Please be advised that contacting Ruder Ware by e-mail does not create an attorney-client relationship. If you contact the firm by e-mail with respect to a matter where the firm does not already represent you, any information which you disclose to us may not be regarded as privileged or confidential.


Accept   Cancel

Please be advised that contacting Ruder Ware by e-mail does not create an attorney-client relationship. If you contact the firm by e-mail with respect to a matter where the firm does not already represent you, any information which you disclose to us may not be regarded as privileged or confidential.


Accept   Cancel

PAL Login

linkedin.jpgyoutube.jpgvimeo.jpgtwitter_off.png View Ruder Ware

Search Results


Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Warning: substr_count(): Empty substring in /home/ruderw5/public_html/blocks/search/controller.php on line 263

Searching for Articles published in May 2017.
Found 12 Results.

One Racial Slur Constitutes Harassment?

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

A recent decision from the Second Circuit Court of Appeals in New York has again opened the door to questions about hostile work environment and racial harassment.  The particular question addressed in this court decision was whether one racial epitaph (use of the “n-word”) would support a claim for racial harassment and the creation of a hostile work environment.  The Court did not make a final ruling but rather found the lower Federal District Court had improperly interpreted a 1997 decision and acknowledged that the use of a racial slur could form the basis for a claim of racial harassment and a hostile work environment.  This is not a definitive ruling but rather an acknowledgement that this area of the law is unclear and is open to further interpretation.  The Court did acknowledge that one utterance of a racial slur could be sufficient to defeat a motion for summary judgment against the employee meaning the case would be presented to a jury or judge to determine whether or not a hostile work environment existed. Wisconsin employers have a somewhat different landscape.  It is clear a single act of sexual harassment could form the basis for a claim of sexual discrimination under the Wisconsin Fair Employment Act.  The definition of sexual harassment in Wisconsin acknowledges a single act could form the basis for a claim of harassment.  This definition has not been applied specifically to a claim of racial harassment or hostile work environment based upon anti-racial discrimination but we can see how the courts would find the Wisconsin law gives that type of protection whether the claim of hostile work environment is based upon sex, race, national origin or even age.  Wisconsin employers can avoid being a test case on this issue by doing proper training of employees and supervisors to ensure it is clear this type of behavior is not appropriate in the workplace.

Protected Employee Must Notify Employer of Need for Time Off

Posted on May 31, 2017, Authored by Dean R. Dietrich, Filed under Employment

A recent decision in the Northern District of California highlighted the importance of employers applying a consistent rule that employees must notify the employer if they are unable to report to work, even if the employee suffers from a disabling condition.  In a recent decision, the Federal Court Judge held that a Company properly terminated an employee who suffered from several disabilities because the employee did not follow the company call-in policy that required an employee to call in before 9:00 a.m. if they were unable to report to work on a particular day. In this case, the employee suffered from several disabilities which sometimes interfered with his ability to report to work.  The employee received permission from the Company to take time off when necessary because of the disabling conditions but was told he must notify the Company if he was taking time off.  On the first occasion the employee failed to notify the Company, the Company gave the employee a final warning and made it clear the employee must notify his manager before 9:00 a.m. if he was taking off work on that particular day because of his conditions.  Several weeks after this written notice, the employee failed to report in when he was taking off and did not report in for a period of four days.  As a result of this failure to report in, the Company terminated the employee. The Federal Court dismissed the claims brought by the employee when it was shown the employee was on the internet and accessing various sites during the time that he was off work so he could not justify his claim he could not report in to the Company that he would be off work due to his conditions.  The Federal Court held that the Company had the right to terminate the employee, especially after the employee acknowledged he understood the call-in requirements that were applicable if he needed to take time off because of his disabling conditions. This case is a reminder that a Company needs to clearly communicate with employees regarding its policy for calling in and being absent from work.  If a Company enforces this policy uniformly and consistently, the Company is in a position to successfully address the situation where a disabled employee is simply away from work without any type of notice to the Company.

Reminder: New Voluntary Self-Referral Disclosure Effective June 1

Posted on May 31, 2017, Authored by Emilu E. C. Starck, Filed under Health Care

As discussed in a previous blog, beginning on June 1, 2017, health care providers of services and suppliers wanting to voluntarily disclose actual or potential violations of the Stark Law must follow a new process finalized by CMS.  Previously, health care providers and suppliers were able to submit a self-disclosure of an actual or potential Stark Law violation to CMS by sending a letter to CMS.  Beginning June 1, 2017, health care providers and suppliers will be required to submit all information necessary for CMS to analyze an actual or potential Stark violation on a Form CMS-10328.  This form includes a SRDP Disclosure Form, a Physician Information Form (a separate one must be completed for each physician included in the disclosure), a Financial Analysis Worksheet, and a certification.  A disclosing party is still permitted to submit an optional letter with any additional information.  More information, including the SRDP forms, is available here.  https://www.cms.gov/medicare/fraud-and-abuse/physicianselfreferral/self_referral_disclosure_protocol.html This new disclosure process is not applicable to all (e.g. physician-owned hospitals and rural hospitals).  Please contact us if you have any questions regarding the new disclosure process or whether it is applicable to you.

OCR Settlement Lessons - Failing to Perform an Electronic Access Risk Analysis Before an Unauthorized Access Occurs

Posted on May 3, 2017, Authored by John H. Fisher, II, Filed under Health Care

Failure to conduct a risk assessment before a hacking incident occurred resulted in a $400,000 settlement between the Office of Civil Rights (OCR) and a Federally Qualified Health Clinic (FQHC).  The FQHC filed a breach report upon learning its employee emails had been hacked and the hacker had access to electronic health information of over 3,000 patients.  The OCR’s investigation that resulted from the breach disclosure revealed that required corrective action was taken in response to the breach but that the provider failed to conduct a timely risk analysis.  Furthermore, the provider failed to conduct an assessment of risks and vulnerabilities of ePHI prior to the breach and had not implemented corresponding risk management plans to address electronic risks.  Even when the provider conducted a risk analysis, OCR found the analysis to be insufficient to meet HIPAA security standards. Lesson 1 – Conduct an analysis of electronic risk vulnerabilities before an unauthorized access breach occurs. Lesson 2 – OCR considered that the provider was an FQHC and still imposed a $400,000 settlement amount. Lesson 3 – Do not overlook the HIPAA security rules.

Thinking About Expanding Your Business

Posted on May 30, 2017, Authored by Christopher M. Seelen, Filed under Ag-Visor

Flyte Family Farm in Coloma has grown a lot over the years.  Not only has Flyte grown tons of crops, but Flyte has also grown its business, which has expanded to five greenhouses and 3200 acres. Adam Flyte and his wife, Carrie, started their business growing corn, soybeans and fresh vegetables, which they sold at seasonal farm stands.  In 1999, Adam and Carrie expanded into hydroponics. But, expansion has been gradual.  “As opportunities presented themselves and if it made financial sense, we expanded to meet demand,” said Adam, who built one greenhouse in 1999, one in 2000, two more in 2001, and another in 2004.  Along the way, Adam and Carrie also acquired three farms. The Flyte Family Farm business expansion has been a success.  But, what makes a business expansion successful?  What should you consider when deciding whether to expand your own business?  What do ag lenders say about business expansion?  Here are some things to consider: Why Now?  According to ag lenders, the most important question is why do you want to expand?  “You need to ask yourself ‘What’s driving the need for expansion?’” says Rich Wilcox, an ag lender, who is vice president at BMO Harris Bank. Terry Johnson, vice president of ag/commercial lending at Pioneer Bank agrees, “it all starts with the ability of the producer to explain why” it wants to expand.       In a 2012 article on growth management strategies, David Coggins, executive vice president and chief banking officer at Investors Community Bank, wrote that, “operators have all kinds of reasons for growing/expanding . . .. It all comes down to finding out your own ‘why’ before developing a plan to get there.” In the case of Flyte Family Farm, the “why expand?” question was answered when Adam and Carrie saw demand for hydroponics that also fit the couple’s educational backgrounds in horticulture and agri-business.  That would be classified as a good reason to expand.  What are bad reasons to expand?  “My neighbor is expanding or I read an article that says you need to expand to be profitable,” says Johnson. Going big doesn’t always mean becoming profitable and that leads to our next consideration. Is Your Current Operation Profitable?  Ag lenders will tell you there is nothing magical about business expansion that will make you more profitable. “If you have high operating ratios now, you’re probably going to have high ratios in expansion,” said Johnson, who indicates you should take a look at your existing operation and figure out how to become more profitable before expanding. If your goal is to increase revenue, then expansion should not be the first step you take.  Rather, Coggins writes, you should take “advantage of all the opportunities to ‘get better’ before you work on ‘getting bigger.’”  Wilcox concurs, “Can you work to do better before you strive to do more?”  Have You Factored in a Drop in Commodity Prices?  When commodity prices are high, it is natural for producers to want to expand their business so they can make more money. But, Johnson cautions producers should not “make long-term decisions based on short-term economics.” Johnson points out that expansion is a 20 to 25 year decision that you may make when prices are high, but what happens when prices drop?  Therefore, it is very important producers have a plan in place for dealing with a downturn in commodity prices.  If revenue falls short, how are you going to pay for the costs of expansion? “I would advise them to think it through and record their thoughts as part of a business plan which would include projections of best case, middle case, and worst case scenarios with odds of each,” says Wilcox. To protect against fluctuations in commodity prices, Flyte Family Farm diversified its products.  Flyte grows corn, soybeans, hay, and sweet corn. Flyte also has 800 acres certified as organic. Organic crops include: blueberries, sweet potatoes, sweet corn seed corn, and hay. Maintain Healthy Equity in Your Assets.  Johnson advises that businesses should “not borrow their last dollar in expansion.” “You may need to borrow additional money in the future to deal with unexpected costs.  If you have strong equity, you can get through the hard times.” Johnson says. Wilcox agrees that expansion may cause some issues that were not anticipated.  Therefore, Wilcox asks, “is the business strong enough financially to absorb post expansion drop in equity or missed problems with expansion plans?” Adam Flyte acknowledges that managing your debt load is very important and that “working capital is key.” So, what percent of your assets is it smart to borrow against?  From a collateral standpoint, “No more than 70% of the asset value on the high side. Lower levels might be smarter.” Wilcox said.  From an owner-equity standpoint, Wilcox does not recommend getting below 40%. Ideally, the goal would be a “debt to assets ratio of 50% or less” Johnson said. Make Sure Everyone is on the Same Page.  Expansion sometimes means family members or friends are coming together to boost business. But, your family or friends may disagree on their roles or how the business will be conducted. Wilcox wants to know, “Is the family and employee base on board with expansion plans?” Johnson relayed a story about a father who expanded his dairy business so he could farm with his five sons.  Later, when the operation was struggling, the sons admitted at a family meeting they didn’t like milking cows.  The moral of the story is communication between family members and business partners is critical. Expansion may also bring you additional responsibilities and headaches. Coggins writes that an expanded organization can test your “management talent” and “you need to ask yourself the hard question of whether you have the talent for taking on a bigger and much different job and a more strategic role in the organization.” Seek Out Trusted Advisors.   A good ag lender can be a helpful adviser.  Johnson notes that you should not run away from a lender who asks you lots of questions. “The questions are designed to help you understand whether expansion is appropriate for you.” said Johnson. Coggins writes “Your banker is going to look at a whole host of factors in considering your request for expansion, from working capital, to long-term cash flow assumptions, transition and construction phase issues, contingencies and having a well-documented plan.” Adam Flyte agrees that your ag lender can be a critical part of your success.  The lender is a “friend and a partner,” Adam relates. Finally, be aware that legal issues can arise as you expand your business.  Such issues include: partnership or LLC operating agreements, construction agreements, estate and succession planning, leases and offers to purchase, and employment agreements, to name a few.  So, don’t be afraid to add an attorney to your circle of trusted advisors.   © 2017 The Badger Common Tater.  Antigo, WI.  Reprinted with permission.

Lessons from OCR HIPAA Settlements - Mobile Device Security Standards

Posted on May 3, 2017, Authored by John H. Fisher, II, Filed under Health Care

In the first known case involving a wireless provider, a cardiology service provider agreed to pay a $2.5 million settlement based on the impermissible disclosure of unsecured electronic protected health information (ePHI).  The company provides remote mobile monitoring of and rapid response to patients at risk for cardiac arrhythmias.  The company disclosed to the Office of Civil Rights (OCR) that a workforce member’s laptop had been stolen from a vehicle parked outside of the employee’s home.  The laptop contained the ePHI of 1,391 individuals. The disclosure of this situation resulted in an OCR investigation that revealed the company did not maintain an adequate risk analysis and risk management process.  The investigation also revealed that HIPAA security policies were in draft form and had not been implemented.  No policies could be produced to specifically address safeguards protecting ePHI. In the press release relating to this matter, the OCR made a special point to highlight the need to adopt and implement policies to address the special risks involved with using mobile devices in the health care industry.  OCR made a rather strong comment regarding the need to address mobile devices risks stating “[f]ailure to implement mobile device security by Covered Entities and Business Associates puts individuals’ sensitive health information at risk.  This disregard for security can result in a serious breach, which affects each individual whose information is left unprotected.” Lesson 1 – Adopt and implement policies and procedures addressing security risks associated with the use of mobile devices. Lesson 2 – Make sure your policies and procedures are in final form and have been adopted and implemented as active policies. Lesson 3 – Many providers focus on HIPAA privacy policies and overlook HIPAA security standards.  Do not make this mistake.

Seventh Circuit Court of Appeals Speaks Out on Employment Issues

Posted on May 3, 2017, Authored by Dean R. Dietrich, Filed under Employment

Several recent decisions by the Seventh Circuit Court of Appeals have set the tone for court decisions in the employment law field.  The Seventh Circuit Court of Appeals covers a number of states in the Midwest, including Wisconsin, so the rulings are important for Wisconsin employers up to a point.  The first decision involves sexual orientation.  The Seventh Circuit Court of Appeals held, contrary to other Courts, that sexual orientation is protected under Title VII of the Civil Rights Act and thereby extends the right of an employee to bring suit for discrimination based upon sexual orientation.  This decision sets the stage for a Supreme Court review of the entire question although it does not have a heavy impact on Wisconsin employers.  Sexual orientation is a protected category under the Wisconsin Fair Employment Act so Wisconsin employees have a state law protection even if the federal law does not extend protections against such discrimination to employees.  The decision will not make a big difference for Wisconsin employers other than opening the door to potential federal claims for discrimination based upon sexual orientation.  There are certain circumstances where a federal claim could allow an employee to recover more monies from an employer if that type of discrimination is proven in federal court. In another decision, the Seventh Circuit Court of Appeals held that a Wisconsin employer did not discriminate against an employee who was unable to perform the regular duties of her position.  In its ruling, the Seventh Circuit found that the employee failed to prove a retaliation claim because she was unable to show her termination was based solely upon her having filed a discrimination complaint against the University of Wisconsin-Platteville.  The Court concluded that the actions taken by the University were not “materially adverse” to the employee at a level to suggest they persuaded the employee to not engage in the protected activity of filing a discrimination complaint.  The employee alleged that statements made by her supervisor showed a materially adverse activity by the employer, but the facts showed that the statements did not directly criticize the employee.  The Court of Appeals also found that the employer had offered legitimate, non-discriminatory reasons for being critical of the employee and there was nothing to show that these reasons were a pretext for some type of retaliation.  These decisions show the “yin and yang” of court decisions today and offer little guidance to employers when addressing difficult issues in the workplace.  It seems evident that employees will be afforded more protections under state and federal law to ensure they are not adversely affected based upon a discriminatory reason.  It is also clear that employers have a right to address performance concerns of employees as long as there are legitimate, non-discriminatory reasons for the action being taken.

Breaking News-House Passes Comp Time Bill!

Posted on May 23, 2017, Authored by Sara J. Ackermann,

Some Frequently Asked Questions for the Curious... The House passed a bill named the Working Families Flexibility Act of 2017 earlier this month that, if signed into law, would dramatically change private sector compensation in the United States.  Interested? Keep reading. What is “comp time”?  “Comp time” is the concept of allowing an employee who works overtime to choose paid time off in lieu of overtime compensation.  It is currently not legal in the private sector, but allowed in the public sector. Why should I care about this bill?  As an employer, you may appreciate the flexibility of providing employees 1 hour of paid time off for each hour of overtime worked in the place of paying cash in overtime compensation which is currently 1.5 times the hourly wage.  Employers who offer seasonal employment may appreciate the ability to offer comp time for employees to use during layoff periods. When will this bill become law?  This is uncertain.  The bill must still pass the Senate and be signed by the President.  Republicans are optimistic they can get the bill passed.  It may be several weeks before it even hits the Senate for consideration. What are the specific details?  As currently drafted, the bill allows employees to choose to accrue up to 160 hours of “comp time” for hours worked beyond 40 in a week.  Employers could not force employees to accept the comp time in lieu of actual overtime payments.  In addition, the bill allows both employers and employees to change the comp time option back to regular overtime.  Employers who make the switch would need to provide employees with 30 days’ notice.  If employee’s accrued time off is not used by the end of the year, it will be cashed out. Employers are supposed to honor an employee’s request to use comp time in a reasonable manner.  Opponents of the bill are fearful that employers will use the bill to discriminate against those employees who don’t choose the comp time option, and also wrongfully deny the use of comp time to those who do choose it. What does this mean for Wisconsin employers? This is uncertain.  Wisconsin has its own wage and hour regulations.  Currently, the concept of “comp time” is not recognized under Wisconsin law.  Without Wisconsin legislation that adopts this federal legislation, an argument could be made that comp time would still be prohibited under Wisconsin law. Where can I get more information?  Ruder Ware will keep you posted of further developments. In the meantime, if you need more information, please contact anyone in our Employment, Benefits & Labor Relations practice group.

2018 Health Savings Account Cost of Living Adjustments

Posted on May 8, 2017, Authored by Mary Ellen Schill,

The Internal Revenue Service on May 5th announced the cost-of-living adjustments for the HSA contribution limits and for High Deductible Health Plan (HDHP) deductibles and out-of-pocket maximums for 2018. HSA/HDHP Requirement Cost-of-Living Adjustments Limit on HSA Contributions - Self-only HDHP 2017 - $3,400 2018 - $3,450 Limit on HSA Contributions - Family HDHP 2017 - $6,750 2018 - $6,900 HDHP Required Deductible - Self-only HDHP 2017 - $1,300 2018 - $1,350 HDHP Required Deductible - Family HDHP 2017 - $2,600 2018 - $2,700 HDHP Out-of-pocket Maximum - Self-only HDHP 2017 - $6,550 2018 - $6,650 HDHP Out-of-pocket Maximum - Family HDHP 2017 - $13,100 2018 - $13,300 HSA Catch-up Contribution Limit 2017 - $1,000 2018 - $1,000 All of the above are for calendar year 2018. For further information, please contact Attorney Mary Ellen Schill, who prepared this article, or any of the attorneys within the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

OSHA Extends Deadline for Electronically Submitting Worker Injury and Illness Records

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

The Occupational Safety and Health Administration (OSHA) announced on May 17, 2017 that the deadline for employers with 250 and more employees to electronically submit information from their 2016 Form 300A to OSHA is being extended.  Under the electronic reporting rule that went into effect on January 1, 2017, the original deadline was to be July 1, 2017. OSHA stated that it will announce the new deadline at a later date.  This is the notice currently on the OSHA website: “OSHA is not accepting electronic submissions of injury and illness logs at this time, and intends to propose extending the July 1, 2017 date by which certain employers are required to submit the information from their completed 2016 Form 300A electronically. Updates will be posted to this webpage when they are available.” As of right now, the other electronic reporting deadlines remain intact: Employers with 250 or more employees: Submit 2016 Form 300A by the new date to be announced by OSHA.  Submit 2017 Forms 300A, 300, and 301 by July 1, 2018. Thereafter, submit Forms 300A, 300, and 301 by March 2 of each year. Employers with 20 to 249 employees in Designated Industries (those industries listed in Appendix A to Subpart E of Part 1904 of the rule): Submit 2016 Form 300A by July 1, 2017. Submit 2017 Form 300A by July 1, 2018. Thereafter, submit Form 300A by March 2 of each year. All other employers electronically submit reports to OSHA only upon notification from OSHA. The electronic reporting rule is currently being challenged in federal court in Oklahoma.  National Association of Home Builders of the United States v. Perez, No. 5:17-CV-00009 (W.D. Okla.).

Unemployment Benefits Cannot Be Denied Based on Eight Cash Transaction Inadvertent Errors Out of 80,000 Transactions in a 21-Month Period

Posted on May 22, 2017, Authored by Russell W. Wilson, Filed under Employment

The Wisconsin Supreme Court has interpreted the meaning of “substantial fault” in an unemployment insurance case, which will be applicable in worker’s compensation cases, as well.  The case is Operton v. Labor and Industry Review Commission, 2017 WL 1743039.  In doing so the Supreme Court affirmed the ruling of the Wisconsin Court of Appeals, which had reversed the Labor and Industry Review Commission.  This case is about the meaning of “substantial fault” as applied to a cash register clerk who goofed from time to time. First, what the case is not about is the employer’s right to fire the employee for having made cash transaction errors.  The employer clearly held that right, which was never at issue in the case.  The case was about the employee’s eligibility for unemployment benefits after her employment was terminated. The Supreme Court’s decision recites the broad policy that underlies unemployment insurance, which is to alleviate the social cost of unemployment.  In furtherance of that policy, eligibility for benefits is liberally interpreted in favor of the unemployed worker.  Recent legislative changes, however, have tightened eligibility based on “misconduct” and “substantial fault.” The facts in the case were straight-forward.  The clerk had worked for 21 months during which time she would have made roughly 80,000 cash register transactions.  Over the course of that employment she made eight errors while processing payments.  The errors were broadly similar in nature; they were not identical.  For example, in one instance she accepted a Women Infants and Children (WIC) check for $8.67 worth of items when the check was actually worth only $5.78.  Once she allowed a customer to leave without finishing the transaction on the pin pad.  On another occasion she failed to check the identification of a customer who used a credit card for a purchase of over $50.  The errors occurred sporadically over the term of her employment. The employee is now entitled to receive unemployment benefits based on this ruling because she did not engage in “misconduct” or “substantial fault.”  In fact, the employer did not claim misconduct on her part.  Rather, the employer argued that her unintended errors met the definition of “substantial fault.” That definition is general in the positive sense and specific in the negative sense.  Broadly, “substantial fault” means “acts or omissions of an employee over which the employee exercised reasonable control and which violated reasonable requirements of the employee’s employer.” (My emphasis)  So what does the exercise of “reasonable control” by the employee mean?  And what are “reasonable requirements”?  The legislature did not say.  The legislature did say, however, what does not constitute “substantial fault”: One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction. One or more inadvertent errors made by the employee. Any failure of the employee to perform work because of insufficient skill, ability, or equipment. Exemption number one did not apply because the payment transactions were mistakes, not infractions of rules.  And exemption number three did not apply because the employee, having processed about 80,000 payment transactions, clearly had the skill and ability to do so.  The case came down to whether eight sporadic, broadly similar yet not identical errors out of roughly 80,000 successful transactions in a 21-month span met the exemption criteria of “one or more inadvertent errors.”  The Supreme Court held that there was no substantial fault on the part of the employee because she had merely committed “one or more inadvertent errors” so as to be exempt from the definition of “substantial fault” as a matter of law. When a court of last resort rules that a particular set of facts satisfies a legal criterion, the message sent is: This case was not close.  We do not want to see cases on similar facts brought again.  Despite the apparent bright line ruling, the Supreme Court decision left the uncertainty door ajar just a bit.  Although the court of appeals decision stated that an employer’s warning as to inadvertent errors is not material (since the legislature did not allow for warnings in exemption number 2), the Supreme Court cautioned “[t]hat is not to say an employer’s warning can never be relevant to whether an employee’s error was inadvertent.”  The Supreme Court also stated it need not determine whether a numerical limit on the number of inadvertent errors may exist before they become intentional. The definition of “substantial fault” in the unemployment benefits context applies in worker’s compensation where the employer discharges an employee who is on light duty for a work-related injury.  In the past a discharge for whatever reason resulted in worker’s compensation temporary benefits being reinstituted for the duration of the healing period.  In light of recent changes to the Worker’s Compensation Act, however, those benefits are not payable where the employer can prove that its decision to terminate the employee was based on substantial fault (or on misconduct).  Operton shows that the full parameters of “substantial fault” have yet to be developed.  But if the facts are close to those in Operton, employers should think hard before contesting unemployment benefits.  Likewise, worker’s compensation insurance carriers (and employers who are self-insured for worker’s compensation) should consider the wisdom of not reinstituting temporary benefits when the employee is discharged while on light duty from an industrial injury or condition.

Repayment and Self Disclosure of Known Overpayments

Posted on May 3, 2017, Authored by John H. Fisher, II, Filed under Health Care

Timeframes for Making Repayment to the Government The 60-day repayment rule adopted as part of the Affordable Care Act is a very strong arrow in the quiver of federal enforcement agencies.  Under the 60-day rule a known overpayment can become a False Claim if it is not repaid or if a self-disclosure is not filed within 60 days after identification.  Until final rules were promulgated in early 2016, it was not clear when a provider would be deemed to have “identified” an overpayment.  Prior to the final regulations, it was not clear whether the 60-day time period started as soon as a situation was brought to light that could possibly create an overpayment.  A strict view of the 60-day rule put a lot of pressure on providers to rapidly investigate situations that could lead to overpayments.  In many cases, it was very difficult to reasonably investigate and take action within such a short time frame. The 2016 regulations gave providers a bit of relief.  The regulations clarify that an overpayment is not “identified” when the basic information comes in that could possibly result in an overpayment determination.  Instead, providers are expected to use reasonable diligence to investigate situations that could result in an overpayment.  Reasonable diligence requires a timely, good faith investigation of credible information.  In comments to the final regulations, the Office of Inspector General (OIG) states that reasonable diligence requires an investigation to be conducted within a maximum timeframe of six months from receipt of the credible information that an overpayment might exist.   Absent extraordinary circumstances, identified potential issues must be investigated to conclusion within six months.  At the expiration of the six-month period, the 60-day disclosure period commences.  This provides a total of eight months from initial identification until the time repayment or self-disclosure is due. OIG acknowledges there might be extraordinary circumstances affecting the provider, supplier, or their community that may make it reasonable to take more than six months to investigate. What constitutes extraordinary circumstances is a fact-specific question.  Extraordinary circumstances may include unusually complex investigations the provider or supplier reasonably anticipate will require more than six months to investigate.  The OIG mentions natural disasters and states of emergency as providing reasonable justification for extending the investigation period.  Use of these circumstances as an example highlights the need to use all efforts necessary to complete the investigation as quickly as possible and to use the six-month standard as the outside target date.