Functional Capacity Evaluations are improper for a variety of reasons.  First, the ability to perform a function on one occasion, for a few seconds, does not mean that a person can repeatedly perform that function on an hourly or daily basis.  There are published journal articles — internationally — that have commented upon the limited or poor level of usefulness of such tests.  Second, the particular test or command requested usually seeks a person to use an infirm or compromised body part or mechanism and the claimant may be hesitant or fearful of injury or pain and then can be easily accused of  what the insurance companies call “sub-maximal effort”.  And finally, there is a possibility of injury during these exercises and the long term care insurance company is unlikely to take financial responsibility for any injuries.

Claimants with long term care insurance claims should be armed with legal knowledge as their rights and as to what is proper or improper in the handling of their long term care claims.  You can contact us with any questions at http://www.quadrinoschwartz.com/contact/.

The law states that the insurance company or health plan cannot initiate an overpayment recovery effort more than 2 years after the doctor received the original payment from the insurer or health plan. The exception to the 2 year rule is when the insurer or health plan has a reasonable belief of fraud, intentional misconduct, or abusive billing or when the request for an audit is made by a self insured plan or there is a state or federal government program requiring the audit. The law defines “abusive billing” as billing practices that result in the submission of claims that are not consistent with sound fiscal, business, or medical practices and are engaged in at such frequency and for such a period of time as to reflect a consistent course of conduct.

Rather than answering questions and setting real standards, this new law actually raises a number of issues. The law only determines when an insurer or health plan can “initiate” an overpayment “recovery effort.” It does not state that after an audit is initiated and an effort has been made, that a refund must be paid by the doctor just because the insurance company has requested the refund. In short, while the insurance companies appear to be using the existence of the new law to accelerate their conduct of audits,  the law has not given the insurers or the health plans additional legal rights.  The law has not overruled the court decisions requiring proof of actual fraud in order for a refund to be due.

The law only addresses, in this writer’s view, the timing for the initiation of an audit or overpayment recovery request, not whether the doctor will indeed owe a repayment under any particular circumstance. For those doctors who are participating in a number of plans, there should be a review of the contract the doctor entered into with the insurer or health plan to see whether there are specific audit procedures and a delineation of significant rights granted to the insurer or the health plan. If the doctor has agreed in a contract to make a repayment under defined circumstances, the written agreement would supersede the fraud court decisions and control the relationship between the doctor and the insurer or health plan. The language in these contracts needs to be reviewed carefully, and qualified legal counsel may indeed identify numerous barriers that would prevent the insurer or health plan from obtaining a repayment from the doctor. Out-of-network plans present an entirely different legal situation, since the doctor has not entered into a contract with the insurer or health plan. There is no right to an “audit” in such cases and the doctor is in a stronger position when dealing with an audit request from an out-of-network insurer or health plan.

There are many additional legal issues involved and thus medical providers should seek highly qualified counsel when dealing with requests for medical records by insurers, health plans, or their affiliates on claims that have already been paid.

In the vast majority of situations, the health insurers have no entitlement to a refund whatsoever. For example, if the medical provider is out of network, there is no contractual or other legal obligation to undergo the audit.  However, the request by the insurer can indeed provide the medical provider with an opportunity to actually investigate the insurer, instead of having the insurer investigate the medical provider.  If the insurer is simply attempting to use the process to intimidate the medical provider, a well-informed and proper response by qualified legal counsel can set things back on track between the provider and the insurer.  Even if there are real issues of concern, there are ways to use the tools provided by ERISA (employee benefits law and regulations) to uncover the issues and resolve the problems.

Medical providers should know that they have much more leverage in this context than they realize.  With the help of experienced health insurance lawyers to identify the issues and their defenses, the medical providers can maximize their chances of success.

Quadrino Schwartz is also on the cutting edge in this area of health insurance law and has a track record of success in defending medical providers facing retrospective reviews / audits.

RICO provides for “treble damages”, meaning that the loser could be required to pay triple the amount of any judgment obtained in court.  In the ongoing effort to intimidate medical providers, the auto insurers have been trying to use RICO as a weapon.

In one such recent case,  Quadrino Schwartz obtained a dismissal of a RICO lawsuit brought by a major insurer.  The Court ruled in GEICO v. Hollis Medical Care, No. 103431 (EDNY) that GEICO did not allege and cannot prove the existence of a racketeering “enterprise” and thus that portion of GEICO’s case was dismissed.

The sole legal basis for Blue Shield’s denial was that “residential care” was not covered under the Blue Shield health insurance policy issued to Ms. Harlick.  In the claims and ERISA appeals process, Blue Shield did not assert that the mental health care was not “medically necessary”.   In its denial, it had relied solely upon its legal position as to care rendered in a “residential facility”.

A federal judge in California initially ruled against Ms. Harlick and dismissed her case.  On appeal, however, the 9th Circuit Court of Appeals reversed the decision and dealt a blow to Blue Shield.  See Harlick, V. Blue Shield of California,2011 Wl 3796177 (9th Cir, 2011). After finding that the residential care was covered due to California’s Parity law, the Court ruled that Blue Shield could not assert a medical necessity defense in the lawsuit because it did not do so earlier, in the claims process.  Blue Shield was thus ordered to pay in full for the many months of treatment provided to Ms. Harlick.

An insurance company’s late assertion of a defense to a health care claim is a violation of the ERISA regulations that govern health insurance claims under group insurance plans.  The health insurance lawyers at Quadrino Schwartz frequently use these regulations as weapons in the settlement and litigation of health care claims on behalf of medical providers and patients.

The owner of the building was a mortgage company that had taken title by foreclosure. After the fire, the insurer alleged that the building was worth nothing because it was an abandoned apartment complex. The insurer also refused to pay claiming that it should have been notified that the building was vacant.

The jury rejected the insurance company’s arguments and found that it acted in bad faith.

The case was venued in the District of Colorado.

See James River Ins. Co. v. Rapid Funding, 07-cv-01146.

A drunk driver was sued for severely injuring a couple when he crossed a divider and crashed his pickup truck into an innocent couple, injuring both of them severely. They were hospitalized for over a month. His insurer did not tell him that his insurance policy had a limit that was likely to be exceeded by this significant case, and it refused to settle on his behalf.

The drunk driver worked out a $5 million settlement with the injured couple and then allowed them to pursue his insurance company for its bad faith conduct in the handling of the liability claim against him, under his insurance policy. Allstate had an opportunity to resolve the case at an early stage, but by refusing to do so, it lost the opportunity and left its insured exposed for millions of dollars in liability to the insured couple.

After a trial on the bad faith case, the jury returned a verdict for $5.8 million in damages to compensate the injured couple for their injuries and financial harm and $10.5 million in punitive damages to punish Allstate for its conduct.

On appeal, the Court in Johnson v. Allstate, WD68169 Mo. App. West Dist. 2008, the court found that Allstate had exhibited a “reckless disregard” for its policyholder and upheld the verdict. The liability had been clear and Allstate failed to investigate and denied coverage in a manner that was a clear breach to its policyholder.

In Aecon Buildings, Inc. v. Zurich of North America et al. No. CO7-832MJP (WD Wash, 2008), Aecon was faced with a number of construction defect claims from an Indian reservation upon which it was building the casino. It sued its subcontractors, seeking recovery from them, and the subcontractors tendered those legal claims to their insurers. Those insurers refused to defend and indemnify the subcontractors.

After a mediation in which Aecon settled the dispute with the owner for $3.75 million, it pursued the insurers for the subcontractors for reimbursement, alleging a bad faith investigation and an unreasonable coverage determination under the insurance policies in question. The claims were asserted under Washington’s Consumer Protection Act and under the common law duty of good faith and fair dealing under the insurance contracts.

The court found that even if it is ultimately found that coverage does not exist and there was never a duty to defend, Aecon can still proceed against the insurers for its bad faith and improper investigation and that due to their bad faith they are estopped from denying coverage.

Beginning with Allstate and ending with Liberty Mutual, with companies such as AIG, Conseco, WellPoint and Farmers in between, the list is a comprehensive and detailed report built on research and investigation of court documents, FBI records, state investigations and more. This is no late night TV show top ten list, but 29 pages packed with disturbing information.

As you read through the report, underlying the frustration and anger is a sinking feeling that this is a David and Goliath situation. As the insured, you’re likely to feel trapped, especially after reading about things such as the Powerpoint slide prepared for Allstate which features “an alligator and the caption ‘sit and wait’—emphasizing that delaying claims will increase the likelihood that the claimant gives up. According to former Allstate agent Shannon Kmatz, this would make claims ‘so expensive and so time-consuming that lawyers would start refusing to help clients.’”

If it was only one corrupt insurance company about which we were reading, it wouldn’t be so disheartening. But a list of ten (and you can be sure these ten aren’t the only ones employing the tactics of ‘deny, delay, defend’) indicates that it’s not an anomaly but a business model. These companies profit from lying, evading and taking advantage of their policyholders. It’s a situation that cannot continue.

Luckily the report isn’t all gloom and doom. The bad is tempered with the good, if you know how to see it, as with this quote about Unum, listed as the second worst Insurance Company, “Despite doctors’ orders to stop working, Unum told [the insured] he was not disabled and could still work—a decision the U.S. Ninth Circuit Court of Appeals would later describe as ‘defying medical science.’” It is shocking to read about the reprehensible acts of these insurance companies, but encouraging to read that judges and juries do side with the insured in many cases, ordering the insurance companies to pay what they have promised.

Cases can be won. Change can be made. And you can get your claims paid. Our firm specializes in taking on Goliath, and we’re dedicated to helping you get the security you deserve.

After Hurricane Katrina, many Louisiana residents found themselves without insurance coverage based upon their homeowner’s policy’s “flood” exclusion. Although both the trial court and intermediate appellate courts ruled in favor of the insured homeowners by finding the exclusion to be unambiguous and inapplicable to man-made events such as the failure of a level, the Louisiana Supreme Court reversed the decision and ruled in favor of the insurance carriers by finding the “flood” exclusion unambiguously applied to both natural and man-made floods in Sher v. Lafayette Insurance Company, __So.2d___, 2008 WL 928486 (La. 2008).

But Hurricane Katrina victims aren’t the only ones fighting with insurance companies to define and receive coverage for damages from natural disasters. CNN’s Money Magazine, in its article entitled Insurers Playing Rough, discusses a disturbing trend by insurance carriers to make lowball settlement offers to their insureds following natural disasters, thereby exploiting the insured’s financial vulnerability in order to avoid paying the total value of their legitimate claims. As detailed by Money Magazine, the carriers offer far less than the claims are worth because many of their insureds who have had their homes and businesses destroyed are desperate to rebuild their lives and will accept paltry settlements to survive.

Homeowners wonder what they can do if their insurance companies deny their claims or give lower payouts than what they feel is deserved. Although the Money Magazine article mentioned above gives some suggestions, your best opportunity to receive the financial coverage you deserve comes from having an experienced professional on your side. Our firm is experienced in negotiating with insurance carriers, has extensive knowledge concerning the intricacies of insurance law, and—unlike your insurance carrier—we always have your best interests in mind.