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.™
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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.
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.
$115 is the fee that health plans participating in the Independent Dispute Resolution (“IDR”) process required by the No Surprises Act (the “NSA”) to resolve disputes with health care providers, facilities, and providers of air ambulance services (“providers”) over the amount the health plan will pay the provider for out-of-network health care or items for because the health plan and provider cannot reach agreement about the appropriate amount outside the IDR process will be required to pay disputes initiated on or after February 21, 2023 under a new final rule scheduled for publication by the of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (“Treasury”) (collectively the “Departments”) on December 21, 2023.
The Departments establishment of the IDR fee for post-February 20, 2025 disputes and their previous December 15, 2023 announcement of the full reopening of the IDR portal for all dispute categories are part of the Departments’ ongoing response to the August 3, 2023 Federal District court ruling in Texas Medical Association, et al. v. U.S. Department of Health & Human Services, et al., No. 6:23-cv-00059-JDK (TMA IV), which vacated portions of the previous guidance that the Departments previously adopted to establish the IDR process and the administrative fee amount for the Federal IDR process for disputes initiated during the calendar year beginning January 1, 2023.
Post February 22, 2024 IDR Fees
On December 18, 2023, the Departments released an advance copy of the final rule (the “Rule”) setting the fees the NSA requires both the health plan or issuer and a health care provider, facility, or air ambulance services provider (the “parties”) when the parties must use the NSA Federal Independent Dispute Resolution (IDR) process to set the amount a health plan must pay the provider for out-of-network medical care or items because the plan and provider cannot agree on an appropriate payment amount for disputes initiated on or after the date the Rule is published in the Federal Register. Since the Rule is scheduled for publication in the Federal Register on December 21, 2023, the new fee will apply to disputes initiated after February 20, 2023.
In response to the TMA IV ruling, the Rule amends existing regulations to provide that the Departments going forward will determine the administrative fee charged by the Departments to participate in the Federal IDR process, and the ranges for certified IDR entity fees for single and batched determinations, through annual notice and comment rulemaking, rather than in guidance published annually. The preamble to the final rule also sets forth the methodology used to calculate the administrative fee and the considerations used to develop the certified IDR entity fee ranges.
Following this new process, the Rule also finalizes an administrative fee amount of $115 per party and finalizes a certified IDR entity fee range of $200-$840 for single determinations and $268-$1,173 for batched determinations for disputes initiated on or after February 21, 2023.
Interested parties can review the Rule here and the Departments Fact Sheet on the Rule here.
IDR Portal Reopened December 15, 2023
The Rule establishing the IDR fee for disputes initiated after February 20, 2024 follows the Departments’ December 15, 2023 announcement of their reopening of the IDR portal for processing all health benefit disputes covered by the NSA between providers and payers.
As part of its provisions to protect patients from “surprise bills” or out-of-network services covered by the NSA, the NSA establishes rules and procedures for providers and payers to determine the appropriate out-of-network payment rate for out-of-network services received by patients enrolled in covered payer programs. Where payers and providers cannot agree about the appropriate payment rate using other NSA procedures, the IDR portal is the online system established under the NSA for disputing payers and health care providers arrange for a certified IDR entity to resolve disagreements about the appropriate out-of-network payment rate for items and services subject to the surprise billing protections in the NSA through a process in which the certified IDR entity reviews offers made by each disputing party along with supporting information about the dispute. Once established under the NSA, payers are required to pay providers the appropriate payment rate for the covered out-of-network services provided to the member patient and the provider is prohibited from balance billing charges in excess of the appropriate payment rate for those services. The Departments previously suspended the operation of the IDR portal earlier this year after a federal court ruled that rules adopted by the Departments implementing the NSA violated the NSA.
In connection with the reopening of the IDR Portal, the Departments also announced the following extensions of the applicable IDR deadlines for the initiation of new batched disputes and new single disputes involving air ambulance services, resubmission of disputes determined by certified IDR entities to be improperly batched, and selection or reselection of a certified IDR entity.
Parties for whom the IDR initiation deadline under applicable regulations fell on any date between August 3, 2023 and December 15, 2023 will have until the 20th business day after the Federal IDR portal reopens, which is January 16, 2024, to initiate a new batched dispute or a new single dispute involving air ambulance services. Parties for whom the IDR initiation deadline falls between December 16, 2023 and January 15, 2024 will also have until January 16, 2024 to initiate a batched or air ambulance dispute. Parties whose initiation deadline falls on January 16, 2024 or after will have the usual 4 business days after the end of the Open Negotiation Period, or if the dispute is subject to the 90-calendar-day suspension period following a payment determination, the usual 30 business day period, to initiate a batched or air ambulance dispute in the Federal IDR portal.
For batched disputes and single disputes involving air ambulance services initiated under extensions of deadlines after the Federal IDR portal reopens, the deadline for the parties to jointly select a certified IDR entity will be 10 business days after initiation.
For disputing parties that were engaged in certified IDR entity selection for batched disputes when the Federal IDR portal temporarily closed, the deadline for parties to jointly select a certified IDR entity will be 10 business days after the Federal IDR portal reopens, which is December 29, 2023.
An initiating party that has received a notification from a certified IDR entity that a dispute initiated before August 3, 2023 was improperly batched will have one opportunity to resubmit the improperly batched items and services for reconsideration within 10 business days of being notified by the certified IDR entity, provided that the initiating party’s 4-business-day period to resubmit the batched dispute expired between August 3 and August 9, 2023.
The deadline to submit fees and offers will remain 10 business days after certified IDR entity selection.
Disputing parties with batched disputes that were impacted by the temporary suspension of use of the notice of offer form will be granted an additional 10 business days to submit offers, as communicated to impacted disputing parties by email from the Federal IDR Inbox.
The deadline extensions announced December 15, 2023 supplement extensions the Departments previously announced in November, 2023. On November 22, 2023, the Departments used their statutory authority (Internal Revenue Code Section 9816(c)(9), ERISA Section 716(c)(9), and PHS Act Section 2799A-1(c)(9)) to grant extensions in the following circumstances:
Disputing parties may request additional time, beyond the current business day deadline, to respond to the certified IDR entity’s requests for additional information. The Departments instructed certified IDR entities to grant such requests through January 16, 2024.
Certified IDR entities may provide parties, upon request, an additional 10 business days after the original offer deadline to submit an offer. Certified IDR entities may provide parties this additional time, as needed, through January 16, 2024.
On November 29, 2023, the Departments also announced another extension of the timeline for disputing parties to select a certified IDR entity. Under this extension, disputing parties will have 10 business days to select a certified IDR entity for all disputes through January 16, 2024. This extension will be provided automatically and does not require a request by disputing parties.
The Departments already announced the November 22, 2023 and November 29, 2023 extensions until January 16, 2023 for new single and bundled disputes and these extensions will persist for all disputes until January 16, 2023.
In connection with their full reopening of the IDR portal, the Departments renewed prior reminders to parties accessing or using the IDR portal to clear their computer’s cache or open the Federal IDR initiation web forms in a private or incognito window to see all the new features at least once a week to ensure access to the most up-to-date version of the initiation form as the Departments continue to implement Federal IDR web forms to accommodate guidance-related and system enhancements. Users failing to follow this recommendation risk additional follow-up with certified IDR entities or system errors.
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:
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 No Surprises Act (“NSA”) Federal Independent Dispute Resolution (“IDR”) portal now is reopened for processing all health benefit disputes covered by the NSA between health care providers, facilities, and providers of air ambulance services (“providers”), and group health plans, health insurance issuers, and Federal Employee Health Benefits Program carriers (“payers”) (collectively, “disputing parties”). The December 15, 2023 announcement of the reopening of the IDR portal by the Departments of Health & Human Resources, Labor and Treasury (“Departments”) for all types of NSA-covered claims allows dispute resolution processes central to the administration of the NSA’s protections for health plan members against “surprise” balance bills for covered out-of-network services from health care providers including air ambulance.
As part of its provisions to protect patients from “surprise bills” or out-of-network services covered bu the NSA, the NSA establishes rules and procedures for providers and payers to determine the appropriate out-of-network payment rate for out-of-network services received by patients enrolled in covered payer programs. Where payers and providers cannot agree about the appropriate payment rate using other NSA procedures, the IDR portal is the online system established under the NSA for disputing payers and health care providers arrange for a certified IDR entity to resolve disagreements about the appropriate out-of-network payment rate for items and services subject to the surprise billing protections in the NSA through a process in which the certified IDR entity reviews offers made by each disputing party along with supporting information about the dispute. Once established under the NSA, payers are required to pay providers the appropriate payment rate for the covered out-of-network services provided to the member patient and the provider is prohibited from balance billing charges in excess of the appropriate payment rate for those services. The Departments previously suspended the operation of the IDR portal earlier this year after a federal court ruled that rules adopted by the Departments implementing the NSA violated the NSA.
In connection with the reopening of the IDR Portal, the Departments also announced the following extensions of the applicable IDR deadlines for the initiation of new batched disputes and new single disputes involving air ambulance services, resubmission of disputes determined by certified IDR entities to be improperly batched, and selection or reselection of a certified IDR entity.
Parties for whom the IDR initiation deadline under applicable regulations fell on any date between August 3, 2023 and December 15, 2023 will have until the 20th business day after the Federal IDR portal reopens, which is January 16, 2024, to initiate a new batched dispute or a new single dispute involving air ambulance services. Parties for whom the IDR initiation deadline falls between December 16, 2023 and January 15, 2024 will also have until January 16, 2024 to initiate a batched or air ambulance dispute. Parties whose initiation deadline falls on January 16, 2024 or after will have the usual 4 business days after the end of the Open Negotiation Period, or if the dispute is subject to the 90-calendar-day suspension period following a payment determination, the usual 30 business day period, to initiate a batched or air ambulance dispute in the Federal IDR portal.
For batched disputes and single disputes involving air ambulance services initiated under extensions of deadlines after the Federal IDR portal reopens, the deadline for the parties to jointly select a certified IDR entity will be 10 business days after initiation.
For disputing parties that were engaged in certified IDR entity selection for batched disputes when the Federal IDR portal temporarily closed, the deadline for parties to jointly select a certified IDR entity will be 10 business days after the Federal IDR portal reopens, which is December 29, 2023.
An initiating party that has received a notification from a certified IDR entity that a dispute initiated before August 3, 2023 was improperly batched will have one opportunity to resubmit the improperly batched items and services for reconsideration within 10 business days of being notified by the certified IDR entity, provided that the initiating party’s 4-business-day period to resubmit the batched dispute expired between August 3 and August 9, 2023.
The deadline to submit fees and offers will remain 10 business days after certified IDR entity selection.
Disputing parties with batched disputes that were impacted by the temporary suspension of use of the notice of offer form will be granted an additional 10 business days to submit offers, as communicated to impacted disputing parties by email from the Federal IDR Inbox.
The deadline extensions announced December 15, 2023 supplement extensions the Departments previously announced in November, 2023. On November 22, 2023, the Departments used their statutory authority (Internal Revenue Code Section 9816(c)(9), ERISA Section 716(c)(9), and PHS Act Section 2799A-1(c)(9)) to grant extensions in the following circumstances:
Disputing parties may request additional time, beyond the current business day deadline, to respond to the certified IDR entity’s requests for additional information. The Departments instructed certified IDR entities to grant such requests through January 16, 2024.
Certified IDR entities may provide parties, upon request, an additional 10 business days after the original offer deadline to submit an offer. Certified IDR entities may provide parties this additional time, as needed, through January 16, 2024.
On November 29, 2023, the Departments also announced another extension of the timeline for disputing parties to select a certified IDR entity. Under this extension, disputing parties will have 10 business days to select a certified IDR entity for all disputes through January 16, 2024. This extension will be provided automatically and does not require a request by disputing parties.
The Departments already announced the November 22, 2023 and November 29, 2023 extensions until January 16, 2023 for new single and bundled disputes and these extensions will persist for all disputes until January 16, 2023.
In connection with their full reopening of the IDR portal, the Departments renewed prior reminders to parties accessing or using the IDR portal to clear their computer’s cache or open the Federal IDR initiation web forms in a private or incognito window to see all the new features at least once a week to ensure access to the most up-to-date version of the initiation form as the Departments continue to implement Federal IDR web forms to accommodate guidance-related and system enhancements. Users failing to follow this recommendation risk additional follow-up with certified IDR entities or system errors.
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.
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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 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.
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A newly-announced settlement agreement and corrective action plan (the “Settlement”) between a prominent New York academic medical center and the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (“OCR”) arising from disclosures and access allowed a reporter covering the COVID-19 pandemic warns health care providers, health plans, healthcare clearinghouses (“covered entities”), their business associates and workforce members (collectively, “HIPAA entities”) to prevent their organizations and workforce members not to share protected health information (“PHI”) or allow reporters or other media to access patients or PHI without first obtaining the legally required patient authorizations as well as evaluate their own organization’s potential exposure to OCR enforcement from known or suspected unauthorized disclosures of PHI by their own organizations or workforce during the COVID-19 pandemic or other events over the past two years.
While the Settlement involved a health care providers, health plans and other HIPAA entities also are subject to the same HIPAA requirements to prevent unauthorized photography, videos, or other sharing or disclosure of participant or other PHI to media in interviews or other media interactions or by workforce members, business associates or other third parties. Furthermore, since the Employee Benefit Security Administration now views HIPAA compliance and other prudent steps to protect PHI and other sensitive health information as part of fiduciaries and plan administrator’s ERISA compliance obligations, the management of these and other HIPAA obligations also is critical to ERISA compliance. Accordingly, health plans and their fiduciaries, administrators, and sponsors should confirm their continued compliance in light of the insights provided by the Settlement and related OCR guidance.
HIPAA-Compliant Authorization Required Before Media Access To Patients Or Patient Information
The HIPAA Privacy Rule prohibits SJMC and other HIPAA entities from disclosing any patient’s PHI unless::
The individual who is the subject of the information (or the individual’s personal representative) authorizes the disclosure in writing in the form required by the Privacy Rule; or
The Privacy Rule otherwise expressly permits or requires the disclosure.
OCR guidance makes clear that these prohibitions continue to apply when health care providers or other HIPAA entities are dealing with have print, television, or other media reporters.
SJMC Settlement
The Settlement between OCR and St. Joseph’s Medical Center (“SJMC”) resolves potential OCR charges that SJMC violated the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule by allowing an Associated Press (“AP”) reporter to access, photograph, and review clinical information of three COVID-19 patients without appropriate HIPAA authorization. Although the dated documents governing the Settlement reflect the parties reached the Settlement Agreement in August, OCR only made the Settlement public on November 20, 2023.
The OCR investigation that prompted the settlement began shortly an AP article about SJMC’s response to the COVID-19 public health emergency containing photographs and information about three COVID-19 patients came to OCR’s attention. The nationally distributed article included pictures of the three patients as well as details about the patients’ COVID-19 diagnoses, current medical statuses and medical prognoses, vital signs, treatment plans, and other PHI.
OCR determined from the investigation that SJMC allowed the AP reporter to observe and access clinical information of three patients receiving treatment for COVID on April 20, 2020 without first obtaining the necessary patient authorization required by HIPAA and that the disclosures were not otherwise allowed by any other exception to the Privacy Rule.
To avoid potentially much larger civil monetary penalties authorized by HIPAA, SHMC entered into the Settlement under which it agreed to pay $80,000 to OCR and agreed to develop written policies and procedures and train its workforce to comply with the HIPAA Privacy Rule. Under the Settlement, OCR also will monitor SHMC’s HIPAA compliance for two years.
Prior OCR Enforcement & Guidance Warned HIPAA Entities About Media Disclosures
OCR guidance and enforcement actions alerted SJMC and other HIPAA entities of their HIPAA responsibility not to disclose or allow access by the media or other third parties long before SJMC allowed the media access and disclosures that resulted in the new Settlement.
2013 Shasta Regional Medical Center Enforcement
Shasta Regional Medical Center (“SRMC”) holds the distinction of being the first covered entity punished for wrongfully disclosing PHI to the media. Under a resolution agreement OCR announced on June 14, 2013, OCR required SRMC to pay OCR $275,000 and implement a series of corrective actions for using and disclosing to the media PHI of a patient while trying to perform public relations damage control against accusations reported in the media that SRMC had engaged in fraud or other misconduct when dealing with the patient. That SRMC resolution Agreement followed an OCR investigating a January 4, 2012 Los Angeles Times article report that two SRMC senior leaders had met with media to discuss medical services provided to a patient. OCR’s investigation indicated that SRMC failed to safeguard the patient’s PHI from impermissible disclosure by intentionally disclosing PHI to multiple media outlets on at least three separate occasions, without a valid written authorization. OCR’s review also revealed senior management at SRMC impermissibly shared details about the patient’s medical condition, diagnosis and treatment in an email to the entire workforce. Further, SRMC failed to sanction its workforce members for impermissibly disclosing the patient’s records pursuant to its internal sanctions policy.
2016 NY-Presby Resolution Agreement & OCR Media Guidance
OCR’s next warnings to covered entities about their HIPAA responsibilities when dealing with the media came in 2016, when OCR concurrently announced a $2.2 million settlement with New York-Presbyterian Hospital and published its 2016 Frequently Asked Question (“Media FAQ”) addressing the obligation to comply with HI)PAA when dealing with the media.
According to the NY-Presby Resolution Agreement, OCR’s investigation revealed that NY-Presbyterian “blatantly” violated HIPAA when it allowed ABC film crews and staff virtually unfettered access to its health care facility. OCR says the access NY-Presbyterian allowed ABC effectively created an environment where patients PHI could not be protected from impermissible disclosure to the ABC film crew and staff filming the episode. While the Resolution Agreement reflects allowing the filming and other access to ABC without prior HIPAA-compliant authorization from patients in the facility itself violated HIPAA, OCR also particularly found “egregious” the facility allowing ABC film crews and staff to film a dying patient and another patient in significant distress without first obtaining a HIPAA-compliant authorization from each of those patients and even more so that NY-Presbyterian failed stop the filming even after a medical professional urged the crew to stop.
Based on its investigation, OCR charged NY-Presbyterian with violating 45 C.F.R. §§ 164.502(a) and 164.530(c) by:
Impermissibly disclosing the PHI of two identified patients to the film crew and other staff of “NY Med;”
Failing appropriately and reasonably to safeguard its patients’ PHI from disclosure during the filming of “NY Med” on its premises; and
Failing to implement policies, procedures, and practices to protect the privacy of the filming of the television show.
OCR collected $2.2 million from New York-Presbyterian Hospital as the required settlement payment under that resolution agreement.
2016 Media FAQ Guidance
Coincident with its announcement of the NYPH Settlement, OCR published the 2016 Media FAQ addressing HIPAA entities’ responsibilities when dealing with the media that outlined its interpretation of HIPAA as requiring HIPAA entities to protect patients and their PHI against unauthorized filming, photography, observation, and other access by news or other media or even other staff, patients or visitors.
Among other things, the Media FAQ states that HIPAA prohibits health care providers and other HIPAA entities from inviting or allowing media personnel into treatment or other areas where patients or patient PHI will be accessible in written, electronic, oral, or other visual or audio form, or otherwise making PHI accessible to the media without prior written authorization from each patient or other subject of the PHI who is or will be in the area or whose PHI otherwise will be accessible to the media except in a very limited set of circumstances set forth in the Media FAQ.
The Media FAQ also states, “It is not sufficient for a health care provider to request or require media personnel to mask the identities of patients (using techniques such as blurring, pixelation, or voice alteration software) for whom authorization was not obtained, because the HIPAA Privacy Rule does not allow media access to the patient’s PHI, absent an authorization, in the first place.
In addition, the Media FAQ states that a health care provider also must ensure that reasonable safeguards are in place to protect against impermissible disclosures or to limit incidental disclosures of other PHI that may be in the area but for which authorization has not been obtained.
Concerning the limited circumstances when a health care provider or other HIPAA entity or business associate may disclose to the media or allow unconsented filming, photographing or use of PHI to the media or other film crews, the Media FAQ also clarifies 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 HIPAA entity may:
Disclose limited PHI about the incapacitated patient to the media in accordance with the requirements of 45 C.F.R. 164.510(b)(1)(ii) when, in the hospital’s professional judgment, doing so is 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 any person, including the media, without obtaining a HIPAA authorization 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 as specified in 45 C.F.R. 164.510(a).
The Media FAQ also discusses circumstances where a healthcare provider or other HIPAA entity may use the services of a contract film crew to produce training videos or public relations materials on the provider’s behalf if the provider ensures that the film crew acting as a business associate enters into a HIPAA compliant business associate agreement with the HIPAA entity which among other things ensures that the film crew will safeguard the PHI it obtains, only use or disclose the PHI for the purposes provided in the agreement, and return or destroy any PHI after the work for the health care provider has been completed as required by 45 C.F.R. 164.504(e)(2). The Media FAQ also states that as a business associate, the film crew must comply with the HIPAA Security Rule and a number of provisions in the Privacy Rule, including the Rule’s restrictions on the use and disclosure of PHI. In addition, the Media FAQ reminds HIPAA entities and business associates of the need to obtain prior authorizations from patients whose PHI is included in any materials before any of those materials are posted online, printed in brochures for the public, or otherwise publicly disseminated.
Finally, the Media FAQ states HIPAA entities can continue to inform the media of their treatment services and programs so that the media can better inform the public, provided that, in doing so, the covered entity does not share PHI with the media.
Memorial Herrman Health System Resolution Agreement
OCR’s next media coverage-related enforcement action involved the largest not-for-profit health system in Southeast Texas, Memorial Hermann Health System (MHHS). The 2017 MHHS Resolution Agreement and Corrective Action Plan resulted from HHHS issuing a press release with the name and other PHI about a patient arrested and charged with fraudulently obtaining health care by presenting an allegedly fraudulent identification card to MHHS office staff without first obtaining authorization from the patient. MHHS paid OCR a $2.4 million resolution payment as well as agreed to implement a detailed corrective action plan. See $2.4M HIPAA Settlement Warns Providers About Media Disclosures Of PHI.
Three Resolution Agreements Following Disclosures ForBoston Trauma Reality Series
OCR followed up the next year with a concurrent announcement of resolution agreements against three unrelated hospitals for allowing ABC film crews to film in patient treatment and other areas for the ABC medical documentary “Save My Life: Boston Trauma” series. Under three separate settlement agreements, OCR collected a total of $999,000 from Boston Medical Center, Brigham and Women’s Hospital, and Massachusetts General Hospital for putting publicity before patient privacy by allowing ABC News documentary film crews to film patients and access other patient information for a news documentary without obtaining prior patient authorization under three separate settlement agreements with the hospitals.
The circumstances that resulted in the three resolution agreements announced on September 20, 2018 were strikingly similar to those underlying the NY-Presby Resolution Agreement. Notably, the investigations that resulted in the three settlement agreements all arose out of each of the respective hospital’s permitting an ABC documentary film crew filming a medical documentary to access patient areas of their hospitals.
OCR’s investigation of MGH arose in response to an announcement about the impending filming on its website while OCR’s investigations of BMC and BWH started in response to a January 12, 2015 Boston Globe article that reported the Hospitals each separately had allowed ABC film crews filming a documentary to access PHI and film patients without obtaining patient authorization. See Boston Medical Center Resolution Agreement (BMC Settlement Agreement); Brigham and Women’s Hospital Resolution Agreement (BWH Settlement Agreement); and Massachusetts General Hospital Resolution Agreement (MGH Resolution Agreement)
The MGH Resolution Agreement reflects that OCR’s investigations began with an investigation of MGH on December 17, 2014 based on a news story posted to MGH’s website on October 3, 2014, indicating that ABC News would be filming a medical documentary program at MGH. The MGH Resolution Reports that the investigation revealed that before allowing the filming between October 2014 to January 2015, MGH reviewed and assessed patient privacy issues related to the filming and implemented various protections regarding patient privacy, including providing the ABC film crew with the same HIPAA privacy training received by MGH’s workforce.
Information contained in the respective settlement agreements reflect that OCR’s investigations of BMC and BWH began about a month later on January 25 and 26, 2015 respectively in response to the Boston Globe article. The BWH Settlement Agreement states that the BWH investigation revealed that like MGH, BWH reviewed and assessed patient privacy issues related to the filming and implemented various protections regarding patient privacy, including providing the ABC film crew with the same HIPAA privacy training received by BWH’s workforce before allowing the filming by the ABC film crew that occurred between October 2014 to January 2015. The BMC Settlement Agreement does not state that OCR found BMC engaged in similar deliberations or undertook the same or other efforts to safeguard patients and their PHI.
The BMC Settlement Agreement reports that the OCR concluded based on the BMC investigation showed that BMC impermissibly disclosed PHI of patients to ABC employees during the production and filming of a television program at BMC in violation of HIPAA. Meanwhile, while acknowledging the privacy deliberations and efforts undertaken at MGH and BWH, OCR also concluded that each of those organizations also violated HIPAA because in allowing the film crew access and to film patients and patient areas:
The timing at which they obtained patient authorizations showed MGH and BWH impermissibly disclosed the PHI of patients to ABC employees during the production and filming of a television program at BWH; and
Despite the various patient privacy protections in place, MGH and BWH failed to safeguard its patients’ PHI appropriately and reasonably from disclosure during a filming project conducted by ABC on its premises in 2014 and January 2015.
To resolve potential HIPAA violations, BMC has paid OCR $100,000, BWH has paid OCR $384,000, and MGH has paid OCR $515,000. In addition, each Hospital agreed to provide workforce training as part of a corrective action plan that will include OCR’s guidance on disclosures to film and media in the 2016 Media FAQ.
Allergy Associates of Hartford, P.C.Resolution Agreement
Large institutional health care organizations are not the only HIPAA entities subjected to OCR investigation or enforcement for inappropriate sharing of PHI with the media. In its November 2018
On November 26, 2018, OCR announced that Allergy Associates, the three doctor health care practice Allergy Associates of Hartford, P.C. would pay OCR $125,000 and take corrective action under a Resolution Agreement and Corrective Action Plan resolving charges stemming from comments a physician made to a reporter on a patient dispute with the practice in 2015 violated HIPAA.
According to OCR, the disclosure of patient information that prompted OCR’s HIPAA charges resulted from a physician associated with the practice commenting to a local television station reporter for a story about a disabled patient’s complaint to the station that Allergy Associates turned her away from a scheduled appointment because of her use of a service animal. After the patient contacted the television statement to complain about being turned away by the practice when accompanied by her service animal, the station contacted the doctor for comment about the dispute between the Allergy Associates’ doctor and the patient. Although OCR reports its investigation revealed that Allergy Associates’ Privacy Officer instructed the doctor to either not respond to the media or respond with “no comment,” the doctor nevertheless accepted the television station reporter’s invitation to comment and discussed the dispute with the reporter.
OCR learned of the physician’s unauthorized comments to the reporter when it received a copy of an October 6, 2015, HHS civil rights complaint filed on behalf of the patient with the Department of Justice, Connecticut, U.S. Attorney’s Office (DOJ) by the Connecticut Office of Protection and Advocacy for Persons with Disabilities (OPA). In response to this complaint, OCR initiated a joint investigation with DOJ into the civil rights allegations against Allergy Associates. The complaint also alleged that Allergy Associates impermissibly disclosed the patient’s PHI in violation of HIPAA.
OCR found the physician’s discussion of the patient’s complaint without first obtaining a HIPAA-complaint authorization from the patient both violated HIPAA and demonstrated a reckless disregard for the patient’s HIPAA privacy rights. Additionally, Resolution Agreement also states that OCR’s investigation revealed that Allergy Associates did not take any disciplinary or other corrective action against the doctor after learning of his impermissible disclosure to the media.
To resolve the HIPAA charges, Allergy Associates agrees in the Resolution Agreement and Corrective Action Plan to pay $125,000 as well as to undertake a corrective action plan that includes two years of monitoring their compliance with the HIPAA Rules.
OCR COVID-19 HIPAA Guidance & Warnings About Media-Related HIPAA Responsibilities
With the COVID-19 pandemic fueling a torrent of media inquiries and coverage of patient, workforce and other aspects of the pandemic, OCR reminded health care providers and other HIPAA entities of HIPAA’s requirement of prior authorization before sharing PHI or allowing media to access patients or areas where media could observe patients or their PHI throughout the COVID-19 pandemic.
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”), OCR warned covered health care providers and other HIPAA entities that the Privacy Rule prohibits HIPAA entities from giving media or film crews access to PHI including access to facilities where patients’ PHI could be accessible without the patients’ prior authorization and cautioned testing facilities and other health care providers to prevent unauthorized use, access or disclosure of test results and other PHI except as specifically allowed in the applicable HIPAA Law. In this respect, the 5/5 Guidance quoted then OCR Director Roger Severino, as unequivocally stating “Hospitals and health care providers must get authorization from patients before giving the media access to their medical information; obscuring faces after the fact just doesn’t cut it.”
Consistent with this warning, the 5/5 Guidance described reasonable guidelines and safeguards that HIPAA entities should use to protect the privacy of patients whenever the media is granted access to facilities. Additionally, the 5/5 Guidance specifically warned HIPAA entities among other things that:
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;
Covered health care providers may not require a patient to sign a HIPAA authorization as a condition of receiving treatment; and
Masking or obscuring patients’ faces or identifying information before broadcasting a recording of a patient does not sufficiently deidentify patient information to allow unauthorized disclosure. A valid HIPAA authorization is still required before giving the media such access.
Despite these warnings, throughout the COVID-19 health care emergency videos and other media reports often incorporated videos or other images of patients and other descriptions or details about patients containing PHI reporters or media outlets obtained from accessing facilities, interviewing workforce members, or shared with the media or others allowed to access patients or facilities, often without a HIPAA-compliant patient authorization and often by workforce members without authorization or otherwise in violation of their employing HIPAA entity’s policies. See e.g. Ezekiel Elliott COVID-Test Disclosure Highlights Health Care Provider & Plan HIPAA & Other Privacy Risks From Medical Testing & Other Medical Information;, Health care workers express overwhelming fatigue as COVID-19 cases surge across the country; Pandemic takes its toll on health care workers; ABC News Special Coverage: Coronavirus Pandemic. Since the widespread media coverage makes clear SJMC was not the only health care provider or other HIPAA entity where the entity or members of its workforce allowed media access to facilities, shared or allowed the media or other third-parties to take patient photos, videos, or shared or allowed media access to other PHI, additional OCR enforcement actions or settlements arising from COVID-19 related media disclosures against other HIPAA-entities are likely.
To mitigate their own organizational exposure to potential HIPAA and other privacy-related exposures from known or as-of-yet unidentified past or future media-related HIPAA violations, all HIPAA entities should consult qualified legal counsel for advice and assistance within the scope of attorney-client privilege on investigating their organizations potential risks from any past media disclosures and opportunities for mitigating any known or uncovered HIPAA exposures by acting proactively as well as for guidance on best practices to prevent or mitigate liability from future dealings with the media.
To promote their compliance and the defensibility of their practices and efforts when compliance issues arise, HIPAA entities need conduct a well-documented assessment of their current and past compliance, policies, practices and workforce training on allowing media or others to enter, film, photograph or record within their facilities or otherwise disclosing or allowing media access to their facilities as well as their policies about when parties not involved in care of a particular patient can film, photograph, or otherwise record, observe or access areas where patients or patient PHI is or might be present without prior written consent of the patient.
Going forward, all HIPAA entities should ensure their policies clearly prohibit their entities, their business associates and their workforce from allowing film or media to film, photograph or even access areas where patients or their PHI are accessible or otherwise disclosing PHI to members of the media without first obtaining a HIPAA-compliant authorization from each patient whose presence or PHI could be observed, recorded or otherwise accessed. Adopting the policy alone is insufficient, however, HIPAA entities also need to implement and enforce appropriate procedures and training to promote compliance with those policies and processes to monitor and respond to any violations of HIPAA’s requirements.
When considering the adequacy of their current policies, practices and training concerning filming, photography and other access and disclosure to patients, patient treatment areas and other PHI, HIPAA entities should keep in mind that the obligation to prevent unauthorized filming, photography or any other PHI access or disclosure PHI extends to “any third party not involved in patient care,” not merely those to media or film crews. Consequently, HIPAA entities should address potential risks from filming, photographs or other access and disclosure to patients, patient treatment or recordkeeping areas, or PHI by all parties within or with access to their facilities or records including but not limited to staff, business associates, contractors, other patients as well as media or other visitors.
Recognizing that the NY-Presbyterian corrective action plan included a requirement that NY-Presbyterian require “all photography, video recording and audio recording conducted on NY-Presbyterian premises” be reviewed, preapproved and actively monitored for compliance with the Privacy Rule and NY-Presbyterian’s policies, HIPAA entities also should take steps to monitor and properly restrict and protect any filming, photography or other observations, records or other PHI by individuals within their workforce, as well as to regulate the access and activities of unrelated third parties. In this respect, HIPAA entities are cautioned about the need to prohibit and enforce suitable prohibitions against members of their workforce and others using their own personal devices or other equipment to film, photograph, and copy or disseminate photographs, film, recordings or other records or data that qualifies as or contains PHI without authorization in accordance with established protocols.
HIPAA entities also should take steps to ensure their policies and training make clear that these prohibitions apply whether or not the workforce member believes that identity of the patient or patient information is concealed or otherwise not discoverable.
Moreover, even with respect to photographs, films or other recordings or records legitimately created for treatment, payment or operations purposes, HIPAA entities generally need to take steps to restrict use, access and disclosure of the photographs or other recordings to individuals legitimately involved in patient treatment, operations, payment or other activities allowed by the Privacy Rule and to safeguard those materials against use, access or disclosure to others within or outside their workforce except as allowed by HIPAA and other applicable law. .
Since HIPAA entities also are likely to be subject to other statutory, ethical, contractual or other privacy or confidentiality requirements beyond those imposed by the Privacy Rule, most HIPAA entities also will want to consider and take steps to identify and address these other potential legal or ethical responsibilities 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 privacy or other related exposures when conducting this review. Additionally, most HIPAA entities also will want to take into account and manage their potential exposure to privacy, theft of likeness or other intellectual property, or other statutory or common law tort or contractual claims that might attached to the unauthorized filming, photographing, or surveillance of individuals under federal or state common or statutory laws.
Since this analysis and review in most cases will result in the uncovering or discussion of potentially legally or politically sensitive information, HIPAA 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, HIPAA entities should keep in mind that HIPAA compliance and risk management is an ongoing process requiring constant awareness and diligence. Consequently, HIPAA entities should both monitor OCR and other regulatory and enforcement developments as well as exercise ongoing vigilance to monitor and maintain compliance within their organizations.
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 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 labor and employment, employee benefit, 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:
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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.
Heads up employers! The Department of Labor Wage and Hour Division plans to raise by more than 35 percent the minimum salary required for an employee to qualify as exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) under the exemption for executive, administrative, and professional employees (commonly referred to as the “white-collar exemption”) as well as increase the minimum compensation that an employee must earn to qualify as an exempt employee under the special rule allowing employers to treat certain “highly compensated employees” as exempt. If changes proposed in the Notice of Proposed Rulemaking (Proposed Rule), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (“Proposed Rule”) released August 30, 2023 will significantly increase the labor costs for employers of the more than 4 million employees projected to cease to qualify as exemption from the FLSA minimum wage and overtime requirements. All employers relying on these exemptions should reevaluate and adjust their compensation budgets and other compensated dependent projections to account for the expected impact of these changes. Additionally, employers and others concerned by these proposed changes should comment to the Labor Department by as well as express their concerns to relevant members of Congress.
Proposed White-Collar Exemption Salary Level Test Compensation Increase
The white-collar exemption to the FLSA generally exempts an employee from the FLSA minimum wage and overtime requirements if the employee Is employed in a bona fide executive, administrative, or professional (EAP) capacity as those terms are defined in the Department of Labor’s regulations at 29 CFR part 541.
Currently, an employee generally must meet the following conditions to qualify as an exempt employee under the white-collar exemption:
Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);[1]
Be paid at least a specified weekly salary level, which currently is $684 per week (the equivalent of $35,568 annually for a full-year employee) in the current regulations (the “salary level test”); and
Primarily perform executive, administrative, or professional duties, as provided in the Department’s regulations (the “duties test”).
The Proposed Rule would Increase the minimum salary that an employee must earn to meet the salary level test by 35 percent from $684 per week ($35,568 annually) to $1,059 per week ($55,068 annually). This represents an immediate more than 35 percent increase in the minimum salary that an employer must pay an employee to treat the employee as exempt from minimum wage and overtime requirements. The Proposed rule also would extend the applicability of the standard salary level to Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and increase the special salary levels for American Samoa and the motion picture industry.
The Proposed Rule also seeks to increase the total annual compensation that an employee must earn to qualify as exempt as a highly compensated employee.
Presently, a highly compensated employee is deemed exempt under Section 13(a)(1) even though the employee does not meet all of the other requirements in the standard white-collar test for exemption as an executive if:
The employee earns total annual compensation of $107,432 or more, which includes at least $684* per week paid on a salary or fee basis;
The employee’s primary duty includes performing office or non-manual work; and
The employee customarily and regularly performs at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee.
The required total annual compensation of $107,432 or more, which includes at least $684 per week paid on a salary or fee basis, may otherwise consist of commissions, nondiscretionary bonuses and other nondiscretionary compensation earned during a 52-week period, but does not consist of credit for board, lodging, or other facilities, payments for medical or life insurance, or contributions to retirement plans or other fringe benefits.
Additionally, the weekly salary amount of $684 must be paid in its entirety. Employers may not use nondiscretionary bonuses and incentive payments (including commissions) to satisfy any portion of the weekly standard salary level for highly compensated employees.
The Proposed Rule would increase the total annual compensation requirement for an employee to qualify as a highly compensated employee from $107,432 to $143,988 per year, which would be required to include at least $1,059 per week.
Proposed Automatic Adjustments Every Three Years
The Proposed Rule also calls for automatic updates to the earnings thresholds applicable under the White-Collar Exemption every three years based on then current wage data.
FLSA Violations Expensive
As costly as complying with applicable FLSA minimum wage and overtime rules can be, violations are worse as illustrated by the $324,049 in back wages and liquidated damages that a federal judge just ordered home health provider Destiny Healthcare Services Inc. and its owner to pay for wrongfully failing to pay required overtime to 159 workers.
From October 2020 through October 2022, Wage and Hour Division investigation determined owner Mirza Baig and administrator Sonia Chalal did not keep accurate records of hours worked and paid the affected workers straight-time wages for all hours worked. By doing so, the Westchester-based employers failed to pay overtime as required by the FLSA.
Businesses Should Prepare For Compensation Cost Increases
Given the proactivity of the Biden Administration led Labor Department, employers generally should prepare for the Labor Department to move quickly to finalize and adopt the changes set for the Proposed Rule.
Given this likelihood, all employers should evaluate the extent to which the changes in the Proposed Rules are likely to require the employer to reclassify and treat as non-exempt ay employee the employer currently classifies as salaried and if so, identify and prepare to implement any changes to compensation necessary to maintain compliance with the modified rules when effective. Where the job position warrants increased compensation, an employer may want to increase compensation for a worker that otherwise meets the required conditions to qualify as exempt. In other cases, employers should evaluate the current compensation structure to determine whether and how to convert the current salaried compensation to an hourly rate of pay in a manner defensible under the FLSA minimum wage and overtime rules as well as the process changes required to track and document hours of work and other additional data necessary to comply with recordkeeping requirements of the FLSA. In some instances, it may be possible for the employer to restructure the current salary as a base wage plus overtime rate for overtime rate without materially increasing compensation costs for the impacted employee. In other cases, however, employers may want to begin recruiting additional workers or making other changes to mitigate the projected impact of the required conversion of employees currently classified as salaried to hourly under the Proposed Rule.
Additionally, employers also should evaluate and begin preparing for the expected broader impact of the changes in their compensation budgets, as well as other wage dependent costs and product or service pricing to account for the expected impact of these changes. These projections should anticipate both the direct impact, if any, of the expected labor costs increases that the employer expects to experience in its workplace, as well as the indirect inflationary effect on costs likely to result from increased labor costs of suppliers and others.
While bracing for the likely adoption of the Proposed Rules, employers and other concerned about these impacts or other changes proposed in the Proposed Rule should share their input by commenting within the 60-day period following official publication of the Proposed Rule on the Proposed Rule through the Federal eRulemaking Portal or by mail to Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, DC 20210.
[1] Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers).
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.
Employers now should begin using the new Form I-9, Employment Eligibility Verification (“2023 Form I-9”) to verify the identity and eligibility of workers to work in the United States. The U.S. Immigration and Customs Service (“USICS”) made the 2023 Form I-9 available on August 1, 2023.
Use of the 2023 Form I-9 to verify worker identity and eligibility to work will be mandatory beginning November 1, 2023.
Between August 1 and October 31, 2023 employers are permitted to use either the 2023 Form I-9 or the previous Form I-9 dated October 21, 2019 fulfill their I-9 identity and employment eligibility verification responsibilities.
After October 31, 2023, employers failing to use the 2023 Form I-9 to fulfill their I-9 responsibilities may be subject to penalties.
To reduce the risk that an employer inadvertently will fail to timely begin using the 2023 Form I-9 by the required November 1, 2023 deadline, employers generally should acquire and begin using the 2023 Form I-9 for any verifications of identity and eligibility to work after the 2023 Form I-9 becomes available on August 1, 2023.
Employers will be able to acquire the 2023 Form I-9 for free beginning August 1, 2023 by downloading it from the USCISC website here. Alternatively, employers can order the paper Form I–9 here.
When preparing to use the 2023 Form I-9, employers will notice that it incorporates the following changes:
Reduces Sections 1 and 2 to a single-sided sheet;
Is designed to be a fillable form on tablets and mobile devices;
Moves the Section 1 Preparer/Translator Certification area to a separate, standalone supplement that employers can provide to employees when necessary;
Moves Section 3, Reverification and Rehire, to a standalone supplement that employers can print if or when rehire occurs or reverification is required;
Revises the Lists of Acceptable Documents page to include some acceptable receipts as well as guidance and links to information on automatic extensions of employment authorization documentation;
Reduces Form instructions from 15 pages to 8 pages; and
Includes a checkbox allowing employers to indicate they examined Form I-9 documentation remotely under a DHS-authorized alternative procedure rather than via physical examination.
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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 American Bar Association Real Property Probate and Trust Section Employee Benefits Committee invites you to catch up on a briefing on newly proposed rules and other guidance on the Mental Health Parity and Addiction Equity Act (‘MHPAEA”) by participating in its free monthly membership call on Friday, August 18, 2023 at Noon Central Time conducted by SLP author and publisher employee benefits attorney Cynthia Marcotte Stamer, along with fellow employee benefit attorneys Jacquelyn Meng Abbott and Allison Moody.
With their 2023 Mental Health Parity and Addiction Equity Act’s Comparative Analysis Report to Congress (“Report”) and an accompanying Enforcement Fact Sheet (“Fact Sheet”) confirming their continued prioritization of MHPAEA, the Department of Labor Employee Benefit Security Administration (“EBSA”), the Department of Health and Human Services Centers for Medicare & Medicaid Services (“CMS”) and the Department of Treasury (collectively the “Tri-Agencies) also signaled plans to further tighten MHPAEA’s requirements by releasing a joint Notice of Proposed Rulemaking (“Proposed Rule”) and a Technical Release (“Technical Release”) seeking input on MHPAEA. During the meeting, employee benefit attorneys Committee Co-Chair, Cynthia Marcotte Stamer, and Committee Vice Chairs Jacquelyn Meng Abbott, and Allison Moody will lead a discussion of the new guidance package including:
The Report, Fact Sheet and selected MHPAEA litigation enforcement developments
The recently Proposed Regulations and Technical Release;
Other MHPAEA compliance developments and tips; and
Possible areas of concern on which the RPTE Employee Benefits Committee or others might want to submit in response to the Tri-Agencies.
Interested persons can use the following information to join the Zoom Meeting here using Meeting ID: 963 6704 4137 and Passcode: 509661 or Dial in by telephone using either of the following numbers: Telephone Dial In: 888 475 4499 US Toll-free; 877 853 5257 US Toll-free.
For more information about the American Bar Association RPTE Section and its Employee Benefits Committee, see 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.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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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.
Attorney and Solutions Law Press, Inc. author Cynthia Marcotte Stamer will discuss the emerging challenges and potential coping strategies for third party administrators (“TPAs”), employers and employee benefit plans for dealing with the evolving federal and state litigation, regulation, enforcement, pollical dissention, disruptions and uncertainty triggered by the Supreme Court’s Dobbs v. Jackson Women’s Health Organization landmark abortion decision as a panelist for the “Emerging Impact of Dobbs on Employers, Employee Benefits and Healthcare” at the 2023 Fall Spring Meeting of the Society of Professional Benefit Administrators (“SPBA”) on September 13-14, 2023 at the Hilton Downtown Hotel in Nashville, Tennessee.
In Dobbs, the Supreme Court reversed its previous 1973 Roe v. Wade ruling when it ruled the U.S. Constitution does not provide any Constitutional right to an abortion. While the Dobbs opinion expressly limited its holding only to the right to abortion, the principles expressed by the Supreme Court majority inevitably touched off debate over the implications of Dobbs and other cases pending before the Court on contraception, LBGT rights and other reproductive and privacy rights. Meanwhile, the Dobbs opinion also has prompted the Biden Administration to issue a series of Executive Orders, regulations, and other actions intended to stymie and obstruct legislative and other bans or restrictions on abortion and other reproductive rights in states with politically conservative majorities in Dobbs’ wake.
As the aftermath of Dobbs continues to unfold, employers, employee benefit plans, TPAs, medical providers, patients and others are facing struggling to understand and respond to the shifting and often ambiguous workforce, benefits, care, safety, cybersecurity, privacy and other immediate legal and practical demands and concerns fueled by the evolving federal and state litigation, regulation, enforcement, political upheaval and uncertainty emerging in response to Dobbs.
Stamer will join FTI Consulting, Inc.’s Tracy McCollum Bordignon in exploring the implications of the Dobbs and other subsequent developments on the responsibilities, risks and options of TPAs, employers and plans when dealing with abortion and other reproductive rights of employees and plan members and share strategies to help these organizations cope with the shifting legal, operational and political fallout of Dobbs.
An employee benefit and employment lawyer Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefit Counsel, Stamer has more than 35 years of experience guiding employers, health and other employee benefit and insurance programs and their fiduciaries, insurers and TPA on policy and product design, administration, compliance, and risk management and related workforce, contracting, regulatory and other compliance, risk management and operations concerns.
Recognized as 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’s work throughout her career as focused on the design, documentation, implementation, review, amendment, termination, enforcement and defense of workforce, employee benefit, and managed care and insurance policies, programs, claims and appeals administration, funding, contracting, compliance, enforcement, investigation and defense, and other aspects of the operation and administration of self-insured and insured health and other employee benefit and insurance plans and related workforce, insurance, managed care and other health care, technology, tax and other concerns arising in relation these programs, products and practices for employer and other employee benefit plan sponsors, fiduciaries, third party administrators and other plan service providers, insurers and others 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 Department of Labor, Department of Health & Human Services, Internal Revenue Service, Department of Justice, Federal Trade Commission and other federal; state insurance, labor, health, and other agency notice and reporting, investigations, audits, discipline and other enforcement actions.
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 care and other Committees and projects for multiple Sections of the ABA and many other organizations Recognized 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 the Bureau of National Affairs, 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 and her experience 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 SPBAA or the agenda or registration for its Fall Conference in Nashville, see here.
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An Austin, Texas bar faces an Equal Employment Opportunity Commission (“EEOC”) lawsuit after allegedly firing a worker for being pregnant. The suit sends a warning to employers about the risks of pregnancy discrimination as protections for pregnancy are set to expand when the federal Pregnant Worker Fairness Act (PWFA) becomes effective next month.
The lawsuit signals the REOC’s continuing commitment to enforce pregnancy discrimination laws including new pregnancy accommodation mandates set to take effect June 27. The Pregnant Workers Fairness Act (PWFA), set to go into effect on June 27, 2023, will require employers to provide a reasonable accommodation to workers for known limitations related to pregnancy, childbirth, or related medical conditions.
The pregnancy discrimination suit filed by the EEOC accuses Corner Bar with illegally discriminating against a female bartender by reducing her hours and terminating her because she was pregnant.
According to the EEOC’s suit, the female bartender told her managers she was pregnant. Soon after her pregnancy became visible, her hours were cut and she was taken off the closing shifts, which were among the most profitable. Corner Bar later informed the bartender in a phone call that the business was “parting ways” with her, the EEOC said.
The lawsuit against three limited liability companies that operate Corner Bar and other Austin-area hospitality businesses charges the alleged conduct violates Title VII of the Civil Right Act of 1964, as amended by the Pregnancy Discrimination Act, which prohibits discrimination based on pregnancy. The EEOC is seeking back pay, compensatory and punitive damages, and appropriate injunctive relief to prevent similar discriminatory practices in the future.
The EEOC announcement of the lawsuit warns other businesses against pregnancy discrimination.
“This lawsuit should serve to remind employers that federal law clearly prohibits employers from discriminating against employees on the basis of pregnancy, childbirth or related medical conditions,” said Philip Moss, a trial attorney with the EEOC’s San Antonio Field Office. “The EEOC remains committed to fighting discrimination based on sex in the workplace, including pregnancy discrimination, in all of its forms.”
The announcement also makes clear this readiness extends to the impending requirements of the PWFA. Robert Canino, regional attorney for the Dallas District Office, added, “Employers violate discrimination laws when they deny women opportunities based on stereotypes and unfounded assumptions about what they are able to do during and after pregnancies. As a matter of fact, the importance of these workplace pregnancy discrimination issues is further re-enforced by the federal Pregnant Worker Fairness Act (PWFA), which becomes effective next month.”
All covered employers should take immediate steps to update policies, postings, training and practices to ensure their ability to defend their compliance with the PWFA and other federal and state pregnancy discrimination, leave and accommodation requirements.
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:
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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 insurers must ensure their programs don’t violate the Mental Health Parity and Addiction Equity Act (“MHPAEA”) by improperly limiting or excluding coverage for the treatment of autism or mental therapy developmental disorders.
MHPAEA requires group health plans and health insurance issuers that offer mental health benefits to ensure that mental health benefit financial requirements and nonquantitative treatment limitations are generally no more restrictive than those applied to medical/surgical benefits. The Department of Labor Employee Benefit Security Administration (“EBSA”) has identified MHPAEA autism and other mental health and substance abuse coverage enforcement as a key priority in its current fiscal year enforcement plan. Violation of its prohibitions is costly. Aside from any costs of providing wrongfully denied coverage and defense costs for resulting investigations and enforcement, violations generally also trigger that the employer is accountable for self-identifying, reporting and paying excise tax penalties imposed for MHPAEA violations under Internal Revenue Code Section 6039D to avoid even more penalties unless an exception applies.
Although many diagnosticians and courts consider autism a neurological rather than psychological disorder, EBSA often interprets and enforces MHPAEA as applicable to Applied Behavior (ABA) therapy and other treatment for autism, For instance, an EBSA Benefits Advisor stepped in to assist a Seattle family encountering difficulty communicating with their health plan regarding claims for their child the plan reprocessed the claims, resulting in an additional $20,000 of coverage. Another parent contacted an EBSA Benefits Advisor in the Dallas Regional Office for assistance with claims that had not been paid. After the Advisor contacted the plan to resolve the issue, this family received approximately $24,000 they were owed.
EBSA also has taken more formal enforcement actions in other instances. For example, EBSA’s Los Angeles Regional Office recently investigated a large service provider that excluded coverage for ABA therapy in hundreds of self-insured plans. The EBSA investigation resulted in 3 plans removing their exclusion for ABA therapy and offering coverage for that benefit moving forward, affecting more than 18,000 participants and their beneficiaries.
Meanwhile, an investigation by EBSA’s Chicago and Dallas Regional Offices into an ABA therapy exclusion resulted in a large claims administrator adding ABA therapy as a default coverage option for all of its self-insured plans. This correction resulted in the elimination of the exclusion of ABA therapy for autism for nearly one million participants.
To protect access to autism benefits, EBSA also works closely with other federal agencies, such as the U.S. Department of Health and Human Services. For example, EBSA assisted HHS’ Centers for Medicare and Medicaid Services in investigating an improper appeals process following the denial of coverage for autism treatment by a plan for a large school district. In the end, the plan reimbursed a total of $2,464 in unpaid claims to the participant.
The actions relating to ABM therapy and other autism-related treatment are part of a broader, high-priority EBSA and Department of Health and Human Services MHPAEA compliance and enforcement initiative which prioritizes enforcement of compliance by health plans and health insurers with MHPAEA’s mandates that health plans and insurance policies of covered health plans and insurers comply with its requirement of parity in the coverage provided for mental health and substance abuse care as compared to other care. To fulfill these requirements, health plans and insurers covered by MHPAEA must be prepared to produce documentation of their audit and analysis to demonstrate that any quantitative or qualitative requirements applicable to mental health or substance abuse coverage in form or operation are not greater than those applied to other comparable benefits. Meeting this burden generally requires significant documented analysis regarding the plan design and administration taking into complicated HPAEA regulations. Additionally, health plans and insurers also should ensure that their administrative practices and notifications comply with additional MHPAEA requirements applicable to claim determinations involving adverse benefit determinations for mental health or substance abuse treatment, as well as otherwise applicable Patient Protection and Affordable Care Act (“ACA”), Employee Retirement Income Security Act (“ERISA”) and for insured plans or policies, state insurance rules.
In the face of these and other enforcement actions, group health plans, their sponsors, their insurers, fiduciaries, administrators and employer and other MHPAEA-covered health benefit program sponsors, fiduciaries and administrators are urged to seek review and advice from legal counsel experienced with MHPAEA and other rules impacting autism diagnosis and treatment coverage about the adequacy and defensibility of their health program as it relates to coverage for autism and other developmental disabilities.
Additionally, employers also are reminded that autism and other developmental and neurological disorders also generally qualify as disabilities qualify for protection against discrimination and require accommodation under the Americans With Disabilities Act (“ADA”).
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 violations 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 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 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 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 change and in response to operational, health care, natural disaster, economic and other crisis and change.
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 care, health and other benefits, 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.
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
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Employer and other group health plan sponsors, fiduciaries, administrators and insurers should prepare their plans and their administrators to respond appropriately to today’s (3/29/2022) U.S. Food and Drug Administration (“FDA”)’s authorization of a second booster dose of either the Pfizer-BioNTech or the Moderna COVID-19 vaccines for certain populations will affect health plan COVID-19 coverage, workplace vaccination mandates or both.
FDA Emergency Use Approval of Second COVID-19 Booster
On March 29, 2022, the FDA amended its e emergency use authorization (“EAU”) for COVID-19 vaccination to add authorization for second COVID-19 booster shots under the following circumstances:
A second booster dose of the Pfizer-BioNTech COVID-19 Vaccine or Moderna COVID-19 Vaccine may be administered to individuals 50 years of age and older at least 4 months after receipt of a first booster dose of any authorized or approved COVID-19 vaccine.
A second booster dose of the Pfizer-BioNTech COVID-19 Vaccine may be administered to individuals 12 years of age and older with certain kinds of immunocompromise at least 4 months after receipt of a first booster dose of any authorized or approved COVID-19 vaccine. These are people who have undergone solid organ transplantation, or who are living with conditions that are considered to have an equivalent level of immunocompromise.
A second booster dose of the Moderna COVID-19 Vaccine may be administered at least 4 months after the first booster dose of any authorized or approved COVID-19 vaccine to individuals 18 years of age and older with the same certain kinds of immunocompromise.
Second Booster Authorization Health Plan Implications
Group health plans, their sponsors, fiduciaries, administrators and insurers need to evaluate their existing group health plan language to determine if and when their group health plan will cover second COVID-19 booster doses.
While Federal law currently mandates that all group health plans and group and individual health insurance covered by the Patient Protection & Affordable Care Act (“ACA”) cover FDA-approved initial vaccination and first booster vaccinations administered in accordance with recommendations of the Advisory Committee on Immunization Practices (“ACIP”), the ACIP as of now has not amended its COVID-19 vaccination recommendations to include the FDA second boosters approved by the FDA.
Health plans’ current obligation to cover without cost sharing initial COVID-19 vaccinations and first boosters in accordance with FDA authorizations to covered individuals arises under Section 3203 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Since January 5, 2021, Section 3203 of the CARES Act has mandated that all group health plans and health insurance issuers subject to the Patient Protection and Affordable Care Act (“ACA”) cover without cost sharing any COVID-19 vaccine with an FDA approved EUA Biologics License Application (“BLA”) consistent with the recommendations of the ACIP. While the CARES Act mandates coverage for ACIP-recommended COVID-19 vaccinations, including vaccines and boosters securing FDA approval subsequent to the effective date of the mandate. As enacted, the CARES Act mandate grows to include COVID-19 vaccinations and booster shots securing FDA approval subsequent to its enactment when recommended by the ACIP. Since the CARES Act only mandates coverage of ACIP recommended vaccines and as of March 29, 2022, the second booster is nt ACIP recommended, the Cares Act does not appear to mandate group health plans and health plan insurers cover the second booster shot approved by the FDA as of March 29, 2022. If in the future the ACIP recommends the booster, coverage by ACA covered group health plans and individual and group health insurance would become mandatory.
As of March 29, 2022, coverage of the second COVID-19 booster with or without cost-sharing also does not appear to be required to comply with the preventive care mandates of §2713 of the Public Health Service Act [PHSA]) enacted as part of the ACA.
The ACA preventive care and other mandates generally apply to individual health insurance coverage, fully insured small- and large-group coverage, and self-insured group plans that are not grandfathered or otherwise exempt.
Where applicable, Section 2713’s preventive care mandate generally requires ACA covered plans to cover without cost sharing specified preventive health services recommended with an A or B rating by the United States Preventive Services Task Force (USPSTF) and any immunization with a recommendation by ACIP adopted by the Centers for Disease Control and Prevention (CDC), for routine use for a given individual. As of now neither agency has adopted a recommendation of the second COVID-19 vaccine booster. Since Section 2713 specifies that its coverage mandates cannot trigger an obligation for covered group health plans to cover a new or revised recommendation any sooner than one year after a new or revised recommendation ispublished, any future adoption by the USPSTF, but not the ACIP, of a recommendation of the second booster shot will not trigger a federal coverage mandate. the ACA preventive care mandate. In contrast, ACA covered health plans would become immediately obligated to cover the second COVID booster if and when the ACIP in the future adds it to its recommendations, as the CARES Act mandate effectively renders moot the one year waiting period applicable for the ACA mandate.
As ACA group health plans and health insurance will become immediately required by the CARES Act to cover the second booster if and when the ACIP amends its COVID recommendations to recommend the second booster, group health plans, their sponsors, fiduciaries, administrators and insurers should monitor the ACIP recommendations for possible changes.
Along with this diligent oversight, most plan sponsors, fiduciaries and administrators should review their existing health plan language to determine if their existing plan language provides the currently mandated coverage as well as if the current language expressly provides or is sufficiently ambiguous to open the door for construction of the plan as authorizing coverage beyond existing applicable mandates. The COVID-19 related operational disruptions and exigencies present when the existing COVID-19 coverage mandates took effect creates a substantial likelihood that many plans contain less than optimal language regarding the COVID-19 vaccine and other mandates. Employer and other health plan sponsors, insurers, fiduciaries and administrators should assess whether tightening up their health plan language for the vaccination and other mandates is advisable to minimize compliance exposure risks, plan administration errors or unnecessary overpayments. Regardless of whether any change in plan language is necessary or advisable, group health plan fiduciaries, sponsors, administrators and insurers should prepare plan administration team members to respond to likely questions from plan members about COVID-19 vaccine and other COVID-related coverage. Health plan and human resources staff should be trained both to provide the appropriate substantive responses and to follow appropriate processes and procedures to contain the spread of fiduciary liability and to minimize the retaliation and other risks.
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.
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 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 workforce, employee benefits, health care and insurance legal representation, public policy leadership and advocacy, coaching, scholarship and training.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, Vice Chair of the ABA International Section Life Sciences Committee, current Chair-Elect of the ABA Tort & Insurance Section (TIPS) Medicine and Law Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer’s has worked extensively health and other employee benefit plan, managed care and other health and wellness, 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, workforce and vendor performance 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.
Ms. Stamer also shares her leadership through her extensive involvement in many professional, community and civic organizations including several current leadership roles in various ABA Committees, as a former Joint Committee on Employee Benefits Council Representative, former Society for Human Resources Management Region IV Board Chair and National Consultant’s Board Member; former Editorial Advisory Board Member and author for HR.com, Insurance ThoughtLeaders, BNA CD-Rolm, and Employee Benefits News; former Alliance for Healthcare Excellence Board President, 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, former 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. 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.
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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 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.
The Centers for Disease Control (CDC) One-Stop Shop provides quick access to communication resources. Topic-specific toolkits make it easy to access, leverage, and share CDC resources. These new toolkits contain videos, social media posts, PSAs, print resources, checklists, FAQs, and web resources for the following populations
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 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 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 http://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.
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.
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:
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U.S. employers need to prepare for their likely need to deal with paid family medical leave, paid sick leave, unemployment insurance and other employer impacting provisions of the “Families First Coronavirus Response Act,” (H.R. 6201) passed by the House of Representatives last week and expected to pass the Senate in some form this week as part of Congressional efforts to mitigate impacts of disruptions of the COVID-19 containment disruptions. Since the paid leave mandates would take effect 15 days from enactment, employers will want to prepare to comply and take into account the likely mandates when planning and communicating with workers and dealing with other financial and operational disruptions from the crisis.Solutions Law Press, INC. is planning to host a briefing for employers on the requirements after passed by Congress. For an invitation, register at http://www.solutiinslawpress.com or email here.
Paid Family Medical Leave
As passed by the House, the paid leave requirements currently only apply to employers with fewer than 500 employees and are accompanied by tax credit provisions intended to help covered businesses pay the cost of compliance. The bill’s paid leave requirements add special job-protected paid leave to the Family and Medical Leave Act (FMLA) for employees who have been working for at least 30 calendar days. In particular, covered employees would be entitled to 12 weeks of paid family leave, of which the first 14 days may be unpaid, to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the COVID-19 pandemic (“COVID Leave”). The bill also provides employees may. but employers can’t require employees to use accrued personal or sick leave during the first 14 days. After the initial 14 days, covered employers must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay. Because the leave is FMLA covered, employers should expect to be required to continue health coverage during the leave at usual employee contribution rates and to reinstate the employee to their position with all benefits and employment rights and seniority upon timely return. The provisions will take effect 15 days after the date of enactment and expire on December 31, 2020.
Paid Sick Leave
Employers with fewer than 500 employees will be required to provide full-time employees 2 weeks (80 hours) of paid sick leave for COVID-19 specific circumstances related to COVID-19 such as self-isolating, doctors’ visits or the like. Part-time employees would be entitled to the number of hours of paid sick time equal to the average number of hours worked over a 2-week period.
Employers must pay employees for any paid sick time taken at their regular rates of pay and will be required to post a notice informing employees of their rights to leave.
Since the bill expressly does not, as currently drafted, the bill expressly provides that it does not preempt existing state or local paid sick leave entitlements, employers also could face additional requirements under state or local law.
Like the COVID leave, these provisions also will go into effect 15 days after the date of enactment and expire on December 31, 2020.
Unemployment Insurance
The bill also includes $1 billion in emergency unemployment insurance (UI) relief to the states: $500 million for costs associated with increased administration of each state’s unemployment insurance (“UI”) program and places $500 million in reserve to help states with a 10 percent increase in unemployment. To receive a portion of this grant money, states mustveclerience the required increase in unemployment and temporarily ease certain UI eligibility requirements, such as waiting periods and work search requirements.
Prospects For Enactment
Although some Senators raised questions about certain provisions of the bill, it is expected to pass in some form this week as Congress and the Administration rush to provide relief for workers and business impacted by the economic effects of the COVID-18 pandemic containment efforts. Accordingly, covered employers should expect Congress to pass and President Trump to sign the bill this week. Meanwhile all employers also should brace for added legislation and regulation as well as continued operational and financial disruption as the COVID-19 virus impacts continue to roll out across the U.S. and around the World.
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 http://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
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.
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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.
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.
The just announced March 31, 2019 update of the the Annual Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark for federal government contractors and subcontractors changes to 5.9% provides an important reminder to U.S. employers to review and tighten the compliance of their recruiting, hiring, employment, compensation and benefits, and other policies and practices to withstand growing scrutiny and enforcement risks under federal laws.
Government contractors, subcontractors and other U.S businesses should reconfirm their compliance with the new benchmark and other VEVRAA requirements for dealing with veterans in light of the Trump Administration’s continuing emphasis on enforcing it and other federal laws protecting active duty military and veteran servicemen and women. As part of these enforcement efforts the Office of Federal Contract Compliance Programs (“OFCCP”) has announced it plans to incorporate VEVRAA Focused Reviews into the Corporate Scheduling Announcement List next fiscal year.
The Department of Labor announced the new 5.9% 2019 benchmark today (March 27, 2019). At the same time, it also updated national and state information in the VEVRAA Benchmark Database for federal contractors and subcontractors who calculate an individualized hiring benchmark using the five-factor method.
VEVRRA & USERRA Protections For Active Duty Military & Veterans
Affirmative action hiring by government contractors and subcontractors is one of the VEVRRA requirements for government contractors and subcontractors to provide assistance to and protect returning veterans from employment discrimination.
One of two key federal laws specifically prohibiting discrimination against returning veterans, VEVRRA applies only to government contractors and subcontractors. The other law, the Uniformed Services Employment and Reemployment Rights Act (USERRA), applies to virtually all U.S. employers.
Among other things, VEVRAA and its implementing regulations impose affirmative action requirements that require federal contractors and subcontractors to monitor and improve efforts to recruit and hire “protected veterans.” Protected veterans generally include veterans who are:
Disabled veterans: Those who are “entitled to compensation…under laws administered by the Secretary of Veterans Affairs” or “those who were released from active duty because of a service-connected disability;
Recently separated veterans;
Active duty wartime or campaign veterans;
Campaign badge veterans; and
Armed Forces service medal veterans.
Among other things, VEVRAA and its implementing Final Regulations generally require government contractors and subcontractors:
To set a hiring benchmark by either: (1) adopting a benchmark based on the national percentage of veterans currently in the workforce (5.9% effective March 31, 2019); or (2) creating an individualized benchmark based on their own interpretation of the best available data nationally and within their state/region.
Invite voluntary self-identification of applicants and employees as protected veterans. Pre-offer invitation to self-identify will involve asking whether the applicant believes that s/he is a protected veteran under VEVRAA without asking about the particular category of protection. Post-offer self-identification will request information regarding the specific category of protected veteran status. For Sample self-identification forms for both pre- and post-offer forms, see Appendix B Part 60-300 of the Final Regulation.
Comply with OFCCP reviews including providing on-site and off-site access to documents needed for compliance and focused reviews.
Track and report the effectiveness of veteran recruiting and hiring efforts by collecting specified data, which also must be retained for three years.
Provide access to job listings that identify the employer as a federal contractor in a format that can be used by veterans’ Employment Service Delivery Systems (ESDS).
Use mandated language in federal contracts (including subcontracts) to communicate the contractor’s obligations to employ and advance protected veterans.
While VEVRRA only applies to government contractors and subcontractors, USERRA generally applies to all employers.
USERRA generally provides that an individual who leaves a job to serve in the uniformed services is generally entitled to continue medical coverage for up to 26 months while absent for a qualifying military leave, reemployment by the previous employer upon timely return from military leave and, upon reemployment, to restoration of service, promotion, benefits and other rights of employment.
As part of these reemployment rights, qualifying service members timely returning from military leave are entitled to receive credit for benefits, including employee pension plan benefits, that would have accrued but for the employee’s absence due to the military service. USERRA’s pension-related provisions generally require that pension plans treat a service member who is called to active duty as if the service member had no break in service for purpose of the administration of pension benefits when the service member timely returns to employment at the end of a military leave. In addition to these pension rights, USERRA also requires employers honor other rights to employment, promotion and other benefits and rights of employment.
Beyond these VEVRRA and USERRA employment rights, service members taking or returning from active duty often enjoy various other employment and other protections under various other federal and state laws, many of which have been expanded in recent years.
As many veterans suffer return with physical, cognitive or emotional injuries and conditions, veteran applicants and employees may qualify for the disability discrimination, accommodation, privacy and other protections of the Americans with Disabilities Act (ADA) and, in the case of government contractors and subcontractors, the Section 503 of the Rehabilitation Act.
Under requirements of the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), creditors including a pension plan, employer loan program or credit union generally are required to drop interest charges down to 6 percent on debt owed by those called to active duty for the period of such military service. Further, under the Employee Retirement Income Security Act (ERISA), the loan will not fail to be a qualified loan under ERISA solely because the interest rate is capped by SSCRA. These and other provisions of federal law often require pension and profit-sharing plans that allow plan loans to change loan terms and tailor other special treatment of participants who are on military leave.
In addition to the specific protection given to a service member, employers also need to be ready to honor certain family leave protections afforded to qualifying family members or caregivers of service members added to the Family & Medical Leave Act (FMLA) in recent years. As amended to include these military leave related protections, the FMLA may require certain employees who are the spouse, son, daughter, or parent of a military member to take to 12 weeks of FMLA leave during any 12-month period to address the most common issues that arise when a military member is deployed to a foreign country, such as attending military sponsored functions, making appropriate financial and legal arrangements, and arranging for alternative childcare. This provision applies to the families of members of both the active duty and reserve components of the Armed Forces. Meanwhile, the “Military Caregiver Leave” provisions added to the FMLA may entitle certain employees who are the spouse, son, daughter, parent or next of kin of a covered service member to up to 26 weeks of FMLA leave during a single 12-month period to care for the service member who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness incurred or aggravated in the line of duty on active duty. These provisions apply to the families of members of both the active duty and reserve components of the Armed Forces. The expansion of these requirements, updating of regulation, and rising enforcement by private plaintiffs and the government make it advisable that businesses take all necessary steps to ensure their employment practices, employee benefit plans, fringe benefit programs and other practices are updated and administered to comply with the current requirements of VEVRRA, USERAA, SSCRA, the FMLA and other applicable federal and state laws.
Special care also generally is needed when designing and administering employment based health benefit programs to avoid violating federal eligibility rules prohibiting discrimination against service members, to properly offer continuation coverage and reinstatement during and following periods of service by employees and family members, and to avoid improper denial of coverage or coordination of benefit rules with military and veteran health benefits.
Given the potential liabilities that can result from noncompliance with these and other federal employment rules and requirements protecting active military and veteran service men and women, U.S. employer generally should reconfirm and carefully monitor and document their compliance with these laws to minimize their liability exposure. Where employers use subcontractors or otherwise outsource work, these businesses also should consider require their subcontractors and other service providers to contract to comply with these requirements, to supply data and other documentation that the employer might need to complete reports or otherwise defend its compliance, to cooperate in audits and other investigations, and to participate and cooperate with employer initiated compliance audits as well as government audits and investigations.
Need more information about veterans’ employment or other Human Resources, employee benefits, compensation or other performance and compliance management, check out the extensive training and other resources available on the author’s website or contact the author, Cynthia Marcotte Stamer.
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 has advised, trained, coached and defended businesses, employee benefit plans and others, published, and problem solved on opportunities and challenges relating to employment, benefits consumer, health care, disability and other rights and needs of active duty and veteran service people and their families.
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 health care, financial, tax, HR and technology, privacy, data security and breach; health care, 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 services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here 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 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.
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.
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.
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.
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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.
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President Trump today (October 12, 2017) issued the following that he promised to be the first in a series of executive orders and other administrative actions that his administration will roll out to provide Obamacare relief for consumers, employers and others by promoting healthcare choice and competition given the continued difficulty by the Republican-led Congress to pass legislation repealing or replacing the health care law.
On the heels of his announcement of the Executive Order, President Trump moved forward on his promise to take other action on Obamacare by announcing that the Administration will not continue funding for individual subsidies that currently are continued under an Obama Administration action in the absence of Congressional action funding those subsidies.
Concerned parties should monitor and inform themselves about proposed changes in the Executive Order and other actions as they are proposed and develop, and provide timely comments and other input to help influence the shape and content of any changes proposed or adopted in response to the Executive Order. Solutions Law Press, Inc. will be monitoring developments. Stay tuned for updates.
Language of Executive Order
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Policy.
(a) It shall be the policy of the executive branch, to the extent consistent with law, to facilitate the purchase of insurance across State lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people. The Patient Protection and Affordable Care Act (PPACA), however, has severely limited the choice of healthcare options available to many Americans and has produced large premium increases in many State individual markets for health insurance. The average exchange premium in the 39 States that are using http://www.healthcare.gov in 2017 is more than double the average overall individual market premium recorded in 2013. The PPACA has also largely failed to provide meaningful choice or competition between insurers, resulting in one-third of America’s counties having only one insurer offering coverage on their applicable government-run exchange in 2017.
(b) Among the myriad areas where current regulations limit choice and competition, my Administration will prioritize three areas for improvement in the near term: association health plans (AHPs), short-term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs).
(i) Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance. Expanding access to AHPs will also allow more small businesses to avoid many of the PPACA’s costly requirements. Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth.
(ii) STLDI is exempt from the onerous and expensive insurance mandates and regulations included in title I of the PPACA. This can make it an appealing and affordable alternative to government-run exchanges for many people without coverage available to them through their workplaces. The previous administration took steps to restrict access to this market by reducing the allowable coverage period from less than 12 months to less than 3 months and by preventing any extensions selected by the policyholder beyond 3 months of total coverage.
(iii) HRAs are tax-advantaged, account-based arrangements that employers can establish for employees to give employees more flexibility and choices regarding their healthcare. Expanding the flexibility and use of HRAs would provide many Americans, including employees who work at small businesses, with more options for financing their healthcare.
(c) My Administration will also continue to focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system. To the extent consistent with law, government rules and guidelines affecting the United States healthcare system should:
(i) expand the availability of and access to alternatives to expensive, mandate-laden PPACA insurance, including AHPs, STLDI, and HRAs;
(ii) re-inject competition into healthcare markets by lowering barriers to entry, limiting excessive consolidation, and preventing abuses of market power; and
(iii) improve access to and the quality of information that Americans need to make informed healthcare decisions, including data about healthcare prices and outcomes, while minimizing reporting burdens on affected plans, providers, or payers.
Sec. 2. Expanded Access to Association Health Plans.
Within 60 days of the date of this order, the Secretary of Labor shall consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs. To the extent permitted by law and supported by sound policy, the Secretary should consider expanding the conditions that satisfy the commonality‑of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974. The Secretary of Labor should also consider ways to promote AHP formation on the basis of common geography or industry.
Sec. 3. Expanded Availability of Short-Term, Limited‑Duration Insurance.
Within 60 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, consistent with law, to expand the availability of STLDI. To the extent permitted by law and supported by sound policy, the Secretaries should consider allowing such insurance to cover longer periods and be renewed by the consumer.
Sec. 4. Expanded Availability and Permitted Use of Health Reimbursement Arrangements.
Within 120 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.
Sec. 5. Public Comment.
The Secretaries shall consider and evaluate public comments on any regulations proposed under sections 2 through 4 of this order.
Within 180 days of the date of this order, and every 2 years thereafter, the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor and the Federal Trade Commission, shall provide a report to the President that:
(a) details the extent to which existing State and Federal laws, regulations, guidance, requirements, and policies fail to conform to the policies set forth in section 1 of this order; and
(b) identifies actions that States or the Federal Government could take in furtherance of the policies set forth in section 1 of this order.
Sec. 7. General Provisions.
(a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
October 12, 2017
Implications & Actions
The impact of this and other Executive Orders and other Presidential actions depend upon what actions, if any, the agencies determine they are allowed by law to take and how those changes are implemented. Concerned persons and organizations should begin preparing input to the agencies and monitoring and commenting on proposals and other guidance to help shape the outcome.
Solutions Law Press, Inc. is preparing initial analysis of this Executive Order and will be closely monitoring and updating this analysis. Follow up to learn more and stay abreast of new 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 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. Author of numerous works on privacy and data security, Ms. Stamer‘s experience includes involvement in cyber security and other data privacy and security matters for more than 20 years.
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 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.
Individual Americans that don’t maintain their and their dependents’ enrollment in at least minimum essential coverage in a health program meeting the requirements of the Patient Protection & Affordable Care Act commonly referred to as “Obama Care” still generally should expect to pay individual shared responsibility tax penalties imposed by Obamacare.
Despite campaign promises to quickly repeal or reform Obamacare, the Republican controlled Congress has been unable to pass legislation repealing the individual tax penalty or other Obamacare coverage mandate related rules. Moreover, contrary to the impression widely held by many Americans that President Trump’s January 20 Executive Order protects uncovered individuals from the tax imposed under Internal Revenue Code Section 5001A, the Internal Revenue Service still plans to enforce and collect the tax. See here. Consequently, Internal Revenue Code Section 5001A still generally requires uncovered taxpayers to pay the individual shared responsibility payment.
This means that taxpayers not enrolled in minimum essential coverage or otherwise exempt from the individual responsibility payment need to be prepared to pay the tax.
In anticipation of enforcement of the individual shared responsibility tax, the Internal Revenue Service just set the monthly national average premium for qualified health plans that have a bronze level of coverage offered through Exchanges at $272 per individual and the maximum monthly national average premium for qualified health plans with a bronze level of coverage offered through Exchanges at $1,360 for a shared responsibility family with five or more members. The Internal Revenue Service intends that these amounts will be used to calculate individual shared responsibility tax penalties for 2017. The updated amounts are published in Rev. Proc. 2017-48
In general, the individual responsibility tax equals the lesser of (1) the sum of the monthly penalty amounts, or (2) the sum of the monthly national average bronze plan premiums for the shared responsibility family. See § 1.5000A-4(a). The monthly national average bronze plan premium means, for a month for which a shared responsibility payment is imposed, 1/12 of the annual national average premium for qualified health plans that (1) have a bronze level of coverage, (2) would provide coverage for the taxpayer’s shared responsibility family members, and (3) are offered through Exchanges for plan years beginning in a calendar year with or within which the taxable year ends. §§ 5000A(c)(1)(B) and 1.5000A-4(c). For this purpose, “shared responsibility family” means, for a month in a taxable year, all nonexempt individuals for whom the taxpayer and the taxpayer’s spouse, if the taxpayer is married and files a joint return with the spouse, are liable for the shared responsibility payment under § 5000A for that taxable year. See § 1.5000A-1(d)(17).
Taxpayers who are not enrolled in the necessary health coverage to meet the Obamacare health coverage mandate should evaluate their shared responsibility tax penalty exposure and weigh whether it makes more sense to enroll in qualifying health coverage or prepare to pay the tax.
About The Author
Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.
Throughout her legal and consulting career, Ms. Stamer has drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters as well as for her work and thought leadership on a broad range of other health, employee benefits, human resources and other workforce, insurance, tax, compliance and other matters. Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.
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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.
About Solutions Law Press
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 www.SolutionsLawPress.com.
If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press™ events, 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, see here.
NOTICE: Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct. Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.
Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.
Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party. They are not, and do not serve as a substitute for legal, accounting, tax or other advice. They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.
Parties accessing or using any of Solutions Law Press, Inc.™ 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 publisher and the author expressly disclaim all liability for this content and any 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.
For the 28th year, U.S. News & World Report has published its annual ranking of U.S. hospitals across the country. The 2017-18 Best Hospitals list (List) reports results of U.S. News & World Report’s rating and comparisons of more than 4,500 medical centers across the nation in 25 specialties, procedures and conditions based on the methodology developed and refined annually by U.S. News & World Report and its project partner, RTI International. While U.S. News & World Report touts its lists and findings as a valuable tool for guiding patient care choices, patients and others contemplating using the reported data to help evaluate hospital facilities or make care decisions will want to evaluate carefully the methodology used to derive the lists to assess the relevance of the reported rankings to their needs and purposes.
Based on the methodology specially developed by U.S. News & World Report along with RTI International for purposes of determining the ranking for a particular year, the Report separately evaluates and publishes the lists separately ranking the evaluated facilities based on the following criteria:
2017-18 Best Hospitals Specialty Rankings list
2017-18 Best Hospitals Procedure and Condition Ratings
2017-18 Best Hospitals Honor Roll
2017-18 Best Regional Hospitals
2017-18 Best Children’s Hospitals
The “Best Hospitals Honor Roll” that recognizes 20 hospitals that U.S. News & World Report concluded showed “ unusual competence across a range of adult specialties, procedures and conditions … tak[ing]” into account the full range of adult inpatient care – both performance in the Best Hospitals specialty rankings and in the Best Hospitals procedures and conditions based upon the combined points earned by the ranked hospital using a complicated methodology summarized here. Using this methodology, U.S. News & World Report named the following 20 hospitals to its list of the 2017-18 Best Hospitals Honor Roll:
Mayo Clinic, Rochester, Minn.
Cleveland Clinic
Johns Hopkins Hospital, Baltimore
Massachusetts General Hospital, Boston
UCSF Medical Center, San Francisco
University of Michigan Hospitals and Health Centers, Ann Arbor
Ronald Reagan UCLA Medical Center, Los Angeles
New York-Presbyterian Hospital, N.Y.
Stanford Health Care-Stanford Hospital, Stanford, Calif.
Hospitals of the University of Pennsylvania-Penn Presbyterian, Philadelphia
Cedars-Sinai Medical Center, Los Angeles
Barnes-Jewish Hospital, St. Louis
Northwestern Memorial Hospital, Chicago
UPMC Presbyterian Shadyside, Pittsburgh
University of Colorado Hospital, Aurora
Thomas Jefferson University Hospitals, Philadelphia
Duke University Hospital, Durham, N.C.
Mount Sinai Hospital, New York
NYU Langone Medical Center, New York
Mayo Clinic Phoenix
While no Texas hospitals were named among top 20 hospitals listed on the Best Hospitals Honor Role, U.S. Word & Report ranked the University of Texas MD Anderson Cancer Center as the No. 1 cancer treatment center in the nation.
Within the Texas Region, U.S. News & World Report ranked Houston Methodist Hospital as the “No. 1 hospital in the state of Texas;” UT Southwestern” as the “best hospital in Dallas-Fort Worth,” and “the No. 2 hospital in the state of Texas;” followed by Baylor University Medical Center, Dallas No.3, Baylor St. Luke’s Medical Center Houston, No.4 Memorial Hermann-Texas Medical Center, No.5 and Medical City Dallas Hospital No. 6 on its list of the best hospitals in the state of Texas.
While U.S. News and World Report touts the lists as providing “rich data that patients can use to help them make informed decisions about where to receive surgical or medical care,” patients and others must read and evaluate carefully the explanation of the explanation of methodology used by U.S. News & World Report and RTI International set forth in the 2017-18 Best Hospitals Methodology Report to understand the basis and meanings of the rankings to understand the rankings and their implications. The findings and resulting lists reported are determined both by the data relied upon and the methodology developed and used to derive its findings. For instance, because the report relies heavily upon Medicare data to conduct the analysis, the analysis does not reflect the experience of typical patients under 65. Also, the findings of the report also are impacted by a broad range of other decisions made in the course of deriving the methodology for a particular year and are not necessarily consistent with ranking methodologies used by other ranking or credentialing organizations or even fully consistent with the methodology used by U.S. News & World Report to determine rankings reported for previous years. Accordingly, even U.S. News & World Report acknowledges that the top ranking of a hospital on the list does not necessarily mean that the listed hospital is the best hospital choice for a particular patient or condition as well as acknowledges other rating organization using different criteria and methodologies might reach different ranking results. Accordingly, the publishers state that they view the list as just a “starting point” to help patients decide where to seek care. “Patients still have to do their own research and talk with their doctors” to take into account other patient specific factors including the care needs of the patient, stress and expense of travel and lodging in another city and their insurer’s willingness to pay for care if a hospital is out of network.
Do the reported rankings agree with your experience and expectations? How valuable do you view the U.S. News & World Report list and findings? How do you expect your family or your health plan to use this or other rankings for purposes of guiding or deciding patient care choices? Join the discussion on the Solutions Law Press, Inc. PROJECT COPE: Coalition on Patient Empowerment Facebook page @ProjectCOPECoalition or on LinkedIn in our COPE: Coalition On Patient Empowerment Group .
About The Author
Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.
Throughout her legal and consulting career, Ms. Stamer has drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters as well as for her work and thought leadership on a broad range of other health, employee benefits, human resources and other workforce, insurance, tax, compliance and other matters. Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.
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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.
About Solutions Law Press
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 www.SolutionsLawPress.com.
If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press™ events, 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, see here.
NOTICE: Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct. Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.
Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.
Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party. They are not, and do not serve as a substitute for legal, accounting, tax or other advice. They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.
Parties accessing or using any of Solutions Law Press, Inc.™ 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 publisher and the author expressly disclaim all liability for this content and any 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.
Agents and brokers planning to market health insurance coverage sold through the health care marketplaces established under the Patient Protection and Affordable Care Act (ACA) should register and participate in one of the upcoming “Plan Year 2018 Registration & Training Overview For Agents and Brokers” sessions offered by the Centers for Medicare & Medicaid Services (CMS) to:
Provide Registration and training information for Plan Year (PY) 2018; and
Answer participant questions.
CMS is offering separate training for brokers and agents who previously completed PY 2017 registration and training (Returning Brokers) from the training for agents and brokers who did not complete the PY 2017 registration and training (New Brokers).
New Broker training sessions presently are scheduled on July 20, 2017 and July 26, 2017 from 1:00 p.m.- 2:30 p.m. Eastern Time. Returning Broker training sessions are scheduled for July 21, 2017 and July 27, 2017 from 1:00-2:00 p.m. Eastern Time.
To register or for more information, see the REGTAP website here.
About The Author
Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.
Throughout her legal and consulting career, Ms. Stamer has drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters as well as for her work and thought leadership on a broad range of other health, employee benefits, human resources and other workforce, insurance, tax, compliance and other matters. Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.
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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.
About Solutions Law Press
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 www.SolutionsLawPress.com.
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Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party. They are not, and do not serve as a substitute for legal, accounting, tax or other advice. They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.
Parties accessing or using any of Solutions Law Press, Inc.™ 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 publisher and the author expressly disclaim all liability for this content and any 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.
“2017 Federal Group Health Plan Mental Health Rules Update”
Solutions Law Press, Inc™ Health Plan Update WebEx Briefing
Tuesday, June 27, 2017
10:30 A.M.-11:30 P.M. Eastern | 11:30 A.M.-12:30 P.M. Central
EXPANDING REGULATORY REQUIREMENTS & ENFORCEMENT SPELL TROUBLE FOR HEALTH PLANS AND THEIR SPONSORING EMPLOYERS.
Solutions Law Press, Inc.™ invites employer and other group health plan sponsors, fiduciaries, insurers, administrative service providers, plan brokers and consultants are invited learn critical information about their expanding risks and responsibilities arising from existing and proposed changes to rules and enforcement of federal group health plan mental health and substance abuse (MH/SUB) coverage and privacy rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as supplemented by the Patient Protection and Affordable Care Act (ACA) and the 21st Century Cures Act (Cures Act) and the Privacy Rules of the Health Insurance Portability & Accountability Act (HIPAA) conducted by attorney Cynthia Marcotte Stamer, a Fellow in the American College of Employee Benefits recognized as among the “Best Lawyers” in employee benefits for her health and other benefit knowledge, experience, policy advocacy and thought leadership. Register here now!
Tightening Health Plan Mental Health & Substance Abuse Rules & Enforcement Make Group Health Plan Compliance Critical
New and proposed guidance jointly published June 16, 2017 by the Departments of Labor (DOL), Health & Human Services (HHS) and Treasury is the latest in a series of regulatory and enforcement developments over the past year alerting group health plans and their employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration to get serious about their group health plans’ compliance with the MHPAEA federal group health plan mental health and substance abuse coverage and benefit requirements, as supplemented by the ACA and the Cures Act without running afoul of the Privacy Rules of HIPAA.
Building upon federal group health plan mental health parity mandates originally implemented under the Mental Health Parity Act, the MHPAEA generally requires that any financial requirements or treatment limitations group health plans impose on mental health and substance use disorder (MH/SUD) benefits not be restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers. Not satisfied with the MHPAEA coverage and disclosure protections, however, Congress subsequently broadened federal MH/SUD benefit rights under group health plans through the enactment of the ACA and the Cures Act. Congress also has imposed special requirements and protections for mental health treatment records adds additional responsibilities for group health plans and their service providers when dealing with information and records in connection with the administration of MH/SUD benefits.
After a long period of lax oversight and enforcement of these federal group health plan mental health rules, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) since October, 2016 have begun both tightening the rules and acting to increase oversight and enforcement. The Departments have issued a series of joint guidance clarifying and broadening their interpretations of these MH/SUD benefit and disclosure mandates while simultaneously taking steps to increase awareness and enforcement of these rights. As part of these ongoing efforts, Departments’ on June 16, 2017 expanded this guidance with their publication of new Mental Health Parity Implementation FAQs Part 38 discussing their joint interpretation of the broadening effect of the enactment of the ACA and the Cure Act on these plan requirements. Concurrently, the Departments signaled their intention to add additional responsibilities for group health plans and insurers by publishing along with FAQ Part 38 a Draft MHPAEA Disclosure Template and request for comments. This latest guidance package reaffirms that the Departments are continuing efforts to increase oversight of and enforcement of MH/SUD compliance against group health plans, their sponsors, fiduciaries, insurers, and their administrative and other service providers. In the face of these developments and the reported initiation of enforcement actions by the Departments, the group health plans, their employer and other sponsors, fiduciaries, insurers, and their administrative and other service providers should move quickly to understand and update their plans and practices to comply with these recent developments while bracing for the likely need to deal with further expanded disclosure and other additional responsibilities under the MHPAEA jointly proposed by the Departments on June 16, 2017.
Beyond fulfilling these expanding MHPAEA responsibilities, health plan fiduciaries, administrators, insurers and sponsors also must ensure their health plan and its business associates comply with special rules concerning the protection, use and disclosure of mental health treatment records and information that may impact certain mental health treatment and other records received, used, retained or disclosed in the course of administering mental health, substance abuse or other provisions of their group health plans under the HIPAA Privacy Rules. Keeping in mind that HHS audit and enforcement of compliance by health plans and other HIPAA covered entities with HIPAA’s medical privacy and data security rules, health plan sponsors, fiduciaries, insurers and administrative and other service providers also should take the opportunity to verify that their plans and practices comply with special HIPAA rules impacting authorizations and other dealings with certain mental health and substance abuse health information and records and other HIPAA medical privacy and security requirements.
Given these developments, group health plans, their sponsors, fiduciaries, insurers and administrator must take steps to verify and maintain compliance with these federal MH/SUD requirements. Ensuring proper compliance with these federal rules is particularly important to avoid triggering the substantial liability that health plans, their employer and other sponsors, insurers, and administrators can incur if their health plan violates these mandates. Obviously, plans and their sponsors, insurers and fiduciaries can expect to pay additional plan expenses necessary to pay wrongfully denied benefits and other expenditures these plan or its fiduciaries expend to investigate, defend and resolve claims or compliance audits, investigations, litigation or actions brought by the Departments, state insurance regulators with respect to state governments or insurers, or private litigation by participants or beneficiaries. Many employer or other plan sponsors may be unaware that these violations also generally expose employers and other health plan sponsors to liability to self identify, self-report on Internal Revenue Service Form 8928 and self-pay and excise tax of up to $100 per participant per day per uncorrected violation by the due date for filing of their annual corporate tax return.
With oversight and enforcement already rising and the Departments proposing to expand further both disclosure duties and enforcement, group health plans, their employer and other sponsors, insurers, fiduciaries and administrators clearly need to take prompt action to verify their existing health plan provisions and administrative practices are up-to-date and administered to withstand challenge from the Departments, participants, beneficiaries, health care providers and others. Consequently, employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration should act quickly to verify their plan terms and practices are updated to comply with existing rules and share their input in response to the Departments June 16, 2017 requests for comments.
ABOUT CYNTHIA MARCOTTE STAMER
Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.
Throughout her legal and consulting career, Ms. Stamer has drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters as well as for her work and thought leadership on a broad range of other health, employee benefits, human resources and other workforce, insurance, tax, compliance and other matters. Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.
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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.
About Solutions Law Press
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 www.SolutionsLawPress.com.
If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press™ events, 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, see here.
NOTICE: Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct. Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.
Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.
Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party. They are not, and do not serve as a substitute for legal, accounting, tax or other advice. They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.
Parties accessing or using any of Solutions Law Press, Inc.™ 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 publisher and the author expressly disclaim all liability for this content and any 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.
Healthcare providers, health plans, healthcare clearinghouses and their business associates (Covered Entities) can’t disclose the name or other protected health care information about a patient in press releases or other announcements without prior authorization from the patient. That’s the clear lesson Covered Entities should learn from the $2.4 million payment to the U.S. Department of Health and Human Services (HHS) that the largest not-for-profit health system in Southeast Texas, Memorial Hermann Health System (MHHS) is paying to settle charges it violated the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule by issuing a press release with the name and other protected health information (PHI) about a patient without the patient’s prior HIPAA-compliant authorization under a Resolution Agreement and Corrective Action Plan (Resolution Agreement) announced May 10, 2017 by HHS Office of Civil Rights (OCR).
The Resolution Agreement resolves OCR charges the operator of 13 hospitals, eight Cancer Centers, three Heart & Vascular Institutes, and 27 sports medicine and rehabilitation centers violated the Privacy Rule that resulted from an OCR compliance review of MHHS triggered by multiple media reports suggesting that MHHS improperly disclosed the name and other details about a patient arrested and charged with presenting an allegedly fraudulent identification card to office staff at an MHHS’s clinic after MHHS clinic staff alerted law enforcement of suspicions the patient was presenting false identification to the clinic. According to OCR, after law enforcement investigated and arrested the patient, MHHS published a press release concerning the incident in which MHHS senior management approved the impermissible disclosure of the patient’s PHI by adding the patient’s name in the title of the press release without securing prior authorization of the patient.
While OCR concluded the report to law enforcement 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.
To resolve and avoid the potential Civil Monetary Penalties that HIPAA could authorize OCR to impose for the alleged Privacy Rule violation, MHHS agrees in the Resolution Agreement to pay OCR a $2.4 million monetary settlement and implement a corrective action plan that obligates MHHS to update and train its workforce on its policies and procedures on safeguarding PHI from impermissible uses and disclosures including specific instructions and procedures to:
Address (a) Uses and disclosures for which an authorization is required, including to the media, to public officials, and on the internet; (b) Disclosures for law enforcement purposes; and (c) Uses and disclosures for health oversight activities;
Identify MHHS personnel or representatives whom workforce members, agents, or business associates may contact in the event of any inquiry or concern regarding compliance with HIPAA in relation to these activities;
Internal reporting procedures requiring all workforce members to report to the designated person or office at the earliest possible time any potential violations of the Privacy, Security or Breach Notification Rules or of MHHS’ privacy and security policies and procedures and MHHS promptly to investigate and address all received reports in a timely manner; and
Application and documentation of appropriate sanctions (which may include retraining or other instructive corrective action, depending on the circumstances) against members of MHHS’ workforce, including senior level management, who fail to comply with the Privacy, Security or Breach Notification Rules or MHHS’ privacy and security policies and procedures, including a description of the sanctions; a timeframe in which MHHS will apply and document sanctions for violations of the HIPAA Rules or of MHHS’ privacy, security or breach policies or procedures; the manner in which MHHS will document the sanctions; and where MHHS will store or retain such documentation (e.g., personnel file).
The corrective action plan in the Resolution Agreement also requires all MHHS facilities to attest to their understanding of permissible uses and disclosures of PHI, including disclosures to the media and others.
Covered entities should keep in mind the MHHS Resolution Agreement is the latest in a series of OCR enforcement actions and resolution agreements highlighting the need for Covered Entities to adopt and use appropriate policies and procedures to prevent wrongful disclosures of PHI to the media or public. For instance, in June, 2013, OCR required Shasta Regional Medical Center (SRMC) to pay a $275,000 settlement payment and implement a comprehensive corrective action plan to resolve OCR charges stemming from SRMC’s disclosure of PHI about a patient to members of the media and its workforce in an effort to respond to accusations the patient made that SRMC engaged in fraud and other misconduct. See HIPAA Sanctions Triggered From Covered Entity Statements To Media, Workforce. In contrast, the $2.2 million resolution agreement that OCR required New York Presbyterian Hospital for improperly allowing a film crew to film hospital patients in violation of HIPAA was almost 10 times greater than the SRMC penalty and was accompanied by OCR’s publication OCR of specific additional guidance warning Covered Entities against improper disclosures to the media. See $2 Million+ HIPAA Settlement, FAQ Warn Providers Protect PHI From Media, Other Recording Or Use.
Following on the heels of this previous guidance and prior enforcement actions warning Covered Entities against wrongful disclosure to the media, the MHHS Resolution Agreement sends a strong message to Covered Entities that they should expect little sympathy if their organizations improperly share PHI with the media. OCR’s announcement of the MHHS Resolution Agreement, for instance quotes OCR Director Roger Severino with stating that “Senior management should have known that disclosing a patient’s name on the title of a press release was a clear HIPAA Privacy violation that would induce a swift OCR response.” The announcement goes on to quote Director Severino further as stating, “This case reminds us that organizations can readily cooperate with law enforcement without violating HIPAA, but that they must nevertheless continue to protect patient privacy when making statements to the public and elsewhere.”
Conduct Entity-Wide Risk Assessment & Review & Tighten Media Relations Policies, Processes & Training ASAP
Covered entities should heed the warning by conducting a risk assessment of their organization’s susceptibility to potential improper disclosures to media or others and reviewing and implementing necessary written policies, procedures and training to prevent the improper disclosure of patient PHI to media or others unless the Covered Entity either secures prior HIPAA-compliant authorization from the patient or can prove the disclosure falls squarely under an exception to the Privacy Rule’s prohibition against disclosure of PHI without authorization except as allowed by the Privacy Rule.
Based on experiences reported in the MHHS and other similar resolution agreements, Covered Entities also generally will want to ensure that their policies, procedures and training extend to all potential sources of communications that could involve patient information and make clear that the Privacy Rule restrictions must be followed even if the circumstances involve allegations of misconduct, special performance by healthcare providers or others that it would benefit the organization or certain individuals to have known to the public, or other circumstances likely to be of interest to the media or other parties.
As part of this process, covered entities should ensure they look outside the four corners of their Privacy Policies to ensure that appropriate training and clarification is provided to address media, practice transition, workforce communication and other policies and practices that may be covered by pre-existing or other policies of other departments or operational elements not typically under the direct oversight and management of the Privacy Officer such as media relations. Media relations, physician and patients affairs, outside legal counsel, media relations, marketing and other internal and external departments and consultants dealing with the media, the public or other inquiries or disputes should carefully include and coordinate with the privacy officer both to ensure appropriate policies and procedures are followed and proper documentation created and retained to show authorization, account, or meet other requirements.
In conducting this analysis and risk assessment, it will be important that Covered Entities include, but also look beyond the four corners of their Privacy Policies to ensure that their review and risk assessment identifies and assesses and addresses compliance risks 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. For this reason, Covered Entities also generally will not only to adopt and implement specific policies, processes and training in these other departments to prohibit and prevent inappropriate disclosures of PHI in the course of those departments operations. It also may be advisable to pre-established processes for reviewing media or other communications for potential PHI content and require prior review of any proposed public relations and other internal or external communications containing patient PHI or other information by the privacy officer, legal counsel or another suitably qualified party.
Because of the high risk that the preparation or review of media or other public communications reports will involve the use and disclosure of PHI, Covered Entities also generally should verify that all outside media or public relations, legal, or other outside service providers participating in the investigation, response or preparation or review of communications to the media or others both are covered by signed business associate agreements that fulfill the Privacy Rule and other requirements of HIPAA as well as possess detailed knowledge and understanding of the Privacy and Security Rules suitable to participate in and help safeguard the Covered Entity against violations of these and other Privacy Rules. See e.g., Latest HIPAA Resolution Agreement Drives Home Importance Of Maintaining Current, Signed Business Associate Agreements.
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.
As a core component of her work, Ms. Stamer has worked extensively throughout her career with health care providers, health plans and insurers, managed care organizations, health care clearinghouses, their business associates, employers, banks and other financial institutions, management services organizations, professional associations, medical staffs, accreditation agencies, auditors, technology and other vendors and service providers, and others on legal and operational compliance, risk management and compliance, public policies and regulatory affairs, contracting, payer-provider, provider-provider, vendor, patient, governmental and community relations and matters including extensive involvement advising, representing and defending public and private hospitals and health care systems; physicians, physician organizations and medical staffs; specialty clinics and pharmacies; skilled nursing, home health, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing and management services 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; and other health industry clients to manage and defend compliance, public policy, regulatory, staffing and other operations and risk management concerns. A core focus of this work includes work to establish and administer compliance and risk management policies; 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; dealings with JCHO and other accreditation and quality organizations; investigation and defense of private litigation and other federal and state health care industry investigations and enforcement; insurance or other liability management and allocation; process and product development; managed care, physician and other staffing, business associate and other contracting; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others.
Author of leading works on HIPAA and other privacy and data security works and the scribe leading the American Bar Association Joint Committee on Employee Benefits Annual Agency Meeting with OCR, her experience includes extensive compliance, risk management and data breach and other crisis event investigation, response and remediation under HIPAA and other data security, privacy and breach laws. 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 trade secret, HIPAA and other medical, consumer, insurance, tax, and other privacy and data security, 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.
In connection with this work, Ms. Stamer has worked extensively with health care providers, health plans, health care clearinghouses, their business associates, employers and other plan sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA, FACTA, trade secret and other information privacy and data security rules, including the establishment, documentation, implementation, audit and enforcement of policies, procedures, systems and safeguards, 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 care providers, health insurers, health plans, technology and other vendors, and others.
Her work includes both regulatory and public policy advocacy and thought leadership, as well as advising and representing a broad range of health industry and other clients about policy design, drafting, administration, business associate and other contracting, risk assessments, audits and other risk prevention and mitigation, investigation, reporting, mitigation and resolution of known or suspected violations or other incidents and responding to and defending investigations or other actions by plaintiffs, DOJ, OCR, FTC, state attorneys’ general and other federal or state agencies, other business partners, patients and others.
In addition to representing and advising these organizations, she also has conducted training 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, MGMA, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
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.
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 physicians, hospitals and healthcare systems, DME, Pharma, clinics, health care providers, managed care, insurance and other health care payers, quality assurance, credentialing, technical, research, public and private social and community organizations, and other health industry organizations and their management deal with governance; credentialing, patient relations and care; staffing, peer review, human resources and workforce performance management; outsourcing; internal controls and regulatory compliance; billing and reimbursement; physician, employment, vendor, managed care, government and other contracting; business transactions; grants; tax-exemption and not-for-profit; licensure and accreditation; vendor selection and management; privacy and data security; training; risk and change management; regulatory affairs and public policy and other concerns.
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 plans, 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.
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; 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.
Ms. Stamer also is a highly popular lecturer, symposium and chair, faculty member 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. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other 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.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (469) 767-8872 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.
The US House of Representatives is scheduled to vote again tonight on the revised Majority-leadership lead first step healthcare reform legislation seeking to provide Americans and American business with some initial relief from the soaring premium and health care costs, care access barriers and regulatory and other burdens that have resulted under the ObamaCare law and regulations. Every American should call, e-mail or fax the leaders and their Congressperson as soon as possible today and tell them to pass this legislation and get busy passing the next set of reforms with no further delay, the get and stay II formed and involved until it gets it done starting with the House hearing and vote slated tonight starting at 8:30 Eastern. Get details here.
Health care and its reform is a complex challenge. Americans and American businesses, health payers, and States and their healthcare needs are highly diverse. The ambitious but far from successful Obamacare law shows the dangers of well-meaning but unrealistic To try to fix these challenges with a sweeping, one shot fix.
While passage of this legislative package won’t magically fix these challenges, it will provide quick relief for some of the ObamaCare expense and restrictions and expand the choices that Americans, American business, payers, providers and States while Congress works with American to identify and pursue legislative, regulatory, marketplace and other improvements.
While Congress and the Trump Administration continue to ponder and debate what if anything to do with the health care reforms of the Patient Protection and Affordable Care Act (ACA), employer and other health plan sponsors, health plan insurers, plan fiduciaries and others responsible for health plan design, administration or funding must take steps to verify their past and continuing compliance with the ACA and other federal mandates while laying the groundwork to respond quickly to any eventual reforms.
Regardless of what, if anything, the existing Congress or the Trump Administration does to repeal or reform the ACA or other federal health plan rules, all health plan sponsors, insurers, fiduciaries and administrators should act to mitigate their substantial and ever-growing health plan exposures by arranging for an independent compliance audit of their health plan terms, materials and operations for potential uncorrected past or current violations of the 40 federal mandates covered by the Form 8928 reporting and associated Internal Revenue Code excise tax liability exposure, as well as other applicable plan liabilities under the Employee Retirement Income Security Act (ERISA), the Social Security Act, the Internal Revenue Code and other federal laws within open statute of limitation periods.
The cost, complexity and riskiness of health plan sponsorship and administration has grown exponentially over the past two decades. Thanks to the ACA and the continuous stream of other federal laws and regulations implemented over the past 20 years, sponsoring employers, as well as their health plans and those responsible as fiduciaries for administering, funding and insuring these programs now face huge costs, responsibilities and liabilities. While the ACA substantially expanded the federal health plan mandates and liabilities, the ACA is not the lone cause and its amendment or repeal alone won’t fully resolve these risks prospectively or retrospectively insulate sponsoring employers, their plans or their fiduciaries and insurers from the liabilities and costs of compliance issues occurring before Congress repeals or amends the ACA.
Of particular note for employer and other sponsors of group health plans are the self-reporting and excise tax self-assessment and payment requirements for employers coupled with the companion responsibilities and liabilities fiduciaries, plan administrators and others face under these federal mandates make it important that employers and others sponsoring group health plans and their management or other leaders overseeing or participating in plan design or vendor selection, plan administration or other plan related activities get advice and help from qualified legal counsel experienced in health plan matters:
To conduct an independent compliance review and risk assessment of their health plans,
To recommend and assist in the performance of recommended steps to correct or mitigate risks from any potential past or existing violations or other exposures that have arisen or are likely to arise from existing contractual, plan design or other health plan actions;
To explore the potential advisability of taking additional steps to prevent or mitigate health plan associated compliance or other risks going forward whether or not health reform happens; and
To begin preparing to take advantage of any impending health care reforms by evaluating the requirements and procedures that existing plan terms, contracts, vendors and arrangements are likely to require to implement changes necessary to respond to any reforms as quickly and efficiently as possible.
Spring Clean Your Health Plan House
Since any reforms eventually enacted are unlikely to retroactively eliminate liability of employers, their health plans or fiduciaries for violations of federal health plan mandates, health plan terms, or associated contracts occurring before the effective date of reform, employer and other health plan sponsors, fiduciaries, insurers and administrators should begin by identifying, cleaning up any existing, unresolved, and preventing any new health plan compliance problems.
While overall compliance with applicable federal mandates and health terms generally should be the goal, employers or others sponsoring group health plans need to be particularly concerned with their responsibilities and potential liability under the Internal Revenue Code to self-identify, report and pay stiff excise tax penalties of $100 per day per violation of any of 40 federal health plan mandates imposed by the ACA and various other federal laws when the sponsor files its annual tax return.
Sponsors and plan fiduciaries also need to be concerned about other risks beyond sponsoring employers’ excise tax liability exposures for sponsoring a non-compliant group health plan. Among other things, group health plans and their fiduciaries can face audits, litigation and enforcement actions by the Centers for Medicare & Medicaid Services and other health plans for improperly coordinating plan claims with other coverage as well as lawsuits from covered persons, their health care providers or other beneficiaries, the Department of Labor and CMS, or others seeking to enforce rights to benefits, penalties in the case of CMS or the Department of Labor, and attorneys’ fees and other costs of enforcement. Beyond benefit litigation, the employer or representatives of the sponsoring employer, if any, named or acting as fiduciaries, insurer or third-party service providers named or acting as fiduciaries, also could face fiduciary lawsuits seeking damages, equitable relief, and attorneys’ fees and costs of court, for failing to prudently administer the plan in accordance with its terms and the law brought by covered persons or their beneficiaries or the DOL as well as fiduciary breach penalties if the fiduciary breach action is brought by the DOL. If the plan fails to comply with claims and appeals procedures or other ERISA notification requirements, parties named or functioning as the plan administrator for this purpose also could face penalties of up to $125 per violation per day in the case of enforcement actions brought by participants and beneficiaries or $1025 per violation per day in the case of actions brought by the DOL, plus attorneys’ fees and other costs of enforcement. Unless the employer previously took steps to draft its health plan documents and negotiate its vendor contracts to provide otherwise, most vendor provided plans typically assign these liabilities to the sponsoring employer or a member of its management by naming that employer or the management person the “plan administrator” and/or “named fiduciary” responsible for those activities and liabilities, requiring the plan sponsor to indemnify the vendor for costs and liabilities arising from the performance of actions under the plan even when those actions don’t comply with ERISA fiduciary or other legal standards applicable to the performance of those duties under the plan, or both, and other contractual or plan provisions that shift liabilities and costs to the plan sponsor.
To mitigate their exposure to these liabilities and costs, employer or other health plan sponsors should consider arranging for an independent legal compliance and risk assessment of their health plan, its terms, materials and operations to help mitigate the sponsoring employer’s exposure to self-identify, self-report on IRS Form 2848 and pay the $100 per day per violation excise tax liability now generally required under the Internal Revenue Code for any such violation.
Beyond mitigating a plan sponsor’s Form 8928 reporting and associated excise tax exposures, an independent compliance audit also can mitigate other risks and exposures for the sponsoring employer, the plan and its fiduciaries, the cost of which the sponsoring employer often bears financial responsibility for funding pursuant to the contractual indemnification and funding obligations entered into in connection with the establishment and maintenance of the plan, the fiduciary role, if any, of the employer with respect to the plan, or both. Accordingly, a timely and appropriate review is likely to help mitigate other risks and liabilities such as:
Fiduciary liability that can arising from failing to administer the plan in accordance with these and other federal health plan mandates under ERISA;
Unanticipated benefit costs and liabilities, which for self-insured plans are likely to be particularly burdensome if compliance issues are not identified and corrected before applicable deadlines to pay and submit claims to the stop-loss or other insurer expire (usually at or shortly after the close of a plan year or if earlier, contract termination);
Benefit costs and penalties for wrongful coordination of benefits with Medicare, Medicaid, DOD and certain other plans or coverage in violation of Secondary Payer and other mandates; and
Costs of defending and settling audits, litigation and other government or participant enforcement actions.
Since prompt self-audit and correction can help mitigate all of these liabilities, business leaders of employers sponsoring health plans should act promptly to engage experienced legal counsel experienced with health plan laws and operations to advise the plan sponsor about how to audit their group health plan’s plan documents, materials and operations for compliance with these and other federal health plan rules within the scope of attorney-client privilege while managing tax, financial, benefit and fiduciary liability exposures to deal with potential compliance concerns that the review might discover as well as mitigate risks that could result if the audit is improperly structured or conducted.
Prepare To Respond To Potential Health Reform & Other Health Plan Improvement
Beyond identifying and addressing existing compliance concerns and other risks associated with prior or existing plan design or administration, most employer and other sponsors also will want to review the health plan document and materials and associated insurance, third-party administration and other health plan vendor contracts pursuant to which the health plan is established, maintained and administered to identify requirements and opportunities to respond quickly to make changes when and if health care reform happens as well as for other opportunities to mitigate existing risks and costs.
As most commentators expect some type of regulatory or statutory health plan relief to result from the current health care reform debates in Congress, employer and other health plan sponsors desiring to accelerate their ability to take advantage of any forthcoming relief should familiarize themselves with the procedures required under existing plan terms, contracts and rules to modify their programs in response to these changes. Almost certainly, plan sponsors should anticipate needing to adopt some amendments to plan documents, summary plan descriptions and other materials to take advantage of any legislative or statutory relief. Plan sponsors also need to keep in mind that their vendor contracts with administrators, group, stop-loss or captive insurers, and other vendors likely also will require the plan sponsor to notify and negotiate with its vendors to secure their agreement before adopting these changes to avoid violating those vendor agreements and prudently to arrange for appropriate implementation and administration of the modified plan design and terms. Identification of the contractual and plan requirements and commencement of discussions with the relevant vendors can help expedite the planning and implementation of any desired plan modifications the plan sponsor elects to make in response to any statutory or regulatory reforms.
While preparing for anticipated health care reforms, most plan sponsors also will want to review their plans and vendor contracts for other potential opportunities to mitigate risks or expenses. With respect to existing and future liability mitigation, each plan sponsor generally should carefully assess the allocation of fiduciary responsibility and liability between the sponsoring employer, members of its management or other workforce team, and vendors to identify potential areas where the contract may assign named or other plan administrator or other fiduciary status and liability to the plan sponsor or a member of its workforce for duties outsourced to a vendor. Sponsoring employers or their management may want to initiate negotiations with the vendor to reallocate the fiduciary role and responsibility to the party responsible for performance of the specific duties, enhancement of performance guarantees, indemnifications and insurance coverage for proper performance of the outsourced duties by the vendor in accordance with the plan terms, including any mandates imposed by the ACA and other federal laws in form and operation, and other safeguards or, if the vendor is unwilling to consider these changes, begin searching for a replacement vendor willing to provide better accountability for its actions with respect to the services it is hired to perform.
Except in rare circumstances where the sponsoring employer has carefully contracted to transfer fiduciary liability to its insurer or administrator and otherwise does not exercise or have a fiduciary obligation to exercise discretion or control over these responsibilities, employers sponsoring group health plans that violate federal mandates like the out-of-pocket limit often ultimately bear some or all of these liabilities even if the violation actually was committed by a plan vendor hired to administer the program either because the plan documents name the employer as the “named fiduciary” or “plan administrator” under ERISA, the employer or a member of its management named in the plan generally bears fiduciary responsibility functionally for selection or oversight of the culpable party, the employer signed a contract, resolution or plan document obligating the employer to indemnify the service provider for the liability, or a combination of these reasons.
Since prompt self-audit and correction can help mitigate all of these liabilities as well as help to preserve access to stop-loss or other reinsurance coverage, if any, applicable to help pay for some or all of any additional benefit liabilities resulting from these benefit mandates, business leaders of companies offering group health plan coverage should act quickly to engage experienced legal counsel for their companies for advice about how to audit their group health plan’s compliance with these and other federal health plan rules within the scope of attorney-client privilege while managing tax, financial, benefit and fiduciary liability exposures to deal with potential compliance concerns that the review might discover as well as mitigate risks that could result if the audit is improperly structured or conducted.
While businesses inevitably will need to involve or coordinate with their accounting, broker, and other vendors involved with the plans, businesses generally will want to get legal advice in a manner that preserves their potential to claim attorney-client privilege to protect against discovery in the event of future enforcement or litigation actions sensitive discussions and analysis about compliance audits, plan design choices, and other risk management and liability planning as well as to get help identifying potential plan design, contracting, procedural or other changes that may be needed to fix compliance deficiencies and mitigate other risks, particularly in light of complexity of the exposures and risks.
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 and othre employee benefit, financial services, health care 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.
Throughout her career, she has helped a diverse array of clients manage, administer and defend employee and other workforce, vendors and suppliers, their recruitment, selection, performance management, contracting, investigation, discipline and termination; health and other employee benefits; compensation; safety; governance; compliance and internal controls; strategic planning, process and quality improvement; change management; trade secret and other privacy, data security and data breach;; crisis preparedness and response; internal, government and third-party reporting relations, audits, investigations and enforcement; government affairs and public policy; and other compliance and risk management, government and regulatory affairs and operations 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, 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 extensively throughout her career with employers, health and other employee benefit plans, insurers, managed care organizations, health care clearinghouses, health care providers, their business associates, employers, banks and other financial institutions, management services organizations, professional and trade associations, accreditation agencies, auditors, technology and other vendors and service providers, and others on benefit and insurance program legal and operational compliance, risk management, public policies and regulatory affairs, contracting, payer-provider, provider-provider, vendor, patient, governmental and community relations and matters including extensive involvement advising, representing and defending plan sponsors, fiduciaries, service providers, managed care organizations, insurers, self-insured health plans and other payers. Her experience includes both leading edge work designing and administering programs, as well as defending clients in connection with audits and enforcement actions by OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC, OSHA, Department of Insurance, Department of Justice and state attorneys’ general and other federal and state agencies; accreditation and quality organizations; private litigation and other federal and state health care industry investigation, enforcement including insurance or other liability management and allocation; process and product development, contracting, deployment and defense; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others.and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.
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. Her work includes both regulatory and public policy advocacy and thought leadership, as well as advising and representing a broad range of health industry and other clients about policy design, drafting, administration, business associate and other contracting, risk assessments, audits and other risk prevention and mitigation, investigation, reporting, mitigation and resolution of known or suspected violations or other incidents and responding to and defending investigations or other actions by plaintiffs, DOJ, OCR, FTC, state attorneys’ general and other federal or state agencies, other business partners, patients and others.
A lead policy advisor to the Government of Bolivia on its pension privitization project and involved in U.S. federal and state as well as cross border workforce, pension, health care, Social Security, immigration, and tax regulatory and statutory reform throughout her adult life, Ms. Stamer also is widely sought out for her thoughtleadership and assistance with domestic and international public policy concerns in Pensions, healthcare, workforce, immigration, tax, education and other areas.
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.
Ms. Stamer also is a highly popular lecturer, symposium and chair, faculty member 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, 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.
For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at (469) 767-8872 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 at www.solutionslawpress.com.
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.
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 fiduciaries and sponsors, health insurers, health care providers, health care clearinghouses (“covered entities”) and their business associates must get and keep your business associate (BA) agreements (BAAs) in place, up-to-date, and readily available for inspection in accordance with the Health Insurance Portability & Accountability Act (HIPAA) Privacy Rule, 45 C.F.R. Part 160 and Subparts A and E of Part 164 (Privacy Rule). That’s the clear message to covered entities and their business associates in the April 17, 2017 HIPAA Resolution Agreement just announced by the Department of Health & Human Services (HHS) Office of Civil Rights (OCR) with the Center for Children’s Digestive Health (CCDH).
While the Resolution Agreement relates to breaches of the BAA requirements of a small pediatric practice, all health plans, health care providers and other covered entities and business associates should focus on the adequacy of their BAAs and their BAA record keeping. HIPAA compliance surveys reflect deficiencies with the BAA rules are common throughout the industry. These findings and the involvement of BAs in data breaches or other OCR enforcement activities suggest a high probability that many other covered entities and business associates may be sitting ducks for similar sanctions. See e.g., HIPAA Compliance Survey Churns Up Many Business Associate Problems (January 3, 2017). Consequently, all covered entities and business associates generally should treat the CCDH Resolution Agreement as a message to review and correct as necessary their organizations’ compliance and recordkeeping to minimize their exposure to potential sanctions from violations of the HIPAA business associate rules.
The HIPAA Business Associate Agreement Requirements
OCR’s announcement of the CCDH Resolution Agreement is the latest in a growing series of HIPAA enforcement actions showing the growing risk covered entities and their business associates face for failing to take appropriate steps to comply with the BAA and other Privacy Rule requirements of HIPAA.
As compliance audits and surveys of covered entities and business associates suggest a high level of noncompliance with the business associate agreement requirements among covered entities and business associates, While the ever-growing list of Resolution Agreements and Civil Monetary Penalties announced by OCR cover a variety of categories of HIPAA violations, the CCDH Resolution Agreement highlights the importance of covered entities and their business associates ensuring that before the BA creates, accesses, receives, discloses, retains or destroys any PHI for the covered entity, a BAA meeting the Privacy Rule requirements is signed and retained for at least the six-year period the Privacy Rule requires in a manner easily producible when and if OCR or another agency asks for a copy as part of an investigation or other compliance audit. See Privacy Rule §§ 164.502(e), 164.504(e), 164.532(d) and (e).
The Privacy Rule requires that covered entities and business associates 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. Meanwhile, the Privacy Rule recordkeeping requirements require that covered entities and BAs maintain copies of these BAAs for a minimum of six years.
Violations of the Privacy Rule can carry stiff civil 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).
Under Section 1177, 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.
In contrast, 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.
CCDH Sanctions For Violation Of HIPAA Business Associate Agreement Rules
The CCDH Resolution Agreement arises from violations of this requirement that OCR says it discovered as a result of a compliance review conducted in response to an OCR investigation of a CCDH business associate, FileFax, Inc. According to OCR, OCR found from the compliance review of CCDH triggered by OCR’s investigation of FileFax that while CCDH began disclosing PHI to Filefax in 2003 and that Filefax stored records containing protected health information (PHI) for CCDH, neither CCDH nor Filefax could produce a signed Business Associate Agreement (BAA) covering their relationship for any period before October 12, 2015.
Based on the resulting investigation, OCR concluded:
CCDH failed to obtain a BAA providing written assurances from Filefax that it would appropriately safeguard the PHI in Filefax’s possession or control satisfactory assurances as required by Privacy Rule §164.502(e); and
Because CCDH failed to secure the required BAA, it violated the Privacy Rule by impermissibly disclosing the PHI of at least 10,728 individuals to Filefax when CCDH transferred the PHI to Filefax without obtaining the requisite BAA from Filefax (Covered Conduct).
In the Resolution Agreement, CCDH agrees to pay HHS $31,000.00 (Resolution Amount) and enter into and comply with a Corrective Action Plan (CAP) in return for OCR’s release of CCDH from liability for “any actions it may have against CCDH under the HIPAA Rules” for the Covered Conduct. The Resolution Agreement only settles the civil monetary penalty and other OCR enforcement liabilities of CCDH with respect to the Covered Conduct. Its provisions expressly state the Resolution Agreement does not affect any exposures of CCDH to CCDH to OCR civil monetary penalties or other enforcement for any HIPAA violations other than the Covered Conduct.
Perhaps even more noteworthy given the HITECH Act’s provisions coordinating the civil and criminal sanctions of HIPAA, while the Resolution Agreement provides no clear indication that the Justice Department might be considering criminally prosecuting CCDH or any other party in relation to the Covered Conduct, the Resolution Agreement also expressly states that its provisions do not affect CCDH’s potential exposure, if any, to criminal prosecution by the Justice Department for a criminal violation of the Privacy Rules under Section 1177 of the Social Security Act.
Implications For Covered Entities & Business Associates
Covered entities and their business associates should heed the CCDH Resolution Agreement as a strong message from OCR to ensure their organizations are complying with HIPAA’s BAA and other requirements. The Resolution Agreement makes clear that the starting point of this compliance effort must be obtaining and maintaining the requisite BAAs for each BA relationship.
To position their organizations to withstand potential investigation by OCR, covered entities and BAs should start by conducting a well-documented audit within the scope of attorney-client privilege both to verify that an appropriate, signed BAA is in place for each BA relationship as well as adequacy of processes for identifying business associate relationships, ensuring that signed BAAs are in effect before BAs access any PHI, and for investigating, reporting and resolving any breaches of the HIPAA Privacy or Security Rules that may arise in the course of operations.
Conducting this audit as soon as possible is particularly important in light of reported findings of widespread compliance concerns. See HIPAA Compliance Survey Churns Up Many Business Associate Problems (January 3, 2017). As the audit process could identify potential violations or other legally sensitive concerns, covered entities and business associates generally will want to arrange for this audit and evaluation to be conducted under the supervision of legal counsel experienced with HIPAA within or pursuant to processes structured with the assistance of legal counsel within the scope of attorney-client privilege.
Beyond confirming all necessary BAAs are in place, covered entities and business associates also generally will want to evaluate the adequacy of BAs’ processes and procedures for maintaining compliance with the Privacy and Security Rules as well as processes and procedures for responding to audits, investigations and complaints, reporting and addressing breaches of electronic and other PHI and other possible compliance concerns under HIPAA and other related laws. In many instances, parties may n wish to revise and strengthen existing BAAs to more specifically define these policies and procedures more specifically as well as indemnification, cyber or other liability coverage requirements and other contractual provisions for allocating potential costs and liabilities arising from breaches, audits, investigations and other expenses associated with the administration of these provisions.
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.
As a core component of her work, Ms. Stamer has worked extensively throughout her career with health care providers, health plans and insurers, managed care organizations, health care clearinghouses, their business associates, employers, banks and other financial institutions, management services organizations, professional associations, medical staffs, accreditation agencies, auditors, technology and other vendors and service providers, and others on legal and operational compliance, risk management and compliance, public policies and regulatory affairs, contracting, payer-provider, provider-provider, vendor, patient, governmental and community relations and matters including extensive involvement advising, representing and defending public and private hospitals and health care systems; physicians, physician organizations and medical staffs; specialty clinics and pharmacies; skilled nursing, home health, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing and management services 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; and other health industry clients to manage and defend compliance, public policy, regulatory, staffing and other operations and risk management concerns. A core focus of this work includes work to establish and administer compliance and risk management policies; 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; dealings with JCHO and other accreditation and quality organizations; investigation and defense of private litigation and other federal and state health care industry investigations and enforcement; insurance or other liability management and allocation; process and product development; managed care, physician and other staffing, business associate and other contracting; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others.
In the course of this work, Ms. Stamer has accumulated extensive experience helping health industry clients manage workforce, medical staff, vendors and suppliers, medical billing, reimbursement, claims and other provider-payer relations, business partners, and their recruitment, performance, discipline, compliance, safety, compensation, benefits, and training, board, medical staff and other governance; compliance and internal controls; strategic planning, process and quality improvement; change management; assess, deter, investigate and address staffing, quality, compliance and other performance; meaningful use, EMR, HIPAA and other data security and breach and other health IT and data; crisis preparedness and response; internal, government and third-party reporting, audits, investigations and enforcement; government affairs and public policy; and other compliance and risk management, government and regulatory affairs and operations concerns.
Author of leading works on HIPAA and other privacy and data security works and the scribe leading the American Bar Association Joint Committee on Employee Benefits Annual Agency Meeting with OCR, her experience includes extensive compliance, risk management and data breach and other crisis event investigation, response and remediation under HIPAA and other laws.
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 physicians, hospitals and healthcare systems, DME, Pharma, clinics, health care providers, managed care, insurance and other health care payers, quality assurance, credentialing, technical, research, public and private social and community organizations, and other health industry organizations and their management deal with governance; credentialing, patient relations and care; staffing, peer review, human resources and workforce performance management; outsourcing; internal controls and regulatory compliance; billing and reimbursement; physician, employment, vendor, managed care, government and other contracting; business transactions; grants; tax-exemption and not-for-profit; licensure and accreditation; vendor selection and management; privacy and data security; training; risk and change management; regulatory affairs and public policy and other concerns.
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.
In connection with this work, Ms. Stamer has worked extensively with health care providers, health plans, health care clearinghouses, their business associates, employers and other plan sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA, FACTA, trade secret and other information privacy and data security rules, including the establishment, documentation, implementation, audit and enforcement of policies, procedures, systems and safeguards, 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 and enforcement, and a host of other related concerns. Her clients include public and private health care providers, health insurers, health plans, technology and other vendors, and others.
Her work includes both regulatory and public policy advocacy and thought leadership, as well as advising and representing a broad range of health industry and other clients about policy design, drafting, administration, business associate and other contracting, risk assessments, audits and other risk prevention and mitigation, investigation, reporting, mitigation and resolution of known or suspected violations or other incidents and responding to and defending investigations or other actions by plaintiffs, DOJ, OCR, FTC, state attorneys’ general and other federal or state agencies, other business partners, patients and others.
In addition to representing and advising these organizations, she also has conducted training 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, MGMA, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
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.
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.
Ms. Stamer also is a highly popular lecturer, symposium and chair, faculty member 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. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other 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.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (469) 767-8872 or via e-mail here.
About Solutions Law Press, Inc.™
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A just-announced $3.2 million Health Insurance Portability & Accountability Act (HIPAA) Civil Monetary Penalty (CMP) paid by Children’s Medical Center of Dallas (Children’s) for failing to adequately secure electronic protected health information (ePHI) and correct other HIPAA compliance deficiencies teaches many key lessons for employer and other health plans and insurers, healthcare clearinghouses, healthcare providers and their business associates (“Covered Entities”) about mistakes to avoid in managing not only ePHI on laptops and mobile devices, as well as their overall HIPAA compliance and risk management.
The Department of Health & Human Services (HHS) Office of Civil Rights (OCR) imposed the $3,217,000.00 Civil Monetary Penalty (CMP) under a January 18, 2017 Final Determination based upon findings that Children’s for years knowingly violated HIPAA by failing to encrypt or otherwise properly secure ePHI on laptops and other mobile devices and failing to comply with many other HIPAA requirements. OCR originally notified Children’s of its intention to impose the CMP based on findings of widespread violations by Children’s of HIPAA in a September 30, 2016 Notice of Proposed Determination (Proposed Determination) that OCR sent to Children’s President of System Clinical Operations, David Berry. Although the Proposed Determination included instructions for requesting a hearing on the Proposed Determination, Children’s paid the CMP rather than exercising these hearing rights.
Evidence Children’s Ignored Repeated Notices of Violations For Years
According to the Proposed Determination, OCR uncovered widespread HIPAA violations by Children’s while investigating the HIPAA compliance of the Dallas-based pediatric health and hospital system in response to two separate notices of large breaches of ePHI that Children’s filed with OCR in response to the HIPAA Breach Notification Rule. Under the Breach Notification Rule, Covered Entities generally must provide notice of any breach of unsecured ePHI involving more than 500 individuals with OCR, subjects of the breached ePHI and the media within 60 days of receiving notice of the breach. In contrast, for breaches of unsecured ePHI involving fewer than 500 individuals, Covered Entities generally must notify subjects of the breached ePHI within 60 days, but can delay notification to OCR until filing a consolidated annual report of small breaches of ePHI.
The two breach notifications that triggered the OCR investigation leading to the CMP both involved losses of mobile devices containing ePHI that Children’s filed with OCR.
The first breach report, filed on January 18, 2010, notified OCR of the loss at the Dallas/Fort Worth International Airport on November 19, 2009 of an unencrypted, non-password protected BlackBerry device containing the ePHI of approximately 3,800 individuals.
The second reported breach report filed on July 5, 2013, reported the theft of an unencrypted laptop with the ePHI of 2,462 individuals from its premises sometime between April 4 and April 9, 2013. The OCR investigation found that although Children’s implemented some physical safeguards to the operating room storage area (e.g., badge access was required, and a security camera was present at one of the entrances), it also provided access to the area to staff who were not authorized to access ePHI. Children’s janitorial staff had unrestricted access to the area where the laptop was stored but did not provide encryption to protect the ePHI on the laptop from access by such unauthorized persons. Children’s internal investigation concluded that the laptop was probably stolen by a member of the janitorial staff.
In the course of investigating these two reported breaches, OCR took note that Children’s previously reported a small breach of unsecured ePHI on an unencrypted mobile device. In a letter dated August 22, 2011, from Children’s Vice President of Compliance and Internal Audit and Chief Compliance Officer Ron Skillens to OCR Equal Opportunity Specialist Jamie Sorley, Mr. Skillens stated that a Children’s workforce member (an unidentified medical resident) lost an iPod device in December 2010. The iPod had been synched to the resident’s Children’s email account, which resulted in the ePHI of at least 22 individuals being placed on the device. The ePHI on the iPod was not encrypted. The loss of the iPod resulted in the impermissible disclosure of ePHI by the medical resident. OCR concluded the ePHI of 22 individuals was impermissibly disclosed, because the workforce member and agent of Children’s provided access to any unauthorized person who discovered the device.
OCR found that the breaches resulted from Children’s violation of the HIPAA Security Rule by failing to encrypt laptops and other mobile devices or and implement other appropriate safeguards for the protection of ePHI on mobile devices;
Failing to appropriately document its decision to not implement encryption on mobile devices and any applicable rationale behind a decision to use alternative security measures to encryption; and
Failing to implement security measures that were an equivalent alternative to the security protection available from encryption solutions.
The Proposed Determination also reports that the OCR ’s investigation revealed that Children repeatedly over several years knowingly failed to implement and administer proper encryption and other safeguards on laptops and other mobile devices containing ePHI despite actual knowledge of the unaddressed risks to unencrypted ePHI in violation of the HIPAA Security Rule dating back to at least 2007. The Proposed Determination notes, for instance, that:
A Security Gap Analysis and Assessment conducted for Children’s December 2006-February 2007 by Strategic Management Systems, Inc. (SMS) (SMS Gap Analysis) identified the absence of risk management as a major finding and recommended that Children’s implement encryption to avoid loss of PHI on stolen or lost laptops.
A separate PricewaterhouseCoopers (PwC) analysis of threats and vulnerabilities to certain ePHI (PwC Analysis) conducted in August, 2008 for Children’s determined that encryption was necessary and appropriate. The PwC Analysis also determined that a mechanism was not in place to protect data on a laptop, workstation, mobile device, or USB thumb drive if the device was lost or stolen and identified the loss of data at rest through unsecured mobile devices as being “high” risk. PwC identified data encryption as a “high priority” item and recommended that Children’s implement data encryption in the fourth quarter of 2008.
Furthermore, in September 2012, the HHS Office of the Inspector General (OIG) issued the findings from its audit of Children’s that focused on information technology controls for devices such as smartphones and USB drives. Among other things, the report, entitled “Universal Serial Bus Control Weaknesses Found at Children’s Medical Center,” found that Children’s had insufficient controls to prevent data from being written onto unauthorized and unencrypted USB devices and that “without sufficient USB controls, there was a risk that ePHI could have been written onto an unauthorized/unencrypted USB device and taken out of the hospital, resulting in a data breach.” A copy of this report was provided to Mr. Skillens.
Despite the prior breach notifications and warnings from the SMS Gap Analysis, the PwC Analysis and the OIG audit report, Children’s failed to take the necessary steps to encrypt and otherwise safeguard its ePHI on mobile devices. Children’s still had not implemented encryption on all devices as of April 9, 2013 even though appropriate commercial encryption products were available to achieve encryption of laptops, workstations, mobile devices, and USB thumb drives in use by Children’s staff by, at least, the time of the PwC Analysis in 2008. Furthermore, while leaving these deficiencies unresolved, the Proposed Determination notes that Children’s issued unencrypted BlackBerry devices to nurses beginning in 2007 and allowed its workforce members to continue using unencrypted laptops and other mobile devices until at least April 9, 2013 despite the findings of SMS and PwC and Children’s actual knowledge about the risk of maintaining unencrypted ePHI on its devices.
Based on this evidence, OCR concluded that Children’s had “actual knowledge” of the unaddressed threats to ePHI as early as March 2007 and at least one year prior to the reported security incidents. Furthermore, OCR also found that Children’s additionally violated HIPAA by failing to implement sufficient policies and procedures governing the receipt and removal of hardware and electronic media that contain ePHI into and out of its facility, and the movement of these items within the facility prior to at least November 9, 2012. Prior to November 2012, Children’s information technology (IT) assets were inventoried and managed separately from the inventory of devices used within its Biomedical Department. Children’s IT asset policies did not apply to devices that accessed or stored ePHI that were managed by the Biomedical Department. Consequently, Children’s was unable to identify all devices to which the device and media control policy should apply prior to completing a full-scope inventory to identify all information systems containing ePHI in November 9, 2012. As Children’s did not conduct a complete inventory to identify all devices to which its IT asset policies apply to ensure that all devices were covered by its device and media control policies, the Proposed Determination concluded Children’s was out of compliance with the Security Rule at 45 C.P.R. § 164.310(d)(l).
After OCR’s investigation indicated widespread Privacy and Security Rule noncompliance by Children’s, the Proposed Determination states that OCR attempted to negotiate a resolution with Children’s through its informal resolution agreement process from approximately November 6, 2015, to August 30, 2016. When these efforts failed, OCR issued a May 10,2016 Letter of Opportunity that formally informed Children’s that since OCR had been unable to resolve its findings that Children’s violated the Privacy and Security Rules by informal means, OCR was informing Children’s of the preliminary indications of non-compliance and providing Children’s 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 determination of a CMP pursuant to 45 C.F.R. § 160.404. The letter stated that Children’s could also submit written evidence to support a waiver of a CMP for the indicated areas of non-compliance. Each of Children’s indicated acts of noncompliance and the potential CMP for them were described in the letter. The letter was delivered to Children’s and received by Children’s agent on May 12, 2016.
Children’s responded to OCR’s letter on or about June 9, 2016. The Proposed Determination states that OCR determined that the information and arguments submitted by Children’s in its June 9, 2016 letter did not support an affirmative defense pursuant to 45 C.F.R. § 160.410 or a waiver of the CMP pursuant to 45 C.F.R. § 160.412. Accordingly, OCR notified Children’s in its September 30, 2016 Proposed Determination of OCR’s intent to implement the $3,217,000.00 CMP and procedures for appealing this planned CMP assessment. When Children’s did not file an appeal, OCR issued the Final Determination assessing the CMP. OCR reports that Children now has paid the $3,217,000.00 CMP.
Important Lessons For Other Covered Entities
The Children’s CMP and underlying circumstances provide many key lessons for other Covered Entities. Obviously, the Final Decision drives home the importance of:
Proper encryption and other security and access controls of devices and systems containing ePHI; and
Proper documentation of risk assessments, audits, breach investigations and other events, compliance analysis and conclusions taken in response, and corrective actions selected and implemented in response to these events.
Beyond the importance of documented compliance with encryption and other requirements, the Children’s CMP and its associated Proposed Determination and Final Determinations also illustrate the importance of proper behavior in response to a known or suspected breach. The Proposed Determination and Final Determination make clear that beyond the breaches uncovered in the course of the investigation, OCR’s decision to implement the CMP was influenced by, among other things:
OCR investigates all large breach reports;
Small breach reports can count too;
The recurrent disregard and failure by Children to act to address the HIPAA security violations over a period of years despite both repeated notifications of its noncompliance and actual breaches resulting from these compliance deficiencies; and
The failure of Children’s to cooperate with OCR to reach a voluntary resolution agreement which might have allowed Children to resolve its liability for the breaches OCR found by paying a potentially smaller settlement payment and implementing corrective actions to OCR’s satisfaction.
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 “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, the author of this update is widely known for her 28 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 helps these 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.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, current American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, 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 Compliance Chair of the National Kidney Foundation of North Texas, and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer’s includes nearly 30 years’ of work with a diverse range of health industry clients on an extensive range of matters.
Ms. Stamer has worked closely with health industry, managed care and insurance and other businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of staffing, human resources and workforce performance management, internal controls and regulatory compliance, change management and other performance and operations management 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.
As a core component of her work, Ms. Stamer has worked extensively throughout her career with health care providers, health plans and insurers, managed care organizations, health care clearinghouses, their business associates, employers, banks and other financial institutions, management services organizations, professional associations, medical staffs, accreditation agencies, auditors, technology and other vendors and service providers, and others on legal and operational compliance, risk management and compliance, public policies and regulatory affairs, contracting, payer-provider, provider-provider, vendor, patient, governmental and community relations and matters including extensive involvement advising, representing and defending public and private hospitals and health care systems; physicians, physician organizations and medical staffs; specialty clinics and pharmacies; skilled nursing, home health, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing and management services 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; and other health industry clients to establish and administer compliance and risk management policies; 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 investigation, enforcement including insurance or other liability management and allocation; process and product development, contracting, deployment and defense; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others, and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.
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 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 concerns including policy design, drafting, administration and training; business associate and other contracting; risk assessments, audits and other risk prevention and mitigation; investigation, reporting, mitigation and resolution of known or suspected breaches, violations or other incidents; and defending investigations or other actions by plaintiffs, OCR, FTC, state attorneys’ general and other federal or state agencies, other business partners, patients and others. Ms. Stamer has worked extensively with health care providers, health plans, health care clearinghouses, their business associates, employers and other plan sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA, FACTA, trade secret and other information privacy and data security rules, including the establishment, documentation, implementation, audit and enforcement of policies, procedures, systems and safeguards, 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 care providers, health insurers, health plans, technology and other vendors, and others. In addition to representing and advising these organizations, she also has conducted training 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.
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.
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. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, 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.
Beyond her extensive involvement advising and representing clients on privacy and data security concerns and other health industry matters, Ms. Stamer also has served for several years as a scrivener for the ABA JCEB’s meeting with OCR, the Chair of the Southern California ISSA Health Care Privacy & Security Summit, and an editorial advisory board member, author, program chair or steering committee member, and faculties for a multitude of other programs and publications regarding privacy, data security, technology and other compliance, risk management and operational concerns in the health care, health and other insurance, employee benefits and human resources, retail, financial services and other arenas.
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 HIPAA and other concerns by her service in the leadership of a broad range of other professional and civic organization including 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, 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; former Board Compliance Chair and Board member of the National Kidney Foundation of North Texas, 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, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Council, 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.
Ms. Stamer also is a highly popular lecturer, symposium and chair, faculty member 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. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other 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.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (469) 767-8872 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 or your profile here.
Employer and other health plan sponsors, fiduciaries and insurers generally should be prepared to prove that they are maintaining and administering their health plans to comply with many Patient Protection and Affordable Care Act (ACA) mandates pending Congressional repeal or reform of the ACA, despite President Trump’s January 20, 2017 Executive Order on “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (Executive Order) because the Federal agencies responsible for the implementation and interpretation of the ACA generally don’t have authority to bar health plan participants and beneficiaries from bringing benefit denial or breach of fiduciary duty lawsuits against health plans or fiduciaries for violating ACA mandates incorporated into the Employee Retirement Income Security Act (ERISA).
In addition to affirming President Trump’s commitment to seek the prompt repeal of the ACA, the Executive Order seeks to mitigate the burden of the ACA pending Congressional repeal by ordering the Departments Health and Human Services (HHS), Labor (DOL), Treasury (Treasury) and other agencies with ACA authority (Agencies) to exercise all available authority and discretion to the “maximum extent permitted by law:”
To waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a “cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
To provide greater flexibility to States and cooperate with them in implementing healthcare programs and to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State;
For departments and agencies with responsibilities relating to healthcare or health insurance to encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.
While applicable Agencies are expected to act as quickly as possible to comply with President Trump’s orders, various statutory and procedural requirements almost certainly will limit both the relief granted and the speed with which the Agencies can grant the relief. One obvious place where statutory limitations on Agencies authority almost certainly will impact the availability of relief arises from the ACA’s incorporation of many of its patient protection act group mandates into ERISA. While the Agencies may possess the authority to lessen the burden of compliance with the regulatory mandates of the ACA by revising regulations, issuing enforcement relief or other certain other actions, these powers do not extend to blocking the authority of participants and beneficiaries to bring suit to enforce the provision of the ACA that the ACA added to ERISA through private benefit denial or breach of fiduciary duty lawsuits brought under ERISA.
In the case of insured health plans, sponsors, insurers and administrators also will need to consider whether their ability to take advantage of the federal relieve available is blocked or restricted by state insurance statutes, regulations or other administrative requirements. The likelihood of state statutory or regulatory restrictions on insured arrangements is particularly likely because of the heavy regulation of these products by states including the widespread incorporation of ACA mandates into state insurance laws and regulations in response to the Market Reform provisions of the ACA.
Even if these federal requirements are met to qualify for, adopt and implement any federally issued regulatory relief, employer and other plan sponsors, insurers, fiduciaries and administrators also should plan for and be prepared to run the necessary traps to properly amend their plan document, summary plan description and other plan notifications, administrative services agreements, stop loss or other insurance contracts and other vendor agreements to implement their desired changes. Beyond knowing what has to be done to adopt and communicate the desired changes, employer and other sponsors and fiduciaries, their consultants, brokers and advisors need to consider the requirements and consequences that the planned changes might have under applicable plan documents and vendor agreements to avoid unanticipated costs or liabilities as well as what actions are needed to ensure that ERISA’s prudence and other fiduciary requirements are met.
Until these and other required actions are completed by the Agencies and the applicable plan sponsors, fiduciaries and other parties, employers and other plan sponsors, their management, their health plans, health plan fiduciaries, administrators and insurers remain legally obligated to continue to comply with the ACA as presently implemented under the existing regulations and judicial and administrative rulings.
Responsible parties should begin preparing to take advantage of the anticipated legislative and regulatory relief both by both carefully monitoring statutory and regulatory health plan developments and positioning themselves to act quickly when relief comes by evaluating their existing heath plan documents, contracts, communications and systems to verify existing compliance and determine requirements for implementing any planned changes, opening up discussion vendors about these possibilities and taking other steps to position themselves to act knowledgeably and efficiently to take advantage of new opportunities if and when they emerge and are warranted.
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 and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.
Ms. Stamer works with health industry and other 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. 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.
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 in the leadership of a broad range of other professional and civic organization including 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 advisor 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; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other 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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (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 at 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 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
Trump Executive Order Promises But Gives No ACA Health Plan Relief Until Agencies Act
Employer and other health plan sponsors, insurers, plan members and their family, health care providers and others struggling to cope with the costs and burdens of complying with the Patient Protection and Affordable Care Act (ACA) health care reforms are celebrating the promise of impending relief from ACA mandates held out by newly inagurated President Donald Trump January 20, 2017 Executive Order on “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (Executive Order).
In addition to affirming President Trump’s commitment to seek the prompt repeal of the ACA, the Executive Order seeks to mitigate the burden of the ACA pending Congressional repeal by ordering the Departments Health and Human Services (HHS), Labor (DOL), Treasury (Treasury) and other agencies with ACA authority (Agencies) to exercise all available authority and discretion to the “maximum extent permitted by law”:
To waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a “cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
To provide greater flexibility to States and cooperate with them in implementing healthcare programs and to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State;
For departments and agencies with responsibilities relating to healthcare or health insurance to encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.
While employer and other health plan sponsors and others struggling to cope with the costs and mandates of ACA unquestionably welcome the promise of relief offered by the Executive Order, it is critical that those looking forward to enjoying this promised relief not jump the gun or overestimate the scope of the relief. Because the Executive Order is not self-executing, the Executive Order provides no legally enforceable relief from applicable ACA compliance obligations unless and until the applicable Agency or Congress adopts that relief consistent with law. While applicable Agencies are expected to act as quickly as possible to comply with President Trump’s orders, various statutory and procedural requirements almost certainly will limit both the relief granted and the speed with which the Agencies can grant the relief.
First, because the Executive Order is not self-executing, it doesn’t actually provide any relief for anyone; rather it just creates the expectation that the Agencies will grant some relief in the future. Those anticipating relief should expect that even regulatory relief will take time since the Agencies by law as well as the terms of the Executive Order will be required to comply with the often time consuming and cumbersome requirements of the Administrative Procedure Act and other applicable statutes in considering and issuing regulatory revisions and relief, including any applicable requirements for submission and approval by the Office of Management and Budget. The often added need for interagency collaboration and negotiation created by the ACA’s grant of multijurisdictional authority over many of its provisions historically has made negotiating these requirements more complicated and time consuming.
Second, relief will not be available for certain exposures because statutory limits on the jurisdiction and authority of the Agencies under the ACA will limit the scope of the relief that an Agency can grant. The Agencies generally do not have the authority to waive certain provisions of the ACA which are not within the discretion of the Agencies, such as the right of participants and beneficiaries in employer or union-sponsored health plan to sue to enforce ACA health plan mandates through a benefits or breach of fiduciary action brought under the Employee Retirement Income Security Act. Likewise, Agencies also will be restricted in their ability to waive penalties or requirements where the statutory mandate is drafted in a manner that denies the Agency discretionary authority to offer that relief.
Third, health plans, their sponsors, insurers, fiduciaries and administrators should anticipate that they may need to take certain action in response to any issued relief before they can take advantage of the relief allowed such as adopting health plan amendments, issuing notices to participants or beneficiaries, making elections or a combination of these actions.
In the case of insured health plans, sponsors, insurers and administrators also will need to consider whether their ability to take advantage of the federal relieve available is blocked or restricted by state insurance statutes, regulations or other administrative requirements. The likelihood of state statutory or regulatory restrictions on insured arrangements is particularly likely because of the heavy regulation of these products by states including the widespread incorporation of ACA mandates into state insurance laws and regulations in response to the Market Reform provisions of the ACA.
Even if these federal requirements are met to qualify for, adopt and implement any federally issued regulatory relief, employer and other plan sponsors, insurers, fiduciaries and administrators also should plan for and be prepared to run the necessary traps to properly amend their plan document, summary plan description and other plan notifications, administrative services agreements, stop loss or other insurance contracts and other vendor agreements to implement their desired changes. Beyond knowing what has to be done to adopt and communicate the desired changes, employer and other sponsors and fiduciaries, their consultants, brokers and advisors need to consider the requirements and consequences that the planned changes might have under applicable plan documents and vendor agreements to avoid unanticipated costs or liabilities as well as what actions are needed to ensure that ERISA’s prudence and other fiduciary requirements are met.
Until these and other required actions are completed by the Agencies and the applicable plan sponsors, fiduciaries and other parties, employers and other plan sponsors, their management, their health plans, health plan fiduciaries, administrators and insurers remain legally obligated to continue to comply with the ACA as presently implemented under the existing regulations and judicial and administrative rulings. While preparing for future changes, health plans, their sponsors, fiduciaries, administrators and insurers also should act to manage their prior and existing liabilities arising out of acts or omissions occurring before Congress or the regulators revise and ease the rules.
While health plans, their sponsors, fiduciaries, administrators and insurers remain legally responsible to comply with existing rules until changed by the regulators or Congress, they still have much to do to get ready for the changes that are coming while acting to manage their health plan costs and liabilities in the meantime. Whether or not the Trump Administration in the future provides relief from Form 8928 self-reporting and excise tax self- assessment penalties for violation of 40 federal group health plans, group health plans and their fiduciaries almost certainly will remain exposed to ERISA lawsuits for violation of ACA or other federal group health plan mandates. In addition, until revoked or revised, employers and health plans remain subject to and risk liability for failing to provide ACA-required tax forms, notices, benefits, coverage, rights or other compliance.
Responsible parties should begin preparing to take advantage of the anticipated legislative and regulatory relief both by both carefully monitoring statutory and regulatory health plan developments and positioning themselves to act quickly when relief comes by evaluating their existing heath plan documents, contracts, communications and systems to verify existing compliance and determine requirements for implementing any planned changes, opening up discussion vendors about these possibilities and taking other steps to position themselves to act knowledgeably and efficiently to take advantage of new opportunities if and when they emerge and are warranted.
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 and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.
Ms. Stamer works with health industry and other 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. 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.
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 in the leadership of a broad range of other professional and civic organization including 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 advisor 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; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other 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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (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 at SolutionsLawPress.com such as:
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
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