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Searching for Articles published in January 2017.
Found 9 Results.

Limited Right to Ask for Discontinuance of Dues Deductions

Posted on January 10, 2017, Authored by Dean R. Dietrich, Filed under Employment

A recent federal court decision in Madison has struck down a portion of the Right-to-Work law applicable to all employers in Wisconsin.  Under this decision by U.S. District Judge William Conley, the Court has issued a permanent injunction stopping employers from following the language in Section 111.06(1)(i) of the Wisconsin Statutes.  This provision of the state statutes provides that an employer is prohibited from deducting dues from an employee paycheck if the employer receives a notice from an employee requesting discontinuance of the dues deductions within 30 days.  The Court determined that federal law would supersede the state law and set a different schedule for when an employee may notify an employer of discontinuance of dues deductions. The practical effect of this decision is to require an employee to follow the timelines listed in the union dues card for notifying the company to discontinue dues deductions.  Typically, the timeline identified in the union card is a specific date (usually 15 days or 30 days) prior to the date the employee signed the union card (annual anniversary) or the date of expiration of an existing Labor Agreement.  In other words, an employee has a limited time frame to notify the employer that he/she no longer wishes to have dues deducted from his/her paycheck.  The timeline is identified in the union dues card signed by the employee and complies with the federal law that allows the union to have an irrevocable contract for dues deductions of a maximum of one year. Many employers have pursued language in Labor Agreements that would allow an employee to give a 30-day notice of discontinuance of dues deductions at any time.  There is still a significant question whether these contract provisions would be enforceable in light of this new federal court ruling.  At this time, it is not clear whether an appeal will be taken as the federal court decision relies heavily upon a federal court case that has not been overturned by the United States Supreme Court.  Employers must now be careful how they handle the discontinuance of dues deductions when receiving a notice from an employee desiring to stop the automatic deduction of union dues from their paycheck.

The Problem of Lender "Inquiry Notice" Status

Posted on January 19, 2017, Authored by Randi L. Osberg, Filed under Banking and Financial Matters

If a lender is fully secured, can it just ignore suspicions of borrower misconduct?  The danger is that a lender could lose its collateral under these circumstances and be treated as an unsecured creditor.  This is exactly what happened to a lender that failed to inquire further about collateral pledged by a borrower that was engaged in fraud.  See In re Sentinel Management Group, Inc., 809 F.3d 958 (7th Cir. 2016). In the Sentinel case, an employee of the lender raised the following question to a member of his department: How could the borrower have pledged $300 million in collateral when the borrower only had about $20 million in capital?  Had the lender followed up on this suspicion, the lender would have discovered the borrower had illegally pledged securities that were owned by the borrower’s customers but transferred to a borrower-owned clearing account. [Ag lenders: Think about stored grain for a potentially equivalent situation.] When the borrower filed for bankruptcy, the Trustee sought to avoid the pledge of collateral to the lender as a fraudulent transfer.  The lender asserted a defense, namely, that the lender was a good-faith transferee of the collateral.  However, the Seventh Circuit held the lender had been put on notice to inquire further about the collateral.  Because the lender failed to follow up on the employee’s suspicion, the Seventh Circuit held that the lender was not a good-faith transferee and therefore, the pledge of collateral was avoided as a fraudulent transfer.  The end result was that the lender lost hundreds of millions of dollars of collateral. In the Sentinel case, the Seventh Circuit held that lenders who are put on “inquiry notice” are not good-faith transferees.  So, what does “inquiry notice” mean?  The Seventh Circuit indicates that the “term signifies awareness of suspicious facts that would have led a reasonable firm, acting diligently, to investigate further, and by doing so discover wrongdoing.” So, the takeaway here is to not ignore warning signs of a customer’s misconduct thinking “I’m okay.  I have sufficient collateral for my loan.  I don’t have to do anything.”  Further inquiry and action may be required.  For more information, please contact Randi Osberg, the author of this article.

National Origin Discrimination – A New Frontier?

Posted on January 4, 2017, Authored by Dean R. Dietrich, Filed under Employment

Immigration law is said to be the next major debate in both state legislatures and Congress.  While that debate will focus on the rights of immigrants to gain legal status in our country, employers can anticipate many new issues arising under national origin discrimination. I wrote about this topic several weeks ago, but now see it being played out in the courts.  A recent lawsuit was filed in the Federal District Court of the Middle District of Pennsylvania in which an employee has accused Verizon of violating workplace discrimination laws because she was terminated from employment allegedly due to her accent.  The employee received positive evaluations, but it was noted on several occasions that the Company was fearful customers would think their calls were being handled by someone in the Philippines or India because of her accent and then would assume that they would not receive proper service from the Company.  The accent of the employee was noted at various times with a directive that she eliminate the accent in order to continue employment with the Company.  This is just one version of how litigation may likely unfold regarding national origin discrimination. I am also very concerned about potential harassment in the workplace based on national origin.  The recent Guidance by the EEOC spells out various ways that a company can be subject to national origin discrimination claims.  The Guidance updated the definition of national origin discrimination to add language that suggests treating someone differently because they have a physical, cultural or linguistic characteristic of a different national origin group would constitute discrimination.  In other words, if employees or managers perceive an employee to be of a different national origin because of various characteristics, the employee will become protected and the employer can be subject to a national origin discrimination claim if differential treatment is allowed to occur. The new EEOC Guidance also suggests that a claim could be brought against an employer if the employer is found to have discriminated against an employee because of a “relationship” with a person of a different national origin.  This “relationship” concept comes from disability discrimination law and expands the area of potential claims based upon one’s known relationship or contact with someone of a different national origin.  Harassing conduct based upon a connection to another person of a different national origin would again form the basis for a claim under this line of argument. Employers need to recognize the potential for increased activity in the workplace based upon one’s national origin.  Educating managers about the potential liability and the need to exercise greater control over conduct in the workplace will be important to avoid the potential for heightened activity in this area.

A Secretary of the Treasury who understands Main Street and Wall Street?

Posted on January 24, 2017, Authored by Ruder Ware Attorneys, Filed under Banking and Financial Matters

Last week, Steven Mnuchin, President Donald Trump’s nominee to run the Treasury Department faced a nearly six-hour grilling by Senate Finance Committee Republicans and Democrats, alike.  The former Goldman Sachs executive was pressed on a variety of policy and personal issues including his past connections to a California bank seen by some as an unmerciful foreclosure mill and his ideas for reform to Dodd-Frank. Despite his pedigree as a former leader of one of the largest banks in the world, Mnuchin took a sharp and pointed position in support of community and regional banks.  In response to a question from Senator Mike Crapo (R-ID), Mnuchin said “my biggest concern is…regulation is killing community banks…We are losing the ability for small- and medium-sized banks to make good loans to small- and medium-sized business in the community where they understand those credit risks better than anybody else.” Mr. Mnuchin is right.  According to the Federal Reserve Bank of St. Louis, community and regional banks’ regulatory compliance costs make up a much higher percentage of their noninterest expenses compared to larger financial institutions.[1]  For example, banks with assets of $1 billion to $10 billion reported total compliance costs averaging 2.9% of their noninterest expenses, while banks with less than $100 million in assets reported compliance costs averaging 8.7% of their noninterest expenses.[2]  Regulatory relief to community and regional banks is of great importance to Wisconsin because, while Wisconsin is well banked, over 93% of banks headquartered in Wisconsin have less than $1 billion in assets and over a quarter have less than $100 million in assets.[3]  Increasing regulatory compliance costs are a driving factor for much of the consolidation in the banking industry.  In many instances, due in part to high regulatory costs, it does not pay for community and regional banks to stay independent and they are forced to sell or merge with a bigger bank.  Last year alone, there were sixteen bank mergers or acquisitions in Wisconsin, that’s an increase from twelve in 2015 and nine in 2014.[4]  Wisconsin isn’t alone - over the past ten years, the number of FDIC-insured banks in the U.S. has shrunk by almost 30%.[5]  If confirmed as Secretary of the Treasury, it appears Mr. Mnuchin will be a powerful advocate for Wisconsin community and regional banks working to reduce over burdensome regulations that unnecessarily drive up compliance costs.  And that’s good news for those who appreciate the personal touch of a community bank. If you are interested, here is the complete video of the U.S. Senate Committee on Finance hearing to consider the anticipated nomination of Steven Mnuchin to be Secretary of the Treasury. [1] https://www.stlouisfed.org/publications/regional-economist/july-2016/scale-matters-community-banks-and-compliance-costs [2] Id. [3] http://www.ibanknet.com/scripts/callreports/fiList.aspx?type=statebank&state=55&sort=assets [4] http://www.jsonline.com/story/money/business/2016/12/31/wave-bank-consolidation-continues/96000492/ [5] Id.

OSHA’s New Guidelines for Employer Anti-Retaliation Policies

Posted on January 18, 2017, Authored by Robert J. Reinertson, Filed under Employment

Most employers and employees know that the Occupational Safety and Health Administration (OSHA) is the federal agency charged with overseeing safety and health in U.S. workplaces.  Many are surprised, however, to learn OSHA is also responsible for enforcing 22 whistleblower protection statutes that don’t necessarily have anything to do with worker safety and health.  These 22 statutes, ranging from the Affordable Care Act to the Wendell H. Ford Aviation Investment and Reform Act, and everything in between, are designed to protect employees from retaliation for reporting a variety of concerns and issues in the workplace.  Retaliation can include any adverse employment action, including harassment, lack of promotion, demotion, discipline, and termination.   OSHA has just issued its long-awaited “Recommended Practices for Anti-Retaliation Programs”.  These guidelines, intended for private, public, and non-profit employers of all sizes, are the product of a 12-member advisory commission after receiving a number of comments from employer and employee advocacy organizations. The recommended practices are centered around what OSHA calls five “key elements to an effective anti-retaliation program”:             ●          Management leadership, commitment, and accountability             ●          Procedures for listening to and resolving employees’ concerns             ●          Procedures for receiving and responding to reports of retaliation             ●          Anti-retaliation training             ●          Program oversight OSHA maintains these recommended practices are voluntary and do not create new legal obligations.  OSHA also has stated that neither adopting nor failing to adopt the practices is any indication of an employer’s good faith or lack of good faith in a particular case.  Regardless of whether or not employers adopt the new recommendations from OSHA, it is always advisable to have anti-retaliation provisions in effect and to periodically review employee handbooks and policies to make sure that such provisions are up-to-date. Here is a link to the new OSHA guidelines:             https://www.whistleblowers.gov/recommended_practices  

Asking for Current Salary in Application?

Posted on January 27, 2017, Authored by Dean R. Dietrich, Filed under Employment

The City of Philadelphia has passed legislation that prohibits an employer from asking for the current salary of an applicant being considered for employment with a public or private employer.  The theory behind this legislation is to prevent employers from excluding applicants who may be interested in a position even though the salary level of the position being applied for is less than what the individual is current earning.  The desire is to open the door for all applicants to be considered equally instead of applicants being “weeded out” because of their current level of earnings. This is an admirable thought but it also places a large burden on employers who will be interviewing candidates and potentially selecting a candidate that will demand a much higher salary than the company wishes to offer.  This could lead to first choice applicants being excluded from actual employment because of salary demands. I have often thought that money was not a controlling factor when someone applies for a new position.  It was my thought that the applicant applied for the position because they wanted to do that type of work or wanted to work with that company.  Many years of experience have taught me that money is a very important, if not the most important, consideration for many applicants for a position.  I wish I could say differently. As a result, this type of new legislation could create a greater burden on employers as they go through the hiring process and then find out the applicant earns a far higher salary than the company can offer.  It may also expand the employer’s belief that individuals with certain qualifications are interested in the job when that really is not the case. We will have to wait to see if this type of prohibition spreads to other states and employers.  For example, Massachusetts has similar legislation but there is no talk of this in Wisconsin.  Salary consideration should not be foremost in determining the suitability of a candidate for a position because there always is potential for a claim of discrimination by the higher paid applicant due to age, but salary considerations normally would be part of the hiring process.

OIG Report Indicates Areas of Hospice Fraud Vulnerability and Issues a Warning to Hospice Providers

Posted on January 27, 2017, Authored by John H. Fisher, II, Filed under Health Care

The HHS Office of Inspector General recently released a report indicating deficiencies in hospice election statements and physician certification of patient eligibility for hospice care.  Medicare hospice care provides help to patients who are terminally ill continue life with minimal disruptions.  In order to qualify for hospice benefits, a physician must certify the patient is terminally ill.  Additionally, the patient must sign an election statement that acknowledges certain Medicare covered services are being waived in favor of palliative care. The OIG found that hospice election statements lacked required information or had other statement vulnerabilities in more than one‐third of the cases examined.  Election statement deficiencies included an absence of required acknowledgement of waiver of certain Medicare covered services. The OIG found physician certification requirements were not met in 14 percent of examined cases.  Physicians are required to compose a narrative when certifying a patient is terminally ill.  In many cases there appeared to be very little actual involvement by the certifying physician. Based on this study, the OIG clearly stated that hospice providers must improve their election statements and ensure physicians meet their requirements for certifying eligibility for hospice benefits.  Additionally, the OIG recommended the Center for Medicare and Medicaid Services take certain actions to strengthen oversight and assure compliance with these requirements.  The OIG recommended that CMS (1) develop and disseminate model text for the election statement patients must sign before receiving hospice benefits, (2) instruct surveyors to focus their review on the adequacy of election statements and compliance with physician certification of terminal illness,  (3) educate hospice providers about the requirements for election statements and certification of terminal illness, and (4) provide guidance to hospice providers on the impact on beneficiaries when they revoke previously made elections for hospice care. Hospice providers should be attentive to this report.  This is not the first time the OIG has investigated and reported on these program integrity issues involving hospice providers.  We can expect the OIG to increase its enforcement in this area and there is likely to be an increase in cases brought against hospice providers who do not integrate the various regulatory requirements into their compliance activities. The OIG report mentioned recent hospice fraud cases as illustrating the potential consequences of not following the certification rules.  The cases described are relatively extreme cases involving deliberate attempts to cheat the system by manufacturing patient eligibility.  The participants in these cases went to jail for these activities.  In a Mississippi case, the hospice provider used patient recruiters and submitted fraudulent claims to Medicare for patients who were not appropriate for hospice.  These beneficiaries had no idea they were in hospice care.  This case resulted in the owner of the hospice  being sentenced to 3 years in prison and ordered to pay $1.1 million in restitution to Medicare. A second case involved a hospice provider who submitted false claims to Medicare and altered patient records to make patients appear eligible for hospice services when they were not. To increase enrollment, the hospice owner also paid health care professionals for referring patients to his hospice care even though they were not appropriate to receive hospice benefits.  The owner was found guilty of health care fraud, sentenced to more than 14 years in prison and ordered to pay $16.2 million in restitution to Medicare. Even though these cases involve egregious violations that resulted in jail time, more subtle cases of non-compliance can present risk to hospice providers.  Failure to adequately document and certify the need for care can result in investigation, large overpayment obligations, and potential False Claims Act liability.  These consequences can be very extreme and penalties involved can be enough to put a hospice operation out of business.  Management of these organizations should also be cognizant of Federal policy changes that focus investigations, and criminal and civil liability against responsible individuals.  In some cases, prosecution will be sought from individuals and the organization may be allowed to remain operational because of significant need for their services.  After all, in the cases cited above, individual managers are serving jail time for their activities.

Lessons Learned from Recent OCR Settlements

Posted on January 26, 2017, Authored by John H. Fisher, II, Filed under Health Care

We can learn some valuable lessons about compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) from settlements that are announced by the U.S. Department of Health and Human Services, Office for Civil Rights (OCR).  These settlements give us guidance of issues OCR considered important as well as their interpretation of various HIPAA requirements.  This is a summary of a few more recent settlements announced by OCR. The Importance of Implementing Safeguards for electronic Protected Health Information (ePHI) MAPFRE Life Insurance Company of Puerto Rico (MAPFRE) agreed to pay $2.2 million and implement a corrective action plan in a case arising from a stolen “pen drive” containing complete names, dates of birth, and Social Security numbers of 2,209 individuals.  The pen drive containing the ePHI was stolen from the MAPFRE tech department.  MAPFRE filed a breach report with OCR stating it was able to identify the breached ePHI by reconstituting the data in the computer on which the USB data storage device was attached.   The company represented in its breach report that it would take certain steps to correct its noncompliance with HIPAA requirements.  A subsequent investigation by OCR revealed that MAPFRE had failed to conduct a risk analysis, failed to implement risk management plans, and failed to deploy encryption or an equivalent alternative measure on its laptops and removable storage media in a timely manner.  The company also failed to implement or delayed implementing other corrective measures it had previously told OCR would be implemented. In announcing the settlement, OCR stressed that covered entities are expected to perform assessments to protect and safeguard ePHI.  Additionally, the results of those assessments must actually be implemented.  Part of the problem MAPFRE has is representing things to OCR that were not implemented.  This was almost certainly a factor resulting in OCR taking enforcement action against MAPFRE. Failing to Provide Breach Notification on Time An OCR settlement with Presence Health is heralded as the first OCR settlement resulting from a failure to report a breach of unsecured ePHI within the timeframes required under applicable HIPAA regulations.  Failing to meet applicable timeframes cost Presence Health $475,000 in settlement with OCR. The case arose when paper-based operating schedules, which contain PHI of 836 individuals, were found to be missing from the surgery center at one of the provider’s medical centers.  The operating schedules were discovered to have been missing on October 22, 2013 but breach notification was not provided to OCR until January 31, 2014.  The notification was not provided in time to meet the requirement that a covered entity notify OCR of a breach without unreasonable delay and within 60 days of discovery.  The breach disclosure rules applicable to breaches affecting 500 or more individuals were applicable.  These rules require notification to prominent media outlets, affected individuals, and OCR. In its press release covering this settlement, the OCR stressed, “Covered entities need to have a clear policy and procedures in place to respond to the Breach Notification Rule’s timeliness requirements…Individuals need prompt notice of a breach of their unsecured PHI so they can take action that could help mitigate any potential harm caused by the breach.” It is unclear exactly why the provider failed to meet the regulatory requirements in this case.  The settlement is a good example of why it is necessary for covered entities to have clear policies describing the process to be followed when faced with a potential breach situation.  This is also an area of OCR audit under the Stage II OCR audit program.  Providers should be certain their breach disclosure policies and procedures are in place.  There have been changes to the breach disclosure regulations over the years, so policies should be reviewed to be in compliance with current law and properly updated. Malware Infection and Lack of Firewall Protection Causes Breach In yet another significant settlement by OCR, the University of Massachusetts-Amherst (UMass) agreed to a monetary penalty of $650,000 resulting from a workstation that was contaminated with a malware program that resulted in impermissible disclosure of electronic health information.  This disclosure involved information of about 1,670 individuals and included names, addresses, Social Security numbers, dates of birth, health insurance information, diagnoses and procedure codes.  The provider determined the malware was a generic remote access Trojan that infiltrated their system because a proper firewall was not in place. Central to OCR’s analysis was the provider failed to identify the components located in its Hearing Center as being part of covered components.  This resulted in the provider failing to apply and ensure compliance with HIPAA privacy and security rules at that location.  HIPAA permits legal entities have some functions covered by HIPAA and some that are not to elect to become a “hybrid entity.”  To successfully “hybridize,” the entity must designate in writing the health care components that perform functions covered by HIPAA and assure HIPAA compliance for its covered health care components.  It was the failure to properly follow the hybrid entity rules that left the components at the applicable site vulnerable to outside malware attack. UMass failed to implement technical security measures at the Center to guard against unauthorized access to ePHI transmitted over an electronic communications network by ensuring that firewalls were in place at the applicable location.  This settlement emphasizes the need to assure that PHI is properly secured and firewalls are used when needed.  It is also instructional regarding the proper application of the rules relating to hybrid status.

Protect Your Assets - Medical Assistance & Long-term Care Planning Spring 2017 - Eau Claire, WI

Posted on January 9, 2017, Authored by ,

The Need for Planning Who Is Eligible for Medical Assistance Planning?  Protection of the House and Vacation Home  Permitted Transfers of Assets  Using Trusts to Protect Your Assets This seminar is presented at no charge - refreshments are included. It is offered at both 9:00 a.m. and 5:30 p.m. Please specify a time when registering. Holiday Inn EC South 4751 Owen Ayres Court Eau Claire, WI  54701 To register, please contact Angela Mothes amothes@ruderware.com, or 715.834.3425 Or to register online, please choose one of the following: Eau Claire - Morning Session (9:00 a.m.) Eau Claire - Evening Session (5:30 p.m.)