New Jersey - Volume XIII, Number 12 - December, 2004

DOBI TO SEEK STAY OF ALL MIIX TRIALS In early January 2005, the NJ Department of Banking & Insurance (DOBI) will petition the Superior Court for an order staying all trials of medical malpractice cases involving MIIX insureds. The plan proposed by DOBI would stay all medical malpractice trials until September 2005. During this period, DOBI will attempt to settle as many cases as possible, with a one million dollar cap on the amount to be paid in any one case. If sufficient numbers of cases settle, the remaining cases will then be tried. If not, options include placing MIIX in receivership and implementing the $300,000 state safety net.

It was reported that MIIX has approximately 2,700 open cases, up to 500 more anticipated, and reserves of approximately $550 million. Total liability is estimated at upwards of $725 million, with MIIX spending nearly $1 million a day in legal, administrative, and indemnity expenses.

PHYSICIANS INDICTED FOR PERFORMING UNNEEDED TESTS Two Essex County physicians have been indicted for routinely prescribing and performing unnecessary cardiac diagnostic testing in order to bill at higher specialist rates. The NJ Office of Insurance Fraud Prosecutor (OIFP) alleges the two billed insurance companies more than $35,000 for the unnecessary services and never advised the patients that they were being diagnosed with, or tested for, cardiac-related problems. The two have been charged with second degree conspiracy, health care claims fraud, and attempted theft by deception. Some of the offenses carry a maximum penalty of up to ten years in prison and a fine of up to $150,000. The physicians also face possible civil insurance fraud fines under the Insurance Fraud Prevention Act. One of the physicians also was charged for allegedly submitting claims for unnecessary x-rays and, in some cases, failing to take precautions to protect patients from radiation during the x-rays. That physician faces two counts of unlawfully exposing people to unnecessary radiation. The OIFP is asking for other patients to come forward who have reason to believe that they were subjected to unnecessary medical treatments by the physicians.

HIPAA SECURITY RULE ENFORCEMENT DEADLINE APPROACHING HIPAA covered entities should keep in mind that the Security Rule, another component of the Health Insurance Portability & Accountability Act (HIPAA), will be enforced effective April 20, 2005. These standards protect the confidentiality, integrity, and availability of electronic protected health information (PHI), as opposed to the Privacy Rule, which applies to PHI in all forms--written, oral and electronic. The Security Rule consists of multiple standards which are implemented by a set of specifications, some of which are “required”and some of which are “addressable.” The rule provides for flexibility and “scalability.” Compliance starts, then, with a risk assessment, followed by decision-making and implementation. The decision-making should be supported by considerations of probable security risks and consequences, practice size and resources, the technical capabilities of the practice, and the costs of implementing the possible security solutions. Practices that are covered entities under HIPAA and who need assistance in conducting their risk analysis and complying with the Security Rule can call Denise Sanders at KACS, for assistance.

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