It's education and healthcare, stupid

CC0 Pixabay via picryl

Experts are puzzled over American discontent while economic indicators ride high. Yet they consistently fail to recognize what seems to me an obvious factor: the exorbitant cost of education and healthcare.

My feeds have been awash in stories and analyses of the disconnect between economic indicators of a prosperous America and people's simultaneous sourness on their economic prospects. The Atlantic tackles the problem perennially (e.g., Apr. 2022, Oct. 2023, Nov. 2023, Dec. 2023, Jan. 2024). Yesterday I caught up on my podcast backlog with Paddy Hirsch and Darian Woods enumerating five explanations for The Indicator earlier this month.

To be fair, the explanations are multiple, complicated, and interrelated. Almost every writer fairly points to inflation as a capstone problem. As Hirsch put it, Americans care less about mathematical formulae than about strain on the wallet at the gas pump and the grocery checkout. 

Moreover, The Indicator helpfully told me, data show that even if wages are keeping up with inflation on average across the economy, that's not the experience of many, if not most, Americans. Wages in volatile markets, especially for young people who have the economic flexibility to change jobs more readily, are outpacing inflation times over. But wages in career tracks, for middle-aged and older Americans tied to mortgages and other responsibilities, are failing to keep pace with inflation. So yes, we're rightly frustrated when a smiling employer gleefully announces a wage hike, yet we somehow have less money in our pockets at month's end.

At the same time, I have been frustrated repeatedly by writers' and analysts' failure to recognize an elephant in the room: the exorbitant cost of education and healthcare in America. The problem is amplified by inflation, but it's not a byproduct of inflation, and it won't be remedied by any number of interest-rate hikes.

Let me interject that there is an overarching problem as well that analysts often fail to recognize, which is simply that economic indicators are not interchangeable with human happiness. American culture habituates us to equate, mistakenly, economic prosperity with personal joy. Yet ample social science data gathered around the world show that wealth, whether societal or personal, does not necessarily correlate with happiness; much less is it causal. And see Matthew 6:19-24. A productive society by economic measures is not necessarily a society that produces art, that affords opportunity for recreation and leisure, or that values freedom for individual and interpersonal fulfillment.

Even by economic measures, though, healthcare and education are anomalous sectors. As a matter of morality, healthcare cannot be left to the free market—and I say this as an economic conservative—because the essentiality of healthcare for survival makes any bargain inherently unfair, any playing field invariably unlevel.

Similarly, education, at least in part, also must operate extrinsically to the free market for goods and services. Education does not guarantee upward economic mobility. But upward economic mobility is profoundly unlikely without education. And a market has no incentives to provide educational opportunity as long as labor is abundant.

Consider: A society based on slave labor might look marvelous by economic measures: full "employment," efficient resource distribution, pyramid-building productive capacity. Yet there is zero potential for laborers' upward social or economic mobility. In America, we purport to abhor servitude and to prize socioeconomic potential as "the American dream."

Both healthcare and education are therefore imperative in our society; their absence, or unattainability, is hard felt. But the free market will provide neither in adequate supply. Healthcare will be unattainable for those unable to pay the going price. Education is a byproduct of a healthy economy only insofar as it is necessary to ongoing productivity. The economy won't provide for retraining as long as labor is abundant, and upward mobility is not even on the board.

This isn't an abstract problem. This is what Americans feel on the ground.

I went to the ER in the fall.  I was in the hospital for maybe seven hours, out-patient.  I am lucky to have insurance that covered most of the roughly $15,000 cost.  I am blessed with employment that allows me to cover without much strain the roughly 10% of the cost allotted to me. 

But for many Americans, in many instances, medical treatment is unaffordable or entails bankrupting medical debt. People choose to live with pain—not economic pain, but real pain, sometimes a toothache, sometimes terminal illness—because they can't afford healthcare. 

Why would we expect that people suffering with pain and ailments, unable to see doctors, would ever report feeling good about the economy?

My wife and I make decent money (for now). By some measures, our U.S. household ranks as high as the 93rd percentile by income. By tightening our belts for a few years, we mostly managed to put our one child, after public K12, through a bachelor's program. Still, she had to borrow about $50,000, much of it at 6.5%, to close the gap for four-year university. And we co-signed on those loans even while we were still, in our 40s, paying off our own higher-education debt. Neither our education debt nor the mortgage on our modest home discounted our income on the FAFSA that blithely informed us of our ample capacity to pay for college. And again, we're lucky and blessed. We could make it work.

For too many Americans, the cost of higher education is crippling or prohibitive. To my point, the economy doesn't care about education other than an efficient means to an end. The only relevant question is whether the hamster wheel is still turning. There's no need for people to better themselves, their lot. 

Why would we expect that people without hope for a better life for themselves or their children would ever report feeling good about the economy?

Education costs and debts work an enormous strain, financially and emotionally, on Americans. Healthcare costs, sometimes risks, sometimes debts, work an enormous strain, financially, emotionally, and physically, wearing us down, day after day.

And here's what really gets my goat: Things don't have to be this way. My cousins in Canada and Europe don't suffer under these strains. They have affordable healthcare and education. They are free to move about their lives.

My cousins pay more in overall tax burden—but not much more, and maybe less if I factor in my lifetime healthcare and education costs, as well as property taxes. And don't get into it with me over quality. As to education, I teach in Europe, and my students there are, to be frank and on average, better equipped as liberal arts undergrads than my American 1Ls, not for lack of work ethic. As to healthcare, I haven't met my primary care doctor since three primary care doctors ago. The reason I went in the fall to the ER, where I waited for five hours to be seen, was that neither my primary care network nor any area urgent care had a single opening. My "best healthcare plan anywhere in the world" must have been mislaid with my jetpack.

Can you imagine an America in which a university degree or a hospital admission would not have to be followed by years or decades of monthly payments? in which people could retrain for better jobs without incurring crippling debt? in which people could change jobs without sweating the burden of massive debts or the risk of losing access to life-saving medicine for themselves or their families?

That would be a free market. A level playing field. 

That's not what American corporations want. So that's not what Congress wants.

It's ludicrous (ludacris?) to expect that people—consumers—would radiate joy about a rosy economy as long as they're shackled, compelled to run the hamster wheels of a market that's not really free.

Go Red for Women

Today, February 3, is National Wear Red Day, a project of the American Heart Association (AHA) to commemorate American Heart Month and raise awareness of heart disease, especially in women.

Read more about heart disease in women at the AHA, including warning signs and symptoms. Read more at The Savory Tort about how we're losing the war on heart disease and need to retake the upper hand.

We're losing the war on heart disease

Last week, my wife's life was at risk because we did not understand that women in heart distress do not necessarily experience the symptoms one might expect; indeed, they might have no chest pain at all.

My wife, a law librarian at Roger Williams University, is now home from Rhode Island Hospital (RIH) after a scary and unpleasant five nights. She will be OK.

But two weeks ago, she was misdiagnosed by her primary care provider. We too thought she was suffering only a stomach inflammation. In fact, she was experiencing a cardiac event.

Pixabay CC0

A week later, when primary care failed to yield an explanation and the pain became intolerable, we went to the ER.

My hat's off to the staff at RIH. In the ER, they respectfully heard out our recitation of symptoms and amateur self-diagnoses, erroneous as it turned out, and nonetheless rapidly and tenaciously checked out the heart. In the blood work, they discovered enzymes indicative of heart-muscle damage at 500 times normal levels. Our primary care provider had not tested for that.

You're going to hear a lot about women's heart health in the coming weeks, because February 3 is National Wear Red Day, a project of the American Heart Association (AHA) that kicks off American Heart Month. But I've known about Wear Read Day, and I've even worn red. I've known that symptoms of women's heart trouble are elusive. Still, I did not recognize the cause of my wife's distress. So this message can't be delivered early or often enough.

The day my wife came home, the January/February AARP Bulletin landed on our doorstep with the cover story, "America's War Against Heart Disease." A subhead reads, "75 years after it started, we’re losing the battle against our number 1 killer."

This isn't just news for seniors. Sari Harrar reported, "Death rates from heart disease rose 8.5 percent for adults ages 45 to 64 between 2010 and 2020." My wife is under 50.

The AHA says that women with any of these symptoms should "call 911 and get to a hospital right away":

1. Uncomfortable pressure, squeezing, fullness or pain in the center of your chest. It lasts more than a few minutes, or goes away and comes back.
2. Pain or discomfort in one or both arms, the back, neck, jaw or stomach.
3. Shortness of breath with or without chest discomfort.
4. Other signs such as breaking out in a cold sweat, nausea or lightheadedness.
5. As with men, women’s most common heart attack symptom is chest pain or discomfort. But women may experience other symptoms that are typically less associated with heart attack, such as shortness of breath, nausea/vomiting and back or jaw pain.

Our home pharmacy since my wife came home.
RJ Peltz-Steele CC BY-NC-SA 4.0

Harrar reported particularly on the risk-compounding factor of gender.

For decades, women were underrepresented in clinical trials and their heart attack symptoms dismissed in emergency rooms as stomach pain or even emotional problems. The [AHA] published its first treatment guidelines for women in 1999, but it's taken longer for science to discover that the anatomy and electrical pathways of the female heart are unique, which may help explain why a woman's heart attack symptoms can be different from a man's.

Yet women's heart health is still understudied, according to a 2022 review of research in the journal Circulation Research, and women's heart attack warning signs are too often overlooked....

... [H]ealth professionals seem to have the same difficulty identifying heart disease in women: The same study found that when women suffering heart attacks arrive at an emergency room, they experience longer wait times ....  Another study found that women tend to wait longer before calling 911 when they're having a heart attack—up to 37 minutes longer.

This is not so simple as a problem of bias in perspective. All of my wife's doctors in primary care and at RIH were women. But the primary care providers failed to check out the heart, and the ER doc picked up on the possibility immediately.

Farrar's reporting showed that socioeconomics, race, and ethnicity further compound the problem of under-diagnosed or misdiagnosed heart disease. There might be real genetic differences based in race, but they cannot explain a 21% higher mortality rate for African-American adults over white adults, nor the increase in that gap over time, and a higher incidence of heart disease in Hispanic women and men over white women and men.

There are many viable explanations for disparities in outcome by race and ethnicity, importantly including consequences of wealth disparity, such as access to healthy food. But costs and fear of costs no doubt lead the pack of problems.

My family is fortunate to have access to healthcare. Insurance is available to us through both of our employers, which pay a portion of the premiums. Co-pays and deductibles for us are expensive, but manageable. 

The Rhode Island Hospital complex.
Kenneth C. Zirkel via Wikimedia Commons CC BY-SA 4.0

We don't yet have explanations of benefits for this bout of healthcare. But for an anecdotal point of comparison, a two-night hospitalization last year, with no surgical procedures, billed about $13,000 to our insurance. We were responsible for about $1,500. That's not going to stop us from going to the ER, but it will cause many people to pause. And lower-premium plans available through the Affordable Care Act can have much higher deductibles than ours.

A New York Times investigation featured on The Daily podcast this week opened with the story of a woman who stalled her emergency care for fear of costs. After at last seeking help and being hospitalized, she was responsible for a $1,900 tab. But that was too much for her fixed income. She struggled to meet even the demand of a payment plan while still buying food.

Alas, the Daily story was not even about costs. Rather, the investigation revealed that that patient's experience represented a prevalent norm at "nonprofit" hospitals that, by law, are not supposed to charge anything to people who can't afford it.

Some numbers about the Washington hospital highlighted in that story: Annual revenue: $27 billion. Tax break for "nonprofit" status: $1 billion. CEO's annual salary: $10 million.

The patient in the story was given a payment plan, but never an option not to pay. She prioritized the payments over her groceries because she felt indebted to the hospital for having saved her life. She imagined her money going to the staff who took care of her.

We are fortunate also because we live in the small state of Rhode Island and are only a short drive away from hospitals in Providence. Rural healthcare in America is another matter. In the Louisiana town where my wife grew up, and we still have family, the closest hospital is 70 miles away, and it's no tribute to cutting-edge technology.

On The Takeaway from WNYC this week, Harold Miller, president of the Center for Healthcare Quality and Payment Reform, explained why more than 600, or nearly 30% of rural hospitals nationwide are at risk of closing, and 141 have closed since 2010.

A federal aid package to save rural healthcare might be well intentioned but is misguided, Miller said, because to be eligible, a hospital must shut down its inpatient services. But there are no resources to transport patients to larger urban hospitals hours away. The urban hospitals don't have the capacity for that influx anyway. The resulting healthcare system we are now creating would have failed catastrophically had it been in place during the pandemic, when inpatient capacity was stretched to the limit. And that's to say nothing of separating patients from their families by long distances.

It's critical that every person, man and woman, be enlisted in the war on heart disease. Everyone especially should be on guard for the risk to women that might not be easily identified by symptoms. We're going to have to rely on ourselves and one another all the more with a healthcare system that is inconsistently resourced and increasingly ill equipped for the fight.

Reversal in eldercare case highlights limits of qualified immunity, low injury threshold of intentional torts

Boston police officer assists an elderly pedestrian in 2014.
(Alex Klavens CC BY 2.0 via Flickr)

A dispute over elder care occasioned treatment of qualified immunity and a range of tort theories by the Massachusetts Appeals Court yesterday.

Gallagher v. South Shore Hospital arose from an apparently mismanaged effort to investigate and redress a report of elder abuse; the report proved unfounded. The plaintiff caretaker and elder man alleged that a police officer and state agent entered their home without sufficient suspicion or warrant and removed the man from the home, and that a hospital then held and tested the man for five days against her and his will.

Most of the court's opinion comprised blow-by-blow facts and the Fourth Amendment analysis. However, the court opined as well on a range of common law tort claims against the defendants: a police officer, a state-contracted elder service agent, and South Shore Hospital, Inc., for trespass, false imprisonment, and battery. The police officer defended on grounds of qualified immunity, inter alia.

In proceedings on various motions, two trial court judges awarded summary judgment to all defendants. The trial courts held the state actors protected by qualified immunity and the tort claims flawed.

In the estimation of the Appeals Court, the trial courts erred. The Appeals Court reversed and remanded as to all defendants, finding that live questions of fact precluded the summary judgments. In my estimation, the error on qualified immunity was informative, and the errors on tort theories were egregious.

In articulating the qualified immunity theory, the police defendant and eldercare agent pointed to a concurrence by Justice Kavanaugh in a 2020 U.S. Supreme Court case, Caniglia v. Strom, in which the Court held unanimously that a warrantless home entry and firearm seizure violated the Fourth Amendment. The Appeals Court explained:

[Officer] Pompeo argues that the facts at bar are similar to the example of an elder welfare check that Justice Kavanaugh described in his concurring opinion in Caniglia. In his example, "an elderly man is uncharacteristically absent from Sunday church services and repeatedly fails to answer his phone throughout the day and night. A concerned relative calls the police and asks the officers to perform a wellness check." Justice Kavanaugh stated that "[o]f course," in those circumstances, the officers may enter the home. Pompeo argues that she reasonably thought [elder plaintiff] LaPlante was injured or in imminent danger on June 25 because no one responded to the doorbell, knocks, or telephone call, and because [caretaker] Gallagher had left LaPlante in the car with strangers two days earlier.

The trial court found these facts to constitute the requisite exigency to enter the home. The Appeals Court disagreed.

The facts in this case are nothing like the hypothetical Justice Kavanaugh described. The implication of the hypothetical is that the elderly man lives alone. LaPlante did not. Moreover, Gallagher and LaPlante were not out of touch or nonresponsive, as was the elder in Justice Kavanaugh's hypothetical. Pompeo and another elder care worker had seen LaPlante two days earlier ... and his appearance was not a cause for concern....

Further, even if Pompeo could see LaPlante on the couch [through a window], neither he nor Gallagher had any obligation to answer the door or respond to the knock. "When law enforcement officers who are not armed with a warrant knock on a door, they do no more than any private citizen might do. And whether the person who knocks on the door and requests the opportunity to speak is a police officer or a private citizen, the occupant has no obligation to open the door or to speak." Kentucky v. King (U.S. 2011). A jury could find that Gallagher's lack of response to a knock on the door when she was not expecting visitors, and her absence from the room in which LaPlante was sleeping, did not give rise to a reasonable belief by Pompeo that LaPlante was unattended and suffering an emergency.

In an age in which the public is increasingly skeptical of police qualified immunity, the analysis is refreshing for taking seriously the doctrine's objective check on police perception. The likely failure of qualified immunity here leaves the state defendants vulnerable to the civil rights and tort claims on remand.

On the tort claims, the trial courts erred egregiously in dismissing for perceived want of injury. My first-semester, 1L Torts students can tell you that none of trespass, false imprisonment, nor battery requires physical injury, in the sense of impact. These intentional torts all balance a higher culpability state with a lower injury threshold. The lower threshold rests upon the theory that tort objectives such as preserving the peace and averting vigilantism justify recognition of insults to personal integrity or honor, even in the absence of physical or pecuniary loss. The notion is as old as the Roman law of iniuria.

As to trespass, the Appeals Court opined, quoting Massachusetts high court precedents, "It has long been the 'general rule' in this Commonwealth that 'possession of real estate is sufficient to enable the parties in possession to maintain an action against a stranger for interfering with that possession.' Proof of injury is not required; 'the action is founded merely on the possession.'"

Similarly, false imprisonment is accomplished by the plaintiff's awareness of confinement, and battery by an "offensive," that is, non-consensual nor justified-by-social-contract, touching of the plaintiff. In false imprisonment, "[i]t is enough if a person's personal liberty is restrained," the Appeals Court opined. And even if the elder man, not legally competent at the time, "was not aware of his confinement, Gallagher, his proxy, was." The court further relied on, while expressly not adopting, similar sentiments in the Second Restatement of Torts.

On each theory, the plaintiff is permitted to prove compensable loss above and beyond the minimal, prerequisite condition of injury. The caretaker alleged that the elder man in fact deteriorated physically while in hospital care, evidenced by an enlarged bedsore and diminished mobility. And the facts established to date indicate that the elder man had been subject to blood and urine testing in the hospital without the consent of the caretaker, his only proxy: a more-than-de-minimis, physical insult.

The same reasoning that unwound qualified immunity negated any defense of emergency on which the trial courts relied to dismiss the tort claims as a matter of law. And the hospital claimed no emergency over the elder man's five-day residency, such as would have justified failing to seek the caretaker's consent.

Finally, I was struck by a footnote the court dropped that speaks not only to the sad facts of this case, but to the broader context of our present, vigorous public policy discussion about the role of police in society and our infrastructure for social services, such as physical and mental healthcare. The court lamented:

[The eldercare agent who precipitated investigation and police involvement,] Bessette[,] and Gallagher were strangers to one another. Perhaps if Bessette had agreed to assist Gallagher by sitting with LaPlante for an hour while Gallagher did grocery shopping, she could have accomplished her investigatory purpose—allowing her to speak with LaPlante alone— and we might not have a case at all. Pasqualone v. Gately (Mass. 1996) (if officer had asked gun owner to voluntarily turn over his weapons after his license was revoked rather than demand them with considerable show of force, we might have a different case).

Recently, my wife and I read in the New York Times Magazine about the "viral nightmare" that exploded at Arizona State University from students' feud over the "multicultural safe space," fueled in no small part by the university's hyper-formalist response.

"If only someone had sat them down and made them listen to each other ... ," my wife sighed.

The instant case is Gallagher v. South Shore Hospital, Inc., No. 21-P-207 (Mass. App. Ct. Oct. 6, 2022) (temporary posting). Justice Vickie L. Henry wrote the opinion for a unanimous panel that also comprised Chief Justice Green and Justice Sullivan.

Good riddance, covid immigration testing

I took this photo in Swansea, Mass., back in January 2022 (CC BY-NC-SA 4.0 RJ Peltz-Steele).

The sign well summed up how I was feeling about the chaotic guidance coming from the federal government at the time.

I never posted the photo, but figured I'd pull it out now to celebrate the dropping of the test requirement for immigration.

Of course, I now have about $300 worth of unused tele-medicine test kits I no longer need. Incidentally, apparently, my pharmacy insurer is not obligated to reimburse me for those, despite the President's promises. Promises, promises, Joe. But that's another story.

Court: Employer has no free speech right to republish worker healthcare data that state provides conditionally

Confidential (Nick Youngson Alpha Stock Images CC BY-SA 3.0)

An employer has no First Amendment right to republish the identity of workers who relied on publicly subsidized healthcare when the state provides the names conditionally, for restricted use, the Massachusetts Appeals Court held yesterday.

A state program imposed assessments on employers whose employees relied on publicly subsidized healthcare.  The state offered to tell the employer which employees triggered assessment, so that the employer could review, and if appropriate challenge, the assessment. But the names came with strings attached: employers were required to promise that they will use the names in the administrative process only and not republish them.

Emerald Home Care, Inc., challenged the assessment program and conditional disclosures as violative of procedural due process and the First Amendment.

Affirming the Superior Court, the Appeals Court rejected both arguments.  As to due process, the state provided employers ample notice and opportunity to be heard in resisting the assessments.  As to the First Amendment, the state may attach conditions to access to confidential information.

In the First Amendment analysis, the court cited two U.S. Supreme Court oldies but goodies: LAPD v. United Reporting (1999) and Seattle Times v. Rhinehart (1984).  In LAPD, the Court allowed a statute to condition access to criminal histories on non-commercial use.  In Seattle Times, the Court allowed a protective order on discovery disclosures in a defamation-and-privacy case in which a newspaper was the defendant.

Justice Desmond

The Appeals Court applied intermediate scrutiny, drawn from Seattle Times.  The court reasoned that confidentiality in healthcare insurance information is an important state interest, and the restrictions on disclosure were closely tailored to the purpose of maintaining confidentiality while allowing the employer limited access for the purpose of administrative review.

The case is not remarkable for its holding, but it marks an ongoing tension between U.S. and foreign law over free speech, privacy, and data protection.  In the United States, the First Amendment often is a wrench in the works of government efforts to regulate information downstream from its disclosure to a third party.  Legal systems elsewhere in the world are more comfortable with the notion that a person's privacy rights may tag along with information in its downstream transfer from hand to hand, outweighing the free speech right to republish.

I noted some years ago that in some areas of U.S. law, including freedom of information (FOI), or access to information, we can see examples of American privacy expectations that accord with, not diverge from, European norms.  Downstream control by contract has been a key advancement in making some jurisdictions willing to furnish court records to information brokers.  Binding a broker to adjust records later as a condition of receipt helps to solve problems such as expungement, the American judiciary's equivalent to the right to be forgotten.

The case is Emerald Home Care, Inc. v. Department of Unemployment Assistance, No. AC 20-P-188 (Mass. App. Ct. Feb. 2, 2021).  Justice Kenneth V. Desmond Jr. authored the opinion for a unanimous panel that also comprised Chief Justice Green and Justice Lemire.

Opioids, coronavirus add up to dangerous interaction

pxfuel.com

Purdue Pharma will plead guilty to criminal charges in the marketing of OxyContin, the Justice Department (DOJ) announced yesterday.  Meanwhile, addiction and coronavirus are dangerously interrelated, Dr. Joseph Grillo warns.

DOJ settled with Purdue Pharma in civil and criminal investigations, and with Sackler family shareholders in civil investigation.  Purdue will admit that it conspired to defraud the United States by misleading and impeding enforcement by the Drug Enforcement Administration for almost 10 years.  Purdue also will admit to conspiring to violate the Federal Anti-Kickback Statute with inducements to doctors to prescribe opioids for almost eight years.  (Purdue Plea.)

On the civil side, Purdue will settle, without admission, allegations of false claims to federal healthcare programs, of improper inducements to prescribing doctors, and of improper contracts with fulfilling pharmacies.  The government will have an unsecured claim on $2.8bn in Purdue's bankruptcy.  (Purdue Settlement Agreement.)  Purdue shareholders in the Sackler family will pay $225m in settlement of allegations that they approved an intensified opioid marketing program.  (Sackler Settlement Agreement.)

The settlements do not resolve state claims.

Opioids have taken more than 450,000 American lives since 1999, The New York Times reported yesterday, citing CDC research.  COVID-19 deaths now exceed 220,000, according to the CDC.

In 2020, the coronavirus pandemic nudged the opioid epidemic out of the number one spot for enemy of public health.  But the two are hardly mutually exclusive.  Addiction, of all types, interacts with the threat of coronavirus in a mutually exacerbating feedback loop.  Joseph Grillo, M.D., J.D., and an alum of my torts class, raised a warning flag on his blog yesterday.

"Two great epidemics of our generation are intersecting in ways that are additively deadly, and which highlight the urgent ways we must respond to some of the underlying fault lines in our society that are worsening both crises," Dr. Grillo wrote.

Read more about substance use disorders (SUD) and coronavirus at A Pandemic Within a Pandemic, Joseph Grillo, M.D. Medical Legal Consulting, Oct. 21, 2020.

Court: Family of elder-care resident may use rare 'bill for discovery' to investigate how broken foot occurred

In an unusual case last week, the Massachusetts Appeals Court allowed a "bill for discovery" to proceed despite its arguable incompatibility with rules of civil procedure.

Mary T. Atchue, an elderly resident in an assisted living facility in Worcester, Massachusetts, sustained a broken foot while being moved.  In an action maintained by her family since her death, Atchue filed a "complaint for discovery," based in equity.

Marie Van den Broeck, BE (CC BY 3.0)

The court held that the complaint could proceed, despite objection from defendant Benchmark Senior Living, LLC, that the claim would not be allowed by the state rule of civil procedure for pre-litigation discovery.  Discovery processes specified by statute and rule supersede the historic bill for discovery in equity insofar as they pertain, the court reasoned, but the bill remains available to supplement modern practice where it does not pertain.

The viability of a bill for discovery is dependent on the viability of the underlying potential claim in litigation, the court further held.  Atchue has a viable theory on tolling the statute of limitations, and her claims survive her death under the state survival statute.  So a bill for discovery remains available.

I don't usually dig into civil procedure cases, but this one caught my eye because of the unusual disposition in pre-litigation discovery.  I've written with approval about the use of the access to information law, or freedom of information act, in South Africa having been used as a pre-litigation discovery device, specifically, in fact, for a potential plaintiff to investigate the possibility of negligence in healthcare services.

Shaped by the experience of apartheid, the South African law, and comparable laws elsewhere in Africa modeled on it, allow access to information in the private sector when the complainant can demonstrate sufficient need grounded in civil rights.

The court vacated dismissal and remanded.

The case is Atchue v. Benchmark Senior Living LLC, No. 19-P-125 (Mass. App. Ct. Oct. 5, 2020).  Justice Vickie L. Henry wrote the opinion for a panel that also comprised Justices Rubin and Wolohojian.

Oops. We accidentally linked healthcare to your job.

mohamed_hassan (pixabay.com)

I stand with the rest of the world in awestruck horror of America's stubborn insistence that access to healthcare should be a function of both one's wealth and the largesse of one's employer.

Critics of the free market are quick to conclude that it has failed the American worker.  Economic libertarians are just as quick to tout the essentiality of free contract.  Before we make any decisions about the free labor market, maybe we should try it out.  A market in which a worker can't change jobs for fear of a recurring cancer or a bankrupting accident is not a free labor market.

For the NPR podcast Throughline, Lawrence Wu set out recently to explain how we arrived at the problem of employer-dependent healthcare.  The description of the episode, "The Everlasting Problem" (Oct. 1, 2020), reads:

Health insurance for millions of Americans is dependent on their jobs. But it's not like that everywhere. So, how did the U.S. end up with such a fragile system that leaves so many vulnerable or with no health insurance at all? On this episode, how a temporary solution created an everlasting problem.

For This American Life and Planet Money, Alex Blumberg and Adam Davidson also addressed this subject back in 2009.  Their bit ran only 11 minutes, but I have never forgotten the shocking fact that "four accidental steps led to enacting the very questionable system of employers paying for health care."

Arkansas defense of healthcare law invites Supreme Court justices to weigh in on federal preemption

The State of Arkansas defended a state healthcare law in the U.S. Supreme Court Tuesday.

The state argued against federal ERISA and Medicare part D preemption of state regulation of pharmacy benefits managers, the companies that manage most Americans' prescription drug benefits.  The case affords an opportunity to see what newer justices have to say about preemption.

Preemption is a curious area of law.  Ostensibly statutory interpretation, it has overtones of federalism, as judges are called on to chart the scope of congressional intent as exercised in a power domain shared with state legislatures.  Confounding theories of interpretation, textualism is often insufficient to resolve preemption problems, because statutory schemes, such as the framework for employment-benefit regulation, may be left ambiguous as to what the scheme does not regulate, yet can be undermined by state laws with incompatible purposes.  As a result, preemption cases in the U.S. Supreme Court have been known to render splintered decisions and odd-bedfellow pairings of justices.  More than once, preemption precedent has been criticized as inconsistent and messy.

In an op-ed in The Arkansas Democrat-Gazette (ADG) in 2015, I wrote that Arkansas Act 900 raised serious and compelling questions of federalism.  I didn't pick sides—indeed, each side claims to be on the side of consumers—but I did describe the Arkansas Attorney General's dismissive response to challenge of the statute as glib.  The Eighth Circuit subsequently held the law preempted.  Forty-five states, D.C., and the Trump Administration have sided with the appellant AG, according to the ADG.

The case is Rutledge v. Pharmaceutical Care Management Association, No. 18-540 (argued U.S. Oct. 6, 2020).  Ronald Mann wrote an excellent analysis of the case, on the merits and implications, at SCOTUSblog.

Shielding business from coronavirus torts neglects deep-seated dysfunction in litigation, health insurance

Amid reopening and the controversy over reopening, American private business is seeking legislative protection against coronavirus-related tort litigation.

To oversimplify, businesses are worried about being sued if a worker or customer contracts the virus in the workplace or in a retail space.  Tuesday morning, U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley told National Public Radio that the Chamber is not asking for blanket immunity, but "a safe harbor ... against frivolous lawsuits."

"No one wants to protect bad actors here," Bradley said.  He suggested that liability could be predicated on gross negligence or "willfully forcing workers to work in unsafe conditions," which, legally speaking, is recklessness.

Protecting business from litigation is the Chamber's bread and butter, and that doesn't make it the Big Bad Wolf.  Businesses, especially small businesses, represent real people, owners and workers, who, in the absence of any extended public safety net, need to work to make ends meet.  Facing bankruptcy because of prolonged closure or because of the inevitability of a contagious disease surmounting all precaution is a heck of a catch-22 to put a business in.  From that perspective, the Chamber's position seems a fair ask.

At the same time, the Chamber's advocacy highlights two enormous socio-legal problems in America: transaction costs in tort litigation and employment-based health insurance.  A safe harbor would brush both these problems back under the rug.

It isn't tort litigation per se that business fears; it's the cost of that litigation.  Corporate defense—that's the kind of law I practiced a million years ago—wins in litigation with an enviable record.  The burden of proof rests with the plaintiff, which means that even meritorious causes may fail upon the vagaries of evidence.  What's more, the usually superior resources of the corporate defense bar warp the playing field of an adversarial contest predicated on the fallacy that the truth will out.  But the defense's advantages don't change the fact, for many reasons I won't here explore, that litigation costs a fortune.

As a result of runaway transaction costs, everyone loses.  Plaintiffs and would-be plaintiffs with meritorious complaints wind up not suing, winning nothing, or winning far less than will make them whole.  Plaintiffs without meritorious complaints may nevertheless win in settlement.  Meanwhile the cost of defense in every scenario, from insurance in anticipation of litigation to fees in its management, is visited on American business and passed on to the American consumer.  And the mere risk of those costs results in over-deterrence that burdens the American marketplace, distorting economic behavior.  This dysfunction renders the U.S. personal injury system a laughingstock elsewhere in the world.

So if the deck is so stacked against plaintiffs, why do they sue anyway, courting an invariably unfulfilling outcome and burdening even prevailing defendants?  That leads us to the second problem, our dysfunctional health insurance system.

An injured person might wish not to sue, yet become a plaintiff anyway; if the person is insured in any measure, the insurer will make the choice.  And notwithstanding the intervention of insurance, our healthcare system usually leaves an injured, would-be plaintiff holding a bag of devastating, bankruptcy-inducing invoices.   (I asked, rhetorically, earlier this week, what perversion of American values causes a working person diagnosed with terminal cancer to have to spend his precious last year of life carving out time from family and chemotherapy to do fundraising.)  In the American litigation and health insurance systems, a plaintiff sues against all odds because the plaintiff has no other choice.  And in a perverse feedback loop, plaintiff and plaintiff's insurer are permitted to pin their hopes on the likelihood that the threat of excessive transaction costs will shake loose a settlement upon even the weakest of claims.

The problem of healthcare costs is compounded by America's stubborn insistence on employer-based health insurance.  Focused on the bottom line, employers effectively make advance healthcare decisions for workers, which, naturally, increases incurred costs for the workers who become patients.  With precious little control over their healthcare choices, but afraid of wholly losing coverage, risking food and shelter for themselves and their families in a country that eschews social safety nets for people while bailing out corporations, workers make irrational market choices, such as working for less than a living wage, accepting a salary to obviate overtime, going to work in unsafe conditions, and going in sick.  We got into this mess entirely by accident, as Planet Money reported in 2009, and we seem helpless to get out of it.  Ironically, now, the Chamber seeks to protect business against a litigation problem that results in large part from employers' own choices, however economically rational, to leave workers unprotected from catastrophe and trapped in a job by an unlevel labor market.

In the theoretical American tort system, the way it works when I teach its rules and policies to law students in America and Europe, the businesses represented by the U.S. Chamber should not be worried about tort lawsuits.  The test for negligence-based liability in American tort law is simply unreasonableness.  A business that takes reasonable measures to protect workers and customers against infection would suffer no liability, even given the inevitability that contagion will still happen in the face of reasonable precautions.

The truth of the matter is quite different from the theory, and Bradley's statement to NPR demonstrates the divergence.  On the one hand, Bradley said that business must be protected against "frivolous lawsuits."  The problem with that rationale is that the legal system already provides for potentially hefty penalties and sanctions against any plaintiff or plaintiff's lawyer who would try to prosecute a truly frivolous lawsuit.

On the other hand, Bradley said that businesses should be liable only upon a heightened culpability standard, gross negligence or recklessness.  "No one wants to protect bad actors here," he said.  Someone who is grossly negligent or reckless is not necessarily bad; bad is a normative judgment and not a workable legal standard.  Colloquially, he is equating bad with culpability, and that's fair.  But if the equation holds, why is a negligent business not also bad?  Is every negligence lawsuit necessarily a frivolous lawsuit?

Bradley made a strategic semantic choice.  Mention of the "frivolous" is calculated to evoke a gut reaction of displeasure in Americans who have been conditioned by the heavy media messaging of tort reform advocacy.

But let's for the moment cut Bradley and the Chamber some slack.  From where they sit, frivolous cases and negligence claims are equally problematic.  That's because plaintiffs are compelled by the circumstances of our dysfunctional systems to sue in negligence even when the merits might not bear out the claim.  In other words, the brokenness of our litigation and healthcare systems over-incentivizes injured persons to litigate.  A plaintiff decides to sue because of desperate need for compensation, not because of the strength of the claim that the defendant is blameworthy.

Negligence isn't the thing that's broken.  For my money, negligence, meaning the reasonableness test, applied by a Seventh Amendment jury, remains one of the greatest innovations in law in the last two centuries and has proved a worthy American example for the world.

Our litigation system is broken.  And our health insurance system is broken.  Adoption of a safe harbor for defendants within those systems as they exist now will just mean that when a business is negligent, and a person gets sick as a result, the sick person will bear the cost of the illness and of the business's negligence.  That's not how American civil justice is supposed to work.  That's not how it was ever supposed to work.

So many pundits, so many of us, Americans and people around the world, have wondered aloud whether this crisis might at last precipitate real and meaningful change, change that might bring people's standard of living into correlation with our fantastic global wealth and technology.  We've wondered whether, and we've dared hope that, we stand at the threshold of the Great Realization, from which humankind will never turn back.

In that frame of reference, the safe harbor proposed by the Chamber, or moreover statutory immunity from tort liability, would be a profoundly disappointing portent of business as usual.

My thanks to Professor Rebecca Crootof at Richmond Law for an email that got me thinking about this.  Thanks also to any loyal reader who made it this far without pictures.  My "Report from a Social Distance Week 7" is delayed but not forgotten; look for it this weekend.

In memoriam: Sam Lloyd, TV lawyer 'Ted Buckland'

Sam Lloyd in 2009
(BrokenSphere
CC BY-SA 3.0)

Sam Lloyd played Ted Buckland on Scrubs. Lloyd died one week ago, on April 30.

Ted definitely makes my short list of favorite TV lawyers.  I'd say he's neck-and-neck with Jackie Chiles for number one in the sitcom genre, edging out Lionel Hutz.  Lloyd as Ted also appeared in three episodes of Cougar Town and in three episodes of the short-lived web series, Scrubs: Interns.  Lloyd's extensive filmography in other roles dates back to Night Court in 1988 and includes Ricky in Seinfeld.  Lloyd talked TV with the AV Club in 2011.

YouTube user nitemare91191 created a "Best of Ted" Scrubs compilation in 2007.

The a cappella comedy included in these clips was not just for laughs.  Lloyd and his "The Blanks" (YouTube channel: check out this A-ha cover) were a talented quartet in real life.  Lloyd was a nephew of actor Christopher Lloyd.

Zach Braff and Donald Faison also remembered Sam Lloyd at the top of their podcast, Fake Doctors, Real Friends, on Tuesday (cue to 1m30s, duration about 5 minutes).

Lloyd died at age 56 from an inoperable brain tumor diagnosed only a year ago.  He leaves behind his wife, Vanessa, and their one-year-old son, Weston.  A moving tribute is posted on the family's GoFundMe page, which was started last year to help pay for Lloyd's healthcare.

Rest in peace, Sam Lloyd, and thanks for the comic relief.

Let's take a pause, too, to think about why working people with cancer in the world's 12th richest country need GoFundMe pages to pay for healthcare, and why no one still running for President has a plan to change that.

Maybe it's time for the Great Realization.

Mass. appellate courts render two wrongful death opinions in attenuated duty and causation

Massachusetts appellate courts have rendered two wrongful death opinions in the last two days, both favoring plaintiffs.

In Dubuque v. Cumberland Farms, Inc. (AC 17-P-266) (June 6, 2018), the Court of Appeals upheld a $20m judgment against the convenience store after inadequate "bollard" protection of a pedestrian who was killed when struck by an out-of-control car.  The opinion includes an interesting discussion on evidence regarding the admissibility of past pedestrian-car collisions arguably similar or distinguishable.

Today in Correa v. Schoeck (SJC 12409), the Supreme Judicial Court reinstated Walgreens pharmacy as a defendant in the tragic death of a 19-year-old who was unable to fill a prescription for life-saving medication.  The prescription was hung up on paperwork somewhere among pharmacy, doctor's office, and insurer.  The court held the pharmacy bound to at least a thin reed of duty in the negligence claim.

Open Memo re FSA service for Mass. GIC

For the convenience of my colleagues in Massachusetts Commonwealth employment, I post here the fruits of my recent investigation into the state's FSA service.  I beg the indulgence of persons beyond, for whom this item will be of limited interest.

 --

OPEN MEMORANDUM

9 February 2017

From    Richard J. Peltz-Steele

            in personal capacity, but for purpose of identification: Professor, UMass Law School

Re        Service of ASI Flex as the FSA provider for GIC

Cc        ASI Flex c/o Kaleena Kollmeier, Account Manager

            GIC c/o Rachelle S. Mercier, Esq., MPH, Associate General Counsel

            UMass Dartmouth community c/o UMD Forum listserv

I.          Introduction

I have experienced growing frustration with ASI Flex as Flexible Spending Account (or Arrangement) (FSA) service provider for the Group Insurance Commission (GIC).  I will here conflate the two components of the FSA, the Health Care Spending Account (HCSA) and the Dependent Care Assistance Program (DCAP).  My experience is exclusively with the HCSA, which is to speak neither favorably nor unfavorably with respect to the DCAP.

This month, a straw broke my camel’s back when a document verification submission I made for medical expenditures on my FSA Visa was twice rejected for insufficiency, despite my submission of the requested documentation.  The rejections were improper; ASI Flex’s investigation of the matter confirmed error.  I appreciate ASI Flex’s investigation and correction of the matter.  I am nevertheless left with boiling frustration over repeated problems.  Given the substantial time and energy that I have to invest in working with ASI Flex to claim or document disbursement of my own money, I am left to wonder whether the slim benefit of a tax advantage is worth the effort at all.

Accordingly, I conducted an informal investigation of the efficacy of ASI Flex participation.  This investigation has three prongs.  First, I sought input from my colleagues at UMass Dartmouth (UMD) to contextualize my experience with the experiences of others.  Second, I talked with ASI Flex Account Manager Kaleena Kollmeier, to explain my concerns and better understand ASI Flex’s position.  Third, I requested from the GIC all effective contracts and terms of service that govern or affect the relationship of GIC claimants with ASI Flex.

In this memorandum, I will share my findings in each vein and draw modest conclusions.

II.        Feedback from UMass Dartmouth

I was struck on two counts by the responses to my informal query at UMD.  First, I was surprised with the high level of anxiety, frustration, and vehemence that came through the communications.  I expected that some others, like me, might report occasional bad experiences.  I did not expect to find so many people at the end of their ropes, having already terminated participation in the FSA program or contemplating termination.  Second, strong common threads of complaint came through the communications.  That is, the problems people report with ASI Flex arise with remarkable consistency from a specific problem, namely the process of follow-up documentation for FSA Visa card transactions.  One might hope that such consistent focus might make resolution more feasible.

I will transcribe here representative comments from my UMD colleagues, without attribution so as to protect respondents’ privacy.

First, there were some positive comments.

I have not had problems at all.  [On follow up, respondent wrote that she does not use the FSA Visa, but submits paid receipts and documents through the online interface.]

I have never had any problems with them.  I have used them for reimbursements of day care and summer camps only and provided them with the receipts each time.  Always received prompt payments.  [On follow up, respondent wrote that she used only DCAP, filing reimbursement requests, and not HCSA and FSA Visa.]

The more numerous negative comments almost all concern the process of follow-up documentation.  I have grouped these comments loosely:

●          efforts to work on documentary demands;

I’ve not had any trouble with claim denials, but I find that nearly every time I use my [FSA Visa] card for an “uneven expense,” $333 or $29.14, I’m always asked for documentation.  If the charge is a round number $30, $400, at the same vendors (dentist, eye doctor, optometrist, pharmacy) the charges sail through.

[T]he number of requests for documentation “for IRS purposes” certainly has been more frequent than I expected.

At first, it annoyed the heck out of me that I needed to gather additional documentation for the insurance folks, after years of not needing to do so.  I later learned that some of the providers I use (my kids’ dental, for example) only submitted the charge and did not include explanation for the charge.  Now I pretty much know which providers need to be reminded to give me an invoice that states the work that was done, so I can scan it over to ASI.

I . . . have questioned their constant request for additional information on a charge, as little as a $10 copay.  I’ve had to go retrieve receipts several times, and often they are from the same office.  You can clearly see they are all from a doctor’s office.  I did call and ask why they are questioning so many things that in the past never seemed to be an issue.  After all, this is our money.  The individual I spoke with could not answer any of my questions.  I’m not impressed with this company.

●          burgeoning frustration working on documentary demands; and

After jumping through many frustrating hoops with ASI Flex, I have learned to just keep a scanned copy of every single receipt, and to request some type of invoice for every single service to include with that receipt.  When I provide a receipt which clearly states the name of a doctor’s office at the top, I’m not sure why they can’t presume that it is a co-pay, since I’m not sure what else anyone would pay a doctor’s office for, but whatever.  I got tired of going back and forth with them on these things and found that if I just do it this way, more often than not, they don’t ask for receipts. . . .  [T]hey are a pain to work with!

I am having significant issues with ASI Flex and documentation requirements.  I have had multiple issues, and some of the documentation claims seem random.  Follow-up documentation has been rejected for no reason.

[A]ll of my bills are paid with the Visa debit card [ASI Flex] issue[s].  Having said that, I have been very dissatisfied with the amount of documentation I am required to provide ASI Flex, including almost every payment made to [provider name redacted].  [O]ne would have thought that once a vendor is in the system, that should suffice.  I always thought that the onus was on the employee in case of an audit and not the employer.  I have complained to HR before about them.

●          pushed to the breaking point.

ASI Flex is a disaster, and I have complained to HR about it on a few occasions.  I continue to be denied payment despite having all of the proper paperwork from the doctors.  I actually may not renew it because it is such a mess.

I did participate in ASI Flex last year, but it got to the point where I was needing to scan and upload each doctor visit from [provider], which seemed excessive, before I could use my card, my money, so I decided not to continue with it. . . .  [I]t’s sad that they make the process so cumbersome!  I could understand if you were making purchases of dubious intent at Rite Aid or CVS, but when the bill is directly from a doctor’s office?  . . . I think the company we used before ASI Flex . . . was much easier to deal with, and I don’t think I ever had to submit additional paperwork.  Maybe we can go back to them?

I got so frustrated and angry with ASI Flex that I discontinued enrollment in the program.  They wanted documentation for every transaction. I had to call them a number of times as well as providers to get the right documentation.  It makes my blood boil again to remember back on having to deal with them.

I found them very difficult to work with.  My son had a [medical procedure, redacted for privacy], and their continual requests for documentation for his . . . medications and other documentation—quite simply made the program more trouble than it was worth.  I did not re-enroll in the program.

I stopped using ASI Flex, as I found their process to be ridiculous and cumbersome.  I agree that their request for extra information seemed superfluous most of the time.  I had never had issues with BenStrat [the predecessor FSA provider], only having to explain the odd request (such as therapeutic massage . . . ). . . .  [F]inally I dropped [ASI Flex]. Terrible experience, and I don’t know why we went from a great company in New Hampshire to an awful company in Missouri.

Noteworthy here to my mind is the common thread of follow-up documentation.  This same problem has fueled my own frustration.  I learned from ASI Flex a couple of years ago that medical expenses charged to the FSA Visa card will require follow-up documentation for every expense other than a co-pay in a doctor’s office—perhaps the even amount referred to by one respondent—and an Rx co-pay at the pharmacy counter.

Thus some questions are raised.  Is all of this follow-up documentation necessary?  Why is the follow-up documentation process so burdensome?  And why are claims denied even after follow-up documentation is provided?

The respondent who pointed out that the burden of audit falls on the claimant, not on ASI Flex, makes a fair point.  And more than one respondent aptly wondered why ASI Flex cannot track a registry of providers, so that follow-up documentation is not required again and again for the same provider, even for the same service. 

When ASI Flex demands follow-up documentation, the claimant is forced to be the go-between, shuttling, sometimes physically, back to providers’ offices—often requiring multiple telephone calls during restrictive business hours—to try again and again to secure documentation that will satisfy ASI Flex.  Then the user has to organize and submit that documentation to ASI Flex, whether by mailing it, or by scanning and uploading to the secure online portal.  The process is time consuming and labor intensive, a far cry from the ease of use that an FSA Visa card promises.

Adding insult to injury, I and others experience problems with claim denial or documentation rejection subsequent to the provision of follow-up documentation, whether because the documentation is not sufficient for ASI Flex’s purpose, or because of ASI Flex error.

Heavily complicating matters is the complexity of communication between claimant and ASI Flex.  ASI Flex reserves for itself the ease of communicating with claimants through the online “Secure Message Center.”  Its messages are often far from helpful.  For example, this was the explanation of one (erroneous) claim denial I received:

We received your submission for documentation to support a debit card transaction that could not be electronically substantiated and could not process it because the statement does not include the necessary information, the charges on the submitted statement do not match the outstanding card transaction OR the item is not eligible through your employer's FSA program. This transaction will still appear in your online Account Detail as requiring documentation, and if you do not take action, may lead to your FSA debit card being suspended. In order to resolve this situation, please submit a statement for an eligible expense that you paid for out-of-pocket (i.e. did not use your FSA debit card to pay for) with a completed and signed claim form, send in the correct itemized statement of services for this transaction, or send in a check or money order payable to ASIFlex for the amount in question. Please call ASIFlex at 800.659.3035 with questions.

Clearly some representative at ASI Flex found my follow-up documentation wanting, but why?  Three possible reasons are cited in the alternative.  Would it be impossible to narrow it down to one?

A more troubling problem with the Secure Message Center is that it is only a one-way channel of communication.  A claimant’s options to follow up on secure message such as this one, maybe to ask for clarification, are limited.  A telephone call is invited, but no hours to call are stated.  In fact, the line is staffed for some evening and Saturday hours, but not 24/7.  ASI Flex has an email address, asi@asiflex.com.  But that address is not stated in the claim denial nor shown anywhere on the claimant’s interactive website, my.asiflex.com.  Email to that address anyway is neither secured nor tied to the claimant’s account and matter.  Thus the claimant is left with a vague denial of payment and no good way to respond.

That claimants bear the heavy burden of having to deal with providers on the one hand—subject to their whimsically inadequate documentation, limited channels of communication, and narrow business hours—and then have to deal with ASI Flex on the other hand—subject to cumbersome communication portals, vague claim denials and documentation rejections, and, again, limited channels of communication during only slightly more generous business hours—is a recipe for, as one respondent put it, “disaster.”

III.       Feedback from ASI Flex

ASI Flex Account Manager Kaleena Kollmeier allowed me to voice complaints, provided me some helpful additional information, and expressed a commitment to improving ASI Flex service.  Here I share some of what I learned with respect to the problem of follow-up documentation.  Naturally what Kollmeier told me I recount here in my words, so accuracy may be limited by my understanding.

With respect to the need for follow-up documentation, I, like some respondents, remembered BenStrat being less demanding of follow-up documentation than ASI Flex.  Kollmeier said that ASI Flex follows industry norms with respect to follow-up documentation for FSA Visa card purchases—my observation being essentially correct that only round-number, doctor’s-office or pharmacy-counter co-pays will go through unchallenged—and that ASI Flex practice in that respect might mark a necessary departure from the practices of a former provider.  Kollmeier said that ASI Flex is required by the IRS to make disbursements only upon evidence that the provider, service, and dates of service meet eligibility criteria and match the claim by patient identity and amount of charge.

Kollmeier cited IRS Publication 969, which may be found in 2015 iteration at https://www.irs.gov/pub/irs-pdf/p969.pdf.  That publication states, at page 16:

You must provide the health FSA with a written statement from an independent third party stating that the medical expense has been incurred and the amount of the expense. You must also provide a written statement that the expense has not been paid or reimbursed under any other health plan coverage. The FSA cannot make advance reimbursements of future or projected expenses.

Debit cards, credit cards, and stored value cards given to you by your employer can be used to reimburse participants in a health FSA. If the use of these cards meets certain substantiation methods, you may not have to provide additional information to the health FSA

I note, however, that this text does not directly contradict the observation of one respondent, that the onus of audit falls on the claimant.  I suggested to Kollmeier, and maintain, that ASI Flex is engaging in excessive scrutiny.

With respect to the plea of some respondents that ASI Flex should be able to track providers and recognize doctor’s offices as inherently within FSA coverage, Kollmeier said that in fact some doctor’s offices do provide services that are not eligible for medical reimbursement, such as massage therapy without special approval.  On that basis, ASI Flex regards itself as bound to inquire as to the nature of all services provided, on every occasion, for payments, even to doctor’s offices, in excess of routine co-pays.

With respect to the explanation of claim denials, Kollmeier said that the language of messages, such as that which I quoted above, is agreed upon between ASI Flex and the GIC.  I note that that fact might move some of the blame for vagueness to the GIC, but does not mean that claimants are being well served.

With respect to communication deficiencies, Kollmeier acknowledged limitations and suggested that there is room for improvement.  She also educated me as to some avenues of communication that might help. 

First, Kollmeier told me that claimants may use—not to submit claims, but to communicate with ASI Flex—the email address asi@asiflex.com.  While this email address is not published on the claimant’s account website, https://my.asiflex.com/, it is visible on the lower-right corner of the general ASI Flex website, http://www.asiflex.com/, where there are also toll-free telephone and fax numbers.  I note that this ASI Flex home page is not a web page that claimants are encouraged to consult; indeed, I did not know it existed.

It is useful to know moreover that there is an ASI Flex home page specifically dedicated to ASI Flex service of the GIC account, http://www.asiflex.com/gic/.

Second, Kollmeier told me about the evening hours of the toll-free telephone line.  The line is staffed 8-8 Monday through Friday and 10-2 on Saturday.

Third, Kollmeier told me about the ASIFlex Mobile App, which is available in the Google Play Store and the Apple App Store.  ASI Flex has publicized the app, and I knew it existed.  But I did not know that it had any functionality superior to the web portal.  Kollmeier told me that it has one functionality that might make life easier for claimants to provide follow-up documentation, that documentation can be submitted via smartphone photograph.

IV.       Contracts and Terms of Service

I requested from ASI Flex, via Ms. Kollmeier, and from the GIC, via online public record request, all effective contracts and terms of service that govern or affect the relationship of GIC claimants with ASI Flex.

From Kollmeier, I learned that terms of service of claimant interaction with ASI Flex are contained in the enrollment form.  For example, the enrollment form for HCSA accounts for new hires is, at the time of this writing, located on the state website here,

http://www.mass.gov/anf/docs/gic/hcsadcapforms/fsaenrollmentformapr2016.pdf.

The state also lists FSA FAQs here,

http://www.mass.gov/anf/employee-insurance-and-retirement-benefits/status-changes/flexible-spending-account-.html.

I note that here,

http://www.mass.gov/anf/employee-insurance-and-retirement-benefits/benefit-enrollment/forms/active-employee-forms/hcsa-forms.html,

one can find various resources, including an FSA Appeal Form,

http://www.mass.gov/anf/docs/gic/forms/fsa-appeal-form.docx.

ASI Flex also features various resources from its home page, http://www.asiflex.com/, under the “Resources” tab, including links to forms, FAQs, and a table of eligible expenses.

The GIC was very accommodating in working with me to fulfill my public record request.  In partnership with GIC counsel, I narrowed my request to procurement-related materials.  I have reviewed all of the GIC documents, and ASI Flex seems to have been retained according to an ordinary and lawful process.

The terms of the GIC-ASI Flex relationship almost entirely concern the administration of the program and describe the claimant-ASI Flex relationship only in broad terms.  I am temporarily parking online the documents I received for anyone to review.  They may be downloaded in this ZIP file: https://dl.dropboxusercontent.com/u/12999009/ASIFlex/GIC-ASIFlex%20Documents.zip (about 28.6 megabytes).

Most of the documents are routine forms, but I direct interested persons to two documents of more substance, the “Bidder Q&A” and “ASI Flex Plan Document.”  In Bidder Q&A, the GIC answered bidders’ questions about expectations for the FSA program.  The document provides some commonsense guidance about how the FSA program is expected to work.  The ASI Flex Plan Document lays out in terms as specific as they get what program features ASI Flex promised to provide.

Two observations about the FSA program are made plain in these documents and perhaps merit mention.  First, ASI Flex is paid wholly from the monthly administrative fees paid by plan participants.  There is no payment for services from GIC to ASI Flex.  Second, funds forfeit from FSA users’ plans are returned to the GIC.  The GIC uses those funds for plan administration.  Funds may be used to balance accounts, for example, when an employee leaves midyear with paid claims in excess of contributions to date.  And funds are used to support plan programming, such as breakfasts organized to inform employees about FSA options.  Both of these arrangements in the GIC-ASI Flex program are, to my understanding, typical of how FSA programs operate.

V.        Conclusions

ASI Flex has, through our account manager, signaled a willingness to meet our needs.  But the design of the service process bears serious deficiencies that render the very value of the FSA program debatable for GIC participants.  Some of these deficiencies derive from the onerous limitations on FSA programs under federal law.  But there remains within those constraints ample room for ASI Flex and the GIC to improve the service experience for the claimant-GIC participant, and indeed, to ensure that FSA participation is even worth the effort, especially for users of the FSA Visa card.

With respect to the need for follow-up documentation on card purchases, ASI Flex should streamline its claims process to reduce the need.  A hard constraint is the IRS requirement that eligibility information be provided by a third party.  But the IRS affords substantiation measures to bypass this requirement, and ASI Flex uses bypasses with respect to some co-pays.  An automatic rule that every submission must be supported by follow-up documentation unduly shifts ASI Flex’s administrative burdens to the claimants, who pay for ASI Flex services.

ASI Flex has sufficiently lengthy experience with recurring claims from recurring providers that alternative substantiation methods should be feasible with some investment of effort.  Moreover, the point remains apt that the claimant, not ASI Flex, principally bears the onus of audit.  If one provider offers all eligible services except for massage therapy, then a claimant ought be permitted the opportunity simply to attest—by electronic checkbox—that the service was not for massage therapy, rather than requiring every claimant to run ragged trying to obtain additional information from that provider’s office about every transaction.

ASI Flex should also reach out to medical service providers and work pro-actively to ensure that providers give their clients, in the first live interaction, all of the written documentation the clients need for claims.  A patient should never have to return to a doctor’s office to obtain follow-up documentation required for an FSA claim, because of a missing date or service description for examples, unless the patient herself or himself failed to keep track of paperwork previously rendered.  Medical service providers and ASI Flex are both in the business of client service.  That client-claimants are stuck in the middle, victimized by a twisted game of “Red Rover,” should be unacceptable to the GIC.

With respect to the explanation of claim denials or documentation rejections, ASI Flex and the GIC should ensure that every claim or rejection is treated with individual care.  No denial or rejection should ever issue that does not specifically state the reason for denial or rejection and provide the claimant with the full array of redress options, including all avenues of communication, and how and when to avail of them.

With respect to communication, ASI Flex should reexamine and enhance its channels of communication with clients.  At minimum, the Secure Message Center should be a two-way avenue of communication, as is typical today in bank-client online communication systems.  Better would be a live chat function, as is typically found on retailers’ website today.  The hours of operation of the telephone line should always accompany dissemination of the number.  The ASI Flex email address should be on all correspondence and on the client account website, and the email account should be attentively responsive.

Since the federal government lowered the caps on FSA set-asides, the efficacy of program participation for many claimants has become dubious.  That is the fault of neither ASI Flex nor the GIC.  However, ASI Flex and the GIC together owe a duty to program participants to minimize the transaction costs of program participation, including participants’ own time and energies, so as to maximize the efficacy of participation.  The bureaucratic design of the present claims’ system seems better calculated to reduce transaction costs for ASI Flex than for the customers who pay for ASI Flex’s services.  The nature of complaints about those services reveals a consistent and persistent focus on deficiencies in the follow-up documentation process.  Even within legal constraints, there is ample room for ASI Flex to address those deficiencies.  Meanwhile the GIC should be advocating transparently for the reasonable expectations of plan participants.

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