Use of cyberinsurance continues to grow

Travis Wall was extensively quoted in an article recently published in Dell’s Tech Page One about the growing use of cyberinsurance among companies. According to an August 2013 Ponemon Institute report, 76 percent of companies believed cyberthreats represented the biggest danger to their sustainability.  

According to Wall, few companies appreciate the actual time and costs involved in responding to a data breach.

Without a cyberpolicy, companies have no protection against damages related to these risks,” says Travis R. Wall, a partner at Barger & Wolen LLP, a San Francisco-based insurance law firm and the founder of the firm’s Cyber Risk and Technology Group. “The costs can be significant for both large and small companies.”

The article goes on to discuss misconceptions small and large companies have with regard to cybersecurity issues as well as the varying cost of cyberinsurance.

Companies should weigh their needs carefully before deciding on the appropriate coverage. Insurers offer a variety of [coverage options], but not all are relevant to all companies,” Wall says.

Companies should ensure they can address their “minimum” requirements, Wall says. “All companies should have data security insurance covering the loss or theft of employees’ or consumers’ personal information,” he says. “In general, cyberpolicies exclude coverage for losses arising from an insured’s fraudulent or dishonest acts or from willful violations of laws or statutes.

For more information on Barger & Wolen's Cyber Risk & Technology practice, please contact Travis Wall.

Is Chronic Lyme Disease More Debilitating Than Other Chronic Illnesses? New CDC Survey says Yes.

A recently published patient survey found that those with chronic Lyme disease experience significantly lower health quality status compared to those with other chronic diseases. In a study of over 3,000 patients with chronic Lyme disease, the Lyme patients reported a poorer quality of life than patients with other chronic diseases (including diseases such as congestive heart failure, diabetes, multiple sclerosis and arthritis).

Although the full impact of this disease is not widely understood, this study suggests that the majority of patients with chronic Lyme disease have severe symptoms, require a great deal of medical care, and suffer a low quality of life with high disability and unemployment rates. Furthermore, Lyme patients reported more damaging mental and physical health days, a significant symptom disease burden, and greater activity limitations. It is not surprising that these symptoms can lead to greater impairment in ability to work, increased utilization of healthcare services, and greater out of pocket medical costs.

Most Lyme survey participants reported suffering from three or more symptoms that were either severe or very severe, including fatigue, sleep impairment, joint pain, muscle aches, and other types of pain. Over 40% of respondents reported they were currently unable to work because of Lyme disease and 24% reported they had been disabled at some point in their illness.

Lyme disease, caused by the bacterium Borrelia burgdorferi, is transmitted to humans through the bite of infected blacklegged ticks. According to the Center for Disease Control and Prevention (CDC) Common symptoms include fever, headache, fatigue, and a characteristic skin rash called erythema migrans. If untreated, infection can spread to joints, the heart, and the nervous system.

If life with chronic Lyme disease becomes unmanageable and debilitating, you might find your symptoms greatly interfere with your ability to work. Unfortunately Lyme disease is not widely recognized, and insurance companies do not always understand the difficult nature of this disease. This means you must be your own best advocate, and demand proper diagnosis, treatment, and insurance coverage for your disease. If you have questions about your long term disability insurance policy, or have experienced a long term disability insurance denial for chronic Lyme disease, contact our office for a no-cost consultation.

We understand, and we can help.
www.kantorlaw.net (800) 446-7529

For more information on these new survey findings for chronic Lyme disease, see: http://lymedisease.org/news/lyme_disease_views/news-largest-survey-of-chronic-lyme-finds-high-disability-unemployment-medical-costs.html

A Welcome Clog in Rhode Island’s School-to-Sheltered-Workshop Pipeline

Smiling womanMarie has a developmental disability. She is employed but not in a competitive workplace. Rather, Marie works in a “sheltered workshop,” a segregated workplace for individuals with intellectual and developmental disabilities. The sheltered workshop has not offered Marie any job training or support that will allow her to move to competitive employment, as she would like to do. Nor has anyone there asked her about her interests or goals. Rather, she was directed to the workshop straight from high school and has spent years there earning about $2 an hour, far below the minimum wage.

Under federal disability and rehabilitation laws, Marie should not be stuck in this situation. The Individuals with Disabilities Education Act—more commonly known as “IDEA”—and the Rehabilitation Act are supposed to effect a smooth transition from high school to targeted employment, with school officials and vocational rehabilitation agencies working together. And the Americans with Disabilities Act (ADA) requires that services for people with disabilities—such as those of vocational rehabilitation agencies—be offered in the most integrated setting that is appropriate. Marie’s long tenure at the sheltered workshop falls far short of these goals.

While Marie is a fictional character for illustrative purposes, in reality, more than 400,000 people like her are working in sheltered workshops across the country. Many of them work there for years after being placed there directly from high school. This path has been called the “school-to-sheltered-workshop pipeline,” echoing the lament of other civil rights advocates about the “school-to-prison pipeline.”

But just this month, the U.S. Department of Justice struck a blow to the sheltered-workshop pipeline in Rhode Island. What began as a Fair Labor Standards Act investigation by the U.S. Department of Labor—the workshop in question sometimes paid its employees less than $1 an hour—turned into a Justice Department investigation into violations of the ADA and IDEA. The Justice Department found a clear pipeline from a local special education program to a sheltered workshop. It also found a broader statewide pattern of segregation: about 80 percent of people receiving such state services were placed in sheltered workshops and similar segregated programs, and only 5 percent of students with developmental disabilities moved from school into jobs in integrated settings.

This month’s agreement between the Justice Department and Rhode Island gives the state 10 years to take specific actions to fix its violations of the ADA and to end the school-to-sheltered-workshop pipeline and unwanted segregated employment for individuals with developmental disabilities. The agreement has been hailed as long-overdue progress and could serve as a nationwide model.

Coincidentally, the current issue of Clearinghouse Review: Journal of Poverty Law and Policy, which has an education law theme, contains an article that dives deeper into this phenomenon. Ronald M. Hager’s article, Stemming the School-to-Sheltered-Workshop Pipeline, looks at the failures of the rehabilitation system to assist students with developmental disabilities as they transition from high school to employment. He lays out in detail how schools and rehabilitation agencies can use a student’s individualized education program (IEP) to make a smooth, holistic transition from school to the world beyond. And he relates the interesting history of the case in Rhode Island that settled last week.

The forthcoming May-June issue of Clearinghouse Review will further explore the challenges facing individuals with disabilities and low income. In anticipation of the issue, the Shriver Center will host a webinar on May 7 looking at alternatives to guardianship for individuals with intellectual and mental health disabilities. Finding less-restrictive alternatives to guardianship, much like ending segregated sheltered workshops, is one more way advocates can work to preserve the autonomy of their clients with disabilities.

 

Asking the Right Questions About Your Disability Coverage

We represent a number of clients who suffer from Rheumatoid Arthritis and various other rheumatic conditions. Recently, the American College of Rheumatology posted a blog on its website advising the newly diagnosed to ask the “right” questions. You can see that advice here: http://simpletasks.org/asking-right-questions-diagnosis/#src=social.

That got us thinking about how you can ask the right questions about your disability coverage.

Rheumatoid Arthritis (“RA”) is a chronic disorder in which the body’s immune system attacks joint tissue and causes inflammation that can spread throughout the body. It can also cause excruciating pain. Because there are very few visible symptoms during most stages of this disease, its sufferers appear to be fine when in reality, they are in extreme pain.

Another difficult aspect of RA, from a disability standpoint, is that there is no single test for diagnosing the condition. Rather, it is diagnosed by clinical evaluation, lab tests and imaging. This makes meeting your long term disability plan’s definition of disabled more difficult as insurers are often looking for “objective evidence” of disability.

Moreover, studies have shown that RA can result in depression and anxiety for those diagnosed with this disease. This can further complicate a long term disability claim under a policy that limits benefits for disabilities caused or contributed to by a mental or nervous disorder.

Kantor & Kantor can offer you help with your disability claims - should you become disabled by RA or other rheumatic conditions. We can help you ask the right questions, such as: what are all of my symptoms; did my depression start after or before my diagnosis? What kinds of medications am I taking? Are their side effects also disabling me? What does my policy say about appropriate treatment?

If you have been diagnosed with RA or another rheumatic condition, and the symptoms (and side effects of the medications to treat it) become disabling, please do not hesitate to contact Kantor & Kantor for a no-cost consultation at (800) 446-7529.

We understand, and we can help.
www.kantorlaw.net

Claim Denied! … How To Deal With Surprising Insurance Denials

It’s safe to say that most insureds have dealt with some type of insurance obstacle, whether it was a billing error that seemed nearly impossible to correct, a medication/procedure/treatment that was unfairly denied, or an outright denial of benefits. While insurance complications like these can be incredibly frustrating, overwhelming, and financially draining, there is another denial tactic used by insurance companies that is absolutely appalling: the insurance denial AFTER an authorization has been granted, and AFTER the procedure is already completed.

How can this be? How is it possible for an insurance company to deny a procedure, after it has already been approved? There are several reasons this type of insurance denial, and understanding these reasons can help you to (1) prevent denials, and (2) advocate for your benefits even after the denial.

First, you should understand that procedures (for example, a back surgery for a herniated disc) must be considered “medically necessary” to be covered by your insurance company. The law is clear that medically necessary care must be provided, however, there’s a catch: your insurance company can review your case for medical necessity both before and after a procedure. Thus, it is possible for them to come to a different conclusion after your procedure has been completed, which could mean an insurance denial…and a massive and unexpected bill.

So, what can you do to protect yourself against this type of insurance denial?

1. Get it in writing! Be sure to request a copy of your authorization letter from your insurance company, as well as a confirmation letter from your physician stating that he/she plans to perform the same procedure that has been authorized. If your initial request for authorization is denied, contact our office for support.

2. Know the Code: It is critical that the procedure code listed on your authorization letter is the same code that is billed by your healthcare provider. If your healthcare provider submits a code that is different from your authorization letter, your claim will probably be denied. Watch out for simple coding errors!

3. Appeal the decision: An insurance denial, whether it is before your procedure or after your procedure, is NOT the final word. The appeal process is complicated, but it is often worth the effort! Pay attention to time limits and deadlines, and if you do not feel well enough to file an appeal, you may want to reach out to an experienced attorney for help. For tips on preparing your appeal, see our blog on Preparing for a Long Term Disability Insurance Benefits Appeal.

For more on insurance denials, see When insurers don't pay for surgery.

In our experience, a common problem is the denial of authorizations for health procedures – for example, back surgeries. Many of our clients come to us when their insurance company has denied authorization for a medically necessary back surgery, which leaves them in pain and without the opportunity for treatment and healing. Unfortunately, it is the rare individual that can afford to pay out of pocket for this procedure. We have successfully argued that such treatment is not investigational, as claimed by the insurance company, but rather a medically appropriate and necessary treatment, accepted as proven and effective within the medical community, and utilizes FDA approved devices.

If you have experienced a procedure related insurance denial, please do not hesitate to contact our office for a no-cost consultation.

We understand, and we can help.
www.kantorlaw.net (800) 446-7529

Indiana: New Home Warranties Must Be Insured

When faced with a subrogation loss involving a new or fairly new house, and a potential construction defect that caused the loss, one of the first things to look for is how warranties can help or hurt your case. Did the builder give an express warranty? For how long? Were any warranties disclaimed? Do implied warranties exist? What if your homeowner isn’t the original buyer- do the warranties extend to subsequent purchasers?


Indiana has a unique approach to new home construction warranties. The Indiana New Home Construction Warranty Act (the “Act”) (see Indiana Code §32-27-2-1 et. seq.) allows a builder to provide specific warranties and disclaim all implied warranties if the text of the statute is followed. The express warranties are very specific in terms of what must be warranted, and for how long. For instance, if a builder utilizes the Act, it must provide a four year warranty covering defects in the home’s roof. In addition, in order to comply with the Act, the warranties must all be backed by an insurance policy at least equal to the purchase price of the new home, as well as completed operations products liability insurance covering the builder’s liability for reasonably foreseeable consequential damages arising from a defect covered by the warranties that the builder provides. The Act also provides that the express warranties, as long as they have not expired, will extend to subsequent purchasers.


The statute allows for recovery damages arising from the breach as well as reasonably foreseeable consequential damages arising from the defect and attorney’s fees, if provided for in the written contract.


Why would a builder choose to give a buyer express warranties via the Act? The likely answer is that it allows the builder to have control over its liability if a construction defect occurs. In Indiana, the implied warranty of fitness and habitability and the implied warranty of workmanship are warranties determined by case law and are not based in statute. If a builder provides express warranties in compliance with the Act, it is able to disclaim these implied warranties and the uncertainty of limitless liability. If a builder provides express warranties via the Act, it is assured that any warranty liability will be covered by insurance. This also works to the benefit of a plaintiff in a subrogation case, as there will be guaranteed insurance for the construction defect if the builder complies with the Act.
 

Based on the foregoing, when presented with a construction defect claim or case in Indiana, it is important to look at the contract to see if the builder has provided an express warranty pursuant to the Act.
 

Illinois Tightens Settlement Procedures

We have all experienced the frustration of having negotiated an acceptable settlement recovery after years of loss investigation and discovery, only to have the settling defendant drag its heels in terms of proffering a release and/or tendering the settlement proceeds. That frustration will be felt less frequently in Illinois due to new legislation.

Effective at the beginning of 2014, Illinois Code of Civil Procedure sec. 735 ILCS 5/2-2301 mandates that a settling defendant must tender to the plaintiff a release within 14 days of written confirmation of the settlement (735 ILCS 5/2-2301(a)). The settling defendant must pay all sums due to the plaintiff within 30 days of tender by the plaintiff of the executed release and all applicable documents contemplated by the statute that may be necessary (735 ILCS 5/2-2301(d)): a court order approving the settlement if court approval of the settlement is required (735 ILCS 5/2-2301(b)) and documents regarding the release or resolution of liens (735 ILCS 5/2-2301(c)).

If, following a hearing, the court finds that timely payment has not been made, 735 ILCS 5/2-2301(e) mandates that judgment shall be entered against the non-compliant defendant for the amount set forth in the executed release, plus costs incurred in obtaining the judgment, and interest at the rate specified under 735 ILCS 5/2-1303 (currently 9% per annum) from the date plaintiff tendered the executed release and all other applicable documents.

The new procedure applies to all personal injury, property damage, wrongful death and tort actions, except as otherwise agreed to by the parties (735 ILCS 5/2-2301(g)). It also does not apply to the State of Illinois; any State agency, board or commission; any State officer or employee sued in his or her official capacity; any person or entity that is being represented by the Attorney General and being provided indemnification by the State pursuant to the State Employee Indemnification Act; any municipality or unit of local government; or any class action lawsuits.
 

Towers Watson risk transfer program aims to offload retiree health care risks

Last week, Towers Watson & Co. unveiled a program that would enable employers to eliminate unfunded retiree health care plan liabilities for Medicare-eligible retirees by shifting those liabilities to insurers through the purchase of group annuities.

Barger & Wolen partner Michael Newman told Business Insurance in its March 30th story about the program that retiree health care plan liabilities are a big issue for some employers.

“A lot of employers want to defuse those liabilities, but many will wait and see” for results before deciding, Mr. Newman said.

Under the program, employers would first have to adopt a defined contribution approach for health care coverage offered to Medicare-eligible retirees. Under that approach, employers agree to make a fixed contribution towards the premiums of health care plans available through Towers Watson's private exchange, with retirees picking up the difference between the credit provided by their employers and the cost of the plan they select.

In the risk transfer program, the employer would purchase, paying the full premium upfront, a group annuity from an insurer. The insurer then would provide retirees with a monthly tax-free check, which a retiree would put towards the premium of the plan he or she selects in the Towers Watson Exchange, known as OneExchange, through which dozens of insurers offer coverage.

Through the approach, which Towers Watson calls Longitude Solution, an employer would fully shift its retiree health care liabilities, including unknown factors of retiree longevity, to an insurer.

Retiree health care “benefits do not engage or attract new talent, yet they create balance sheet volatility and income statement expense, and divert management time,” Towers Watson said in a written analysis describing the program, claiming those factors would be eliminated through its risk transfer approach.

“This seems to be answering an employer need: to make retiree health care costs more predictable,” Mr. Newman said.

For the full story in Business Insurance , click here subscription required).

Will a Building Boom Be a Bust for Low-Income Residents?

House under constructionHousing affordability has become one of the hottest issue in America's urban centers, and one popular solution is to ramp up housing construction. In his first State of the City address, New York City Mayor Bill de Blasio emphasized that in order to solve its affordability problem, the city must work with developers to build more housing. San Francisco Mayor Ed Lee similarly focused his own annual address on an ambitious plan to build 30,000 units of housing by 2020.

The logic behind this building push rests on the simple principles of supply and demand and the assumption that increasing the supply of homes will lower housing costs. The reason rents are too high, it’s claimed, is because there is great demand for a relatively small number of apartments. Therefore increasing the supply of homes will lower housing costs. But while building seems to be the obvious solution, it's a policy choice that comes with complex questions. Who should build the homes, and who should live in them? Where should the homes be built? If we don't get the answers to these and other questions right, a pro-building policy will do little to ease housing costs of low-income residents, and will likely end up accelerating their displacement from our cities.

The choice of who builds new homes will influence who lives in them. Private, for-profit developers are only likely to build affordable housing if it’s profitable and if there aren't more attractive business opportunities. If we chose to deregulate zoning and rely on the private sector to build (a policy currently championed by liberals and conservatives alike), we'll end up with more housing for the wealthy, as that's what makes developers the most money.

It should be obvious that the development of luxury condos is not a solution to a housing affordability crisis, but advocates of deregulation, like popular economics blogger and The Rent is Too Damn High author Matt Yglesias and urban economist Ed Glaeser, insist that even those who can't afford to live in these homes will benefit. When a high-income person moves into a new luxury unit, the argument goes, she frees up her old home for a slightly lower-income person to move in. This scenario repeats itself, providing new housing opportunities all the way down the economic ladder.

However, this model doesn’t take into account who is really buying these new luxury properties and why they’re buying them. In cities that attract new real estate buyers from around the world, such as New York and San Francisco, the homes left behind by new luxury condo residents will often be in another housing market, providing no new housing opportunities for existing residents. The most stunning example can be found in Central London, where 70% of all newly built homes are bought by foreigners. In New York, foreign buyers accounted for one out of every three condo purchases in 2011.

And in some cases, the purchasers of these new properties don’t leave any homes behind at all—luxury condos are often bought as real estate investments or second homes. Housing appreciation is so high in these cities that investors have little incentive to rent out their property, leaving some stretches of Manhattan looking like ghost towns.

This spatial mismatch between people and housing, as well as speculative real estate investment, mean that private sector housing development will have diminishing returns as we move down the economic ladder. Vacant homes will be snapped up by speculators and out-of-towners before they ever reach low-income tenants. This creates a scenario where a city will have to satisfy external housing demand before it can even begin to address the housing needs of its current low-income residents. At best, this is a spectacularly inefficient way to deliver affordable housing to those who need it the most; at worst, it doesn't deliver at all.

The federal government must again focus on subsidizing the construction of more affordable housing. New subsidized housing is especially needed in depressed housing markets where no one is interested in building and dereliction has rendered much of the affordable housing supply uninhabitable. A new Urban Institute study shows that low-income residents in depressed markets like Detroit and Buffalo face an even greater shortage of affordable rental housing than their counterparts in New York and San Francisco. It’s also no coincidence that the same study found Atlanta and Chicago, two of the country’s most prolific demolishers of public housing, to be among the cities that made the least progress toward meeting their affordable housing needs over the past decade.

Whether it’s governments or developers, or both, that end up building, it's clear they will have a lot of work to do. We'll need to drastically change parts of our cities in order to build enough housing to make them affordable again. This raises a final question: Which parts of our cities—or, more appropriately, whose parts—will be transformed by this building boom? America's experience with urban renewal and gentrification has taught us that it is largely low-income communities that are destroyed in order to create new housing opportunities. If upper- and middle-income residents aren't willing to share the burden this time around, or if governments lack the political courage to enforce an equitable development plan, then a building boom may only exacerbate the housing problems of low-income residents.

Your Insurance Company Wants You to Give Up On Your Claim

Insurance benefits provided by your employer benefit plan are usually governed by the federal laws of ERISA (Employee Retirement Income Security Act). Not all plans are insured, and instead may be self-funded. But, when they are insured, your dealings will almost always be exclusively with an insurance company.

Under ERISA, you are entitled to receive, upon request and free of charge, "reasonable access to, and copies of all documents, records, and other information relevant to your claim for benefits, including any guidelines relied upon in making this determination.”

The quote above is standard boilerplate language that appears at the end of almost every denial letter issued by a health, life, or disability insurance company when the benefits are governed by ERISA. In such a case, an insurer is required by federal law to give you access to almost all of the documents they utilized in making a claim determination. This includes, but is not limited to, the policy or plan, the medical records, internal notes and memos, and the notes of their reviewing physicians.

The verbiage will vary from carrier to carrier, sometimes being extremely detailed. For example, one carrier we dealt with recently put this in their denial letter:

“You have the right to receive, on request and free of charge, a copy of any internal rule, guideline or protocol, as well as any other documents relevant to your appeal that we relied on in making this decision. You also have the right to receive, on request and free of charge, an explanation of the scientific or clinical judgment that we relied on in making this benefit decision, as well as the diagnosis or treatment codes, and their corresponding meanings.”

Seems pretty simple right? Just send them a written request and you get all the information you could ever want to know about why your claim was denied. After all, ERISA also says they can be fined $110/day if they fail to timely honor your request. Well, like most things in life (or rather, most things in life where an insurance company is involved), a seemingly simple process can be downright maddening!

Take the following story into account when you experience frustration dealing with simple, federally required requests of your own…and remind yourself that if a lawyer is facing this much trouble, then it’s not your fault when you face the same resistance.

• A new client retains Kantor & Kantor after his 91-year-old grandmother has her skilled nursing claim denied by her health insurer;
• Kantor & Kantor immediately sends a request to the insurer for the claim file;
• A week later, we get a letter from the insurer saying they have received our request for an appeal and that we can expect their decision soon;
• That same day, the insurer sends another letter saying that the appeal isn’t going to be processed because no medical records were provided;
• Kantor & Kantor also sends a letter asking for an extension of time to appeal the denial;
• The insurer again responds that they have received our appeal request and will render a decision soon;
• Kantor & Kantor sends another letter, making it abundantly clear that the previous 2 letters were requests for the claim file and an extension, and not the appeal itself;
• The insurer sends 2 more letters, both of which say that the letters we sent do not qualify as appeals (THANKS FOR TELLING US WHAT WE JUST TOLD YOU!), but doesn’t produce any documents from the claim file;
• Kantor & Kantor submits an 800+ page appeal packet on behalf of the client, making sure to point out their errors in our multiple requests for the claim file;
• The insurer denies the appeal in basically 1 sentence, even though their position is completely contradicted by the 600+ pages of medical records;
• Kantor & Kantor sends another request for the claim file, this time quoting word-for-word for the language that appeared in the denial letter that was just issued so there can’t possibly be any confusion on their end (see above);
• (Can you guess what happened next?)
• The insurer sent yet another letter saying they have received our request for an appeal and that we can expect their decision soon;
• I decided to call instead of sending another letter, spoke to a pleasant woman in their claims department, explained the comedy of errors to her, and got her to fax me a letter confirming our conversation and assuring that the requested documents will be sent ASAP;
• 10 days later, I got a packet of documents, 90% of which have nothing to do with the claim at issue;
• I called again and spoke to a supervisor who said she understood the problem and would call me back later that day with how she was going to get me the requested documents…she never called me back.

We offer you this story not to discourage you, but rather to offer you some encouragement for when you feel like you’re ramming your head into a wall while dealing with your insurance company. It’s not you…it’s them. They purposely make the process difficult because they know the vast majority of people will just go away in the end.

So, the best thing you can do when facing resistance from your insurer is to keep fighting! Please remember that if that fight becomes too much to deal with on your own, you can contact our office for a no cost consultation. We might be able to help level the playing field.

We understand, and we can help.
www.kantorlaw.net (800) 446-7529