COVID Lawsuits Begin

We are now several months into the COVID pandemic and COVID related lawsuits against employers, businesses and hospitals are beginning to appear. A California lawsuit filed against HCA by a group of their health workers and their union alleges that HCA’s management at Riverside Community Hospital in California failed to provide its workers with proper protective equipment and pressured staff to bypass known safety precautions to meet certain quotas.  Further the litigation claims that the HCA did not alert employees to COVID-19 exposures and pressured employees that had symptoms of COVID-19 to return to work against state and CDC guidelines.  The California healthcare workers union that was involved claimed that HCA was particularly lax and particularly sloppy.

You can expect similar lawsuits by healthcare workers but such suits face certain barriers: 

• In many states if you are an employee, it is difficult to bypass workman’s compensation laws and go directly against your employer.
• Contract workers who are not actually employees of hospitals or clinics may have more success since they may not be subject to workman’s comp limitations on claims and payouts.  More and more hospitals have been using contract workers for certain functions including emergency room, some surgery suites and similar activities.  If the COVID lawsuits continue this decision by hospitals to contract out that work may turn out to be an unfortunate decision.
• In some states there are efforts to give statutory immunity to employers for COVID lawsuits. It is difficult to determine the reason why state legislatures may want to give broad immunity against COVID lawsuits.

Employers who have required employees or contractors employees to work during this COVID crisis may want to review their insurance coverage to determine whether they have any insurance coverage or how much insurance coverage they may have for such claims.

Note: Many of these claims are for failure to follow CDC or state department of health protocols, failure to provide adequate personal protective equipment and similar items which may or may not be covered under state workman’s compensation laws or by insurance.

ER Billing Becomes a Flashpoint

Many hospitals “contract out” their ER services to firms that provide the doctors and management of ER suites.  For a number of years these contracted out ER companies have been able to bill at “out-of-network” rates that are typically much, much higher than the rates allowed by the large national insurance companies/payors.  The results in many states were individuals who received ER services later receiving stunningly high balance bills for the employee/ER patient to pay.

Several states reacted to this contractual problem by prohibiting balance billing to individual patients.  New York is one of those states.

The ending of balance billing in states such as New York has now led to open conflict between large insurance providers such as United Health Group and emergency room provider/management companies.

A group of ER staffing firms has sued United Healthcare and a network management firm Multiplan for their refusal to pay the out-of-network rates now that balance billing is prohibited to patients in New York.  To some this is a lawsuit about heartless payors refusing to pay ‘honest’ physicians and physician management companies the correct amount for their ER services.  To the payor, such as United Health, this lawsuit is about craven greed by ER management firms that have for the last several years, used payor and Medicare billing rules to extricate large amounts of money for ER services.  In essence, the insurance companies claim the ER doctors and ER management firms charge unreasonably high rates for their services according to the hospitals, while the ER doctors and ER management firms claim that healthcare insurance companies/payors are conspiring to unreasonably hold down ER doctor compensation and charges.  We understand there are other lawsuits also pending over these matters as the result of the laws that banned balance billing take effect and now healthcare insurers and ER management and supply firms battle it out in court who will take the losses from the ban on balance billing.

RIGHT THE FIRST TIME

Almost half of the countries’ hospitals face lower payment penalties from Medicare patients because of these hospitals’ history of patient readmissions.  This latest release of penalties covers the July 2016-June 2019 period and apparently does not involve any COVID related data.  CMS is still deciding whether to suspend the penalty program during the COVID related period because it will likely skew statistics and the drain on regular hospital resources may make penalties inappropriate.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians, practices and hospitals in contract items, federal legal compliance, practice entity creation, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.