June 2018 - Mix Sanders Thompson
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June
2018
Volume 66 . Number 6
PropertyCasualty360.com
L E S UES
H
E GAL I C I S S
U S V E
O O
M N EW L
P. 24
TO N S E
AU RA I +
RICA
NE CLAIM
S
TUDY
HUR NG S
P. 35 S H OPPI
CE
S U RAN
IN
P. 37
ED ICAL S
CH M UEST
HITE RDS REQ
RECO S
P. 40 R ATEGIE
ST
IA TION
MED
P. 43
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CONTENTS VOLUME 66 | NUMBER 6 | JUNE 2018
Cover Story
Liability in the Age
of Autonomous Vehicles
By Robert F. Tyson and Greta M. Schultz, iconoclast
Tyson & Mendes LLP pg. 46
Some auto risks will not change, but others will shift
from drivers to manufacturers.
Columns
CLAIMS QUEUE
12 Risky Rides: Unique Exposures
for Amusement Parks
By Karen L. Sorrell, CPCU
CLAIMS MANAGEMENT
16 Litigating Product Liability Claims
pg. with Foreign Entities
24 By Shelby Guilbert & Nicholas Hill
FRAUD MANAGEMENT
Features 18 Keeping Clients’ Data Safe
By Donna Rice
35
Legal Lessons Following a Busy CAT Season TECHNICAL NOTEBOOK
By Jason Wolf, Koch Parafinczuk Wolf Susen
20 Corrosion and Hail-Damaged HVAC
Lawsuits related to multiple hurricanes question Coil Repairs
some claims practices.
By Matt Livingston
37
5 Trends Influencing P&C
ICONOCLAST
Insurance Purchases
46 Guns, Schools and Claims – Part 1
By Tom Super and Colleen Cairns, J.D. Power
By Ken Brownlee, CPCU
Insurers must understand how consumers shop
and what attracts them to a brand.
Departments
40
How to Avoid Overpaying for Defense Costs 4..........Online
By Jeremy H. Rogers, Mix Sanders Thompson, PLLC 6..........Editor’s Note
HITECH requests provide insurers some relief from 8..........National Report
medical records expenses.
10........Reporter’s Notebook
43
Motivated to Settle 22........And the Verdict Is…
By Gregory Service
ediation offers policyholders another option
M Claims Visionaries Sponsored Content
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HOW TO
AVOID
OVERPAYING
FOR DEFENSE
COSTS By Jeremy H. Rogers
40 | JUNE 2018 | Claims Magazine | PropertyCasualty360.com
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I
s evaluating a claimant’s medical records and billings a How the HITECH Act limits medical
part of your claims handling process? If so, you under- record retrieval expenses
stand how costly it can be to obtain such records — par- Surprisingly, many carriers and law firms are unaware fed-
ticularly when those materials are voluminous. eral law allows each patient to obtain an electronic copy of
Insurers can easily spend several thousand dollars on his or her medical records for the cost of supplies and la-
medical record retrieval costs for a single claimant. How- bor. In 2009, Congress enacted the HITECH Act, 42 U.S.C. §
ever, a federal law, called the Health Information Technology 17935(e)(1), which provides in relevant part that every per-
for Economic and Clinical Health Act (“HITECH”), pro- son has the “right to obtain from [their health care providers]
vides a simple and straightforward way for insurers to stop a copy of [their medical records] in an electronic format[.]”
overpaying for medical records. HITECH allows health care providers to charge a fee for
only the costs of:
Expenses for obtaining medical records (1) Labor for copying the records requested, whether in
Whether you handle bodily injuries on personal or commer- paper or electronic form;
cial lines, workers’ compensation, special investigations and (2) Supplies for creating the paper copy or electronic me-
fraud, or underinsured/uninsured motorist claims, you ana- dia (e.g., CD or USB flash drive) if the individual requests
lyze claimants’ medical records on a daily basis. that the electronic copy be provided on portable media;
Traditionally, you obtain these records with a release exe- (3) Postage, when the individual requests that the copy be
cuted by the claimant, followed by payment of the healthcare mailed; and
providers’ statutory “per page” fees for paper copies of those (4) Preparation of an explanation or summary of the
records. State law governs the amount of money healthcare records, if agreed to by the patient.
providers may charge for copying medical records. Depend- In the last quarter of 2017 and the first quarter of 2018, my
ing on the state, the costs to obtain printed copies of such firm sought a total of 68,534 pages of medical records and
records can be substantial. incurred $10,726.47 in related fees using HITECH requests.
In Washington, providers may charge $26 for search and The same amount of records, without HITECH requests and
handling, $1.17 per page for the first 30 pages, and $0.88 per using Washington’s statutory per page fee, would have cost
page for all additional pages. In Oregon, it is $30 for the first $75,005.11 in defense costs. Our firm saved $64,278.64 in de-
10 pages, $0.50 for pages 11-50, and $0.25 per page for each fense costs in two quarters by using HITECH requests.
additional page. Under Maryland’s regulations, providers
can charge $22.88 for retrieval and preparation, and $0.76 Requirements for HITECH requests
per page for all pages. While in Indiana, there is a $20.00 HITECH’s fee restrictions and cost savings come with several
labor fee, $0.50 per page for pages 11-50, and $0.25 per caveats. First, HITECH’s application is limited to healthcare
page for pages 51 and higher. In Texas, hospitals may charge providers who maintain paperless records, such as hospitals,
$45.79 for the first 10 pages, then $1.54 per page for pages larger facilities and medical practice groups. Smaller and
11-60, $0.76 per page for pages 61-400, and $0.41 per page independent providers who only maintain paper or hand-
for any remaining pages. written copies of records are exempt from complying with
Using a sample claimant with 1,000 pages of records, HITECH. Therefore, it is less likely you will be able to reduce
it would cost a company $914.70 in Washington, $287.50 the retrieval fees associated with most chiropractic and mas-
in Oregon, $782.88 in Maryland, $277.50 in Indiana, and sage records under HITECH.
$627.19 in Texas, to obtain copies of medical records. These The other key trigger for the application of HITECH’s
shutterstock.com/SNEHIT
costs only increase as the volume of the claimant’s records fee limitations is that the records cannot be sought through
increase. However, there is an economical and more effi- subpoenas or release authorizations. You cannot obtain
cient way to obtain these necessary records to in include in the records unilaterally or for your sole benefit and receive
an evaluation. any cost savings. In February 2016, the U.S. Department of
PropertyCasualty360.com | Claims Magazine | JUNE 2018 | 41
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Health & Human Services (“HHS”) made this point clear, ex- requests. Among those are hospitals and medical facilities, as
plaining that: well as records retrieval vendors and service providers.
“[T]hird parties often will directly request [medical records HITECH does not cover the costs associated with producing
from a health care provider] and submit a written HIPAA autho- paper copies of medical records. Typically, and in order to max-
rization from the individual . . . for that disclosure. Where the imize profit, healthcare providers assume that claimants want
third party is initiating a request for [medical records] on its own paper copies and charge their state’s statutory per page fee for
behalf, with the individual’s HIPAA authorization . . . the access such records. Even with HITECH requests calling for produc-
fee limitations do not apply.” [See Individuals’ Rights under HI- tion of electronic copies on portable media, some health care
PAA to Access Their Health Information 45 CFR § 164.524, U.S. providers still attempt to produce paper copies and bill their
Dept. of Health & Human Services (Feb. 25, standard fees. Diligence is required to get
2016).] Instead, you will need the claimant’s some healthcare providers to strictly comply
help in obtaining the desired records. THE OTHER KEY with HITECH’s requirements.
Under HITECH, the claimant, or a per- For records retrieval vendors, HITECH re-
sonal representative of the claimant (and not TRIGGER FOR THE quests run contrary to their business models
simply the claimant’s attorney), must make a and profit margins. While some vendors spe-
direct request for his or her medical records.
APPLICATION cialize in obtaining and scanning paper copies
In applying HHS’s guidance, at least one OF HITECH’S FEE of medical records, and others focus only on
court has agreed that claimants’ counsel do scanning and categorizing such records, there
not qualify as “personal representatives” for LIMITATIONS IS are not a lot of services they can offer when re-
purposes of HITECH. THAT THE RECORDS trieving electronic copies of medical records.
In Bocage, v. Acton Corp., the U.S. District This is because under HITECH, healthcare
Court for Southern Alabama dismissed a law- CANNOT BE providers are obligated to transmit electronic
suit in which plaintiffs’ counsel requested ac- copies of records to the third party that the
SOUGHT THROUGH
cess to the medical records under HITECH claimant clearly designates to receive them.
for application of its fee restrictions, holding SUBPOENAS For decades, the standard way to obtain
that “a legal representative who requests an medical records has been through use of re-
individual’s protected health information (and OR RELEASE lease authorizations, followed by payment of
is not a personal representative of the individ- AUTHORIZATIONS. per page fees. The use of HITECH requests is
ual) is not entitled to the fee limitations im- one way for companies to effectively reduce
posed under” the HITECH. their defense spend. Companies may also
Rather, HITECH requires that three requirements must be met save more by avoiding the unnecessary logistical costs of scan-
for a claimant to transmit his or her records directly to another ning and storing volumes of paper medical records. As technol-
person, including: (1) the request must be in writing; (2) the re- ogy evolves, companies may find even more cost-effective ways
quest must be signed by the individual or personal representative; to lower their records costs in the future.
and (3) the request must clearly identify the designated person and
where to send the claimant’s records. Jeremy H. Rogers (jeremy@mixsanders.com) is an attorney
at Mix Sanders Thompson, PLLC, a litigation defense firm in
No benefits for suppliers of paper records Seattle, Wash. He defends insureds in general liability matters
Not everyone is enamored with the cost savings claimants (and, in federal and state court, offers coverage advice, and assists in
by extension, the claims defense industry) receive from HITECH special investigations.
42 | JUNE 2018 | Claims Magazine | PropertyCasualty360.com
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