QUARTERLY NEWSLETTER - SPRING EDITION 2012 - #3
It is with deep sadness that we announce the passing of SAC SECURE our dear friend and partner, Vince Acquisto on January 19, 2012. Vince, 71 years young, was surrounded by his loving family at the conclusion of his fulfilling life. We thank our clients for being supportive during this sad time and assure you his memory will live on at SAC. We dedicate this issue to Vince’s memory and his commitment to educate his clients and warn them of the many pitfalls By Karlene J. Rogers-Aberman, Esq., VINCENT ANTHONY ACQUISTO when navigating healthcare law. and Youngsam Salmon, Operations MARCH 18, 1940 - JANUARY 19, 2012 Manager Joy & George In light of the spate of security breaches and HIPAA violations we’ve seen reported SUCCESS STORY recently, we wanted to take this opportunity to reassure our clients that SAC maintains strict security measures with respect to our clients’ confidential business records, inSAC Secures Complete Victory Against TPA After ERISA Plan Goes Bankrupt cluding medical records and patient inforofficial appeals seeking to determine why mation. By Karlene J. Rogers-Aberman, esq. the claim had been underpaid. Each time, In a recent arbitration proceeding filed on Aetna provided vague reasons, including It is SAC’s policy to comply with the Health behalf of a Northern California hospital, that the member’s plan had terminated; that Insurance Portability and Accountability Act SAC obtained full reimbursement plus al- it was no longer administering the self-fundmost four years of accrued interest against ed plan’s account; and that it was only the (HIPAA); the Health Information Technology Aetna. Aetna was the third party adminis- claims administrator and therefore had no Act (HITECH); the F.T.C.’s Red Flag Rules, trator (“TPA”) of a self-funded ERISA plan liability to the hospital for payment. In Aet- and all other applicable rules, statutes and which, unbeknownst to the hospital, had na’s sixth and final response to the hospital regulations. As such, SAC has in place filed for bankruptcy protection a few months in 2010, it finally stated that it was its un- appropriate administrative, technical and derstanding that the plan had filed for bank- physical safeguards to protect the integrity, before its member sought treatment. confidentiality and availability of both paper Typically, a hospital has little recourse ruptcy, and that Aetna had “no information and electronic protected health information against a bankrupt health plan, other than on how to contact them at this point.” to file a creditor’s claim and hope to collect Aetna’s Hospital Services Agreement with (EPHI) received from SAC’s clients and a few pennies on the dollar after all of the the hospital indicated that Aetna had no handled by SAC’s employees and other secured claims have been paid. The plan’s legal responsibility for payment on claims covered entities or personnel. TPA also often escapes liability because it for services rendered to the plan’s mem- The following are just a few examples of a is not the actual “payor” and thus has no ber. However, it also indicated that Aetna comprehensive security system in place at legal or financial obligations to the provider. agreed to “assist reasonably as appropriate SAC: Not so in this instance. In a written deci- in collecting such payments.” The arbitrator sion, the arbitrator’s written statement of agreed with the arguments made by SAC • Quarterly analysis of SAC’s firewalled decision, it was found that Aetna’s conduct that Aetna sought only to dodge its obligacomputer network is performed by a was so egregious, so “negligent” and “inde- tions and failed to offer any assistance to qualified information technology comfensible,” that it owed a duty to reimburse the hospital in obtaining payment. Aetna, pany to identify and remedy detected as the plan’s administrator, was at all times the hospital for the losses incurred. security vulnerabilities; Briefly, the ERISA plan filed for bankruptcy in the best position to know of the plan’s • Regular audits are undertaken pertainin late 2007. In February 2008, its plan ben- bankruptcy status. In fact, after the hospiing to user activity, modifications to our eficiary was admitted, via ambulance, to the tal’s claim for payment had been pending system software and to ensure that hospital which provided medically neces- for several months, the plan converted its Chapter 11 bankruptcy action to a Chapter data integrity is maintained; sary care and treatment until the patient’s discharge a month later. In accordance 7 liquidation proceeding. Ultimately, not a • Electronic transmission of EPHI is prowith its standard procedure, the hospital single one of its 531 creditor claims were tected by the use of passwords and contacted Aetna, who was administering allowed. encryption measures, and all inbound the plan, to verify coverage and obtain au- In rendering the full award plus interest in and outbound email passes through thorization. Aetna duly provided the cov- the hospital’s favor, the arbitrator acknowlspam and virus filtering software; erage information and confirmed that the edged that had the hospital been made hospital would be paid for the entire stay at aware of the plan’s status, it could have • In furtherance of its goal of becoming the contracted rate. The hospital was never made alternative arrangements with the paa completely “paperless” environment, tient. Having been deprived of its ability to told that the plan was in bankruptcy. SAC scans all incoming and outgoing paper documents into its secure netAfter submitting its claim for payment, Aet- do so as a direct result of Aetna’s conduct, work servers. The paper documents na reimbursed the hospital only a fraction Aetna was required to make the hospital are then placed in a dedicated, seof the amount owed. Over the next 2 years whole. and 10 months, the hospital contacted Aet- SAC attorney Christopher J. Hapak litigated CONT’D - Next Page na both through informal phone calls and this matter on the hospital’s behalf.
SAC Takes Security Seriously
TPA Made To Pay