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Health Insurer Fined For Violating Independent Review Rules

Posted Wednesday, July 11, 2018 by Pivotal Law Group

Washington’s insurance commissioner recently announced a $100,000 fine in response to a consumer complaint that Kaiser Foundation Health Plan, an HMO, ignored consumers’ rights in the health claims appeal process. The commissioner found that Kaiser failed to follow several rules related to appeals of health insurance claims to an Independent Review Organization (“IRO”).

At issue are rules contained in Washington’s statutes and administrative codes protecting insurance policyholders. Among other things, Washington law required Kaiser to provide the IRO with any records, documents, or information relevant to the claim within three business days; ensure that expedited reviews are adjudicated within 72 hours of the policyholder’s request; and provide the policyholder the IRO’s name and contact information within one business day.

In Kaiser’s case, the insured had the right to provide evidence supporting the insured’s claims to the IRO within five days. However, Kaiser failed to notify most consumers they had the right to do this. The commissioner also found Kaiser dragged its feet in the IRO process. Kaiser was found to have failed to timely send claims files to the IRO; failed to process expedited claims on time; and failed to timely give consumers the IRO’s name and contact information.

The commissioner found these violations occurred during the period from January 2016 through March 2017.

Kaiser signed a Consent Order regarding the above violations, pursuant to which Kaiser acknowledged its duty to comply with the law and consented to imposition of the fine.

Pivotal Law Group attorney McKean J. Evans represents insurance policyholders and has obtained favorable outcomes in disputes with health insurance carriers. If you have questions regarding a health claim dispute, contact McKean for a free consultation.

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Case law update: The “self-service” exception for a Slip and Fall injury at a Grocery Store

Posted Friday, July 6, 2018 by Christopher L. Thayer

In a December 2017 decision, the Washington State Court of Appeals, Division III, addressed a slip and fall personal injury claim where claimant fell in the shampoo aisle of a Walmart in Sunnyside. In McPherson v. Wal-Mart Stores, Inc., No. 34696-0-III (12/14/17), in an unpublished decision, the Court of Appeals affirmed the trial court’s dismissal of Ms. McPherson’s claim.

McPherson was injured after she slipped and fell in the shampoo aisle of a Walmart store in Sunnyside, Washington. The fall took place just after 5:00 p.m. After the incident, a store manager noted a shampoo bottle that had been knocked over on one of the shelves, resulting in some clear shampoo spilling down onto the floor. The spilled shampoo was deemed to be the cause of McPherson’s fall. The store manager reviewed video surveillance of the aisle where McPherson fell. According to a declaration from the manager, the video showed a Walmart associate had checked the condition of the shampoo aisle between 4:04 p.m. to 4:06 p.m. Later, at 4:53 p.m., the manager observed two women handling bottles of shampoo in the area where McPherson’s fall occurred. One of these women placed a shampoo bottle on the shelf in the same spot where the manager later discovered the shampoo bottle that spilled onto the floor. The manager declared that no one had notified Walmart of any spills in the shampoo aisle prior to McPherson’s fall.

After the McPherson sued for negligence, Walmart moved for summary judgment. The trial court agreed with Walmart, ruling McPherson lacked evidence the store had actual or constructive notice of the shampoo spill and dismissed McPherson’s claim. McPherson appealed.

A patron of a retail establishment is considered a “business invitee” under Washington law. A property owner is only liable for a personal injury claim to a business invitee if the owner had “actual or constructive notice of an unsafe condition”. Ingersoll v. DeBartolo, Inc. ,123 Wn. 2d 649, 652 (1994). Courts have defined “constructive” notice:

Constructive notice arises where the condition ’has existed for such time as would have afforded [the proprietor] sufficient opportunity, in the exercise of ordinary care, to have made a proper inspection of the premises and to have removed the danger.’”


There is an exception, the so-called “self-service” exception which provides: a plaintiff need not prove actual or constructive notice “when the nature of the proprietor’s business and his methods of operation are such that the existence of unsafe conditions on the premises is reasonably foreseeable.” Pimental v. Roundup Co. 100 Wn. 2d 39, 49 (1983).

Pimentel’s self-service exception has not been applied to all self-service areas where customers retrieve items from store shelves. Ingersoll, at 653. Most stores operate under a self-service model. Yet not all store areas present the types of readily apparent hazards discussed in Pimentel. A plaintiff who has sustained injuries in a self-service section of a store is not automatically excused from proving actual or constructive notice. To avoid having to prove actual notice, plaintiff must establish the defendant’s particular self-service operation makes the existence of unsafe conditions reasonably foreseeable. Pimentel , at 49-50.

To meet Pimentel’s self-service exception, a plaintiff must show the unsafe condition giving rise to injury was “continuous or foreseeably inherent in the nature of the business or mode of operation.” Specific to the McPherson case, the Court held McPherson needed to provide evidence of: (1) the frequency of shampoo spills at the Sunnyside Walmart, (2) the number of store associates assigned to clean such spills, (3) the frequency of checks for spills by store associates, (4) the number of injuries caused by slip and fall incidents involving shampoo spills, and (5) whether Walmart encourages patrons to report spills, etc. The trial court found McPherson presented no evidence to support any of these elements, and the Court of Appeals agreed.

Although an unreported decision, meaning it has no precedential value, McPherson is nonetheless a good primer on this particular area of law: slip and fall injuries in retail stores. The body of law relating to actual or constructive notice has developed over the years and reflects the court systems efforts to balance the potential liability of a store owner vs. protecting the safety of its customers. Grocery stores in particular are susceptible to slippery liquids being spilled on the floor. Whether or not an establishment is liable for any injuries is going to be very fact-specific. Proving how long a particular spill was on the floor can be difficult if not impossible for a claimant.

If you have questions about premises liability for injuries, either as a property owner or potential claimant, please contact managing member Chris Thayer at (206) 805-1494 or CThayer@PivotalLawGroup.com.

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Pet Insurance: Read The Fine Print

Posted Thursday, June 28, 2018 by Pivotal Law Group

Great Danes might be the best dogs - they’re calm, require relatively little exercise and space, and are super affectionate towards their human family. Unlike a lot of needier breeds who need constant activity, Danes reputedly just want to chill with you on the sofa.

The problem with Great Danes is they’re prone to significant, protracted health problems that get incredibly expensive - partly due to their large size and partly due to their susceptibility to congenital and hereditary disorders. Thus, in researching the pros and cons of owning a Dane, I was repeatedly advised “buy pet insurance!” That got me thinking whether pet insurance is actually a good deal or a scam preying on cost-conscious pet owners.

Apparently pet insurance, whatever its benefits, has caught the ire of Washington State’s Insurance Commissioner for some pretty significant problems. One company was found to have violated state law more than 600 times. Among other things, the pet insurer:

  • Illegally failed to give new policyholders copies of their policy contracts;

  • Misrepresented the policy coverage in its marketing and advertising materials;

  • Failed to cancel policies after pets died or the policyholder no longer owned the pet;

  • Sold policies under a fake name, preventing consumers from identifying the company when they had complaints;

  • Misled consumers about under what circumstances the company would refund premiums;

  • Ignored consumer complaints;

  • Sold insurance through unlicensed brokers; and

  • Failed to explain the reasons for refusing to renew coverage.

Pet insurance also tends to come with significant exclusions. Pre-existing condition exclusions are unsurprising. But some policies also exclude “wellness” care and expenses “not directly related to veterinary service” - super ambiguous terms with lots of room for fine print and interpretation that could give the company a basis to deny coverage.

Similarly, some insurance excludes hereditary or congenital disorders - a major drawback if your pet is of a breed (like Great Danes) that are notoriously subject to such diseases.

The upshot is to do your diligence and research the company and your coverage carefully before buying pet insurance, and to double check the policy fine print on your existing coverage to be sure you have the coverage you thought you bought.

Pivotal Law Group attorney McKean Evans has obtained favorable coverage decisions for insureds in disputes regarding coverage denials. If you have concerns regarding a pet insurance dispute, contact McKean at (206) 805-1493 or mevans@pivotallawgroup.com for a free consultation.

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The Importance of Addressing Digital Assets in Estate Planning

Posted Wednesday, June 20, 2018 by Pivotal Law Group

More than ever, technology is fundamental to our lives. In 2018, even hardened luddites maintain email, social media, and/or cloud-storage accounts, or store considerable information on their smartphones. Maintaining digital information electronically may be second-nature, but it is important not to overlook it when considering estate planning issues.

Digital assets are particularly relevant to one important estate planning component: the power of attorney. A power of attorney is a written document by which the signer (the “principal”) grants authority to a specific person (the “agent”) to do certain acts or exercise certain powers if the principal becomes incapacitated or unavailable. Agents operating under powers of attorney will likely need to access the principal’s digital assets to effectively carry out their obligations. Unlike traditional assets such as real estate, accounts held at financial institutions, or tangible personal property, digital assets are only accessed through electronic devices. They can be easy to overlook, or to inadvertently discard or delete.

Digital assets are often stored remotely on cloud-based servers operated by third-party entities such as Microsoft, Apple, and Google, which retain control of the servers hosting the digital asset. Storage of digital assets on these entities’ servers is subject to intricate terms of use. Improper access of these assets can expose agents to criminal penalties under the federal Computer Fraud and Abuse Act (CFAA), 18 U.S.C. §1030.

Digital assets are increasingly important. Bitcoin is the obvious example. In one famous case, an individual reportedly tried to comb through a landfill after inadvertently throwing away the credentials to $75 million worth of Bitcoin. Some traditional financial accounts like checking or savings accounts now offer online-only account options. Other examples include digital works generated by musicians, photographers, and other artists, and accounts on streaming channels such as YouTube or Twitch. Even online videogame accounts can be valuable.

Besides assets with monetary value, most people routinely maintain other critical information on cell phones, email, social media, and/or cloud storage. This might include monthly bills for utilities or other critical services, or monthly statements or insufficient funds notices from accounts maintained at brick-and-mortar institutions. It might also include assets with significant personal value to the principal or their family, such as photo albums or correspondence.

Washington’s Uniform Fiduciary Access to Digital Assets Act (UFADAA), Chapter 11.120 RCW, applies to principals exercising authority under a power of attorney. UFADAA provides a framework for granting agents authority to access a principal’s digital assets. The UFADAA permits a principal to allow or prohibit disclosure to his or her agent of some or all of the principal’s digital assets. RCW 11.120.040. Such a designation overrides contrary provisions in terms-of-service agreements, as long as the contrary provision does not require the principal to act “affirmatively and distinctly” from the principal’s assent to the terms of service. Id. An authorized agent is specifically empowered to obtain the content of the principal’s electronic communications from a custodian maintaining such communications, provided that the agent provides the information required by the statute. RCW 11.120.090.

However, agents should be wary of federal anti-hacking laws that could be read to impose liability on an unwary agent accessing a principal’s digital assets. The Computer Fraud and Abuse Act prohibits obtaining information from Internet-connected devices “without authorization.” 18 U.S.C. §1030. It is therefore critical for powers of attorney to expressly authorize the agent to access digital assets – but the principal’s authorization is only half the equation. One federal court has suggested the CFAA makes it a crime to access digital assets even with the individual owner’s authorization if the person accessing the asset also lacks the authorization of the entity hosting the data (e.g., Google or Facebook). In Facebook, Inc. v. Power Ventures, Inc., the court stated that authorization from Facebook users was inadequate to give authorization to access data stored on Facebook’s servers without Facebook’s authorization.

In sum, digital assets are a critical element of any power of attorney or estate planning mechanism. If you have questions regarding a power of attorney or estate planning issue, contact McKean for a free consultation at 206-805-1493 or mevans@pivotallawgroup.com.

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Health Plans Can’t Discriminate Against Mental Health Treatment Says Ninth Circuit

Posted Thursday, June 14, 2018 by Pivotal Law Group

Among the challenges of a mental health condition is the difficulty persuading health insurers to cover treatment. Mental health conditions can be difficult to objectively diagnose and can require lengthy and expensive treatment often with little prospect of a conventional “cure.” Hence, health plans have a powerful incentive to minimize coverage for mental health conditions to reduce costs.In response, the federal government, as well as Washington and many other states, have enacted mental health parity laws. In general, these laws prohibit health insurers and health plans from discriminating against mental health conditions by mandating mental health conditions be covered to the same degree as physical ailments.

On June 6, 2018, the Ninth Circuit Court of Appeals confirmed the federal Mental Health Parity Act prohibits health plans from discriminating against mental health conditions for the purposes of health insurance coverage. In Danny P. v. Catholic Health Initiatives, the court determined the health plan violated the law by denying the plaintiff’s claim for the cost of an inpatient stay at a residential mental health treatment facility.

In ruling for the plaintiffs, the court determined the Mental Health Parity Act required the health plan’s coverage of inpatient mental health treatment facilities be no more restrictive than coverage for stays at skilled nursing facilities. Since the Act prohibited imposing more restrictive coverage requirements on mental health treatment than on treatment for physical conditions, the Act precluded the health plan from deciding to cover room and board at skilled nursing facilities for medical patients while refusing to provide the same coverage for mental health inpatient care.

The Danny P. decision is an important win for patients seeking mental health treatment and vindicates Congress’ intent in passing the Mental Health Parity Act that mental health patients be free from discrimination by their health plans.

Pivotal Law Group attorney McKean J. Evans represents insureds and employees in health plan coverage disputes, and has successfully compelled health insurance plans to cover treatment. If you have questions about health insurance coverage, contact McKean for a free consultation.

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