Fraud Waste and Abuse Training Requirements Eliminated for Providers

A final rule published in the April 15, 2010 Federal Register makes clear that enrolling in Medicare is considered enough proof that providers know about fraud, waste and abuse issues, and that Medicare Advantage (“MA”) plans do not need to require additional compliance training.

In the 2007 MA regulations, CMS stated that it would hold MA plans and Part D sponsors responsible for fraud and abuse training of first-tier and downstream entities that participate in their plans. This would have included providers who contract with many health plans, which means providers would have had to establish many different training programs.

CMS appeared to back away from the requirement in a proposed regulation posted in October 2009.  This latest final rule, which takes effect June 7, 2010, puts the issue to rest.

CMS listened to providers’ complaints about the burden triggered by training requirements from different MA plans, which essentially amounted to CMS being a tad too extreme in its fraud-fighting efforts. CMS wanted to make sure that plans had good compliance programs and that their downstream contractors, such as providers, had them as well.  But pushing the responsibilities onto providers went a little too far.

To comply with all the idiosyncrasies of each plan’s compliance program would have been a logistical nightmare. Now, with the final rule, an unnecessary and basically impossible standard has been made reasonable and providers will not have to deal with the additional training requirements.

© 2010 Parsonage Vandenack Williams LLC

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Bill Seeks to Strengthen the False Claims Act

The federal False Claims Act permits a person with knowledge of fraud against the United States Government, referred to as the “qui tam plaintiff,” to file a lawsuit on behalf of the Government against the person or business that committed the fraud.  For example, an employee that learns from a colleague of fraud by his or her employer at work may bring a qui tam action against the employer.  If the action is successful,  the qui tam plaintiff is rewarded with a percentage of the recovery.

The House and Senate have approved a final version of the Fraud Enforcement and Recovery Act, which includes provisions to strengthen the False Claims Act.  President Obama is expected to sign the measure.

The changes to the False Claims Act are due to a perception among some lawmakers that recent federal court decisions may have restrained the law from achieving its intended goals.  False claims lawsuits often target hospitals, physicians and pharmaceutical companies because their businesses receive massive sums of federal dollars.

Under the new legislation, the attorney general would be required to submit an annual report to Congress about settlements made under the FCA.  This would help to assess whether the Department of Justice is using the act as it is intended and ensure that qui tam plaintiffs are protected in bringing an action.


© 2009 Parsonage Vandenack Williams LLC

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American Recovery and Reinvestment Act Includes COBRA Changes

The American Recovery and Reinvestment Act of 2009 (“ARRA”) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage starting on or after February 17, 2009 and lasts for up to nine months.


COBRA gives employees who lose their jobs, including their health benefits, the right to purchase group health coverage provided by the plan under certain circumstances.

If the employer continues to offer a group health plan, the employee and his or her dependants can keep their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed, but in general, the cost is lower than that for private, individual health insurance coverage.

The plan administrator must notify affected employees of their right to elect COBRA. The employee and his or her dependants each have 60 days to elect the COBRA coverage, otherwise they lose all rights to COBRA benefits.

It is important to note that COBRA generally does not apply to plans sponsored by employers with less than 20 employees. However, many States (including Nebraska) have similar requirements for small plans providing benefits through an insurance company. The premium reduction is available for plans covered by these State laws.

Changes Regarding COBRA Continuation Coverage Under ARRA

Premium Reduction:  The premium reduction for COBRA continuation coverage is available to “assistance eligible individuals.”

An “assistance eligible individual” is the employee or a member of his or her family who:

·         is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;

·         elects COBRA coverage; and

·         is eligible for COBRA as a result of the employee’s involuntary termination between September 1, 2008 and December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

ARRA treats assistance eligible individuals who pay 35 percent of their COBRA premium as having paid the full amount. The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes. If the credit amount is greater than the taxes due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess.

The premium reduction applies to periods of coverage starting on or after February 17, 2009. A period of coverage is a month or shorter period for which the plan charges a COBRA premium. The premium reduction starts on March 1, 2009 for plans that charge for COBRA coverage on a calendar month basis. The premium reduction for an individual ends upon eligibility for other group coverage (or Medicare), after 9 months of the reduction, or when the maximum period of COBRA coverage ends, whichever occurs first. Individuals paying reduced COBRA premiums must inform their plans if they become eligible for coverage under another group health plan or Medicare.

Special COBRA Election Opportunity:  Individuals involuntarily terminated from September 1, 2008 through February 16, 2009 who did not elect COBRA when it was first offered OR who did elect COBRA, but are no longer enrolled (for example because they were unable to continue paying the premium) have a new election opportunity. This election period starts on February 17, 2009 and ends 60 days after the plan provides the required notice. This special election period does not extend the period of COBRA continuation coverage beyond the original maximum period. COBRA coverage elected in this special election period begins with the first period of coverage beginning on or after February 17, 2009. Additionally, this special election period opportunity does not apply to coverage sponsored by employers with less than 20 employees that is subject to State law.

Notice: Plan administrators must provide notice about the premium reduction to individuals who have a COBRA qualifying event during the period from September 1, 2008 through December 31, 2009. Plan administrators may provide notices separately or along with notices they provide following a COBRA qualifying event. This notice must go to all individuals, whether they have COBRA coverage or not, who had a qualifying event from September 1, 2008 through December 31, 2009.

Individuals eligible for the special COBRA election period described above also must receive a notice informing them of this opportunity, which must be provided within 60 days following February 17, 2009.

Expedited Review of Denials of Premium Reduction: Individuals who are denied treatment as assistance eligible individuals and thus are denied eligibility for the premium reduction (whether by their plan, employer or insurer) may request an expedited review of the denial by the U.S. Department of Labor. The Department must make a determination within 15 business days of receipt of a completed request for review. The Department is currently developing a process and an official application form that will be required to be completed for appeals.

Switching Benefit Options: If an employer offers additional coverage options to active employees, the employer may (but is not required to) allow assistance eligible individuals to switch the coverage options they had when they became eligible for COBRA. To retain eligibility for the ARRA premium reduction, the different coverage must have the same or lower premiums as the individual’s original coverage. The different coverage cannot be coverage that provides only dental, vision, a health flexible spending account, or coverage for treatment that is furnished in an on-site facility maintained by the employer.

Income limits: If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid. For taxpayers with adjusted gross income between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers), the amount of the premium reduction that must be repaid is reduced proportionately. Individuals may permanently waive the right to premium reduction but may not later obtain the premium reduction if their adjusted gross incomes end up below the limits.

Fact Sheet: COBRA Premium Reduction

U.S. Department of Labor

February 26, 2009

  © 2009 Parsonage Vandenack Williams LLC

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On January 16, 2009, the Family and Medical Leave Act (“FMLA”) regulations issued U.S. Department of Labor went into effect.  This is the first major update since the FMLA was enacted over 15 years ago.  Although the basic rights have not changed, Congress amended the FMLA to provide new leave rights relating to military family leave and also updated and modified certain other FMLA regulations.  A summary of the key items in the new regulations is provided below.


Serious Injury or Illness of Covered Service Member


The changes to the FMLA authorize up to 26 weeks of leave for certain family members to care for seriously ill or injured military personnel.  The provision is not limited to just immediate family members.  Rather, an employee eligible for this type of leave includes next of kin as well as immediate family members.  The serious injury or illness provision is different from the FMLA’s serous health condition provision.  A serious injury or illness is one that “may render the service member medically unfit to perform the duties of his or her office, grade, rank or rating.”  The regulations clearly state that an employee cannot combine the standard 12 weeks of FMLA leave with the 26 weeks of service member leave.


Qualifying Exigency for Military Personnel


The changes to this provision include up to 12 weeks of leave in a 12-month period due to a “qualifying exigency” relating to an employee’s immediate family member being on active duty, or who has been notified of an impending call to active duty, in support of a contingency operation.  This type of leave does apply if the service member is a member of the regular armed forces – it applies only to members of the reserves or the retired forces.


According to the statute, a “qualifying exigency” includes: (1) any issue that arises from receiving short notice of deployment (seven or less calendar days of deployment), where leave can be used during the seven calendar days; (2) attendance at official ceremonies, programs, family support programs, or informational briefings; (3) arrangements of childcare or attendance at certain school activities; (4) to make or update legal or financial arrangements; (5) to attend counseling; (6) to spend time with a military service member on short-term rest and recuperation (limit of five days); and (7) post-deployment official programs, or issues relating to death.  The need to take leave for one or more of the above reasons must be related to the service member’s active duty or call to active duty.


Serious Health Condition and Continuing Treatment


Under the current regulations, a serious health condition may be established by a three-day period of incapacity that is followed by subsequent treatment.  However, under the new regulations, the subsequent treatment needs to occur within specific timeframes.  If the subsequent treatment consists of two or more treatments, the treatment must occur within 30 days of the first day of incapacity.  If the subsequent treatment consists of one visit followed by treatment, the visit (which must be in person) must occur within seven days of the first day of incapacity.


Certification/Fitness for Duty


There are several changes in regard to an employer’s right to request certification under the FMLA.  This includes the ability of the employer to request additional certifications at specific intervals.  The new rules have rules regarding essential functions and serious health conditions.  Specifically, they permit the employer to include information in the certification form directed to the employee’s essential functions and the ability of the employee to perform those essential functions.  This is very significant because a “serious health condition” is defined to include a three-day period of incapacity, which may include an inability to work.  Under the existing regulations, there is no way to evaluate a health care provider’s general assertion of incapacity.  But with the new regulations, there will be an ability for the employer to request specific information relating to the alleged incapacity, through an evaluation of the employee’s ability to perform the essential functions of his or her job.  The fitness for duty form can now also request information about the employee’s ability to perform the essential functions of his or her job.


Doctor Consent


One problem employers have had with collecting needed information was the prohibition on anyone other than the employer’s medical professional contacting the employee’s health care provider.  This has changed.  Under the new regulations, other individuals are also authorized to contact the employee’s health care provider for authentication and clarification, including a human resources professional.  Although a management representative may contact the employee’s health care provider, this may not be the employee’s direct supervisor.


New Forms


The Department of Labor has issued several new forms that fully comply with the new FMLA regulations.  The new forms are not required to be used but will likely prove to be very helpful to employers.  The forms are available at


  © 2009 Parsonage Vandenack Williams LLC
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Employees Have No Absolute Right To Return To Work Following FMLA Leave

The Family and Medical Leave Act (“FMLA”) is federal legislation that gives certain covered employees the right to take unpaid leaves of absence in certain circumstances, including leave for an employee’s own serious health condition. Employees who qualify for FMLA leave may take up to twelve (12) weeks of unpaid leave during any designated 12-month period. Additionally, the FMLA is intended to provide certain return to work protection for an employee who needs to take FMLA leave. However, there are limits to this protection and it is now clear that the protection is not guaranteed.

On April 27, 2006, the federal Fourth Circuit Court of Appeals ruled in the case of Yashenko v. Harrah’s NC Casino Company LLC (“Yashenko”), that an employee desiring to return to work after completing FMLA leave has no absolute right to do so. The Court went on to determine that the decision of the employer to deny reinstatement to the complaining employee was proper under the specific circumstances presented.

In Yashenko, the Defendant managed the gaming enterprise for the Eastern Band of the Cherokee Indians. Mr. Yashenko was employed by Defendant as Manager of Employee Relations. During each of the years 2000, 2001 and 2002, Mr. Yashenko took medical leaves of absence, most of which were taken as FMLA leave. In May 2003, he requested medical leave again due to a serious health condition resulting from problems related to heart surgery. Defendant approved his request for FMLA leave.

While Mr. Yashenko was on his FMLA leave in 2003, Defendant underwent a reorganization, which had the effect of eliminating Mr. Yashenko’s position. Defendant informed Mr. Yashenko of the job elimination and encouraged him to apply for other available positions. Mr. Yashenko declined, saying that he did not feel up to it due to the medication he was taking and his doctors’ recommendations against it.

On July 21, 2003, Mr. Yashenko completed his FMLA leave and sought to return to work. But upon his return, Defendant fired him. Mr. Yashenko then filed suit against his employer in federal court claiming a violation of his right to reinstatement under the FMLA. He also claimed that he was retaliated against for engaging in the protected activity of taking FMLA leave.

First, the court discussed Mr. Yashenko’s claim that the FMLA establishes an automatic right to job reinstatement following leave. The language in one part of the FMLA says that on return from FMLA leave, an employee is “(A) to be restored by the employer to the position of employment held by the employee when the leave commenced; or (B) to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.” Mr. Yashenko argued that the words “to be restored” from this section of the FMLA is plain language sending a clear message that mandates job restoration.

Addressing Mr. Yashenko’s argument, the court examined another provision of the FMLA and the regulations established by the Secretary of Labor interpreting the Act. For instance, the court noted that 29 USC § 2614(a)(3)(B) provides that “nothing in this section shall be construed to entitle any restored employee to. . .any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken leave.” The court found that the regulation interpreting this provision makes clear that an employee has “no greater right to reinstatement” than if the employee had been continuously employed during the FMLA leave period.

Furthermore, the court determined that “an employer must be able to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration of employment.” As such, the court concluded that notwithstanding Mr. Yashenko’s assertions otherwise, the right of reinstatement is not automatic following FMLA leave. The court’s decision is in line with the decisions of four other federal Circuit Courts of Appeal (i.e., the 3rd, 6th, 8th and 11th Circuits).

Mr. Yashenko also challenged Defendant’s decision to reorganize and deny him re-employment. He claimed that the alleged reasons for Defendant’s action was not legitimate and interfered with his FMLA rights, and that Defendant retaliated against him for exercising his protected right to take such leave. In regard to this claim, the court noted three main facts: (1) It was undisputed by the parties that before Mr. Yashenko’s most recent FMLA leave, the finance department had suggested a reorganization that would eliminate Mr. Yashenko’s position; (2) There had already been three restructurings involving the elimination of at least 12 other positions; and (3) Defendant continued to provide Mr. Yashenko with continued benefits until his FMLA leave was completed and offered him the chance to interview for other positions. Based on the foregoing facts, the court held that Defendant did not interfere with Mr. Yashenko’s FMLA rights and that, with respect to the retaliation claim, Mr. Yashenko did not carry his burden of proof to overcome the legitimate non-discriminatory reasons offered by defendant for its action.

The Yashenko decision provides some cover to employers in cases where the employer legitimately would have fired the employee had the employee not taken FMLA leave. One example the court gave is where an employer is planning to fire a poor performing employee but before it can do so, the employee takes FMLA leave. Another example is when the employer eliminates an entire branch of a business, which includes the position of the employee on FMLA leave.

It is very important to note that each case will be judged on its facts. If an employer is simply refusing reinstatement to an employee returning from FMLA leave for a fabricated reason, or worse yet, because the employer is upset that the employee has taken FMLA leave, the Yashenko decision will be no help to the employer. Therefore, employers must be certain that their decision to terminate an employee is the same decision they would have made had the employee not taken FMLA leave. They must also examine any documents or other records that could support (or undermine) that assertion, with specific emphasis on the timing of such records/action vs. when the employee first requested or went out on FMLA leave. Finally, employers must consider all surrounding circumstances to be sure that the decision is not misperceived and thereby ruled to be a violation of the employee’s FMLA rights.

© 2009 Parsonage Vandenack Williams LLC 

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How to Fire an Employee

  Firing an employee is not an easy task – preparation is key.  When firing an employee, careful planning can limit misunderstandings, anger and recrimination.  Before you meet with the employee, make sure that there is detailed documentation in regard to the employee justifying your actions.  Pull together performance appraisals, written warnings, salary information, and all correspondence with that employee, especially if it is related to job performance.

             If an employee is entitled to additional consideration, such as severance, medical coverage, or additional vacation days, you should have your attorney draft a waiver for the employee to sign.  It is important to include all termination benefits to which the employee is entitled.  Make the employee’s receipt of the additional consideration dependent on his or her agreement not to sue.

             You will want to collect everything that the company has given to the employee.  Determine which computer passwords, access codes, and permissions need to be changed.

 If possible, have a witness such as your Human Resources manager observe the proceedings.  This witness will then be available to corroborate the events of the meeting should the former employee decide to sue.

 At the beginning of the meeting, explain to the employee why he or she is being terminated. Be firm but courteous while outlining the reasons as succinctly as possible.  Make sure that the employee completely understands why he or she is being fired, rather than just reprimanded.  Still, try to limit explanations and discussion about the termination.  It is important no to apologize for taking this action.  Give the employee time to express his or her feelings and provide honest answers without leaving room for any debate.

 Finally, explain the conditions of the termination, such as the severance package and any benefits or outplacement services offered. Then have the employee sign all related paperwork, including any appropriate waivers or agreements.  Try to conclude the meeting with a handshake and a sincere wish that the employee do well in the future.  It is always best to leave things on a positive note and keep any hard feelings or upset to a minimum.


 © 2008 Parsonage Vandenack Williams LLC


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