Tag Archives: health insurance plan

Do The Health Exchange Delays Matter?

Almost every morning, we hear about another problem with the Healthcare.gov website.  The Obama administration has committed to fixing the problems by Dec. 1, but the delays will still cause problems that we should be considering.

Each carrier or health plan that developed rates for the exchanges developed rates that would apply for 2014.  Although the initial enrollment period could extend past Jan. 1, most carriers assumed that a significant portion of the enrollment would begin no later than then. Rates for 2014 are based on projected claims for the full year.  This projection reflects health-care inflation, in addition to many other key assumptions.  A complete 2014 claim period would be centered on July 1.  Any delays in enrollment would push back the center date.  For example, a 10-month period ending Dec. 31 would be centered on Aug. 1.  Because health-care costs rise as the year progresses, a delay in enrollment would increase the cost of the average claim, even though the monthly rate paid by the person buying the insurance would remain the same. Assuming an illustrative annual rate of 8% increases in health-care costs, there would be about a 0.64% per month understatement in projected claims being paid by carriers.  Because anticipated margins in exchange rates likely fall in the 2% – 4% range, delays in enrollment can significantly lower projected margins.

Beyond the inflationary impact of enrollment delays, there is a strong likelihood that the delay may lead to a bias in the average morbidity or health status of the enrolled population.  Individuals with the best health have the least need to enroll in the exchanges.  Therefore, one might expect healthier individuals to be the slowest to enroll.  The individual mandate penalty may appear small compared with the premium for even the least expensive bronze coverage. Delays in enrollment would likely have an adverse impact on the health plan’s assumption for average morbidity under the program, because a disproportionate share of the less healthy individuals will be enrolled into the exchanges.  In other words, the pool of people being covered through the exchanges will be less healthy than insurers expected when they set rates. With margins at just 2% – 4%, a small swing in morbidity would eliminate a carrier’s margin independent of the inflationary impact.

Issues related to the demographic mix of the population that insurers assume will enroll add to the potential problems. Since health-care reform has limited the rate variation by age to a 3:1 maximum, rates for older individuals have been reduced while younger individuals pay a subsidy.  In reality, the actual costs by age exhibit a higher ratio, probably closer to 4:1 or 5:1.  If younger individuals delay enrolling or don’t enroll at all, rather than pay to subsidize older individuals, carrier margins are expected to deteriorate even more.  For each 10% proportionate reduction in enrollment by those under age 45 compared to that assumed in rate development, margins are reduced by about 1.1 percentage points.  A proportionate reduction of 20% could eliminate most, if not all, of a carrier’s margin.

A less obvious concern to some, yet perhaps even a more important issue, is the impact of the delays on the 2015 rates on the exchanges.  Without delays, the rates for 2015 will be based on a very limited experience base, probably just the first quarter of 2014.  With delays, the rates will be based on even less.  In light of the delays, the 2015 rates will be based upon projections of 2014 rates, continued uncertainty, and confusion about actual financial results in 2014.  Unexpected losses will force carriers to increase future rates to make up deficits. 

Bottom line:  The delays matter and, if not carefully managed, will create serious financial implications in 2014 and subsequent years.

All Employers CAN Reduce The Cost Of Health Care

What health plans and brokers don't want you to know….

Sometimes it's humbling to admit what you don't know. It's even worse to realize that you don't know what you don't know (YDKWYDK – pronounced, yidick-widick). Well, last fall I was hit square in the face with an embarrassing case of YDKWYDK. Silly me, I presumed that within certain boundaries, actuarial science is, well, a science. Based on the experience/characteristics of a population, and the design of a plan, there was a narrow range within which premiums would be assessed. Not exactly.

Informed Purchasers Can Get Better Coverage And A Lower Cost
I advise employers about how to manage health care costs. That's what I do for a living. Well, I discovered there is a process for uncovering available savings of which I've been unaware. Let's call it the informed purchaser discount. It turns out if you:

  • Learn more about how rates get set (not necessarily based on actual claims risk), and
  • Discover where fees might be hidden (many places), and
  • Inform yourself on calculations health plans use to forecast cost and protect themselves from exposure (quite conservatively), and
  • Partner with someone who has the data platform and predictable process to uncover available savings, and
  • Design a new plan that aligns patient and provider interests,

You can pay a lot less for coverage.

Why Don't You Already Know About This?
Well, it turns out there are incentives built into the system such that:

  • Most brokers — who are paid by the plans — are reluctant to push back on plans for better prices, and
  • Brokers who do push back may get penalized by the plans with worse quotes or slower service, and
  • The timing of quotes are manipulated to rush decisions and leave less time for deliberations, and
  • Because it's a hassle to price many different designs, the plans and brokers often choose a favorite and don't bother to tailor it to specific client needs, and
  • All plans tend to operate this way, so you won't detect over-charging by simply comparing among them.
  • Thus, benefits managers are left reporting to the executive team, honestly: “This is the best I could find.”

Sigh. In other words, circumstances are stacked against the individual employer, especially small ones that are fully-insured. The traditional industry process is meant to keep us in the dark.

Worse yet, as traditional benefit professionals, we don't know what we don't know. There are many reasons not to rock the boat. Perhaps there is a long-term, trusted relationship with the broker; they've become our friends. Brokers won't tell you that they think you can get a better deal — otherwise you would question why they aren't getting it. Perhaps there is fear that getting a different broker or an outside advisor will be looked upon as a sign that we have made poor choices in the past. Perhaps it is simply easier to do what we always do. Perhaps we assume we will get the best deal through the competitive bidding process. Perhaps we assume that because we are smart and capable in other areas, the same approach applies in health coverage. Whatever the reason, the vast majority of businesses don't have the insight to demand and get the informed purchaser discount.

So, you ask, how much can that discount be? (Are you sitting down?) $1,000 to $3,000 per employee, every year. For a 500 person company, that equates to overpaying between a half a million and 1.5M dollars on health care over the past five years. It's shocking, it's appalling, it's something I would not have believed … but folks, it's real. And you can do something about it.

I have spent my professional benefit career advising employers about plan design, corporate policy, health care quality, and health interventions. All the while, I should have been encouraging them to partner with an experienced purchaser who knows the process and can share understandings of risks and incentives.

Stop Paying A Penalty Simply For NOT Being Informed
The only way to get an informed purchaser discount is to make the process transparent and work with someone who only has a financial incentive to save you money. This doesn't mean you fire your broker (unless you want to), only that you insist on having a broker who will partner with an independent plan reviewer/designer. You want someone who is not threatened by complete transparency — something you will learn is not welcomed by plans or most brokers. (If your broker resists, I can recommend a few who do advocate transparency and are open-minded).

What should the independent party do?

  1. Review your current plan and experience at no charge.
  2. Assess the savings opportunity at no charge.
    Explain your design options and confirm you are comfortable with specific types of changes. The savings should not be solely derived from making the plan less desirable, such as:

    • restricting access to providers
    • shifting large increases in cost to employees
    • design changes that discourage employees from choosing coverage
  3. If savings are not likely, state that fact, shake hands and part ways.
  4. Charge a reasonable fee, most of which is contingent upon meeting a minimum savings (e.g. $1000 per employee).

In other words, there should be no cost or risk to assess your opportunity, and the group who guarantees savings should get paid after the savings are achieved.

Does such an organization exist? Yes. It's not a brokerage, but a small, independent consulting group called Incenta, that is saving its clients a lot of money. Do I work for them? No, but I am introducing them to my clients because it feels bad not to. Will I be partnering with them in the future to bring this solution to more employers? Absolutely.

What Now?
This article is a stark departure from my usual analytical or policy-oriented discussion. Readers who know me know that I investigate topics thoroughly and thoughtfully. Despite this, all of us encounter situations where yidick-widick, and we discover new solutions to old problems. It's not a sin to find out we didn't know — but I've decided it's inexcusable to ignore it now that I do know.

Never have I been more convinced that a different sort of expert is needed. Plus, in this case it happens to be very low risk — no cost to assess potential savings, and the vast majority of fees contingent upon achieving $1000 to $3000 of savings per employee.

So, I encourage every benefits manager to become one of the (few) informed purchasers. Don't wait until your renewal is approaching. And don't be afraid to admit YDKWYDK — better to learn this now than continue paying the penalty for remaining uninformed. Call or email me or the others listed at the bottom of this article. Become informed. Your bottom line, and your company executives will thank you.

For those interested in following up, talking it though, or getting started toward a better process of getting health care coverage, feel free to contact:

Wendy Lynch
Send Email to Wendy

Dennis Kelly
Send Email to Dennis

Dave Dias (one of the transparency-advocating brokers I know)
Send Email to Dave

Restated HIPAA Regulations Require Health Plans To Tighten Privacy Policies And Practices

Health plans, their insurers, employer and other sponsors, and business associates have work to do. Health care providers, health plans, health care clearinghouses and their business associates will need to review and update their policies and practices for handling and disclosing personally identifiable health care information (“PHI”) in response to the omnibus restatement of the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”) of its regulations (the ” 2013 Regulations”) implementing the Privacy and Security Rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Rulemaking announced January 17, 2013 may be viewed here.

Since 2003, HIPAA generally has required that health care providers, health plans, health care clearinghouses and their business associates (“Covered Entities”) restrict and safeguard individually identifiable health care information (“PHI”) of individuals and afford other protections to individuals that are the subject of that information. The 2013 Regulations published today complete the implementation of changes to HIPAA that Congress enacted when it passed the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009 as well as make other changes to the prior regulations that the Office of Civil Rights found desirable based on its experience administering and enforcing the law over the past decade.

Since passage of the HITECH Act, Office of Civil Rights officials have warned Covered Entities to expect an omnibus restatement of its original regulations. While the Office of Civil Rights had issued certain regulations implementing some of the HITECH Act changes, it waited to publish certain regulations necessary to implement other HITECH Act changes until it could complete a more comprehensive restatement of its previously published HIPAA regulations to reflect both the HITECH Act amendments and other refinements to its HIPAA Rules. The 2013 Regulations published today fulfill that promise by restating the Office of Civil Rights' HIPAA Regulations to reflect the HITECH Act Amendments and other changes and clarifications to OCR's interpretation and enforcement of HIPAA.

Highlights Of Changes
Among other things, the 2013 Regulations:

  • revise the Office of Civil Rights' HIPAA regulations to reflect the HITECH Act's amendment of HIPAA to add the contractors and subcontractors of health plans, health care providers and health care clearinghouses that qualify as business associates to the parties directly responsible for complying with and subject to HIPAA's civil and criminal penalties for violating HIPAA's Privacy, Security, and Breach Notification rules;
  • update previous interim regulations implementing HITECH Act breach notification rules that require Covered Entities including business associates to give specific notifications to individuals whose personally identifiable health care information is breached, the Department of Health & Human Services and in some cases, the media when a breach of unsecured information happens;
  • update interim enforcement guidance the Office of Civil Rights previously published to implement increased penalties and other changes to HIPAA's civil and criminal sanctions enacted by the HITECH Act
  • implement HITECH Act amendments to HIPAA that tighten the conditions under which Covered Entities are allowed to use or disclose personally identifiable health care information for marketing and fundraising purposes and prohibit Covered Entities from selling an individual's health information without getting the individual's authorization in the manner required by the 2013 Regulations;
  • update the Office of Civil Rights' rules about the individual rights that HIPAA requires that Covered Entities afford to individuals who are the subject of personally identifiable health care information used or possessed by a Covered Entity to reflect tightened requirements enacted by the HITECH Act that allow individuals to order their health care provider not to share information about their treatment with health plans when the individual pays cash for the care and to clarify that individuals can require Covered Entities to provide electronic personally identifiable health care information in electronic form;
  • revise the regulations to reflect amendments to HIPAA made as part of the Genetic Information Nondiscrimination Act of 2008 (GINA) which added genetic information to the definition of personally identifiable health care information protected under the HIPAA Privacy Rule and prohibits health plans from using or disclosing genetic information for underwriting purposes; and
  • clarifies and revises other provisions to reflect other interpretations and information guidance that the Office of Civil Rights has issued since HIPAA was passed and to make certain other changes that the Office of Civil Rights found appropriate based on its experience administering and enforcing the rules.

Covered Entities And Business Associates Must Act To Review And Update Policies And Practices
The restated rules in the 2013 Regulations make it imperative that Covered Entities review the revised rules carefully and updated their policies, practices, business associate agreements, training and documentation to comply with the updated requirements and other enforcement and liability risks. The Office of Civil Rights, even prior to the regulations, has aggressively investigated and enforced the HIPAA requirements.

The commitment of the Office of Civil Rights to enforcement most recently was demonstrated by its recent settlement with Hospice of North Idaho (HONI). On January 2, 2013, the Office of Civil Rights announced that the Hospice of North Idaho will pay the Office of Civil Rights $50,000 to settle potential HIPAA violations that occurred in connection with the theft of an unencrypted laptop computer containing electronic personally identifiable health care information. The Hospice of North Idaho settlement is the first settlement involving a breach of electronic personally identifiable health care information affecting fewer than 500 individuals.

While the Hospice of North Idaho settlement marks the first settlement on a small breach, this is not the first time the Office of Civil Rights has sought sanctions against a covered entity for data breaches involving the loss or theft of unencrypted data on a laptop, storage device or other computer device. Rather, the Office of Civil Rights continues to roll out a growing list of enforcement actions demonstrating that the potential risks of HIPAA violations are significant and growing. See also:

Coupled with statements by the Office of Civil Rights about its intolerance, the Hospice of North Idaho and other settlements provide a strong warning to covered entities of the need to carefully and appropriately manage their HIPAA encryption and other Privacy and Security responsibilities. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

In response to the 2013 Regulations and these expanding exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration the Office of Civil Rights' investigation and enforcement actions, emerging litigation and other enforcement data, their own and reports of other security and privacy breaches and near misses, and other developments to decide if additional steps are necessary or advisable.

Implementing International Medical Providers Into The U.S. Workers’ Compensation System, Part 5

This is Part 5 of a five-part series on legal barriers to implementing international providers into Medical Provider Networks for workers’ compensation. Previous articles in the series can be found here: Part 1Part 2Part 3, and Part 4.

Medical Malpractice And Liability Laws
One major criticism of medical tourism is the lack of legal remedy for patients claiming injury from medical malpractice.91 Medical malpractice and liability laws in foreign countries are not as strict as laws in the U.S.92 Awards for malpractice are generally not as generous either as those in the U.S.93 Physicians overseas do not typically have the same amount of malpractice insurance as their American counterparts.94 And the threshold for determining malpractice is higher outside the U.S.95 Limited recourse through the court systems of many countries is a problem, and the right to sue may not exist for injured patients.96 In India, even though the court system is similar to that in the U.S., medical malpractice awards are rare and never reach the multi-million dollar amount common in U.S. court systems.97

Before recognizing a suit, an American court must have personal jurisdiction over a foreign provider.98 The issue of personal jurisdiction over the foreign provider is a difficult burden for anyone initiating a suit.99 U.S. courts are reluctant to assert personal jurisdiction over physicians who are not residents of the U.S. and do not practice in the forum state.100 Minimum contacts sufficient to exercise personal jurisdiction could be difficult to establish over a physician who performed a harmful procedure outside of the forum state.101 If a U.S. court does find evidence to support personal jurisdiction, the case could be dismissed on the grounds of forum no conveniens (not suitable to the forum).102 If the case is not dismissed, then choice of law conflicts arises.103 104 If a court recognizes a valid claim against a defendant, it is likely the defendant will be successful challenging the location of the suit.105 Most jurisdictions would apply the laws of the country where the malpractice occurred, decreasing the likelihood of a finding of malpractice, and a reduction of damages.106

Patient Privacy And Medical Record Laws (Including HIPAA)
In recent years, the U.S. health care industry has outsourced the processing and interpretation of x-rays and other medical records to countries such as India,107 where the data entry costs are less than half of those in the U.S.108 Half of the $20 billion medical transcription industry is outsourced.109 This is due to the fact that information technology is not a core competency of the health care industry and has proven itself to be a prime candidate for outsourcing. Other tasks such as billing, coding, data-clearing, claims processing, and electronic records data processing and storage also are outsourced.110

One example of a task that is outsourced to India, and that pertains to the workers’ compensation industry is the outsourcing of the initial processing of medical bills for health care claims that are later determined to be workers compensation claims. A company this author had contact with in 2008 conducts subrogation recovery on those medical bills paid by their health care clients when injured workers present their employer’s health care insurance card at time of treatment, and does not inform staff that he was injured on the job. The provider bills the health insurer, rather than his employer’s workers’ compensation carrier. The subrogation company, working on a pilot project for the NYS Workers’ Compensation Board under the Health Insurers’ Match Program (HIMP), outsources the initial processing of the medical bills for health care claims to an office they have contracted with in Gurgaon, India.

Since much of the current business of medical tourism is conducted through facilitators, or medical tourism brokers, as mentioned in Part 1 of this series, they must conform to national or state legislation that governs the privacy and confidentiality of medical records and patient information. The locations in which they are located should bind them to the laws of that jurisdiction, and therefore, they would have to conform to the Health Insurance Portability and Accountability Act (HIPAA) regarding privacy of medical records.111

HIPAA privacy applies to a limited subset of health care entities.112 Those “covered entities” include health plans, health care providers, and health care clearinghouses that process nonstandard information. “Business associates” of covered entities are organizations that perform certain functions or activities on behalf of, or provide certain services to, a covered entity. Examples of functions or activities include claims processing, data analysis, utilization review, and billing. Their services are limited to legal, actuarial, accounting, consulting, data aggregation, management, administrative, accreditation, or financial services.113

HIPAA rules are strict, and health plans in the U.S. must follow them even for services provided abroad. However, they are not applicable to foreign hospitals and doctors. Business Associate agreements under HIPAA should be placed with offshore vendors, and vendors should have their contracts with hospitals and other providers conform to HIPAA standards.114

ERISA
The Employee Retirement Income Security Act (ERISA), enacted in 1974, is a federal law that imposes a set of minimum standards on employee benefit plans, including health insurance plans, and is intended to protect employees by ensuring basic fairness and financial stability to such plans.115 In considering integrating medical outsourcing, i.e., medical tourism, into employee benefit plans, a variety of factors motivates HMO and employee welfare plan administrators.116 Cost savings are one factor, as we have already seen. In determining to use medical outsourcing, HMO and plan administrators must remember their fiduciary duty under ERISA “to discharge their duties with respect to a plan solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to plan participants … and to defray reasonable expenses of administering the plan.”117

Medical tourism has come under challenge that it violates the fiduciary duty imposed by ERISA. It is argued that ERISA is inconsistent with the concept of medical tourism because health insurance plans, employers, and health maintenance organizations (“HMO’s”) cannot authorize and pay for participants to engage in medical tourism without violating the ERISA fiduciary duty of loyalty.118Authorization of medical tourism does not result in a de jure violation of ERISA requirements; it is argued that the benefits are so great that they overwhelm the sponsor’s ability to evaluate the dangers inherent in medical tourism.119 Yet, the very act of authorizing medical tourism produces a de facto violation of ERISA’s fiduciary duties some have argued.120 Further it is argued, that medical tourism defeats ERISA’s public policy justification of ensuring equity in the distribution of employee health benefits.121 Medical tourism may actually promote ERISA’s goal of providing health care benefits more equitably, proponents counter.122 123

This presents an inherent conflict between medical tourism and ERISA’s fiduciary duty because the question arises as to whether the cost saving element qualifies the decision to implement medical tourism as “defraying reasonable expenses,” or does the risk and potential profit to the plan, preclude the decision to outsource from being in the interest of the plan participants.124

There are three arguments that proponents of medical outsourcing use in light of the fiduciary duty imposed by ERISA. The first argument is that the cost savings associated with medical tourism falls within the scope of ERISA’s fiduciary duty because plan administrators are obligated to discharge their duties for “the exclusive purpose of … defraying reasonable expense of administering the plan.” Second, the decision by the Supreme Court in Pegram v Herdrich bolsters the argument that medical tourism does not violate ERISA’s fiduciary duty because it is characterized as a mixed medical and eligibility decision made by a physician, and is exempt from ERISA’s coverage. Finally, proponents argue that the availability of medical tourism does not violate ERISA, it only imposes a fiduciary duty on those who exercise control over the management of a plan or its assets.125

Before medical tourism can be implemented in workers’ compensation, the conflict between the fiduciary duty imposed by ERISA and the benefits of medical tourism must be addressed so as to not prevent the cost savings from medical tourism to be lost to the workers’ compensation industry.

Impact Of PPACA On Medical Tourism
The Patient Protection and Affordable Care Act (PPACA) signed by President Obama in March 2010 will affect individuals, health care providers, insurers, and employers.126 It represents a dramatic shift in U.S. health policy, and is designed to expand access to health insurance, reduce health care spending, expand federal fraud enforcement and transparency requirements, and impose new taxes and fees on health industry sectors.127 The political argument for PPACA equates coverage with access, and access to health care is dependent on the capacity of the health care system to absorb increased demand. Many of these changes will not take place until 2014, and there are hints that the “squeeze” on capacity may mean longer wait times for elective surgery. The new health care reform is seen by some as a push for insurers to include plans with medical travel options.128

It is too early to tell what the impact of PPACA will be on the health care system of the U.S.; yet the effects of PPACA on the international health care community will be far-reaching and economically substantial. For the U.S., the influence of health reform will serve as an impetus towards accelerated globalization of the U.S. health care industry, and will encompass the export of patients abroad. Medical tourism is likely to experience explosive growth over the next three to five years due to the changes in the U.S. health care industry brought about by reform.129 PPACA has already planted seeds for comparison shopping in health care, which will benefit both domestic and outbound medical tourism.130

Much of the discussion so far has been focused on medical tourism from the standpoint of the health care side, which is understandable given the state of the health care system in this country. The laws and regulations imposed upon the health care system are equally incumbent on the workers’ compensation system and present a formidable obstacle to implementing medical tourism. The laws in Oregon and Washington State would suggest that at least as far as these states are concerned, medical tourism in workers’ compensation does not present a problem, However, in order for medical tourism to become a part of the workers’ compensation system in the US, the laws previously mentioned and many other laws may need to be amended or repealed.

Workers’ Compensation Case Law And Medical Tourism
An exhaustive case law search resulted in identifying three cases that support or refute the implementing of medical tourism into the workers’ compensation arena. However, these three cases do offer some insight into how courts might rule regarding the implementation of medical tourism in workers’ compensation.

In State Compensation Insurance Fund v. Workers’ Compensation Appeals Board131, a Mexican resident, working in California as a laborer, fell from a ladder in January 1975. He was treated by the Fund until February 1975. He received treatment from a Mexican provider in his hometown of Tijuana. The medical reports were prepared by both the treating physician and another doctor. The Workers’ Compensation Appeals Board made an award ordering reimbursement for treatment, as well as for medical-legal costs. The State Fund petitioned for reconsideration to disallow reimbursement on the grounds that both physicians were not licensed under California law. The petition was denied, and the case was appealed.

The Court of Appeal affirmed the Board’s award, citing that the definition of physician in the CA Labor Code132 does not exclude physicians licensed to practice in another country, and when medical treatment and reports are procured from physicians in accordance with Labor Code, § 4600133, employers are responsible for reasonable expense of treatment and medical-legal costs. The court held that the definition of physicians in the statute was unreasonable in light of clear jurisdiction of the Board over extraterritorial injuries when the contract of hire was made in California.

The next case, also in California, was a case of domestic medical tourism, and has some relevance on implementing medical tourism for workers’ compensation abroad because it involves the matter of distance. In Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board134, the applicant, Eugene Bolton, worked as a cook for the employer, Braewood Convalescent Hospital. He slipped and sustained injuries to his back and right elbow. He was overweight at the time of the accident, having weighed 422 pounds. His treating physician and two of the employer’s physicians recommended he lose weight to facilitate his recovery from his injuries. On the recommendation of a friend, he enrolled in the Duke University obesity clinic in Durham, North Carolina in February 1979. He participated at the clinic for ten months and lost 175 pounds.

In November 1979, he returned to California because he could no longer afford to continue the program. He filed for reimbursement of his expenses at the clinic, which included medical, lodging, special diet and transportation costs. The Workers’ Compensation Judge awarded him temporary disability prior to his enrollment at the clinic, the cost of the clinic, and his future participation in the program. Braewood sought reconsideration and challenged the award for past and future self-procured medical treatment. The Workers’ Compensation Appeals Board granted reconsideration of the judge’s failure to award temporary disability benefits during the time of his treatment at the clinic. After reconsideration, the Workers’ Compensation Appeals Board affirmed the judge’s award. On appeal, the employer contended that the Workers’ Compensation Appeals Board erred in awarding reimbursement, temporary benefits and compensation for future treatment.

The Supreme Court of California affirmed the award of the Workers’ Compensation Appeals Board by holding that, although the employer had a right to direct applicant to a specific weight-reduction program135, such a right was lost as a result of employer’s failure to act by identifying and offering an alternative program, thus the applicant acquired the right to choose for himself which program to undertake, and that the right of reimbursement was part and parcel of his proper exercise of the right to choose.136 The evidence supported the Workers’ Compensation Appeals Board’s conclusion of reasonableness of location 3,000 miles from applicant’s home, and thus the costs of attending were reimbursable. The applicant was entitled to the award of temporary disability for the period he participated in the program, and the recommendations of two physicians to lose weight were sufficient to support award for cost of future medical treatment.137

The last case, AMS Staff Leasing, Inc. v. Arreola138, involved an undocumented Mexican worker in Florida who was injured in January of 2005, when a vehicle struck him in the right leg as he was unloading trash from the back of a truck. He was hospitalized for a long period of time, and had twelve surgeries to repair the fracture. In August 2005, he was seen by an orthopedist in Dallas, who recommended additional surgery. Arreola never got the surgery in the US, as he returned to Mexico in November, and did not have legal documents to return to the US.

In February 2006, Arreola’s lawyer sent a letter to the counsel for the employer/carrier requesting authorization of one of three orthopedic doctors in Arreola’s hometown of Jalisco. The employer/carrier did not offer him any medical care in Mexico and refused to authorize any Mexican physicians to treat him. In March 2006, the claimant went to a hospital in Jalisco and was assigned to an orthopedic surgeon. The surgeon’s diagnosis was the same as the orthopedist in Dallas, and it was his opinion that Arreola’s chances to return to work were poor. Arreola filed a Petition for Benefits seeking authorization for continued medical care in Mexico and for costs and attorney’s fees. The employer/carrier defended the petition on the grounds there were no known orthopedic doctors in Mexico who qualified as a “physician” according to the workers’ compensation statutes.

The Judge of Compensation Claims entered an order directing the employer/carrier to provide written authorization to the orthopedic surgeon in Mexico to provide Arreola “with ongoing care that is reasonable, and medically necessary, and related to the industrial accident.” The judge also ordered the employer/carrier to pay for that care. In August 2006, the claimant filed another Petition of Benefits for Temporary Partial Disability (TPD) Benefits. He was awarded the benefits after a second hearing.

The employer/carrier challenged the two orders of the Judge for the TPD benefits and the continuing medical care in Mexico. The Court of Appeal ruled that state law did not preclude the foreign physician’s treatment of the claimant in Mexico. They stated that Florida workers’ compensation law contemplates coverage for non-citizens, and they cited an earlier case in which the court held that undocumented workers were entitled to workers’ compensation coverage in Florida139, and two later cases140 141 that held that “to construe the section 440.13(2)(a) in a manner that would limit authorized treatment for a claimant injured in Florida to a physician licensed in the State, or anywhere else in the US, would preclude workers (including illegal aliens) who return to their home country from receiving authorized remedial care for clearly compensable injuries.”

The Court of Appeal in the Arreola case also stated that Florida law indicates that an injured worker is not prohibited from moving from his pre-injury residence in the state, and receiving treatment outside of the state. As the claimant was no longer living in Florida, the court held that this case was different from the Decker v. City of West Palm Beach142, United Records & Tapes v. Deall143 144 and Layne-Western Co. v. Coxcases that the defendants cited, in that Arreola was already living in Mexico when he requested medical treatment. Therefore, the trial court did not err in directing the employer/carrier to authorize treatment by a Mexican physician, and the trial court’s decision was affirmed by the court.

Conclusion
Research into the legal barriers to implementing medical tourism into workers’ compensation found nothing of any real substance that would prevent workers’ compensation cases from benefiting from medical tourism. We have seen that there still remain several legal barriers to the implementation of medical tourism into workers’ compensation. Various federal and state laws need to be changed, and the issues of medical malpractice and liability laws, patient privacy and medical record laws and HIPAA, as well as ERISA and the impact of PPACA must all be addressed. But it is my opinion that these barriers can and will be overcome, especially in light of case law that has broken down some of those barriers already for foreign workers. The cost savings that can be achieved and the quality of care that matches, and even surpasses that found in the U.S., is sufficient reason why medical tourism should be implemented.

However, those opposed to implementing medical tourism into workers’ compensation would make the point that we cannot be certain of the quality of care and outcomes of medical procedures performed, especially in third world countries where the living conditions might not be ideal for recovery and healing. They may also add that the technology and skill level of the physicians are not on the same level as that found in the U.S. And finally they may be reluctant to spend money to fly a claimant and a companion to another country for what may seem to be a “medical vacation.”

Yet, the creation of the Joint Commission International to assess the quality of foreign hospitals has brought about a higher standard of care. There are more physicians trained in the U.S. or in the U.K. in many of the countries catering to medical tourists, utilizing the latest technology and medical training available, as well as many of them being board-certified in various medical specialties. The costs for three of the most common procedures in India, Thailand and Singapore includes the cost of airfare, hospital and hotel, and is considerably cheaper than having the injured worker treated in the U.S.

Legal Criticisms Of Medical Tourism And Workers’ Compensation
There will still be objections to implementing medical tourism from the defendant community, (i.e., employers and their insurance carriers); however, the courts in both of the cases presented here ruled against the defendants in those cases. The defendants argued on the grounds that the physicians treating the plaintiffs in Mexico were not licensed in the states where the cases occurred, or in any other U.S. state. The court in State Comp Ins. Fund denied the defendant’s petition to reconsider the Workers’ Compensation Appeals Board award on the grounds that the definition of a physician did not exclude physicians licensed to practice in another country. The court in AMS Staff Leasing, Inc. ruled that state law did not preclude treatment by a foreign physician.

Defendants also stated that there were no known orthopedic doctors in Mexico who qualified as a “physician” as the term is used in the statutes. This argument about there not being any known orthopedic doctors is specious at best, given the fact that many doctors are being trained in the U.S. and are board-certified here as well.

It would appear that at least for the moment, the courts are willing to allow some measure of medical tourism in workers’ compensation. How future courts will decide is unclear, but there is at least some precedent for ruling in favor of medical tourism. Another way in which medical tourism will be implemented is if workers’ compensation carriers, realizing the benefits of medical tourism, push for it at the state and federal level. The evidence presented here has indicated that employers and insurance companies may not have a choice in the matter as the cost of health care rises and the process of reform taking place makes it obvious that the increased competition will offer medical tourism as a viable option to lower costs.

The globalization of health care will necessitate the removal of all barriers to providing the best care possible at the lowest cost. The cost savings that are being realized by medical tourism as a part of the health care industry can be just as beneficial in workers’ compensation. Therefore, medical tourism should be implemented into workers’ compensation and the legal barriers should be modified.

91 Williams, 641.

92 Longe, 14.

93 Boyle, 46.

94 Longe, 14.

95 Ibid, 14.

96 Ibid, 14.

97 Boyle, 46.

98 Williams, 643.

99 Ibid, 643.

100 Ibid, 643.

101 Ibid, 643.

102 Boyle, 46.

103 Ibid, 46.

104 Williams, 644.

105 Ibid, 644.

106 Ibid, 644-645.

107 Herrick, 19-20.

108 Terry, 441.

109 David Lazarus, “Outsourced UCSF Notes Highlight Privacy Risk: How one offshore worker sent tremor through medical system,” San Francisco Chronicle, (San Francisco, CA), March 28, 2004. Accessed from http://www.mindlully.org.

110 Terry, 441.

111 Leigh G. Turner, “Quality in health care and globalization of health services: accreditation and regulatory oversight of medical tourism companies,” International Journal for Quality in Health Care 2011, 23, 1 (2010): 4. doi:10.1093/intqhc/mzq078 accessed from http://www.hhs.gov.

114 Joseph Marlowe and Paul Sullivan, “Medical Tourism: The Ultimate Outsourcing,” Aon Consulting Forum, March, (2007), 4. Retrieved from https://infolinx.aon.com.

115 Williams, 612 and 650.

116 Christopher J. Brady, “Offshore Gambling: Medical Outsourcing Versus ERISA’s Fiduciary Duty Requirements,” Washington and Lee Law Review 64, no. 3 (2007): 1105.

117 Ibid, 1106.

118 Williams, 650.

119 Ibid, 650.

120 Ibid, 651.

121 Ibid, 651.

122 Brady, 1105.

123 Williams, 652.

124 Brady, 1106.

125 Ibid, 1106.

126 Corinne M. Karuppan and Muthu Karuppan, “Changing Trends in Health Care Tourism,” The Health Care Manager 29, no. 4 (2010): 351.

127 Brad Beauvais, Matt Brooks and Suzanne Woods, “Gazing through the Looking Glass … Analysis of the Impact of the US Health Care Reform Bill on the International Health & Business Landscape,” (paper presented at the Seventeenth Annual South Dakota International Business Conference, Rapid City, SD, October 1, 2010). 51.

128 Karuppan and Kauppan, 351.

129 Beauvais, et al., 61.

130 Karuppan and Karuppan, 357.

131 State Compensation Insurance Fund v. Workers’ Compensation Appeals Board, 69 Cal. App.3d 884 (1977).

132 CA Lab Code, § 3209.3.

133 CA Labor Code, § 4600.

134 Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board, 34 Cal.3d 159 (1983).

135 Cal Civ. Prac. Workers’ Compensation, §2:29.

136 CA. Labor Code, §4600.

137 Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board, 34 Cal.3d 159 (1983).

138 AMS Staff Leasing, Inc. v. Arreola, 976 So.2d 612 (2008).

139 Cenvill Dev. Corp. v. Candelo, 478 So.2d 1168 (Fla. 1st DCA 1985).

140 Safeharbor Employer Servs., Inc v. Velazquez, 860 So.2d 984 (Fla. 1st DCA 2003).

141 Gene’s Harvesting v. Rodriquez, 421 So.2d 701 (Fla. 1st DCA 1982).

142 Decker v. City of West Palm Beach, 379 So.2d 955 (Fla. 1st DCA 1980).

143 United Records & Tapes v. Deall, 378 So.2d 99 (Fla. 1st DCA 1979.

144 Layne-Western Co. v. Cox, 497 So.2d 955 (Fla. 1st DCA 1986).

Implementing International Medical Providers Into The U.S. Workers' Compensation System, Part 5

This is Part 5 of a five-part series on legal barriers to implementing international providers into Medical Provider Networks for workers’ compensation. Previous articles in the series can be found here: Part 1, Part 2, Part 3, and Part 4.

Medical Malpractice And Liability Laws
One major criticism of medical tourism is the lack of legal remedy for patients claiming injury from medical malpractice.91 Medical malpractice and liability laws in foreign countries are not as strict as laws in the U.S.92 Awards for malpractice are generally not as generous either as those in the U.S.93 Physicians overseas do not typically have the same amount of malpractice insurance as their American counterparts.94 And the threshold for determining malpractice is higher outside the U.S.95 Limited recourse through the court systems of many countries is a problem, and the right to sue may not exist for injured patients.96 In India, even though the court system is similar to that in the U.S., medical malpractice awards are rare and never reach the multi-million dollar amount common in U.S. court systems.97

Before recognizing a suit, an American court must have personal jurisdiction over a foreign provider.98 The issue of personal jurisdiction over the foreign provider is a difficult burden for anyone initiating a suit.99 U.S. courts are reluctant to assert personal jurisdiction over physicians who are not residents of the U.S. and do not practice in the forum state.100 Minimum contacts sufficient to exercise personal jurisdiction could be difficult to establish over a physician who performed a harmful procedure outside of the forum state.101 If a U.S. court does find evidence to support personal jurisdiction, the case could be dismissed on the grounds of forum no conveniens (not suitable to the forum).102 If the case is not dismissed, then choice of law conflicts arises.103 104 If a court recognizes a valid claim against a defendant, it is likely the defendant will be successful challenging the location of the suit.105 Most jurisdictions would apply the laws of the country where the malpractice occurred, decreasing the likelihood of a finding of malpractice, and a reduction of damages.106

Patient Privacy And Medical Record Laws (Including HIPAA)
In recent years, the U.S. health care industry has outsourced the processing and interpretation of x-rays and other medical records to countries such as India,107 where the data entry costs are less than half of those in the U.S.108 Half of the $20 billion medical transcription industry is outsourced.109 This is due to the fact that information technology is not a core competency of the health care industry and has proven itself to be a prime candidate for outsourcing. Other tasks such as billing, coding, data-clearing, claims processing, and electronic records data processing and storage also are outsourced.110

One example of a task that is outsourced to India, and that pertains to the workers’ compensation industry is the outsourcing of the initial processing of medical bills for health care claims that are later determined to be workers compensation claims. A company this author had contact with in 2008 conducts subrogation recovery on those medical bills paid by their health care clients when injured workers present their employer’s health care insurance card at time of treatment, and does not inform staff that he was injured on the job. The provider bills the health insurer, rather than his employer’s workers’ compensation carrier. The subrogation company, working on a pilot project for the NYS Workers’ Compensation Board under the Health Insurers’ Match Program (HIMP), outsources the initial processing of the medical bills for health care claims to an office they have contracted with in Gurgaon, India.

Since much of the current business of medical tourism is conducted through facilitators, or medical tourism brokers, as mentioned in Part 1 of this series, they must conform to national or state legislation that governs the privacy and confidentiality of medical records and patient information. The locations in which they are located should bind them to the laws of that jurisdiction, and therefore, they would have to conform to the Health Insurance Portability and Accountability Act (HIPAA) regarding privacy of medical records.111

HIPAA privacy applies to a limited subset of health care entities.112 Those “covered entities” include health plans, health care providers, and health care clearinghouses that process nonstandard information. “Business associates” of covered entities are organizations that perform certain functions or activities on behalf of, or provide certain services to, a covered entity. Examples of functions or activities include claims processing, data analysis, utilization review, and billing. Their services are limited to legal, actuarial, accounting, consulting, data aggregation, management, administrative, accreditation, or financial services.113

HIPAA rules are strict, and health plans in the U.S. must follow them even for services provided abroad. However, they are not applicable to foreign hospitals and doctors. Business Associate agreements under HIPAA should be placed with offshore vendors, and vendors should have their contracts with hospitals and other providers conform to HIPAA standards.114

ERISA
The Employee Retirement Income Security Act (ERISA), enacted in 1974, is a federal law that imposes a set of minimum standards on employee benefit plans, including health insurance plans, and is intended to protect employees by ensuring basic fairness and financial stability to such plans.115 In considering integrating medical outsourcing, i.e., medical tourism, into employee benefit plans, a variety of factors motivates HMO and employee welfare plan administrators.116 Cost savings are one factor, as we have already seen. In determining to use medical outsourcing, HMO and plan administrators must remember their fiduciary duty under ERISA “to discharge their duties with respect to a plan solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to plan participants … and to defray reasonable expenses of administering the plan.”117

Medical tourism has come under challenge that it violates the fiduciary duty imposed by ERISA. It is argued that ERISA is inconsistent with the concept of medical tourism because health insurance plans, employers, and health maintenance organizations (“HMO’s”) cannot authorize and pay for participants to engage in medical tourism without violating the ERISA fiduciary duty of loyalty.118 Authorization of medical tourism does not result in a de jure violation of ERISA requirements; it is argued that the benefits are so great that they overwhelm the sponsor’s ability to evaluate the dangers inherent in medical tourism.119 Yet, the very act of authorizing medical tourism produces a de facto violation of ERISA’s fiduciary duties some have argued.120 Further it is argued, that medical tourism defeats ERISA’s public policy justification of ensuring equity in the distribution of employee health benefits.121 Medical tourism may actually promote ERISA’s goal of providing health care benefits more equitably, proponents counter.122 123

This presents an inherent conflict between medical tourism and ERISA’s fiduciary duty because the question arises as to whether the cost saving element qualifies the decision to implement medical tourism as “defraying reasonable expenses,” or does the risk and potential profit to the plan, preclude the decision to outsource from being in the interest of the plan participants.124

There are three arguments that proponents of medical outsourcing use in light of the fiduciary duty imposed by ERISA. The first argument is that the cost savings associated with medical tourism falls within the scope of ERISA’s fiduciary duty because plan administrators are obligated to discharge their duties for “the exclusive purpose of … defraying reasonable expense of administering the plan.” Second, the decision by the Supreme Court in Pegram v Herdrich bolsters the argument that medical tourism does not violate ERISA’s fiduciary duty because it is characterized as a mixed medical and eligibility decision made by a physician, and is exempt from ERISA’s coverage. Finally, proponents argue that the availability of medical tourism does not violate ERISA, it only imposes a fiduciary duty on those who exercise control over the management of a plan or its assets.125

Before medical tourism can be implemented in workers’ compensation, the conflict between the fiduciary duty imposed by ERISA and the benefits of medical tourism must be addressed so as to not prevent the cost savings from medical tourism to be lost to the workers’ compensation industry.

Impact Of PPACA On Medical Tourism
The Patient Protection and Affordable Care Act (PPACA) signed by President Obama in March 2010 will affect individuals, health care providers, insurers, and employers.126 It represents a dramatic shift in U.S. health policy, and is designed to expand access to health insurance, reduce health care spending, expand federal fraud enforcement and transparency requirements, and impose new taxes and fees on health industry sectors.127 The political argument for PPACA equates coverage with access, and access to health care is dependent on the capacity of the health care system to absorb increased demand. Many of these changes will not take place until 2014, and there are hints that the “squeeze” on capacity may mean longer wait times for elective surgery. The new health care reform is seen by some as a push for insurers to include plans with medical travel options.128

It is too early to tell what the impact of PPACA will be on the health care system of the U.S.; yet the effects of PPACA on the international health care community will be far-reaching and economically substantial. For the U.S., the influence of health reform will serve as an impetus towards accelerated globalization of the U.S. health care industry, and will encompass the export of patients abroad. Medical tourism is likely to experience explosive growth over the next three to five years due to the changes in the U.S. health care industry brought about by reform.129 PPACA has already planted seeds for comparison shopping in health care, which will benefit both domestic and outbound medical tourism.130

Much of the discussion so far has been focused on medical tourism from the standpoint of the health care side, which is understandable given the state of the health care system in this country. The laws and regulations imposed upon the health care system are equally incumbent on the workers’ compensation system and present a formidable obstacle to implementing medical tourism. The laws in Oregon and Washington State would suggest that at least as far as these states are concerned, medical tourism in workers’ compensation does not present a problem, However, in order for medical tourism to become a part of the workers’ compensation system in the US, the laws previously mentioned and many other laws may need to be amended or repealed.

Workers’ Compensation Case Law And Medical Tourism
An exhaustive case law search resulted in identifying three cases that support or refute the implementing of medical tourism into the workers’ compensation arena. However, these three cases do offer some insight into how courts might rule regarding the implementation of medical tourism in workers’ compensation.

In State Compensation Insurance Fund v. Workers’ Compensation Appeals Board131, a Mexican resident, working in California as a laborer, fell from a ladder in January 1975. He was treated by the Fund until February 1975. He received treatment from a Mexican provider in his hometown of Tijuana. The medical reports were prepared by both the treating physician and another doctor. The Workers’ Compensation Appeals Board made an award ordering reimbursement for treatment, as well as for medical-legal costs. The State Fund petitioned for reconsideration to disallow reimbursement on the grounds that both physicians were not licensed under California law. The petition was denied, and the case was appealed.

The Court of Appeal affirmed the Board’s award, citing that the definition of physician in the CA Labor Code132 does not exclude physicians licensed to practice in another country, and when medical treatment and reports are procured from physicians in accordance with Labor Code, § 4600133, employers are responsible for reasonable expense of treatment and medical-legal costs. The court held that the definition of physicians in the statute was unreasonable in light of clear jurisdiction of the Board over extraterritorial injuries when the contract of hire was made in California.

The next case, also in California, was a case of domestic medical tourism, and has some relevance on implementing medical tourism for workers’ compensation abroad because it involves the matter of distance. In Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board134, the applicant, Eugene Bolton, worked as a cook for the employer, Braewood Convalescent Hospital. He slipped and sustained injuries to his back and right elbow. He was overweight at the time of the accident, having weighed 422 pounds. His treating physician and two of the employer’s physicians recommended he lose weight to facilitate his recovery from his injuries. On the recommendation of a friend, he enrolled in the Duke University obesity clinic in Durham, North Carolina in February 1979. He participated at the clinic for ten months and lost 175 pounds.

In November 1979, he returned to California because he could no longer afford to continue the program. He filed for reimbursement of his expenses at the clinic, which included medical, lodging, special diet and transportation costs. The Workers’ Compensation Judge awarded him temporary disability prior to his enrollment at the clinic, the cost of the clinic, and his future participation in the program. Braewood sought reconsideration and challenged the award for past and future self-procured medical treatment. The Workers’ Compensation Appeals Board granted reconsideration of the judge’s failure to award temporary disability benefits during the time of his treatment at the clinic. After reconsideration, the Workers’ Compensation Appeals Board affirmed the judge’s award. On appeal, the employer contended that the Workers’ Compensation Appeals Board erred in awarding reimbursement, temporary benefits and compensation for future treatment.

The Supreme Court of California affirmed the award of the Workers’ Compensation Appeals Board by holding that, although the employer had a right to direct applicant to a specific weight-reduction program135, such a right was lost as a result of employer’s failure to act by identifying and offering an alternative program, thus the applicant acquired the right to choose for himself which program to undertake, and that the right of reimbursement was part and parcel of his proper exercise of the right to choose.136 The evidence supported the Workers’ Compensation Appeals Board’s conclusion of reasonableness of location 3,000 miles from applicant’s home, and thus the costs of attending were reimbursable. The applicant was entitled to the award of temporary disability for the period he participated in the program, and the recommendations of two physicians to lose weight were sufficient to support award for cost of future medical treatment.137

The last case, AMS Staff Leasing, Inc. v. Arreola138, involved an undocumented Mexican worker in Florida who was injured in January of 2005, when a vehicle struck him in the right leg as he was unloading trash from the back of a truck. He was hospitalized for a long period of time, and had twelve surgeries to repair the fracture. In August 2005, he was seen by an orthopedist in Dallas, who recommended additional surgery. Arreola never got the surgery in the US, as he returned to Mexico in November, and did not have legal documents to return to the US.

In February 2006, Arreola’s lawyer sent a letter to the counsel for the employer/carrier requesting authorization of one of three orthopedic doctors in Arreola’s hometown of Jalisco. The employer/carrier did not offer him any medical care in Mexico and refused to authorize any Mexican physicians to treat him. In March 2006, the claimant went to a hospital in Jalisco and was assigned to an orthopedic surgeon. The surgeon’s diagnosis was the same as the orthopedist in Dallas, and it was his opinion that Arreola’s chances to return to work were poor. Arreola filed a Petition for Benefits seeking authorization for continued medical care in Mexico and for costs and attorney’s fees. The employer/carrier defended the petition on the grounds there were no known orthopedic doctors in Mexico who qualified as a “physician” according to the workers’ compensation statutes.

The Judge of Compensation Claims entered an order directing the employer/carrier to provide written authorization to the orthopedic surgeon in Mexico to provide Arreola “with ongoing care that is reasonable, and medically necessary, and related to the industrial accident.” The judge also ordered the employer/carrier to pay for that care. In August 2006, the claimant filed another Petition of Benefits for Temporary Partial Disability (TPD) Benefits. He was awarded the benefits after a second hearing.

The employer/carrier challenged the two orders of the Judge for the TPD benefits and the continuing medical care in Mexico. The Court of Appeal ruled that state law did not preclude the foreign physician’s treatment of the claimant in Mexico. They stated that Florida workers’ compensation law contemplates coverage for non-citizens, and they cited an earlier case in which the court held that undocumented workers were entitled to workers’ compensation coverage in Florida139, and two later cases140 141 that held that “to construe the section 440.13(2)(a) in a manner that would limit authorized treatment for a claimant injured in Florida to a physician licensed in the State, or anywhere else in the US, would preclude workers (including illegal aliens) who return to their home country from receiving authorized remedial care for clearly compensable injuries.”

The Court of Appeal in the Arreola case also stated that Florida law indicates that an injured worker is not prohibited from moving from his pre-injury residence in the state, and receiving treatment outside of the state. As the claimant was no longer living in Florida, the court held that this case was different from the Decker v. City of West Palm Beach142, United Records & Tapes v. Deall143 144 and Layne-Western Co. v. Coxcases that the defendants cited, in that Arreola was already living in Mexico when he requested medical treatment. Therefore, the trial court did not err in directing the employer/carrier to authorize treatment by a Mexican physician, and the trial court’s decision was affirmed by the court.

Conclusion
Research into the legal barriers to implementing medical tourism into workers’ compensation found nothing of any real substance that would prevent workers’ compensation cases from benefiting from medical tourism. We have seen that there still remain several legal barriers to the implementation of medical tourism into workers’ compensation. Various federal and state laws need to be changed, and the issues of medical malpractice and liability laws, patient privacy and medical record laws and HIPAA, as well as ERISA and the impact of PPACA must all be addressed. But it is my opinion that these barriers can and will be overcome, especially in light of case law that has broken down some of those barriers already for foreign workers. The cost savings that can be achieved and the quality of care that matches, and even surpasses that found in the U.S., is sufficient reason why medical tourism should be implemented.

However, those opposed to implementing medical tourism into workers’ compensation would make the point that we cannot be certain of the quality of care and outcomes of medical procedures performed, especially in third world countries where the living conditions might not be ideal for recovery and healing. They may also add that the technology and skill level of the physicians are not on the same level as that found in the U.S. And finally they may be reluctant to spend money to fly a claimant and a companion to another country for what may seem to be a “medical vacation.”

Yet, the creation of the Joint Commission International to assess the quality of foreign hospitals has brought about a higher standard of care. There are more physicians trained in the U.S. or in the U.K. in many of the countries catering to medical tourists, utilizing the latest technology and medical training available, as well as many of them being board-certified in various medical specialties. The costs for three of the most common procedures in India, Thailand and Singapore includes the cost of airfare, hospital and hotel, and is considerably cheaper than having the injured worker treated in the U.S.

Legal Criticisms Of Medical Tourism And Workers’ Compensation
There will still be objections to implementing medical tourism from the defendant community, (i.e., employers and their insurance carriers); however, the courts in both of the cases presented here ruled against the defendants in those cases. The defendants argued on the grounds that the physicians treating the plaintiffs in Mexico were not licensed in the states where the cases occurred, or in any other U.S. state. The court in State Comp Ins. Fund denied the defendant’s petition to reconsider the Workers’ Compensation Appeals Board award on the grounds that the definition of a physician did not exclude physicians licensed to practice in another country. The court in AMS Staff Leasing, Inc. ruled that state law did not preclude treatment by a foreign physician.

Defendants also stated that there were no known orthopedic doctors in Mexico who qualified as a “physician” as the term is used in the statutes. This argument about there not being any known orthopedic doctors is specious at best, given the fact that many doctors are being trained in the U.S. and are board-certified here as well.

It would appear that at least for the moment, the courts are willing to allow some measure of medical tourism in workers’ compensation. How future courts will decide is unclear, but there is at least some precedent for ruling in favor of medical tourism. Another way in which medical tourism will be implemented is if workers’ compensation carriers, realizing the benefits of medical tourism, push for it at the state and federal level. The evidence presented here has indicated that employers and insurance companies may not have a choice in the matter as the cost of health care rises and the process of reform taking place makes it obvious that the increased competition will offer medical tourism as a viable option to lower costs.

The globalization of health care will necessitate the removal of all barriers to providing the best care possible at the lowest cost. The cost savings that are being realized by medical tourism as a part of the health care industry can be just as beneficial in workers’ compensation. Therefore, medical tourism should be implemented into workers’ compensation and the legal barriers should be modified.

91 Williams, 641.

92 Longe, 14.

93 Boyle, 46.

94 Longe, 14.

95 Ibid, 14.

96 Ibid, 14.

97 Boyle, 46.

98 Williams, 643.

99 Ibid, 643.

100 Ibid, 643.

101 Ibid, 643.

102 Boyle, 46.

103 Ibid, 46.

104 Williams, 644.

105 Ibid, 644.

106 Ibid, 644-645.

107 Herrick, 19-20.

108 Terry, 441.

109 David Lazarus, “Outsourced UCSF Notes Highlight Privacy Risk: How one offshore worker sent tremor through medical system,” San Francisco Chronicle, (San Francisco, CA), March 28, 2004. Accessed from http://www.mindlully.org.

110 Terry, 441.

111 Leigh G. Turner, “Quality in health care and globalization of health services: accreditation and regulatory oversight of medical tourism companies,” International Journal for Quality in Health Care 2011, 23, 1 (2010): 4. doi:10.1093/intqhc/mzq078 accessed from http://www.hhs.gov.

114 Joseph Marlowe and Paul Sullivan, “Medical Tourism: The Ultimate Outsourcing,” Aon Consulting Forum, March, (2007), 4. Retrieved from https://infolinx.aon.com.

115 Williams, 612 and 650.

116 Christopher J. Brady, “Offshore Gambling: Medical Outsourcing Versus ERISA’s Fiduciary Duty Requirements,” Washington and Lee Law Review 64, no. 3 (2007): 1105.

117 Ibid, 1106.

118 Williams, 650.

119 Ibid, 650.

120 Ibid, 651.

121 Ibid, 651.

122 Brady, 1105.

123 Williams, 652.

124 Brady, 1106.

125 Ibid, 1106.

126 Corinne M. Karuppan and Muthu Karuppan, “Changing Trends in Health Care Tourism,” The Health Care Manager 29, no. 4 (2010): 351.

127 Brad Beauvais, Matt Brooks and Suzanne Woods, “Gazing through the Looking Glass … Analysis of the Impact of the US Health Care Reform Bill on the International Health & Business Landscape,” (paper presented at the Seventeenth Annual South Dakota International Business Conference, Rapid City, SD, October 1, 2010). 51.

128 Karuppan and Kauppan, 351.

129 Beauvais, et al., 61.

130 Karuppan and Karuppan, 357.

131 State Compensation Insurance Fund v. Workers’ Compensation Appeals Board, 69 Cal. App.3d 884 (1977).

132 CA Lab Code, § 3209.3.

133 CA Labor Code, § 4600.

134 Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board, 34 Cal.3d 159 (1983).

135 Cal Civ. Prac. Workers’ Compensation, §2:29.

136 CA. Labor Code, §4600.

137 Braewood Convalescence Hospital et al. v. Workers’ Compensation Appeals Board, 34 Cal.3d 159 (1983).

138 AMS Staff Leasing, Inc. v. Arreola, 976 So.2d 612 (2008).

139 Cenvill Dev. Corp. v. Candelo, 478 So.2d 1168 (Fla. 1st DCA 1985).

140 Safeharbor Employer Servs., Inc v. Velazquez, 860 So.2d 984 (Fla. 1st DCA 2003).

141 Gene’s Harvesting v. Rodriquez, 421 So.2d 701 (Fla. 1st DCA 1982).

142 Decker v. City of West Palm Beach, 379 So.2d 955 (Fla. 1st DCA 1980).

143 United Records & Tapes v. Deall, 378 So.2d 99 (Fla. 1st DCA 1979.

144 Layne-Western Co. v. Cox, 497 So.2d 955 (Fla. 1st DCA 1986).