Let’s say you have health insurance through your employer and live in one of 21 states with laws protecting consumers against surprise medical bills from out-of-network providers.
Should one of those unwanted bills land in your mailbox, you can turn to your state law and regulators for help, right?
If you’re among the millions of Americans with a category of job-based health coverage known as self-funded insurance, most state health care laws do not apply to you.Ask Emily
A series of columns answering consumers’ questions about California’s changing medical landscape.
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Plus, if you have an issue with your coverage, you must go through a different appeals process than other state residents with private insurance. You must seek help from a federal regulator that may — or may not — be responsive.
“We have unequal consumer protections for a big chunk of our population,” says Tam Ma, legal and policy director for the advocacy group Health Access California.
For Millions of Insured Americans, State Health Laws Don’t Apply
Nationally, 61 percent of covered workers were in self-funded plans last year, according to the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)
In California, about 5.7 million people were enrolled in such plans. Last year, the Golden State’s two health insurance regulators received more than 1,000 requests for help from consumers in self-funded plans. The departments have no authority over those plans and had to refer many of the enrollees to the U.S. Department of Labor, which regulates them.
Businesses that opt for self-funded plans — also called self-insured plans — generally pay the medical bills of their employees directly.
Under a fully insured plan, on the other hand, the employer — or an individual or family — buys coverage from a state-regulated insurance company, which assumes the financial risk. In California, fully insured plans are overseen by the state Department of Managed Health Care or the state Department of Insurance.
Large companies are more likely to self-insure. Among companies with 5,000 or more employees, 94 percent of covered workers were in self-funded plans last year, KFF data show.
More businesses — including smaller ones — are self-insuring because they can save money, says Dean Hoffman, an employee benefits consultant based in Wisconsin who specializes in self-insured plans.
One way they save is by avoiding the cost of complying with state-mandated benefits. For example, Hoffman says, for every premium dollar spent on fully insured plans in Wisconsin, about 11 cents goes toward state-mandated requirements.
“Every time you add a benefit, there’s a price associated with that,” he says.Email Sign-Up
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It might not be obvious that you’re covered by a self-funded plan. Most businesses contract with health insurance companies to administer them, pay claims and provide access to their provider networks. That means your insurance card will likely have a Cigna, Blue Shield or other familiar logo on it even if your plan is self-funded.
If you’re not sure whether your plan is self-insured, ask your human resources department.
“To the consumer, it feels no different,” says Karen Pollitz, a senior fellow at KFF. “If you work for a big company, it’s a pretty good bet you’re in a self-funded plan.”
If you are, you may feel the difference in coverage, consumer protection and grievance procedures, however. “The only consumer protections available to those folks are just what federal law provides,” Ma says.
Consider state laws relating to surprise medical bills. Among the states that have adopted various protections against such bills, Connecticut, Illinois, New York, Florida, Maryland and California have the strongest and most comprehensive measures.
But even if you live in one of these states, “you still might get hit by large medical bills” if you’re in a self-funded plan, Pollitz says.
Some self-insured businesses, however, voluntarily provide many of the same protections as state law, says Lauren Vela, a senior director at the Pacific Business Group on Health, which represents about 75 companies that self-insure nationwide.
In the case of surprise bills — from out-of-network doctors such as anesthesiologists, for instance — “a lot of employers, not all of them, would have it written into their plan that it would not be considered out-of-network,” Vela says. “No employer wants to have employees get these kinds of surprise bills.”
To handle complaints about coverage, most states have laws allowing consumers in private health plans to appeal to an independent, external reviewer chosen by the state if your plan denies a claim and you disagree, Ma says.
In self-insured plans, you are entitled to external review — but your employer chooses, hires and pays the reviewer, Pollitz says. “It’s not independent in the way that state programs are.”
Plus, your regulator, the U.S. Department of Labor, may be slow to get involved in the grievance process, Ma says.
The department “doesn’t really have the resources or the ability to protect consumers in a timely way,” she says. “It may take them a very long time to get to your case, if they do at all, compared to state-regulated plans.”
So, if you’re in a self-funded plan and disagree with a coverage decision, look at your explanation of benefits, which will describe how to appeal. You can also ask your human resources department for guidance, or your union, if one represents you.
Most experts agree that your first step will likely be to contact the customer service line on your insurance card and request a review.
EBSA “has experts who can help on this,” says Michael Trupo, a spokesman for the department, though he did not answer follow-up questions for more details.
If you don’t get your questions answered, many states have Consumer Assistance Programs that help you navigate insurance problems, including those with self-funded plans. The Department of Managed Care administers California’s program, which can be reached at 888-804-3536.
“They’ll help you file your appeal and make inquiries on your behalf,” Pollitz says. “They can be your advocate.”
California’s managed-care regulator has fined insurance giant Anthem Blue Cross $5 million for repeatedly failing to resolve consumer grievances in a timely manner.
The state Department of Managed Health Care criticized Anthem, the nation’s second-largest health insurer, for systemic violations and a long history of flouting the law in regard to consumer complaints.
“Anthem Blue Cross’ failures to comply with the law surrounding grievance and appeals rights are long-standing, ongoing and unacceptable,” said Shelley Rouillard, director of the Department of Managed Health Care. “Anthem knows this is a huge problem, but they haven’t addressed it.”
Before this latest action, California had already fined Anthem more than $6 million collectively for grievance-system violations since 2002.
The state said it identified 245 grievance-system violations during this latest investigation of consumer complaints at Anthem from 2013 to 2016.
Rouillard cited one example in which Anthem denied a submitted claim for an extensive surgical procedure, even though it had issued prior approval for the operation. Twenty-two calls contesting the denial — placed by the patient, the patient’s spouse, the couple’s insurance broker and the medical provider — failed to resolve the complaint. It was not until the patient sought help from the managed-care agency, more than six months after the treatment, that Anthem paid the claim.
Anthem Inc. could not be immediately reached for comment. The company, based in Indianapolis, sells Blue Cross policies in California and 13 other states.Email Sign-Up
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California is known for having tough consumer protection laws on health coverage and for assisting policyholders when they exhaust their appeals with insurers. In other actions, the state has fined insurers for overstating the extent of their doctor networks and for denying patients timely access to mental health treatment.
Jamie Court, president of Consumer Watchdog, an advocacy group in Santa Monica, Calif., said the regulatory response to these problems varies greatly by state. He singled out New York, Washington and Kansas as some of the states with good track records of holding health insurers accountable.
“The real problem is when states don’t act there is not a great avenue for the consumer. It’s very hard to bring legal action,” Court said. “Anthem definitely needed a wake-up call. But this will also send a message to other insurers.”
Nationally, consumers continue to express their displeasure with health insurers over a wide range of issues, including denials for treatment, billing disputes and the lack of in-network doctors.
Verified complaints related to health insurance and accident coverage rose 12 percent in 2016 compared to the previous year, totaling 53,680, according to data compiled by the National Association of Insurance Commissioners. The data only includes incidents in which state regulators confirmed there was a violation or error by the insurer involved.
Court and other advocates welcomed the significant fine in California and said this is just the latest example of Anthem’s failure to uphold basic consumer protections.
Overall, state officials said that calls to Anthem’s customer service department often led to repeated transfers of calls and that the company failed to follow up with enrollees.
After previous fines, Anthem has pledged to provide more training to employees and to better track grievances and appeals in order to reduce delays.
“If you look at the history of Anthem and the penalties assessed over the years, they are definitely an outlier compared to other health plans,” Rouillard said.
“All the plans have some issues with grievances, but nothing to the degree we are seeing with Anthem.”
The managed-care department said a health plan’s grievance program is critical, so that consumers know they have the right to pursue an independent medical review or file a complaint with regulators if they are dissatisfied with the insurer’s decision. The grievance system can also help insurers identify systemic problems and improve customer service, state officials said.
The state’s independent medical review program allows consumers to have their case heard by doctors who are not tied to their health plan. The cases often arise when an insurer denies a patient’s request for treatment or a prescription drug.
In 2016, insurance company denials were overturned in nearly 70 percent of medical review cases and patients received the requested treatment, according to state officials.
In revising the Senate Republican tax plan’s expansion of the Child Tax Credit (CTC), Senate Finance Committee Chairman Orrin Hatch raised its cost by about $13 billion (or 22 percent) per year but did nothing for the millions of low- and moderate-income working families that would get only token help under the prior proposal.
Navigating Aging focuses on medical issues and advice associated with aging and end-of-life care, helping America’s 45 million seniors and their families navigate the health care system.
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Being old and sick in America frequently means a doctor won’t ask you about troublesome concerns you deal with day to day — difficulty walking, dizziness, a leaky bladder, sleep disturbances memory lapses, and more.
It means that if you’re hospitalized, you have a good chance of being treated by a physician you’ve never met and undergoing questionable tests and treatments that might end up compromising your health.
It means that if you subsequently seek rehabilitation at a skilled nursing facility, you’ll encounter another medical team that doesn’t know you or understand your at-home circumstances. Typically, a doctor won’t see you very often. In her new book, “Old & Sick in America: The Journey Through the Health Care System,” Dr. Muriel Gillick, a professor of population medicine at Harvard Medical School and director of the Program in Aging at Harvard Pilgrim Health Care Institute, delves deeply into these concerns and why they’re widespread.
Her answer: a complex set of forces is responsible. Some examples:
- Medical training doesn’t make geriatric expertise a priority.
- Care at bottom-line-oriented hospitals is driven by the availability of sophisticated technology.
- Drug companies and medical device manufacturers want to see their products adopted widely and offer incentives to ensure this happens.
- Medicare, the government’s influential health program for seniors, pays more for procedures than for the intensive counseling that older adults and caregivers need.
In an interview, Gillick offered thoughts about how older adults and their caregivers can navigate this treacherous terrain. Her remarks have been edited for clarity and length:
Q: What perils do older adults encounter as they travel through the health care system?
The journey usually begins in the doctor’s office, so let’s start there. In general, physicians tend to focus on different organ systems. The heart. The lungs. The kidneys. They don’t focus so much on conditions that cross various organ systems, so-called geriatric syndromes. Things like falling, becoming confused or dealing with incontinence.Email Sign-Up
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Q: What can people do about that?
Older people are often unwilling to bring these issues to the attention of their doctors. But if a family member is accompanying the patient, they should speak up.
In some practices, a nurse practitioner may be more attuned to these issues than the physician. So, it’s a good idea to learn who in the medical office you go to is good at what.
Another approach is to request a geriatric assessment or consultation that will bring these issues to the forefront.
Q: How do geriatric assessments work?
A geriatric assessment does two major things. It looks at the whole person. And it focuses on that person’s functioning — on what they can do. Can they dress themselves, walk, get to the bathroom? Can they cook meals? Take a bus downtown? Balance their checkbook?
An outpatient geriatric assessment is typically 1½ to two hours and conducted by an interdisciplinary team. A social worker or a mental health professional will ask about the person’s family situation. Are they living alone? Do they have support? A nurse practitioner will look at physical function. And a physician will go over medical concerns and examine the cognitive performance of the individual. Then, the team pulls all these pieces together to look at what’s going on with that person.
When someone starts being frail — having consistent difficulty doing things — an assessment of this kind is often a good idea.More Columns
Q: The next step you talk about in your book is the hospital.
One of the big perils in the hospital is technology, which is also its great virtue. Technology can improve quality of life and be life-extending. But, sometimes, it creates endless complications.
An example are imaging tests such as CT scans. Physicians hardly think of this as an invasive test. But often one has to administer a dye to see what’s going on. That dye can cause kidney failure in someone with impaired kidney function — something that’s common in older adults.
Sometimes there’s no real need for scans. An example would be an older person who becomes acutely confused in the hospital, which happens a lot. The appropriate response is to look at what’s causing the confusion and take away the offending agent. Often, that’s a medication that was started in the hospital. Or, it’s an infection. But the routine knee-jerk reaction is to do a CT scan to rule out the possibility of a stroke or bleeding in the brain.
For the most part, doctors want to do whatever it takes to diagnose a problem. For younger patients, this may make sense. But for frail older patients with multiple medical conditions, a cascade of complications can result.
Q: What do you advise older patients and their families do?
When a test is proposed, ask the doctor “how important is it to pursue this diagnosis” and “how will the results change what you do?”
It’s also reasonable to say something along the lines of “every time I’ve had a test, it seems like I get into some kind of trouble. So, I really want to know, with this test or this treatment, what kind of trouble could I get into?”
Q: In your book, you talk about how a doctor-patient relationship can be sidelined when someone goes to the hospital. Instead, hospitalists provide care. How should people respond?
It’s really important to give that doctor a sense of the patient and who they are. Say, your 88-year-old mother is in the hospital, and she’s become profoundly confused. The doctor doesn’t know what she was like a week or a month ago. He may assume she has dementia unless he hears otherwise. He won’t understand it might be delirium.
You or a caregiver want to come across as someone who can make it easier for the doctor to do his or her job — versus someone who’s a nuisance. You want to build trust, not annoyance.Use Our Content
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Q: What about skilled nursing facilities?
These are settings that people go to after the hospital, to get rehabilitation. Typically, the contact with doctors is minimal after an initial evaluation, though there’s a spectrum as to how much medical care there is.
A subset of older adults go to rehab just to get physical therapy after they’ve had a joint replacement or a hip fracture. They are really pretty stable, medically. If they get good physical therapy and nursing care, it’s probably OK that the doctor isn’t around much.
But there are also older patients who come to skilled nursing facilities, or SNFs, after having had one complication after another in the hospital. These patients can be very fragile, with many medical problems. They’re at risk of getting some new problem in the SNF — perhaps an infection — or an exacerbation of one of the problems they already have that hasn’t resolved.
Q: What do you recommend?
When you arrive at an SNF, it’s a new cast of characters. A physician whom you’ll see fleetingly. Nurses. Physical therapists. Aides. If you’re a caregiver, make sure you have face-to-face time with these staffers.
SNFs are required within the first week or so to have a care planning meeting with the team. They’re supposed to invite patients and their representatives to the meeting. This is a good place to say something along the lines of “My mother has been through a lot, and now that we’ve met you and seen what you can do, we’d like you to do your best to treat her here and not send her back to the hospital.”
You have to have trust to make that happen. The family has to trust the medical team. And the team has to trust that the family isn’t going to get upset and sue them. A meeting of this kind has the potential to allow everyone to figure out what’s important and what the plan will be going forward.
We’re eager to hear from readers about questions you’d like answered, problems you’ve been having with your care and advice you need in dealing with the health care system. Visit khn.org/columnists to submit your requests or tips.
Canadian Courts Are Taking a Step Toward Corporate Liability of Multinationals for Wrongdoings Abroad
The globalization of business has allowed multinational corporations to conduct economic activities that transcend national boundaries. These activities have had both a positive and a negative impact on human lives across the globe. (Sean E.D. Fairhurst & Zoe Thoms, Post-Kiobel v. Royal Dutch Petroleum Co.: Is Canada Poised to Become an Alternative Jurisdiction for Extraterritorial Human Rights Litigation, 52 Alta. L. Rev. 389 (2014).) While corporations have adapted quickly to this shift in business, national legal systems have shown difficulties in providing regulations that adequately allow the states to keep control over business operations that occur in a multiplicity of jurisdictions. These transnational business operations are often conducted through supply chains or through subsidiaries. A supply chain is the network of entities that are involved in the maiking of the final product sold to customers by the leading corporation. (Mark Stevenson & Martin Spring, Flexibility from a Supply Chain Perspective: Definition and Review, 27(7) Int’l J. Operations & Production Mgmt. 685, 686 (2007).) By conducting their operations through a supply chain and subsidiary, the leading corporations have access to raw materials or to workforces at a lower cost than they could have in their home country, thereby increasing their competitiveness. In this relatively new system of doing business, profits flow to the leading company, but liability for wrongs remains at the bottom of the chain. Although supply chains can be an answer for economic gain, it may also be at the cost of human rights and the environment. (Fairhurst & Thoms, supra, at 401.) These international developments have led some national and international jurisdictions to adopt statutes and guidelines to promote corporate social responsibility in order to ensure that corporations respect human rights abroad and are held liable for wrongs, and to provide victims with adequate remedies.
The majority of corporations operating in the extractive sector are Canadian, with 54% of the world’s mining companies listed on the Toronto Stock Exchange in 2012, which represents more than 1,000 mining companies. (Philip Woram, Are Their Chickens Coming Home to Roost in Ontario: Why Hudbay and Yaiguaje May Signal a New Era of Heightened Liability for the International Extractive Industry, 49 Int’l Law. 243, 244 [vi] (2015).) Though Canada has a reputation of being a peaceful country that advocates for human rights, it does not impose any clear obligation upon its corporations to ensure respect for human rights and the environment through their supply chain and overseas activities. (Penelope Simons, Unsustainable International Law: Transnational Resource Extraction and Violence against Women, 26 Transnat’l L. & Contemp. Probs. 415, 428 (2017).) Canada promotes corporate social responsibility and asks its corporations to conduct their international operations in line with Canadian values. However, the government has not adopted laws similar to the U.S. Alien Tort Statute or the U.S. Dodd-Frank Act, despite coming under frequent criticism for its lack of action by the United Nations. (Chilenye Nwapi, Resource Extraction in the Courtroom: The Significance of Choc v. Hudbay Minerals Inc. for Transitional Justice in Canada, 14 Asper Rev. Int’l Bus. & Trade L. 121, 129 (2014).)
Corporate Social Responsibility in Canada
In the case of Canada, the overseas economic activity of our mining companies is enormous. Attempts at federal legislation have been unsuccessful. In the absence of statutory authority the courts have not yet addressed issues related to globalization and human rights with the sort of boldness and creativity we associate with great judges like Ivan Rand. (Ian Binnie, Judging the Judges: “May They Boldly Go Where Ivan Rand Went Before”, 26 Can. J. L. & Jurisprudence 5, 19 (2013).)
The courts hold an important role in making law: by interpreting of the law, they help establish rights, duties, and protections. Alien tort law and regulations on the environmental and human rights impact of corporations abroad might not have been enacted in Canada, but in the past five years, the Canadian judiciary has taken steps to fill in the gap. Courts have ensured that Canadian corporations do not escape accountability for human rights abuses, environmental crimes, violation of host countries’ laws, or unethical behavior they are directly involved or through an intermediary company they control by profiting from the lack of accountability mechanisms in foreign countries. (Nwapi, supra, at 130-131.)
In this post, I will briefly review three cases in which courts took steps toward the enforcement of corporate social responsibility.
Choc v. Hudbay Minerals Inc.: Parent Corporation’s Duty of Care
[T]ort law should be evolving to accord with globalization, and local communities should not have to suffer without redress when adversely impacted by the business activity of a Canadian corporation operating in their country. […] Ordinary tort doctrine would call for the losses to be allocated to the ultimate cost of the products and borne by the consumers who benefit from them, not disproportionately by the farmers and peasants of the Third World. (Choc v. Hudbay Minerals Inc, para. 73.)
In 2011, Guatemalan citizens commenced three actions before the Ontario Superior Court against Hudbay Minerals Inc. (Hudbay) claiming that the corporation should be held accountable for human rights abuses committed under the Fenix mining project. (Fairhurst & Thoms, supra, at 401.) They alleged that private security guards who were employed by Compañia Guatemalteca De Niquel (CGN), the corporation in charge of the said project, committed acts of violence, rape and murder against civilians during an eviction required for the Fenix mining project. (Choc v. Hudbay Minerals Inc, para. 4). According to the plaintiffs, eleven women were gang-raped by the security personnel; Adolfo Ich, an indigenous leader, was shot in the head during a land dispute; and German Chub Choc was also shot in an unprovoked attack by security guards and is now paralyzed. (Id. paras. 5-7.) At that time, Hudbay owned the Fenix project through its wholly-controlled and 98.2%-owned subsidiary, CGN. (Id. paras. 8-10). The plaintiffs therefore advanced two arguments: the “corporate veil” should be lifted, meaning that they asked the court to set aside the legal distinction between the shareholder (Hudbay) and its subsidiary company (CGN). They also asked the court to find a “duty of care” upon Hudbay. (Id. para. 47.) In order to stay the actions, Hudbay brought three preliminary motions on the ground that there was “no reasonable cause of action.” (Id. para. 1.)
Lifting the Corporate Veil
The criteria allowing the corporate veil to be pierced are strict. The court explained that “the separate identity concept is foundational to Anglo-Canadian law, and applies even where the evidence demonstrates that the corporation has been involved in impropriety.” (Id. para. 47.) There are only two situations in which the corporate veil can be pierced: “where the very use of the corporation is to hide the [impropriety], or when there is an agency relationship in which the corporation acts as an agent under the authorization of its shareholders.” (Id. paras. 47-49.) The latter was found as a possible scenario and led the court to declare that “if the plaintiffs can prove at trial that CGN was Hudbay’s agent at the relevant time, they may be able to lift the corporate veil and hold Hudbay liable. Therefore, the claim based on piercing the corporate veil in the Choc action should be allowed to proceed to trial.” (Id.)
The claim for direct negligence is slightly different from the first one, because the plaintiffs are not asking the court to hold Hudbay directly liable for the wrongs committed by the security guards, but they argued that, by its own inaction, Hudbay failed to prevent the torts and therefore has been directly negligent. (Id. para. 52.) In other words, the court had to examine if Hudbay had a “duty of care” over the situation. According to the test established in Anns v. Merton London Borough Council,  A.C. 728, a parent company has a duty of care when: (1) “the harm complained of is a reasonably foreseeable consequence of the alleged breach; (2) there is sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care on the defendants; and, (3) there exist no policy reasons to negate or otherwise restrict that duty.” (Id. para. 52.)
The court found that the plaintiffs presented sufficient arguments that, if proven, could affirm that there was a duty of care for the parent company. The court found among other things that “it would have been reasonably foreseeable to Hudbay, […] that authorizing the use of force in response to peaceful opposition from the local community could lead to the security personnel committing violent acts” and that “[public statements] made by the parent company are one factor among others to be considered and are indicative of a relationship of proximity between the defendants and plaintiffs.” (Id. paras. 64-68.) The alleged public statement made by Hudbay is that they “did everything in its power to ensure that the evictions were carried out in the best possible manner while respecting human rights.” (Id. para. 67.) This part of the court ruling is interesting for the future, because it sends a message to parent companies that their public announcements on the work of their supply chains can create expectations from the public and that it would be in their best interest if they act as they said they would.
It is important to keep in mind that in order to analyze the preliminary motion and to ascertain whether the actions should go further, “the plaintiffs’ pleadings are to be taken as proven” and whether or not they will be successfully proven is a matter that will be determined at the trial. (Id. para. 58.) However, in this preliminary motion, the court made it clear that if the pleadings are successfully proven at trial, the court could determine that the parent company has a “duty of care,” which means that it could be held liable for negligence for its subsidiary’s wrongdoing abroad.
Chevron Corp v. Yaiguaje: Recognition of Foreign Judgement
In a world in which businesses, assets, and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions. Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due. (Chevron Corp. v. Yaiguaje, para. 1.)
Ecuador’s Corte Nacional de Justicia has upheld a judgement sentencing the American corporation Chevron to pay $9.51 billion to the indigenous citizens of Lago Agrio, a region in Ecuador where Texaco, a former corporation now merged with Chevron, conducted oil extraction and caused “extensive environmental pollution that has disrupted the lives and jeopardized the futures of its residents.” (Id. para. 4.) However, Chevron refused to pay and does not own any assets in Ecuador, leaving the indigenous citizens without national means to obtain a remedy that they may be entitled to. In 2012, the plaintiffs commenced an action for recognition and enforcement of a foreign judgment before the Ontario Superior Court of Justice against Chevron Canada, a subsidiary of Chevron. (Id. para. 71.) Chevron Canada sought an order declining the competence of the court to permanently stay the action. The motion went up to the Supreme Court of Canada, which confirmed the competence of the Ontario Superior Court of Justice to examine the action. (Id. para. 94.)
Justice Gascon clearly restated the principles governing the recognition and enforcement of a foreign judgement in Canada, insisting on the difference between a substantive action and an action of recognition and enforcement of a pre-existing obligation. (Id. para. 42.) In sum, the foreign “judgement must have been rendered by a court of competent jurisdiction and must be final, and it must be of a nature that the principle of comity requires the domestic court to enforce.” (Id. para. 35.) In his ruling, he explained that the overriding factor to determine jurisdiction is the existence of a “real and substantial connection” between the foreign court and the parties, not between the court seized with an action of recognition and enforcement of foreign judgement and the parties. (Id. para. 33.) Analyzing this “real and substantial connection” only serves the purpose of determining whether the foreign court had jurisdiction and ruled lawfully. (Id. para. 35.) Justice Gascon also pointed out the importance of respecting the power of each state to adopt laws and to enforce them within its own territory through the principle of comity. The principle of comity in international private law “calls for the promotion of order and fairness, an attitude of respect and deference to other states, and a degree of stability and predictability in order to facilitate reciprocity.” (Id. para. 52.) He concluded that Chevron Canada was served in juris (personal service of the originating process within the province or territory of the forum) at its place of business in Mississauga, so in accordance with the provision setting jurisdiction for action in recognition and enforcement of a foreign judgement and therefore the Ontario Superior Court of Justice has jurisdiction to rule over the case. (Id. paras. 75-94.)
Even if the Ontario Superior Court later decided not to enforce the Ecuadorian judgement, the position of the Canadian highest tribunal is clear: the Canadian approach to recognition and enforcement of foreign judgement is generous and liberal and Canadian courts intend to respect foreign authority and to enforce lawful foreign judgements when appropriate. (Id. para. 27.)
Araya v. Nevsun Resources Ltd.: Private Law Obligations Arising From International Law
It is beyond question that companies have the ability to significantly influence human rights around the world for good or for ill. Sometimes influence implies obligation. In light of mounting evidence of corporate complicity in human rights abuses, there is, at the very least, an obligation upon the legal community to clarify the human rights-related duties of companies as a matter of national and international civil and criminal law. (Binnie, supra, at 50.)
In 2014, three Eritreans commenced an action against Nevsun Resources Ltd. (“Nevsun”) in British Columbia on the ground that Nevsun was complicit in the use of forced labor and other human rights violations through Segen Construction. (Jeffrey Bone, Book Review: The Governance Gap: Extractive Industries, Human Rights, and the Home State Advantage, 11 McGill Int’l J. Sust. Dev. L. & Pol’y 357, 366).) The only way for Nevsun to exploit the Bisha mine was to conduct its operations through Segen Construction, a contractor that was imposed by the state of Eritrea. (Id.) Nevsun could not enter the Eritrean territory. The plaintiffs sought damages for “the use of forced labour; torture; slavery; cruel, inhuman or degrading treatment; and crimes against humanity.” (Araya v. Nevsun Resources Ltd., para. 43.) The peculiarity of this case is that a part of the violations claimed found their legal basis in customary international law. (Id.) It is the very first case based directly on international law commenced in Canada. (Bone, supra, at 366.) Nevsun brought five preliminary motions in order to stay the case. (Araya v. Nevsun Resources Ltd., para. 8.) The court dismissed three of them, including the one challenging the use of customary international law as the basis of this civil claim. (Bone, supra, at 375-8.)
Nevsun argued that the prohibitions found in international law do not impose obligations upon private corporations and therefore “do not give rise to a private law cause of action for damages,” even when incorporated into Canadian law. (Araya v. Nevsun Resources Ltd., para. 424.) In its ruling, the court stressed the complexity of customary international law by qualifying it the “most complicated and developing area of the law as it moves to adapt to the ever-changing social and economic conditions of our modern world.” (Id. para. 433.) Customary international law can be defined, in general terms, as rules “drawn from the settled practice of sovereign states” that are clearly observed as binding legal obligations by this community of states and applicable to every sovereign state. (Id. para. 434.)
The court pointed out that there has never been a successful civil claim alleging the breach of customary international law. (Id. para. 445.) However, this does not mean that this type of claim is bound to fail and concluded that the “claims raise arguable, difficult and important points of law and should proceed to trial so that they can be considered in their proper factual and legal context. This is necessary such that the common law and the law of tort may evolve in an appropriate manner.” (Id. para. 486.) The chances of finding a clear prohibition imposed upon private companies arising from customary international law might not seem high, but the court made interesting statements such as “following the common law tradition, […] prohibitive rules of customary international law should be incorporated into domestic law in the absence of conflicting legislation” and “[t]his is even more so where the obligation is jus cogens,“ which the prohibition of forced labor and torture are. (Id. para. 449, 441, 434.) Jus cogens comprises “a set of higher-order international law principles [that] are peremptory norms of international law from which no derogation is permitted” because they are seen as “the most fundamental standards of the international community.” (Id. paras. 437-438.)
The role of the court, in this preliminary motion, was not to decide whether or not there are international law obligations imposed upon private companies, but whether to allow the case to proceed to trial. By allowing so, the court acknowledges the importance of defining the role of customary international law upon private corporations in this modern and global context. Nevsun has appealed this preliminary ruling and the hearing was held on September 25, 2017, but a decision has yet to be issued. If the appeal is dismissed, this important question will be analyzed at trial.
The fight towards adequate protection of human rights in practice concerns a multiplicity of actors within the national and international legal sphere at every level of society. The legislative branch is not the only body with the power to deal with matters relating to human rights. Each branch of government has a role to play and the Canadian courts seem primed to do just that. Ian Binnie, former Justice of the Supreme Court of Canada, has vigorously called on them to do so:
Is it too much to ask that today’s judges rise to the challenges of today’s world with similar vigour? They have done so when the unity of the country was at stake. I have also acknowledged – indeed praised – the importance of judicial restraint where circumstances warrant. In the case of creating some form (and forum) of relief for Third World victims of globalization, however, we seem to have used restraint as an excuse for inertia. (Binnie, supra, at 21.)
SynerMed, a company that manages physician practices serving hundreds of thousands of Medicaid and Medicare patients across California, is planning to shut down amid scrutiny from state regulators and health insurers.
The company’s chief executive, James Mason, notified employees in an internal email Nov. 6, obtained by Kaiser Health News, that audits by health plans found “several system and control failures within medical management and other departments.”
As a result, Mason wrote, the company “will begin the legal and operational steps to shut down all operations.” He said he was working on the transition of SynerMed’s clients to another management firm within the next 180 days.Use Our ContentThis story can be republished for free (details).
Separately, the California Department of Managed Health Care confirmed it is investigating the company.
“There is an open investigation of SynerMed, but the details are confidential right now,” said spokesman Rodger Butler. His agency monitors the financial solvency and claims-payment practices of many physician groups that contract with health plans.
The company’s sudden decision to shut down has sparked alarm among some doctors and medical groups that have relied on the company to handle their finances and business operations.
For years, SynerMed has served as a key middleman between health plans and independent physician practices, handling insurance contracting, paying claims and performing other administrative tasks so doctors can focus on treating patients. That role has expanded as millions more Californians are enrolled in Medicaid managed-care plans under the Affordable Care Act.
SynerMed has billed itself as “one of the largest Medicaid/Medicare management service organizations in the nation.” Last year, the company boasted that it had enrollment of 1 million patients in California, aided by an influx of enrollees who got coverage under the federal health law.
Mason, the CEO, didn’t respond to requests for comment. The company referred calls to its general counsel, but she couldn’t be reached.
In his email to employees, Mason said he had “discovered certain internal control issues within the medical management department.”
“Well,” he wrote, “as a result of the manner in which those issues were disclosed to the health plans and regulatory agencies, we have been subject to unannounced audits by almost all of our health plan partners.”
The CEO said two medical groups, AlphaCare and EHS (Employee Health Systems) Medical Group, have already terminated their contracts with SynerMed.
“I am heartbroken and saddened by these events after we have worked so hard to build our reputation as a company that operates with integrity,” Mason wrote in his email to employees.
Part of SynerMed’s growth had come from managing care for low-income seniors and people with disabilities who are eligible for both Medicare and Medicaid, called Medi-Cal in California. The state has been at the forefront nationally in trying to shift those “dual-eligible” patients into managed-care plans, which are paid a fixed rate per patient to coordinate a range of medical care.
A spokesman for the Medi-Cal program said the agency had no information to share on SynerMed.
SynerMed is a subsidiary of PAMC, Ltd., which also owns Pacific Alliance Medical Center in Los Angeles’ Chinatown. The hospital agreed to pay $42 million in June to settle federal allegations of improper kickbacks to referring physicians.
The U.S. Justice Department said Pacific Alliance Medical Center agreed to the settlement to resolve a whistleblower lawsuit alleging that the hospital submitted false claims to Medi-Cal and Medicare. In a news release at the time, federal officials said the hospital and its owners did not admit liability in settling the case.
The hospital is closing later this month. Officials there attributed the closure to the fact that the lease on the property is ending and it wasn’t financially feasible to retrofit facilities to meet the state’s seismic requirements.
In a statement to Kaiser Health News, PAMC said “there is no connection between the closure of [the hospital] and any matters involving SynerMed. SynerMed is a wholly owned subsidiary that provides completely different services.”
Senate Tax Bill Would Add 13 Million to Uninsured to Pay for Tax Cuts of Nearly $100,000 Per Year for the Top 0.1 Percent
Senate leaders’ new version of their tax bill adds a provision repealing the Affordable Care Act’s individual mandate, the requirement that most people enroll in health insurance coverage or pay a penalty. The revised Senate bill also sunsets most of its individual income tax cuts after 2025, to comply with Senate rules that prohibit bills considered under fast-track “reconciliation” procedures from increasing long-term budget deficits. But the revised bill maintains a permanent cut in the corporate tax rate, from 35 percent to 20 percent.