April 3, 2017
Issues To Consider If Your Personal Injury Claimant Is A Medicare Beneficiary, And Is Being Treated Under Letters Of Protection
One of the more challenging aspects of successful claims resolution arises in situations where a personal injury claimant receives medical care and treatment pursuant to letters of protection. A letter of protection (“LOP”), of course, is an arrangement which allows the injured claimant to obtain medical care in exchange for a promise to pay for those services directly out of a future settlement or judgment. Claims involving LOPs are often difficult, if not impossible to settle, because the amounts billed for services rendered under an LOP are typically many times greater than if those exact same services had been billed through private insurance, workers’ comp or Medicare. Indeed, it is not uncommon to see medical bills rendered pursuant to an LOP totaling ten to fifteen times higher than if those same medical services had been billed under private insurance or some other statutory fee schedule. So, when confronted with astronomical medical bills submitted pursuant to an LOP, are there avenues that can be explored to hopefully mitigate those damages and obtain a more favorable resolution? The answer is “yes”, and one such opportunity arises in situations where the personal injury claimant is over the age of 65 and is (or should be) a Medicare beneficiary. The first step in evaluating whether an opportunity may exist to challenge unreasonable medical bills for services rendered pursuant to an LOP is to determine whether that doctor or facility is a “participating” or “non-participating” Medicare provider, or whether that provider has formally “opted out” of the Medicare program. Medicare requires doctors and other health care providers to formally enroll in the program; and, upon doing so, each provider is furnished with a billing number and a “national provider identifier”. Providers who choose to participate in the Medicare program are required to sign and submit an agreement each year, indicating their willingness to accept assignment for all covered items and services furnished to Medicare beneficiaries for the upcoming year. A vast majority of doctors and providers submit this agreement indicating their willingness to participate in the Medicare program, and abide by its rules and regulations. Indeed, in 2011, more than 97% of doctors were “participating physicians”. Accordingly, absent evidence to the contrary, it is a fair assumption that most providers providing services to claimants who are Medicare beneficiaries have expressly agreed to accept Medicare assignment. A provider who enrolls in Medicare but does not submit a signed participation agreement is considered a “non-participating provider”. A non-participating provider can choose whether or not to accept Medicare assignment on a claim-by-claim basis. However, if a non-participating provider chooses not to accept Medicare assignment for a particular claim, Medicare will instead pay the beneficiary directly for the services provider (at Medicare rates), and the non-participating provider is restricted from billing more than 115% of the Medicare reimbursement rate. In other words, even a “non-participating physician” is still subject to certain billing limitations/restrictions. Of course, a health care provider is also free to formally “opt out” of the Medicare program; however, as noted above, only a very small percentage of doctors (less than 3% in 2011) elect to do so. In order to formally “opt out” of the Medicare program, a provider is required to submit a signed Affidavit to Medicare reflecting this intention, which shall be effective for a period of 2 years. Once it has been determined whether a given health care provider has either agreed to accept Medicare assignment (greater than 97%), or has formally opted out of the program (less than 3%), a subsequent determination can then be made regarding the propriety of an LOP. Specifically, only if a provider has “opted out” of Medicare is that provider authorized to furnish services to a Medicare beneficiary pursuant to a private contract (eg. letter of protection) and the Medicare claims submission and limiting charge rules do not apply. Providers who have enrolled in Medicare are bound by agreement not to charge Medicare beneficiaries individually for services that that patient/claimant could have had covered under Medicare. See 42 U.S.C. § 1395cc. However, it should be further noted that, even if a provider has “opted out” of Medicare and has, instead, entered into a private contract with a Medicare beneficiary, such a contract must clearly state: The beneficiary’s acknowledgement that he/she is giving up all Medicare payments for services rendered; The beneficiary’s acknowledgement that he/she is liable for all charges without Medicare balance billing limitations or assistance from Medigap or other supplemental insurance, and; The beneficiary’s acknowledgement that he/she has the right to receive services from a medical provider eligible for Medicare coverage. So, if a claimant’s attorney asserts that his client’s providers have formally “opted out” of Medicare, request copies of the required Affidavits as well as the “private contract” entered into between provider and patient (to determine whether the required “acknowledgements” have been incorporated within). If the provider (or claimant’s counsel) cannot prove that there has been a proper “opt out” of Medicare, request or remind claimant’s counsel that if his client has received any Medicare covered services from a “participating” provider, or even a “non-participating” provider, section 1848 of the Social Security Act requires that provider to complete a claim form and submit it to Medicare on behalf of the beneficiary/claimant. Generally, claim forms must be submitted to Medicare no later than the end of the next calendar year in which the service was provided. A participating or non-participating provider who misses these filing deadlines cannot bill Medicare for its share of the service furnished – i.e. the provider is no longer entitled to receive the 80% reimbursement from Medicare. However, the provider is still allowed to bill the patient/claimant for his/her portion of the coinsurance (generally 20% of what Medicare would have allowed for a Medicare-covered service) So, depending on the age of the medical bills, if claim forms have not been timely submitted by a “participating” or “non-participating” provider, an argument exists that the claimant’s bills should be properly reduced to an amount that would represent 20% of the Medicare reimbursement rate – as the claimant would have no liability for any greater amount. If a claimant or his/her counsel advises that a provider is unwilling to submit the required claim form to Medicare, they should be encouraged to contact the Medicare Administrative Contractors (MACs), who will take the appropriate action. Health care providers will be reprimanded for their refusal to follow Medicare policy, and may lose their right to bill Medicare altogether for recurring or egregious violations. Finally, in addition to the Social Security Act and the accompany Medicare rules and regulations, Florida Statute § 456.056(4) (titled “Treatment of Medicare Beneficiaries; refusal, emergencies, consulting physicians”) also states that “[i]f treatment provided to a beneficiary is not for such emergency medical condition, and the primary physician accepts [Medicare] assignment, all consulting physicians must accept [Medicare] assignment unless the patient agrees in writing, before receiving the treatment, that the physician need not accept assignment.” Subsection (5) states that “any attempt by a primary physician or a consulting physician to collect from a Medicare beneficiary any amount of charges for medical services in excess of those authorized under this section, other than the unmet deductible and the 20 percent of charges that Medicare does not pay, shall be deemed null, void and of no merit.” Bottom line, if confronted with a claim in which the injured claimant is a Medicare beneficiary and has received medical services rendered pursuant to letters of protection, there are avenues that merit further investigation to challenge the reasonableness and propriety of the corresponding bills.
March 24, 2017
Construction Liens: How Do You Prove The Date Of “Final Furnishing?”
Most construction folks in Florida know that to lien a job, the lienor must file its lien within 90 days of ….something. An unpaid lienor usually starts focusing on this question sometime after its pay application hasn’t been paid for a month or so – not later, we hope. In fact, the lien must be recorded in the public records – filed with the clerk in the county where the property worked on is located – “not later than 90 days after the final furnishing of labor or services or materials by the lienor.” 713.08 (5) The claim of lien may be recorded at any time during the progress of the work or thereafter but not later than 90 days after the final furnishing of the labor or services or materials by the lienor. A lien filed after the 90th day is invalid, and may expose the lienor to liability to the owner for attorneys’ fees and damages. See e.g. Sam Rodgers Props. v. Chmura, 61 So. 3d 432, 436 (Fla. 2d DCA 2011) describing (but reversing) trial court’s holding that lien filed 168 days after last performance of work was “fraudulent and unenforceable”. Filing on time is a big deal, not just because a late filing blows the lienor’s lien rights. Filing late and hoping for the best is not cost free. In a recent matter we handle, the general contractor and a lienor subcontractor disagreed what date the subcontractor last performed work. The general contractor responded to the lien by arguing its job logs showed the last record of the lienor being on the job was several days before the date of final furnishing asserted in the lien, and would have put the lien out past the 90th day. So the question becomes: in your day to day construction operations, would you have evidence to prove what the date of “final furnishing” was? In our matter, the lienor had skillfully created and kept text messages with photos of work with the date and time embedded in the text message. However, offering a text message or an email opens up the entire content of all emails or an electronic device to scrutiny, which creates some risk. In Best Drywall Servs. v. Blaszczyk, 2016 Fla. App. LEXIS 15865, the lienor had to testify at trial to prove its lien. The lienor’s president had to testify to the date of final furnishing (because while the lien is a recorded document, the lien itself is not proof for purposes of trial of the events described in the lien). A living human being has to offer competent testimony to prove each element of the lien. Unfortunately for the lienor, human beings get nervous and forgetful under pressure, and testifying at trial is pressure. The company’s president struggled on the witness stand, and testified to five different dates of final furnishing – including two which would have made the lien late. The court found that, despite the contradictory testimony, the jury could decide which of the five dates it believed, and whether the lien was timely. It’s better to offer written or photographic business record into evidence, than have to coach a witness who’s nervous and bad with dates. Other sources of proof might be delivery tickets, employee time records, dispatch tickets or reports sending an employee to the job, toll records (for an exit near the jobsite), or even a credit card bill entry for a nearby lunch spot. Of course, these kinds of records can go both ways. The question is, what direct, or circumstantial, evidence will make a jury of six people believe the lienor did, or didn’t, have someone working on the job that day, in the face of a GC’s job log that shows otherwise? And how can the lienor – who on the date of last furnishing probably doesn’t know there’s going to be a payment problem – maintain the focus to create and preserve the evidence of the work? An unreliable fix for a late lienor that some have tried is to come back and do some punch list or warranty work, to try to start the 90 day clock running anew. However, the lien law says this won’t work: 713.01(12) “Final furnishing” means the last date that the lienor furnishes labor, services, or materials. Such date may not be measured by other standards, such as the issuance of a certificate of occupancy or the issuance of a certificate of final completion, and does not include correction of deficiencies in the lienor’s previously performed work or materials supplied. With respect to rental equipment, the term means the date that the rental equipment was last on the job site and available for use.” Note that the date of final furnishing is not “measured” by the date of the c.o. or “other standards,” but by actual performance of work, which is not corrective of “previously performed” work. Florida courts have consistently held that corrective work or warranty work does not create a new, later date to restart the 90 day clock. “After the installation of fixtures or equipment in a building, later services in the nature of correction or repair are not regarded as a part of the installation so as to make the time within which to file under a mechanic’s lien based on the original installation run from the time of performance of such later services.” 391 So. 2d 302, 303 (Fla. 5th DCA 1980). But what if the “correction” is doing work that wasn’t done and was therefore also necessary to “complete” the contract – like leaving a doorknob off. In Viking, after the HVAC work was in place and operating, and after owner occupancy, it was necessary to add weep holes to drain the HVAC system, and move a thermostat. Presumably weep holes to drain HVAC condensate is work that was required, but not done, and was therefore necessary to “complete” the job, and not merely “correct” the work. The philosopher Zeno could have confused undergraduates for generations asking whether a missing door knob, or weep holes, is work that is not “complete,” or “corrective”.” In logic, and in the real world, these categories overlap. The court in Viking pushed this logic aside, noting the weep hole addition work was trivial and distant in time. The point here is, despite the logical argument that work not “complete” may also be “collectively” repaired, the courts are not buying this logic: In this case, at the request of the owners, the contractor also returned to the job site in 1978 to install weep holes and had a subcontractor move a thermostat. These items were also to correct or ratify conditions or to eliminate problems resulting from work under the original contract. In addition, as compared to the whole contract work, they were too remote in time and too unsubstantial and too trivial in quantity to extend the time for filing. Viking, 391 So.2d at 303. The Viking court called down precedents where a vendor of 64,700 tons of steel made a later 17 pound delivery to try to restart the 90 days (People’s Bank of Jacksonville v. Virginia Bridge & Iron Co., 94 Fla. 474, 113 So. 680 (1927)), and where an electrician added a single conduit 5 months after “completion” (Finney v. Barber Block Plant, Inc., 183 So.2d 698 (Fla. 2d DCA 1966)). The court bolted a “triviality” standard on the test for final furnishing, to thwart the lienor’s “completion, not merely correction” argument. The lienor in Viking made a compelling argument that the owner might not find the lack of an essential, omitted electrical conduit so trivial, when the owner bargained for it. The court rejected this position because the weep holes were “of comparable insignificance when compared to the total contract work as to not extend the time for filing the contractor’s claim, notwithstanding that the owner insisted that he was entitled to such work under the construction contract.” Id. at 304. The triviality standard doesn’t appear in Sec. 713.01(11)’s definition of final furnishing, but the courts have followed it. The point is that minor corrective or warranty work – or work which is minor, trivial, but ambiguous in nature, like adding an omitted part of the work – is an unreliable tactic to extend the 90 days to file a lien. A lienor who has blown the 90 days might search the contract scope, specifications, or change orders for work which is, as shown by the contract documents, to be part of the contract, and seemingly substantive and nontrivial, to complete. The possible tactic here is to find an omitted, substantive performance – perhaps an ambiguity or an omission – that better fits the real two prong test of “completion” and “nontriviality”. Another alternative: a change order to add work to the existing contract on terms so favorable the GC and/or owner can’t refuse. These approaches are untested. We recommend: The lienor should focus on when the last date of substantive performance was;Document the evidence of the type of performance and date;Invite the owner or GC to agree in writing by an e mail or letter advising that the lienor has last performed on the date;Keep alerts on the calendar.Focus not later than 60 days after the date of last performance on the status of payment. A good lawyer can usually get a lien filed on the last day, but problems like traffic jams, computer crashes and missing information may thwart even heroic efforts. As with turning on homework, why wait till the last minute?
January 26, 2017
Chris Hill Receives Golden Gavel Award
HRKM Partner, Chris Hill, was recently awarded Westfield Insurance Company’s Golden Gavel Award! Presented by Jim Schumaker, the Golden Gavel was given to Chris for his outstanding handling of a claim on behalf of Westfield. We want to congratulate Chris on receiving this honor!
December 20, 2016
Happy Holidays from Everyone at HRKM
Wishing you and your family happiness this Holiday Season and throughout the coming year from all of us at Hill, Rugh, Keller & Main!
December 5, 2016
HRKM Owner, Chris Hill Participates in Charity Golf Scramble
HRKM Owner and Partner, Chris Hill and friends participated in BASE Camp Children’s Cancer Foundation‘s Golf Scramble this past weekend. HRKM was honored to sponsor this organization which supports children and their families going though the challenge of living with cancer and other life-threatening illnesses.
November 20, 2016
HRKM Attorneys Attend OCBA Event in Downtown Orlando
HRKM Attorneys, Nick Patrick, Andrew Showen and Scott Reed had the privilege of attending the Orange County Bar Association’s Joint Voluntary Happy Hour in Downtown Orlando last night. Thank you to the OCBA for hosting such a great event!
November 3, 2016
Hurricane Matthew Reminded Us What Insureds Can Lose When They Give Assignments of Benefits
Hurricane Matthew has brought out repair contractors offering services to property owners who have suffered damages to their homes, businesses and condominiums. Already we’ve seen one form of agreement between a repair contractor and a condominium association with hurricane damage, which contains an “assignment of benefits”. This is language assigning to the contractor, the condominium association or other building owner’s rights to recover compensation from its insurance company for storm damage. Under the assignment, the contractor would take control of the building owner’s right to collect payments for hurricane damage under the under the insurance policy. Requesting assignments of benefits is a common practice for water damage or storm damage repair which in the judgment of this writer has become pernicious and abusive, and ultimately costly to consumers. Under Florida law, insured homeowners have a right to enforce their insurance policy, and if the insurance company refuses to pay or otherwise perform, the insured may recover attorney’s fees. However, the attorney’s fees are a one way remedy: the insurer can’t recover fees from the insured if the insured’s claim is found to be excessive or wrongful. The legislature believed this was an appropriate counter-balance to the insurance companies’ perceived ability to take an too long to pay a claim, or not pay at all, while the homeowner was in need of the money and lacked the financial ability to enforce the contract. The unintended consequence of this law has been that some hurricane damage repair providers and their lawyers have figured out how to manipulate the system. The storm damage repair company takes control of the attorney’s fees remedy and use it as leverage to collect questionable fees for other services. Contracts with consumers (for services like windshield repair or repair of storm damage like Hurricane Matthew) will often include an “assignment of benefits”. The repair company then takes control of the homeowner’s rights under the policy arising out of the incident, including the right to recover attorney’s fees in the event of nonpayment. It is easy to see how this could lead to the practice of the repair provider/assignee making excessive or unreasonable claims against the insurer. It knows that if there is a dispute, even a legitimate dispute over excessive prices or unreasonable services, the insurer risks paying attorney’s fees. It’s cheaper for the insurance company to not dispute a claim even if it is excessive, than to pay two sets of lawyer – its own and the repair company’s – to litigate the issue. As an example, suppose a repair contractor’s bill for fixing Hurricane Matthew damage were to include charges for gasoline to get to the job of $10 a gallon, calling it an “administrative markup.” Most people would call this gouging. The insurer would face the risk of disputing the claim and possibly paying attorneys’ fees many times greater than the disputed amount. The author has personally seen claims go to litigation where an assignee service provider filed suit over a few hundred dollars a day after a bill was sent to an insurer and not paid. A search of the public records disclosed that that same provider had pending dozens of lawsuits in each of the surrounding counties filed by the same lawyers in the same form against multiple insurance companies, over small amounts in dispute, each of these carrying an attorney’s fee entitlement. In the case the writer is aware of, the service provider presented an attorney’s fees claim of $3,000.00 for filing a small claims court lawsuit over an amount in dispute of about $260.00. Multiple this by dozens of hundreds of times – as this practice is very common in both storm repairs and windshield repair – and it comes to a lot of money. Ultimately, this cost is passed back onto the consumer. Which is why signing an assignment of benefits may appear convenient to the insured, but ultimately may not be a good deal. First, the insured losses control of the claim for payment. The claim may end up in litigation between the repair provider holding the assignment, and the insurance company, with repercussions on the insured’s claim history in future premiums and renewals. In a tight insurance market in the future, this could create problems. Second, it’s unclear what happens when there is hidden hurricane damage later discovered which is or should have been a part of the initial claim, which has now been assigned away to the repair provider. Depending on the language of the assignment of benefits – which is drafted by the repair provider and not particularly with the interests of the insured in mind – the insured may have assigned away all of its rights arising out of a particular incident or event, for compensation under the insurance policy. Whether the insured would honor claims for later emerging or under discovered damage arising out of the same event is a gray area. The insurance market is cyclical. Some years it’s not hard to get insurance; other years it’s next to impossible. Wind storm insurance is almost always hard to get. Assigning a claim to a repair provider who may disrupt the business relationship between the building owner and the insurer by filing a lawsuit over a small amount of money that reasonable people could have settled may create future problems for the building owner getting renewals or negotiating a premium. Service providers may portray the assignment of benefits clause as simply an administrative convenience to allow the provider to file the paperwork and collect the money and sparing the building owner the administrative hassles. We believe the same result could be accomplished by simply having the repair provider file out the claim form and present it to the building owner for signature, receiving the check, endorsing it over to the provider, and putting it in the mail.
October 21, 2016
Partners & Staff of HRKM Show Support for Breast Cancer Awareness
In recognition of Breast Cancer Awareness Month, partners and staff of Hill, Rugh, Keller & Main, P.L. “pink-out” the office in Orlando. #BreastCancerAwarenessMonth #PinktoberOrlando
September 28, 2016
Employee Or Independent Contractor: What You Need To Know
The issue of whether an individual is an employee or an independent contractor for liability purposes is not always clear-cut. To resolve the issue, Florida courts apply a multifactor test, with the most important factor being the “extent of control” a company retains over how a worker does his job. For a small business, getting this issue right can mean the difference between success or bankruptcy. In August 2016, Ric Keller, a partner at Hill, Rugh, Keller & Main, P.L., obtained a favorable ruling on this issue from the Fifth District Court of Appeals in a case entitled Middleton v. East Coast Fence. The appellate court affirmed a summary judgment in favor of the employer based upon the general rule that an employer is not liable for the negligent acts of an independent contractor because the employer lacks control over the manner in which the work is performed. In that case, the Plaintiff was driving on I-95 when a Ford pickup truck passed him, pulling a trailer behind it carrying a wood pallet. The pallet flew off the trailer and into the windshield, resulting in serious injuries and multiple surgeries. The Plaintiff argued that driver of the truck, a fencing subcontractor, was an employee of East Coast Fence for liability purposes based, in part, on the fact that he was allegedly required to wear a company t-shirt, place a company sign on the truck, and place a company sign on the customer’s property. In contrast, East Coast Fence maintained that the driver was an independent contractor because it did not control how he did his job. East Coast Fence also pointed out that the worker supplied his own tools and transportation, did not receive employee benefits or a W-2 form, and was paid a flat rate by the job as opposed to an hourly rate. Why are these factors important? The Florida Supreme Court, in Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966), set forth the following factors to be considered in determining whether one is an employee or independent contractor: “The extent of control which, by the agreement, the master may exercise over the details of the work;”“Whether or not the one employed is engaged in a distinct occupation or business;”“The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;”“The skill required in the particular occupation;”“Whether the employer or workman supplies the instrumentalities, tools, and a place of work for the person doing the work;”“The length of time for which the person is employed;”“The method of payment, whether by time or by the job;”“Whether or not the work is a part of the regular business of the employer;”“Whether or not the parties believe they are creating the relationship of master and servant;”“Whether the principal is or is not in business.” Id. In Middleton v. East Coast Fence, the driver’s alleged use of company t-shirts and company signs were certainly relevant factors to be considered, but ultimately these factors were insufficient for the driver to be considered an employee for liability purposes, and the summary judgment in favor of East Coast Fence was affirmed. It is critical for employers to successfully navigate this gray area of Florida law. Whether it is drafting an independent contractor agreement, or litigating the employee/independent contractor relationship, HRKM can help.