saying among other things:
I’m pleased to report, as you requested, Mr. President, that all the insurance companies here — either today or before today — have agreed to waive all copays on coronavirus testing and extend coverage for coronavirus treatment in all of their benefit plans.
And, at your direction, Medicare and Medicaid, last week, already made it clear to Medicare and Medicaid beneficiaries that coronavirus testing and treatment would be covered. These private insurance carriers have extended that as well.
They’ve also agreed to cover telemedicine so that anyone, particularly among the vulnerable senior population, would not feel it necessary to go to a hospital or go to their doctor. They’ll know that telemedicine is covered.
While the announcement indicates that insurers involved in the meeting plan to expand coverage and waive deductibles, self-insured employer and union sponsored plans aren’t technically covered by the agreement. While many employers sponsoring self-insured health plans will want their health plan to provide similar coverage as part of their risk management response to the coronavirus outbreak. Self-insured plan sponsors and fiduciaries should confirm appropriate plan language is adopted and that their stop loss insurance carriers are on board or other arrangements are made to plan for and cover costs, and that other plan vendors are on board to handle responsibilities. This is particularly critical as failing to make the necessary amendments could result in an absence of stoploss insurance to cover additional cost. And relatively small workforce is with few people seeking the care, this might not make a material difference in plan costs. If several workers seek treatment, however, the absence of stoploss insurance coverage for the claims could both impact coverage for those particular items if the deductible under the policy has been met as well as could affect whether those claims count overall aggregate coverage losses. The bottom line is, make sure that your documentation matches your Promise or your extension of coverage will likely be truly 100% self insured. Likewise employers and other plan sponsors in the plan administrators of these plans are reminded that the law generally requires that they provide written notice of the changes to plan members in a timely fashion. Having plan administration services and other vendors on board also is important to ensure that the claims are appropriately and timely processed to avoid violation of plan terms and other rules.
In the meantime, the widespread lack of understanding among plan members about the distinction between insured and self-insured plans coupled with the breadth of the unqualified announcement by the White House is likely to fuel confusion by covered individuals and their providers. Not only will covered persons and providers need to know whether the program is insured or self-insured, they also will need to confirm how each of these programs implements the expanded coverage.
IRS Guidance Clears Way For High Deductible Health Plans To Raise Deductibles
Employers and health plans wishing to waive deductibles for coronavirus testing will not have to worry that waiving the deductible will violate IRS high deductible health plan (“HDHP”) rules, however. Earlier today, the IRS provided relief allowing high deductible health plans to pay these expenses without disqualifying their programs for high deductible health plan treatment under the Code in Notice 2020-15. The Notice provides that, until further guidance is issued, a health plan that otherwise satisfies the requirements to be a HDHP under Code section 223(c)(2)(A) will not fail to be an HDHP under section 223(c)(2)(A) merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Also due to this guidance, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).
Business & Other Disruptions Response
Government, healthcare and other leaders are urging businesses and individuals to limit contact and care to guard against the virus because of its strength and ability to spread quickly. The U.S.’s top infectious-disease specialist told lawmakers the pathogen “is 10 times more deadly than the seasonal flu.”
Accordingly, health and government officials are urging all segments of society to take precautions. CDC, for instance has published the resources to help businesses, schools and others keep their people and locations safe here.
Unfortunately the strategy for ending the pandemic brings its own draconian side effects. Along with dealing with the threat of the disease itself, the efforts to manage the disease outbreak, many businesses also are forced to deal with demand losses, supply and business interruptions, staffing shortages, unanticipated expenses and a wide range of other operational and financial disruptions that are side effects of the outbreak and its management.
The outbreak has and continues to prompt the cancellation of a plethora of business, trade, government, school, and sports and entertainment events. Notable for its involvement in heath care and related insurance matters, the National Association of Insurance Commissioners (“NAIC”) is one of a growing number of event sponsors that are allowing workers to work from home, are cancelling or banning participation in live meetings and other events and/or are converting from live to virtual formats in response to the outbreak. Trade and business associations, entertainment and sports and otehr venures also are impacted. For instance, the NAIC announced its decision to move its meetings to a purely virtual format today. According to the announcement, the National Spring Meeting that had been scheduled to take place in Phoenix next week is cancelled. Instead, the NAIC announced the following tentative schedule:
A revised schedule with dates, times and call-in numbers will be available on Naic.org next week.
Concerning the reasons for its decision, the NAIC explained:
Recently, the number of confirmed cases of COVID-19 has exceeded 100,000 worldwide, including over 1000 confirmed U.S. cases in 36 jurisdictions. Given rapidly changing information and out of an abundance of caution for the safety of our members, guests and staff, the NAIC officers, in consultation with NAIC members, have decided to hold the Spring National Meeting in a virtual-only format.
Along with limiting contact, for instance, many businesses and organizations are “deep cleaning” their facilities to address potential virus contamination. Some biological experts point out however that this deep cleaning involves substantial expenditures which do little to guard against new exposures brought by others coming into a business, school or other workplace. Some biological contamination experts suggest that organizations should consider investing in resources specified ultraviolet lights or other tools that could help control exposures on a longer-term and more recurrent basis. Experts emphasize that remediation and prevention efforts need to recognize that exposures are likely to occur recurrently over a period of time across the life of this and future virus outbreaks.
The financial consequences of staffing or supply shortages, declines in product or services demands, event cancellations, cleaning and other costs and a host of other side effects present such a widespread risk to many businesses that many are facing layoffs or even bankruptcy or other restrucuring. While President Trump and other federal and state leaders are promising employment tax holidays and other relief to try to mitigate some of these financial effects, businesses impacted by these disruptions should begin assessing and planning to execute options to mitigate losses and manage these risks as soon as possible to maximize their potential ability to take advantage of options to restructure debt or contractual obligations, adjust workforce staffing, and make other adjustments successfully to weather the pandemic storm and fallout. When considering these options, businesses will want to understand the relative complete costs of reductions in hours, furloughs, contractual adjustments and other options to make and execute their choices as well as possible.
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.
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 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 pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an 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 operational, health care, natural disaster, economic and other crisis and change.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government 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 privaitization 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 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.
Today (March 2, 2020) is the deadline for employers and other health benefit program sponsors, insurers, plan administrators and fiduciaries, health care providers, PBMs and other interested persons to comment on proposed federal rule change that would require insured health plans to count drug rebates and price concessions retained by pharmacy benefit managers (PBMs) as administrative expenses for purposes of determining if the issuing insurer is required to rebate premiums under the medical loss ratio (MLR) rules of the Patient Protection & Affordable Care Act (“ACA”). With the comment period on the package of health care transparency regulations published by the Trump Administration to implement the transparency reform it hopes will fuel better quality and cost effectiveness in the U.S. health care system, health plan sponsors, fiduciaries, administrators, insurers, heath care providers, PBMs, and other participants in the system need to start preparing to deal with their own responsibilities under the new rules, and to help plan members, patients and their caregivers, and other consumers to understand and use the new information the rules will make available.
2/06/20 Proposed Rule Pressures Insurers To Require PBMs To Disclose & Pass Through Manufacturer Rebates
Issued as part of the proposed “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plans Proposed Rule” (“2/6/20 Proposed Rule”) published by the Department of Health & Human Services (“HHS”) on February 6. 2020, the as part of a series of Trump Administration health care reform initiatives seeking to use competition and transparency to improve health care quality, choice and affordability, in furtherance of the Trump Administration “health plan transparency” initiative HHS predicts this change included in the could generate $18.2 million more per year in the MLR rebate payments to consumers covered under insure health plans subject to the MLR and other insurance market reform provisions of the ACA. See also Remarks by President Trump on Honesty and Transparency in Healthcare Prices (November 15, 2019). For a more detailed summary of the 2/06/20 Proposed Rule, see here.Most health plans contract with PBMs to decide the prescription drug formularies, copays, and other coverage design for their health plans, to administer their pharmacy benefits and to negotiate discounts and rebates from drug manufacturers in exchange for placing their drugs on a health plan’s formulary. PBMs are supposed to work on behalf of health plans to secure drug rebates, refunds, discounts, coupons, and direct or indirect remuneration, among other discounts. Health plans compensate PBMs in a variety of ways, including:
Paying administrative fees;
Allowing a PBM to retain the difference between the amount a PBM charges the health plan for a drug and the amount a PBM pays the pharmacy (called “spread pricing”); or
Allowing a PBM to retain all or a portion of any negotiated discounts from manufacturers, including rebates.
Currently, insured plans covered by the MLR rule as well as the PBM arrangements of many self-insured, employer or union sponsored health plans, do not require PBMs to disclose, account for, or pass through to the health plan they are engaged by the prescription drug rebates and certain other amounts that PBMs receive and retain from prescription drug manufacturers that the PBM selects for inclusion on the health plan formulary.
The current federal ACA MLR rule requires insured health plans subject to the MLR rule to deduct from their prescription drug claims both rebates they receive from manufacturers and any payments the PBM retains from the spread, but does not address situations in which the PBM retains rebates or other price concessions negotiated on behalf of the plans. Consequently, the MLR reporting or calculation of insurers typically does not reflect any rebates PBMs retain that are not passed through to the insurer even though the PBM is supposed to be working on behalf of the health plan.
In recent years, these arrangements have come under widespread criticism as creating conflicts of interests that compromise the loyalty of the PBM to act in the best interest of its health plan clients and their plan members because when PBMs don’t report and pass through all pricing concessions negotiated by PBMs, health plans and health plan members don’t receive the benefit of those price discounts and the decisions that the PBM makes in choosing the highest quality and most cost effective medications for the formulary may lead the PBM to choose and price drugs on the plan formulary to maximize the PBM’s profits rather than the best interests of the plan and its members.
The 2/06/20 Proposed Rule would classify the portion of premium revenue that an insured health plan subject to the MLR rule expends on pharmacy costs as the actual reimbursement to pharmacies – minus any rebates or price concessions from manufacturers – no matter if the plan or its contracted PBM receives the price concession. Requiring health insurers covered by the MLR rule to include rebates retained by their PBMs an administrative expense would make it difficult for most health insurers to keep all administrative expenses within 15 or 20 percent the MLR rules. Since health insurers whose administrative expenses exceed the MLS ratio must rebate premiums under the ACA, HHS anticipates that finalizing the 2/06/20 Proposed Rule as proposed would prompt insured health plans covered by the MLR rule that use PBMs to administer pharmacy benefits to change the compensation provisions of their PBM contracts to eliminate or restructure those payments.
Since self-insured health plans generally are not subject to the ACA MLR rule, however, those plans generally need to pursue contracting or other strategies to address this concern. Increasingly, many self-insured health plan sponsors, fiduciaries and administrators already are changing their PBM contracting and selection strategies to require disclosure and pass through of rebate and other compensation received by PBMs from manufacturers such as including administrative-fee-only compensation and a guarantee of 100 percent pass-through of rebates and manufacturer-derived revenue from the PBM to the health plan in their PBM contracts.
With the official comment deadline set to expire on March 2, 2020, employer and other insured and self-insured health plan sponsors of health plans using PBMs, fiduciaries and advisors should turn their attention to evaluating the likely implications of the 02/06/20 Proposed Rule on their health plan arrangements as well as more generally evaluating their pharmacy benefit designs, PBM contracts and compensation arrangements, and associated arrangements and practices for potential conflicts of interest, hidden cost savings and other opportunities for improvement. As part of this efforts, employer sponsors, plan fiduciaries, administrators, and vendors of self-insured plans should keep in mind that the fiduciary responsibility rules of the Employee Retirement Income Security Act generally require plan fiduciaries to prudently evaluate compensation and other arrangements with plan vendors as well as to take action to identify and protect the plan against breaches of loyalty by plan vendors or fiduciaries from conflicts of interests or prohibited transactions. Plan administrators also should conduct due diligence to confirm that PBM and other vendors properly including all compensation for purposes of Form 5500 and other reporting. Along with assisting their health plan clients with these activities, brokers, consultants, TPAs, and other plan vendors also should evaluate the potential implications of the reforms in the 02/06/20 Proposed Rule as well as any relevant state law reforms on the advice and services they provide to their clients, as well as their potential responsibilities and exposures in light of the evolving state health and PBM transparency rules.
Other Health Plan Transparency Reforms
The 2/06/20 Proposed Rule is one in a series of federal health rule changes the Trump Administration is pursuing as part of its initiative seeking to use health care transparency to improve the price, quality and choice in the U.S. health care system. In addition to the changes proposed in the 2/06/20 Proposed Rule, in response to President Trump’s July 24, 2020 Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First, HHS on November 14, 2019 also undertook two other regulatory actions intended to increase price transparency to empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets:
Both the final and proposed rules require that pricing information be made publicly available.
Proposed Coverage Transparency Rule
The Proposed Coverage Transparency Rule would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front. With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements. This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons.
If finalized, the Proposed Transparency in Coverage Rule will require non-grandfathered health plans and health insurance issuers to make certain health care price information more accessible to consumers and other stakeholders by requiring each non-grandfathered group health plan[2] or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets to make available:
To participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request. For the first time, most consumers would be able to get estimates of their cost-sharing liability for health care for different providers, allowing them to both understand how costs for covered health care items and services are determined by their plan, and shop and compare costs for health care before receiving care; and
To the public, including stakeholders such as consumers, researchers, employers, and third-party developers the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.
The Trump Administration believes these changes will provide opportunities for innovation to drive price comparison and consumerism in the health care market. In addition, the Transparency In Coverage Rule also proposes to allow issuers that empower and incentivize consumers through the introduction of plans that include provisions that encourage consumers to shop for services from lower-cost, higher-value providers, and that share the resulting savings with consumers, to take credit for such “shared savings” payments in their medical loss ratio (MLR) calculations. HHS says it made this proposal to ensure, should the proposal be finalized as proposed, that issuers would not be required to pay MLR rebates based on a plan design that would provide a benefit to consumers that is not currently captured in any existing MLR revenue or expense category. HHS believes this proposal would preserve the statutorily-required value that consumers receive for coverage under the MLR program, while encouraging issuers to offer new or different value-based plan designs that support competition and consumer engagement in health care. See also Transparency in Coverage Proposed Rule (CMS-9915-P) Fact Sheet. The official comment period on the Proposed Transparency in Coverage Rule has not expired. In January, HHS extended the comment period on the Transparency in Coverage Rule from January 14, 2020 to January 29, 2020.
Final Hospital Transparency Rule
Concurrent with its release of the Proposed Coverage Transparency Rule, HHS also finalized the Hospital Transparency Rule that will require hospitals to provide patients with clear, accessible information about their “standard charges” for the items and services they provide in two ways beginning in 2021:
Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems. The file must include additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.
Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.
Shoppable services are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.
The requirements for the consumer-friendly file are that the information must be made public in a prominent location online that is easily accessible, without barriers, and it must also be searchable. Item and service descriptions must be in ‘plain language’ and the shoppable service charges must be displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service.
In order to ensure that hospitals comply with the requirements, the Hospital Transparency Rule also provides CMS with new enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day. In response to public comments, CMS is finalizing that the effective date of the final rule will be January 1, 2021 to ensure that hospitals have the time to be compliant with these policies. See also
Start Preparing For New Transparency Requirements, Effects & Opportunities
With the comment periods on the Proposed Transparency in Coverage Rule already past and the deadline for comment on the 2/6/20 Proposed Rule set to expire today, employer and other health benefit plan sponsors, insurers, fiduciaries, administrators, heath care providers, insurers, plan members and other stakeholders should turn their attention to evaluating the potential opportunities, burdens, and impacts of these transparency reforms.
More Information
We hope this update is helpful. For more information about the 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.
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 including more than 30 years’ leading edge work on PBM and other insured and self-insured contracting and related matters. .
Author of numerous highly regarded works on PBM and other health plan contracting and design, 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 health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems and other health care providers, 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 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. 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 publications on “Transparent PBM Contracting,” “ACOs, Direct Contracting: Legal & Practical Challenges For Employers, Providers & TPAs,” “The Medicare Advantage Contracting Manual,” “Third Party Administrator (TPA) Contracting Principles and Strategies and a multitude of other highly regarded publications and presentations, Stamer is widely recognized for her thought leadership on PBM and other managed care and health plan contracting and design, and a multitude of other health care, health plan and other health industry matters. In addition, Ms. Stamer contributes her time and leadership to numerous policy, professional, civil and other organizations including service as the, 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 the 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.
Among other things, the Proposed Rule, if adopted as proposed, would:
Repeal regulations relating to the Early Retiree Reinsurance Program;
Require health plans in state insurance markets to count drug rebates and price concessions retained by pharmacy benefit managers (PBMs) as administrative expenses. HHS predicts this change could generate $18.2 million more per year in medical loss ratio (MLR) rebate payments to consumers;.
Establish payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally-facilitated Exchanges and State-based Exchanges on the Federal platform;
Modify requirements for “essential health benefits” to allow states greater flexibility and add an annual state reporting of state-required benefits that are in addition to essential health benefits (EHB) for which states are required to defray the costs;
Amend rules to give states with additional flexibility in the operation and establishment of Exchanges concerning cost-sharing for prescription drugs; excepted benefit health reimbursement arrangements offered by non-Federal governmental plan sponsors; the medical loss ratio program; Exchange eligibility and enrollment; exemptions from the requirement to maintain coverage; quality rating information display standards for Exchanges; and other related topics.
For a more detailed summary of the Proposed Rule, see here.
Employer and other health benefit plan sponsors, insurers, fiduciaries, administrators, heath care providers and other stakeholders desiring to comment on the Proposed Rule must submit their comments electronically no later than 5 p.m. Eastern today (March 2, 2020) by following the submit comments instructions here.
More Information
We hope this update is helpful. For more information about the this 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.
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 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.
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. 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.
Health plans and their health plan records providers and other business associates should review and update their existing policies and practices concerning providing and charging individuals for access to protected health information in response to modifications in the Department of Health & Human Service (“HHS”) Office of Civil Rights (“OCR”) rules implementing the Health Insurance Portability & Accountability Act (“HIPAA”) requirements regarding patient’s rights to access their protected health information (“PHI”) from health plans, health care providers, health care clearinghouses (“”Covered Entities”) and their business associates (“HIPAA entities”) to comply with a January 23, 2020 court order (the “Coix Order”) in Coix Health, LLC v. Azar, et al, No 18 –CV-0040 (D>D.C. January 23, 2020). Utilizing the flexibility resulting from the Coix Order could help reduce health plan costs of compliance with the HIPAA right of access rule by allowing the health plan and its records providers more freedom to determine the charges and format for delivering PHI in response to records requests received from other insurers, lawyers and other third parties.
Coix Order Invalidates Pieces of OCR HIPAA Rules On PHI Record Rules
The new flexibility is the result of the Coix Order entered by a Federal District Court in response to a lawsuit brought by Coix Health, LLC (“”Coix”). Coix brought the lawsuit challenging the “Patient Rate” restrictions on the amounts that HIPAA entities can charge for providing records containing PHI the “third party directive” requirements in the rules implementing HIPAA’s right of access requirements under 45 C.F.R. §164.524 as adopted by OCR as part of its final rule entitled “Modifications to the HIPAA Privacy, Security, and Enforcement Rules Under the Health Information Technology for Economic and Clinical Health Act, and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules.” (The “2013 Omnibus Rule”) on January 25, 2013. In particular, the 2013 Omnibus Rule includes a “Patient Rate” rule that limits the charges that Covered Entities can make for delivering PHI requested by patients and third parties to prevent patient access to PHI from being thwarted by excessive fees. As part of the Patient Rate rule, OCR restricted what Covered Entities and their records providers can charge to provide copies of protected health information. The Patient Rate rule restricts charges that can be imposed to provide protected health information, restricts the methods for calculating these charges and limits the type and amount of labor costs that can be included when calculating the Patient Rate. The Patient Rate rule in the 201 Omnibus Rule also requires that Covered Entities and their records companies provide the requested PHI directly to the patient or to a third party designed by the patient and in the format requested by the patient regardless of the format in which the Covered Entity or its medical provider maintains the PHI within its record.
When originally implemented, the medical records industry generally understood that the Patient Rate limitations applied only to requests for PHI made by the patient for use by the patient. Before 2016, however, Covered Entities and their medical records providers generally understood that this Patient Rate rule did not apply to or limit fees that Covered Entities or their medical records providers could charge commercial entities or other third parties like insurance companies and law firms to fill requests for PHI. That understanding changed, in 2016, however, when HHS issued guidance that stated that the Patient Rate applies even to requests to deliver PHI to third parties.
A specialized medical-records provider that contracts with healthcare suppliers nationwide to maintain, retrieve, and produce individuals’ PHI, Cox handles tens of millions of requests for records containing PHI annually including demands by healthcare providers for treatment purposes, patients asking for their own PHI, and third parties, such as life insurance companies and law firms, seeking a patient’s PHI for commercial or legal reasons. According to Cox, OCR’s interpretation of the Patient Rate rule as applicable to third party requests as well as direct patient requests cost it and other medical records companies millions of dollars in revenue. Accordingly, Coix filed the Coix Health, LLC v. Azar, et al lawsuit challenging OCR’s 2016 application of the Patient Rate to third party requests as violating the procedural and substantive protections of the Administrative Procedure Act (“APA”). In addition to this challenge to the scope of the Patient Rate, Coix also contested OCR pronouncements in the 2016 guidance document on (1) the types of labor costs that are recoverable under the Patient Rate; and (2) the three alternative methods identified for calculating the Patient Rate as violating the APA’s procedural and substantive provisions. Finally, Coix also challenged the requirement in the Patient Rate rule that records companies to send PHI to third parties regardless of the format in which the PHI is contained and in the format specified by the patient. According to Coix, Congress required only that certain types of electronic health records be delivered to third parties, not all records regardless of their format, as HHS’s regulations now command.
In its January 23, 2020 ruling on HHS’s motion to dismiss and the parties’ cross-motions for summary judgment, the D.C. District Court agreed with OCR that OCR’s rule requiring the use of one of three methods for calculating the Patient Rate was unreviewable as a final agency action and dismissed Coix’ challenge to that requirement. Concerning Coax’s other challenges, the Court sided with Coix. It ruled that:
OCR’s 2013 rule compelling delivery of PHI to third parties regardless of the records’ format is arbitrary and capricious insofar as it goes beyond the statutory requirements set by Congress;
OCR’s broadening of the Patient 3 Rate in 2016 is a legislative rule that the agency failed to subject to notice and comment in violation of the APA; and
OCR’s 2016 explanation concerning what labor costs can be recovered under the Patient Rate is an interpretative rule that OCR was not required to subject to notice and comment.
Accordingly, District Court in the Coix Order declares unlawful and vacates (1) the 2016 Patient Rate expansion and (2) the 2013 mandate broadening PHI delivery to third parties regardless of format within the individual right of access” set forth in the provisions of 45 C.F.R. §164.524 of the 2013 Omnibus Rule insofar as it expands the HITECH Act’s third-party directive beyond requests for a copy of an electronic health record with respect to protected health information of an individual in an electronic format.” Additionally, the federal court ordered that the fee limitation set forth at 45 C.F.R. § 164.524(c)(4) only apply to an individual’s request for access to their own records, and does not apply to an individual’s request to transmit records to a third party.
As a result of the Coix Order, Covered Entities and their medical records providers still must calculate the Patient Rate in accordance with one of the three allowed methodologies when providing a patient with records containing PHI in response to a patient request. However, Covered Entities and their medical records provider now may exercise greater flexibility when determining the format and charges when responding to requests from third parties other than the patient for records containing PHI. Before doing so, however, most Covered Entities and business associates will want to update their HIPAA policies and procedures to reflect the new practices consistent with the new HIPAA and other relevant requirements. Updating the policies first is important because the 2013 Omnibus Rule states Covered Entities violate HIPAA by failing to follow their own HIPAA privacy and security policies when those practices are more restrictive than those mandated by OCR’s 2013 Omnibus Rule. Consequently however, Covered Entities and their medical records companies desiring to exercise this newly available flexibility should revise their existing policies and procedures to authorize their exercise of this new flexibility consistent with the Coix Order and associated OCR guidance.
OCR Plans To Comply With Coix Order In Applying Patient Record Rule
In an “Important Notice Regarding Individuals’ Right of Access to Health Records” released January 28, 2020, OCR announced that that it will comply with the Coix Order vacating the “third-party directive” within the individual right of access “insofar as it expands the HITECH Act’s third-party directive beyond requests for a copy of an electronic health record with respect to [protected health information] of an individual . . . in an electronic format.” Additionally, OCR stated that the fee limitation set forth at 45 C.F.R. § 164.524(c)(4) will apply only to an individual’s request for access to their own records, and not apply to an individual’s request to transmit records to a third party. However, OCR also added that the right of individuals to access their own records and the fee limitations that apply when exercising this right are undisturbed and remain in effect. OCR will continue to enforce the right of access provisions in 45 C.F.R. § 164.524 that are not restricted by the court order.
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.
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 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.
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. 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.
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.
The $1.6 million civil monetary penalty (“CMP”) assessed against the Texas Health and Human Services Commission (“TX HHSC”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy and Security Rules between 2013 and 2017 committed by a predecessor agency, the Department of Aging and Disability Services (“DADS”) illustrates the critical need for health plans and insurers and all other HIPAA covered entities and business associates to confirm the adequacy of their enterprise wide security assessment, oversight, and other HIPAA Privacy and Security compliance and risk management including documentation of the reassessment and updating of these materials and assessments in connection with any update or change in software, systems or other system and security relevant developments.
OCR imposed the CMPs against TX HHSC for violations of HIPAA OCR found DADS committed from 2015 to 2017, before it was reorganized into TX HHSC in September 2017. Like most other large HIPAA CMPs and settlements paid to avoid CMPs, a review of the TX HSSC CMP events makes clear that the large penalty resulted mostly because of inadequate assessment and oversight of security, rather than the actual breach itself that prompted the investigation leading to the CMP assessment. Beyond the substantial HIPAA CMPs assessed, health plans, insurers, their fiduciaries and administrative or other service providers serving as business associates need to keep in mind their likely exposure to liability and expenses from fiduciary responsibility breaches under the Employee Retirement Income Security Act of 1974, state insurance and other data security and breach requireents, contracts and other pbligations.
Before its merger into TX HHSC, DADS was the Texas agency primarily responsible for providing and administering the state’s long-term care services for aging and intellectually and physically disabled people. TX HHSC now administers and provides the services previously provided by DADS as part of its broader operation of state supported living centers; provision of mental health and substance use services; regulation of child care and nursing facilities; and administration of hundreds of other programs for people needing supplemental nutrition benefits, Medicaid and certain other assistance including those previously provided by DADS.
DADS Breaches & Violations
The $1.6 million CMPs assessment against TX HHSC resulted after OCR investigated a 2015 breach report made by DADS. On June 11, 2015, DADS submitted a Breach Notification Report (“Report”) notifying OCR that on April 21, 2015 names, addresses, social security numbers, treatment information and other electronic protected health information (“ePHI”) of 6,617 individuals was viewable over the internet when a software coding flaw allowed prohibited access to ePHI with access credentials when DADS moved an internal application from a private, secure server to a public server. OCR’s investigation determined that, in addition to that impermissible disclosure, DADS violated the HIPAA Security Rule by failing to conduct an enterprise-wide risk analysis and implement access and audit controls on Community Living Assistance and Support Services and Deaf Blind with Multiple Disabilities (“CLASS/DBMD”) program information systems and applications intended to collect and report information about “Utilization Management and Review” activities to the Centers for Medicare & Medicaid Services (“CMS”) for the CLASS/DBMD waiver programs.. The CMS waiver programs required DADS to collect and report to CMS applicant and enrollee community and institutional service choice, Level of Care, Plan of Care, waiver provider choice and other waiver program performance data for CLASS and DBMD as part of a required evidentiary report on all §1915(c) waiver programs. The CLASS/DBMD application glitch compromised the ePHI by allowing an undetermined number of unauthorized users to view the ePHI without verifying user credentials. TX HHSC learned of the breach from an unauthorized user who accessed ePHI in the application without being required to input user credentials. Because of inadequate audit controls, DADS was unable to determine how many unauthorized persons accessed individuals’ ePHI.
OCR initiated a compliance review of DADS on June 23, 2015 in response to the breach notification. As HIPAA Security Rule at 45 C.F.R. ·§ 164.312(a)(l) requires a covered entity to implement technical policies and procedures for electronic information systems that maintain ePHI to allow access only to those persons or software programs properly granted access rights under HIPAA Security Rule § 164.308(a)(4), OCR found that by placing the CLASS/DBMD application on their public server without requiring users to provide access credentials, TX HHSC violated HIPAA by failing to implement access controls on all of its systems and applications throughout its enterprise in violation of 45 C.F.R. § 164.312(a)(l).
The HIPAA Security Rule at 45 C.F.R. § 164.312(b) requires a covered entity to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use ePHI. In the course of its investigation, OCR requested in its June 23, 2015 Data Request that DADS provide a copy of its current HIPAA administrative and technical policies and procedures. As DADS provided no evidence that the application was capable of auditing user access after it was moved to the unsecure public server as required by 45 C.F.R. § 164.312(b) with its response, OCR also concluded from its investigation that TX HHSC failed to implement audit controls to all of its systems and applications, like the application involved in the breach, as required by 45 C.F.R. § 164.312(b).
Beyond these violations, OCR also found that DADS also violated the HIPAA Security Rule by failing to conduct the required accurate and thorough enterprise wised risk analysis required by the HIPAA Security Rule. In this respect, the HIPAA Security Rule at 45 C.F.R. § 164.308(a)(1)(ii)(A) requires a covered entity to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI it holds. In its August 31, 2015 response to OCR’s Data Request dated July 23, 2015, DADS acknowledged that, while it had performed ”risk assessment activities” on individual applications and servers, it never performed an “agency-wide” security risk analysis. On July 28, 2017, OCR received the documentation that DADS represented to be the documentation of its risk analysis. After reviewing this evidence, OCR additionally found DADS violated the HIPAA Security Rule by failing to conduct an enterprise-wide risk analysis and implement access and audit controls.
Calculation & Assessment CMPs Totaling $1.6 Million
On May 23, 2018, OCR issued a Letter of Opportunity and informed TX HHSC that OCR’s investigation indicated that TX HHSC failed to comply with the Privacy and Security Rules, which remained unresolved despite OCR’s attempts to do so. The letter stated that pursuant to 45 C.F.R. § 160.312(a)(3), OCR was informing TX HHSC of the preliminary indications of non-compliance and providing TX HHSC with an opportunity to submit written evidence of mitigating factors under 45 C.F.R. § 160.408 or affirmative defenses under 45 C.F.R. § 160.410 for OCR’s consideration in making a CMP determination under 45 C.F.R. § 160.404. The letter identified each area of noncompliance. It also stated that TX HHSC also could submit written evidence to support a waiver of a CMP for the indicated areas of non-compliance.
Although the designated representative for TX HHSC as DADS successor received the Letter of Opportunity on May 24, 2018, . TX HHSC did not provide any written evidence of mitigating factors under 45 C.F.R. § 160.408 or affirmative defenses under 4S C.F.R. § 160.410 for OCR’s consideration in making the CMP determination or submit any written evidence to support a waiver of a CMP for the indicated areas of non-compliance. Accordingly, after securing the requisite approval from the Justice Department, OCR issued a Notice of Proposed Determination of Civil Monetary Penalties (“Proposed CMP”) on July 29, 2019.
As explained by the Proposed CMP, as amended by the HITECH Act, Section 13410, 42 U.S.C. § 1320d-5(a)(3), HIPAA authorizes OCR as the designated representative of the Secretary of HHS to impose CMPs against a covered entity for post-February 18, 2009 HIPAA Privacy or Security Rule violations. These current CMP provisions provide the following rules for the assessment of CMPs for such violations:
A minimum of$100 for each violation where the covered entity or business associate did not know and, by exercising reasonable diligence, would not have known that the covered entity or business associate violated such provision, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $25,000.
A minimum of$1,000 for each violation due to reasonable cause and not to willful neglect, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $100,000. Reasonable cause means an act or omission in which a covered. entity or business associate knew, or by exercising reasonable diligence would have known, that the act or omission violated an administrative simplification provision, but in which the covered entity or business associate did not act with willful neglect.
A minimum of $10,000 for each violation due to willful neglect and corrected within 30 days, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $250,000.
A minimum of$50,000 for each violation due to willful neglect and uncorrected within 30 days, except that the total amount imposed on the covered entity or business associate for all violations of an identical requirement or prohibition during a calendar year may not exceed $1,500,000.
By law, OCR adjusts the CMP ranges and calendar year cap for each penalty tier for inflation. The adjusted amounts are applicable only to CMPs whose violations occurred after November 2, 2015.
The Proposed CMP included notice of the CMPs OCR intended to impose CMPs totaling $1.6 million for the violations. Characterizing each of the violations as due to reasonable cause and not willful neglect, the Proposed CMP Notice made note that OCR was authorized by statute to assess penalties of up to $50,000 per day for each day of the identified violations due for reasonable cause, rather than willful neglect, but authorized OCR to adjust the penalties in light of aggravating and mitigating factors. The Proposed CMP stated that in arriving at the lesser daily penalty amount, OCR considered as mitigating factors that:
The violations did not result in any known physical, financial, or reputational harm to any individuals nor did it hinder any individual’s ability to obtain health care; and
TX HHSC immediately removed the application once it received a report that unauthorized users could access the ePHI of individual beneficiaries.
However, OCR also took note that it viewed DADS failure to act promptly to remediate the breach and to keep a commitment made to OCR in August, 2015 timely to conduct and complete the agency wide risk analysis by August 31, 2016 as an aggravating factor. Considering these factors, the Proposed CMP notified TX HHSC that OCR intended to assess a daily penalty amount of$1,000 per day ($1,141 after November 2, 2015) per violation capped at $100,000 per calendar year per violation. Applying these amounts, the CMP notified TX HHSC that OCR intended to impose CMPs totaling $1.6 million, as follows:
Impermissible disclosures in violation of 45 C.F.R. § 164.502(a), a $100,000 CMP
Inadequate access controls in violation of 45 C.F .R. § 164.312(a)(l), a $500,000 CMP
Inadequate audit controls in violation of 45 C.F.R. § 164.312(b), a $500,000 CMP
Failure to perform required enterprise wide risk analysis in violation of 45 C.F.R. § 164.308(a)(l)(ii)(a), a $500,000.
After TX HHSC , as successor to DADS, did not file a request for hearing before an administrative law judge within the 90 days, OCR imposed the $1.6 million CMP in dated October 25, 2019 made public on November 7, 2019.
Lessons For Other Health Plans, Insurers & Other HIPAA Exposed Entities
The latest in a growing series of multimillion dollar CMPs and Resolution Payments assessed and collected by OCR, the TX HHSC CMP illustrates the critical necessity for all covered entities and business both to take appropriate, well-documented action to prevent, timely discover and redress, and report ePHI breaches and otherwise comply with the otherwise applicable requirements of the HIPAA Privacy, Security and Breach Notification Rules including the conduct and continuous maintenance of appropriate enterprise wide security assessments, audits, and oversight. With OCR promising to continue its enforcement, all covered entities and business associates should verify the existence and adequacy of their existing enterprise wide risk assessments and safeguards and procedures for monitoring, investigating potential security risks and other breaches and other HIPAA compliance oversight. Beyond these compliance efforts, the TX HHSC and other CMP actions also drive home the strong advisability for covered entities or business associates that experience a known or potential breach or other violation promptly to investigate and mitigate potential breaches and other violations.
Beyond the direct HIPAA exposure, health plans and their fiduciaries also need to keep in mind that these violations also can create fiduciary liability risks for ERISA fiduciaries, state insurance and identity theft exposures for brokers and other service providers, contractual exposures for vendors, and other risks. The Department of Labor recently has begun making inquiries about data security and privacy as part of its plan audits according to recent reports.
When managing HIPAA and other compliance and risks, health plans and other covered entities and business associates should seek assistance in conducting their assessments as well as responding to any preexisting and emergent breach or other compliance concerns within the scope of attorney-client privilege from qualified legal counsel with the necessary knowledge and experience of HIPAA and other federal and state laws, regulations and administrative and judicial decisions that define and shape their exposure. In the event of a breach or other compliance concern, timely guidance and representation by legal counsel with both experience of these requirements and with dealing with OCR and other agencies may help mitigate exposures by expediting timely and appropriate response.
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 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 GroupMs. 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, 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 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.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating 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, 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.
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.
On Wednesday, May 8, 2019, Health and Human Services(“HHS”) Secretary Alex Azar announced the adoption of a Medicare and Medicaid Programs; Regulation to Require Drug Pricing Transparency Final Rule (the “Rule”) by the Centers for Medicare & Medicaid Services (“CMS”) requiring direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.
Part of President Trump’s American Patients First blueprint, the 102 page Rule seeks to increase transparency for patients and bring down overall drug costs both for patients and for the Medicare and Medicaid programs.
Effective 60 days after its official publication in the Federal Register on May 10, 2019, the Rule will require direct-to-consumer television advertisements for prescription drug and biological products covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, with the prices updated quarterly.
According to CMS, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy. CMS believes patients should know what a drug costs as they discuss their options with their doctor.
While pharmaceutical drug manufactures generally must obtain approval from the FDA Office of Prescription Drug Promotion (ODPD) for advertising, OPDP does not review price information in prescription drug advertisements. Consequently, HHS says ODPD will not require a manufacturer that simply adds price information to a direct-to-consumer advertisement as required by § 403.1202 of the Rule unless the price information explicitly or implicitly incorporates safety or efficacy information about the drug, or makes express or implied claims about the safety or efficacy of the drug.
In addition to the Rule, HHS continues to review a number of other rules and proposals it hopes to further advance the American Patients First blueprint initiative to improve drug price transparency and inform consumer decision making by fixing opaque systems, changing incentives that drive costs or other undesirable behaviors by pharmaceutical companies, prescription benefit management (“PBM”) companies, health insurers and plans, providers and patients.
Health plan, their employer and other sponsors, insurers, PBM and other vendors and others should anticipate that the new Rule and other elements and initiatives of the Trump Administration American Patients First blueprint will impact plan design and administration both by directly impacting PBM and pharmaceutical costs, products, formularies and arrives and by fueling a host of new discussions by patients and their providers about pharmaceutical drug selection. In addition to impacting existing plan features and their administration, health plans, their fiduciaries, administrators and insurers should prepare for a predictable surge in scrutiny by plan
members about health plan prescription drug formularies that in many cases will fuel new appeals and challenges to the plan denials, formularies and other impacted features. Health plan fiduciaries, administrators, PBMs and other vendors, employer and other sponsors should anticipate and begin preparing both to handle these new health plan demands and ideally, to educate patients and their caregivers to use the new information to
make better health care choices.
If you have questions or would like more information about the new Rule or other developments impacting your health plan design or administration, please contact the author directly.
If you found this article of interest, Solutions Law Press, Inc. invites you to check out other Solutions Law Press, Inc. publications. We also invite you to share your own best practices ideas and resources and join the 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 Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
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.
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; 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.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
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 the following:
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 advise 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 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.
Health plans, their sponsoring employers and unions, insurers, fiduciaries, administrators, insurers and other service providers should learn from the $3 million lesson a Franklin, Tennessee-based diagnostic medical imaging services provider is learning about the heavy penalties a health plan, health care provider, health care clearinghouse or business associate (“Covered Entity”) risks if a post-data breach investigation by the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) shows the Covered Entity breached the privacy, data security, business associate agreement and breach notificataion rules of the Health Insurance Portability and Accountability Act (HIPAA) Security and Breach Notification Rules before or after the breach.
Under a new OCR Resolution Agreement and Corrective Action Plan announced May 6, 2019, Touchstone Medical Imaging (“Touchstone”) must pay $3,000,000 to OCR and adopt a corrective action plan to settle OCR charges it violated HIPAA arising from an OCR investigation of Touchstone’s handling of a 2014 breach. Around May 9, 2014, the Federal Bureau of Investigation (“FBI”) and OCR notified Touchstone that one of its FTP servers allowed uncontrolled access to PHI that allowed search engines to index the PHI of more than 300,000 of Touchstone’s patients, which remained visible on the Internet even after the server was taken offline. While Touchstone initially claimed that no patient PHI was exposed, in the course of OCR’s investigation, Touchstone subsequently admitted PHI of more than 300,000 patients was exposed including, names, birth dates, social security numbers, and addresses. As a result of its delayed acknowledgement of the occurrence of the breach on May 9, 2014, Touchstone did not provide notice of the breach until October, 2014, months after OCR and FBI notified it of the breach. See here.
OCR’s investigation found Touchstone breached HIPAA before and after the breach. OCR’s investigation found before the breach, Touchstone failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its electronic PHI (ePHI), and failed to have business associate agreements in place with its vendors, including their IT support vendor and a third-party data center provider as required by HIPAA. OCR also found Touchstone did not thoroughly investigate the security incident until several months after notice of the breach from both the FBI and OCR. Consequently, Touchstone’s notification to individuals affected by the breach also was untimely.
To resolve OCR charges arising from these events, Touchstone agreed to pay OCR $3,000,000. In addition to the monetary settlement, Touchstone will undertake a robust corrective action plan that includes the adoption of business associate agreements, completion of an enterprise-wide risk analysis, and comprehensive policies and procedures to comply with the HIPAA Rules.
The Resolution Agreement illustrates the expensive price Covered Entities risk from failing to conduct risk assessments, obtain business associate agreements and fulfill other HIPAA requirements before a breach, then failing to promptly investigate, provide notification and redress a breach when discovered. Covered Entities should learn from the painful lesson learned by Touchstone by reconfirming the adequacy of their current HIPAA compliance and using care to timely and adequately investigate and provide notification if and when a breach occurs.
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, health and other 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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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 encompassess 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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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; a 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.
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 advise 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 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.
Health plans must deliver electronic protected health information (“ePHI”) to electronic applications or software (“apps”) used by plan members, and are responsible under the Health Insurance Portability & Accountability Act (“HIPAA”) Privacy and Security Rules for the security of electronic protected health information (“ePHI”) on apps they sponsor or provide, according to new guidance from the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”).
With health plans and their sponsors and insurers increasingly offering or promoting the use of apps to plan members members to access, maintain and use their health information, health plans, health care providers, health care clearinghouses and their business associates (“covered entities”) covered by HIPAA must understand and be prepared meet their HIPAA responsibilities to provide and protect ePHI to and on these apps, but may want to rethink sponsoring or providing a particular app for that purpose.
New HIPAA FAQ guidance (the “FAQs”) from OCR that addresses the implications of HIPAA on covered entities responsibility when asked to share or for ePHI shared or stored on apps or application programming interfaces (“APIs”) systems, covered entities have a legal obligation to disclose ePHI to an app when subjects of the ePHI or their personal representatives request such disclosures. However, the FAQs also state a covered entity or its business associates won’t be responsible for the security of the data shared to the app unless it sponsors or provides it.
pends upon whether the AP or API interface provider is a business associate of the covered entity versus just a third-party provider whose involvement and receipt of the PHI is requested and arranged by the subject of the PHI.
Covered Entities Obligated To Disclose ePHI to Apps Chosen By Individuals
The FAQs make crystal clear that covered entities do not have the option of refusing to share ePHI to an app when requested to do so by the subject of the ePHI or its personal representative. The FAQs states that covered entities cannot refuse to disclose ePHI to an app chosen by an individual because of concerns about how the app will use or disclose the ePHI it receives. In this regard, the FAQs state that the HIPAA Privacy Rule generally prohibits a covered entity from refusing to disclose ePHI to a third-party app designated by the individual if the ePHI is readily producible in the form and format used by the app. See 45 CFR 164.524(a)(1), (c)(2)(ii), (c)(3)(ii).According to the FAQ, the HIPAA Rules do not impose any restrictions on how an individual or the individual’s designee, such as an app, may use the health information that has been disclosed pursuant to the individual’s right of access. For instance, a covered entity is not permitted to deny an individual’s right of access to their ePHI where the individual directs the information to a third-party app because the app will share the individual’s ePHI for research or because the app does not encrypt the individual’s data when at rest.According to the FAQs, the liability a covered entity or business associate bears for sharing ePHI to an App under the HIPAA Privacy, Security, or Breach Notification Rules (HIPAA Rules) depends on the relationship between the covered entity and the app.
Breaches of Health Information Disclosed To An App
If an app that is neither a covered entity nor a business associate of the covered entity under HIPAA receives ePHI at the request of the subject or its personal representative, the FAQ states that the shared ePHI is no longer subject to the protections of the HIPAA Rules. Thus if the individual’s app – chosen by an individual to receive the individual’s requested ePHI – was not provided by or on behalf of the covered entity (and, thus, does not create, receive, transmit, or maintain ePHI on its behalf), the covered entity would not be liable under the HIPAA Rules for any subsequent use or disclosure of the requested ePHI received by the app. For example, the covered entity would have no HIPAA responsibilities or liability if such an app that the individual designated to receive their ePHI later experiences a breach. See also, See also OCR FAQ 2039, “What is the liability of a covered entity in responding to an individual’s access request to send the individual’s PHI to a third party.In contrast, however, the FAQ states that if the app was developed for, or provided by or on behalf of the covered entity – and, thus, creates, receives, maintains, or transmits ePHI on behalf of the covered entity – the covered entity could be liable under the HIPAA Rules for a subsequent impermissible disclosure because of the business associate relationship between the covered entity and the app developer. For example, if the individual selects an app that the covered health care provider uses to provide services to individuals involving ePHI, the FAQs state that the health care provider may be subject to liability under the HIPAA Rules if the app impermissibly discloses the ePHI received.
Transmission of ePHI to App Using Unsecured Method
The FAQs also address the potential exposures of covered entities and their business associates arising from the transmission of ePHI to an App using an unsecure method. According to the FAQs, the access rights HIPAA guarantees to individuals allows an individual to request that a covered entity to direct their ePHI to a third-party app in an unsecure manner or through an unsecure channel. See 45 CFR 164.524(a)(1), (c)(2)(ii), (c)(3)(ii). For instance, an individual may request that their unencrypted ePHI be transmitted to an app as a matter of convenience. The FAQ states that a covered entity that transmits ePHI through an unsecured means under such circumstances would not be responsible for unauthorized access to the individual’s ePHI while in transmission to the app. With respect to such apps, however, the FAQs also suggest that the covered entity may want to consider informing the individual of the potential risks involved the first time that the individual makes the request.
Post Transmission Exposure of Covered Entity’s EHR Systems Developer
The FAQ also discusses the potential exposure of a covered entity’s electronic health record (EHR) system developer under HIPAA after completing the transmission on behalf of a covered entity of ePHI to an app designated by the subject of the ePHI. According to the FAQs, the exposure of the HER system developer depends on the relationship, if any, between the covered entity, the EHR system developer, and the app chosen by the individual to receive the individual’s ePHI. A business associate relationship exists if an entity creates, receives, maintains, or transmits ePHI on behalf of a covered entity (directly or through another business associate) to carry out the covered functions of the covered entity. A business associate relationship exists between an EHR system developer and a covered entity. If the EHR system developer does not own the app, or if it owns the app but does not provide the app to, through, or on behalf of, the covered entity – e.g., if it creates the app and makes it available in an app store as part of a different line of business (and not as part of its business associate relationship with any covered entity) – the EHR system developer would not be liable under the HIPAA Rules for any subsequent use or disclosure of the requested ePHI received by the app.If the EHR system developer owns the app or has a business associate relationship with the app developer, and provides the app to, through or on behalf of, the covered entity (directly or through another business associate), however, the FAQs state the EHR system developer then potentially could face HIPAA liability (as a business associate of a HIPAA covered entity) for any impermissible uses and disclosures of the health information received by the app. For example, if an EHR system developer contracts with the app developer to create the app on behalf of a covered entity and the individual later identifies that app to receive ePHI, then the EHR system developer could be subject to HIPAA liability if the app impermissibly uses or discloses the ePHI received.
Covered Entity’s Duty To Enter Into Business Associate Agreement Depends Upon Relationship
Likewise, the FAQs also state that whether HIPAA requires a a covered entity or its EHR system developer to enter into a business associate agreement with an app designated by the individual in order to transmit ePHI to the app depends upon the relationship between the app developer and the covered entity and/or its EHR system developer. A business associate is a person or entity who creates, receives, maintains or transmits PHI on behalf of (or for the benefit of) a covered entity (directly or through another business associate) to carry out covered functions of the covered entity. An app’s facilitation of access to the individual’s ePHI at the individual’s request alone does not create a business associate relationship. Such facilitation may include API terms of use agreed to by the third-party app (i.e., interoperability arrangements).HIPAA does not require a covered entity or its business associate (e.g., EHR system developer) to enter into a business associate agreement with an app developer that does not create, receive, maintain, or transmit ePHI on behalf of or for the benefit of the covered entity (whether directly or through another business associate). However if the app was developed to create, receive, maintain, or transmit ePHI on behalf of the covered entity, or was provided by or on behalf of the covered entity (directly or through its EHR system developer as the covered entity’s business associate), then a business associate agreement would be required.
Health Plan & Other Covered Entity Take Aways
The new FAQ raises several action items for health plans, their sponsoring employers or unions, fiduciaries, administrators, brokers and insurers as well as other covered entities. Among other things, health plans and other covered entities must recognize and be prepared currently to provide PHI to subjects of that information on the apps of the requesting individual’s preference within the time frames dictated by HIPAA. Health plans and other covered entities need to recognize that the FAQs reflect this is a current, not future responsibility.
Second, health plans, health care providers and others that have or are considering providing apps or other tools to health plan members or patients for use in accessing or using PHI also generally need to recognize that the health plan or health care provider generally will bear responsibility under HIPAA for the adequacy of the security of the apps provided by or on behalf of the health plan or health care provider. Given the general responsibility to provide PHI to any apps designated by a subject of PHI, many health plans and health care providers may wish to reconsider whether providing or endorsing a particular app continues to make sense taking into account the HIPAA data privacy and security responsibilities and risks attendent to maintaining the security of PHI stored and accessed using those tools. Those electing to provide apps or other tools need to take steps to ensure the current and future adequacy of the data security of the app and its associated storage and other components including any future modifications to those tools.
Furthermore, health plans and other covered entities also should consider the advisability of revising existing notices and authorizations in response to the new FAQs. For instance, health plans, health care providers and others supplying PHI to an app designated by the requesting individual may want to consider revising forms to document the direction and consent of the requestor to the electronic delivery of the PHI to the designated app to better position themselves to claim the protection against liability for breaches on these subject designate apps described in the FAQs. Meanwhile, health plans or other covered entities providing apps also may wish to weigh options for supplementing disclosures to mitigate potential risks from use or failure to upgrade apps that might be viewed as covered entity provided or sponsored.
Certainly, before sponsoring or allowing a business associate to offer or provide an app or other similar solution, health care providers and other covered entities must ensure that the business associate agreement requirements of HIPAA are met from the app developer and others providing services or the app as business associates to the covered entity. Covered entities also should take steps to ensure that the interfaces between the apps and other systems are properly secured at the point of implementation and during any subsequent upgrades keeping in mind that OCR guidance expects covered entities to reconfirm security for any system, software or app upgrades. Meeting this expectation for apps within the possession of patients or plan members can present special challenges requiring careful planning.
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, health and other 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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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 encompassess 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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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; a 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.
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.
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 advise 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 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.
Employers and their health plans should encourage employees, health plan members and their families to dispose of outdated and unused medications cost effectively on the upcoming National Prescription Drug Take Back Day on April 27, 2019.
Led by the Drug Enforcement Administration (DEA), for several years, the National Prescription Drug Take Back Day celebrations provide U.S. families an opportunity to safety dispose of unused or expired prescription pain and other medications cost effectively by dropping them off at one of 4,000 collection sites.
Expired and unused medications present a host of safety risks.
Educating employees, plan members and their family about the importance of properly disposing of unused and expired medication is important. Medications generally only should be used by the patient for whom they are prescribed and within the period before their scheduled expiration. Keeping unused or expired medication creates a host of risks for patients and others in their families and communities. Unneeded or unused painkillers, attention and anxiety medications and other prescriptions often are diverted to recreational or other use by patients other than the individual for whom they were prescribed.
Risk also can arise when a patient prescribed a medication consumes it after its originally intended consumption period. Pain, anxiety or other prescription medications used after their originally intended period of use may create safety issue due to interactions with conditions or medications not contemplated when originally ordered, may be used with good intentions for the wrong purposes, or even used by patients in an unsafe or abusive manner. Patients may delay or underminetheir recovery from a new condition by self-treating a new condition by taking previously physician prescribed antibiotics or other medications ineffective or contraindicated for the new condition the patient seeks to treat.
Expired medications also create risks from loss of potency or other instability that can occur after their expiration date. As a consequence, disposing of extra or expired medication is an important part of safe medication management.
On the other hand, disposing of unused or outdated medication can be challenging. Throwing medication in unsecured trash disposal creates risks of improper access, contamination of water and other environment or both. Washing unused medications down the drain or flushing them down toilets also creates contamination concerns. However, finding a no or low-cost place to dispose of unneeded or expired medication historically has been challenging. While many pharmacies offer disposal packages, chargers to use these services generally are expensive.
National Prescription Drug Take Back Day helps educate Americans about the need for timely proper medication disposal and management while also providing a cost effective means for disposing of unused medications safely. Individuals can drop off unneeded prescription drugs at one of the 4,000 collection sites identifiable using the Site Collection Locator.
Health plans, employers, health care providers, churches, schools, parent teacher associations and other community organizations are encouraged to help spread the word and encourage participation in the April 27 observances using the free promotional materials or other related resources included in the National Prescription Drug Take Back Day Toolbox.
Tips and tools for medication management arejustsome of the tools and training included in the Family Health Care Toolkit Resources and Program authored by Ms. Stamer. Want to learn more? Know other challenges, issues or resources? Solutions Law Press invites you to join the discussion and learn and share more about health, disability and aging challenges, needs, resources and victories on Facebook @projectcopecoationand/or in the Project Cope LinkedIn Group. Learn and discuss about Human Resources and employee benefit practices and requirements by joining the discussion in our HR & Benefits Compliance Group.
About The Author
Recognized by LexisNexis® Martindale-Hubbell® as a “AV-Preeminent” (Top 1%/ the highest) and “Top Rated Lawyer,” with special recognition 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 “Health Care,” “Labor & Employment,” “Tax: Erisa & Employee Benefits” and “Business and Commercial Law” by D Magazine, the author of this update is widely known for her 29 plus years’ of work in health care, health benefit, health policy and regulatory affairs and other health industry concerns as a practicing attorney and management consultant, thought leader, author, public policy advocate and lecturer.
Throughout her adult life and nearly 30-year legal career, Ms. Stamer’s legal, management and governmental affairs work has focused on helping health industry, health benefit and other organizations and their management use the law, performance and risk management tools and process to manage people, performance, quality, compliance, operations and risk. 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 supports these organizations and their leaders on both a real-time, “on demand” basis as well as outsourced operations or special counsel on an interim, special project, or ongoing basis with strategic planning and product and services development and innovation; workforce and operations management, crisis preparedness and response as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Heavily involved in health care and health information technology, data and related process and systems development, policy and operations innovation and a Scribe for ABA JCEB annual agency meeting with OCR for many years who has authored numerous highly-regarded works and training programs on HIPAA and other data security, privacy and use, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues including meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical confidentiality and privacy, federal and state data security and data breach and other information privacy and data security rules and many other concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy and governmental and regulatory affairs experience, Ms. Stamer also is widely recognized for regulatory and policy work, advocacy and outreach on healthcare, education, aging, disability, savings and retirement, workforce, ethics, and other policies. Throughout her adult life and career, Ms. Stamer has provided thought leadership; policy and program design, statutory and regulatory development design and analysis; drafted legislation, proposed regulations and other guidance, position statements and briefs, comments and other critical policy documents; advised, assisted and represented health care providers, health plans and insurers, employers, professional. and trade associations, community and government leaders and others on health care, health, pension and retirement, workers’ compensation, Social Security and other benefit, insurance and financial services, tax, workforce, aging and disability, immigration, privacy and data security and a host of other international and domestic federal, state and local public policy and regulatory reforms through her involvement and participation in numerous client engagements, founder and Executive Director of the Coalition for Responsible Health Policy and its PROJECT COPE: the Coalition on Patient Empowerment, adviser to the National Physicians Congress for Healthcare Policy, leadership involvement with the US-Mexico Chamber of Commerce, the Texas Association of Business, the ABA JCEB, Health Law, RPTE, Tax, Labor, TIPS, International Life Sciences, and other Sections and Committees, SHRM Governmental Affairs Committee and a host of other involvements and activities. 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative, 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 has worked closely with a diverse range of health care providers, managed care, insurance and other health care payers, quality assurance, credentialing, technical, research, public and private social and community organizations, foreign and US federal, state and local agencies and others on health care, aging, disability, savings and other process improvement, change management; regulatory affairs and public policy and other concerns.
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; a 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.
Recognized for her pragmatic and insightful thoughleadership, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management 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, Insurance Thought Leadership and many other prominent publications and speaks and conducts training for a broad range of professional organizations.. Health Care Compliance Association, Atlantic Information Service, and others.
For more information about Ms. Stamer or her services, credentials, publications, involvements or presentations, 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.
Adding employee recess to the workday schedule could be a cost effective wellness tool based on health research recently reported by the National Institutes on Health (“NIH”).
Sedentary work and lifestyles fuel many of the heath risks and costs targeted by employer and health benefit employee wellness programs.
With most American adults now spending an average of 11 to 12 hours a day sitting, sedentary work and life styles present leading disease and health cost drivers. Research showing long periods of sitting increase the risk of heart disease and death overall make finding ways to counteract the negative health effects of sedentary lifestyles a key objective of many wellness and public health initiatives. However questions exist about the effectiveness and return on investment of many of the wellness program strategies and tools in the marketplace in producing meaningful changes in employee health or health related behavior.
Findings of research recently announced by NIH suggests giving employees movement breaks for as little as 30 minutes a day could counteract the adverse health effects of their sedentary work. See Light activity may lower harmful effects of sitting.
According to NIH, a study of nearly 8000 people aged 45 or older found as little as 30 minutes of light activity per day may reduce the risk of death incurred by sitting. Replacing sitting with just a few minutes of movement at a time provided health benefits.
NIH reports researchers found that any amount of activity was better than sitting. People who swap 30 minutes of sitting for 30 minutes of light-intensity activity per day would have a 17% lower risk of death. Light-intensity activities include walking and doing chores that require moving around.
People who swap 30 minutes of sitting for 30 minutes of moderate to vigorous physical activity per day would have a 35% lower risk of death from any cause. These types of activities can include jogging, bicycling, and playing sports.
But people didn’t have to move for a full 30 minutes in a row to benefit. Even smaller intervals to break up periods of sitting—including from just 1 to 5 minutes of activity—reduced the risk of death.
NIH also reports positive effects of movement were seen regardless of age, race, weight, smoking and drinking patterns, or existing health problems.
Small amounts of movement mainly benefitted people who didn’t already have an active lifestyle. For people who had a low activity level overall, taking modest activity breaks made a big difference in the risk of death. For people who already had a high level of activity during the day, however, no additional benefit was seen from a little extra movement.
The findings of the health benefit of movement breaks is consistent with findings of a growing series of other recent health studies showing getting adults and children moving during the day even for short periods during the day can produce major heath benefits. See, e.g. Brief Activity Breaks May Benefit Children’s Health; Physical Activity Program Helps Maintain Mobility; Moderate Exercise May Improve Memory in Older Adults. The message is clear: Even modest increases in activity can reduce risk for many serious conditions, including heart disease, diabetes,certain kinds of cancer, and some types of depression and cognitive disorders.
The research also shows that the health benefits can come from engaging in light or moderate movement activities as little as 30 minutes a day even if these activities are broken up and not participation in traditional exercise. Healthful physical activity includes exercise as well as many everyday activities, such as doing active chores around the house, yard work, or walking the dog.
Aerobic activities that make heart and blood vessels by healthier by causing individuals to breathe harder can include brisk walking, dancing, swimming, and playing basketball. Strengthening activities, like push-ups and lifting weights, help make your muscles and bones stronger and can also improve balance.
While the benefits of movement are clear, too many employees fail to do it. Although most people know that physical activity is a good thing, most adults nationwide don’t meet even the minimum recommended amounts of physical activity of at least 30 minutes of brisk walking or other moderate activity, 5 days a week.
NIH-funded research has found that environment—where people live, work, or go to school—can have a big impact on how much individuals move and even how much they weigh. These findings suggest employers and communities can do many things to encourage their people to fit movement into their sedentary lifestyles.
To create a work or other environment that encourages employees to get moving, NIH suggests looking for opportunities to change the environment so activity is an easier choice for workers to make.
Some suggestions include:
Structuring meetings, job duties and other activities to require or encourage sedentary workers to stand up, walk and move around periodically throughout the day;
Providing access to walking sidewalks, trails and other places workers can walk and encouraging workers to use them;
Encouraging workers to walk or take public transportation to lunch or other meetings when feasible rather than drive;
Encouraging people to walk and talk rather than sitting while holding discussions;
Encouraging workers to find waking buddies to walk to lunch or share other exercise breaks or activities with in and outside the workplace;
Encouraging management and employees to incorporate stretching or other movement breaks into meetings and other gatherings; and
Encouraging people to take the stairs and walk to meet fellow employees in person rather than communicating by phone or e-mail when practical.
While each workplace presents different opportunities and challenges, the message from the research is clear: Getting your people moving can produce meaningful health and health and disability cost savings. Maybe it’s time for your company to add short movement recesses to its employees’ day to capitalize on these benefits.
Want to learn, share or discuss other human resources, benefits and compensation, or health and wellness management developments and ideas? We invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating in 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.
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, she is nationally recognized for her leading edge work, publications, advocacy and programs on making compliant wellness and disease management programs that work and other health and disability plans and management strategies and concerns.
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.
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; 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.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
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 the following:
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 advise 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 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.
Employers, health plans and others concerned about managing the high medical, disability and other costs of Type 2 Diabetes should use today’s annual Diabetes Awareness Day observances and resources to beef up their efforts and tools.
With 1 in 3 adult Americans at risk for Type 2 diabetes, the Centers for Disease Control (“CDC”) and other public and private organizations partnering in The National Diabetes Prevention Program are urging all Americans, their health plans, state and local agencies and communities to protect themselves and join their fight to prevent or delay Type 2 diabetes.
Celebrated every year on the fourth Tuesday in March, Diabetes Alert Day promotes awareness of the prevalence and risks of undiagnosed or unmanaged Type 2 Diabetes to Americans, American taxpayers, health benefit programs and their communities.
More than 30 million people in the United States have diabetes and an additional 84 million adults—over a third—have prediabetes, and 90% of them don’t know they have it.
Diabetes is the 7th leading cause of death in the United States (and may be underreported).
Type 2 diabetes accounts for about 90% to 95% of all diagnosed cases of diabetes; type 1 diabetes accounts for about 5%.
In the last 20 years, the number of adults diagnosed with diabetes has more than tripled as the American population has aged and become more overweight or obese
Undiagnosed or unmanaged Type 2 diabetes threatens serious and disabling medical risks for afflicted individuals that also are financially costly for patients and their families, their health plans, taxpayers and communities.
Type 2 diabetes usually starts during adulthood; however, children, teens, and young adults increasingly also are developing it. Since Type 2 diabetes symptoms often develop over several years and can go on for a long time without being noticed it’s important individuals know the factors for Type 2 Diabetes and that people with these symptoms visit their doctor promptly.
Fortunately, Type 2 Diabetes and its costs often can be prevented or minimized through appropriate diagnosis and treatment. That’s why the CDC and its partners are urging all Americans, the employers, health plans, health care providers and communities to join the fight against Type 2 Diabetes.
To start with, the CDC and its partners ask every American to learn their risk for diabetes by taking the online Type 2 Diabetes Risk and promote use of CDC-recognized lifestyle change programs to individuals suffering or at risk for Type 2 diabetes.
The CDC and its partners also are asking American families, health care providers, employers and their health benefit programs, federal, local and state governments and communities to help identify and get people at risk or suffering from Type 2 diabetes involved in making appropriate lifestyle changes and other activities to help manage their Type 2 Diabetes and offers a multitude of free tools and resources to help promote Type 2 Diabetes Awareness and assist in its prevention and treatment.
Employers and their health plans and insurers should consider participating in Diabetes Alert Day and using some of the resources provided by CDC and other partners to beef up their Type 2 and other Diabetes prevention, screening and management efforts. Appropriate use of these resources could help mitigate exposure to the high medical, disability, productivity and other costs that employers and their health plans generally incur when employees or their family members suffer from undiagnosed or unmanaged diabetes. When utilizing these resources, however, employers and their health plan fiduciaries, insurers and administrators are reminded to use care to implement and administer these wellness and other programs in a manner that complies with the Americans With Disabilities Act (“ADA”), Health Insurance Portability & Accountability Act, Internal Revenue Code and other federal and state requirements concerning the design and administration of wellness and disease management programs including recent updates in the Equal Employment Opportunity Commission’s regulations and enforcement positions under the ADA.
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.
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, FMLA and other leave, 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; 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.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; audits, investigations, enforcement and defense; Civil Rights; 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.
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 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 the following:
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 advise 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 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.
Employee benefit plan sponsors, fiduciaries, administrators and advisors should review and update their benefit and compensation plan designs and testing in response to the just released tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and related regulations for the 2019 plan year in new Revenue Ruling 2019-06.
The new tables are available in the advance release copy of Revenue Ruling 2019-06, scheduled for official publication in Internal Revenue Bulletin 2019-14on April 1, 2019.
The Revenue Ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and related regulations for the 2019 plan year.
For this purpose, covered compensation is average of the contribution and benefit bases in effect under section 230 of the Social Security Act for each year in the 35 year period ending with the year in which an employee attains social security retirement age.
As the change will impact plan contribution limits, discrimination testing and other plan and contribution design and administration, employer and other plan sponsors, fiduciaries, administrators and service providers should evaluate the effects of the adjustments so as to maximize their ability to anticipate and respond to the adjustments.
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.
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; 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.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
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 the following:
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 advise 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 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.
Health plans and their employer and other sponsors, fiduciaries, administrators and other service providers, as well as health care providers, health care clearinghouses and their business associates (“Covered Entities”) should reconfirm the adequacy of their Health Insurance Portability and Accountability Act (“HIPAA”) compliance and risk management in light the U.S Department of Health and Human Services Office of Civil Rights (“OCR”) February 7, 2019 announcement that its 2018 year-end $3 Million Resolution Agreement with California-based Cottage Health increased OCR’s already record-setting enforcement recoveries in 2018 to nearly $28.7 million in a year already distinguished by OCR’s collection of a record-setting $16 million resolution payment against health insurance giant Anthem. Along with acting to ensure their own organization’s ability to defend their HIPAA compliance, Covered Entities and their leaders also should take advantage of the opportunity to provide input to OCR on opportunities for simplifying and improving OCR’s HIPAA regulations and enforcement by submitting relevant comments by February 12, 2019 to a Request for Information published by OCR in December that invites suggestions for simplifying or making other improvements to OCR’s current HIPAA guidance as well as monitoring and responding to other new and proposed regulatory developments.
2018 Cottage Health Resolution Agreement
According to OCR’s February 7, 2019 announcement, Cottage Health agreed in OCR’s final settlement of 2017 to pay OCR $3 million and to adopt a substantial corrective action plan to settle charges of HIPAA violations resulting from OCR’s investigations into two HIPAA Breach notifications Cottage Health filed regarding breaches of unsecured electronic protected health information (ePHI) affecting over 62,500 individuals.
A December 2, 2013 breach notification that the removal of electronic security protections by a Cottage Health contractor rendered ePHI such as patient names, addresses, dates of birth, diagnoses/conditions, lab results and other treatment information of 33,349 individuals on a Cottage Health server accessible for download without a username or password from the internet to anyone outside Cottage Health. In an update to its original report filed on July 2, 2014, Cottage Health increased the number of individuals affected by this breach to 50,917. OCR’s investigation determined that security configuration settings of the Windows operating system permitted access to files containing ePHI without requiring a username and password. As a result, patient names, addresses, dates of birth, diagnoses, conditions, lab results and other treatment information were available to anyone with access to Cottage Health’s server.
A December 1, 2015, that the misconfiguration of a server following an IT response to a troubleshooting ticket, exposed unsecured ePHI including patient names, addresses, dates of birth, social security numbers, diagnoses, conditions, and other treatment information of 11,608 individuals over the internet.
Based upon its investigation into the two breach reports, OCR concluded Cottage Health violated HIPAA by failing to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the ePHI; failed to implement security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level; failed to perform periodic technical and non-technical evaluations in response to environmental or operational changes affecting the security of ePHI; and failed to obtain a written business associate agreement with a contractor that maintained ePHI on its behalf.
To resolve its exposure to potentially must greater civil monetary sanctions that OCR might seek for such potential violations under HIPAA’s civil monetary sanction rules, Cottage Health entered into December, 2018 Resolution Agreement to pay the $3 million settlement and undertake what OCR characterizes as “a robust corrective action plan to comply with the HIPAA Rules.” Among other things, the corrective action plan requires Cottage Health to:
Conduct an enterprise-wide risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by Cottage Health (“Risk Analysis”) that OCR views as satisfactory to meet the requirements of 45 CFR 164.308(a)(1)(ii)(A);
Develop and implement a risk management plan to address and mitigate any security risks and vulnerabilities identified in the Risk Analysis acceptable to OCR;
Implement a process for regularly evaluating environmental and operational changes that affect the security of Cottage Health’s ePHI;
Develop, maintain, and revise, as necessary, written policies and procedures to comply with the Federal standards that govern the privacy and security of individually identifiable health information under 45 C.F.R. Part 160 and Subparts A, C, and E of Part 164 (the “Privacy Rule” and “Security Rule”).
Distribute to and conduct training on the HIPAA policies and procedures from all existing and new members of the Cottage Health workforce with access to PHI. Additionally, Cottage Health require all workforce members that have access to PHI to certify their receipt of, understanding and commitment to comply with the HIPAA Policies before allowing access to PHI and must deny access to PHI to any workforce member that has not provided the required certification.
Submit to ongoing notification and reporting requirements to keep OCR informed about its compliance efforts.
2018 Record Setting HIPAA Enforcement Year
The final Resolution Agreement negotiated by OCR in 2018, the $3 million Cottage Health Resolution Agreement signed on December 11, 2018 added to an already record-setting year of HIPAA enforcement recoveries by OCR. In addition to recovering the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc. OCR’s recovery of the following HIPAA settlements and fines totaling nearly $28.7 million surpassed its previous 2016 record of $23.5 million by 22 percent.
Date
Name
Amount
Jan. 2018
Filefax, Inc (settlement)
$ 100,000
Jan. 2018
Fresenius Medical Care North America (settlement)
$ 3,500,000
June 2018
MD Anderson (judgment)
$ 4,348,000
Aug. 2018
Boston Medical Center (settlement)
$ 100,000
Sep. 2018
Brigham and Women’s Hospital (settlement)
$ 384,000
Sep. 2018
Massachusetts General Hospital (settlement)
$ 515,000
Sep. 2018
Advanced Care Hospitalists (settlement)
$ 500,000
Oct. 2018
Allergy Associates of Hartford (settlement)
$ 125,000
Oct. 2018
Anthem, Inc (settlement)
$ 16,000,000
Nov. 2018
Pagosa Springs (settlement)
$ 111,400
Dec. 2018
Cottage Health (settlement)
$ 3,000,000
Total (settlements and judgment)
$ 28,683,400
Aside from the previously discussed Cottage Health Resolution Agreement OCR announced on February 7, 2019, these OCR 2018 enforcement recoveries included:
FileFax Resolution Agreement. In January 2018, OCR settled for $100,000 with Filefax, Inc., a medical records maintenance, storage, and delivery services provider. OCR’s investigation found that Filefax impermissibly disclosed protected health information (PHI) by leaving the PHI in an unlocked truck in the Filefax parking lot, or by granting permission to an unauthorized person to remove the PHI from Filefax, and leaving the PHI unsecured outside the Filefax facility.
Fresenius Medical Care North America Resolution Agreement. In January 2018, OCR also settled for $3.5 million with Fresenius Medical Care North America (FMCNA), a provider of products and services for people with chronic kidney failure. FMCNA filed five breach reports for separate incidents occurring between February 23, 2012 and July 18, 2012, implicating the electronic protected health information (ePHI) of five FMCNA owned covered entities. OCR’s investigation revealed that FMCNA failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. Additional potential violations included failure to implement policies and procedures and failure to implement a mechanism to encrypt and decrypt ePHI, when it was reasonable and appropriate to do so under the circumstances.
MD Anderson ALJ Ruling. In June 2018, an HHS Administrative Law Judge ruled in favor of OCR and required The University of Texas MD Anderson Cancer Center (MD Anderson), a Texas cancer center, to pay $4.3 million in civil money penalties for HIPAA violations. OCR investigated MD Anderson following three separate data breach reports in 2012 and 2013 involving the theft of an unencrypted laptop from the residence of an MD Anderson employee and the loss of two unencrypted universal serial bus (USB) thumb drives containing the unencrypted ePHI of over 33,500 individuals. OCR’s investigation found that MD Anderson had written encryption policies going back to 2006 and that MD Anderson’s own risk analyses had found that the lack of device-level encryption posed a high risk to the security of ePHI. Despite the encryption policies and high risk findings, MD Anderson did not begin to adopt an enterprise-wide solution to encrypt ePHI until 2011, and even then it failed to encrypt its inventory of electronic devices containing ePHI between March 24, 2011 and January 25, 2013. This matter is under appeal with the HHS Departmental Appeals Board.
MMC/BWH/MGH Resolution Agreements. In September 2018, OCR announced that it has reached separate settlements totaling $999,000, with Boston Medical Center (BMC), Brigham and Women’s Hospital (BWH), and Massachusetts General Hospital (MGH) for compromising the privacy of patients’ PHI by inviting film crews on premises to film an ABC television network documentary series, without first obtaining authorization from patients.
ACH Resolution Agreement. In September 2018, OCR also settled with Advanced Care Hospitalists (ACH), a contractor physician group, for $500,000. ACH filed a breach report confirming that ACH patient information was viewable on a medical billing services’ website. OCR’s investigation revealed that ACH never had a business associate agreement with the individual providing medical billing services to ACH, and failed to adopt any policy requiring business associate agreements until April 2014. Although ACH had been in operation since 2005, it had not conducted a risk analysis or implemented security measures or any other written HIPAA policies or procedures before 2014.
Allergy Associates Resolution Agreement. In October 2018, OCR settled with Allergy Associates, a health care practice that specializes in treating individuals with allergies, for $125,000. In February 2015, a patient of Allergy Associates contacted a local television station to speak about a dispute that had occurred between the patient and an Allergy Associates’ doctor. OCR’s investigation found that the reporter subsequently contacted the doctor for comment and the doctor impermissibly disclosed the patient’s PHI to the reporter.
Anthem Resolution Agreement. In October 2018, Anthem, Inc. also paid $16 million to OCR and agreed to take substantial corrective action to settle potential violations of the HIPAA Rules after a series of cyberattacks led to the largest U.S. health data breach in history. Anthem filed a breach report after discovering cyber-attackers had gained access to their IT system via an undetected continuous and targeted cyberattack for the apparent purpose of extracting data, otherwise known as an advanced persistent threat attack. After filing their breach report, Anthem discovered cyber-attackers had infiltrated their system through spear phishing emails sent to an Anthem subsidiary after at least one employee responded to the malicious email and opened the door to further attacks. OCR’s investigation revealed that between December 2, 2014 and January 27, 2015, the cyber-attackers stole the ePHI of almost 79 million individuals, including names, social security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information.
Pegosa Springs Medical Center. In November 2018, Pagosa Springs Medical Center (PSMC), a critical access hospital, paid $111,400 to OCR to resolve potential violations concerning a former PSMC employee that continued to have remote access to PSMC’s web-based scheduling calendar, which contained patients’ ePHI, after separation of employment. OCR’s investigation revealed that PSMC impermissibly disclosed the ePHI of 557 individuals to its former employee and to the web-based scheduling calendar vendor without a business associate agreement in place.
These 2018 Resolution Agreements reaffirm the growing risks that Covered Entities and their business associates run by failing to take adequate steps to prevent and respond to breaches of ePHI and otherwise to maintain their compliance with HIPAA. Covered entities and business associates and their leaders should recognize and respond to these growing risks by reevaluating and strengthening their HIPAA compliance and risk management efforts to minimize the likelihood of violations and enhance their ability to mitigate potential liability that can result from breaches of HIPAA by responding efficiently and effectively.
Other Regulatory & Enforcement Developments
In addition to reaffirming their ongoing compliance with the longstanding requirements of HIPAA and other related federal and state laws, Covered Entities also should use care to carefully monitor and respond to new regulatory and other developments that might create new responsibilities or new opportunities to simplify their HIPAA compliance. In this respect, Covered Entities should take note of the 2018 and ongoing efforts by OCR to develop and publish new rules and other guidance intended to help health care providers and other Covered Entities, patients and caregivers and others understand their rights and responsibilities when dealing with protected health information in relation to patients afflicted with substance abuse and mental illness. Undertaken as part of the Trump Administration’s broader effort to combat opiate and other substance abuse within the United States, OCR in October published a package of guidance on How HIPAA Allows Doctors To Respond To The Opioid Crisis. Covered Entities and others concerned with the management of patients afflicted with substance abuse and mental illness should evaluate this guidance to understand and tailor their practices to respond to OCR’s perspectives of how HIPAA impacts the use, access and disclosure of protected health information as part of these efforts.
Covered Entities and others concerned about HIPAA compliance and interpretation also should carefully monitor and provide appropriate and timely input on developing HIPAA guidance that could impact their operations. In this regard, Covered Entities with ideas about opportunities for improving existing HIPAA guidance are encouraged to submit comments to OCR by February 12, 2019 in response to its Request for Information on improving care coordination and reducing the regulatory burdens of the HIPAA Rules published on December 12, 2018. In that RFI, OCR invites input from the public on how the HIPAA Privacy Rule, could be modified to:
Encourage information-sharing for treatment and care coordination;
Facilitate parental involvement in care;
Address the opioid crisis and serious mental illness;
Account for disclosures of PHI for treatment, payment, and health care operations as required by the HITECH Act;
Change the current requirement for certain providers to make a good faith effort to obtain an acknowledgment of receipt of the Notice of Privacy Practices; and/or
Otherwise simplify or improve the existing HIPAA rules.
As a part of these efforts, Covered Entities and other concerned parties also should anticipate that OCR will be focusing heavily in the upcoming year on the potential HIPAA privacy and security implications of efforts by its sister agency, the Office of the National Coordinator for Health Information Technology (“ONC”), to promote greater interoperability of electronic medical records discussed in ONC’s recent 2018 Report to Congress: Annual Update on the Adoption of a Nationwide System for the Electronic Use and Exchange of Health Information (“Report”).
Under the 21st Century Cures Act, Congress gave ONC authority to enhance innovation, scientific discovery, and expand the access and use of health information through provisions related to:
The development and use of upgraded health IT capabilities;
Transparent expectations for data sharing, including through open application programming interfaces (APIs); and
Improvement of the health IT end-user experience, including by reducing administrative burden.
These priorities seek to increase nationwide interoperability of health information and reduce clinician burden. The Report says increases in the adoption of health IT means most Americans receiving health care services now have their health data recorded electronically. However, this information is not always accessible across systems and by all end users—such as patients, health care providers, and payers—in the market in productive ways. While the Report states ONC intends to move forward to promote efforts to help ensure that electronic health information can be shared safely and securely where appropriate to improve the health and care of all Americans, these activities inherently will raise many HIPAA concerns and challenges. Covered Entities and others concerned with these activities will want to carefully monitor the concurrent activities of OCR and ONC as these efforts progress, both to help tailor their planning and compliance efforts to respond to the anticipated demand for greater interoperability as required by ONC and to help shape these rules by providing timely input as appropriate in response to these developments.
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 managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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.
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 advise 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 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 planned shift to demand greater interoperability promises to create new demands for employer-sponsored health plans, health insurers and others involved in the healthcare delivery and payment processes. Health plans and their insurers and sponsors should begin preparing for these new demands, as well as to leverage the new opportunities and manage the new risks they will create.
The Report describes barriers, actions taken, and recommendations as well as ONC’s path forward to implement the 21st Century Cures Act.
Under the 21st Century Cures Act, Congress gave HHS authority to enhance innovation, scientific discovery, and expand the access and use of health information through provisions related to:
The development and use of upgraded health IT capabilities;
Transparent expectations for data sharing, including through open application programming interfaces (APIs); and
Improvement of the health IT end user experience, including by reducing administrative burden.
These priorities seek to increase nationwide interoperability of health information and reduce clinician burden..
Current Status
The Report says increases in the adoption of health IT means most Americans receiving health care services now have their health data recorded electronically. However, this information is not always accessible across systems and by all end users—such as patients, health care providers, and payers—in the market in productive ways. For example:
Despite the individual right to access health information about themselves established by the HIPAA Privacy Rule, patients often lack access to their own health information, which hinders their ability to manage their health and shop for medical care at lower prices;
Health care providers often lack access to patient data at the point of care, particularly when multiple health care providers maintain different pieces of data, own different systems, or use health IT solutions purchased from different developers; and
Payers often lack access to clinical data on groups of covered individuals to assess the value of services provided to their customers.
The Report says these limitations create several problems, including:
Patients should be able to easily and securely access their medical data through their smartphones. Currently, patients electronically access their health information through patient portals that prevent them from easily pulling from multiple sources or health care providers. Patient access to their electronic health information also requires repeated use of logins and manual data updates.
For health care providers and payers, interoperable access and exchange of health records is focused on accessing one record at a time.
Payers cannot effectively represent their members if they lack computational visibility into which health care providers offer the highest quality care at the lowest cost. Without the capability to access multiple records across a population of patients, health care providers and payers will not benefit from the value of using modern computing solutions—such as machine learning and artificial intelligence—to inform care decisions and identify trends.
Payers and employer group health plans which purchase health care have little information on health outcomes. Often, health care providers and payers negotiate contracts based on the health care provider’s reputation rather than on the quality of care that health care provider offers to patients. Health care providers should instead compete based on the entire scope of the quality and value of care they provide, not on how exclusively they can craft their networks. Outcome data will allow payers to apply machine learning and artificial intelligence to have better insight into the value of the care they purchase.
Current Barriers
According to the Report, HHS heard from stakeholders over the past year that barriers to interoperable access to health information remain, including technical, financial, trust, and business practice barriers. These barriers impede the movement of health information to where it is needed across the care continuum. In addition, burden arising from quality reporting, documentation, administrative, and billing requirements that prescribe how health IT systems are designed also hamper the innovative usability of health IT.
Current and Upcoming Actions
The Report states HHS has many efforts to help ensure that electronic health information can be shared safely and securely where appropriate to improve the health and care of all Americans.
ONC also reports Federal agencies, states, and industry have taken steps to address technical, trust, and financial challenges to interoperable health information access, exchange, and use for patients, health care providers, and payers (including insurers). HHS aims to build on these successes through the ONC Health IT Certification Program, HHS rulemaking, health IT innovation projects, and health IT coordination.
In accordance with the Cures Act, HHS is actively leading and coordinating a number of key programs and projects. These include continued work to deter and penalize poor business practices and that HHS conducted multiple outreach efforts to engage the clinical community and health IT stakeholders to better understand these barriers, challenges, and health care provider burden.
Recommendations
The Report makes the following overarching recommendations for future actions HHS plans to support through its policies and that the health IT community as a whole can take to accelerate progress:
Focus on improving interoperability and upgrading technical capabilities of health IT, so patients can securely access, aggregate, and move their health information using their smartphones (or other devices) and health care providers can easily send, receive, and analyze patient data.
Increase transparency in data sharing practices and strengthen technical capabilities of health IT so payers can access population-level clinical data to promote economic transparency and operational efficiency to lower the cost of care and administrative costs.
Prioritize improving health IT and reducing documentation burden, time inefficiencies, and hassle for health care providers, so they can focus on their patients rather than their computers.
The Report also says interoperable access underpins HHS’s efforts to pursue a health care system where data are available when and where needed.
ONC intends to particularly focus on promoting open APIs. Open APIs are technology that allow one software program to access the services provided by another software program and can improve access and exchange of health information. ONC says APIs can:
Support patients’ ability to have more access to information electronically through, for example, smartphones and mobile applications. HHS applauds the emergence of patient-facing applications that allow patients to access, aggregate, and act on their health information; and
Allow payers to receive necessary and appropriate information on a group of members without having to access one record at a time.
Increase institutional accountability, support value- based care models, and lead to competitive medical care pricing that benefits patients.
The Report claims patients, health care providers, and payers with appropriate access to health information can use modern computing solutions to generate value from the data. Improved interoperability can strengthen market competition, result in greater quality, safety, and value for the healthcare system, and enable patients, health care providers, and payers to experience the benefits of health IT.
Prepare For Enhanced Operability Requirements
ONC’s plan to achieve greater interoperability presents new business and compliance planning opportunities and challenges for health care providers, health insurers and other payers, health data and information technology (IT) providers and others. Among other things, participants in the healthcare system and their suppliers will need to prepare to comply with new expectations and mandates for interoperability. Meeting these demands will require financial expenditures as well as present technological challenges.The increased availability and accessto electronica medical records and information resulting from these changes also a can be expected to drive new challenges and demands. Among other things, businesses relying on control of health information or records to influence or control patience, reimbursement, or other business value need to reevaluate and adjust their business models accordingly.
Improve accessibility and interoperability also is likely to create new expectations and demands by patients, payers, other providers and perhaps most significantly for providers and payers, regulators. Participants in the system will need to understand these applications and prepare to both defend their business performance as well as their compliance taking into account these new demands.
Amid all of this, of course, providers, pears, and their business associates can anticipate continued if not enhanced demands for enhanced data security and privacy protections and accompanying enforcement of these standards.
As ONC move forward on its plans to enhance interoperability, all concerned stakeholders will want to monitor developments and provide thoughtful and timely input. The time to get started is now. ONC and it’s sister agency, the Office of Civil Rights currently are inviting public comments about how to achieve these and other health IT and privacy improvements. Those interested in providing input should make sure their comments are submitted by the applicable deadlines next month.
ONC and it’s sister agency, the Office of Civil Rights currently are inviting public comments about how to achieve these and other health IT and privacy improvements. Read the full Report here and share your input by the specified deadlines.
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 managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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.
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 advise 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 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.
A ruling by a Federal District judge on Friday (December 14, 2018) ruled unconstitutional the Patient Protection and Affordable Care Act (ACA) touches off a new wave of uncertainty about the future of the massive healthcare reform law commonly known as Obamacare just as the enrollment period for 2019 health coverage ended. While Federal District Judge Reed O’Connor finds in his ruling released on Friday that amendments passed by Congress last December robbed the ACA of its original constitutionality, only time will tell if the ruling actually will end the ACA reforms or the effect of such ruling on the hotly debated ACA reforms and other statutory and regulatory reforms Congress and the Trump Administration subsequently prospectively or retrospectively. Consequently, health plans, their employer and other sponsors, insurers, administrators, and fiduciaries; health care providers, consumers and others will need to watch developments closely.
Justice O’Connor’s decision was released one day before the last day of the enrollment period for Americans to elect whether and what coverage, if any, to enroll in through the Obamacare exchanges for calendar 2019.
In Texas v. US, Texas Governor Greg Abbott and other Republican governors challenged the constitutionality of the ACA following passage of the Tax Cuts and Jobs Act of 2017 (TCJA). The plaintiffS argued the TCJA rendered the ACA unconstitutional because it repealed the individual mandate of the ACA upon which the Supreme Court previously found the ACA constitutional.
In the 2012 decision in Nat’l Fed’n of Indep. Businesses v. Sebelius (NFIB), 567 U.S. 519, 530–38 (2012) written by Chief Justice Roberts, the Supreme Court ruled that Congress could not rely upon the Commerce Clause for Constitutional authority to enact the ACA. However, the Supreme Court nevertheless found the Individual Mandate provisions of the ACA preserved the constitutionality of the ACA as a constitutional exercise of Congress’ Taxing Power.
In Texas v. US, the plaintiff governors argue that the repeal of the Individual Mandate as part of Congress’ passage of the TCJA last December robbed the ACA of its constitutionality. They say it is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under the Interstate Commerce Clause. They further urge that if they are correct, the balance of the ACA is untenable as inseverable from the Invalid Mandate. Judge O’Connor agreed with the plaintiff’s in his ruling on Friday. Now it remains to be seen if his ruling will face and withstand the appeal and if so, what effect it will have on Obamacare overall and other subsequent statutory and regulatory reforms.
While only time will tell whether the decision stands and its effect, the path to clarity promises to be filled with more drama and uncertainty. Former US Attorney General Jeff Sessions previously had stated that the Justice Department under his leadership would not expend resources to defend the ACA. It remains to be seen how the Justice Department will not respond in light of his recent resignation. Even if the Justice Department does not step up to defend Obamacare, it is likely that states like California that have intervened in support of the ACA in the litigation will attempt to appeal the action. Assuming that an appeal proceeds, a Court of Appeals would hear the appeal before an almost certain appeal by the losing side in that appeal to the United States Supreme Court, where President Trump’s new appointee would hear the action. Along with the possibility that these Courts will uphold the trial court’s ruling, either of these appeals courts could overrule the trial court in whole or in part. Thus, subsequent appeals decisions could:
Reverse Judge O’Connor’s ruling entirely, leaving The ACA intact in its current form; or
Uphold part but not all of the decision, leaving some parts in place but not others.
pending further decisions, it remains unclear if subsidies, prohibitions against preexisting conditions, guaranteed issue, cost regulations, benefit and coverage mandates and other insurance reforms, health care billing and other reforms will survive.
Meanwhile, regardless of the outcome of the appeals, the decision and its fallout almost certainly will touch off more debate in Congress. With health care reform already a hot topic, more Congressional battles were inevitable. However the decision adds a new and significant wrinkle to the politics of the health reform fight.
In January November’s election will cause the leadership of the House of Representatives is set to transfer from Republicans to Democrats while leaving control over the Senate in the hands of Republications. With leadership of the two legislative bodies split, Democrats are unlikely to be able to use their new control of the House to enact legislation that would overrule outright an adverse decision by the courts. Consequently, Democrats will have an uphill battle if the court decision stands unless and until they can regain Senate control. Instead they are likely to be related to the role occupied by the House the past 4 years in which bills to enact the Democrat vision will pass the House only to die a quick death in the Republican controlled Senate or face veto by the Republican President.
On the other hand, Republicans also could not overcome a decision unfavorable to their agenda for the opposite reason: Despite control of the majority in the Senate and having a Republican President opposed to the ACA, Republicans can’t enact legislation without winning a majority of votes in the House.
On the other hand, either party can and almost certainly will use its veto power over the other party’s agenda. The fight likely will spill over into budget, immigration, workforce and other jet legislation that otherwise might and should enjoy bipartisan support in Congress.
As the litigation proceeds, concerned parties will want to keep a close eye of the Courts, the regulation and enforcement actions of the Trump Administration and the Congress.
Meanwhile, it is important to keep in mind that implementation of Judge O’Connor’s decision is stayed pending appeal.
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 managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer is nationally recognized as a thoughtleader in health benefits and health care matters domestically and internationally. She has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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.
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 advise 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 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.
February 12, 2019 is the deadline for health plans and their sponsoring employers, fiduciaries and business associates, as well as health care providers, health care clearinghouses, health care consumers, employer and other concerned persons to provide input on reducing the regulatory burdens of the Health Insurance Portability and Accountability Act (HIPAA) Privacy, Security and Breach Notification Rules in response to the December 12, 2018 invitation of the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR).
OCR issued the invitation for public comment in a December 12, 2019 Request for Information (RFI). The RIF seeks input from the public on how OCR’s HIPAA Privacy and other Rules could be modified to further the HHS Secretary’s goal of promoting coordinated, value-based healthcare. This RFI is a part of the Regulatory Sprint to Coordinated Care, an initiative led by HHS Deputy Secretary Eric Hargan.
HHS developed the HIPAA Rules to protect individuals’ health information privacy and security interests, while permitting information sharing needed for important purposes. However, in recent years, OCR has heard calls to revisit aspects of the Rules that may limit or discourage information sharing needed for coordinated care or to facilitate the transformation to value-based health care. The RFI requests information on any provisions of the HIPAA Rules that may present obstacles to these goals without meaningfully contributing to the privacy and security of protected health information (PHI) and/or patients’ ability to exercise their rights with respect to their PHI.
OCR’s December 12, 2018 press release concerning the RFI indicates that OCR is looking for candid feedback about how the existing HIPAA regulations are working in the real world and how OCR can improve them to improve quality of care and eliminate undue burdens on covered entities while maintaining robust privacy and security protections for individuals’ health information.
In addition to requesting broad input on the HIPAA Rules, the RFI also seeks comments on specific areas of the HIPAA Privacy Rule, including:
Encouraging information-sharing for treatment and care coordination
Facilitating parental involvement in care
Addressing the opioid crisis and serious mental illness
Accounting for disclosures of PHI for treatment, payment, and health care operations as required by the HITECH Act
Changing the current requirement for certain providers to make a good faith effort to obtain an acknowledgment of receipt of the Notice of Privacy Practices
Public comments on the RFI are due by February 11, 2019.
The RFI follows up on OCR’s announcement of another series of high dollar resolution agreements against covered entities and business associates for alleged breaches of HIPAA’s Privacy or Security Rules, as well as publication of various new guidance intended to help patients, their families, covered entities, business associates and others understand when HIPAA restricts or allows the release of protected health information by covered entities and business associates in mass shooting or other disaster situations, when dealing with patients with substance abuse or mental health conditions and in various other scenarios. Covered entities, their business associates as well as employer and other health plan sponsors, fiduciaries and others involved with protected health information transactions and disclosures should review this new guidance and evaluate its implications on their actions and practices in addition to sharing input with OCR about opportunities to improve existing HIPAA Rules.
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 managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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.
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 advise 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 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.
Employers should invite employees to update their Form W-4 withholding and finalize other 2019 payroll and income tax withholding arrangements based on guidance for 2019 published by the IRS and Treasury Department in Notice 2018-92 on November 26, 2018.
Many U.S. employers had delayed making changes to their income and payroll tax withholding pending the anticipated release by the IRS and Treasury Department of a revised Form W-4 and related income and payroll tax guidance updated to reflect changes to the Internal Revenue Code enacted as part of the Tax Cut and Jobs Act (P.L. 115-97)(“Trump Tax”) at the end of 2017.
Following the enactment of Trump Tax, most businesses have operated in reliance upon interim guidance published by the agencies at the beginning of the year to carryout their 2018 withholding obligations.
Until recently, the IRS and Treasury Department were expected to complete for use in 2019 the major overhaul of the Form W-4 and related guidance in response to the Trump Tax amendments to Sections 3402, 3405 and other Code rules. When the revision of the Form W-4 proved more complex than anticipated, however, the IRS and Treasury Department in September, 2018 announced that release of the newly designed and updated Form W-4 would be delayed from 2019 to 2020.
In Notice 2018-92, IRS and the Treasury Department provides interim guidance to employers and their workers on income tax withholding for 2019 pending agencies issuance of regulations implementing the changes, as well as requests comments on certain withholding procedures from concerned parties. For the most part, Notice 2018-92 continues the interim guidance that IRS and Treasury previously published for 2018. Specifically, Notice 2018-92:
Announces that the 2019 Form W-4 will be similar to the 2018 Form W-4,
Addresses new TCJA “withholding allowance” terminology,
Continues until April 30, 2019 Notice 2018-14’s temporary suspension of the requirement to furnish new Forms W-4 within 10 days for changes resulting solely from the TCJA,
Provides that, for 2019, the default rule when an employee fails to furnish a Form W-4 will continue to be single with zero withholding allowances,
Allows taxpayers to take into account the qualified business income deduction under section 199A to reduce withholding under section 3402(m),
Announces that the IRS and Treasury intend to update the regulations under section 3402 to explicitly allow taxpayers to use the online withholding calculator or Publication 505, Tax Withholding and Estimated Tax, in lieu of the worksheets to Form W-4,
Requests comments on alternative withholding methods under section 3402(h),
Announces that the IRS and the Treasury Department intend to eliminate the combined income tax withholding and employee FICA tax withholding tables under Treas. Reg. § 31.3402(h)(4)-1(b),
Modifies notification requirements for the withholding compliance program, and
Provides that for 2019, withholding on annuities or similar periodic payments where no withholding certificate is in effect is based on treating the payee as a married individual claiming 3 withholding allowances under § 3405(a)(4).
The Code generally requires employees that experience a change that reduces the number of withholding exemptions that the employee qualifies to claim to notify their employer and complete a new Form W-4 within 10 days of a specified event date. Interim relief published by the IRS and Treasury Department provides relief to workers whether the change in withholding eligibility results solely due to a Code change enacted as part of Trump Tax. Otherwise, however, employees generally still remain obligated to keep their withholding up-to-date. Since employees often are unaware of or overlook this responsibility, employers generally should encourage workers to review and update their Form W-4 withholding elections in connection with annual enrollment periods and in conjunction with other life or other changes likely to affect the withholding eligibility of the worker.
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.
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; 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.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
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 the following:
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 advise 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 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.
Self-insured employer and union sponsored health plans, health insurers and other health care payers, health care providers, managed care and practice management service providers and others structuring or working with preferred provider or other managed health care contracts should weigh the potential implications on their health plan provider agreements and managed care practices of the antitrust lawsuit jointly brought by the U.S. Department of Justice and the North Carolina Attorney General against North Carolina’s largest healthcare system, The Charlotte-Mecklenburg Hospital Authority d/b/a Atrium Health (“Atrium”) which challenges steering restrictions and other contractual protections of Atrium against competition from other contracted health care providers.
Court documents filed by the Justice Department with the U.S. District Court for the Western District of North Carolina on November 15, 2018, seek Court approval of a Joint Stipulation and Final Judgment (“Consent Decree”), which if approved by the Court, will resolve a civil antitrust lawsuit challenging Atrium’s practice of requiring and enforcing “steering restrictions” in its managed care provider agreements with commercial insurers, self-insured employer and union health plans and other private payer that prohibit the payers from steering patients to, or sharing information about other potentially more cost-effective competitor hospitals, physicians or other health care providers filed by the Justice Department in June, 2016. While the emphasis by the Justice Department of the market dominance of Atrium in the factual allegations contained in its complaint raise questions about whether the Justice Department would undertake similar litigation against less market dominant providers, the charges made by the Justice Department in its complaint and the agreement by Atrium to cease the challenged conduct nevertheless raise a substantial basis for concern by other health care providers and payers about their own potential antitrust risks from negotiating to include, including or enforcing a wide range of provider steering and other contractual provisions commonly included in many preferred provider contracts between health plans, insurers and their managed care organizations and the health care providers that contract to be participating providers for their health plan narrow network or other managed care provider panels.
It should be noted that steering, and commitments to steer and not to steer patients to various providers are a longstanding and key component of the structure of most preferred provider contracts used in the managed care industry. Steering refers to practices payers historically use to offer or encourage patients and other health care consumers to access care from health care providers that the payer perceives as a more cost effective provider. Historically, insurers promised to steer patients to health care providers contracting to become “preferred providers” to health plan members in return for health care provider’s agreement to provide care a preferred rates or in accordance with other health plan rules. With most health care providers now participating in provider networks, however, payers increasingly want to steer members to lower cost providers within the provider network to maximize savings and place pressure on higher cost participating providers to reduce rates. If the higher cost providers have most favored nation or other contractual safeguards like those in Atrium’s provider contracts, however, contractual barriers obstruct these efforts by payers. The insurers in Atrium used antitrust complaints filed with the Justice Department to attack these contractual barriers.
Formerly known as Carolinas HealthCare System, the dominant health care provider in the Charlotte, North Carolina area, and one of the largest not-for-profit healthcare systems in the United States, Atrium provides healthcare services throughout the Carolinas, including in hospitals, freestanding emergency departments, urgent care centers, physician practices, outpatient surgery centers, imaging centers, nursing homes, and laboratories. Atrium’s flagship facility is Carolinas Medical Center, the largest hospital in North Carolina. Atrium also operates eight other general acute-care hospitals in the Charlotte area and owns, manages, or has strategic affiliations with more than 40 hospitals in the Carolinas.
The Justice Department complaint filed on June 9, 2016 charges that Atrium violated federal antitrust law by using its dominant market power to force commercial payers to agree to include various steering and transparency restrictions in their managed care contracts with Atrium in a manner that illegally restricts competition in violation of federal antitrust laws. The challenged provisions include a series of promises historically included in many provider agreements such as provisions requiring that the private payer:
To steer plan members to participating providers;
Not to steer plan members away from participating providers;
To include Atrium providers in any new networks or preferential treatment afforded to any other contracting provider in new or all plans, products, networks and preferred provider classifications; and
Not to exclude from and/or to provide the provider with the right to receive any new preferences or rewards for being a preferred provider.
Although provider contracts historically have included many of these same provisions, the Justice Department in its lawsuit against Atrium charged that Atrium illegally used its dominant market position to negotiate managed care contracts paying higher reimbursement rates than other less dominant contracted providers received and used the challenged contract provisions to insulate itself against competition from other network providers offer care at more cost effective rates. The Justice Department contends the challenged provisions allow Atrium to continue to charge higher prices free from effective competition from other health care providers by prohibiting the private payers from steering patients to other health care providers and guaranteeing Atrium the most preferential treatment available even if its rates are not competitive with those of other providers enjoying the same status. In its Atrium complaint, the Justice Department asserts that Atrium’s steering restrictions harm payers and consumers in violation of federal antitrust laws by obstructing the ability of insurers to design health benefit plans that give patients financial incentives to choose more cost-effective hospitals and physicians. The Justice Department contends these actions by Atrium force health insurers not to encourage consumers to choose other healthcare providers that offer better overall value and from providing consumers and employers with information regarding the cost and quality of alternative health benefit plan.
More than two years after the Justice Department commenced the lawsuit, court documents filed with the Court by the Justice Department on November 15, 2018 reflect the parties now have agreed to settle the lawsuit. The Justice Department filed an unopposed motion that asks to enter a Consent Decree implementing the terms of a settlement which would preclude Atrium from seeking to negotiate or enforce a wide range of steering and transparency restrictions in existing or future preferred provider agreements. While Atrium would not pay any damages under the proposed Consent Degree, the proposed Consent Decree would:
Prohibit Atrium from seeking to negotiate, include or enforce steering or transparency restrictions in its provider agreements with private payers or otherwise seeking contract terms or taking actions that would prohibit, prevent, or penalize payers for steering or sharing information to promote transparency in the future in any Narrow Network Benefit Plan, Tiered Network Benefit Plan, or any Benefit Plan with Reference-Based Pricing or a Center of Excellence as a component in the Charlotte area; and
Void or restrict Atrium from enforcing certain specific existing steering and transparency restrictions in Atrium’s existing preferred provider agreements with various commercial insurers identified in exhibits to the Consent Decree except with respect to certain “carve out networks.”
If approved in its current form, the Consent Decree will both void a host of existing contractual safeguards currently included in Atrium’s existing provider contracts and affirmatively prohibit Atrium from seeking seek or enforce other safeguards insulating it from competition from other lower cost health care providers by defining “penalties” broadly to include any contract term or action with the likely effect of significantly restraining steering through steered plans or transparency under the facts and circumstances considering the contract provision or action; its economic impact; and the extent to which the contract provision or action has potential or actual procompetitive effects in the Charlotte Area.
Special rules applicable to Department of Justice antitrust settlements under the Tunney Act require the Justice Department to publish the proposed settlement to be implemented by the Consent Decree and the Department’s competitive impact statement in the Federal Register and allow a public comment period of 60 days before the court can approve the Consent Decree. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter J. Mucchetti, Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. After the comment period closes, the Court will consider the motion taking into account the comments and other factors it determines appropriate. Barring unforeseen circumstances, the U.S. District Court for the Western District of North Carolina likely will approve the proposed consent decree upon finding that it serves the public interest.
Because the contractual provisions challenged as anti-competitive in the Atrium litigation are of a nature widely used within the managed care industry, health care providers, health insurers, self-insured employer and union health plans and their sponsors and others involved in the managed care industry should weigh the potential implications of the Atrium litigation and its anticipated resolution on their own provider contracting strategies and practices as well as those of their competitors.
Contractual provisions like those challenged in the Atrium litigation are widely used throughout the managed care industry. Steerage of patients to the participating provider and associated competitive protections historically has been the primary inducements and considerations that providers receive in return for agreeing to accept payer rates and other rules for a health care provider to qualify for inclusion on the payer’s provider panel. Consequently, provider contracts between payers and participating providers commonly include steering, transparency or other restrictions similar in function if not form to those contested in the Atrium litigation. Moreover, promises regarding steering are not limited to provider agreements between payers and providers. Insurers, preferred provider organizations and other managed care organization typically require employer, union or other health plan sponsors of health plans with preferred provider or other managed care features contractually to commit to design their health plans to incorporate features that steer plan members to use preferred providers and prohibit plan members from taking advantage of potentially lower cash or other rates that a participating provider might offer to patients choosing to circumvent the provider network to access care. Since the Atrium litigation raises questions about potential challenges to the enforceability and legality of similar steering and contractual provisions insulating contracted providers from competition health care providers and payers with or negotiating preferred provider contracts that contain anti-steering or other contractual provisions like those challenged in the Atrium litigation and the self-insured group health plans that contract to access provider networks using these contracts should weigh carefully the potential risks of participating in contractors or seeking to negotiate or enforce these provisions taking into account their own specific facts and circumstances and the current guidance within qualified legal counsel within the scope of attorney-client privilege.
While some might be tempted to assume from Atrium’s market dominance that the Atrium challenge and litigation challenges apply only to provider agreements involving providers with substantial market dominance in their region, this is not necessarily the case. Broader existing antitrust precedent concerning restraints on competition arguably provide some grounds for concern that the Justice Department or private litigants might seek to leverage the antitrust challenges raised in the Atrium litigation to challenge Atrium-like steering restrictions, most favored nation status and other similar clauses in preferred provider and other managed care agreements involving health care providers or others with a much smaller market share. Likewise, it remains whether evidence showing the insurer, rather than the provider, originally proposed the questioned provision could impact the risk or render the contracts more defensible.
Despite these and other questions about the extent to which the challenges raised to the Atrium contracts will be asserted, much less successfully litigated with respect to provider protections contained in other preferred provider agreements, those negotiating or involved in preferred provider agreements containing similar provisions should consider and monitor the potential risks and weigh their options for mitigating these risks. Among other things, it is important to keep in mind that antitrust violations carry potential civil and in some cases, even criminal violations, for participating or conspiring to participate in prohibited anticompetitive arrangements. Thus both payers and providers participating or contemplating participating in contracts or negotiation to interject the challenged provisions into their own provider agreements should weigh their actions carefully. Moreover, even when only civilly prosecuted, potential civil damages and defense costs often are substantial. Accordingly, while the Justice Department prosecution of Atrium was civil, rather than criminal in nature and the agreed upon Judgement presented to the Court to end the litigation does not require Atrium to pay any monetary damages, future plaintiffs should not assume that they would similarly avoid such damages in the event their own practices are successfully challenged. Consequently, health care providers, as well as health insurers, employer and union health plans and other private sector payers, and others participating in the negotiation or administration of, or competing in market regions with preferred provider agreements containing steering restrictions or other contractual provisions similar in form or function to those challenged in the Atrium litigation should seek specific legal advice about the potential implications of antitrust challenges raised in the Atrium Judgement on their practices and market situation and options for mitigating those risks.
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 managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health care and health benefit arrangements, contracts, systems, and processes throughout her career. In addition to her extensive provider and payer contracting work, Ms. Stamer also is recognized for her knowledge, experience and leadership on health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. 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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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 encompassess 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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
As a key part of this work, Ms. Stamer throughout her career regularly has worked with health care providers and payers, employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce managed care and other contracts, benefit plans and insurance arrangements, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors, supplier, and patient and member relations and requirements; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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; a 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.
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 advise 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 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.
Following on the heels of Monday’s announcement that Anthem, Inc. is paying a record setting $16 million to resolve charges its violations of the enterprise risk assessment and other requirements of the Health Insurance Portability & Accountability Act (HIPAA) Security Rule allowed cybercriminals to breach the electronic protected health information (ePHI) of more than 79 million patients, physicians and other health care providers, health plans and health insurers, health care clearinghouses (covered entities) and their service providers acting as their business associates (business associates) (hereafter collectively “HIPAA Entities”) should reconfirm their own and their business associates’ compliance with the HIPAA Security Rule’s enterprise risk assessment and other ePHI security requirements. In addition, employer, union, association and other health plan sponsors and fiduciaries should consider incorporating enterprise risk assessments of their health plans and its vendors as well as specific contractual assurance requirements into their business associate agreements to help mitigate their health plan related liabilities and risks.
When conducting these assessments, HIPAA Entities generally will want to ensure that their new enterprise risk assessment documents their consideration of the newly updated Security Risk Assessment (SRA) Tool jointly announced yesterday (October 16, 2018) by the Department of Health & Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) and OCR, lessons shared in OCR’s $16 million Anthem, Inc. resolution agreement, $5.55 million resolution agreement with Memorial Healthcare System and other OCR HIPAA resolution agreements, civil monetary penalty assessments and other Security Rule guidance, as well as other emergent internal and external data suggesting potential susceptibilities of their own systems and data to breach or loss.
HIPAA Entities are reminded that HIPAA requires that all HIPAA covered entities and business associates to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by their organization. Any HIPAA Entity that hasn’t already conducted a recent, appropriately documented enterprise wide risk analysis or updated their analysis in response to changes in equipment, vendors or emerging threats and developments should do so as soon as possible.
HIPAA’s requirement that HIPAA entities conduct and maintain an appropriately comprehensive and timely updated enterprise-wide risk analysis of potential security threats to ePHI both an affirmative requirement of the HIPAA Security Rule and an indispensable process to help healthcare organizations understand their security posture to prevent, detect, respond to and mitigate potential legal, operational and reputational costs that commonly result when ePHI or other sensitive information is breached or destroyed.
The importance of HIPAA entities having and being able to produce in the event of a breach or OCR audit an up-to-date, comprehensively enterprise risk assessment and response plan cannot be overstated. Beyond OCR’s publication of extensive regulatory guidance and educational outreach discussing the responsibility to conduct and maintain documentation of appropriate enterprise risk assessments, virtually every announced HIPAA Security Rule civil monetary penalty assessment and other enforcement action identifies violation of the HIPAA Security Rule’s enterprise risk assessment requirements among the material transgressions committed and required to be corrected by HIPAA entities like Anthem, Inc. subjected to Security Rule enforcement.
The updated SRA Tool jointly released by OCR and ONC on October 16, 2018 further reinforces the importance of complying with the enterprise wide risk assessment requirement while simultaneously encouraging and facilitating compliance by small to medium sized health care practices. Particularly designed with an eye to helping health care providers that work as solo practitioners or in groups with 10 or less health care providers and their business associates identify risks and vulnerabilities to ePHI, OCR says the updated SRA Tool “provides enhanced functionality to document how such organizations can implement or plan to implement appropriate security measures to protect ePHI” and incorporates new features to make the tool “more user friendly.” New features OCR hopes will make the SRA tool more user friendly include:
Enhanced User Interface
Modular workflow with question branching logic
Custom Assessment Logic
Progress Tracker
Improved Threats & Vulnerabilities Rating
Detailed Reports
Business Associate and Asset Tracking
Overall improvement of the user experience
HIPAA Entities should take note, however, that as of its October 16, 2018 released date, the updated version of the SRA Tool currently is only available in Windows format. OCR has indicated that the OCR and ONC have not yet updated the OS iPad version of the previously published version of the SRA Tool. While the previous OS iPad version remains available at the Apple App Store exit disclaimer icon (search under “HHS SRA Tool”), HIPAA Entities that presently use or plan to use the OS iPad tool should consider comparing the prior tool against the updated Windows SRA Tool to verify the continued suitability of its continued use and any adjustments in understanding or application that might be warranted by these differences. Additionally, HIPAA Entities also should review the revised User Guide available on the SRA Tool’s website before starting the assessment.
While the SRA Tool provides valuable guidance to help HIPAA Entities to conduct their own enterprise wide risk assessment, HIPAA Entities should keep in mind that the responsibility to assess their enterprise wide risk and to update their security safeguards to respond to these risks is a continuous one. While using the SRA Tool is an excellent starting point for beginning this assessment, HIPAA Entities need to realize that OCR expects HIPAA Entities to tailor their assessments to identify and respond to the full range of risks and exposures to their ePHI and associated systems and to constantly reevaluate and adjust these assessments in response to emerging system and ePHI threats identified in the course of their operations as well as external developments suggesting previously unidentified or inadequately appreciated threats. Moreover, in addition to conducting the risk assessment, OCR regulatory guidance and guidance drawn from OCR’s civil monetary settlements resolution agreements and other enforcement and audit activities also make clear that in addition to conducting the enterprise wide risk analysis, HIPAA entities also need to be prepared to produce documentation that their organizations took appropriate and timely action to address the risks identified in the risk assessment in accordance with the HIPAA Security Rule.
In addition to mitigate their exposure to potentially substantial HIPAA civil monetary penalties for violating the HIPAA Security Rule, HIPAA Entities also should keep in mind the potential role that their conduct and maintenance of appropriately comprehensive enterprise wide security risk assessments can play in helping to mitigate other legal, financial, operational and reputational risks that commonly also arise along with the HIPAA exposures associated with a breach of HIPAA. In addition to HIPAA’s Security Rules for ePHI, HIPAA Entities typically also are subject to a hodgepodge of non-HIPAA statutory, regulatory and/or contractual obligations to safeguard patient, employee, business partners and other individual, financial, health, tax, peer review and credentialing, trade secrets and other confidential information against improper use, access, destruction or disclosure. Examples of such obligations include the privacy and data security rules of the Fair and Accurate Credit Transaction Act (FACTA), the Internal Revenue Code and other tax laws, federal and state consumer debt and information, electronic crime, data security and identity theft statutes; federal and state trade secret and intellectual property laws; and others, for which violations often equal or substantially exceed the civil monetary penalty liability that commonly arise under the HIPAA Security Rule. The experience of Anthem, Inc. illustrates this point. While the $16 million resolution payment that OCR announced Anthem, Inc. is paying to resolve its HIPAA civil monetary penalty exposures for allowing the breach of the ePHI of 79 million individuals, this payment reflects only a very small portion of the overall liability that Anthem, Inc. incurred from data breach that lead to this resolution payment. Anthem, Inc. also separately already reportedly also has paid more than $115 million to settle other statutory and contractual liabilities arising from the breach separate as well as substantial investigatory and defense costs in addition to the HIPAA liabilities settled under the resolution agreement announced Monday. Other HIPAA Entities subjected to HIPAA civil monetary penalties or paying resolution payments to OCR also typically also have incurred substantial non-HIPAA sanctions and settlements, as well as other defense, investigation, operational and reputational losses as a result of their breaches. HIPAA Entities should strive to ensure that their HIPAA enterprise wide risk assessment and compliance efforts are properly coordinated and administered to manage these overall risks and responsibilities in addition to their HIPAA-specific responsibilities and liabilities.
Beyond these generally applicable breach related risks, health plan sponsors and fiduciaries also need to be concerned about potential fiduciary responsibility obligations of fiduciaries under the Employee Retirement Income Security Act, plan and employer confidentiality requirements under the Internal Revenue Code, and other legal or contractual obligations to participants or employees, indemnification obligations to vendors and operational and trust disruptions that can result from a breach of sensitive health plan data or associated systems or records. Meanwhile, third party administrators, insurers, brokers, consultants, accountants and other vendors also typically face their own unique their own unique licensure, ethics and contractual responsibilities.
Because enterprise wide risk assessments and discussions of their structuring, scope and findings are likely to produce legally sensitive evidence, HIPAA Entities are encouraged to seek the advice of qualified and suitably experienced legal counsel about the advisability of conducting all or certain aspects of an enterprise wide risk analysis and their documentation of their risk evaluation and response to take advantage of possible attorney-client privilege, work-product or other evidentiary rules before or throughout the risk assessment and response process and deliberations.
About The Author
A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C, Cynthia Marcotte Stamer’s more than 30 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.
Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, Scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits (JCEB) Annual Agency Meeting with the Office of Civil Rights and a former JCEB Council Representative; former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; and past Chair, former Welfare Benefit Committee Co-Chair and current Fiduciary Responsibility Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health care, managed care and insurance, and other employee benefit, human resources, and related antitrust, corporate, privacy and data security, tax and other internal controls, regulatory affairs and public policy concerns.
Ms. Stamer’s legal and management consulting work throughout her career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. 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 helps public and private, domestic and international health, insurance and financial security, and other businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
In this respect, Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, regulatory compliance and operational and performance management. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.
As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help health industry, insurance and financial services and other employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compliance and internal controls, risk management, human resources and other workforce performance, discipline, compensation, employee benefits and related programs, products and arrangements.
In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
Ms. Stamer also is deeply involved in helping to influence the health care, workforce, insurance and financial services, employee benefit, privacy and data security and other federal, state and local laws, regulations and enforcement actions. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health, insurance and financial services, employee benefits and other business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, 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 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. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also has a lifelong history of involvement with and service with a diverse range of professional, community and charitable organizations and causes including as founder and Executive Director of the Coalition for Responsible Health Care Policy and its PROJECT COPE: Coalition for Patient Empowerment; technical advisor to the National Physicians’ Council for Health Care Policy; a founding Board Member and President of the Alliance for Healthcare Excellence and its Patient Empowerment and Health Care Heroes Projects; a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; a member of the Dallas United Way Long Range Planning Committee; as well as leadership involvement in the ABA Joint Committee on Employee Benefits Council, the North Texas Healthcare Compliance Professionals Association; the ABA RPTE Employee Benefits & Other Compensation Committee, the ABA Health Law Section, the ABA International Section Life Sciences Committee, and the ABA TIPS Employee Benefit Committee; TEGE Coordinator of the Gulf Coast TEGE Council TE Division; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; Dallas, Regional and State BACPAC Chair of the Texas Association of Business; SHRM Regional Chair and National Advisory Board Chair; WEB Network of Benefits Professionals National and Dallas Boards; as a contributing author and the Advisory Board member of the BNA EBCD CD, InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications and as chair or planning faculty of a multitude of symposia.. For additional information about Ms. Stamer, see www.cynthiastamer.com, or contact Ms. Stamer via email here or via telephone to (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 may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com 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 or updating your profile here.
Health plans, their employer and other sponsors and fiduciaries, health insurers, health care providers, health care clearinghouses and their business associates should study and learn from the just announced, record-setting $16 million resolution agreement between health insurance giant, Anthem, Inc., to resolve Department of Health & Human Services Office of Civil Rights (OCR) charges that Anthem, Inc.’s violations of the Health Insurance Portability & Accountability Act (HIPAA) Privacy and Security Rules exposed the electronic protected health information (ePHI) of almost 79 million people. In addition to reviewing the adequacy of their own HIPAA privacy and security practices, health plans, their employer and union sponsors and fiduciaries also should consider assessing the advisability of tightening their business associate and other agreements with health insurers, third party administrative services providers and other vendors in light of the resolution agreement and experiences arising out of the Anthem breach to better position themselves to assess and enforce HIPAA compliance, receive notice and respond in the event of an insurer or other vendor breach and mitigate financial costs and liabilities resulting from breaches or other compliance deficiencies.
Anthem’s Record Setting HIPAA Breach & Resolution Agreement
The settlement agreement announced October 15, 2018 by OCR requires Anthem, Inc. to pay a $16 million resolution payment to OCR and take a series of corrective actions to resolve HIPAA liabilities to OCR for allowing the largest known U.S. health data breach in history in 2015. The record $16 million resolution payment eclipses the prior record resolution payment of $5.55 million Memorial Healthcare System (MHS) paid OCR to settle HIPAA charges in 2016. Moreover, the $16 million resolution payment it’s just a small portion of the amount that Anthem has been required to shell out as a consequence of the breach. In addition to the $16 million paid under the OCR resolution agreement, anthem already has paid more than $115 million to settle lawsuits arising out of the breach under other laws.
An independent licensee of the Blue Cross and Blue Shield Association and one of the nation’s largest health benefits companies, Anthem provides medical care coverage to one in eight Americans through its affiliated health plans. The breach that resulted in the settlement agreement affected ePHI Anthem maintained for its affiliated health plans including many employer or union sponsored self-insured and insured group health plans and other HIPAA-covered entity health plans.
On March 13, 2015, Anthem filed a breach report with the HHS Office for Civil Rights that disclosed that Anthem discovered on January 29, 2015 that cyber-attackers had gained access to and engaged in continuous and targeted cyberattack on Anthem’s IT system for the apparent purpose of extracting data, otherwise known as an advanced persistent threat attack. After filing its breach report, Anthem discovered cyber-attackers had infiltrated their system through spear phishing emails sent to an Anthem subsidiary after at least one employee responded to the malicious email and opened the door to further attacks. OCR’s investigation revealed that between December 2, 2014 and January 27, 2015, the cyber-attackers stole the ePHI of almost 79 million individuals, including names, social security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information.
In addition to the impermissible disclosure of ePHI, OCR’s investigation revealed that Anthem failed to conduct an enterprise-wide risk analysis, had insufficient procedures to regularly review information system activity, failed to identify and respond to suspected or known security incidents, and failed to implement adequate minimum access controls to prevent the cyber-attackers from accessing sensitive ePHI, beginning as early as February 18, 2014.
In addition to the consequences for the millions of individuals whose ePHI was disclosed through the breach, the breach also triggered responsibilities and concerns for fiduciaries and sponsors of the employer and union-sponsored group health plans administered or insured by Anthem. Sponsors and fiduciaries of private sector employer or union sponsored plans struggled to obtain information and cooperation from Anthem necessary to evaluate and fulfill their health plans’ HIPAA obligations as well as the fiduciary responsibility requirements of the Employee Retirement Income Security Act (ERISA).
In addition to the $16 million settlement that Anthem is paying to resolve OCR’s HIPAA charges stemming from the breach, the OCR settlement agreement also requires Anthem to undertake a robust corrective action plan to comply with the HIPAA Rules.
Health Plans, Sponsors, Fiduciaries & Vendors Should Act To Manage Compliance & Risks
Unquestionably, other health insurers, employer, union and association sponsored group health plans, and their vendors and business associates should evaluate the adequacy and defensibility of their own health plan privacy and security practices in light of the Anthem breach and resolution agreement. In addition, employer, union or association health plan sponsors, administrative service providers and fiduciaries also should consider the advisability of strengthening their business associate agreements with insurers, third party administrators and other health plan service providers to incorporate safeguards, audit, oversight or other provisions and practices to help prudently monitor potential risks and improve their ability to receive timely notice, respond to, and preserve rights of recourse against insurers or other vendors in the event of a breach or other deficiency.
About The Author
A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C, Cynthia Marcotte Stamer’s more than 30 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.
Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, Scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits (JCEB) Annual Agency Meeting with the Office of Civil Rights and a former JCEB Council Representative; former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; and past Chair, former Welfare Benefit Committee Co-Chair and current Fiduciary Responsibility Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health care, managed care and insurance, and other employee benefit, human resources, and related antitrust, corporate, privacy and data security, tax and other internal controls, regulatory affairs and public policy concerns.
Ms. Stamer’s legal and management consulting work throughout her career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. 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 helps public and private, domestic and international health, insurance and financial security, and other businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
In this respect, Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, regulatory compliance and operational and performance management. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.
As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help health industry, insurance and financial services and other employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compliance and internal controls, risk management, human resources and other workforce performance, discipline, compensation, employee benefits and related programs, products and arrangements.
In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
Ms. Stamer also is deeply involved in helping to influence the health care, workforce, insurance and financial services, employee benefit, privacy and data security and other federal, state and local laws, regulations and enforcement actions. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health, insurance and financial services, employee benefits and other business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, 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 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. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also has a lifelong history of involvement with and service with a diverse range of professional, community and charitable organizations and causes including as founder and Executive Director of the Coalition for Responsible Health Care Policy and its PROJECT COPE: Coalition for Patient Empowerment; technical advisor to the National Physicians’ Council for Health Care Policy; a founding Board Member and President of the Alliance for Healthcare Excellence and its Patient Empowerment and Health Care Heroes Projects; a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; a member of the Dallas United Way Long Range Planning Committee; as well as leadership involvement in the ABA Joint Committee on Employee Benefits Council, the North Texas Healthcare Compliance Professionals Association; the ABA RPTE Employee Benefits & Other Compensation Committee, the ABA Health Law Section, the ABA International Section Life Sciences Committee, and the ABA TIPS Employee Benefit Committee; TEGE Coordinator of the Gulf Coast TEGE Council TE Division; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; Dallas, Regional and State BACPAC Chair of the Texas Association of Business; SHRM Regional Chair and National Advisory Board Chair; WEB Network of Benefits Professionals National and Dallas Boards; as a contributing author and the Advisory Board member of the BNA EBCD CD, InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications and as chair or planning faculty of a multitude of symposia.. For additional information about Ms. Stamer, see www.cynthiastamer.com, or contact Ms. Stamer via email here or via telephone to (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 may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com 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 or updating your profile here.
A flurry of activity in the House Ways & Means Committee and other Congressional committees over the past few weeks signals the advisability of keeping a close eye on health care and health benefit reform proposals this Summer in anticipation of both the Fall health benefit enrollment and renewal season and the mid-term November Congressional elections.
Coupled with the Trump Administration’s recent rollout of its long promised association health plan, short-term coverage and other regulatory reforms and promises of more changes to come, the ongoing attention paid by the Administration and Congress to health insurance and health care reform raises a strong possibility that employer, association, and other health plan sponsors, fiduciaries and their vendors that they and their plan members should be on watch for late-breaking developments that may require or warrant last minute changes to health benefit plan designs, communications, contracts or other key decisions.
With President Trump continuing to push for a wide range of health care reforms and health care and health benefit issues recognized as key voter concerns for the upcoming mid-term elections in November, the continued emphasis of the Republican-led Congress and federal regulators talking about their health care reform legislative agenda is not surprising. What may be more surprising to many is the intensity of the ongoing efforts in Congress to try to pass reform over the summer when many members of the House and Senate face tightly contested races in November.
Certainly continued Congressional commitment to pursue reform is evident from the House Ways & Means Committee’s health care heavy agenda of hearings and votes that this week alone resulted in its voting in favor of 11 health care reform bills promising new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors. While it remains to be seen if the House and Senate can agree on any or all of these proposal, the bi-partisan sponsorship of many of these proposals and the intensity of the focus of the Committee and others in Congress reflects a strong interest in health care reform by both parties leading up to November that could impact health benefit and other health care choices for providers, employers and American families in the Fall annual enrollment season.
The legislation passed by the Ways & Means Committee this weeks include bills that would:
Provide relief for employers relief from the Obamacare’s employer mandate and delay for an additional year the effective date of the widely disliked “Cadillac Tax;”
Overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for healthcare flexible spending arrangement plans (HFSAs) that currently forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year;
Offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage using their subsidies; and
Expand expand the availability and usability of HSAs in a multitude of ways.
Furthermore, a review of the Committee’s schedule makes clear that it isn’t finished with health care reform. After holding hearings on health savings account reforms and passing a flurry of health care reform bills intended to give employers relief from two key Obamacare mandates, to allow Obamacare subsidy-eligible Americans the choice to use the subsidies to purchase health care coverage not offered by the Obamacare exchanges, and a host of bills that would expand availability and usability of health savings account (HSA) and health care flexible spending account (HFSA) programs this week, the House Ways and Means Committee will turn its attention to health care fraud oversight and reform next week by holding hearings Tuesday on those health concerns. Health care providers, employer and other health plan sponsors, individual Americans and their families, and others interested in health benefit and health care reform will want to keep a close eye on these and other developments as Congress continues to debate health care reform in the runup to the upcoming 2018 health benefit plan renewal and annual enrollment season and November’s mid-term elections.
Committee Approved 11 Health Care Reform Bills This Week
As a part of its health reform efforts this week, the Committee voted to advance 11 health care reform bills offering new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors.
Among the approved legislation is a bill that would provide key relief for employers from certain key Obamacare mandates that have been widely unpopular with employers. H.R. 4616, the “Employer Relief Act of 2018,” sponsored by Rep. Devin Nunes (R-CA) and Rep. Mike Kelly (R-PA), which would give employers sponsoring health plans for their employees retroactive relief from Obamacare’s onerous employer mandate and delay for an additional year the effective date of another Obamacare requirement that when effective, will forces employers to pay the 40 percent tax on amounts paid for employer sponsored health care coverage that exceeds cost limits specified in the Obamacare legislation commonly known as the “Cadillac Tax.” Relief from the Cadillac Tax is widely perceived as benefiting bother employers and their employees, as its provisions penalize employers for spending more for employee health coverage than limits specified in the Obamacare law. These provisions also are particularly viewed by many as unfair because rising health plan costs since Obamacare’s passage make it likely that many employers will incur the tax penalty simply by sponsoring relatively basic health plans meeting the Obamacare mandates.
In addition to H.R. 4616, the Committee also voted to approve H.R. 6313, the “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018,” sponsored by Rep. Steve Stivers (R-OH), which would overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for HFSAs. Currently, this rule forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year. The bill would allow employers to eliminate this forfeiture requirement so that employees could carry over any remaining unused balances in their HFSAs at the end of the year to use in a later year.
The Committee also voted to advance legislation to offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage. H.R. 6311, the “Increasing Access to Lower Premium Plans Act of 2018,” sponsored by Chairman Peter Roskam (R-IL) and Rep. Michael C. Burgess, M.D. (R-TX), would provide individuals receiving subsidies to help purchase health care coverage through the Obamacare-created health insurance exchange the option to use their premium tax credit to purchase health care coverage from qualified plans offered outside of the exchanges. Currently, subsidies may only be used to purchase coverage from health plans offered through the exchange, which often are much more costly and offer substantially fewer coverage options and less provider choice. In addition, the bill would expand access to the lowest-premium plans available for all individuals purchasing coverage in the individual market and allows the premium tax credit to be used to offset the cost of such plans.
Along with these reforms, the Committee also voted to pass a host of bills that would expand the availability and usability of HSAs including:
H.R. 6301, the “Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act of 2018,” co-sponsored by Health Subcommittee Chairman Peter Roskam (R-IL) and Rep. Mike Thompson (D-CA), which seeks to expand access and enhance the utility of Health Savings Accounts (HSAs) by offering patients greater flexibility in designing their plan design while still being able to maintain their eligibility for HSA contributions.
H.R. 6305, the “Bipartisan HSA Improvement Act of 2018,” sponsored by Rep. Mike Kelly (R-PA) and Rep. Earl Blumenauer (D-OR), which also would expand HSA access and utility by allowing spouses to also make contributions to HSAs is their spouse has an FSA and lets employers offer certain services to employees through on-site or retail clinics.
H.R. 6317, the “Primary Care Enhancement Act of 2018,” co-sponsored by Rep. Erik Paulsen (R-MN) and Rep. Earl Blumenauer (D-OR), which seeks to protect HSA-eligible individuals who participate in a direct primary care (DPC) arrangement from losing their HSA-eligibility merely because of their participation in a DPC. In addition, it allows DPC provider fees to be covered with HSAs.
H.R. 6312, the “Personal Health Investment Today (PHIT) Act,” sponsored by Rep. Jason Smith (R-MO) and Rep. Ron Kind (D-WI), which seeks to fight obesity and promote wellness by allowing taxpayers to use tax-preferred accounts to pay costs of gym membership or exercise classes, children’s school sports programs and certain other wellness programs and activities.
H.R. 6309, the “Allowing Working Seniors to Keep Their Health Savings Accounts Act of 2018,” sponsored by Rep. Erik Paulsen (R-MN), which would expand HSA eligibility to include Medicare eligible seniors who are still in the workforce.
H.R.6199, the “Restoring Access to Medication Act of 2018,” sponsored by Rep. Lynn Jenkins (R-KS) and Rep. Grace Meng (D-NY), which would reverse Obamacare’s prohibition on using tax-favored health accounts to purchase over-the-counter medical products and would add feminine products to the list of qualified medical expenses for the purposes of these tax-favored health accounts.
H.R. 6306, the “Improve the Rules with Respect to Health Savings Accounts,” sponsored by Rep. Erik Paulsen (R-MN), which would increase the contribution limits for HSAs and further enhances flexibility in plans by allowing both spouses to contribute to make catch-up contributions to the same account and creating a new grace period for medical expenses incurred before the HSA was established.
H.R. 6314, the “Health Savings Act of 2018,” sponsored by Rep. Burgess (R-TX) and Rep. Roskam (R-IL), would expand eligibility and access to HSAs by allowing plans categorized as “catastrophic” and “bronze” in the exchanges to qualify for HSA contributions.
Committee Considers Health Care Fraud Next Week
The Committee next week will turn its attention to health care fraud by holding two hearings on Tuesday.
Both hearings are scheduled to take place in Room 1100 Longworth and their proceedings will be live streamed on YouTube.
The Committee’s health care reform focus this week and next are reflective of the continued emphasis of members of Congress in both parties on health care reform legislation as they prepare for the impending mid-term elections in November. As a part of these efforts, the House and Senate already over the past several months have held a wide range of hearings in various committees and key votes on a multitude of reform proposals. Numerous other hearings and votes are planned over the next several months as Congressional leaders from both parties work to advance their health care agendas in anticipation of the upcoming elections.
Key health care and health benefit reform proposals that the Republican Majority has designated for priority consideration include:
Prescription drug costs by checking perceived negative effects of health industry and health plan consolidations involving large health insurers, pharmacy benefit management companies (PBMs), pharmacy companies and other health industry and health insurance organizations on health care costs and patient, plan sponsor and plan sponsor choice and health care quality;
Oversight and reform of existing STARK, anti-kickback and other federal health care rules and exemptions relied upon by PBMs and other health industry organizations;
Efforts to understand and address health care treatment, health care and coverage costs and related social concerns associated with mental health and opioid and other substance abuse conditions and their treatment;
Efforts promote health benefit and health care choice, affordability and coverage; improve patient and employer choice; promote broader health care access and quality; reduce counterproductive regulation; and other health insurance and care improvements through expanded availability of health savings accounts, direct primary care and other consumer directed health care options, association health plan and other program options, streamlining quality reporting and regulation, billing and coding, physician and other health care provider electronic billing and recordkeeping, and other provider, payer, employer, individual and other health insurance mandates and other federal health care and health plan rules; and
While the recurrent stalling of past reform efforts over the past few years calls into question whether any or all of these proposals can make it through the highly politicized and divided Congress, bi-partisian sponsorship of most of the bills reported out this week at least raises the possibility that some of these proposals enjoy sufficient bi-partisan support to potentially pass before the elections. With both parties viewing health care reform as a key issue in the upcoming elections, voter feedback on these proposals could play a big role in determining the prospects for passage this Summer.
Along with the ongoing Congressional reform efforts, the Trump Administration also continues to move forward on a series of regulatory reforms that also could impact health care and health benefit decisions and responsibilities later this year. Beyond the Administration’s implementation of its long promised and recently finalized and released association health plan, short term coverage and other health benefit rules, the Administration’s continued consideration of changes to essential health benefits and other Obamacare regulations, ongoing mental health, substance abuse, and prescription drug reform projects, and other proposed regulatory and enforcement changes are likely to require health plans, their sponsors, insurers, administrators, members and even providers to adapt to changes in federal health plan rules between now and year end.
Amid this shifting legal landscape, employer and other health plan sponsors, their insurers, vendors, providers and participants will want to remain vigilant and work to preserve the flexibility to respond to new rules or guidance likely to rollout over the next several months.
Staying on top of proposed reforms as the Summer progresses is important:
To provide timely input to Congress on proposed reforms of particular benefit or concern;
To help plan for and deal with rules changes that could impact their options and choices during the upcoming health plan renewal and enrollment season this Fall and going forward; and
To be prepared to make informed choices when voting in the upcoming mid-term Congressional elections in November.
Keeping informed about potential changes is only part of the challenge, however. Employer and other health plan sponsors, fiduciaries and service providers also generally should seek to negotiate vendor contracts that allow them the greatest possible flexibility to respond to changing rules, opportunities and requirements with minimum penalties and disruption when designing, negotiating and implementing vendor contracts, plan designs and plan enrollment and other processes and communications.
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, health and other 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; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
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 encompassess 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.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend 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; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other 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, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other 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; HIPAA administrative simplification, 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, HEDIS 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; 1557 and other Civil Rights; 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.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of 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, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, 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’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
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; a 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.
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 advise 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 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.
Construction industry and other employers of employees working in summer heat impacted environments need to take appropriate steps to prevent heat related injuries and illnesses
Every year, dozensof workers die and thousands more become ill while working in extreme heat or humid conditions. More than 40 percent of heat-related worker deaths occur in the construction industry, but workers in every field are susceptible.
Working in extreme heat without appropriate precautions creates heightened risk of a range of heat illnesses. These risks can affect anyone, regardless of age or physical condition.
Employer Responsibility to Protect Workers
Protecting workers from extreme heat generally is part of the responsibility of an employer to provide a safe workplace under the Occupational Health & Safety Act (OSHA) and state occupational health and safety statutes.
Aside from the worker’s compensation, medical and disability costs and workplace disruptions that heat related illness can create, heat related injuries or illnesses to workers also create risks of civil penalties and other liabilities under OSHA.
To minimize risks of heat related OSHA violations and other exposures, an employer of workers exposed to high temperatures should establish and document their training and administration of a complete heat illness prevention program that meets or exceeds applicable OSHA standards.
Resources
OSHA’s Occupational Exposure to Heat page explains what employers can do to keep workers safe and what workers need to know – including factors for heat illness, adapting to working in indoor and outdoor heat, protecting workers, recognizing symptoms, and first aid training. The page also includes resources for specific industries and OSHA workplace standards.
Employers can help promote compliance and reduce heat related injury risks by training and requiring workers and their management to use three common sense elements for preventing heat related injuries and deaths to workers – Water. Rest. Shade.
OSHA guidance urges employers to prevent heat-related injuries by taking the following steps:
Provide workers with water, rest and shade.
Allow new or returning workers to gradually increase workloads and take more frequent breaks as they acclimatize, or build a tolerance for working in the heat.
Plan for emergencies and train workers on prevention.
Monitor workers for signs of illness.
Take prompt action to provide appropriate intervention and medical care in response to signs of potential heat related health issues.
To ensure that they can prove these expectations are met, Most employers will want to adopt specific policies require in well-documented compliance with these requirements.
About The Author
If you need more information about or help with these or other workplace concerns, the author of this article may be able to help.
Board Certified in Labor and Employment Law, 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 management attorney, consultant, coach, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on labor and employment, compensation, health, pension and other employee benefit, insurance, 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 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.
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 such as the following
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating 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, 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 2018 maximum deductible Health Savings Account (HSA) contribution for individuals with family coverage under a high deductible health plan (HDHP) is $6,900, rather than the lower $$6850 limitation that the Internal Revenue Service (IRS) and Department of Treasury originally identified as the 2018 maximum deduction amount last March.
The mid-year change in the 2018 annual limit that Internal Revenue Code § 223(b)(2)(B) sets for the maximum deductible HSA contribution for individuals with family coverage under a HDHP announced in Revenue Procedure 2018-27 on April 26 corrects a mistake in the amount of the 2018 annual limit amount that the Treasury Department and the IRS previously announced in Rev. Proc. 2018-18 on March 2, 2018. Revenue Procedure does not change any other annual limitation or any other requirement under section 223 for calendar year 2018.
Before Revenue Procedure 2018-27, the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP at $6,850 for 2018 – a $50 reduction in the amount of the 2018 limit amount set in Revenue Procedure 2018-18, which reduced the originally announced 2018 limit amount of $6,900 that the Treasury Department and IRS previously had announced in May 4, 2017 in Revenue Procedure 2017-37. After publishing the original $6,900 limit in Revenue Procedure 2017-37, Congress changed the rules on inflation adjustments as part of “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the Act), Pub. L. 115–97, 131 Stat. 2504, enacted December 22, 2017. Consequently, on March 2, 2018, the Treasury Department and the IRS released Rev. Proc. 2018-18, announcing the reduction of the 2018 limit to $6,850 to reflect the statutory amendments to the inflation adjustments under the Act. However, IRS and Treasury say that the recently announced change in the 2018 annual limitation resulted after stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders informed the Treasury Department and the IRS that the costs of modifying the various systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution (and earnings), would be significantly greater than any tax benefit associated with an unreduced HSA contribution (and in some instances may exceed $50). Some stakeholders also pointed to section 223(g)(1), which requires annual inflation adjustments for HSAs to be published by June 1 of the preceding calendar year, as another indication that a current year change would be unduly burdensome.
In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP. Accordingly, $6,900 now is the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP for calendar year 2018.
Before this announced change, some individuals may have received distributions of HSA contribution amounts that were treated as in excess of the annual contribution limit amount before publication of Revenue Procedure 2018-27. Revenue Procedure 2018-27 outlines two alternatives for dealing with these distributions.
Under the first alternative, an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause under Q&A-37 of Notice 2004-50. The portion of a distribution (including earnings) that an individual repays to an HSA by April 15, 2019, is not included in the individual’s gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4). The repayment is not subject to the excise tax on excess contributions under section 4973(a)(5). Also, mistaken distributions that are repaid to an HSA are not required to be reported on Form 1099-SA or Form 8889 and are not required to be reported as additional HSA contributions. However, in accordance with Q&A-76 of Notice 2004-50, a trustee or custodian is not required to allow individuals to repay mistaken distributions.
Alternatively, Revenue Procedure 2018-27 states that an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 and does not repay the distribution to the HSA may treat the distribution in accordance with section 223(f)(3), which describes the treatment of excess contributions returned before the due date of return. Thus, the excess contribution generally would not be included in gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4), provided the distribution is received on or before the last day prescribed by law (including extensions of time) for filing the individual’s 2018 tax return. However, Revenue Procedure 2018-27 adds that the tax treatment under this alternative does not apply to distributions from an HSA that are attributable to employer contributions (pursuant to a cafeteria plan election or otherwise) if the employer does not include any portion of the contributions in the employee’s wages because the employer treats $6,900 as the annual limitation on deductions under section 223(b)(2)(B). In that case, unless the distribution from the HSA is used to pay qualified medical expenses, the distribution is includible in the employee’s gross income under section 223(f)(2) and subject to the 20 percent additional tax under section 223(f)(4).
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.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of 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, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
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 concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; 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; 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; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate 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 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.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
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 including:
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 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.
Employers should consider inviting their workers to conduct a Paycheck Checkup to review their withholding elections to confirm they have the right amount of tax deducted from their paychecks in response to tax law changes enacted by the Tax Cuts and Jobs Act (Trump Tax) and other recent legislation. Helping workers properly to take into account tax relief or other changes reducing their income tax liability can help boost workers’ take home pay, helping them to see more benefit from the wages paid by the employer at payday.
The amount of withholding that an employer withholds from an employee’s pay generally depends upon two factors:
The amount the employee can earn; and
The accuracy of the personal information the employee uses to complete the Form W-4 to notify the employer of his withholding elections; and
The tax rules that decide how much tax the employee ultimately will owe when their personal income tax returns become due on April 15, 2018.
Although most employees don’t think about the potential need to re-evaluate the withholding elections on their current Form W-4 unless reminded by an employer or professional advisor, it’s generally a good idea for workers to periodically review and update their withholding elections since these often change from time to time. Encouraging workers to periodically review and update their W-4 elections can help workers maximize their take home pay while minimizing the risk of being surprised with an unexpected income tax or even under withholding penalty when they file their annual income tax return.
A number of recent events make it particularly likely that employees will benefit from re-evaluating their W-4 withholding now. For one thing, the Tax Cuts and Jobs Act recently changed the way income tax is calculated for most individual taxpayers. As many of these changes were enacted to provide individual tax relief for many taxpayers, workers qualifying for this relief that do not review and update their withholding elections likely are having the employer withhold more tax than necessary from their paychecks. Beyond these tax rule changes, many workers also may need to update their withholding elections in response to changes in their income, marital or other family status or other changes in their personal situation that also can affect the income tax withholding of the individual worker.
The Internal Revenue Service recently updated the Withholding Calculator the IRS provides on its website to help individuals estimate their annual income tax for purposes of deciding the withholding they should enter on their Form W-4 in light of the Tax Cuts and Jobs Act changes. Individuals can use the Withholding Calculator to estimate their 2018 and to compare their current tax withholding to help the individual decide if the individual needs to change his withholding with an employer.
More details about the Withholding Calculator and the new 2018 withholding tables can be found using the following internet links on the IRS’ Frequently Asked Question pages:
Employers should consider sending a reminder to workers to review their Form W-4 using these tools to determine if they can increase their take home pay by changing their withholding to take into account any potential income tax and withholding reductions they qualify for, if any, as a result of the Tax Cuts and Jobs Act or other changes in factors that impact their withholding and income tax liability or if other changes are warranted. Because most employees just completed their annual tax returns and likely have not considered the potential need to change their elections for tax reform or other changes, employees are likely to be particularly receptive and responsive to these reminders now. Employers and benefit plan administrators also may wish to consider helping employees remember to review and update their Form W-4 withholding when sending benefit enrollment packages, processing benefit enrollment elections when announcing pay increases or bonuses, in employee handbooks or payroll stuffers, at annual enrollment times or in response to mid-year election or beneficiary change notifications and at other times when the employer or their benefit plans deal with life event or benefit election events that could impact an employee’s withholding.
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.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of 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, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
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 concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; 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; 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; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate 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 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.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
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 including:
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 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.
Health plans and insurers, their service providers that act as business associates within the meaning of the Health Insurance Portability & Accountability Act (HIPAA) and employer and other health plan sponsors, fiduciaries, and other management leaders should heed the warnings contained in the new Resolution Agreement (FileFax Resolution Agreement) with former HIPAA business associate FileFax, Inc. announced by the Department of Health & Human Services (HHS) Office of Civil Rights (OCR) about their own need to ensure that they and their business associates comply with HIPAA’s business associate and other Privacy, Security, Breach Notification rules as well as the advisability of tightening up their risk management and oversight of business associates that handle protected health information (PHI).
Significant for business associates as what appears to be the first announced resolution agreement with a business associate directly charged by OCR with violating HIPAA and the second resolution agreement pursued and reached with a HIPAA-regulated entity in bankruptcy, the FileFax, Inc. Resolution Agreement OCR announced February 13, 2018 also contains critical lessons for Covered Entities about their dealings with their own business associates when read in conjunction with the April, 2017 resolution agreement the Center for Children’s Digestive Health (CCDH) agreed to resolve OCR charges CCDC, as a Covered Entity, violated HIPAA by allowing FileFax, Inc. to act as its business associate without adequately complying with HIPAA’s business associate requirements.
With widespread media coverage over large scale breaches of health care and other sensitive information placing further pressure upon OCR and other governmental agencies to act to protect Americans’ privacy and data fueling even greater demands for OCR and other agencies to take meaningful action to enforce HIPAA and other privacy and data security requirements, health plans, health care providers, health care clearinghouses (Covered Entities) and their business associates can expect OCR and other agencies to continue to turn up the heat on investigation and enforcement of HIPAA compliance.
In the face of these developments, Covered Entities, their business associates and those responsible for their leadership and operations need to recognize and take the necessary steps both effectively to manage their own HIPAA compliance and risk management as well as to anticipate and make provision to deal with the likelihood that they may face HIPAA responsibilities, exposures and other fallout from their own or another business partner’s breach of PHI or other sensitive data or other HIPAA violations, bankruptcy or other business distress, or other compliance or business event.
The Privacy Rule requires that health plans, health care providers, health care clearinghouses (Covered Entities) and their vendors that qualify as “business associates” under HIPAA comply with detailed requirements concerning the protection, use, access, destruction and disclosure of protected health information. As part of these requirements, Covered Entities and their business associates must adopt, administer and enforce detailed policies and practices, assess, monitor and maintain the security of electronic protected health information (ePHI) and other protected health information, provide notices of privacy practices and breaches of “unsecured” ePHI, afford individuals that are the subject of protected health information certain rights and comply with other requirements as specified by the Privacy, Security and Breach Notification Rules. In addition, Covered Entities and business associates also must enter into a written and signed business associate agreement that contains the elements specified in Privacy Rule § 164.504(e) before the business associate creates, uses, accesses or discloses PHI of the Covered Entity. Furthermore, the Privacy Rule includes extensive documentation and keeping requirements require that Covered Entities and BAs maintain copies of these BAAs for a minimum of six years and to provide that documentation to OCR upon demand.
Violations of the Privacy Rule can carry stiff civil monetary penalties or even criminal penalties. Pursuant to amendments to HIPAA enacted as part of the HITECH Act, civil penalties typically do not apply to violations punished under the criminal penalty rules of HIPAA set forth in Social Security Act , 42 U.S.C § 1320d-6 (Section 1177).
Resolution Agreements the just announced FileFax Resolution Agreement allow Covered Entities and business associates to resolve potentially substantially larger civil monetary penalty liabilities that OCR can impose under the civil enforcement provisions of HIPAA for HIPAA violations through a negotiated settlement process. As amended by the HITECH Act, the civil enforcement provisions of HIPAA empower OCR to impose Civil Monetary Penalties on both Covered Entities and BAs for violations of any of the requirements of the Privacy or Security Rules. The penalty ranges for civil violations depends upon the circumstances associated with the violations and are subject to upward adjustment for inflation. As most recently adjusted here effective September 6, 2016, the following currently are the progressively increasing Civil Monetary Penalty tiers:
A minimum penalty of $100 and a maximum penalty of $50,000 per violation, for violations which the CE or BA “did not know, and by exercising reasonable diligence would not have known” about using “the business care and prudence expected from a person seeking to satisfy a legal requirement under similar circumstances;”
A minimum penalty of $1,000 and a maximum penalty of $50,000 per violation, for violations for “reasonable cause” which do not rise to the level of “willful neglect” where “reasonable cause” means the “circumstances that would make it unreasonable for the Covered Entity, despite the exercise of ordinary business care and prudence, to comply with the violated Privacy Rule requirement;”
A minimum penalty of $10,000 and a maximum penalty of $50,000 per violation, for violations attributed to “willful neglect,” defined as “the conscious, intentional failure or reckless indifference to the obligation to comply” with the requirement or prohibition; and
A minimum penalty of $50,000 and a maximum penalty of $1.5 million per violation, for violations attributed to “willful neglect” not remedied within 30 days of the date that the Covered Entity or BA knew or should have known of the violation.
For continuing violations such as failing to implement a required BAA, OCR can treat each day of noncompliance as a separate violation. However, sanctions under each of these tiers generally are subject to a maximum penalty of $1,500,000 for violations of identical requirements or prohibitions during a calendar year. For violations such as the failure to implement and maintain a required BAA where more than one Covered Entity bears responsibility for the violation, OCR an impose Civil Monetary Penalties against each culpable party. OCR considers a variety of mitigating and aggravating facts and circumstances when arriving at the amount of the penalty within each of these applicable tiers to impose.
In addition to these potential civil liability exposures, Covered Entities, their business associates and other individuals or organizations that wrongfully use, access or disclose electronic or other protected health information also can face civil liability under various circumstances. The criminal enforcement provisions of HIPAA authorize the Justice Department to prosecute a person who knowingly in violation of the Privacy Rule (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person, punishable by the following criminal sanctions and penalties:
A fine of up to $50,000, imprisoned not more than 1 year, or both;
If the offense is committed under false pretenses, a fine of up to $100,000, imprisonment of not more than 5 years, or both; and
If the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, a fine of up to $250,000, imprisoned not more than 10 years, or both.
Because HIPAA Privacy Rule criminal violations are Class A Misdemeanors or felonies, Covered Entities and business associates should include HIPAA compliance in their Federal Sentencing Guideline Compliance Programs and practices and need to be concerned both about criminal exposure for their own direct violations, as well as imputed organizational liability for violations committed by their employees or agents under the Federal Sentencing Guidelines, particularly where their failure to implement or administer these required compliance policies and practices or failure to properly investigate or redress potential violations enables, perpetuates or covers up the criminal breach.
FileFax, Inc. Breach & Resolution Agreement
While Congress amended the Civil Monetary Penalty provisions of HIPAA enforced by OCR to make many of the requirements and Civil Monetary Penalty sanctions of HIPAA directly enforceable by OCR against business associates as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, the FileFax Resolution Agreement appears to be the first HIPAA resolution agreement with a business associate announced by OCR.
Indeed, OCR’s enforcement action that resulted in the FileFax Resolution Agreement would never have occurred had FileFax, Inc. not become involved in handling medical records containing PHI in the capacity of a business associate for Covered Entities.
Before filing for bankruptcy in 2016, FileFax, Inc. advertised it provided HIPAA-compliant storage, maintenance, and delivery of medical records for HIPAA Covered Entities including Illinois based health care provider CCDC, which entered into a resolution agreement with OCR in April, 2017 to resolve OCR charges that it violated HIPAA by allowing FileFax, Inc. to handle PHI without fulfilling HIPAA’s business associate agreement requirements.
Like the CCDC Resolution Agreement, the FileFax, Inc. Resolution Agreement resulted from an investigation of FileFax, Inc. that OCR began in response to a February 10, 2015 anonymous complaint filed with OCR about FileFax, Inc. about deficiencies in its delivery of these HIPAA services in its capacity as a business associate to Covered Entities. The complaint to OCR alleged that FileFax, Inc. violated these requirements because an individual transported medical records obtained from FileFax, Inc. to a shredding and recycling facility to sell on February 6 and 9, 2015.
OCR’s investigation of the complaint against FileFax, Inc. confirmed that an individual had left medical records of approximately 2,150 patients at the shredding and recycling facility, and that these medical records contained patients’ PHI. OCR’s investigation additionally found that between January 28, 2015, and February 14, 2015, FileFax, Inc. impermissibly disclosed the PHI of 2,150 individuals by leaving the PHI in an unlocked truck in the FileFax, Inc. parking lot, or by granting permission to an unauthorized person to remove the PHI from FileFax, Inc. and leaving the PHI unsecured outside the FileFax, Inc. facility.
After OCR commenced its investigation of the complaint, FileFax, Inc. was placed into bankruptcy and a receiver was appointed to liquidate FileFax, Inc.’s assets for distribution to creditors and others in 2016. Despite the bankruptcy, OCR continued to pursue enforcement against FileFax, Inc. for the HIPAA violations it found through its investigation. On February 13, 2018, OCR announced that that the receiver on behalf of FileFax, Inc. had agreed in the FileFax Resolution Agreement to pay a $100,000 monetary settlement out of the bankruptcy estate and to arrange to properly store and dispose of remaining medical records found at FileFax, Inc.’s facility in compliance with HIPAA to resolve OCR’s HIPAA charges against FileFax, Inc.
OCR Previously Sanctioned Covered Entity For Involvement With FileFax, Inc.
Beyond affirming the exposure business associates to OCR civil monetary penalties or other enforcement for violating HIPAA, the FileFax Resolution Agreement in conjunction with OCR’s previously announced April 20, 2017 resolution agreement (CCDC Resolution Agreement) with CCDC also demonstrates the need for Covered Entities to recognize that their organizations are likely to face HIPAA investigations or enforcement from HIPAA violations by or OCR audits or investigations of the conduct of their business associates.
In fact, this is exactly what happened to CCDC. A small, Illinois based Covered Entity, CCDC used FileFax, Inc. to store and dispose of medical records. As a consequence of the FileFax, Inc. investigation, OCR conducted a compliance review of CCDC. OCR reports that its compliance review revealed that while CCDC had disclosed to and allowed FileFax, Inc. to store records containing PHI for CCDC since in 2003, neither party could produce a signed business associate agreement (BAA) prior to October 12, 2015. As a consequence, OCR charged CCDC with violating HIPAA by disclosing PHI to FileFax, Inc. in violation of HIPAA’s business associate requirements.
To resolve its exposure to potentially much greater civil monetary penalties associated with this charge, CCDC agreed under the CCDC Resolution Agreement to pay OCR a $31,000 resolution payment and take a variety of corrective actions. Beyond requiring CCDC to implement and maintain written business associate agreements before allowing business associates to possess or access PHI, the corrective action plan imposed as part of the CCDC Resolution Agreement also expressly requires CCDC to promptly investigate information of a possible violation of its HIPAA policies and procedures by a “workforce member,” which the Privacy Rule defines to include a business associate, and if the investigation reveals a violation, to report the violation and corrective action taken to OCR.
OCR Enforces HIPAA Against Covered Entities & Business Associates In Bankruptcy
OCR’s announcement of the FileFax Resolution Agreement also is significant in its reaffirmation of OCR to its commitment to HIPAA enforcement, even if the HIPAA-violating Covered Entity or business associate goes bankruptcy.
OCR’s enforcement action against FileFax, Inc. despite its bankruptcy and its successful negotiation of the FileFax Resolution Agreement within the bankruptcy should alert Covered Entities and business associates that OCR does not consider the bankruptcy of a Covered Entity or business associate as an obstacle to OCR enforcement against Covered Entities or business associates that violate HIPAA. The seriousness of OCR’s commitment to enforcement, even in the face of bankruptcy is driven home by its announcement of the FileFax Resolution Agreement on the heels of its December, 2017 announcement of its first OCR HIPAA resolution agreement secured with the formal approval of a bankruptcy court, a resolution agreement (21CO Resolution Agreement) against bankrupt health care provider, 21CO.
Secured with bankruptcy court approval, the 21CO Resolution Agreement resolved potentially much larger civil monetary penalties that the Fort Myers, Florida based provider of cancer care services and radiation oncology could have faced for alleged HIPAA breaches OCR charged it committed in connection with its failure to adequately act to prevent and respond to hacking and misappropriation of records containing sensitive electronic protected health information (ePHI) of up to 2,213597 individuals.
The OCR charges against 21CO arose from an OCR investigation commenced after the Federal Bureau of Investigation (FBI) notified 21CO on November 13, 2015 and a second time on December 13, 2015 than unauthorized third party illegally obtained 21CO sensitive patient information and produced 21CO patient files purchased by a FBI informant. As part of its internal investigation, 21CO hired a third party forensic auditing firm in November 2015. 21CO determined that the attacker may have accessed 21CO’s network SQL database as early as October 3, 2015, through Remote Desktop Protocol from an Exchange Server within 21CO’s network. 21CO determined that it is possible that 2,213,597 individuals may have been affected by the impermissible access to their names, social security numbers, physicians’ names, diagnoses, treatment and insurance information.
Although it knew of the breaches in November and December, 2015, 21CO waited more than three months after the FBI notified it of the breaches before it sent HIPAA or other breach notifications about the data breach to patients or notified investors in March, 2016. Its March 4, 2016 Securities and Exchange Commission 8-K on Data Security Incident (Breach 8-K) states 21CO delayed notification at the request of the FBI to avoid interfering in the criminal investigation of the breach.
When announcing the breach, 21CO provided all individuals affected by the breach with a free one-year subscription to the Experian ProtectMyID fraud protection service. At that time, 21CO said it had no evidence that any patient information actually had been misused. However some victims of the breach subsequently have claimed being victimized by a variety of scams since the breach in news reports and lawsuits about the breach.
At the time of the breach and its March 4, 2016 announcement of the breach, 21CO already was working to resolve other compliance issues. On December 16, 2015, 21CO announced that a 21CO subsidiary had agreed to pay $19.75 million to the United States and $528,000 in attorneys’ fees and costs and comply with a corporate integrity agreement related to a qui tam action in which it was accused of making false claims to Medicare and other federal health programs. See 21CO 8-K Re: Entry into a Material Definitive Agreement (December 22, 2015). Among other things, the corporate integrity agreement required by that settlement required 21CO to appoint a compliance officer and take other steps to maintain compliance with federal health care laws. In addition, five days after releasing the March 4, 2017 Breach 8-K, 21CO notified investors that its subsidiary, 21st Century Oncology, Inc. (“21C”), had agreed to pay $37.4 million to settle health care fraud law charges relating to billing and other protocols of certain staff in the utilization of state-of-the-art radiation dose calculation system used by radiation oncologists called GAMMA. See 21CO 8-K Re: GAMMA Settlement March 9, 2016 ; See also United States Settles False Claims Act Allegations Against 21st Century Oncology for $34.7 Million.
Based on OCR’s subsequent investigation into these breaches, OCR found:
21CO impermissibly disclosed certain PHI of 2,213,597 of its patients in violation of 45 C.F.R. § 164.502(a);
21CO failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the electronic protected health information (ePHI) held by 21CO in violation of 45 C.F.R. § 164.308(a)(1)(ii)(A);
21CO failed to implement certain security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level to comply with 45 C.F.R. § 164.306(A) in violation of 45 C.F.R. § 164.308(a)(1)(ii)(B);
21CO failed to implement procedures to regularly review records of information system activity, such as audit logs, access reports, and security incident tracking reports as required by 45 C.F.R. §164.308(a)(1)(ii)(D);
21CO disclosed protected health information to a third party vendors, acting as its business associates, without obtaining satisfactory assurances in the form of a written business associate agreement in violation of HIPAA’s business associate rule requirements under 45 C.F.R. §§ 164.502(e) and 164.308(b)(3).
In return for OCR’s agreement not to further pursue charges or penalties relating to the breach investigation, the Resolution Agreement entered into with the approval of the Bankruptcy Court requires that 21CO pay OCR a $2.3 million Resolution Amount and implement to OCR’s satisfaction a corrective action plan that among other things requires that 21CO complete a detailed series of corrective actions to the satisfaction of OCR.
These and other developments also had significant consequences on 21CO’s financial status and leadership. By March 31, 2015, 21CO notified the SEC and investors that it needed added time to complete its financial statements. Subsequent SEC filings document its restatement of financial statements, the departure of board members and other leaders, default on credit terms, and ultimately its filing for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York on May 25, 2017.
Because 21CO sought bankruptcy court protection from the fallout of its HIPAA breaches and other compliance and business issues, the 21CO Resolution Agreement required bankruptcy court approval. Funds for payment of the required $2.3 million resolution payment and other charges associated with the investigation apparently are being provided in part from breach liability insurance coverage provided under a policy issued by Beazley Insurance, as the Bankruptcy Court order directs Beazley Breach Response Policy No. W140E2150301 to make immediate payment to the OCR of the resolution amount and the payment of fees incurred by 21CO in connection with regulatory defense issues.
HIPAA & Data Breach Enforcement A Growing Health Plan Risk
Health plans and other Covered Entities, plan sponsors and plan fiduciaries, their business associates and other consultants and service providers and members of their workforce need to recognize that the FileFax, CCDC, 21CO and other resolution agreements are part of a growing trend, rather than isolated incidents of enforcement and that their exposure to investigation and enforcement is likely to continue to rise in the face of growing public and Congressional concern about privacy and data security.
While civil monetary penalty enforcement remains much more common than criminal prosecution, Covered Entities, their business associates and members of their workforce must understand that HIPAA enforcement and resulting liability is growing and that this trend is likely to continue if not increase.
While Department of Justice federal criminal prosecutions and convictions under HIPAA remain relatively rare, they occur and are growing. See e.g., Former Hospital Employee Sentenced for HIPAA Violations (Texas man sentenced to 18 months in federal prison for obtaining protected health information with the intent to use it for personal gain); Three Life Sentences Imposed On Man Following Convictions For Drug Trafficking, Kidnapping, Using Firearms and HIPAA Violations (drug king pin gets multiple 10 year consecutive prison terms for unauthorized access to private health information in violation of HIPAA; his health care worker friend sentenced for accessing electronic medical files and reporting information to him);Former Therapist Charged In HIPAA Case;Hefty Prison Sentence in ID Theft Case(former assisted living facility worker gets 37 months in prison after pleading guilty to wrongful disclosure of HIPAA protected information and other charges); Hefty Prison Sentence in ID Theft Case (former medical supply company owner sentenced to 12 years for HIPAA violations and fraud). While the harshest sentences tend to be associated with health care fraud or other criminal conduct, lighter criminal sentences are imposed against defendants in other cases as well. See e.g., Sentencing In S.C. Medicaid Breach Case (former South Carolina state employee sentenced to three years’ probation, plus community service, for sending personal information about more than 228,000 Medicaid recipients to his personal e-mail account.); HIPAA Violation Leads To Prison Term (former UCLA Healthcare System surgeon gets four months in prison after admitting he illegally read private electronic medical records of celebrities and others.)
The experiences of FileFax, Inc., CCDC, 21CO and these other OCR HIPAA Resolution Agreements provide strong evidence that that health plans and other Covered Entities and their business associates can anticipate that OCR will continue to zealously investigate HIPAA breaches and other HIPAA violations. Aside from OCR’s recurrent affirmations of its commitment to HIPAA enforcement, Covered Entities, their business associates and their leaders must recognize that public and Congressional privacy and data security concerns fueled by the ever growing stream of massive data breaches at Alteryx, eBay, Paypal owner TIO Networks, Uber, Equifax and a long list of other previously trusted prominent businesses are creating additional pressure upon OCR and other agencies to pursue even stronger and more aggressive HIPAA oversight and enforcement. Amid this growing concern, OCR, the FTC and other federal and state agencies with regulatory or enforcement authority over HIPAA or other data security and privacy concerns face increasing scrutiny and pressure to take meaningful action to regulate and enforce HIPAA and other laws intended to protect sensitive data even as private litigants enjoy increasing success in obtaining civil judgments from damages resulting from breaches of their PHI or other sensitive personal information using an expanding arsenal of legal theories of recovery. In the face of these growing concerns about privacy and data security, OCR can be expected to continue, if not increase its HIPAA compliance enforcement and oversight by OCR.
Furthermore, the experiences of FileFax, Inc., 21CO, CCDC and other Covered Entities and business associates that already have become the subject of OCR investigation or enforcement also reflect that HIPAA resolution payments or penalties paid to OCR and other costs and expenses associated with the defense and resolution of OCR’s investigations and enforcement actions typically only a portion of the financial and other business consequences that Covered Entities or business associates might expect to incur as a consequence of a breach of PHI or other substantial HIPAA violation or charge.
Beyond their potential HIPAA enforcement exposures following a HIPAA covered data breach or other violation, health care or other Covered Entities and members of their workforce experiencing breaches of ePHI or other PHI often also face FTC or other government investigations and enforcement relating their data breaches under the Fair and Accurate Credit Transactions Act (FACTA) and other federal or state identity theft, data privacy and security, electronic crimes and other laws. They or members of their workforce may face licensing board, credentialing, accreditation, contractual or other investigations or sanctions. Victims, business partners, investors and others often bring civil litigation to address losses or other injures associated with the breach or other misconduct. In addition, losses and disruptions in patients, plan member, vendor, investor, employee, management and other business relationships, and other business disruptions also are common.
Where the breach of other HIPAA violation involves a health plan, health plans, their fiduciaries and sponsors also need to give due consideration to the implications and exposures that might arise under the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA). Beyond the direct exposure of their health plan to HIPAA and other compliance liabilities, health plan fiduciaries generally will want to consider whether their fiduciary responsibility under ERISA requires that prudent or other steps be taken to safeguard health plan information and maintain and administer their health plan in accordance with HIPAA and other laws. As a consequence, fiduciaries generally will want to ensure that they take and document prudent steps to evaluate, monitor and address HIPAA and other privacy and data security safeguards to minimize not only the liability exposures of their health plans, but also to help mitigate their own potential personal liability exposures that could arise or be asserted in response to a HIPAA breach or other HIPAA violation involving their health plans.
In the face of these growing risks and liabilities, Covered Entities and their business leaders face a strong imperative to clean up and maintain their HIPAA compliance and other data security to minimize their exposure to similar consequences. In addition to reaffirming the need for Covered Entities and their business associates to take the necessary steps to maintain and effectively demonstrate the adequacy of their own HIPAA compliance, the CCDC and FileFax Resolution Agreements alert Covered Entities and business associates of the advisability of greater oversight and risk management of their dealings and relationships with the other Covered Entities and business associates with access to or involvement with their PHI or other critical functions.
In light of these rises, leaders, investors, insurers, lenders and others involved with Covered Entities and their business associates should take steps to verify that the Covered Entities and their business associates not only maintain compliance with HIPAA and its business associate and other privacy, data security and breach notification and response requirements, but also maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data. The bankruptcies and other financial and business fallout of HIPAA or other data breaches experienced by FileFax, Inc. 21CO and other HIPAA-covered and non-HIPAA regulated entities also makes clear that Covered Entities and business associates should anticipate that their own fallout from a breach or other HIPAA event and resulting responsibilities and consequences could be impacted by their own or a business associate’s financial distress or bankruptcy. Beyond the risk that their own or another entity’s breach, compliance issues, or other financial or business issues could trigger breach investigation, notice or other responsibilities for their own organizations, Covered Entities, business associates and their leaders also should evaluate and revise their HIPAA risk assessments and security plans to address foreseeable threats to the availability, access, retention and security of PHI and associated records and systems.
The Bankruptcy Court’s order to 21CO’s cyber liability insurer to pay the resolution payment required under the 21CO Resolution Agreement and other costs of investigation and defense also strongly suggests that the purchase of insurance and other arrangements for funding costs of defense or settlement should be included in these evaluations.
In light of these rises, leaders, investors, insurers, lenders and others involved with Covered Entities and their business associates should take steps to verify that the Covered Entities and their business associates not only maintain compliance with HIPAA, but also comply with data security, privacy and other information protection requirements arising under other laws, regulations, and contracts, as well as the practical business risks that typically follow the announcement of a breach. Considering these risks, Covered Entities and their business associates should recognize the advisability of taking meaningful, documented action to verify their existing compliance and ongoing oversight to ensure their organizations can demonstrate appropriate action to maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data.
As part of these efforts, Covered Entities and their business associates should ensure that they have conducted, and maintain and are ready to produce appropriate policies and procedures backed up by a well-documented, up-to-date industry wide risk assessment of their organization’s susceptibility to breaches or other misuse of electronic or other protected health information. The starting point of these efforts should be to adopt and enforce updated written policies, procedures, technical and physical safeguards, processes and training to prevent the improper use, access, destruction or disclosure of patient PHI. Processes also should create, retain and be designed to cost effectively track, capture, and retain both all protected health information, its use, access, protection, destruction and disclosure, and the requisite supportive documentation supporting the appropriateness of those action to position the organization cost-effectively and quickly to fulfill required accounting, reporting and other needs in the event of a data breach, audit, participant inquiry or other event.
As part of this process, Covered Entities and business associates should maintain strong and ongoing processes for assessing and monitoring the adequacy of their policies and practices. In addition to ensuring that their organization has a comprehensive risk management and compliance assessment, Covered Entities and business associates need to conduct documented periodic audits and spot HIPAA audits and assessments. In doing so, they must use care to look outside the four corners of their Privacy Policies and core operating systems to ensure that their policies, practices, oversight and training address all protected health information within their operations on an entity wide basis. This entity-wide assessment should include communications and requests for information normally addressed to the Privacy Officer as well as requests and communications that could arise in the course of media or other public relations, practice transition, workforce communication and other operations not typically under the direct oversight and management of the Privacy Officer.
In connection with these efforts, the enforcement actions make clear that Covered Entities and business associates should adopt, implement and monitor PHI privacy, and security on an entity wide basis. These efforts should include general policies, practices and procedures as well as specifically tailored policies, processes and training to protect PHI and preserve HIPAA compliance throughout their organization. Testing and analysis should be conducted on a regular basis. Documented reassessments and testing should be performed in response to software, hardware or other changes or events that could impact security or other operations. Beyond security, attention also should cover business or system interruption including losses that might occur from the bankruptcy, termination of business or other disruptions of business associates or other parties. Attention should be paid both to protecting access and use of PHI and ePHI in the course of business as well as the transmission, transport, storage and destruction of records or systems containing such information.
Careful attention should be devoted to ensuring that business associate agreements as well and other processes provide for HIPAA compliance with respect to all PHI created, used, accessed or disclosed to business associates or others not part of their direct workforce or operating outside the core boundaries of their facilities.
Covered entities and their business associates also must recognize and design their compliance efforts and documentation recognizing that HIPAA compliance is a living process, which require both constant diligence about changes in systems or other events that may require reevaluation or adjustments, whether from changes in software, systems or processes or external threats.
Because the cost of responding to and investigating breaches or other compliance concern can be quite burdensome, Covered Entities and their business associates also generally will want to pursue options to plan for and minimize potential expenses in the design and administration of their programs as well as to minimize and cover the potentially extraordinary costs of breach or other compliance investigation and results that commonly arise following a breach or other compliance event. As a part of this planning, Covered Entities and their business associates also generally will want to add consideration of changes to federal tax rules on the deductibility of compliance penalty and other related compliance expenditures.
While the Internal Revenue Code traditionally has prohibited businesses and individuals from deducting penalties, fines and other expenditures arising from violations of federal or state laws under Section 162(f) of the Internal Revenue Code, Section 13306 of the Tax Cuts and Jobs Creation Act creates a new exception for amounts (other than amounts paid or incurred any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation) that a taxpayer establishes meet the following requirements:
Constitute restitution (including remediation of property) for damage or harm which was or may be caused by the violation of any law or the potential violation of any law, or
Are paid to come into compliance with any law which was violated or otherwise involved in the investigation or inquiry into a violation or potential violation of any law;
Are identified as restitution or as an amount paid to come into compliance with such law, as the case may be, in the court order or settlement agreement, and
In the case of any amount of restitution for failure to pay any tax imposed under this title in the same manner as if such amount were such tax, would have been allowed as a deduction under this chapter if it had been timely paid.
Because the true effect of these modifications will be impacted by implementing regulations and a number of other special conditions and rules may impact the deductibility of these payments and the reporting obligations attached to their payment, Covered Entities will want to consult with legal counsel about these rules and monitor their implementation to understand their potential implications on compliance expenditures and penalties.
About The Author
Repeatedly 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, a Fellow in the American College of Employee Benefit Council, the American Bar Foundation and the Texas Bar Foundation and board certified in labor and employment law by the Texas Board of Legal Specialization, Cynthia Marcotte Stamer is a practicing attorney, management consultant, author, public policy advocate and lecturer widely known for health and managed care, employee benefits, insurance and financial services, data and technology and other management work, public policy leadership and advocacy, coaching, teachings, and publications. Nationally recognized for her work, experience, leadership and publications on HIPAA and other medical privacy and data use and security, FACTA, GLB, trade secrets and other privacy and data security concerns, Ms. Stamer has worked extensively with clients and the government on cybersecurity, technology and processes and other issues involved in the use and management of medical, insurance and other financial, workforce, trade secrets and other sensitive data and information throughout her career. Scribe or co-scribe of the ABA Joint Committee on Employee Benefits Agency meeting with OCR since 2011 and author of a multitude of highly regarded publications on HIPAA and other health care, insurance, financial and other privacy and data security, Ms. Stamer is widely known for her extensive and leading edge experience, advising, representing, training and coaching health care providers, health plans, healthcare clearinghouses, business associates, their information technology and other solutions providers and vendors, and others on HIPAA and other privacy, data security and cybersecurity design, documentation, administration, audit and oversight, business associate and other data and technology contracting, breach investigation and response, and other related concerns including extensive involvement representing clients in dealings with OCR and other Health & Human Services, Federal Trade Commission, Department of Labor, Department of Treasury, state health, insurance and attorneys’ general, Congress and state legislators and other federal officials.
Ms. Stamer also has an extensive contributes her leadership and insights with other professionals, industry leaders and lawmakers. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of 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. For additional information about Ms. Stamer, see here, e-mail her hereor telephone Ms. Stamer at (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 here including:
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 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 $3.5 million payment that Fresenius Medical Care North America (FMCNA) is paying to the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) to settle potential liability for potentially much higher Civil Monetary Penalties (CMPs) to OCR for Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules violation charges under a voluntary resolution agreement illustrates the need for group health plans and their employer and other sponsors, fiduciaries, and vendors to make HIPAA compliance a key priority for 2018.
Widespread publicity and fallout from data breaches involving Equifax, Blue Cross, the Internal Revenue Service and many other giant organizations have ramped up public awareness and government concern about health care and other data security. The resulting pressure is adding additional fuel to the already substantial concern of OCR and other agencies about compliance with HIPAA and other data security and breach laws. Like the $2.3 million HIPAA resolution agreement OCR announced with now bankrupt radiation oncology and cancer care provider 21st Century Oncology, Inc. (21CO) earlier this year, see, e.g., $23M Penalty Small Part of 21st Century’s Data Breach Fallout; Offers Data Breach Lessons For Other Businesses, the growing list of OCR resolution agreements and other enforcement actions against FMCNA, 21CO and other covered entities and other legal and market fallout that covered entities and other organizations experience following the announcement of breaches or other security deficiencies make the case for why HIPAA-covered health care providers, health plans, health care clearinghouses and their business associates (covered entities) must prioritize HIPAA compliance and other medical and other data security protection, privacy and risk management a top priority in 2018.
When weighing the importance of HIPAA compliance and risk management for their health plans, health plans, their employer or other sponsors, fiduciaries, insurers, administrators and their business associates should resist the temptation to underestimate the exposure because providers, rather than health plans, have been the most common target of the majority of the announced OCR enforcement actions resulting in substantial civil monetary penalties or resolution payments.
Rather, they should take note of resolution agreements and other enforcement actions against health plans such as the $2.2 million settlement payment APFRE Life Insurance Company of Puerto Rico (MAPFRE) paid under a 2017 resolution agreement to resolve HIPAA violation charges OCR brought based on its investigation of a September 29, 2011 breach report MCPFRE made to OCR. The breach report indicated that a USB data storage device (described as a “pen drive”) containing ePHI was stolen from its IT department, where the device was left without safeguards overnight. According to the report, the USB data storage device included complete names, dates of birth and Social Security numbers. The report noted that the breach affected 2,209 individuals. MAPFRE informed OCR that it was able to identify the breached ePHI by reconstituting the data on the computer on which the USB data storage device was attached. OCR’s investigation revealed MAPFRE’s noncompliance with the HIPAA Rules, specifically a failure to conduct its risk analysis and implement risk management plans, contrary to its prior representations, and a failure to deploy encryption or an equivalent alternative measure on its laptops and removable storage media until September 1, 2014. MAPFRE also failed to implement or delayed implementing other corrective measures it informed OCR it would undertake.
The Privacy Rule requires that health plans, health care providers, health care clearinghouses (covered entities) and their vendors that qualify as “business associates” under HIPAA comply with detailed requirements concerning the protection, use, access, destruction and disclosure of protected health information. As part of these requirements, covered entities and their business associates must adopt, administer and enforce detailed policies and practices, assess, monitor and maintain the security of electronic protected health information (ePHI) and other protected health information, provide notices of privacy practices and breaches of “unsecured” ePHI, afford individuals that are the subject of protected health information certain rights and comply with other requirements as specified by the Privacy, Security and Breach Notification Rules. In addition, covered entities and business associates also must enter into a written and signed business associate agreement that contains the elements specified in Privacy Rule § 164.504(e) before the business associate creates, uses, accesses or discloses PHI of the covered entity. Furthermore, the Privacy Rule includes extensive documentation and keeping requirements require that covered entities and BAs maintain copies of these BAAs for a minimum of six years and to provide that documentation to OCR upon demand.
Violations of the Privacy Rule can carry stiff civil monetary penalties or even criminal penalties. Pursuant to amendments to HIPAA enacted as part of the HITECH Act, civil penalties typically do not apply to violations punished under the criminal penalty rules of HIPAA set forth in Social Security Act , 42 U.S.C § 1320d-6 (Section 1177).
Resolution Agreements like the $3.2 million FMCNA resolution agreement allow covered entities and business associates to resolve potentially substantially larger civil monetary penalty liabilities that OCR can impose under the civil enforcement provisions of HIPAA. As amended by the HITECH Act, the civil enforcement provisions of HIPAA empower OCR to impose Civil Monetary Penalties on both covered entities and BAs for violations of any of the requirements of the Privacy or Security Rules. The penalty ranges for civil violations depends upon the circumstances associated with the violations and are subject to upward adjustment for inflation. As most recently adjusted here effective September 6, 2016, the following currently are the progressively increasing Civil Monetary Penalty tiers:
A minimum penalty of $100 and a maximum penalty of $50,000 per violation, for violations which the CE or BA “did not know, and by exercising reasonable diligence would not have known” about using “the business care and prudence expected from a person seeking to satisfy a legal requirement under similar circumstances;”
A minimum penalty of $1,000 and a maximum penalty of $50,000 per violation, for violations for “reasonable cause” which do not rise to the level of “willful neglect” where “reasonable cause” means the “circumstances that would make it unreasonable for the covered entity, despite the exercise of ordinary business care and prudence, to comply with the violated Privacy Rule requirement;”
A minimum penalty of $10,000 and a maximum penalty of $50,000 per violation, for violations attributed to “willful neglect,” defined as “the conscious, intentional failure or reckless indifference to the obligation to comply” with the requirement or prohibition; and
A minimum penalty of $50,000 and a maximum penalty of $1.5 million per violation, for violations attributed to “willful neglect” not remedied within 30 days of the date that the covered entity or BA knew or should have known of the violation.
For continuing violations such as failing to implement a required BAA, OCR can treat each day of noncompliance as a separate violation. However, sanctions under each of these tiers generally are subject to a maximum penalty of $1,500,000 for violations of identical requirements or prohibitions during a calendar year. For violations such as the failure to implement and maintain a required BAA where more than one covered entity bears responsibility for the violation, OCR an impose Civil Monetary Penalties against each culpable party. OCR considers a variety of mitigating and aggravating facts and circumstances when arriving at the amount of the penalty within each of these applicable tiers to impose.
In addition to these potential civil liability exposures, covered entities, their business associates and other individuals or organizations that wrongfully use, access or disclose electronic or other protected health information also can face civil liability under various circumstances. The criminal enforcement provisions of HIPAA authorize the Justice Department to prosecute a person who knowingly in violation of the Privacy Rule (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person, punishable by the following criminal sanctions and penalties:
A fine of up to $50,000, imprisoned not more than 1 year, or both;
If the offense is committed under false pretenses, a fine of up to $100,000, imprisonment of not more than 5 years, or both; and
If the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, a fine of up to $250,000, imprisoned not more than 10 years, or both.
Because HIPAA Privacy Rule criminal violations are Class A Misdemeanors or felonies, Covered Entities and business associates should include HIPAA compliance in their Federal Sentencing Guideline Compliance Programs and practices and need to be concerned both about criminal exposure for their own direct violations, as well as imputed organizational liability for violations committed by their employees or agents under the Federal Sentencing Guidelines, particularly where their failure to implement or administer these required compliance policies and practices or failure to properly investigate or redress potential violations enables, perpetuates or covers up the criminal breach.
The FMCNA resolution agreement is another example of a growing list of resolution agreements various HIPAA covered entities have entered into to resolve their exposure to potentially greater liability should OCR assess civil monetary penalties under HIPAA’s civil sanction scheme.
The breach reports filed on January 21, 2017 reported five separate breach incidents occurring between February 23, 2012 and July 18, 2012 implicating the electronic protected health information (ePHI) of five separate FMCNA owned covered entities (FMCNA covered entities): Bio-Medical Applications of Florida, Inc. d/b/a Fresenius Medical Care Duval Facility in Jacksonville, Florida (FMC Duval Facility); Bio-Medical Applications of Alabama, Inc. d/b/a Fresenius Medical Care Magnolia Grove in Semmes, Alabama (FMC Magnolia Grove Facility); Renal Dimensions, LLC d/b/a Fresenius Medical Care Ak-Chin in Maricopa, Arizona (FMC Ak-Chin Facility); Fresenius Vascular Care Augusta, LLC (FVC Augusta); and WSKC Dialysis Services, Inc. d/b/a Fresenius Medical Care Blue Island Dialysis (FMC Blue Island Facility).
OCR concluded its investigation showed the breaches resulted because FMCNA failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. OCR also concluded:
The FMCNA covered entities impermissibly disclosed the ePHI of patients by providing unauthorized access for a purpose not permitted by the Privacy Rule.
FMC Ak-Chin failed to implement policies and procedures to address security incidents.
FMC Magnolia Grove failed to implement policies and procedures that govern the receipt and removal of hardware and electronic media that contain ePHI into and out of a facility; and the movement of these items within the facility.
FMC Duval and FMC Blue Island failed to implement policies and procedures to safeguard their facilities and equipment therein from unauthorized access, tampering, and theft, when it was reasonable and appropriate to do so under the circumstances.
FMC Magnolia Grove and FVC Augusta failed to implement a mechanism to encrypt and decrypt ePHI, when it was reasonable and appropriate to do so under the circumstances.
In addition to a $3.5 million monetary settlement, a corrective action plan requires the FMCNA covered entities to complete a risk analysis and risk management plan, revise policies and procedures on device and media controls as well as facility access controls, develop an encryption report, and educate its workforce on policies and procedures.
HIPAA & Data Breach Enforcement A Growing Health Plan Risk
Health plans and other covered entities, plan sponsors and plan fiduciaries, their business associates and other consultants and service providers and members of their workforce need to recognize that the FMCNA and other resolution agreements are part of a growing trend, rather than isolated incidents of enforcement.
While civil monetary penalty enforcement remains much more common than criminal prosecution, covered entities, their business associates and members of their workforce must understand that HIPAA enforcement and resulting liability is growing.
While Department of Justice federal criminal prosecutions and convictions under HIPAA remain relatively rare, they occur and are growing. See e.g., Former Hospital Employee Sentenced for HIPAA Violations (Texas man sentenced to 18 months in federal prison for obtaining protected health information with the intent to use it for personal gain); Three Life Sentences Imposed On Man Following Convictions For Drug Trafficking, Kidnapping, Using Firearms and HIPAA Violations (drug king pin gets multiple 10 year consecutive prison terms for unauthorized access to private health information in violation of HIPAA; his health care worker friend sentenced for accessing electronic medical files and reporting information to him);Former Therapist Charged In HIPAA Case;Hefty Prison Sentence in ID Theft Case(former assisted living facility worker gets 37 months in prison after pleading guilty to wrongful disclosure of HIPAA protected information and other charges); Hefty Prison Sentence in ID Theft Case (former medical supply company owner sentenced to 12 years for HIPAA violations and fraud). While the harshest sentences tend to be associated with health care fraud or other criminal conduct, lighter criminal sentences are imposed against defendants in other cases as well. See e.g., Sentencing In S.C. Medicaid Breach Case (former South Carolina state employee sentenced to three years’ probation, plus community service, for sending personal information about more than 228,000 Medicaid recipients to his personal e-mail account.); HIPAA Violation Leads To Prison Term (former UCLA Healthcare System surgeon gets four months in prison after admitting he illegally read private electronic medical records of celebrities and others.)
Beyond the direct exposure of their health plan to HIPAA and other compliance liabilities, health plan fiduciaries also should note that their fiduciary responsibility under the Employee Retirement Income Security Act (ERISA) likely includes taking prudent steps to safeguard health plan information and maintain and administer their health plan in accordance with HIPAA. As a consequence, fiduciaries generally will want to ensure that they take and document prudent steps to evaluate, monitor and address HIPAA and other privacy and data security safeguards to minimize not only the liability exposures of their health plans, but also to help mitigate their own potential personal liability exposures that could arise or be asserted in response to a HIPAA breach or other HIPAA violation involving their health plans.
Coming on the heels of an already lengthy and growing list of OCR high dollar HIPAA enforcement actions, the FMCNA and other resolution agreements and civil monetary penalties these and other announced enforcement actions clearly reflect that OCR takes HIPAA compliance seriously and stands ready to impose substantial penalties when it finds violations in connection with breach notice investigations. Viewed in the context of these and other enforcement actions, the FMCNA Resolution Agreement and others clearly reflect the time for complacency in HIPAA compliance and leniency in HIPAA HIPAA enforcement are passed. Rather, these and other enforcement actions make clear why health care providers, health plans, healthcare clearinghouses and their business associates must make HIPAA compliance a priority now.
Covered entities and business associates also should recognize their potential responsibilities and risks for breaches or other improper conduct concerning patient or other sensitive personal financial information, trade secrets or other data under a wide range of laws beyond HIPAA and its state law equivalents. As documented by the media coverage of the legal and business woes of Alteryx, eBay, Paypal owner TIO Networks, Uber, Equifax and a long list of other previously trusted prominent businesses have and continue to incur from data breaches within their organizations, health care or other covered entities experiencing breaches often also face FTC or other government investigations and enforcement under the Fair and Accurate Credit Transactions Act (FACTA) and other federal or state identity theft, data privacy and security, electronic crimes and other rules as well as business losses and disruptions; civil litigation from breach victims, shareholders and investors, and business partners as well as OCR, FTC, and state data security regulation enforcement. Amid this growing concern, OCR has indicated that it intends to continue to diligently both seek to support and encourage voluntary compliance by covered entities and their business associates and investigate and enforce HIPAA against HIPAA covered entities and their business associates that fail to adequately safeguard PHI and ePHI in accordance with HIPAA. In the face of these growing risks and liabilities, covered entities and their business leaders face a strong imperative to clean up and maintain their HIPAA compliance and other data security to minimize their exposure to similar consequences.
In light of these rises, leaders, investors, insurers, lenders and others involved with covered entities and their business associates should take steps to verify that the covered entities and their business associates not only maintain compliance with HIPAA, but also comply with data security, privacy and other information protection requirements arising under other laws, regulations, and contracts, as well as the practical business risks that typically follow the announcement of a breach. Considering these risks, covered entities and their business associates must recognize and take meaningful, documented action to verify their existing compliance and ongoing oversight to ensure their organizations can demonstrate appropriate action to maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data.
In response to these growing risks and concerns, covered entities and their business associates should ensure that they have conducted, and maintain and are ready to produce appropriate policies and procedures backed up by a well documented, up-to-date industry wide risk assessment of their organization’s susceptibility to breaches or other misuse of electronic or other protected health information. The starting point of these efforts should be to adopt and enforce updated written policies, procedures, technical and physical safeguards, processes and training to prevent the improper use, access, destruction or disclosure of patient PHI. Processes also should create, retain and be designed to cost effectively track, capture, and retain both all protected health information, its use, access, protection, destruction and disclosure, and the requisite supportive documentation supporting the appropriateness of those action to position the organization cost-effectively and quickly to fulfill required accounting, reporting and other needs in the event of a data breach, audit, participant inquiry or other event.
As part of this process, covered entities and business associates should start by reviewing and updating their policies, HIPAA audits and assessments and other documentation and processes. In doing so, they must use care to look outside the four corners of their Privacy Policies and core operating systems to ensure that their policies, practices, oversight and training address all protected health information within their operations on an entity wide basis. This entity-wide assessment should include both communications and requests for information normally addressed to the Privacy Officer as well as requests and communications that could arise in the course of media or other public relations, practice transition, workforce communication and other operations not typically under the direct oversight and management of the Privacy Officer.
In connection with these efforts, the enforcement actions make clear that Covered Entities and business associates should adopt, implement and monitor PHI privacy, and security on an entity wide basis. These efforts should include both general policies, practices and procedures as well as specifically tailored policies, processes and training to protect PHI and preserve HIPAA compliance throughout their organization as well as the business associate agreements and other processes to provide for HIPAA compliance with respect to protected health information created, used, accessed or disclosed to business associates or others not part of their direct workforce or operating outside the core boundaries of their facilities.
Covered entities and their business associates also must recognize and design their compliance efforts and documentation recognizing that HIPAA compliance is a living process, which require both constant diligence about changes in systems or other events that may require reevaluation or adjustments, whether from changes in software, systems or processes or external threats.
Because the cost of responding to and investigating breaches or other compliance concern can be quite burdensome, covered entities and their business associates also generally will want to pursue options to plan for and minimize potential expenses in the design and administration of their programs as well as to minimize and cover the potentially extraordinary costs of breach or other compliance investigation and results that commonly arise following a breach or other compliance event. As a part of this planning, covered entities and their business associates also generally will want to add consideration of changes to federal tax rules on the deductibility of compliance penalty and other related compliance expenditures.
While the Internal Revenue Code traditionally has prohibited businesses and individuals from deducting penalties, fines and other expenditures arising from violations of federal or state laws under Section 162(f) of the Internal Revenue Code, Section 13306 of the Tax Cuts and Jobs Creation Act creates a new exception for amounts (other than amounts paid or incurred any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation) that a taxpayer establishes meet the following requirements:
Constitute restitution (including remediation of property) for damage or harm which was or may be caused by the violation of any law or the potential violation of any law, or
Are paid to come into compliance with any law which was violated or otherwise involved in the investigation or inquiry into a violation or potential violation of any law;
Are identified as restitution or as an amount paid to come into compliance with such law, as the case may be, in the court order or settlement agreement, and
In the case of any amount of restitution for failure to pay any tax imposed under this title in the same manner as if such amount were such tax, would have been allowed as a deduction under this chapter if it had been timely paid.
Because the true effect of these modifications will be impacted by implementing regulations and a number of other special conditions and rules may impact the deductibility of these payments and the reporting obligations attached to their payment, covered entities will want to consult with legal counsel about these rules and monitor their implementation to understand their potential implications on compliance expenditures and penalties.
About The Author
Repeatedly 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, a Fellow in the American College of Employee Benefit Council, the American Bar Foundation and the Texas Bar Foundation and board certified in labor and employment law by the Texas Board of Legal Specialization, Cynthia Marcotte Stamer is a practicing attorney, management consultant, author, public policy advocate and lecturer widely known for health and managed care, employee benefits, insurance and financial services, data and technology and other management work, public policy leadership and advocacy, coaching, teachings, and publications. Nationally recognized for her work, experience, leadership and publications on HIPAA and other medical privacy and data use and security, FACTA, GLB, trade secrets and other privacy and data security concerns, Ms. Stamer has worked extensively with clients and the government on cybersecurity, technology and processes and other issues involved in the use and management of medical, insurance and other financial, workforce, trade secrets and other sensitive data and information throughout her career. Scribe or co-scribe of the ABA Joint Committee on Employee Benefits Agency meeting with OCR since 2011 and author of a multitude of highly regarded publications on HIPAA and other health care, insurance, financial and other privacy and data security, Ms. Stamer is widely known for her extensive and leading edge experience, advising, representing, training and coaching health care providers, health plans, healthcare clearinghouses, business associates, their information technology and other solutions providers and vendors, and others on HIPAA and other privacy, data security and cybersecurity design, documentation, administration, audit and oversight, business associate and other data and technology contracting, breach investigation and response, and other related concerns including extensive involvement representing clients in dealings with OCR and other Health & Human Services, Federal Trade Commission, Department of Labor, Department of Treasury, state health, insurance and attorneys’ general, Congress and state legislators and other federal officials.
Ms. Stamer also has an extensive contributes her leadership and insights with other professionals, industry leaders and lawmakers. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of 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. For additional information about Ms. Stamer, see here, e-mail her hereor telephone Ms. Stamer at (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 here including:
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 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.
Posted by Cynthia Marcotte Stamer 
slphrbenefitsupdate.com 
You must be logged in to post a comment.