* The Trump Administration must keep intact a vital federal law that forbids doctors to refer patients to medical operations where they have a financial interest, the Coalition told the feds. “… these types of self-referral violations end up hurting consumers and driving the cost of health insurance in America ever higher,” Matthew Smith wrote CMS. The Stark Act helps prosecute doctors who gouge Medicare by referring patients to testing labs, clinics and other medical operations they secretly own. Illegal double-dealing places inflated profits over good medicine. Self-referral scams can inflict ill-suited treatment on patients for the sake of big profits, the Coalition told CMS. The Administration wants to water down the 1988 law, believing it’s burdensome for medical providers. The White House also wants to scale back the federal anti-kickback law, which will further loosen anti-fraud controls on America’s federal healthcare system.
* States are heading into the dog days of August with a mixed menu of recent fraud legislation: Massachusetts lost a big chance to protect motorists when an airbag-fraud bill died in the Senate after passing the House in April. … Fraud fighters were happier when a Massachusetts proposal to restrict the use of license plate readers lost traction even though supporters assured everyone that it wouldn’t harm fraud investigations. … In Maryland, Gov. Larry Hogan vetoed a bill requiring government workers-comp self-insureds to report suspected insurance fraud. The bill duplicates existing law, Hogan says.
* With 10,000 Americans turning age 65 every day, scammers often see the elderly as easy targets for insurance fraud. Vulnerable seniors would gain new fraud protections under a new bill in the Pennsylvania House. Financial advisers would gain immunity for good-faith reporting of fraud against seniors. Older fraud victims, or their reps, also can sue scammers and collect attorney fees if they prevail. Punitive damages would kick in if the fraud is willful, wanton or malicious. Legislators remain in session through November, so there’s time to enact new fraud protections for Pennsylvania seniors.
* Fresh from adopting widespread privacy protections, California is debating 2 workers-comp fraud bills. AB 1697 would create a data analytics unit within the state comp division. The new unit would identify fraud, and report the findings to the division. AB 2046 would require state agencies that uncover comp-fraud info to provide that info, upon request, to any state agency that’s investigating comp scams or other insurance fraud. The exceptions would be if providing that info violates federal law or compromises an investigation. Unspent anti-fraud funds from the previous fiscal year also would be rolled into the next year. Both bills have passed the Assembly and are being debated in the Senate.
* The Trump Administration is trying to gut a federal agency that some believe may be working to impose significant limits on investigators’ ability to conduct social-media searches, credit checks and other anti-fraud efforts. The Federal Insurance Agency was created in 2010. The FIO is part of the Treasury Department. It advises federal agencies about insurance matters. Critics view the FIO as an unwelcome federal intrusion into the state-regulated insurance industry. Especially, if as some fear, the agency works to make insurers adhere to highly restrictive privacy policies of the European Union. A House bill would forbid the agency to advise on U.S. insurance matters … terminate the FIO’s subpoena and enforcement powers … and would limit staff to 5 members. The bill is pending in the House Financial Services Committee.
* Puerto Rico took a direct hit by Hurricane Maria last September. The megastorm packed 175 MPH winds, killed up to 8,500 persons and inflicted $91 billion in damage. The NAIC Antifraud Task Force asked the Coalition to create a consumer-outreach plan to warn residents about insurance scams such as deceitful contractors. Maria also exposed residents to disaster-relief scams. Now the island’s leaders are working to reform the state’s insurance laws in Maria’s aftermath. While not fraud-specific, these long-overdue changes will improve the island’s overall insurance market. The hope is that a stronger market will bring better anti-fraud initiatives. HB 1330 would adopt the NAIC’s Service Contractor Model Act. SB 935 would allow international reinsurers into the local market. Both have passed the legislature and await the governor’s signature. The Coalition will continue to assist Puerto Rico in protecting citizens from insurance scams.
* Fraud-fighting efforts in Delaware received a boost this week when a bill was signed increasing the state’s fraud bureau budget by 20 percent. House Bill 303 increases the assessment on insurers doing business in the state from $750 to $900 per year. The bill was passed overwhelmingly in the legislature and supported by fraud fighters who say insurance crime is increasing in the state. Additional funding for other state fraud bureaus likely will be on tap when legislatures open for business next January.
* While most state legislative sessions have ended for the year, Illinois is still open for business and considering a slew of fraud-related bills. One wide-ranging measure impacting workers comp would change what fraud reporting info can be disclosed publicly and expand the scope of claims covered under the law. Another bill, which has already passed the Senate, would change reporting procedures and fund 10 additional fraud investigators. Still another would allow medical providers to tie up disputed claims in court for years. Insurers especially are trying to kill that one.
* A dozen state attorneys general are suing the Trump Administration to stop implementation of a rule that would allow Association Health Plans to be sold to businesses and individuals. The legal action was filed yesterday in U.S. District Court in Washington D.C. The AGs contend that allowing AHPs conflicts with federal healthcare law’s mandate to protect individual and group markets and also violates federal law on employee benefits. In addition, the lawsuit says the rule making process to allow AHPs is illegal. The Coalition met with administration officials to urge them to adopt anti-fraud measures to prevent the sale of bogus AHP plans.
* A new law in Louisiana seeks to put a big red “Cancelled” stamp across health and life policies taken out by fraudsters in the Bayou State. The state now is authorized to retroactively cancel health or life coverage for state workers and retirees, if the policy was obtained fraudulently. The power to determine what is a material misrepresentation is vested in the state Office of Group Benefits. The law applies to state employees, retirees and their dependents.
* The year is barely half over, with 27 new fraud laws and 33 bills pending. A lot has been achieved and a lot more work remains. Even so, the Coalition’s Government Affairs Committee already is planning for 2019. The committee meets July 24 to start identifying legislative priorities for next year. Midterm elections are expected to bring many new faces to statehouses across the nation. Key states like Texas and Nevada, whose legislatures don’t meet every year, will be in session and are expected to be the focus for several anti-fraud bills. Familiar bills such as blocking fraudulent Assignment of Benefits (Florida) and storm-chasing roofers (New York) likely will return. What issues do you think deserve attention in your statehouse next year? Just send your ideas to Matthew Smith.
* Curbing abuses by giant pharmacy benefit managers (PBMs) is the thrust of a proposed model act that NCOIL may vote on at its December meeting in Oklahoma City. State insurance departments could license and have regulatory authority over PBMs in their states. The model closely follows an Arkansas law sponsored by state Sen. and NCOIL President Jason Rapert. A handful of large PBMs hold an outsized impact on near-monopoly pricing of prescription meds, what drugs are included in plan formularies, and how the drugs are dispensed. Kentucky recently fined CaremarkPCS Health $1.5 million. Optum RX overcharged Ohio’s state-run workers-comp bureau $5.6 million in 2017, a state audit found. NCOIL is gathering input on the proposal for a possible December vote.
* Amid temperatures nearing 100 degrees, the nation’s leading insurance legislators are meeting in Salt Lake City this weekend to turn up the heat on fraud. At NCOIL’s summer meeting, legislators adopted a model towing act. The model prohibits over-aggressive solicitations by towers … allows insurers reasonable access to inspect vehicles before storage charges mount or repairs begin … limits how far a vehicle may be towed (absent the owner’s specific direction) … and requires itemized invoicing for towing and storage fees. NCOIL members also voted to renew 2 model acts supported by the Coalition. Legislators re-endorsed previously adopted models addressing airbag fraud, and an anti-runner model. The Coalition’s government affairs chief Matthew Smith is attending and joining with other Coalition members to ensure anti-fraud initiatives remain prominent discussion items.
* California’s new law protecting personal privacy rights has captured headlines lately. Yet the nation’s biggest new breakthrough in privacy rights may rest with South Carolina’s recent law addressing data and privacy protections. That state’s Insurance Data Security Act has been widely discussed since enactment in May. Many insurers already are working on compliance. All state-licensed insurers and their agents must develop a data-info security program. It must include a full risk analysis, and show how the insurer plans to mitigate data breaches. The act, however, doesn’t mandate specific safeguards or requirements that insurers must implement. The clock is ticking, as the new provisions take effect Jan. 1. The bill also has a 6-month compliance window. This is the nation’s first law based on the NAIC’s insurance data model security act. States across the U.S. likely will try to adopt the model next year, all or in part, once legislators take office after the November elections. Data privacy and security no doubt will be key issues for elected leaders, regulators, insurers and consumers across the U.S. in 2019.