By: Philip Qualo, J.D.
Just when the United States was starting to adjust to a new COVID-19 reality, where bejeweled face masks, social distancing and hand sanitizer have become as fundamental to our existence as water, current events have yet again set us down a new trajectory in these unprecedented times. The May 25th murder of George Floyd, a Black man who was unarmed and handcuffed at the time of his death at the hands of law enforcement sparked a series of national protests that has called on the world to reexamine policies and practices that disproportionately impact people of color. The protests have spawned into a national movement in the U.S. that has aimed at reforms in law enforcement practices and legislative accountability. There is a very important arena, however, where racial disparities are not being discussed at this time, and that is in healthcare. Disparate access to affordable, yet effective, healthcare has and continues to have disproportionately negative impact on people of color. In most cases, access to healthcare can be the difference between life and death.
Despite the passage of the Affordable Care Act in 2010, racial disparities in healthcare continue to be a troubling phenomenon in the U.S. Black men and women face 40 percent and 57 percent higher hypertension rates than White men and women, respectively. The death rate from breast cancer for Black women is 50 percent higher than for White women. On average, 25 percent of Latinx children aged 6–11 years are considered obese, compared to 11 percent of White children. Asthma prevalence is also highest among Black and Native American communities, and Black children have a 260 percent higher emergency department visit rate and a 500 percent higher death rate from asthma compared to White children. Native American, Latinx, and Black communities have the highest percentages of adults with diabetes.
Even more troubling, the infant and maternal mortality rates for Black babies and mothers are far higher than those of White babies and mothers. In the U.S., based on 2016 data, White babies die before their first birthday at a rate of 4.9 per 1,000, and White women die from pregnancy and childbirth-related causes at a rate of 13 per 100,000. While those numbers are far higher than other wealthy countries, the picture is far worse for Black babies and mothers. Black babies die before their first birthday at a rate of 11.4 per 1,000, and Black moms die from childbirth-related causes at a rate at a rate of 42.8 per 100,000 – more than double and triple the rates of White babies and moms, respectively.
There is no one solution that can fix this problem. Recognizing that these disparities exist, is something we all must do before we can contemplate how to remedy this systemic issue. In reviewing these troubling statistics, the only solace I find is an overwhelming feeling of being blessed to work for The Phia Group. At Phia, ensuring every American is insured is not enough; we are firm in our belief that we need to reduce the cost of care at a national level. Racial disparities in healthcare will continue to grow with escalating costs, as low income minorities struggle to maintain equal access to affordable coverage and basic healthcare that would likely identify many of the above listed health issues before they grow into lifelong, chronic, and costly conditions. As workforces are growing more and more diverse by the day, this is certain to be a reality to many employers that offer health coverage to their employees. Therefore, improving racial inequality is not only a matter of civil rights, but a matter that must be taken seriously by the healthcare industry in our collective efforts to keep costs low, and access to coverage affordable for all.
By: Jon Jablon, Esq.
In this strange time (strange because of both COVID-19 and the state of self-funded in general), things move at – to quote our CFO/CIO Joe Montalto – “the speed of business.” Candidly, I have never really been sure what that means, despite my smiling and nodding when he says it, but I think it’s a euphemism for “fast.” Things move fast. And you can quote me!
How that manifests in our industry, in Phia’s experience, is that sometimes, a client needs certain services performed ASAP. There may not be time to receive an agreement, review it, collaborate with peers, make changes, have those approved by the vendor, and run a final version by upper management prior to the performance of the services. Certain vendors such as stop-loss carriers are extremely unlikely to proceed without written agreements either due to applicable law or liability concerns, but many vendors will happily begin performing services on no notice when their clients really need it.
It can certainly be potentially dangerous, since contracts are, after all, designed to protect the parties – but from a practical standpoint, relationships like this can be usually be handled in one of a few ways:
Standard industry practice
This is a method of interpretation of an implied contract where both parties act in accordance with what usually happens in the industry with respect to relationships like the one in question. Principles such as “fair market value” apply, where the vendor can’t decide to gouge the client just because no one has explicitly agreed to the fees. Standard industry practice is viewed as “the norm” – what a reasonably buyer and seller of services would reasonably expect their respective rights and obligation to be.
An unsigned service agreement
Numerous times, I have emailed a draft template service agreement to a TPA or broker that needed a medical claim negotiated ASAP. No time to review the contract – just enough time to email the claim and get it settled that day. While we could have relied on the aforementioned standard industry practice to govern the relationship, I prefer to send a copy of the contract that can be reviewed prior to, or even during, the performance of the services, so the client knows exactly what to expect. By saying “here are our terms; by asking us to perform this service sans contract, these are the terms that would have governed, and therefore we operating as if this contract were signed,” we can lay out our pricing and other terms so there can be no question of the details after the fact, and so we won’t need to look to what might be “standard” in the industry – especially since different entities may have different ideas, or experiences, of what is actually standard.
A previous agreement between the parties
Sometimes a vendor continues to perform a service after an existing contract has terminated. Runout can be specified in the agreement, in which case you likely need to look no further than the agreement’s terms – but without runout, if the agreement is truly terminated, and the vendor agrees to perform additional services anyway, it will generally be the case that the prior agreement can govern the relationship, since both parties were at the time aware of the other party’s conditions. Obviously a particularly old service agreement can’t necessarily be relied on – but the more recent the execution of the terminated agreement, the more likely the parties are to be willing to agree on the same terms.
Without a signed service agreement, some things can be left up in the air, so it’s always a best practice to memorialize any business agreement in writing to the extent possible – but when things are truly moving “at the speed of business,” sometimes you have to rely on the industry, an unsigned contract, or even a terminated contract.
If you want a second set of eyes to try to figure out a complex relationship between a health plan, TPA, or broker and another health plan-related vendor, don’t hesitate to ask The Phia Group’s experts, at PGCReferral@phiagroup.com.
By: Nick Bonds, Esq.
Summer is officially here, and employers and employees alike are all wondering if, when, and how to go back to the office. After a spring spent cooped up at home self-isolating and social distancing, many are eager to get back into their old routine, to reclaim some sense of normalcy. While we can all certainly sympathize with that sentiment, the specter of the coronavirus still looms large. To safeguard our collective health and sanity, we all have a responsibility to ensure that a return to office life is handled carefully, lest we experience a resurgence in cases and find ourselves cloistered in makeshift home offices for many months more.
The ideal solution is a vaccine, but that goal will likely not be realized until sometime in early 2021. Once a vaccine is created, there may still be delays in producing and distributing doses to Americans and the rest of the world, further delaying a return to something resembling the before times. To return to our workplaces sooner, the search continues for more immediate solutions.
Many employers, Phia included, have been putting a tremendous deal of thought into the question of how to get employees back in the office while ensuring their health and safety. We’ve implemented a number of measures to minimize risk, such as limiting the total number of people in the office, providing masks and hand sanitizer to employees, checking temperatures as people enter the building, and posting a tremendous amount of informative signage around the office reminding people to keep their distance, cover their faces and wash their hands.
Some employers have sought more elaborate, technological solutions. A number of health and symptom-checking apps have sprung onto the scene, promising to measure employees’ health status and stave off potential workplace outbreaks. Some of these technologies are fairly straightforward, like social-distancing wristbands that buzz when those wearing them get too close to one another. In the right setting, such a device could certainly keep people mindful and help limit vectors of transmission. Other technologies are both more complex and more invasive. Smartphone apps that track employees’ location and act as near-continuous contact tracers, and biometric scanners that monitor for symptoms as employees move through the workplace. Far from Bradbury-esque MacGuffins, these technologies may become the new normal for many employees.
An alternative approach has been to ramp up antibody testing among the workforce, aiming to bring in those employees who have already been exposed to the virus and are (hopefully) immune. The fear with this approach is that it could inadvertently create a two-tiered economy, implicitly valuing employees who have been infected over those who have yet to be exposed. This could even create a perverse incentive, encouraging employees to actively seek to infect themselves as a pathway to returning to work, one of the many reasons that the World Health Organization discourages the “immunity passport” approach.
While none of these strategies can guarantee a virus-free workplace, they can certainly keep us all mindful and encourage best-practices. But at worst, these technologies implicate fundamental privacy concerns, which employers must be aware of. Obvious regulatory landmines for employers come in the form of laws like HIPAA and the ADA, which protect employees’ sensitive health information data. Agencies like the HHS’s Office of Civil Rights and the EEOC have weighed in, offering updated guidance to employers on how to balance employee privacy with maintaining a safe work environment amid the pandemic.
As more workplaces begin reopening, employee safety is a top concern, but privacy requirements cannot be forgotten. Employers must ensure their approach to reopening is a balanced equation, accommodating their business needs as effectively as possible while keeping their employees healthy and their health information secure.
The Nation’s response to the COVID-19 pandemic called on employers to exercise greater flexibility and understanding for employees impacted by COVID-19. For the most part, the series of legislations enacted since the pandemic hit the U.S. have been aimed at expanding unemployment, group health plan coverage, leaves of absence, and providing financial support to struggling employers and Americans faced with an economy that evaporated overnight. However, plan sponsors offering benefits on a pre-tax basis through Internal Revenue Services (IRS) Section 125 cafeteria plans struggled to correlate the nationwide call to provide flexible options employees with the strict terms of their cafeteria plans.
Section 125 cafeteria plans are required to maintain employee pre-tax elections for benefits offered through the plan for the full plan year, with very few exceptions. The type of benefits offered through a cafeteria plan generally include employer-sponsored health coverage, Health Flexible Spending Arrangements (Health FSAs) and Dependent Care Assistance Programs (DCAPs). The IRS also imposes strict limitations on when midyear changes to those elections may be made. As employers have been forced to deal with mandatory shutdowns, furloughs, and newly enacted leave requirements, most plan sponsors found themselves with little guidance on how to handle requested changes to elections made before COVID-19 became a household name.
After much anticipation, the IRS finally released much needed guidance on May 12, 2020. In IRS Notice 2020-29, the IRS provides for increased flexibility with respect to midyear elections under a Section 125 cafeteria plan during calendar year 2020 due to COVID-19. The Notice applies to cafeteria plans that offer employer-sponsored health coverage, FSAs and DCAPs. The Notice permits an employer to amend its cafeteria plans to allow employees to:
Notice 2020-29 does not require cafeteria plans adopt these midyear elections. An employer that decides to amend their cafeteria plan to allow for any of the above midyear election changes must adopt a plan amendment. It should be noted that any amendment to a cafeteria plan made under pursuant to the Notice is only valid through December 31, 2020.
It is important to note that an employer is not required to provide unlimited election changes but may, in its discretion, determine the extent to which such election changes are permitted and applied, provided that any permitted election changes are applied on a prospective basis only, and the changes to the plan's election requirements do not result in failure to comply with the nondiscrimination rules applicable to Section 125 cafeteria plans.
In determining the extent to which midyear election changes are permitted and applied, an employer may wish to consider the potential for adverse selection of health coverage by employees. To prevent adverse selection of health coverage, an employer may wish to limit elections to circumstances in which an employee's coverage will be increased or improved as a result of the election.
By: Andrew Silverio, Esq.
As the days in isolation continue to stretch into weeks and eventually months, it seems there is no industry or business that has not been impacted by the COVID-19 pandemic. But a recent report released by the American Hospital Association (available at https://www.aha.org/guidesreports/2020-05-05-hospitals-and-health-systems-face-unprecedented-financial-pressures-due) reveals a significant financial impact on hospitals and health systems, entities which are truly on the front lines of the fight against COVID-19. This may seem counterintuitive – one might expect that a massive public health event like a viral pandemic would result in an influx of business and corresponding increase in revenues for hospitals and other providers. However, the report outlines various ways in which these providers are suffering significant losses – estimated at $202.6 billion over four months, or $50.7 billion per month.
First, many Americans sheltering in place and reluctant to risk exposure to the virus are canceling or postponing standard care, and shortages of protective equipment and crucial drugs have forced providers to incur increased cost to secure these materials. Additionally, the sudden and historic surge of unemployment has led to a corresponding rise in uninsured patients. Despite government efforts to expand access to COBRA coverage, these efforts have not impacted the cost of coverage itself, and it can still be prohibitively costly, especially for the newly unemployed.
The report itself provides a much more in-depth analysis of the impact of these factors, and I encourage reviewing it in full (with a grain of salt, as the AHA is ultimately an advocacy organization). Taken at face value, it remains to be seen what the ultimate impact on payers will be. Certainly some of this expense will be passed on to payers directly, for example increased supply costs for drugs and medical equipment, but more indirect and widespread impact is likely as well, for example if providers make concerted efforts to be more aggressive with billing and collections do to the increase in uninsured patients, or are forced out of operation, reducing healthcare options overall. For example, CNN outlines at https://www.cnn.com/2020/04/21/us/coronavirus-rural-hospitals-invs/index.html the disparate impact on rural hospitals, many of which are being forced to close down as the sudden and almost complete end of routine care is not accompanied by a corresponding surge in COVID-19 patients. In communities with few healthcare options, the loss of a single hospital can be disastrous, with no competitive incentive remaining for the surviving providers to reasonably limit their charges or ensure the quality of care beyond what’s necessary to manage direct liability.
By: Kevin Brady, Esq.
Earlier this month, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) jointly issued a Final Rule extending a number of deadlines and timeframes relevant to group health plans. The Final Rule recognizes that as a result of the National Emergency, plan participants “may encounter problems in exercising their health coverage portability and continuation coverage rights, or in filing or perfecting their benefit claims. As such, the stated purpose of the Final Rule is “to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established timeframes.”
The Final Rule essentially requires plans to disregard a designated period of time when determining whether certain deadlines or timeframes are satisfied. Consistent with the Final Rule’s stated purpose, the extension of these timeframes will provide additional opportunities for employees and their dependents to maintain existing, or enroll in, coverage as well as provide additional opportunities for participant’s to submit and appeal claims. This designated period of time is succinctly described as the “Outbreak Period” which entails “the period from March 1, 2020 until sixty (60) days after the announced end of the national emergency period or such other date announced by the Agencies in a future notification.”
HIPAA
Special Enrollment
Under HIPAA, employees who experience certain special enrollment events generally have a limited period of time (following the event) to request coverage under their employer’s plan. Under the Final Rule, the Outbreak Period must be disregarded when considering whether a HIPAA special enrollment request is timely.
COBRA
Electing Continuation Coverage
Plan participants who experience “qualifying events” are generally eligible for continued coverage under COBRA subject to certain conditions. After receipt of the COBRA election notice, “qualified beneficiaries” have 60 days to elect continuation coverage. Under the Final Rule, plans must disregard the Outbreak Period when determining whether a qualified beneficiary’s election is timely.
Timely Payment of Premiums
After electing COBRA continuation coverage, qualified beneficiaries must pay their first premium payment with 45 days of their election. Furthermore, qualified beneficiaries must pay premiums in a timely fashion (a premium is considered paid timely “if it is made not later than 30 days after the first day of the period for which payment is being made.” Under the Final Rule, the Outbreak Period cannot be considered when determining whether payment of the premium is timely.
Notice of Qualifying Event
Under certain circumstances (generally divorce or a child losing dependent status), plan participants will bear the responsibility for notifying the group health plan of the qualifying event under COBRA. While COBRA typically requires this notice to be provided within 60 days, the Final Rule requires plans to disregard the Outbreak Period when determining whether notice is timely.
Claims and Appeals
Filing of Claims
Group health plans will generally limit the period of time in which a claim may submitted and considered eligible for coverage. Under the Final Rule, plans must disregard the Outbreak Period when considering whether a claim has been timely filed. This will undoubtedly lead to additional, and potentially significant exposure, for plans as claims that could have been properly denied previously, may now be payable under the plan.
Appealing an Adverse Benefit Decision
Group health plans must provide participants at least 180 days to appeal an adverse benefit decision. Whether a plan provides the required 180 days, or more, plans must disregard the Outbreak Period when determining this deadline. Similar to the extension of the deadline for filing claims, this extension may also lead to additional, and potentially significant, exposure for plans.
External Reviews
For claimants enrolled in non-grandfathered group health plans, those claims which are otherwise eligible for external review (only certain types of appeals are eligible), are entitled to additional time to request an external review under ERISA’s appeals procedure rules. Under the Final Rule, the Outbreak Period is disregarded when considering the deadline to file an external review.
Further, if a claimant’s external review request is not “complete” (meaning that the request for review is not sufficient to be considered by the Independent Review Organization) the claimant is typically limited to the duration of the filing period to perfect the request. However, the Final Rule also requires the plan to disregard the Outbreak Period when determining whether additional information, provided to perfect a request for external review, is timely.
By: Jon Jablon, Esq. In case you haven’t heard, COVID-19 is kind of a bummer. We’re all at home, and like my colleague Jen McCormick, I’ve got a toddler who wants nothing more at any given time than to go to a playground. Even after so many weeks of this, it still seems surreal to be able to say “sorry, buddy, but if we go to a playground, dad might go to jail!” Anyway. This blog post is about direct primary care! Some have expressed the view that the best feature of DPC is the personalization of care; others say the best thing about it is the flat fee. In my view, though – through COVID-19-colored lenses – the best thing about DPC is that direct primary care providers are already prepared to work from home. When I text Dr. Tremblay, it doesn’t matter that his office is closed. It doesn’t matter that I could go to jail if I bring my son to a playground. No – all that matters is that during this crisis, my DPC provider is available to help me. Ironically, he may even be more available than usual, since he’s not burdened with that pesky office time. I can’t speak to the ability to retain DPC care in the midst of this crisis, but if the benefits of DPC in normal times weren’t attractive enough, it’s definitely worth looking into now! In this time of need, individuals or even entire employer groups would do well to explore this option, and provide some much-needed additional security to their families. This may sound like a sales pitch, but really it’s just my personal anecdote about how much more secure my wife and I are knowing that we can speak to a doctor at any time, and have prescriptions written for us, from the comfort of a playground. Or, uh, without ever having to leave the house, I mean. Please continue to stay safe, everyone – including social distancing and access to care!
By: Chris Aguiar, Esq.
There are so many fascinating things to debate in what can only be described as perhaps the strangest times we as a society have collectively endured. Should we open the economy at the expense of American lives? Does the data even support this notion that social distancing makes a difference? How could the models have been so far off their original projections? How did the current administration do with respect to its response? It would be disingenuous to say that these are not topics in which I am interested, but in terms of the day to day business of a subrogation professional (and in the context of this blog), I’m thinking much more in the weeds.
The immediate question a lot of our subrogation clients are asking is quite simply, what is the rule regarding workers' compensation claims with respect to this pandemic? Will medical professionals, first responders, and even essential employees be able to make claims for workers' comp? One’s gut reaction might be to say, “of course they can!” – But deeper analysis requires a bit more nuanced thinking.
The success of every injury claim, be it an auto accident, a work injury, or medical malpractice, rests on a critical element of proving negligence – causation! How does one prove that they contracted the virus as a result of working with a person infected with COVID-19, rather than when they stopped at the grocery store on the way home from their shift? With a virus that the media would lead you to believe is so potent that the mere act of stepping outside your door will leave you at significant risk, how are we to know what actually “caused” that person to contract the virus? It would be virtually impossible to tie the contracting of the virus to one single event – accordingly, the theoretical answer lies in the concept of “presumptive illness”. The practical answer, as is so often the case with legal discussion, is, well, “it depends.”
Every state has different definitions of “presumptive illness” - a presumption that one who works closely with those who are ill, such as medical personnel and first responders, contracted the illness within the scope of their employment. Furthermore, every state defines the class of employees who are eligible for the presumption differently (e.g. which “essential employees” are eligible for the presumption?). Additionally, many states are currently reviewing their laws and determining whether to make a change to specifically address the current pandemic and what employees on the front lines are able to claim. Needless to say, as with everything related to COVID-19, it is a quickly developing situation. At this time, whether a plan participant is eligible for worker’s compensation benefits depends on the type of work they do, and whether that state already provides for this presumption. If it doesn’t, states will need to add this presumption in order to allow workers to access these benefits.
Anyone who has questions can feel free to reach out to our team for more information at info@phiagroup.com.
While some of the United States is tentatively beginning to reopen, much of the country remains firmly under social distancing orders. The ripple effects of keeping people cooped up with their families vary wildly, but many are reveling in the extra time spent together, and are finding numerous ways to stay sane and entertained in the face of the Covid-19 pandemic.
Some of this has led to fairly predictable shortages, but there are reasons for hope. Aside from the struggle of grocery stores (and even a few global online retail-giants-who-shall-not-be-named) to keep toilet paper, disinfectant wipes, and hand sanitizer in stock, the fact that our stores’ shelves have been rendered entirely barren should be seen as a testament to the resilience of our modern supply chain.
Nonetheless, there are a number of things you just can’t find right now. Toilet paper remains scarcer than I’d like it to. The meat case at my local store has been pretty sparse of late. You probably can’t buy a Nintendo Switch from a traditional retail outlet at MSRP to save your life right now. And, spurred by the hordes of energetic youths with no safe outlet for their boundless energy, trampolines are flying off of shelves.
This got me thinking… plenty of people find perfectly mundane ways of injuring themselves in the home. Sure, social distancing keeps us safe from the coronavirus, and protects us in plenty of other ways. Fewer drivers on the roads means fewer car accidents. Fewer kids playing peewee football means fewer broken collarbones. But as a former kid myself, I can tell you: we will find a way to injure ourselves, trampoline or no. And fear of the coronavirus may well make people wary of visiting an emergency room (preferably an urgent care clinic), even when truly necessary, exacerbating injuries and prolonging the healing process. This will almost certainly lead to higher claims costs for plans down the line.
All this to say, it is imperative that we all keep up with our personal well-being in this time of social distancing. If anything, this pandemic may help all of us maintain a greater awareness of our personal health. Companies that encourage telemedicine can help their employees build a rapport with their healthcare providers, leading to better health outcomes and ultimately saving plans money. Keeping ourselves and our families mentally and physically engaged throughout this time will keep us all healthier and saner until we can finally go to our offices again. If it takes a videoconference with your doctor (or a trampoline/black-market videogame console) to make that happen, maybe it’s worth it.
Andrew Silverio, Esq.
Apologies for the attention-grabbing headline, but no, as good as that would be for payers, it didn’t. However, Kaiser Health News recently ran a story, which was also picked up by NPR, speculating that this is precisely what had occurred. The article, which ran on April 17, 2020, discussed the terms and conditions placed on providers who receive funds from the Public Health and Social Services Emergency Relief Fund under Public Law 116-136, one of which states that “… for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.”
For its expansive reading of this seemingly limited prohibition on balance-billing, KHN points to a statement on an explanatory HHS website (the article links to https://www.hhs.gov/provider-relief/index.html) stating that “HHS broadly views every patient as a possible case of COVID-19.” The rationale then, is that if providers can’t balance bill COVID-19 patients, and every patient is a COVID-19 patient, then providers can’t balance bill anyone. However, as noted above, the actual requirement in the provider “Acceptance of Terms and Conditions” (available at https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions.pdf) applies to “…all care for a presumptive or actual case of COVID-19.” Even if every patient is a “presumptive” COVID-19 patient, it is simply not the case that all treatment is treatment for a COVID-19 case.
As beneficial as a broader interpretation of this guidance could be for payers, we would not advise payers to rely on it as it is simply not supported by the terms of the provider Terms and Conditions or consistent with the past positions of HHS. First, note that the “every patient” language was found in explanatory public HHS guidance online, not the actual Terms and Conditions. Additionally, as of April 24, 2020, that language appears to have been removed (perhaps due to the potential for misinterpretation, but that is of course speculation). The link cited by the KHN article now redirects to https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html, which as of April 24, 2020 does not contain the “every patient” language and states that its content was last reviewed on April 24, 2020.
As the legal landscape around COVID-19 continues to rapidly develop, as always, don’t hesitate to contact us with any questions.