California Personal Injury Blog - Compensation

Managing Workman’s Compensation Claims in a Recession: A Growing Challenge

James Cool — Tue, 24 Feb 2009 15:35:33 GMT

With economic woes taking the forefront in most news reports and conversations at the dinner table, it is no surprise that workman’s compensation claims have risen in correlation with layoffs. Some workers may attempt to remain on leave from a position and continue to collect worker’s compensation rather than return to an uncertain, and economically impacted, workplace. Others that have been laid off have filed claims afterward, seeking to use workman’s compensation as a way to make the ends meet after being laid off. There is some concern among employers and managerial staff that workers may attempt to draw out workman’s compensation claims when jobs have been downsized or might be eliminated. This growing challenge for employers and managers was supported by February’s job reports, which indicated an increase in claims.

The current recession is the longest one in 16 years – with unemployment rates being reported around 7.6%. About 600,000 jobs were lost in January alone. In a time where employers are concerned about staying afloat, many of them fail to realize that they may face increased liability for compensation claims as a result of the market’s condition.

State Division of Workers’ Compensation spokeswoman Patricia Ortiz-Wong said claims for workers’ comp have steadily declined in the past eight years, from 931,710 in 2001 to 553,770 in 2008. That trend is not expected to continue in the face of the current recession. Figures from the state also show that the number of claims climbed dramatically from 738,311 in 2000 to 931,710 in 2001, another recessionary period. One claims manager, Mary Anne Hernandez from Pan American Insurance Agency, Inc., predicted that claims and risk managers would see claims go “through the roof.” But other risk managers, such as Dave Dolnick from Brady Cos, a La Mesa Construction Company, was certain that most employees would resolve their claims as soon as medically possible. However, there are legitimate concerns about the extension of worker’s compensation claims. “What we have observed, both somewhat with our own [limited] claims and also in chatting with ... peers, is that claims that are otherwise legitimate become much more difficult to resolve in this kind of a market, when the injured worker doesn’t have the option of a job to go back to,” Dolnick said.

New and reopened claims can be especially problematic to assess given these circumstances – even when the claim is legitimate and not solely the result of fear of job loss, downsizing, or a shaky market. This means that claims and risk managers are bound to be more vigilant than in more prosperous times. Businesses may reevaluate and extend their own insurance coverage, but it is more likely that businesses may revise and revisit job descriptions. Risk and claims managers may also be notified to require additional documentation and approach claims with increased skepticism. All of this means a harder road towards coverage for those with legitimate claims. If you have had a claim recently, it may be helpful to consult an attorney. Additionally, you may want to review and keep on hand a current copy of your job description, especially if you’ve heard that your employer is considering changes.

Originally posted at InjuryBoard by James Cool

Our Health Care Problem

Paul Kiesel — Thu, 22 Jan 2009 16:11:41 GMT

The New Yorker has a great article this week discussing the many problems the U.S. health care system faces (too many to list in this sentence) and I've posted the first four paragraphs, and a link to the rest of the article below.

It's interesting to note that the article starts with the notion that health care reform, in many industrialized nations, develops after extreme examples of cruelty are made public. And the Bush administration provided many examples (again, too many to list in this parenthetical, but SCHIP being one example, as Bush vetoed the bill passed by the Senate and the House -- except the House didn't have enough votes in favor of the bill to override a veto -- in 2007; UnitedHealth reimbursement fraud, etc.) of why health care reform and the way we look at medical treatment in the 21st century needs to evolve and become more accessible and affordable.

United Health, the biggest U.S. health insurer, announced last week it would settle over $400 million in manipulated payments made to doctors and patients for the past 15 years, which resulted in myriad financial hardships for many who were insured by UnitedHealth. And what UnitedHealth (and several other U.S. health insurers) has been doing needs to be put to an end or companies like UnitedHealth need to be severely punished for manipulating not just health care services and payments, but the trust of the individual that is paying a company monthly to ostensibly take care of the individual or his family when they need the medical attention or treatment most.

From The New Yorker:

Getting There from Here

How should Obama reform health care?

by Atul Gawande

In every industrialized nation, the movement to reform health care has begun with stories about cruelty. The Canadians had stories like the 1946 Toronto Globe and Mail report of a woman in labor who was refused help by three successive physicians, apparently because of her inability to pay. In Australia, a 1954 letter published in the Sydney Morning Herald sought help for a young woman who had lung disease. She couldn’t afford to refill her oxygen tank, and had been forced to ration her intake “to a point where she is on the borderline of death.” In Britain, George Bernard Shaw was at a London hospital visiting an eminent physician when an assistant came in to report that a sick man had arrived requesting treatment. “Is he worth it?” the physician asked. It was the normality of the question that shocked Shaw and prompted his scathing and influential 1906 play, “The Doctor’s Dilemma.” The British health system, he charged, was “a conspiracy to exploit popular credulity and human suffering.”

In the United States, our stories are like the one that appeared in the Times before Christmas. Starla Darling, pregnant and due for delivery, had just taken maternity leave from her factory job at Archway & Mother’s Cookie Company, in Ashland, Ohio, when she received a letter informing her that the company was going out of business. In three days, the letter said, she and almost three hundred co-workers would be laid off, and would lose their health-insurance coverage. The company was self-insured, so the employees didn’t have the option of paying for the insurance themselves—their insurance plan was being terminated.

“When I heard that I was losing my insurance, I was scared,” Darling told the Times. Her husband had been laid off from his job, too. “I remember that the bill for my son’s delivery in 2005 was about $9,000, and I knew I would never be able to pay that by myself.” So she prevailed on her midwife to induce labor while she still had insurance coverage. During labor, Darling began bleeding profusely, and needed a Cesarean section. Mother and baby pulled through. But the insurer denied Darling’s claim for coverage. The couple ended up owing more than seventeen thousand dollars.

The stories become unconscionable in any society that purports to serve the needs of ordinary people, and, at some alchemical point, they combine with opportunity and leadership to produce change. Britain reached this point and enacted universal health-care coverage in 1945, Canada in 1966, Australia in 1974. The United States may finally be there now. In 2007, fifty-seven million Americans had difficulty paying their medical bills, up fourteen million from 2003. On average, they had two thousand dollars in medical debt and had been contacted by a collection agency at least once. Because, in part, of underpayment, half of American hospitals operated at a loss in 2007. Today, large numbers of employers are limiting or dropping insurance coverage in order to stay afloat, or simply going under—even hospitals themselves.

Article continues here.

Originally posted at InjuryBoard by Paul Kiesel

UnitedHealth to Settle Over $400 Million in Manipulated Payments to Doctors

Paul Kiesel — Thu, 15 Jan 2009 20:17:36 GMT

From Bloomberg:

By Avram Goldstein and Karen Freifeld

Jan. 15 (Bloomberg) -- UnitedHealth Group Inc., the biggest U.S. health insurer, said it will spend $400 million to settle allegations it has manipulated payments to doctors and patients for the last 15 years.

The company agreed to put $350 million into a class-action restitution fund to pay physicians and policyholders for services provided by out-of-network providers, the company said in a statement today. On Jan. 13, the Minnetonka, Minnesota-based insurer settled allegations from New York Attorney General Andrew Cuomo by paying $50 million and transferring to a nonprofit group its database that set the amount to be reimbursed when patients used doctors outside their network.

UnitedHealth has been battling the largest physician group, the American Medical Association, over out-of-network costs since 2000. The settlement affects less than 10 percent of health benefits because most policyholders use their health plan’s network providers to minimize out-of-pocket expenses. Still, the AMA said it stopped rampant cheating.

“UnitedHealth Group has recognized the importance of restoring its relationship with patients and physicians by ending use of a rigged database,” said AMA President Nancy Nielsen in an e-mail statement. “We must hold insurers accountable to their obligations.”

Aetna Inc., the third-largest health insurer, separately agreed today to pay $20 million to settle a related case with Cuomo.

Aetna, of Hartford, Connecticut, gained 16 cents to $26.27 at 4:15 p.m. in New York Stock Exchange composite trading. Minnetonka, Minnesota-based UnitedHealth rose 81 cents to $24.89.

Ingenix Subsidiary

UnitedHealth’s Ingenix subsidiary is hired by hospitals, employers and competing insurers to improve the handling of medical claims, detect fraud and track patients’ prescription drug use.

Ingenix maintains the out-of-network fee database to determine the “usual and customary” fees paid when policyholders go to doctors outside a network of providers who negotiate discounted fees. Hundreds of insurers rely on the database, the company said last year. The database generated less than 1 percent of Ingenix revenue, UnitedHealth said last year.

“With this agreement, the tide is turning against the corrupted reimbursement system that took hundreds of millions of dollars from the pockets of patients nationwide,” Cuomo said in a statement. “Health insurers will no longer be able to distort their data, leaving patients with unfair bills.”

Aetna’s Payment

Aetna’s $20 million payment will be added to the $50 million paid by UnitedHealth to fund the nonprofit database. The money will go to “a qualified nonprofit organization that will establish a new, independent database to help determine fair out- of-network reimbursement rates for consumers,” Aetna said in a statement.

“We recognize the attorney general’s concern about the conflicts,” said Donald Liss, a regional medical director for Hartford, Connecticut-based Aetna, at a press conference today.

The UnitedHealth class-action settlement agreement “contains no admission of wrongdoing,” United Health said in today’s statement. The company will pay the $350 million from cash on hand and book the charge for the 2008 fourth quarter.

‘Dent’ in Cash

“They can handle this,” said Sheryl Skolnick, an analyst with CRT Capital Group in Stamford, Connecticut, in a telephone interview today. “It puts a little bit more of a dent in the $2 billion of cash that the company has, but they are expected to generate $4 billion in cash flow in 2009 even in this depressed environment.”

Cuomo, who subpoenaed at least 15 other companies in the investigation, previously said insurers used Ingenix’s “defective and manipulated” database to set artificially low reimbursement rates.

“We will not stop until the entire industry has been reformed in this regard,” Cuomo said at the press conference. Other insurers are expected to agree to add funds to the nonprofit entity, a person familiar with the probe said Jan. 12.

Cuomo said he plans to get the nonprofit entity running in six months. He said it would develop a Web site where, for the first time, consumers could find out in advance how much they may be reimbursed for common services by out-of-network doctors in their area. A manager hasn’t been selected, Cuomo said.

When patients visit doctors who aren’t in their insurer’s network, the companies typically cover 80 percent of “reasonable and customary” charges.

In one example, Cuomo’s office said that when $200 was a fair-market rate for a 15-minute doctor’s visit for a common illness, Ingenix said it was $77. UnitedHealth would pay $62 when it should have paid $160, leaving the consumer with a $138 bill.

Originally posted at InjuryBoard by Paul Kiesel

AAJ Ranks UnitedHealth as One of the Worst Insurance Companies in America

Paul Kiesel — Thu, 07 Aug 2008 18:33:40 GMT

UnitedHealth has been accused of being greedy, slow in processing reimbursement payments, and giving substantial compensation to their former CEO (who faced criminal and civil charges for backdating stock options) instead of covering medical treatment costs. UnitedHealth has also used its association with AARP to increase its premiums on products aimed at seniors, which resulted in billions of dollars of profit for UnitedHealth. Now, UnitedHealth can add its inclusion to the list of the Ten Worse Insurance Companies in America, named by the American Association for Justice.

According to the American Association for Justice:

[. . .] UnitedHealth has repeatedly been accused of focusing on profits at the expense of its policyholders and their health care providers. The Nebraska Insurance Department reported a spike in complaints against the insurance giant for wrongful denials of claims and for failing to reimburse claims in a timely manner. Other state regulators have said UnitedHealth has acted improperly in denying claims. In one case, the company denied a doctor’s request for an enclosed bed to protect a four-year-old with an abnormally small head. In another case, the company rejected a request from a patient who lost 200 pounds after bariatric surgery and wanted to have flaps of excess skin removed to prevent infection.

Physicians report that UnitedHealth’s reimbursement rates are so low and delayed that patient health is being compromised. Many physicians in South Carolina have stopped accepting UnitedHealth coverage and others are forcing patients to pay up front. South Carolina is the only state that does not have a “prompt pay law,” which requires insurers to pay claims within 90 days. Texas, which has a prompt pay law, has levied $4 million in fines against UnitedHealth for late payment. 152 Regulators in Arizona fined the insurer $364,750 for illegally denying over 63,000 claims by doctors.

New York regulators and health care providers have taken an aggressive stance against UnitedHealth practices they believe to be unfair. The state Department of Health prohibited UnitedHealthcare of New York from enrolling new members until it improved practices, such as adding more customer relations staff, responding to claims faster, and updating financial reports. The American Medical Association (AMA) and the Medical Society of the State of New York sued the insurer over its reimbursement rates.

Perhaps the biggest hit to UnitedHealth will come from the lawsuits that will be filed over how the company determines what portion of a doctor or hospital bill to pay. UnitedHealth has systematically been forcing patients to pay more than they should for visits to out-of-network doctors and hospitals by intentionally "low-balling reimbursement rates." A company called Ingenix calculates these intentionally flawed rates; however, this company is owned by UnitedHealth, which creates the potential for a conflict of interest.

The Executive of Self-Compensation

William McGuire, who became CEO of UnitedHealth in 1990, immediately began to streamline the company by cutting back on coverage for treatment he deemed unnecessary, and in order to boost and insure his overall executive compensation, by bargaining with doctors to reduce payments.

Because McGuire was able to take UnitedHealth to prosperous performance levels, he was allowed to choose when his stock options would be awarded, allowing him to backdate his options to make it appear they were issued on days when stock prices were at their lowest. This was the man who would lead UnitedHealth and its dubious business philosophy into the 21st century, who would later face criminal charges brought forth by the SEC and who would agree to give back $620 million in stock gains and retirement compensation in order to settle federal and shareholder claims.

McGuire was also the man who brokered the deal between his company and the AARP, which became one of the more, if not the most, lucrative deal for UnitedHealth during McGuire’s tenor. (UnitedHealth received $4.5 billion in premiums from AARP-branded products in 2004 alone, while the seniors’ organization pulled in $197 million in royalties and $23 million in investment income that same year; however, the partnership between the two companies would prove more advantageous for UnitedHealth and leave AARP more vulnerable in the end.)

As the business philosophies of Mr. McGuire were employed over the years, UnitedHealth found itself climbing the list of "Worst Insurance Companies in America."

Originally posted at InjuryBoard by Paul Kiesel

Man Fired After Workers' Comp Claim According to Lawsuit

Shannon Weidemann — Sun, 30 Mar 2008 19:22:18 GMT

A man has filed a lawsuit in West Virginia after he claims he was fired after he filed a Workers' Compensation claim. He was injured in a truck accident while working for Catenary Coal Company. The accident happened in June 2007. The company claims he was fired for drug use.

In August 2007, two months after his accident, Bishop was randomly drug tested, which came back positive with reports of hydrocodone and oxycodone. As a result of the test, Bishop was fired.
According to the suit, Bishop provided a second urine screening and hair sample testing, which rebutted the accuracy of the first test, but the company refused to reconsider their decision to fire him.

The man is seeking compensation for loss of benefits, emotional distress, and legal expenses. There is no specific dollar amount asked for in the lawsuit. The company had no comment on the lawsuit.

Originally posted at InjuryBoard by Shannon Weidemann

California Workers' Comp Rates Will Not Change

Shannon Weidemann — Wed, 26 Mar 2008 19:06:11 GMT

An advisory committee has ruled that Workers' Compensation rates in California do not need to be changed mid-year. The Workers' Compensation Insurance Ratings Bureau is set to meet next in August to discuss rates for 2009. Rates are evaluated twice a year and findings are submitted to the state's Insurance Commissioner.

Mid-year filings usually are "limited to instances of major changes in loss experience, legislation or regulation," the Rating Bureau said in a news release. Insurers' year-end loss experience for their California operations "suggests a modest increase of as much as 4.2 percent" is warranted. But the Rating Bureau will continue to track insurers' experience, and wait to propose any change to take effect starting Jan. 1.

Insurance companies are not bound by the insurance commissioner but often listen to the recommendations of the advisory committee in setting rates. The committee is based out of San Francisco.

Originally posted at InjuryBoard by Shannon Weidemann

Carmichael Man Charged With Workers' Comp Fraud

Shannon Weidemann — Thu, 20 Mar 2008 07:39:33 GMT

A Carmichael man is being charged with workers' compensation fraud after collecting over $150,000 from the state of California. He was a worker at the Preston Youth Correctional Facility and claims he was assaulted by an inmate there. He claims his injuries were so severe he could not work.

The following day, Bourdaniotis allegedly took and passed the Department of Real Estate's salesperson examination, which had a 63 percent failure rate on that day, according to the release.
All this came while Bourdaniotis allegedly claimed his injuries were so debilitating that he "could not follow the plot of a TV program," the release said.
In later months, investigators found that Bourdaniotis got a state contractor's license while still on disability, the release said.

The man has been charged with six counts of felony workers' compensation fraud. He faces up to 30 years in prison if convicted.

Originally posted at InjuryBoard by Shannon Weidemann