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Searching for Articles published in November 2016.
Found 15 Results.

Federal Judge Refuses to Block New OSHA Anti-Retaliation Rule from Taking Effect Tomorrow

Posted on November 30, 2016, Authored by Robert J. Reinertson
Robert J. Reinertson
Attorney
Wausau Office
, Filed under Employment

A federal judge has refused to issue a preliminary injunction to block OSHA’s new anti-retaliation and discrimination rule from taking effect as scheduled.  This means that tomorrow, December 1, the rule prohibiting employers from retaliating or discriminating against employees for reporting workplace injuries and illnesses will take effect. Multiple plaintiffs have sued OSHA in federal court in Texas seeking to prevent the new rule from going into effect.  The rule has been particularly controversial because it is OSHA’s position that it will limit post-incident drug testing and workplace safety incentive programs and allow it the opportunity to undertake more aggressive enforcement activities. The other part of the rule, which requires electronic reporting of workplace injuries and illnesses, will take effect as scheduled on January 1, 2017.  This has also been controversial due to OSHA’s plan to post company injury and illness information on its website. Even though the judge declined to issue a preliminary injunction, the Texas lawsuit will continue as the plaintiffs seek to have the new rule declared unlawful and set aside permanently.  However, it is important to remember that compliance with the rule must begin immediately. Ruder Ware’s employment and labor team is knowledgeable about the new OSHA rule and can assist you with questions and implementation.

Tortious Interference with Contract/Employment Relationship/Truthfulness of Statements/Defense to Tort Claim

A recent ruling from the Seventh Circuit Court of Appeals extended the notion of “truth as a defense” to a tortious interference with employment claim under Wisconsin law.  This establishes a sound defense to a claim by an employee against other employees that they have tortiously interfered with the employee’s contract for employment with a business. In this action, a deputy director of the Marshfield Clinic Research Foundation brought suit against other individuals within the Marshfield Clinic System alleging these individuals made false and improper statements to the Board of Directors of the Clinic which resulted in the employee being terminated from employment.  The Court of Appeals found the statements made by the other employees were truthful and therefore were considered privileged statements that could not be used to support a claim by this deputy director for tortious interference with his employment by Marshfield Clinic.  The defense that statements were substantially true would normally be used as a defense in a libel/slander claim, but under Wisconsin law, there is an exception to a claim of tortious interference with contract (employment) if the claim is based upon statements that were true or substantially true.  This exception prevents an individual from pursuing legal action alleging tortious interference if it is shown that the statements being relied upon were in fact true or substantially true.  No Wisconsin court has ruled on this legal argument; however, the Seventh Circuit Court of Appeals wrote in its decision that it believes that the Wisconsin Supreme Court would apply the same exception if the matter were presented to the Court in a state proceeding.  This ruling gives protection to employees against claims by others in the workplace provided the employees are engaging in truthful conduct and relying upon truthful information in the statements being made that affect the employment rights of another person.

Breaking News: Judge Says He Will Issue Ruling on November 22 Regarding DOL Proposed OT Rule!

Posted on November 17, 2016, Authored by Sara J. Ackermann
Sara J. Ackermann
Attorney
Wausau Office
, Filed under Employment

As we reported recently, (see DOL Overtime Rule Update: Breaking News!!!!!) 21 States and multiple business groups have filed suit in the Eastern District of Texas seeking a delay in the implementation of the proposed OT rule set for December 1.   Yesterday, the judge assigned to that case advised the parties he will issue his ruling on November 22.  We will keep you posted as to the outcome of that ruling.

Taxes Under a Trump Administration

Posted on November 10, 2016, Authored by Mark J. Bradley
Mark J. Bradley
Attorney
Wausau Office
,

Donald Trump won more than 270 votes in the Electoral College and thus on January 20, 2017 he is going to become the 45th president of the United States.  In anticipation of that event, congressional tax writers and proponents for tax overhaul are optimistically planning to move bipartisan tax legislation forward in the first part of 2017.  In doing so, they will have to reconcile differences in the proposals put forward by the president-elect during the campaign and by leaders of the House of Representatives (think Wisconsin Congressman Paul Ryan) earlier this year. Donald Trump’s tax plan would reform the federal tax code by reducing marginal income tax rates for all individuals and businesses, increasing standard deduction amounts, repealing personal exemptions, capping itemized deductions, repealing the individual and corporate alternative minimum taxes (AMT), repealing the 3.8 percent net investment income tax (NIIT), and repealing the federal estate tax.  The details of how some of these proposals would be implemented is not clear. The Trump tax plan would create three ordinary income tax brackets of 12 percent, 25 percent and 33 percent for individuals, maintaining the current capital gains tax rates of 0 percent, 15 percent and 20 percent.  It would also increase the standard deduction from $6,300 to $15,000 for single filers and from $12,600 to $30,000 for married couples filing jointly, eliminating personal exemptions.  Itemized deductions would be capped at $100,000 for single filers and at $200,000 for married joint filers.  So-called tax carried interest income would be taxed at ordinary income tax rates.  Finally, an income tax deduction would no longer be allowed for contributions of appreciated assets to a private charity established by the decedent or the decedent’s relatives. On the business side, the Trump plan reduces the corporate income tax rate from 35 percent to 15 percent, with the reduced tax rate “available to all businesses, both big and small, that want to retain the profits within the business.” It is unclear whether that means the 15 percent tax rate would apply to all business income or only to businesses that are organized as C corporations, with the ordinary individual tax rates applying to the income of pass-through businesses, such as partnerships and S corporations.  The Trump plan also eliminates most corporate tax expenditures except the research and development credit.  Corporate profits held offshore are subjected to a one-time 10 percent deemed repatriation tax, thus ending the deferral of tax on profits held offshore, which under current law are not subject to U.S. tax until they are repatriated. The Trump plan repeals all federal transfer taxes -- gift, estate tax and generation-skipping transfer taxes.  In place of a transfer tax system (with a current 40% tax rate), the Trump plan proposes a capital gains tax (with an approximate 20% tax rate) on the difference between the date of death value of a decedent’s assets and the decedent’s basis.  (Think of “basis” as the starting point for measuring gain on the sale of an asset.)  Because of the relatively high estate, gift and generation-skipping tax exemptions (each at $5,450,000), those transfer taxes affect very few estates.  For example, only about two-tenths of one percent of all the people who will die in 2016 will have an estate large enough to attract the estate tax.  The capital gains tax proposed under the Trump tax plan also would affect very few beneficiaries because the plan exempts from tax the first $5 million of gains per decedent or $10 million per married couple. President-elect Trump’s proposed tax changes are estimated to reduce federal tax revenue by $6.2 trillion between 2016 and 2026, increasing the federal debt by approximately $7.2 trillion (including interest) over the same period if not offset by spending cuts. Under the Trump tax plan, nearly all taxpayers would see a reduction in federal taxes in 2017 and thereafter. Taxpayers with household incomes between $143,100 and $292,100 would see an average tax decrease of approximately $4,310. Those with incomes over $3.8 million—the top 0.1 percent—would see an average $1.07 million decrease in federal tax in 2017. Presidents can propose legislation but need Congress to pass it.  Both House Ways and Means Committee Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch have stated their readiness to move forward with bipartisan tax reform.  The devil, of course, is in the details.  Led by Speaker Paul Ryan, Republican House leaders released their plan for comprehensive tax reform in June of this year.  Their plan contains similarities to the Trump tax plan, but there are important differences.  Estimates are that both the Trump tax plan and the House GOP plan will increase the federal debt if not offset by spending cuts, which some members of Congress from both parties will require to gain their votes.  The effort to reach a compromise on tax legislation will be an early test of the Trump Administration’s ability to work with Congress.

When Does An Overpayment Become Fraud? How Simple Inattention Can Expose You to Penalties for Fraudulent Activities

Posted on November 11, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

If you are involved in any way in the health care system, it should be obvious by now that the government has committed ever increasing resources to the prosecution of fraud and abuse cases. Simply put, from a governmental standpoint, prosecuting fraud and abuse is good business. Every dollar the government puts into pursuing health care fraud and abuse brings a return of around 7 or 8 dollars.  That return on investment is likely to increase with the release of new inflation adjusted Federal penalties and a variety of mechanisms the government can now use to bring more cases under their radar. It is worthy to note we are not just talking about pursuing individuals who are intentionally trying to commit fraud on the system.  There are certainly clear cases where unsavory individuals create schemes to defraud the government.  What is really concerning is that well intentioned providers can be swept up in the system simply because they did not use enough diligence to detect incorrect billings or a number of other infractions.  For example, a simple overpayment can become a false claim if repayment is not made within 60 days after identification.  A provider can be deemed to have identified an overpayment by not taking reasonable steps to look for problems.  Nothing affirmative necessarily needs to be done in order to turn a simple overpayment into a false claim. There are numerous situations where unintentional activity (i.e. a billing or coding error) can result in being overpaid by the federal government under a governmental health care program. I don’t want to say this happens to everyone in the health care system, but it certainly happens to a lot of people usually as a result of some sort of neglect or misinterpretation of very complex regulations. Take for example the rules requiring physician supervision of various support personnel. These rules are extremely convoluted and it is hard to imagine that every doctor has a clear understanding of the level of supervision that is required in each situation.  Nevertheless, a billing occurs and if the proper supervision is later found to not be present and an overpayment results. The OIG might consider a false claim to have occurred if repayment is not made and the provider may be deemed to have knowledge of the supervision requirement and thus the overpayment.  This is an example of what the government considers to be “abuse.” No criminals are involved here, but an overpayment and technical abuse of the system has occurred. The manner in which this situation is dealt with becomes critically important in determining whether there is a simple correction of the situation or whether it is escalated to higher levels of culpability.  Let’s skip forward to a time when the doctor discovers a mistake has been made in the level of supervision that was provided in the past. What happens now is very important. First, let’s imagine that the doctor comes forward and admits the error to the Federal government. There is some money owed back to the governmental health program for the billings that occurred under the improperly supervised services. If the doctor lets it go without making prompt repayment the doctor’s potential exposure has just escalated into a completely different zone of risk and potential culpability. The failure to make repayment within 60 days of the doctor discovering the problem makes the Federal False Claim Act applicable.  Instead of just having to pay back the overpayment amount, the doctor is potentially exposed to three times the original overpayment plus a minimum penalty of $11,000 per claim and a maximum of nearly $22,000 per claim.  This case has now escalated from abuse into fraud. From here it is just a matter of establishing intent to make this a criminal case. This illustrates the need to continually identify risk areas where billing problems could occur.  Where risk is identified, audit and monitoring should occur to help identify anomalies.  Once discovered, problems should be dealt with promptly so a bad situation does not turn into something that has consequences that are completely unacceptable.  Most importantly, it is not a solution to whistle past the graveyard and hope the situation goes away.  These situations must be dealt with promptly, affirmatively, and decisively before they blossom into situations that are much more difficult to resolve.

Worker's Compensation: Opt Out in Wisconsin?

Posted on November 7, 2016, Authored by Russell W. Wilson
Russell W. Wilson
Attorney
Wausau Office
, Filed under Employment

In 2014 Oklahoma enacted a radical change to its workers’ compensation statute, and on September 13, 2016, the Oklahoma Supreme Court held that it violates the state constitution. The case is Dillard’s, Inc. v. Vasquez, 2016 OK 89. Some version of the Oklahoma legislative plan might be considered by the Wisconsin Legislature. This article explores the structure of what the Oklahoma Supreme Court majority opinion termed the “Opt Out Act.” Oklahoma enacted a dual workers’ compensation scheme on February 1, 2014. In doing so, the legislature repackaged its long-standing traditional workers’ compensation program to become known as the “Administrative Workers’ Compensation Act” (AWCA) and created the “Oklahoma Employee Injury Benefit Act” (referred to in the majority opinion as the “Opt Out Act” and in the main concurring opinion as the “OEIBA”). Whereas the AWAC is a traditional statutory workers’ compensation act, the Opt Out Act is an employee welfare benefit plan operated under the Employee Retirement Income Security Act of 1974 (ERISA). Under the new law Oklahoma employers were required to select one or the other. Opting out of workers’ compensation entirely was not allowed. Generally speaking, self-funded employee welfare benefit plans under ERISA are devised so as to vest the plan sponsor with maximum discretion to establish what benefits may be eligible for award. Claims administrators are sometimes appointed to review claims submitted by the beneficiary, here, the injured worker, although in some cases the employer is the claims administrator. The “hearing” is typically a paper review, not a contested case with adverse testimony. Likewise, appeals are usually a paper review. Decisions of the appeal adjudicator are final and binding. Judicial review in state or federal court is subject to narrow review on the paper record established during the claims process with deference to the plan sponsor’s decisions. ERISA, a federal statute, preempts state laws that govern such benefits, except for those state laws enacted solely to provide workers’ compensation benefits. Oklahoma’s Opt Out Act required certain benefit levels for work-related injuries to meet or exceed the same levels as those in the AWCA. In other words, items such as temporary total disability rates and permanent partial disability percentages under the Opt Out Act must meet or exceed those of the AWCA. The critical provision which was held to be unconstitutional provided, however, that no other provision of the AWCA defining covered injuries, medical management, dispute resolution or other process, funding, notices or penalties shall apply unless the plan sponsor expressly chose to do so. Moreover, all employers in Oklahoma under the AWCA and the Opt Out Act retained the full protection of the exclusive remedy of workers’ compensation under the dual scheme. A Dillard’s, Inc. employee, Jonnie Yvonne Vasquez, injured her neck and shoulder while lifting a shoe box in a Dillard’s department store in the fall of 2014. Dillard’s, Inc. had selected the Opt Out Act, and it denied her claim. Ms. Vasquez sought relief before the Oklahoma Workers’ Compensation Commission. Dillard’s, Inc. attempted to remove the matter to federal district court, but the federal judge, having found that the Opt Out Act is not pre-empted by ERISA because it is a workers’ compensation statute, sent the case back to the Oklahoma Commission. The Oklahoma Commission ruled that the Opt Out Act violates Oklahoma’s constitutional prohibition against “special laws.” Dillard’s, Inc. appealed to the Oklahoma Supreme Court, which affirmed the Commission’s ruling. The court found that the dual system creates two classes of employees, those who have work-related injuries or conditions whose employers selected statutory worker’s compensation benefits and those whose employers chose the Opt Out Act. “The core provision of the Opt Out Act . . . creates impermissible, unequal, and disparate treatment of a select group of injured workers. Therefore, we hold that the Oklahoma Employee Injury Benefit Act . . . is an unconstitutional special law under the Oklahoma Constitution . . .” (internal citations omitted). We understand that bills to establish similar opt out schemes have been introduced in Tennessee and South Carolina. The lobbyist for opt out plans is said to be the Association for Responsible Alternatives to Workers’ Compensation (ARAWC). It is said that ARAWC has met with elected officials in the Wisconsin Legislature.

When Can Violation of a Condition of Participation Result in False Claims Act Liability? Update on Escobar’s Materiality Standard

Posted on November 17, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

In June, I published a blog article on a decision of the United States Supreme Court that appeared to change the law applicable to “false certification” in the 7th Judicial Circuit Circuit.  The Supreme Court decision in Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), (“Escobar”) opened the door to finding liability under the Federal False Claims Act for certain violations of the conditions of participation applicable to a provider under the Medicare program.  Before the Escobar decision, 7th Judicial Circuit Courts maintained that a violation of conditions of participation alone could not support a False Claims Act case.  Only a violation of separate “conditions of payment” could result in those penalties.  These cases are important because they define when the failure to meet a simple “conditions of participation” can lead to imposition of False Claims Act damages and a potential whistleblower suit. The Escobar case rejected the distinction between conditions of payment and conditions of participation.  Instead, the Escobar Court found that the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive.  Instead, in the Court’s opinion “what matters is not the label that the Government attaches to a requirement, but whether the defendant knowingly violated a requirement that the defendant knows is material to the Government’s payment decision.”  The Court replaced the “bright line” distinction between conditions of payment and conditions of participation with a less certain “materiality” requirement.  The Escobar Court stated that the “materiality” standard is “rigorous” and “demanding” and requires some indication that the government would not have paid the claim had it known of the deficiency.  Providers were given very little further guidance on how to apply the new “materiality” standard. Since Escobar was decided, various Federal courts have issued decisions interpreting the “materiality” requirement.  Previous law in the 7th Judicial Circuit Court was based on United States v. Sanford–Brown, Ltd., which was decided shortly before the Escobar case.  Sanford-Brown created a strict distinction between conditions of payment and conditions of participation; finding that only a breach of a condition of payment could lead to imposition of a penalty under a false implied certification theory.  After the Escobar case was decided, the U.S. Supreme Court remanded Sanford-Brown back to the 7th Judicial Circuit Court for further consideration consistent with the Escobar holding. When the 7th Judicial Circuit Court considered the case again, it found that no proof had been presented to indicate that the government’s decision to pay the applicable claim would have been any different if the applicable condition had been met.  The Court rather strictly applied the Escobar materiality standard and found that it is not enough to only show that the government would have been entitled to decline payment.  Apparently, the Court considered it important that providing accurate information was not likely to have changed the government’s payment decision.  United States v. Sanford-Brown , No. 14-2506, 2016 WL 6205746 (7th Cir. Oct. 24, 2016).

Breaking News: Texas Judge Delays Overtime Rule!

Posted on November 22, 2016, Authored by Sara J. Ackermann
Sara J. Ackermann
Attorney
Wausau Office
, Filed under Employment

Late today, a Texas federal district court judge issued a ruling that DELAYS the Department of Labor’s proposed overtime rule that was set to go into effect on December 1.  This means that a hearing will be scheduled to determine whether or not the DOL exceeded its authority in issuing the Rule that would increase the salary threshold for white collar exemptions.  Employers may want to consider delaying any changes to employees’ compensation pending the final outcome of this litigation.  At this time, we do not know how long it will be until a hearing will be scheduled.  We will keep you posted on further developments.  In the meantime, contact your Ruder Ware labor and employment team with questions.

CMS Releases the First Comprehensive Overhaul of Nursing Home Conditions of Participation in Over 25 Years

Posted on November 2, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

On October 4, 2016, the Center for Medicare and Medicaid Services (CMS) published a final rule to revise the requirements that Long-Term Care facilities must meet to participate in the Medicare and Medicaid programs. CMS states that the revisions to nursing home regulations are intended to reflect the substantial advances that have been made in the theory and practice of service delivery and safety. The revisions are part of efforts by CMS to achieve broad-based improvements in the quality of health care and in patient safety, while at the same time reducing procedural burdens on providers.  Whether the new regulations actually meet the last of these goals is open to question because the new regulations will require nursing homes to modify their policies, procedures and operations to meet these new Federal standards. The final regulations are the first comprehensive review and update to nursing home conditions of participation since 1991.  CMS cites significant developments and innovations in resident care and quality assessment practices and changes in the clinical complexity of nursing home residents since the last major regulatory revisions as providing significant reason to revise the regulations.  What resulted is a comprehensive revision of both the content and organization to the regulations that govern nursing facilities. Many of the revised requirements are aimed at aligning requirements with current clinical practice standards to improve resident safety along with the quality and effectiveness of care and services delivered to residents. The following contain a high level description of some major provisions of the new regulations.  Each of these areas contain significant new requirements and/or revisions to past requirements.  For more detail please consult the full regulations.  Some of the general areas covered by the new regulations include the following: Resident Abuse, Neglect and Exploitation.  Nursing facilities are now affirmatively required to report allegations of abusive conduct toward residents.  Facilities are also prohibited from employing individuals who have had disciplinary action taken against their professional license by a state licensure body as a result of a finding of abuse, neglect, mistreatment of residents or misappropriation of their property.  This standard will require nursing facilities to modify their employment screening requirements to assure that state past disciplinary records are obtained and reviewed prior to retaining staff. Admission, Transfer, and Discharge Rights.  The new regulations require that transfer or discharge be documented in the patient’s medical chart and that specific information be shared with the provider or facility who receives the transferred resident. Resident Assessments.  The new regulations clarify requirements for appropriate coordination of a resident’s assessment with the Preadmission Screening and Resident Review (PASARR) program under Medicaid. Comprehensive Person-Centered Care Planning.  A new section is added to § 483.21 which requires nursing facilities to develop and implement a baseline care plan for each resident.  The baseline plan must be developed within 48 hours of a patient’s admission and must include the instructions needed to provide effective and person-centered care meeting professional standards of quality care. A nurse aide and a member of the food and nutrition services staff are required members of the interdisciplinary team that develops the comprehensive care plan. Discharge Planning Process.  The new regulations require nursing facilities to develop and implement a discharge planning process that focuses on the resident’s discharge goals and prepares residents to be active partners in post-discharge care, in effective transitions, and in the reduction of factors leading to preventable re-admissions. Discharge planning requirements that were mandated under the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) have also been integrated into discharge planning requirements. Quality of Care Requirements.  The regulations reiterate general quality standards that are required to be followed by nursing facilities.  Facilities must assure that each resident receive and the facility provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, consistent with the resident’s comprehensive assessment and plan of care. Quality of Life.  Based on the comprehensive assessment of a resident, Facilities are required to ensure that residents receive treatment and care in accordance with professional standards of practice, the comprehensive person-centered care plan, and the residents’ choices. Physician Services.  The new regulations permit attending physicians to delegate dietary orders to qualified dietitians or other clinically qualified nutrition professionals and therapy orders to therapists. Nursing Services.  Competency requirements have been added for determining the sufficiency of nursing staff.  Nursing staffing requirements are based on a facility assessment and must include factors such as the number of residents, resident acuity, range of diagnoses, and the content of individual care plans. Behavioral Health Services.  New requirements are added focusing on the need to provide the necessary behavioral health care and services to residents, in accordance with their comprehensive assessment and plan of care.  Changes are made to minimum educational requirements for a social worker. Pharmacy Services.  Pharmacists are required to review a resident’s medical chart during each monthly drug regimen review. Existing requirements regarding ‘‘antipsychotic’’ drugs have been adjusted to refer to ‘‘psychotropic’’ drugs and define ‘‘psychotropic drug’’ to include drugs that affect brain activities associated with mental processes and behavior. Several provisions have been added that are intended to reduce or eliminate the need for psychotropic drugs, if not clinically contraindicated. Dental Services.  Skilled nursing facilities and nursing facilities are prohibited from charging Medicare residents for the loss or damage of dentures that is determined to be the responsibility of the facility.  Facilities are required to implement policies that detail when the loss or damage of dentures is the facility’s responsibility. Nursing facilities are also required to assist residents who are eligible to apply for reimbursement of dental services under the Medicaid state plan. Except in extraordinary circumstances, a referral for lost or damaged dentures must be made within 3 business days. Food and Nutrition Services.  Facilities are required to provide residents with a nourishing, palatable, well-balanced diet that meets their daily nutritional and special dietary needs.  Preferences of each resident must be taken into consideration. Facilities are required to employ sufficient staff with the appropriate competencies and skills sets to carry out the functions of dietary services. This includes the requirements that a director of food and nutrition services be designated. Facility-Wide Assessment Requirement.  Facilities are required to conduct, document, and annually review a facility-wide assessment to determine what resources are necessary to care for residents competently during both day-to-day operations and emergencies. Facilities are required to address in the facility assessment the facility’s resident population (that is, number of residents, overall types of care and staff competencies required by the residents, and cultural aspects), resources (for example, equipment, and overall personnel), and a facility-based and community-based risk assessment. Binding Arbitration Agreements. Facilities are prohibited from entering into binding arbitration with a resident or their representative until after a dispute arises between the parties. This requirement essentially prohibits the use of pre-dispute arbitration requirements. Quality Assurance and Performance Improvement (QAPI).  All LTC facilities are required to develop, implement, and maintain an effective comprehensive, data-driven QAPI program that focuses on systems of care, outcomes of care and quality of life. Infection Control.  Facilities are required to develop an Infection Prevention and Control Program (IPCP) that includes an Antibiotic Stewardship Program and designate at least one Infection Preventionist (IP). Compliance and Ethics Program.  Nursing facilities are required to have in effect a compliance and ethics program that has established written compliance and ethics standards, policies and procedures that are capable of reducing the prospect of criminal, civil, and administrative violations in accordance with section 1128I(b) of the Act.  These provisions implement the requirement under the Affordable Care Act which required CMS to develop the requirements for nursing home compliance programs. Physical Environment.   Facilities that are constructed, re-constructed, or newly certified after the effective date of this regulation may accommodate no more than two residents in a bedroom and contain a bathroom equipped with at least a commode and sink in each room. Training Requirements.  New provisions are added that define what constitutes an effective training program for all new and existing staff, individuals providing services under a contractual arrangement, and volunteers, consistent with their expected roles.

False Claims Act Basics – Known Overpayment Becomes False Claim

Posted on November 11, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

The Federal False Claims Act (“FCA”) provides a very strong enforcement tool to the federal government.  The FCA also provides the opportunity for whistleblowers to bring “qui tam” cases and collect a portion of the recovery where false claims are proved against the federal government. FCA recovery was originally intended to provide a remedy against unscrupulous civil war profiteers.  Penalties were enhanced when the FCA was dragged off the shelf in the 1980s in reaction to some of the overpricing of government contracts selling supplies to the federal government. Recently, the FCA has become one of the government’s prime enforcement tools to deter fraud in the federal health care programs. Historically, the FCA has been available when a health care provider falsely bills for covered services.  Triple damages and a $22,000 per claim penalty provide a strong deterrent in an industry that may make hundreds of claims per day. Recent legislation has expanded FCA liability to claims that the provider knows resulted in an overpayment if the provider does not make repayment within 60 days of obtaining knowledge of the wrongfully billed amount.  Some of the potential applications of this that makes a simple overpayment a false claim has generated much discussion among health care lawyers and compliance officers alike.  An organization deemed to have knowledge of the overpayment has been the subject of much speculation due to the ambiguities that exist in the new rule. It may be helpful to frame this discussion by touching on the general requirements that must be met in order to prove any claim under the Federal False Claims Act.  The three general elements that must be proved include: The submission of a claim to the federal government. In the health care context, the claim will normally be submitted to a government health program. The claim must be false. The claim must have been submitted knowingly.  Actual knowledge that the claim was false will always prove the knowledge requirement.  However, a FCA case can also be built around the submission of a claim with “reckless disregard” for its truth or falsity. Recent health care legislation, in particular the Fraud Enforcement Recovery Act of 2009, greatly expanded the scope of the FCA.  The FCA is now applicable to a wide variety of situations that would not have previously been covered.  For example, the failure to return an identified overpayment now becomes a false claim.  The potential remedies that a provider may face for not promptly repaying known overpayments creates a strong incentive for health care providers to monitor and audit their claims and set up processes that will catch improper billing that could ripen into the FCA. Reckless disregard or hiding your head in the sand like an ostrich is no longer a way to avoid massive potential FCA liability.  Compliance programs need to be amended appropriately to address the new potential legal and financial risk presented by these new penalties.  The compliance program should require active identification of potential risk areas.  Based on identification of risks, an audit program should be implemented to identify any potential compliance infractions.  Once identified, affirmative actions should be taken to correct the situation, make appropriate repayment, and/or self-disclose the violation to the government.

Provider Self-Disclosure Decisions – Voluntary Disclosure Process

Posted on November 11, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

The decision whether or not to voluntarily disclose non-compliance to the government can be very difficult.  Not every case is clear. Clearly not every situation where there has been a billing error amounts to fraud or wrongdoing requiring use of the self-disclosure protocol.  Many overpayments that are identified through audit can be dealt with at the intermediary level.  Where investigation raises questions about whether incorrect bills are “knowingly” submitted, the self-disclosure process may provide some mitigation of potential loss.  Situations where the provider perhaps “should have known” raise more difficult issues of analysis. The Office of Inspector General’s self-disclosure process is available when there is a potential violation of Federal law that could result in the imposition of Civil Monetary Penalties (CMP).  A simple determination that a billing error may have led to an overpayment is generally not covered by the protocol.  It is only when the error presents potential CMP’s that the protocol can be used to self-disclose the violation to the Federal government.  For example, self-disclosure might be considered where an overpayment is not repaid within 60 days after discovery by the provider or where there is a violation of the anti-kickback statute discovered. The situation is also complicated because a potential whistleblower may view a situation much differently than a provider who finds what it believes to be an innocent mistake through the audit process.  A provider may sincerely believe that there was no “wrongdoing” and that a simple mistake has been identified.  Finding such a mistake may actually be evidence the provider’s compliance efforts are working.  On the other hand, there is a whole legal profession out there now that is advertising for people to come forward as whistleblowers.  With potential recovery under the False Claims Act of three times the overpayment plus up to $22,000 per claim, whistleblower lawyers have strong incentive to attempt to turn what the provider believes to be an innocent mistake into a false claim.  The damage calculation creates a big payday for whistleblower plaintiffs and their lawyer, who take these cases on a contingency fee basis. Generally speaking when errors are discovered the provider’s best bet is to be forthright and deal with the matter “head on.”  A complete internal investigation should be conducted to determine the precise nature of the issues and to identify the extent of wrongdoing.  Based on the outcome of the investigation, the provider can determine whether a simple repayment can be used or whether there may be reason to go through the formal self-disclosure process. Anyone who has worked with reimbursement rules will realize that payment policies, rules and regulations are not always clear.  It is often difficult to determine whether there is even a violation of applicable rules or whether an overpayment actually exists.  Legal ambiguities further complicate the self-disclosure decision.  The precise nature of any legal ambiguities involved in the specific case need to be completely documented.  If a decision is made that there has been no wrongdoing, the legal analysis should be laid out in writing and in detail and a reasonable judgment should be made regarding the interpretation of applicable legal standards.  If self-disclosure is made in situations involving legal ambiguities, those ambiguities should be explained in detail as part of the self-disclosure. In the end, a provider facing potential self-disclosure must follow a reasonable process to make a reasoned decision in the face of significant risk and uncertainty. Perhaps most importantly, it is never a good alternative to pretend the situation will never be discovered or brought to light.  These cases can arise in strange and unexpected ways.  It is best to assume a discovered compliance violation will eventually be brought to light.  In most cases it is advantageous for the provider to affirmatively bring the matter forward rather than waiting for the government or a whistleblower to bring a claim.  When that happens, it is much more difficult to resolve the issue.

Western District of Wisconsin Ranks 3rd in Chapter 12 Farm Bankruptcy Filings

The harvest is plenty, but with corn at $3/bushel, soybeans at $9/bushel, and milk at $15-$16/hundred weight, the profits are few.  Did you know that in 2015 and 2016, the Western District of Wisconsin ranks 3rd (out of 94 federal judicial districts) for most Chapter 12 farm bankruptcy filings?  In 2015, the Western District of Wisconsin (16 filings) was tied with the Northern District of New York (16) and behind only the Middle District of Georgia (20), the Eastern District of California (20), and the Middle District of Florida (18). Similarly, through three quarters of 2016, the Western District of Wisconsin (17 filings) again ranks 3rd, which is tied with Kansas (17) and behind only the Middle District of Georgia (25) and Puerto Rico (21). While it is true that overall bankruptcy filings in the Western District of Wisconsin (and throughout the country) are down fairly significantly; unfortunately, Chapter 12 cases are not following that downward trend and remain steady.  We have certainly noticed an increase in Chapter 12 cases that we are handling for our secured creditor clients.  We believe that trend will continue, as debtors’ counsel are indicating that more Chapter 12 cases “are on the way.” Stay tuned for further blog postings that will identify common Chapter 12 issues and what you can do to prepare for a Chapter 12 filing by your loan customer.

Recent Disability Discrimination Cases Outline Employer Responsibilities

Two recent decisions regarding disability discrimination have outlined an employer’s responsibilities when dealing with a potential claim of disability and need for accommodation.  These decisions offer reminders for employers of the importance of recognizing potential disability claims and addressing them promptly. In the first decision, the Eighth Circuit Court of Appeals concluded that an employee had made an implied request for an accommodation even though the employee did not specifically state that she was requesting an accommodation because of her medical condition involving weakness in her back.  The employer required this employee, along with many others, to undergo testing both for competence and physical ability to perform their duties and the employee responded with a medical certification from her physician indicating she was not able to perform the agility testing and needed four months of physical therapy before being able to perform the physical agility test.  The employer terminated the employee because of the inability to show that she was able to perform the various duties of her position and did not acknowledge or address the doctor’s note indicating the need for additional time.  The Court of Appeals concluded that the submittal of the doctor’s note was an implied request for an accommodation (of four more months of physical therapy) and that the employer did not reasonably accommodate this implied request for an accommodation.  Employers are reminded that these types of doctors’ notes will likely be considered a request for an accommodation that must be reviewed and analyzed by the employer to determine whether the accommodation request is reasonable and appropriate. In a second decision, the highest Court of the land, the U.S. Supreme Court, refused to consider a ruling by the same Eighth Circuit Court of Appeals which held that an applicant for a position did not have either actual or “regarded as” disability based upon obesity.  A conditional offer of employment was rescinded after the employee failed a pre-employment physical because the employee suffered from Class 3 obesity and therefore was considered not qualified for the position.  The Eighth Circuit Court of Appeals held that the applicant did not suffer from a physical impairment that was caused by an underlying psychological disorder or condition and therefore the obesity condition of the applicant did not rise to the level of a disability.  The Eighth Circuit also concluded that the applicant was not “regarded as” being disabled because the Americans with Disabilities Act did not support a claim of disability discrimination based upon a perception that a physical condition would be defined as a disability.  Other Circuit Courts have found that obesity is a disabling condition because the employer has assumed that the employee is not able to perform the duties of the position due to the obesity diagnosis.  The United States Supreme Court did not take this case which thereby supported the ruling from the Eighth Circuit that a perceived disability based upon a physical characteristic did not rise to a protected condition.  The case law for now is settled that gross obesity does not automatically constitute a disabling condition but employers must be careful how they view the medical condition of an applicant to avoid potential liability for discrimination claims. The area of disability discrimination continues to be in a state of flux as courts throughout the country take differing views of what constitutes a disabling condition and whether the employee is protected under the ADA.

Lincoln’s Law Becomes Even More Absurd When Applied to the Health Care Industry

Posted on November 3, 2016, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

When Congress originally passed the False Claims Act (31 USC §§ 3729-3733), no one had the health care system in mind.  The False Claims Act was also commonly referred to as the “Lincoln Law”.  The original law was focused on unscrupulous vendors who provided overpriced and often faulty supplies to the military during the Civil War.  In modern times, the False Claims Act has been commonly applied when claims are made under Federal health care programs.  The application of the law that was originally intended to penalize war profiteers leads to draconian results when applied to the health care industry where numerous smaller claims are made by a provider every day.  However, because this law has become a significant source of revenue for the Federal government, we are not likely to see any politicians running to adjust the law to make it consistent with the realities of the modern health care system. The Lincoln Law was unique in several ways.  The law created “qui tam” rights that permit individuals to bring suit alleging false claims and to retain a portion of the award.  The amount of potential award available to a qui tam claimant depends on whether the government chooses to take over the case after it is brought.  With Federal remedies of nearly $22,000 per claim, potential claimants have a real chance for a payday.  In fact, private litigants are often even more inflexible than the Federal government when it comes to settling a potential fraud claim. The False Claims Act was strengthened in 1986 in response to some of the much publicized $1,000 toilet seats and other abuses with respect to companies supplying the United States military.  The 1986 amendments to the False Claims Act provided for treble damages plus civil penalties of between $5,000 and $11,000 per claim.  These legislative changes were intended to add real incentive for “qui tam” litigants to bring fraud claims.  Just a few months ago the per claim penalty under the False Claims Act was increased to a minimum of $11,000 and a maximum of nearly $22,000. The health care industry was never the real target of the False Claims Act.  In fact, when the original “Lincoln Law” was passed in the 1860’s, there was no federal health care program in existence.  From the inception of the False Claims Act through the 1986 amendments, the primary target had been the suppliers to the defense industry.  The defense industry generally makes claims on a monthly or other periodic basis for large amounts of supplies.  Although the 1986 amendments added substantial penalties for making false claims, the impact on the defense industry does not come close to matching the impact on health care providers. In health care, a single hospital may make hundreds of claims to the federal government per day.  False claim allegations can cover a number of years, greatly increasing the number and value of claims that may be at issue.  When treble damages plus $11,000 to $22,000 per claim are applied on top of the actual amount of a “fraudulent” claim, the obligation amount can become staggering. When coupled with new regulations that impute False Claims Act liability based on the failure to repay an overpayment, the result can be really quite absurd and greatly disproportionate to the level of culpability involved.  For example, a simple overpayment created by a routine billing error that is not properly identified can result in potential False Claims Act liability in the millions of dollars.  Under new Federal law, failure to repay a known overpayment within 60 days creates a False Claim.  However, actual knowledge is not required.  Identification of the overpayment can be imputed if the provider should have discovered the overpayment. Even though the False Claims Act was not originally designed to target the health care industry, there does not seem to be any momentum toward mitigating these extreme results.  To the contrary, the government is quite content to leave these disproportionate penalties in place as part of its effort to reduce cost of health care (and to generate additional revenues) by assessing astronomical fines against health care providers and to hold these penalties over their heads to force health care providers to take extreme actions to prevent compliance problems.  The government is taking a “return on investment” approach to health care fraud enforcement.  The False Claims Act allows the government to put its thumb on the scale in the “return on investment” game.  The qui tam provisions provide the government with “quasi agents” who may be disgruntled employees or others who can scout out potential claims, bring them to the government's attention, and take a piece of the financial reward. Providers have only one real way to reduce the disproportionate impact of the False Claims Act on their operations.  This is to create an effective compliance program that proactively detects problems so they can be addressed and corrected before they create excessive risk.  Compliance programs are an outgrowth of the federal sentencing guidelines that permit reduced corporate penalties for fraud if an “effective” compliance program will actually reduce the risk of a violation occurring or depending because it forces the organization to proactively look for compliance problems and correct them before they become insurmountable.  An effective compliance program will also include regular training to staff which also reduces the risk of compliance problems.

Information Technology Administrator

Posted on November 17, 2016, Authored by ,

  Current Openings Ruder Ware Law Firm, a continuously growing business law firm with offices in both Wausau and Eau Claire, Wisconsin, is seeking a talented individual to fill a full-time IT Administrator position.  The IT Administrator position is responsible for implementing and administering the IT infrastructure of a complex multi-office law firm. This position works closely with all IT staff to provide quality end user support in both the Wausau and Eau Claire offices.  The IT Administrator is integral in the strategic planning of the infrastructure and works closely with the Chief Operating Officer on various IT projects. The systems managed by this position are critical to the successful operations of the Firm.  The position is housed in the Wausau office, but does include frequent travel to the Eau Claire office.  Essential Duties and Responsibilities (core competencies):  Administer the hardware and software deployment process, ensuring all equipment is up to date allowing for a high level of efficiency for Ruder Ware employees. Extensive knowledge and expertise in MS Office, particularly MS Word. Repair and/or replace defective hardware as needed. Manage hardware lease and other IT vendor agreements. Provide IT orientation and training to all new employees. Develop and administer ongoing IT hardware and software training to all employees. Prepare and administer an annual budget for applicable departments or units. Prepare an annual personal business plan consistent with firm goals and operating procedures.  Report on business plan progress throughout the year as requested. Make presentations to various constituencies as required. Attend courses or access training needed to keep skills and knowledge up to date. Work constructively and efficiently with other members of the administrative team to provide seamless assistance to internal and external clients. Minimum Education Required:  Associate’s degree in Information Technology or related field or equivalent work experience. Minimum Related Years of Experience Required:  Three to five years of diversified, progressive experience in IT with law firm experience preferred. Salary and Wages:  Will be based on experience and market industry standards along with a rich benefit package to include but not limited to health, life, and disability insurance, paid vacation, 401(k) Profit Sharing Plan, Section 125 Flexible Spending, and Health Savings Account contribution. Please submit resume to lhuss@ruderware.com.