HHS Publishes Interim Final Rule for HIPAA-ARRA Changes

Implementing changes to HIPAA (Health Insurance Portability and Accountability Act) contained in the stimulus package (American Recovery and Reinvestment Act, or ARRA), the Department of Health and Human Services (HHS) on Oct. 30, 2009, published its Interim Final Rule in the Federal Register.

The Final Rule expands the power of the Health and Human Services Secretary to impose civil penalties and fines, which will take effect on Nov. 30 for all HIPAA violations occurring on or after Feb. 18, 2009.

The minimum civil penalty per violation is now $100 for violations that would not normally be detected using due diligence but rises to $1,000 if the violation is "due to reasonable cause and not to willful neglect." Violations that are due to willful neglect and are subsequently corrected will be fined a minimum of $10,000, but that rises to $50,000 if no corrective action is taken.

No covered entity (or business associate, which are now treated the same as covered entities) can be fined more than $1.5 million for all violations of a single provision.

In the past, covered entities could block imposition of any fine if they showed they had no knowledge of the violation. That loophole has been closed, but fines can be avoided if an unknown violation is corrected within 30 days of discovery.

“This strengthened penalty scheme will encourage health care providers, health plans and other health care entities required to comply with HIPAA to ensure that their compliance programs are effectively designed to prevent, detect and quickly correct violations of the HIPAA rules,” said Georgina Verdugo, director of HHS’s Office for Civil Rights, which oversees HIPAA’s privacy, security and breach notification rules.  

The increased penalties in the Final Rule are in addition to breach notification requirements announced earlier this year.

The HHS’s Office of Civil Rights (OCR) will be accepting public commentary on the Interim Final Rule until Dec. 29, 2009.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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BP Slapped With Largest Fine in OSHA History

BP is the recipient of the largest fine in OSHA (Occupational Safety and Health Administration) history–$87 million, or four times the previous record–for a 2005 accident at a refinery in Texas City, Texas, that claimed 15 workers’ lives. The fines were levied for BP’s alleged failure to correct 271 hazards ($56.7 million) and for another 439 "willful and egregious" violations of industry safety standards ($30.7 million).

“We continue to believe we are in full compliance with the settlement agreement, and we look forward to demonstrating that before the review commission” which has the power to modify OSHA penalties, BP said in a statement.

Six months after the March 23, 2005, explosion, BP paid a $21.3 million fine–then the largest in OSHA history–as part of its settlement agreement.

OSHA attributed the explosion to cost-cutting safety moves, antiquated equipment, overworked refinery employees (some averaging 12 hours a day over 29 days), and a overly ambitious production schedule. Since the agreement, BP said it has spent $1 billion updating equipment and safety procedures.

Before BP’s 2005 accident, the previously highest fine was an $11.5 million penalty ordered in 1991 against the Angus Chemical Company and IMC Fertilizer Group, operators of a Louisiana fertilizer plant where an explosion killed eight workers and injured 120.

With "the new sheriff in town" in charge of the Department of Labor (DOL), Secretary Hilda Solis, OSHA is adopting a more aggressive stance toward safety violations and on-site accidents. This could be one in a string of increased enforcements.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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PC’s Labor Law Posters Updated for New EEOC Poster

The Equal Employment Opportunity Commission (EEOC) recently released a new version of its "Equal Employment Opportunity Is the Law" poster that incorporates new regulations for the ADA Amendments Act (ADAAA) and the Genetic Information Nondiscrimination Act (GINA), along with new contact information.

With GINA taking effect for employers on Nov. 21, 2009, it is imperative to make sure your labor law posters include the revised EEOC posting. Personnel Concepts has revised all of its Space Saver-1 State and Federal Labor Law Posters to incorporate the new EEOC version. Update subscribers will be mailed replacement EEOC panels for their SS-1s in November, and others should call Customer Service at (800) 333-3795 to obtain theirs. If you purchase a new state and federal labor law poster from us, it will include all new mandated postings, including EEOC’s.

GINA protects individuals from discrimination based on genetic information at work and in health care matters. Health insurers and health plan administrators came under GINA’s regulation this past May 21.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Obama Declares National Emergency as CBS Questions the CDC

Vaccinations for the H1N1 virus are in full swing across the country with health officials specifically warning those 24 and younger, along with pregnant women, to get vaccinated as soon as possible.

Over the weekend, President Obama declared a national emergency that will allow hospitals to obtain waivers and do things like pack more hospital beds into smaller spaces and establish off-site facilities to deal with the emergency.

Meanwhile, a CBS study questions the accuracy of the figures being used by the Centers for Disease Control and Prevention (CDC) in calling the swine flu an epidemic. Studying statistics from the states themselves, CBS found that in almost 80 percent of the cases where individuals were tested for H1N1, they didn’t even have the common flu let alone the swine variety.

Preparation is still the best recourse, however, so employers are urged to prepare their workplaces and workforces for the worst. Fortunately, Personnel Concepts has developed a Pandemic Flu Workplace Preparedness Kit to help you do just that. Get yours today.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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New HIPAA Breach Rule Breached by CalOptima

Provisions in the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of the stimulus package passed in February, created new security and breach rules for those covered by HIPAA (the Health Insurance Portability and Accountability Act of 1996), but afforded everyone a six-month window to achieve full compliance that runs into 2010.

Nonetheless, a Medicaid payment processor in California named CalOptima has mostly complied with the breach rule after the company discovered the loss of claims forms for some 68,000 persons. The digitized forms contained personally identifying information on the 68,000 and were lost during shipment by the United States Postal Service.

CalOptima has posted a breach notification on its Web site and also has notified federal and state agencies. The company says it will also notify each of the 68,000 affected individuals. The postal service, for its part, says it will continue to search for the missing data disks.

It is unclear whether CalOptima also notified the media of the breach, which is required when a data loss affects 500 or more people.

Employers who offer health insurance are covered by both HIPAA and the new breach rule, so you may want to sign up for Personnel Concepts’ HIPAA Compliance Poster and Subscription Service to keep yourselves and your employees informed of all rights and responsibilities.

POSTSCRIPT: The missing CDs with encrypted data later were found at a secure postal facility in Atlanta, apparently untampered with. CalOptima subsequently scrapped its plan to mail out individual breach notices to the 68,000 affected individuals.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Ninth Circuit Court Signs Off on 12-Hour Shift Scheme

In 1993, the nurses at Pomona Valley Hospital Medical Center in California voluntarily created and voted for a plan to work 12-hour instead of 8-hour shifts while retaining their hourly rate without being paid overtime.

Under the plan, the nurses went from $22.83 an hour for 8 hours to $19.57 for 12 hours. However, for the 12-hour shifts, they would be paid time-and-a-half for hours nine through twelve and double-time thereafter. The goal was to keep the 12-hour shifts revenue neutral when weighed against the 8-hour pay scale.

Even after the nurses later joined the Service Employees International Union (SEIU) and negotiated a higher hourly rate, the union certified the same 12-hour, revenue-neutral scheme in its collective bargaining agreement.

Everyone was happy to be working fewer days and making the same money as before, until….

A nurse named Louise Parth, who had originally voted in favor of the plan, filed a class action claim on the grounds that the hospital’s approach violated the Fair Labor Standards Act (FLSA) by paying nurses working 8-hour shifts more per hour than those working 12-hour shifts, alleging that it was all a scheme to avoid paying overtime.

A district court heard arguments and granted summary judgment in favor of the hospital. Parth appealed, but the Ninth U.S. Circuit Court of Appeals sided with the district court and dismissed the claim.

The Circuit Court’s opinion was based on an earlier decision by the Supreme Court that ratified such schemes.

After the FLSA was enacted in 1938, many employers altered their compensation schemes—by lowering base hourly rates—to ensure that they paid employees the same overall wages after complying with the FLSA’s overtime requirements, but the Supreme Court had already examined these practices in Walling v. A. H. Belo Corp. (1942) 316 U.S. 624 and ruled that even when the employer’s purpose in lowering hourly base rates “was to permit as far as possible the payment of the same total weekly wage after the [FLSA] as before…nothing in the [FLSA] bars an employer from contracting with his employees to pay them the same wages that they received previously, so long as the new rate equals or exceeds the minimum required by the [FLSA].”

Employers, to help you understand overtime pay requirements under the FLSA, Personnel Concepts has developed its comprehensive but easy-to-implement FLSA Overtime Rules Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Feds Condemn Nevada OSHA Program as Incompetent

In light of 25 recent construction- and workplace-related deaths in the state and on the Las Vegas Strip, Federal OSHA officials have conducted an investigation into the Nevada OSHA program and concluded that it is both ineffective and incompetent.

Complete report available here.

The Feds specifically gigged the agency for not issuing more willful violations, noting that its only willful violation citation was later reduced to non-willful, and for not following up on corrective measures mandated on companies that violated OSHA standards.

Nevada OSHA officials claim that willful violations had proven so hard to win in court that they had become reluctant to issue such citations, but they promised a review of their procedures.

Nevada OSHA officials further acknowledged at a news conference Tuesday (Oct. 20, 2009) that they need to make improvements, including in their overall approach to workplace hazards.

“Looking back, we should have taken a more aggressive approach,” said Donald Jayne, the new head of the state Industrial Relations Division, which oversees the agency. “That’s an easy call.”

In light of its probe in Nevada, Fed/OSHA is now planning to examine other states’ programs as well. It’s still possible that the federal agency may also take the dramatic and previously unused step of assuming control of the state OSH Agency.

“The safety of workers must be priority one, and the U.S. Department of Labor is stepping up its review of state OSHA plans to ensure that is the case,” Labor Secretary Hilda Solis said.

The investigation sprang in large part from a Pulitzer Prize-winning exposé by the Las Vegas Sun. It was the most thorough investigation of a state agency conducted in two decades, according to officials.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Employment Lawsuits Expected to Rise in 2010

A survey of 251 U.S. corporate law offices by the international law firm of Fulbright & Jaworski reveals the likelihood that employment lawsuits will rise still more in 2010. Actually, most respondents said that the level of lawsuits will at least remain the same while 34 percent foresaw a spike.

Of the types of suits currently affecting employers, the wage-and-hour violation is the most prevalent, and the industry most affected by this type of lawsuit is retail.

After wage and hour, the other prominent areas of litigation are discrimination suits, privacy claims, ERISA, disability claims, and age discrimination.

Race and sex discrimination cases appear to be the costliest, both in terms of litigation and settlement.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Wellness Programs Can Result in Workers’ Comp Awards

A case in New York in which an employee suffered a spinal injury while exercising as part of his company’s sponsored wellness program shows that good intentions can sometimes be costly.

Logic Technology Inc. performed on-site work for General Electric, where one of its workers suffered the injury at a GE fitness center. The worker filed for workers’ compensation from Logic Technology, and an administrative law judge affirmed the award. The company appealed to the state Workers’ Compensation Board (WCB) and lost. The issue finally ended up in a New York appellate court.

While the judge and WCB ruled in favor of the employee because they found the injury to have occurred during the course of his employment, the appeals court affirmed the workers’ comp award on different grounds. The court held that, though the injury did not occur because of compensated work or because the employee was required to participate in the fitness program, the company was still liable because it "sponsored" the wellness program. (The court noted that the company would not have been liable had it engaged only in "passive acquiescence" of the employee’s fitness program.)

This ruling applies only to New York so far, but if other states include "sponsored" language in their workers’ comp laws, your company might be liable for a similar claim.

Worth checking into.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Houston Firm Levied $20 Million Fine for Employing Illegals, Crackdown Continues

Declaring it is out "to  target the root cause of illegal immigration," the Department of Homeland Security (DHS) and its Immigration and Customs Enforcement (ICE) unit are scurrying about to inspect companies’ 1-9 employment verification records to make sure no illegal immigrants are on the payroll.

ICE hit the jackpot recently when it inspected Houston’s IFCO Systems, the nation’s largest manufacturer of pallets. Inspectors found 1,000 employees who were not authorized to work in the U.S., and IFCO was hit with a $20.7 million fine.

This approach is the reversal of the Bush-era ICE methodology when companies were raided and the illegal workers rounded up and sent off for deportation hearings. Now it’s the employers who are being targeted and fined.

“Employment is the primary driving force behind illegal immigration,” a DHS statement said. “By working with employers to ensure a legal workplace, ICE is able to stem the tide of those who cross our borders illegally or unlawfully remain in our country to work.”

The DHS statement said ICE would base upcoming investigations on tips from the public, reports from current and former employees and referrals from other law enforcement agencies. “ICE does not randomly target employers,” the statement said. “All investigations and arrests are based on specific intelligence obtained from a variety of sources.”

Though ICE is not directly raiding workforces, it reaffirmed its commitment to prosecuting and eventually deporting those who are found to be here illegally.

Employers, the rules and form for verifying your employees’ eligibility to work in the United States have both changed. Stay current–and in legal compliance–by picking up a copy of Personnel Concepts’ I-9 Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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