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Campolo Honors American Ex-POWs at Red Cross Gala

Posted: June 29th, 2016

The American Red Cross on Long Island honored members of the local American Ex-Prisoners of War chapter on June 9, 2016 at the Red and White Dinner Dance, the annual fundraiser for Long Island branch of the 135-year-old nonprofit. In a special recognition ceremony, the Red Cross paid tribute to Joe Abbondondelo, Ben Chrzanoski, Steve Kirtyan, Joseph Manoni, and Bernie Rader, who valiantly served their country in World War II and were held captive in Europe until 1944 and 1945 under unimaginable conditions. Stanley Kosierowski, who passed away on March 22, 2016 shortly after being awarded the prestigious POW medal, was also recognized. Joe Campolo, Red Cross board member and managing partner of Campolo, Middleton & McCormick, LLP, Suffolk County’s premier law firm, was honored to present medals to these American heroes at the event.

Members of the “greatest generation,” many of these former POWs credit the rations they received from the American Red Cross with helping to save their lives. The ceremony was a tribute to the original line of service on which the Red Cross was founded in 1881. For more than 130 years, the Red Cross has been a steadfast supporter of the military and their families. Today, through its Service to the Armed Forces program, the Red Cross serves as a communication link to deployed military members, provides pre- and post-deployment support, and works with veterans in an ever-changing and demanding environment.

Campolo was selected to present the tribute medals to the ex-POWs in recognition of his work as a board member of the American Red Cross on Long Island. Prior to starting Campolo, Middleton & McCormick, he served honorably in the U.S. Marine Corps.

At the ceremony, Campolo said that he was “humbled to help recognize a group of American heroes. Each of these servicemen valiantly protected the liberties and freedoms we hold dear as Americans. Their sacrifice, resolve, and bravery continue to serve as an inspiration to us all.”

June 2016 CMM Newsletter: Negotiate Like an FBI Negotiator, No Fault Update & More

Posted: June 27th, 2016

No-Fault Carrier Not At Fault for Faulty Billing: Billing Confusion Creates Potential Liability for Healthcare Providers

Posted: June 23rd, 2016

By Scott Middleton

A recent New York State Court of Appeals decision, Aetna Health Plans v. Hanover Insurance Company (NY Slip Op 04658, June 14, 2016), creates yet another worry for doctors and patients with respect to medical billing and ultimate responsibility for those bills.

The issue presented is whether a health insurer that pays for medical treatment that should have been covered by the insured’s no-fault automobile insurance carrier may maintain a reimbursement claim against the no-fault insurer within the framework of the Comprehensive Motor Vehicle Reparations Act (New York Insurance Law section 5101).

The insured in this case, Luz Herrera, sustained personal injuries while operating a vehicle insured by defendant Hanover Insurance Company. At the time of the accident, Herrera had private health insurance through plaintiff Aetna. The Aetna plan was an ERISA-based plan, which means that any payments made by the plan are subject to a lien against any third party recovery.

Some of Herrera’s medical providers submitted bills to her Aetna health plan as opposed to the Hanover no-fault insurance policy. Aetna wrote to Hanover seeking reimbursement for medical bills erroneously paid by Aetna that should have been billed to the no-fault carrier. Simultaneously, Aetna filed a lien for reimbursement should Herrera be successful in resolving the personal injury case. Herrera herself sent bills that were erroneously paid by Aetna to Hanover demanding reimbursement. Hanover did not respond to either request.

Herrera demanded arbitration pursuant to her policy with Hanover, claiming that she was entitled to no-fault benefits based upon Aetna’s lien. The arbitrator ruled against Herrera, stating that she lacked standing because Aetna paid the bills and Aetna’s lien was unsatisfied at the time.

Initially, medical bills totaling over $19,000 were incorrectly submitted to Aetna. Herrera’s medical providers continue to submit additional medical bills to Aetna, incorrectly, totaling another $23,500. Herrera then assigned her rights against Hanover to Aetna. Aetna then commenced the action against Hanover seeking reimbursement for the amounts paid on Herrera’s behalf.

Aetna conceded that as a health insurer or plan, it was not a provider of health services as contemplated by the insurance regulations, which permit only an insured or providers of health services to receive direct no-fault payments. Because Aetna is not a healthcare provider, Herrera could not assign her rights.

The court concluded that because Aetna is not a healthcare provider under the no-fault statute, it was not entitled to direct payment of no-fault benefits. Furthermore, the court held that Aetna was “not in privity of contract with Hanover and had not shown that it was an intended third-party beneficiary of Hanover’s contract with Herrera.” Finally, the court determined that Aetna could not sustain a cause of action under subrogation principles because there was no authority permitting a health insurer to bring a subrogation action against the no-fault insurer for sums the health insurer was contractually obligated to pay its insured. Judge Stein aptly points out in her concurring opinion that Aetna should have denied and not paid the benefits.

The decision does not go into any detail with respect to whether Herrera satisfied the lien out of any third party recovery relating to her personal injury case. This decision, however, raises interesting questions. Assuming Herrera was successful in her personal injury case, she would be contractually obligated to repay Aetna based upon the lien. Does she now have a claim against her no-fault carrier for reimbursement or does she have a claim against her medical providers for incorrectly billing her health insurance plan? Judge Stein asked a similar question in her concurrence. Does Aetna now have a cause of action against the providers who incorrectly and improperly billed Aetna as opposed to the no-fault carrier?

In any event, the medical providers, due to a mistake in billing practices, may be exposed to litigation. Doctors, healthcare providers, and medical billers are therefore cautioned to obtain the appropriate information from the patient when it comes to submitting bills to the proper insurance carrier or health plan. It would appear that even an honest mistake could expose the medical provider to otherwise unnecessary litigation.

Tips for Hosting a Workplace Summer Soirée

Posted: June 22nd, 2016

By Christine Malafi

Fireworks. Barbecues. Lemonade. A refreshing dip in the pool. Summer has a way of bringing out the “sunshine” in everybody. Hosting a summer event is a fun, enjoyable way to thank employees for their efforts and celebrate the pleasures of summer on Long Island. But before you dive in, it’s important to consider potential legal issues that could quickly make you forget the fun.

Serving alcohol is always a risk, raising the potential for accidents and injuries, as well as inappropriate behavior and lawsuits. But employers can reduce risk through advanced planning. While liability generally does not attach to “social hosts” for accidents or injuries suffered off-premises by third parties as a result of alcohol served by the host, at least in New York, if an employee leaves an office party and travels directly to another state, New York law may not prevent liability. Additionally, no one under the age of 21 may be served alcohol at a party, or the host may be held liable if someone is injured by that underage drinker. The safest way to prevent potential liability relative to physical injuries involving alcohol use at a summer office party is to hire bartenders to serve the alcohol and ensure that alcohol is not served to underage party guests.

Another risk associated with alcohol consumption is the level of “celebration.” As an employer, you do not want managers and/or supervisors acting inappropriately or provocatively, or flirting, with your staff. The warm weather and laid back atmosphere of summer can make some people feel it’s okay to act inappropriately in a party setting. It’s not. The same workplace standards of a non-hostile work environment and non-harassing conduct apply to and should be enforced at all office gatherings. On a related note, if the party will have music, employers should check the song list for offensive material.

Employers are also advised to carefully consider the nature of the party itself. Depending on the size and dynamics of your group, it may not be worth the headaches and potential exposure (literally) to have a pool party, which comes with its own set of issues involving appropriate clothing/swimsuit choices, as well as safety risks. An outdoor picnic with a casual dress code may be a better option. You don’t want to return from July 4^th weekend facing a lawsuit alleging a hostile work environment or discrimination.

Additionally, it is probable that a court would find that employees’ attendance at an office party relates to their employment, even if attendance is voluntary, potentially triggering workers’ compensation benefits for injuries sustained during the party (and potentially afterwards). To avoid potential wage claims, if attendance is required, the party should be held during normal work hours. Employers must take reasonable steps to protect their employees and guests from injury, whether at the workplace or an off-site location where the party is held.

To help set your mind at ease before your summer event, consider doing the following:

Skip pool-related events
Have transportation to and from the party available
Hire a professional bartender or caterer with sufficient liability insurance
Provide non-alcoholic drinks
Have management/supervisors at the party on the lookout for excessive drinking and/or inappropriate behavior
Invite employees’ family members to participate
Make sure employees know that they are not required to attend

A little advance planning can go a long way. If you have any questions, please feel free to contact us.

Recognizing and Avoiding Elder Scams and Abuse

Posted: June 22nd, 2016

By: Martin Glass, Esq. email

Tags: elder law

A scam is defined as a fraudulent scheme, especially for making a quick profit, and (if severe enough) can be considered financial abuse by the Suffolk County District Attorney’s Office. Unfortunately, our seniors are the most vulnerable to this type of abuse.

There are many types of scams out there, but almost all of them are done by either mail or phone. In one common scheme, someone calls, usually with a lot of background noise, and says that it’s the senior’s grandson. He says that he’s in some foreign country and has just been arrested. He needs a couple thousand dollars to get bailed out and get back to the States and this is his only phone call. The senior rushes right out and wires the money only to discover in the ensuing days that her grandson is fine and has never left New York. The money will never be reclaimed, and now she’s become a victim of a scam.

Another common scheme done both on the phone and through the mail is telling the senior that he has just won the Canadian Lottery or some other major jackpot but just needs to send “handling charges” to claim the prize. This can be a particularly onerous one as once the schemer has their hooks into the senior, they bilk him for more and more. Of course, the senior never sees a dime in prize money.

Other common scams to look out for are high pressure funeral arrangements with empty promises and plots of land that don’t even exist. Many scams target seniors’ retirement money, giving them luxurious or seemingly charitable options to invest into. Most scams involve high pressure or do-or-die situations so the senior has no time to think or reflect. The scammer is praying on their emotion, trying to override their intellect.

As a child of seniors, I find that I have to be more vigilant in making sure my parents aren’t victims of fraud. This is sometimes tricky, as at times I feel that the child has become the parent.

The best thing is to be involved with your parents’ lives. The closer you are to your elderly parents, the more you’ll be aware of what’s happening. As discretely as possible, you need to keep track of their spending patterns, bills, and charitable donations. That’s the only way to know if something changes. And, as hard as it might be, it’s important to be willing to approach them if a red flag comes up.

It’s hard when parent-child roles become reversed, but it’s the only way you can try to advise or instruct your parents on what to do. Often, they just don’t see or realize the financial dangers. What’s the harm in sending some money to a charity? It’s for children in Africa or for wounded veterans. Those “donations” start coming fast and furious, and frequently those charities don’t really exist. This sometimes has the added scam of identity theft when the “charities” start asking personal questions, such as birthdates or social security numbers.

Another thing that might help is the national and state “Do Not Call” registries. This will keep a large portion of scammers away. Of course, some numbers always fall through the cracks, but this is especially beneficial when you can’t be as close as you would like. The more the seniors in your life know about potential scams and the more vigilant you are, the more likely you’ll be able to protect them against this abuse.

New York Court of Appeals Refuses to Extend Exception to the Attorney-Client Privilege

Posted: June 22nd, 2016

Published In: The Suffolk Lawyer

Jeffrey Basso, Esq. Campolo, Middleton & McCormick, LLP

Whether documents or communications are subject to the attorney-client privilege (and thus not subject to disclosure) is a frequently litigated issue. Given the various factual scenarios that can affect what is or isn’t protected, such matters often require judicial interpretation.

Generally speaking, once someone shares a privileged communication with a third party, the privilege is waived and the communication becomes fair game. However, as with most general rules, there are exceptions. One of the most frequent exceptions is the so-called “common interest doctrine.” The basic premise is that a third party may be privy to an attorney-client privileged communication without losing the privilege if the communication is made for the purpose of furthering a nearly identical legal interest shared by the client and the third party. Hyatt v. State of Cal. Franchise Tax Bd., 105 A.D.3d 186, 205 (2d Dep’t 2013). Courts have interpreted the “furthering a nearly identical legal interest” portion to require that the communication be made in pending litigation or in reasonable anticipation of litigation where the client and third party have a common legal interest. Id., Aetna Cas. and Sur. Co. v. Certain Underwriters at Lloyd’s London, 176 Misc.2d 605 (N.Y. Sup. 1998), aff’d, 263 A.D.2d 367 (1^st Dep’t 1999).

In June, the New York Court of Appeals, in Ambac Assur. Corp. v Countrywide Home Loans, Inc., 27 N.Y.3d 616 (N.Y. 2016), overturned a decision of the Appellate Division, First Department and ruled that the threat of litigation is a necessary element of the “furthering a nearly identical legal interest” portion of the common interest doctrine. The Court refused to expand the doctrine to privileged documents shared between companies during a pending merger. Back in 2013, the New York County Supreme Court refused to expand the common interest doctrine. Subsequent to that decision, Bank of America/Countrywide appealed to the Appellate Division, which reversed the trial court and found that the documents exchanged during the course of a merger between Bank of America and Countrywide were, in fact, protected. The First Department found at the time that business entities often have important legal interests to protect even without a potential lawsuit.

Specifically, Ambac challenged Bank of America’s withholding of approximately 400 communications between Bank of America and Countrywide after the signing of the merger plan in January 2008 but before the merger closed that July. Bank of America identified the communications in a privilege log and claimed they were protected from disclosure by the attorney-client privilege because they pertained to a number of legal issues the companies needed to resolve jointly in anticipation of the merger, such as filing disclosures, securing regulatory approvals, reviewing contractual obligations to third parties, maintaining employee benefit plans, and obtaining legal advice on state and federal tax consequences. The parties were represented by separate counsel but the merger agreement directed them to share privileged information related to these pre-closing issues and purported to protect the information from outside disclosure. Bank of America argued that the merger agreement evidenced the parties’ shared legal interest and the fact that the parties sought to maintain confidentiality, thus protecting the relevant communications from discovery.

Ambac, however, argued that the voluntary sharing of confidential material before the merger waived any privilege because Bank of America and Countrywide were not affiliated entities at the time of disclosure and did not share a common legal interest in actual or anticipated litigation.

The Court of Appeals, in refusing to expand the common interest doctrine, held: “We do not perceive a need to extend the common interest doctrine to communications made in the absence of pending or anticipated litigation, and any benefits that may attend such an expansion of the doctrine are outweighed by the substantial loss of relevant evidence, as well as the potential for abuse.”

The Court noted that while mandatory disclosure would inhibit the exchange of privileged information between parties who share a common legal interest in pending or reasonably expected litigation, “the same cannot be said of clients who share a common legal interest in a commercial transaction or other common problem but do not reasonably anticipate litigation.”

The Court added, “Put simply, when businesses share a common interest in closing a complex transaction, their shared interest in the transaction’s completion is already an adequate incentive for exchanging information necessary to achieve that end…Defendants have not presented any evidence to suggest that a corporate crisis existed in New York over the last twenty years when our courts restricted the common interest doctrine to pending or anticipated litigation, and we doubt that one will occur as a result of our decision today.”

This decision provides important clarification not only for litigants. Businesses need to have a clear understanding of when they could be waiving the attorney-client privilege and when they could be required to turn over privileged communications. The Court of Appeals has now confirmed that if there is no pending or reasonably anticipated litigation and you share communications that otherwise would be protected by the attorney-client privilege with a third party who you think shares a common legal interest, you will be waiving the privilege.

Jeffrey Basso, a senior attorney at Campolo, Middleton & McCormick, LLP, represents business owners, corporations, corporate officers, shareholders, and investors in a variety of litigation matters in state and federal court involving business and contractual disputes. An aggressive litigator, Jeff has vast experience prosecuting and defending matters on behalf of clients in actions involving employment contracts, non-compete agreements, trade secrets, fiduciary duty, breach of contract, hour and wage disputes, real estate transactions, investments, and construction matters.

Negotiation Pointers from an FBI Negotiator

Posted: June 22nd, 2016

By: Joe Campolo, Esq. email

Tags: negotiation

It can’t hurt to hear what a former FBI negotiator has to say about negotiation strategy.

Chris Voss, former lead international kidnapping negotiator for the FBI, shares his most effective tips on how to become more persuasive in his new book, Never Split the Difference: Negotiating As If Your Life Depended On It (HarperBusiness, 2016). Business Insider recently posted an insightful article by blogger and Wired writer Eric Barker culling seven of the best tips from Voss’s book. As Barker explains, Never Split the Difference dismisses traditional negotiating tactics such as being abrupt and making your opponent feel that you have the upper hand. Instead, Voss advocates focusing on emotions – conveying empathy, listening to the other side, and building trust. I strive to use the same approach in my negotiations, and empathy and listening have gotten me much better results than threatening and bluffing ever have.

Read Barker’s full article below and visit his blog. You can also order the book on Amazon or from Barnes & Noble.

7 Tips from a Hostage Negotiator That Will Help You Be More Persuasive
By Eric Barker
May 24, 2016
Business Insider
http://www.businessinsider.com/7-tips-from-a-hostage-negotiator-that-will-help-you-be-more-persuasive-2016-5

We all have to have difficult conversations. And they’d be easier if you knew how to be persuasive. Whether it’s dealing with family members, buying a car or negotiating a raise, persuasion is always a useful skill.

But much of what you read doesn’t work in tough scenarios. So I decided to call someone who has handled the most challenging scenarios imaginable — ones where lives are on the line …

Chris Voss was the FBI’s lead international hostage negotiator and he’s the author of an excellent new book: Never Split The Difference.

Think you know what really influences people? Maybe you’ve read some stuff on the subject before?

Well, you’re probably making a lot of mistakes. Chris has some of the most counterintuitive — and effective — techniques you’ve never heard about.

Chris focuses on emotions. And this completely changes the game. His methods get people to solve your problems for you — in ways that will make both sides happy.

Let’s get to it …

Don’t be direct

Straightforward and honest are good qualities. But when you’re too direct in a negotiation or heated discussion, it can come off as blunt and rude. You sound like you don’t care about the other side and just want what you want.

Skipping listening, empathy, and rapport is what turns an easily resolved dilemma into a fight. And you never want to turn a discussion into a war. Be nice and slow it down. Here’s Chris:

Don’t think, “I’m a very direct and honest person. I want people to be direct and honest with me, so I’m going to be direct and honest with you.” Well, that happens to come across as being very blunt and overly aggressive. If I’m not aware that my direct and honest approach is actually offensive to you, then I’ll be mystified as to what your problem is. Meanwhile, dealing with me might feel like getting hit in the face with a brick.

“Cutting to the chase” can feel like an attack. So slow down. Smile. Use a friendly tone or a calm voice.
So what do many negotiation books tell you to do that is totally wrong?

Don’t try to get them to say “yes”

You hear a lot of advice telling you that getting people to say “yes” multiple times will make them more likely to say “yes” to whatever you want. Chris feels this may have been a good idea in the past, but people are on to it.

You’ve probably had people try it on you. And you knew what they were doing. And how did it make you feel? Exactly. Icky and manipulated. Trust and rapport just went out the window.

People are reluctant to say “yes” because it makes them commit to something. It makes them defensive.

Here’s Chris:

When people say “no,” they feel they’ve protected themselves. “No” is protection. “Yes” is commitment. People worry about what have I just committed to by saying yes. But when you say “no,” you don’t commit to anything. Since you just protected yourself, you have a tendency to relax. People actually become a lot more open if they feel they’ve protected themselves.

So what does Chris recommend? Phrase the exact same questions in a way to get them to say “no.” Here’s Chris:

People will do things that aren’t in their best interest, just to prove to you that they have autonomy. If you make it clear to them that it’s okay to say “no,” then you help them feel autonomous which makes them more collaborative. You call somebody up on the phone and say, “Have you got a few minutes to talk?” That will make anybody tighten up. Immediately they want to say “no” to that, because they know if they say “yes,” they’re going to get hooked in and be kept on the phone. The opposite is to say, “Is now a bad time to talk?”

Chris prefers to use phrasing such as, “Would it be a bad idea if…?” People don’t feel locked in, and they’ll often affirm what you’re proposing by saying something like, “No, that’s not a problem.”

There’s a very powerful way to implement this when you’re trying to resolve a situation and you’re being ignored. What does Chris say works magic? Just ask one simple question designed to trigger a “no.”

From Never Split The Difference:

Have you given up on this project?

More often than not the response is a fast, “No, we’ve just been really busy. Sorry about the delay…”

So you’re no longer being blunt and you’re not trying to trick people into saying “yes.” Great. What other mistakes are you probably making?

You need to do an “accusation audit”

If it’s an argument with a loved one or a business negotiation that’s headed south, the other side probably has made some accusations about you. “You don’t listen” or “You’re being unfair.”

And the common response is to start your reply with “I’m not ____.” You deny their feelings. Boom — you just lost the patient, doctor. They now assume you’re not on the same page. That they can’t trust you.

So what does Chris say to do instead? List every terrible thing they could say about you.

From Never Split The Difference:

The fastest and most effective means of establishing a quick working relationship is to acknowledge the negative and defuse it.

Don’t be afraid of sounding weak or apologizing. Unless you’re holding all the cards, making them feel you’re on the same page produces more concessions in the long run than making them feel you don’t care or understand. Here’s Chris:

Denying an accusation enhances the accusation. Saying, “I don’t want it to seem like I don’t care about you,” is denying a negative and that’s a poor tactical choice. Say, “I know it seems like I don’t care about you.” That defuses the negative.

So you’re doing a lot of things that on the surface might sound crazy: trying to get them to say “no,” acknowledging all their accusations about you … What completely insane-sounding thing does Chris also recommend?

Let them feel in control

Many negotiation books use fighting metaphors and emphasize dominance. Bad idea, says Chris. Cool your inner Rambo.

You want a collaborative atmosphere. And if you’re both jockeying for control, forget about it. When some people don’t feel in control they totally lose it, especially in heated situations. So let them feel in control.

You’re not giving them everything they want or letting yourself get pushed around, but the other side has to feel they have control in order to relax. Here’s Chris:

Say, “Okay, you want to set the agenda? Set the agenda.” Ask them open-ended questions. People love to be asked open-ended questions that start with “what” or “how,” because it let’s them feel like they’re educating you and it gives them a feeling of being in control. It works on two levels. One, it tends to create a more collaborative environment, which means you’re going to make a better deal. And, two, if the other side is trying to gain control to cheat you, it lets them drop their guard, so that you can get the upper hand.

Playing dumb is an effective strategy. Keep asking those “how” or “what” questions.

So you let them feel in control and you’re asking a lot of open-ended questions. But how do you know if all this is working? Listen for two magic words …

The two magic words they need to say

“That’s right.” When they say that, you know they feel you understand them. That’s rapport. Now emotions are on your side. Now you’re collaborators trying to solve a problem, not warring tribes. Here’s Chris:

That’s a really powerful connection to be able to establish. They’re telling you they feel connected to you, and they feel a great rapport with you. If there’s anything that’s going to move them in your direction swiftly it’s when they say, “That’s right.”

What conversational move is most likely to trigger a “That’s right”?

A summary. Paraphrase back to them what they’ve been saying. Now they know you’re listening and understanding. You don’t have to agree, you’re just giving a summary.

And what words should make you worried? If they say, “You’re right.” Think about it. When do you say that? When you want to politely tell people to shut up and go away.

Alright, so we’ve focused a lot on emotions and getting them on your side. Now how do we actually make progress in the discussion or negotiation? Well, all that listening wasn’t just about making them feel good. It’s also to get information …

Listen for levers

Sometimes you feel you have no leverage. But Chris believes there is always leverage. You just have to find it. And you do that by listening and asking questions — which nicely builds rapport and makes your counterpart feel in control at the same time.

Negotiation is not a fight. It’s a process of discovery. When you know their real needs, the real reasons they are resisting you, then you’re able to address those directly and problem-solve. Here’s Chris:

The other side has got something to tell you that would change everything. You’ve gotta get that piece of information out of them. Give them a chance to talk, and they’re going to tell you something really important … Let’s say their boss told them two days before that if they don’t close the next deal, their job is on the line. Maybe there’s a company that appears to have all the leverage in the world, but there’s a personal pressure on the executive that you don’t know about, like they need to close this before they leave on vacation. You’re really looking for two things. The stuff they’re intentionally holding back, and then the stuff that they just don’t know is important and they’re not going to mention if you don’t keep them talking.

I saw a good example of this first hand in an MIT negotiation class. Two groups of students have to decide how to split a bunch of oranges. Both sides have detailed information about their needs that the other group can’t see.

The aggressive students rush in and say, “You have to give us all the oranges.” These students get an F. (They probably also go on to get divorced.)

The collaborative students say, “We’ll split the oranges 50/50 with you.” Better, but far far far from optimal.

What do the smart students do? They ask questions. And what they find out is that the other group only needs the orange peels. And their group only needs the fruit. Both sides can get everything they want.

But they never find out if they don’t ask.

There’s always leverage. But you have to listen.

So asking questions is a huge part of getting what you want out of any disagreement. What’s the question that you should be asking the most?

“How am I supposed to do that?”

Playing dumb works. In fact, being helpless works too. Asking “How am I supposed to do that?” is deceptively powerful.

It gets them to solve your problems for you and in a way they deem acceptable.

From Never Split The Difference:

Calibrated “How” questions are a surefire way to keep negotiations going. They put pressure on your counterpart to come up with answers, and to contemplate your problems when making their demands… The trick to “How” questions is that, correctly used, they are gentle and graceful ways to say “No” and guide your counterpart to develop a better solution — your solution.

By getting the other side to think about your situation it very often gets them to grant concessions. And they’re concessions that they’re okay with and will likely stick to because it was their idea to offer them. Here’s Chris:

You want to make the other side take an honest look at your situation. It’s the first way of saying “no” where you’re doing a lot of things simultaneously. You’re making the other side take a look at you. You make them feel in control, because it’s a good “how” question. You don’t want to say it as an accusation. You want to say it deferentially, because there’s great power in deference. You want to find out if they’re going to collaborate with you. 9 times out of 10, you get a response that’s really very good.

Keep asking it. In hostage negotiations Chris would ask it over and over: “How do we know the hostage is safe?” “We don’t have that kind of money. How are we supposed to get it?” “But how do we deliver the ransom to you?”

Now I know what some of you are thinking… Eventually they’re going to say, “You’re just going to have to figure it out.” And that’s fine. That’s the signal you haven’t “left any money on the table.” Here’s Chris:

Of course the one time out of 10 they’ll say to you, “Well, you’re just going to have to figure it out.” But even in that case “How am I supposed to do that?” helps you confirm that you have in fact pulled as much value or gotten as many options as you possibly can out of the other side. You found a solid barrier. Your decision now is, “Okay, do I like this? Do I move in another direction?”

Okay, we’ve learned a lot from Chris. Let’s round it all up and learn the final secret to how paying attention to emotions can help you resolve dilemmas at home and at the office…

Sum up

Here’s what Chris had to say about how to be persuasive:

Don’t be direct:Direct usually comes off as rude, no matter your intentions. Be nice and slow it down.
Don’t try to get them to say “yes”:Pushing for a “yes” makes people defensive. Try to get a “no.”
Do an “accusation audit”:Acknowledge all the negative things they think about you to defuse them.
Let them feel in control:People want autonomy. Ask questions and let them feel like they’re in charge.
The two magic words they need to say:Summarize their position to trigger a “That’s right.”
Listen for levers:They might only need the orange peel. Listen, listen, listen.
Keep asking “How am I supposed to do that?”: Let them solve your problems for you.

Emotions are critical. Most deals end because of negative feelings and most deals close because people like one another. So don’t alienate the other side — unless you are trying to kill the deal. (And that’s an effective technique as well.)

But what you really want to do is what that magic phrase “How am I supposed to do that?” accomplishes so well. It allows you to say “no” without making an enemy. Chris sums it up nicely in his book with a quote.

From Never Split The Difference:

“He who learns to disagree without being disagreeable has discovered the most valuable secret of negotiation.”

Discussions and negotiations aren’t about war or winning. It’s about finding a way for everyone to get what they want and to be happy with what they get. For the people closest to us, it’s also about understanding them better through listening.

And that’s what builds relationships that last.

Overthinking Overpayments from Medicare

Posted: June 15th, 2016

Published In: The Nassau Lawyer

Tags: healthcare

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Since passage of the Affordable Care Act, compliance officers and attorneys have struggled to comply with the new rule requiring notification and repayment of Medicare overpayments within 60 days.[i] The two large questions that remain unclear are what constitutes an “overpayment,” as well as what it means to “identify” an overpayment.

Section 6402(a) of the Affordable Care Act (“ACA”) created a new section 1128J(d)(1) of the Social Security Act (the “Act”), which addresses overpayments. Section 1128J(d)(2) requires an overpayment to be reported and returned “by the later of (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.”

The questions surrounding “overpayment” and “identify” remain crucial because failure to comply gives rise to Federal False Claims Act liability. Section 1128J(d)(3) of the Act directs that any overpayment retained by a person past the 60-day deadline constitutes an obligation under the Federal False Claims Act for purposes of 31 U.S.C. § 3729. Liability under the False Claims Act subjects one to a civil penalty of between $5,000 and $10,000 for each false claim and treble the amount of the government’s damages.

Retention of overpayments beyond the 60-day deadline in the Act has been classified as “reverse false claims” in litigation. The first major litigation addressing the 60-day overpayment reporting deadline in a reverse false claims case was Kane ex rel. U.S. v. Healthfirst.[ii]

In Kane, a software glitch caused three New York City hospitals to submit improper claims to Medicaid in 2009 as a secondary payer for patients for whom they had already received payment through Medicaid managed care. In September 2010, auditors from the New York State Comptroller’s Office notified the defendants of the incorrect billing. The defendants refunded these initial incorrect claims and assigned the Relator,[iii] Mr. Kane, to investigate the extent of overbilling due to the software glitch.

On February 4, 2011, five months after the Comptroller notified the defendants of the improper claims, Mr. Kane notified the defendants’ management that approximately 900 claims totaling over $1 million were improperly billed due to the glitch. On February 8, 2011, Kane was terminated. Kane subsequently became a Relator and filed a False Claims Act action, which the government joined. The complaint alleged that the defendants began repaying the overpayments in April 2011 and “fraudulently delayed” repayments until March 2013. In support of its claim, the government alleged that the defendants reimbursed the government for only approximately 300 improper claims after receiving a Civil Investigative Demand (“CID”) in June 2012.

The court denied the defendants’ motion to dismiss the complaint, holding that the facts in the case clearly showed requisite “knowledge” of the overpayments and a deliberate attempt to avoid the 60-day repayment obligation. However, the court highlighted that “identified” as used in the Act was undefined, and may differ from the term “known” as used in the False Claims Act.

Fast forward to February 12, 2016, where the Center for Medicare and Medicaid Services (“CMS”) issued a final rule to its February 16, 2012 Proposed Rule on the Reporting and Returning of Overpayments.[iv] The Final Rule, published February 12, is entitled “Medicare Program; Reporting and Returning of Overpayments” (“Overpayment Rule”).[v] The regulations promulgated in the Overpayment Rule became effective March 14, 2016.

The Overpayment Rule defines “identification” and provides a lookback period in which to identify overpayments, as well as a procedure for reporting and returning the overpayments.

42 C.F.R. § 401.303 defines “overpayments” as “[a]ny funds that a person has received or retained under title XVIII of the Act to which the person, after applicable reconciliation is not entitled under such title.”

The commentary offers examples of overpayments as:

Medicare payments for noncovered services.
Medicare payments in excess of the allowable amount for an identified covered service.
Errors and nonreimbursable expenditures in cost reports.
Duplicate payments.
Receipt of Medicare payment when another payor had the primary responsibility for payment.[vi]

Once overpayments are identified, the Overpayment Rule mandates a six-year lookback from the date the person identifies the overpayment.[vii] However, providers should note that False Claims Act liability could still extend to 10 years in some cases. CMS suggests that this disparity be reconciled in future clarifications.

Final Rule 42 C.F.R.§ 401.305 defines “identified” as:

A person has identified an overpayment when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. A person should have determined that the person received an overpayment and quantified the amount of the overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment.

To help define “reasonable diligence,” the commentary offers some examples of when an overpayment has been “identified”:

A provider of services or supplier reviews billing or payment records and learns that it incorrectly coded certain services, resulting in increased reimbursement.
A provider of services or supplier learns that a patient death occurred prior to the service date on a claim that has been submitted for payment.
A provider of services or supplier learns that services were provided by an unlicensed or excluded individual on its behalf.
A provider of services or supplier performs an internal audit and discovers that overpayments exist.
A provider of services or supplier is informed by a government agency of an audit that discovered a potential overpayment, and the provider or supplier fails to make a reasonable inquiry. (When a government agency informs a provider or supplier of a potential overpayment, the provider or supplier has a duty to accept the finding or make a reasonable inquiry. If the provider’s or supplier’s inquiry verifies the audit results, then it has identified an overpayment and, assuming there is no applicable cost report, has 60 days to report and return the overpayment. As noted previously, failure to make a reasonable inquiry, including failure to conduct such inquiry with all deliberate speed after obtaining the information, could result in the provider or supplier knowingly retaining an overpayment because it acted in reckless disregard or deliberate ignorance of whether it received such an overpayment).
A provider of services or supplier experiences a significant increase in Medicare revenue and there is no apparent reason—such as a new partner added to a group practice or a new focus on a particular area of medicine—for the increase. However, the provider or supplier fails to make a reasonable inquiry into whether an overpayment exists. (When there is reason to suspect an overpayment, but a provider or supplier fails to make a reasonable inquiry into whether an overpayment exists, it may be found to have acted in reckless disregard or deliberate ignorance of any overpayment.)[viii]

Once a provider has identified overpayments, the Overpayment Rule remains a work in progress. It cites 13 identified criteria from the 2012 proposed rule that must be incorporated into overpayment reports, but then it declines to adopt them, instead directing the provider to ascertain the best recipient and mechanism for reporting the overpayment. The commentary notes that Publication 100-08, Chapter 4, Section 4.16 of the Medicare Program Integrity Manual requires Medicare contractors to process all voluntary refunds,[ix] so providers may seek to issue a refund there first. For other instances, the commentary dictates that the CMS Voluntary Self-Disclosure Protocol (SDRP) and OIG’s Self-Disclosure Protocol (SDP) shall also remain acceptable methods,[x] with their own protocols by which to report overpayments and process refunds. If the person calculates the overpayment using a statistical sampling methodology, the person must describe the methodology in the disclosure report.[xi]

While the Overpayment Rule’s impact in False Claims Act litigation remains untested, it provides helpful guidance for Medicare providers and their compliance officers and attorneys to ferret out overpayments and identify responsibilities to report. Healthcare providers are urged to implement (or review existing) policies to identify, report, and refund overpayments with the guidance of experienced healthcare counsel.

[i] The Centers for Medicare & Medicaid Services (CMS) “60-day rule” requires Medicare Parts A and B providers and suppliers to report and return overpayments by the later of either (a) 60 days after the date an overpayment was identified, or (b) the due date of any corresponding cost report (which is used to report expenses for various types of Medicare reimbursable facilities).

[ii] 120 F.Supp.3d 370 (S.D.N.Y. 2015).

[iii] Under the False Claims Act, in Medicare and other governmental investigations, a “relator”—an individual not affiliated with the government—is authorized to file actions on behalf of the government, in this case to assist with the investigation and recovery of overpayments by Medicare.

[iv] 77 Fed. Reg. 9179 (Feb. 16, 2012).

[v] 81 Fed. Reg. 7654 (Feb. 12, 2016).

[vi] Id. at 7656.

[vii] 42 C.F.R. § 401.305(f).

[viii] 81 Fed. Reg. at 7659.

[ix] Id. at 7675.

[x] 42 C.F.R. § 401.305(d)(2).

[xi] 42 C.F.R. § 401.305(d)(1).

Microsoft v. Baker: Federal Appellate Courts’ Jurisdiction to Review Orders Denying Class Certification

Posted: June 13th, 2016

Published In: The Suffolk Lawyer

Tags: Supreme Court

In the October 2016 term, the U.S. Supreme Court will hear arguments in Microsoft Corp. v. Baker, et al. on appeal from the U.S. Court of Appeals for the Ninth Circuit. The question presented—whether a court of appeals has jurisdiction to review an order denying class certification after the plaintiffs voluntarily dismiss their claim—is an interesting one for federal practitioners with an interest in the procedural tactics of class-action litigation.

In Baker, owners of the Xbox 360 video game console filed five actions claiming the consoles scratched video game discs. Plaintiffs brought claims for breach of warranty and violation of state consumer protection statutes. After lengthy discovery, the district court denied class certification, finding that the individual particularities regarding causation and damages prevented certification. After the Ninth Circuit denied a petition for review, the parties settled on individual terms and the case was dismissed. The same lawyers later brought similar cases on behalf of new plaintiffs claiming that the law on class certification had changed. The district court granted Microsoft’s motion to strike the class allegations based on the still-sound reasoning of the earlier district court decision.

This time, however, after the Ninth Circuit again denied plaintiffs’ petition for review, plaintiffs voluntarily dismissed their claims with prejudice and filed a notice of appeal from the dismissal, instead of prosecuting their individual claims to judgment. The Ninth Circuit held that it had jurisdiction over the appeal from the voluntarily dismissal and overturned the district court’s class certification decision.

As with nearly every Supreme Court case, the implications of Baker extend far beyond the facts of the particular case. To date, six amici curiae briefs have been filed in support of Microsoft. The “friends of the court” are diverse and include, for instance, the U.S. Chamber of Commerce, the Pacific Legal Foundation, and a number of noted civil procedure scholars. According to the Chamber of Commerce, the Ninth Circuit’s ruling gives plaintiffs an unequal advantage in seeking immediate appellate review of class certification decisions. The Pacific Legal Foundation also emphasizes plaintiffs’ “litigation gamesmanship.” And the civil procedure scholars emphasize that the Ninth Circuit’s ruling undermines the history and purpose of Fed. R. Civ. P. 23(f), which grants appellate courts discretion to grant review of an order denying class certification.

The overarching theme of Petitioner and its amici is that Respondents found a tactical loophole under outlying Ninth Circuit law to get another bite at the class certification apple. Given the hurdles to federal class-action certification and the shift in leverage and settlement dynamics after class certification is granted, the question presented in Baker is a serious one. Other circuits have taken a different view from the Ninth Circuit. According to Microsoft’s petition for certiorari, five circuits have held that a court of appeals lacks jurisdiction to review a denial of a class certification where plaintiffs have voluntarily dismissed their claims with prejudice. For instance, in Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d 239, 245-47 (3d Cir. 2013), the Third Circuit equated the Baker plaintiffs’ tactics to “manufactured finality” and noted that such “procedural sleight-of-hand” does not confer appellate jurisdiction.

Although the case may appear postured as a plaintiff-versus-defense-bar issue, it is not necessarily going to render a split decision along ideological lines. Although the future composition of the Supreme Court is currently uncertain, Petitioner has argued that the Ninth Circuit’s ruling is a backdoor attempt to revive the “death knell” doctrine that the Supreme Court rejected in 1978 in Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978). The Livesay opinion held that a district court’s determination regarding class certification is a final decision within the meaning of 28 U.S.C. § 1291. It is worth noting that Justice Stevens wrote the Livesay opinion on behalf of a unanimous Court.

While some may ultimately relegate the Baker opinion to the annals of 1L Civil Procedure exams, those who litigate and defend federal class action cases should stay tuned.