Largest privacy breach payment to date since HIPAA enforcement in 2003

Capping off a three year inquiry into a data breach of thousands of patient health records, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) ordered New York Presbyterian Hospital (NYP) and Columbia University (CU) to pay $4.8 million in settlement fees earlier this month. This marks the largest payment for a privacy breach to date since the enforcement of HIPAA’s Privacy Rule took effect in 2003.

NYP and CU operate Columbia University Medical Center under a joint venture, and operate a shared data network and network firewall that is overseen by employees at both organizations. According to the U.S. Department of Health and Human Services, the shared network connects to NYP patient data systems that contain electronic protected health information (ePHI). The breach occurred in September 2010, when a physician at Columbia University deactivated a PC server on the network that contained ePH. Due to inefficient data protection on the server, nearly 7,000 patient records, which contained information such as vital signs, medications, lab results and other status reports became accessible on internet search engines. Hospital representatives claimed they had no knowledge of the breach until the partner of a deceased patient discovered ePHI on the internet and notified hospital officials.

More than a health problem, obesity can now be called a disability

Based on a recent U.S. District Court case handed down in Missouri, obesity should be included under the American with Disabilities Act (ADA), meaning employers must treat the condition similar to the way other disabilities are protected from discrimination under the law. Last month, the federal district judge in the Missouri case ruled in favor of the plaintiff, who had sued his employer on grounds that the company had fired him because of his weight, and threatened to cease business operations with any other group that employed him. Lawyers for the company argued against the case based on the fact that obesity is not specifically listed under the ADA, and citing language from the Equal Employment Opportunity Commission that obesity is rarely considered a disabling impairment. 

Long Term Care: Planning ahead and securing your future

What do you think of when you hear the words “Long Term Care?”  If you’re like most people, you might think of an insurance policy, or maybe a nursing home. Surprisingly though, Long Term Care involves much more than those things. Sure, a person can purchase a Long Term Care insurance policy, or go into a nursing home for an extended period of time, but it’s important not to forget about the emotional, physical and financial effects that also come into play for individuals dealing with Long Term Care. Whether it’s arthritis in our joints or amnesia in our minds, getting older and slowing down is inevitable for all of us, and while it may seem far off in the future, effective planning for how to handle these life changes as we age is critical.

Long Term Care planning becomes especially important for partners and spouses whose children are likely to become the primary caretakers once their parents can no longer manage living alone. More often than not, these are the individuals who take on the responsibility of assisting with their parents’ daily

More losses for Mass medical carriers may shift risk tolerance for employers

Last week, the Boston Globe released an article highlighting significant first-quarter losses for each of the  three local nonprofit health carriers. The article highlights all of the new ACA taxes required by the insurer’s,  and how those new fees and taxes will be passed on in the form of higher premiums to fully insured businesses covered by Blue Cross, Harvard and Tufts.

Following the Globe’s report, WGA’s Chairman and CEO Phil Edmundson wrote a blog discussing some unexpected losses by both local and national insurance carriers based on unanticipated pharmacy costs to treat illnesses such as hepatitis. The specialty cost increases in the article are consistent with the rate changes seen by many of our own clients,  and an issue that should concern all businesses. Unfortunately, nothing under the Affordable Care Act was designed to get a handle on  pharmacy expenses,  and we anticipate an accelerated rate of cost increases due to pharmaceuticals.

Senate’s TRIA extension threatens insurers with rate hikes

Renewal efforts for  TRIA (the federal terrorism insurance backstop) moved forward last month with a legislative proposal in the Senate that would extend the law for another seven years. The bill, introduced by Senator Charles Schumer, D-NY, and co-sponsored by a bipartisan group of members in the Senate Banking, Housing and Urban Affairs Committee, would reauthorize the federal backstop program for an additional seven years. TRIA is currently set to expire on Dec. 31, 2014, which could leave buyers and carriers facing huge spikes in stand-alone and embedded terrorism insurance rates if the U.S. Government halts coverage.

The new measure, brought to the Senate floor just days before the one-year anniversary of the Boston Marathon Bombings includes two major changes to the program that would increase deductibles and co-pays for insurers. Still, some insurer groups are hesitant about the bill’s

Attention buyers: rate changes likely as health plan profits dip

Health plans have been reporting their first quarter results and it is not a pretty picture. From large national plans like United Healthcare to small plans like Neighborhood Health in Boston, insurers have been beset by an unexpected event: an improvement in treatment for patients. New drugs for Hepatitis C have finally made the market after years of development, and the cost per patient can approach $100,000. For years, Hep C patients have had inadequate treatment for the disease, leaving thousands waiting for the new drugs and causing demand to surge.

The good news is that the new drugs work. The bad news is that the costs are sending insurance results to the tank and we have only seen one response to this problem before: higher health insurance rates.

Menendez flood bill moves forward; policyholders will see relief

A few months ago, WGA reported on President Obama’s approval of the Homeowner Flood Insurance Affordability Act of 2014, which sought to scale back major flood insurance premium increases brought on by the Biggert-Waters Reform Act of 2012. Biggert-Water’s called for re-mapping of flood zones, moving scores of homeowners into new, high-risk flood areas and allowed the NFIP to raise premium’s to an actuarial sound basis for risks in the 100 year flood plan. In addition, the reform repealed the property sales trigger, which prevented new homeowners from keeping the very low pre-FIRM rates on new purchases. FEMA defines “Pre-Firm” (Pre- Flood Insurance Rate Map (FIRM)) buildings as “those built before the effective date of the first Flood Insurance Rate Map (FIRM) for a community. This means they were built before detailed flood hazard data and flood elevations were provided to the community and usually before the community enacted comprehensive regulations on floodplain regulation.” These subsidized rates are a way to offer flood insurance coverage to property owners whose homes were built before flood protection was readily available. 

PPACA changes elevate nurse practitioner risk profile

Over the years, the medical professional liability insurance market has seen its fair share of price increases.  For instance,  in December, 2001, St. Paul Insurance announced it would exit the market, leaving over 750 hospitals, 42,000 physicians and more than 70,000 allied professionals without an incumbent market. The ramifications of this event were felt by every medical professional in the country. At the same time however, it offered insurance carriers an opportunity to grow in what was an otherwise untapped and limited marketplace. As a result, healthcare providers began seeing rates rise and fall, depending on risk classification, location and claims history.

Since then, the medical professional liability insurance market has remained somewhat unpredictable. The passage and implementation of PPACA might be another one of those “events” that brings around a less subtle, but no less significant, change in the medical professional liability insurance market. From all that we have seen, PPACA is likely to cause big changes in the way that health insurance is provided, delivered and purchased. And while this raises numerous issues for consumers, carriers and brokers in the employee benefits sector, the impact on the casualty sector of the insurance community may be equally significant.

Fiduciary standards tighten amid 401(k) plan lawsuits

In one of the first 401(k) fee cases to go to trial, a St. Louis appellate court ruled against a power and technology company for violating its fiduciary duties to 401(k) plan participants. According to the case, the company failed to control plan costs and negotiate rebate terms with investment firms, costing employees millions of dollars in hidden plan fees. The Court awarded over $13 million to the company’s employees- a sign to plan sponsors that their role extends beyond simply offering low-cost investment options.

Experts note the growing frequency of retirement plan cases, as more judges develop fiduciary standards and laws for plan sponsors to protect retirees. In a similar case, employees of a military contracting firm lost hundreds of millions of dollars after company officials neglected to manage plan investment fees being charged by the bank sponsoring its 401(k) plan. Court documents reveal the bank collected additional fees for managing a single-stock portfolio for the company, directing cash from the fund into its own investments and using that cash to paying itself for managing the fund.

Tort reform victory signals future changes in med mal cases

Medical malpractice and plaintiffs’ lawyers scored a huge win last month following the Florida Supreme Court’s ruling which struck the statutory cap on damages in medical malpractice cases. This is a major victory for Tort Reform in a jurisdiction noted for its volume of litigation. In Estate of McCall v. United States, 2014 Fla. LEXIS 933 (Fla. Mar. 13, 2014). The case involved the family of a young woman who died during childbirth at Fort Walton Beach Medical Center in February 2006. Michelle McCall was admitted to the hospital with severe preeclampsia and went into severe shock and cardiac arrest due to extreme blood loss following her delivery. McCall’s estate (her family) filed a wrongful death and medical malpractice claim in the U.S. District Court for the Northern District of Florida, which ruled that the plaintiffs’ financial losses totaled $980,462.40. The court also determined that the family’s non-financial damages amounted to $2 million, but limited their recovery to half that amount, based on Section 766.118, Florida’s statutory cap on wrongful death non-economic damages from medical malpractice claims.