Tag: Insurance

Insurance by Number – Metrics in Litigation

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Jurist and law professor Richard Posner recently commented on a common problem among lawyers, namely, that they believe they have a “math block.”  Jackson v. Pollion, 733 F.3d 786, 788 (7th Cir. 2013).  More recently, Judge and Mediator Wayne D. Brazil noted that even sophisticated risk analysts “cannot reliably determine the ‘discounted settlement value’ of a case” because of their misunderstanding of how to apply mathematical principles to real-world decision making.[1]  In fact, if you are a lawyer, you have likely heard other lawyers make jokes about how if they could do math, they would not have gone to law school, but rather business or medical school.  You may have even made these jokes yourself.

Posner, however, believes that lawyers’ basic discomfort around math is a serious matter, and one that disadvantages clients.  He points to the need for lawyers in litigation related to emerging science or technology to understand the evidence and underlying facts.  We posit that the need for comfort with math applies much more broadly.  In fact, if a lawyer is uncomfortable with “math,” “numbers,” or “metrics,” there are an ever-vanishing number of circumstances where the lawyer can do his or her job effectively.  Our expertise is insurance recovery.  The underlying fact patterns in our field more frequently deal with decades-old contracts than cutting-edge technology.  Nevertheless, we quantify, organize data, make calculations, and wrestle with financial concepts in virtually every matter we encounter.

Here are just a few of the particular circumstances where a comfort with numbers and math come into play in insurance coverage, and many other types of litigation:

  • When we communicate with the CFO or other finance experts within our client organizations, or assist our client contacts in doing so, we must be able to communicate in the language of numbers, balance sheets and quantifiable results.  Speaking this language is similarly necessary to understand fully our clients’ business goals and constraints and the part our legal strategies may play within those goals.
  • Budgeting complicated long-term matters with various contingencies and uncertainties requires that you approach numbers without fear.
  • Evaluating the settlement value of a case with multiple potential issues requires, in the simplest terms, a probability analysis; but as Judge Brazil’s article points out, that may be more complex than many practitioners appreciate.
  • In large, multiparty matters where resolutions may require structures other than a single payment for dismissal, creating and evaluating settlement proposals (often in real time during a negotiation) requires a detailed understanding of how those proposals will translate to a client’s bottom line.
  • The various creative settlement solutions that are proposed may have tax or accounting impacts that must be considered.
  • Simple calculation of damages may become a complex mathematical exercise when lost profits or other complicated losses are involved.  Answering the question of “what did my client lose,” may require examination of balance sheets, income statements, cash flow statements, sales histories, cost histories, and other mathematic and economic evidence.

As insurance recovery lawyers, we deal with these and many more issues that require us to dig deep into data analysis, spreadsheets, numbers and accounting.  Understanding the complicated interaction between multiple dependent and variable outcomes on various insurers and policies necessitates a comfort with math and numbers.  Some lawyers may point out that where the “math part” becomes particularly complicated, experts are typically employed to handle those issues.  But the involvement of an expert does not excuse a lawyer from understanding the expert’s work.  It is ultimately the responsibility of the lawyer to understand and convey the meaning of those calculations to his or her client, opposing counsel, or trier of fact.  Indeed, an understanding of mathematical concepts helps a lawyer know what to ask his or her expert for in the first place.  Knowing how to direct consultants effectively reduces costs, and ultimately creates a greater value to the client.

[1] Judge Wayne D. Brazil, Don’t Apply Risk Analysis To Discounted Settlement Value(February 03, 2014, 9:49 AM),  http://www.law360.com/insurance/articles/500858?nl_pk=e5cceee0-d0cb-4d28-aa35-79dab830e7f8&utm_source=newsletter&utm_medium=email&utm_campaign=insurance.

Article by:

Of:

Gilbert LLP

A Look Ahead: Top 5 Health Law Issues for 2014

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From Affordable Care Act implementation to the continued transition to quality and evidence-based medicine, we expect to see a host of new regulatory and industry changes in 2014. Moreover, federal and state governments will continue to ramp up detection and enforcement of fraud, abuse, and other laws. These changes provide ample opportunities for lawyers to represent and counsel health care industry clients.

In addition to health lawyers, these changes and new opportunities will also affect lawyers who practice in other areas, including business, antitrust, technology, employee benefits, and elder law. Below is an overview of five hot issues in health care law that practitioners – new and seasoned – should monitor in 2014.

1. Affordable Care Act Implementation

Exchanges and the Individual Market. As millions of Americans obtain insurance on the individual market through Exchanges (a.k.a. the “Marketplace”), the ACA individual mandate and the individual insurance market will create a host of issues for health lawyers in 2014. Beginning early in the year, health lawyers will be called on to address coverage, enrollment, and compliance issues. Attorneys and firms looking to expand their ACA practice should consider employee benefits regulations and related legal issues as ACA implementation continues and employers look for help understanding and complying with coverage requirements and pay or play rules.

Medicaid. The ACA’s expansion of Medicaid will also bring increased attention to the Medicaid program in 2014. Attorneys should be prepared to see increased scrutiny of program integrity in the coming year, including inspector general attention at the state and federal levels (e.g., program audits). Attorneys may be called upon to address these and other Medicaid issues in 2014, including issues with eligibility, covered benefits, and movement between Exchanges and Medicaid.

Tax Exemption. Section 501(r) of the Internal Revenue Code, introduced as part of the ACA, requires, among other things, that tax-exempt hospitals conduct a community health needs assessment and adopt a written financial assistance policy. Hospitals that do not meet the 501(r) requirements risk an excise tax, taxing of hospital revenue, and revocation of exempt status. Proposed regulations outlining the 501(r) requirements were released in 2013, and final rules are expected in 2014.

2. Health Information Privacy and Security

This year is shaping up to be another big year for health information privacy and security and the Health Insurance Portability and Accountability Act (HIPAA), as providers, payers, and businesses that support the health care industry (including lawyers) adapt to new compliance requirements and increased liability under the Omnibus Rule regulatory scheme.

This is an area that will be important for health lawyers, as the Omnibus Rule outlines clear compliance requirements for lawyers providing legal services to providers and payers. (For more information on lawyers as business associates, see “Casting a Wider Net: Health Information Privacy is Not Just For Health Lawyers” in the September 2013 Wisconsin Lawyer).

Health lawyers are also awaiting the 2014 release of another major HIPAA rule – expected to outline requirements for tracking uses and disclosures of health information – as well as legislative changes in Wisconsin dealing with confidentiality of mental health records (an in-depth Wisconsin Lawyer article on this is forthcoming).

Lawyers that deal with health information should be familiar with HIPAA and other federal and state laws protecting the confidentiality of health information to address an increased emphasis on HIPAA audits, security, and technology issues in 2014.

3. Provider Reimbursement and Emphasis on Quality Care

Medicare Billing and Payment. As of this writing, Congress is still debating options for repealing the sustainable growth rate (SGR), which is part of a reimbursement formula used to calculate Medicare physician payments. For years, the SGR has resulted in cuts to physician payments. However, Congress has always used SGR “doc fixes” to extend and delay the cuts (most recently, on Dec. 18, 2013, a 23.7 percent cut set to take effect Jan. 1, 2014, was delayed until March).

However, bipartisan efforts in Congress may make 2014 the year of the SGR repeal. Health care attorneys should take note because the SGR repeal will mean significant changes in how Medicare physician reimbursement is calculated, and the wide-spread effect will touch any number of contractual arrangements that use Medicare reimbursement to set compensation terms.

Quality-based Reimbursement. We have seen a steady change from productivity-based compensation models, which pay for volume, to quality-based reimbursement models, and 2014 will continue this progression. Attorneys that represent physicians and physician practices should be prepared for the introduction (or addition) of quality metrics in physician compensation arrangements, as well as an increase in co-management arrangements and opportunities, which engage physicians in hospital management to better align physicians and hospitals.

Narrow Networks. With additional products available in the individual insurance market in 2014 and an increased focus on performance-based contracting, payers are tying rate increases to quality metrics and tightening provider networks. Attorneys representing physician groups may see an increase in narrow network products and, as a result, their clients’ exclusion from networks.

Changing reimbursement concepts are not new but some methodologies will affect physician behavior, require more patient engagement, and influence efficiency as the industry demands accountable care and continues to introduce quality-based incentives.

4. Increased Joint Venture Activity and Market Consolidation

We expect to see increased joint venture activity and market consolidation in 2014. Increasing market share and patient population allows providers and payers to introduce and monitor their quality care initiatives to a broader base of patients and standardize care with the hope of better outcomes and efficiency. Attorneys representing parties in these transactions should be mindful of fair market value and other fraud and abuse requirements, leasing and construction considerations, and potential antitrust implications.

5. Government Enforcement

The health care industry has seen increased government scrutiny, including emphasis on payment, program integrity, and compliance. From Medicare and Medicaid compliance audits, Strike Teams, increased HIPAA penalties, overpayment recoupment, to fraud and abuse self-disclosures and intervening in whistleblower suits, the federal government is improving its enforcement mechanisms used against hospitals and providers. The federal agencies and their contractors have increased their damages and penalty recoveries over the last few years, and we expect this to continue in 2014.

The primary goal of the U.S. Department of Health and Human Services Office of Inspector General’s (OIG) strategic plan for 2014 to 2018 is fighting fraud, waste, and abuse. In order to achieve its goal, the OIG intends to build upon existing enforcement models, refine self-disclosure protocols, and use all appropriate means (including exclusions and debarments) to maximize recovery.

If you are new to health care, or if you want to expand your practice into health law, these areas of strict liability and increased enforcement will be fundamental to your practice in 2014. Understanding the complex regulations and strict liability statutes is fundamental to providing sound legal and business advice to health care clients.

Honorable Mentions

Retail health clinics and on-site health services, changes in medical malpractice standards, increased emphasis on post-acute care, non-physician health care professionals, and the corporate practice of medicine will also be hot topics in 2014.

This article was first published in WisBar Inside Track, Vol. 6, No. 1, a State Bar of Wisconsin publication.

Article by:

Meghan C. O’Connor

Of:

von Briesen & Roper, S.C.

Medicare Physician Fee Schedule Final Rule Issued for Calendar Year 2014

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The Calendar Year 2014 Medicare Physician Fee Schedule (“PFS”) final rule has been issued. The rule, over 1,000 pages in length, determines physician reimbursement for services provided to Medicare beneficiaries. Let’s take a look at just a few of the changes contained therein.

Payment Rates

Physicians will see a substantial decline in reimbursement – 20.1% – based on a statutory requirement which limits the amount of annual growth in physician payments. This requirement is known as the Sustainable Growth Rate (“SGR”). The President’s budget calls for averting these steep cuts, and since 2003, Congress has enacted legislation to prevent them. Congress is currently trying to create an alternative payment method which would include the permanent repeal of the SGR formula.

Primary Care and Chronic Care Management

CMS has stressed its support for advanced primary care physicians to address the needs of Medicare beneficiaries who have two or more significant chronic conditions. In 2015, Medicare will begin making separate additional payments to physicians for chronic care management services. Care management services include care plan development and implementation, patient and caregiver communication, and medication management. Medicare beneficiaries will be able to choose a physician or another eligible practitioner from a qualified practice to furnish chronic care management over 30-day periods.

Telehealth Services

Regulations describing eligible telehealth originating sites will now include health professional shortage areas (HPSAs) located in rural census tracts of urban areas as determined by the Office of Rural Health Policy. This change will result in more qualifying originating sites, which will improve access to telehealth services in shortage areas.

CMS is also developing a policy to determine geographic eligibility for originating sites on an annual basis in order to avoid mid-year changes to geographic designations, which often result in unexpected disruptions in telethealth services. In addition, CMS is updating the list of eligible Medicare telehealth services to include transitional care management services.

Application of Therapy Caps to Critical Access Hospitals

Prior to the passage of the American Taxpayers Relief Act of 2012, therapy caps were not applied to therapy services furnished in Critical Access Hospitals (“CAH”). The final rule, however, in conjunction with the American Taxpayers Relief Act, does subject CAH to therapy caps (currently set at $1,920 for 2014).

Physician Quality Reporting System (“PQRS”)

Eligible professionals will be able to submit quality measure data for the PQRS through qualified clinical data registries. These quality measures will be aligned across all reporting programs so that a physician need only report a measure once for all programs.

Most changes established by the PFS will take effect on January 1, 2014. CMS, however, will accept comments on the final rule until January 27, 2014.

 

Article by:

Anne-Tyler Morgan

Of:

McBrayer, McGinnis, Leslie and Kirkland, PLLC

Dental and Vision Coverage Under the Affordable Care Act

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Many employers are unaware of how dental and vision insurance coverage fit within the Affordable Care Act (ACA). This article unravels these rules.

ACA does not mandate dental and vision insurance for adults. For children under age 19, the rules are different. In the exchanges and the individual and small-employer markets, dental and vision insurance are generally required for children under age 19. This requirement does not apply to large employers with 50 or more employees.

Individuals and Small Employers

Effective January 1, 2014, for the small employer and individual market, ACA requires non-grandfathered health plans to cover a specific group of health benefits known as“essential health benefits.” There are ten benefit categories, of which one is pediatric services. Pediatric services include dental and vision care for children under age 19.

Children in this age group are entitled to teeth cleaning twice a year, x-rays, fillings and orthodontia if medically necessary. (It should be noted that there is not a single definition of “medically necessary.”) In addition, children under age 19 can annually get an eye exam and one pair of glasses or contact lenses. There is no requirement under ACA that health plans provide dental and/or vision coverage to individuals age 19 and over.

The Exchanges

Except as provided below, health insurance plans offered within an exchange must include pediatric dental and vision benefits. If the exchange has a stand-alone dental plan providing pediatric dental benefits, the health insurance plan does not need to offer this benefit. The exchanges do not have stand-alone plans for pediatric vision benefits.

Under the federal exchanges, when the dental insurance is a stand-alone plan, employers and individuals are not required to purchase it. State exchanges may provide otherwise. There are no subsidies for stand-alone pediatric dental plans.

Planning tips:  

  1. It may be more cost effective to purchase a stand-alone dental policy. When the health plan includes dental coverage, certain dental expenses may not be covered until the medical deductible is satisfied.
  2. If dental and vision coverage is desired for adults, the health plan should be carefully examined because the law only requires pediatric dental and vision coverage. If dental and vision insurance for adults are not covered in the health plan, the adults must purchase a stand-alone policy.

Employers With 50 or More Employees

Currently, health plans for large employers with 50 or more employees are not required to provide essential health benefits. Instead, health plans for large employers must offer “minimum essential coverage.” If this coverage is not affordable and meaningful, beginning in 2015, the employer may be subject to a monetary penalty.

The term minimum essential coverage is defined very broadly under ACA. Virtually any health plan offered within a state that is offered to at least 95% of the employer’s full-time employees and dependents constitutes minimum essential coverage. There is no requirement under ACA that dental or vision benefits must be offered in these health plans. Unlike the exchanges and the individual and small employer markets, dental and vision care for children under age 19 are not required.  Although not required, most large employers offer dental and vision coverage to their employees.

Article By:

William N. Anspach, Jr.

Of:

Much Shelist, P.C.

Supreme Court To Consider Employers’ Arguments Regarding Contraceptive Mandate

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The United States Supreme Court will revisit the Affordable Care Act (“ACA”)requirement that most employers provide contraceptive coverage in employee health insurance plans. On November 26, 2013, the Court accepted two cases which center on the issue, each of which resulted in a different outcome. The ACA currently provides an exemption to certain non-profit religious organizations, but there is no such exemption for private employers.

The Supreme Court will now consider whether private companies should be able to refuse to provide employees with contraception coverage under their health plans on the basis of religion. Further, the Supreme Court may consider whether for-profit corporations may validly claim protection under freedom of religion.

In Sebelius v. Hobby Lobby Stores, Inc.[1], the U.S. Court of Appeals for the 10th Circuit ruled that a requirement which forced Hobby Lobby to comply with the contraception coverage mandate violated the Religious Freedom Restoration Act, which protects religious freedom. Hobby Lobby is owned by David and Barbara Green, who have stated that they strive to run their company in accordance with their Christian beliefs. The Greens have no objection to preventive contraception, but only medication which may prevent human embryos from being implanted in the womb (i.e., “the morning-after pill”).

The 10th Circuit Appeals Court ruled in favor of Hobby Lobby based upon its  decision in a previous case, Citizens United v. Federal Election Commission[2], which held that corporations hold political speech rights akin to individuals. Taking this reasoning further, if a corporation can have political speech rights, then it should also have protection for its religious expression, according to the Court.

In Conestoga Wood Specialties v. Sebelius[3], the U.S. Court of Appeals for the 3rd Circuit viewed the issue differently. The Court upheld the contraception coverage mandate based upon what it perceived as a “total absence of case law” to support any argument that corporations are guaranteed religious protection.

According to the ACA, contraceptive coverage provided by employers’ group health insurance plans is “lawful and essential” to women’s health; however, certain businesses assert that their religious liberty is more important. Ultimately, the United States Supreme Court will cast the deciding vote.

[1] Sebelius v. Hobby Lobby Stores, Inc., 723 F.3d 1114 (10th Cir. 2013).

[2] Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).

[3] Conestoga Woods Specialties v. Sebelius, 724 F.3d 377 (3d Cir. 2013).

 

Article by:

Brittany Blackburn Koch

Of:

McBrayer, McGinnis, Leslie and Kirkland, PLLC

 

IRS Announces Modification to “Use-It-Or-Lose-It” Rule for Health Care Flexible Spending Accounts

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On October 31, 2013, the Internal Revenue Service (“IRS”) announced a modification to the “use-it-or-lose-it” rule that applies to health care Flexible Spending Arrangements (“FSAs”) under a cafeteria plan. Under the use-it-or-lose-it rule, unused amounts in a participant’s health care FSA for a plan year not used to pay eligible medical expenses incurred during the plan year were required to be forfeited to the employer, unless the employer adopted the 2 1/2 month grace period. The grace period rules permit participants to use amounts remaining from the prior year to pay eligible medical expenses incurred during the first two months and 15 days immediately following the end of the plan year (March 15 for a calendar year plan).

The New Carryover Provision

Under the new rule, an employer, at its option, may permit a participant to carryover to the immediately following plan year up to $500 in unused amounts from a health care FSA. This carryover may be used to pay or reimburse medical expenses under a health care FSA incurred during the entire plan year to which it is carried over. The rule also provides that:

  • The carryover does not count against or otherwise affect the maximum payroll reduction limit for the plan year ($2,500 for 2014).
  • Although the maximum unused amount allowed to be carried over to any plan year is $500, the plan may specify a lower amount.
  • If a plan permits a carryover, the same dollar limit must apply to all plan participants.
  • A plan that adopts the carryover provision is not permitted to provide the FSA grace period.
  • The use of the carryover option does not affect the plan’s ability to provide for the payment of expenses incurred in one plan year during a permitted “run-out” period at the beginning of the following year.
  • A plan is not permitted to allow unused amounts related to an FSA to be cashed out to the participant or used for any other taxable or non-taxable benefit.
  • A plan is permitted to treat reimbursements of all claims that are incurred in the current plan year as reimbursed first from unused amounts credited for the current plan year and, only after exhausting these amounts, as then reimbursed from unused amounts carried over from the previous year.
  • Any carryover amount used to pay for eligible medical expenses in the current plan year will reduce the amounts available to pay claims during the run-out period from the prior plan year.

For example, Jane Smith participates in her employer’s FSA with a calendar plan year, a run-out period from January 1 to March 31, an open enrollment in November for making salary reductions for the following year and the $500 carryover.

In November 2014, Jane elects a salary reduction of $2,500 for 2015. By December 31, 2014, she has $800 remaining from 2014. The plan may treat $500 of the unused $800 as available to pay 2015 expenses. Jane now has a total of $3,000 to spend in 2015. She is reimbursed for a $2,700 claim incurred in July 2015. The plan treats the first $2,500 as reimbursed with 2015 contributions, and the remaining $200 of the claim as reimbursed with unused 2014 contributions (leaving $300 for any further 2015 expenses). If she submits no further claims in 2015, the remaining $300 is carried over to 2016.

Assume these same facts, except that Jane’s $2,700 expense is incurred and submitted in January 2015 (during the 2014 run-out period). Jane is reimbursed for the claim first from 2015 contributions ($2,500) and then from 2014 contributions ($200). Since this claim was incurred during the run-out period, the 2014 run-out amount is reduced to $600 ($800-$200). If on February 1, 2015 Jane receives a medical bill from 2014 for $700 and submits the expense, the plan may only reimburse her for $600 of the total $700 claim. Jane continues to have $300 available for any 2015 expense, which may be carried over to 2016.

Next Steps

An employer that wants to implement the new carryover option must amend its cafeteria plan on or before the last day of the plan year from which amounts may be carried over and the amendment can be made effective retroactively to the first day of that plan year. For example, an employer can amend a calendar year plan on or before December 31, 2013 and have the carryover rule apply for 2013. The employer must notify participants of the new rule.

This increased flexibility will reduce a key barrier for many potential FSA users and may increase enrollment in FSA programs. Participants will no longer have to perfectly predict normally unpredictable health expenses a year in advance. Even though the carryover is limited to $500, the majority of forfeitures under the use-it-or-lose-it rule were less than $500.

Employers should carefully consider whether their employees would benefit from adopting the carryover rule instead of the grace period rule. The carryover rule is limited to $500 but permits the $500 to be used to pay for eligible expenses during the entire year into which it was carried over. In contrast, the grace period rule permits the entire amount of unused dollars in a health care FSA to be used but only to pay expenses incurred during the first 2 1/2 months of the next year.

Employers seeking to modify a 2013 plan that currently has a grace period should also carefully consider the ERISA implications of eliminating the availability of the grace period for 2013 contributions.

Article by:

Eric W. Gregory

Of:

Dickinson Wright PLLC

Emerging Insurance Coverage & Allocation Issues in 2013 – May 14th, 2013

The National Law Review is a proud sponsor of Emerging Insurance Coverage & Allocation Issues in 2013 Conference:

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When:

Tuesday, May 14th, 2013

Where:

The Rittenhouse Hotel
210 W Rittenhouse Square
Philadelphia, PA

All in-house counsel and insurance professionals always complimentary at Perrin Conferences. Special Restrictions Apply. Registration fee is $895 and includes private website access to course materials, continental breakfast, refreshment breaks and networking cocktail reception. Group discounts available, please inquire.

DOJ Releases, Then Tries to Reel Back FOIA Documents in Holocaust Case

Weekly guest bloggers at the National Law Review this week are from the Center for Public Integrity.   Author Amy Biegelsen reviews  how a  federal government ban on Holocaust survivors suing to collect on European insurance policies from that era may be on a shaky legal footing.  

A federal government ban on Holocaust survivors suing to collect on European insurance policies from that era may be on a shaky legal footing, according to memos accidentally released by the Justice Department in a Freedom of Information Act (FOIA) request. The department wants the memos back and is trying to keep them from circulating.

However, the documents were used in Congressional testimony last month by Samuel Dubbin, an attorney representing Holocaust survivors and their families, and full copies were entered into the official public record.

The memos relate to a federal lawsuit Dubbin lost earlier this year when a federal appeals court rejected a U.S. citizen’s attempt to collect on insurance policies his father purchased in Europe before surviving imprisonment in Auschwitz and Dachau during World War II.

That court ruled Dubbin’s client, Dr. Thomas Weiss, could not bring his case to court. The decision was based, in part, on the Justice Department’s assertion that U.S. foreign policy requires special, non-adversarial agencies be used as the “exclusive forum” to help victims recover such claims.

The memos that Dubbin obtained in his FOIA request were intended as private correspondence among department officials discussing what advice to give to the court to clarify U.S. foreign policy. They reveal the Justice Department had some reservations about whether or not that policy could pre-empt a domestic lawsuit.

JUSTICE DEPT. WANTS COPIES DESTROYED

In a Sept. 24 e-mail to Dubbin, Deputy Assistant Attorney General William Orrick III, said the department had “inadvertently and erroneously” sent him the memos in response to his FOIA request. Dubbin gave a copy of the e-mail to the Center for Public Integrity.

The e-mail landed in Dubbin’s in-box two days after his Sept. 22 testimony in front of a congressional subcommittee hearing on a bill that would make it easier for victims and their families to file suits. A stack of the photocopied documents sat on a table inside the hearing room, available for anyone attending to take.

The Justice Department e-mail instructs Dubbin to “immediately cease using or disclosing the above documents; return the documents to the Department of Justice; and destroy all copies of these documents in your possession.” It also orders him to retrieve any copies he may have circulated and advises him to ask a Holocaust survivors group to remove them from their web site.

Dubbin has refused to return the documents despite the Justice Department’s argument that the documents are confidential under the attorney-client privilege and that he has an ethical obligation to give them back. The department did not respond to Center requests for comment.

Lucy Dalglish, the former director for the Reporters Committee for Freedom of the Press advocacy group, says it’s rare for a government agency to revoke records it has already released in a FOIA response. That’s especially true for the Justice Department, she added, because “they very seldom give out any documents.”

MEMOS SHOW MISGIVINGS

The memos illuminate some of the discussions — and misgivings — department officials had about their response to the New York-based Second Circuit Court of Appeals before it ruled in Dubbin’s case earlier this year.

On behalf of the State Department, the Justice Department sent the appeals court two separate memos, one in 2008 and another in 2009 to explain the U.S. foreign policy issues underlying the case. Its position changes from one to the next. The mistakenly released documents come from internal department discussion before each was sent.

The 2008 memo said that the State Department policy cannot necessarily pre-empt a court case. The 2009 memo was much firmer and told the appeals court that it was “in the foreign policy interests” of the United States for an international commission “to be the exclusive forum for the resolution” of Holocaust survivors’ claims against European insurers.

Among the documents that the government wants returned is a memo written by former assistant to the Solicitor General, Douglas Hallward-Driemeier. He wrote it before the 2008 memo was sent to the court, and it says that he had “reservations about the legal theory” underlying the advice that citizens cannot sue. A year later, before the 2009 memo was sent, Hallward-Driemeier wrote to his department colleagues that the Justice Department lawyers “should refrain from addressing the question whether the government’s foreign policy provides a basis for holding the plaintiffs’ claims preempted.”

Hallward-Driemeier, now a partner with the law firm Ropes & Gray, says he “can’t comment on attorney-client memos that should never have been released.”

Early this year, the Second Circuit ruled in favor of the Italian insurance company Assicurazioni Generali and rejected Dubbin’s attempt to help his client collect on a life insurance policy held by a Holocaust survivor. Dr. Thomas Weiss, a Miami Beach opthamologist born in 1949, has spent years trying to obtain the insurance benefits for a policy purchased by his father, Paul Weiss, in 1937 from Generali.

The appeals court’s ruling “was a direct result of the fact that DOJ hid the ball,” Dubbin told the House committee in September.

SPECIAL PANEL HANDLES EUROPEAN INSURANCE CLAIMS

Why can’t a U.S. citizen go to court to fight a European insurer over an insurance policy benefits? The answer is rooted in an agreement the United States entered into with Germany in 1999. The two countries decided at that time that it would be better to settle these insurance disputes through an international agency funded by European insurance companies, the International Commission on Holocaust Era Insurance Claims (ICHEIC).

As part of that arrangement, the federal government agreed that when cases of U.S. citizens suing German companies came up, it would file briefs with the judges informing them of the foreign policy interest. The agreement was not a treaty and doesn’t carry the force of law, so the U.S. cautioned the European governments that whether or not the cases would be thrown out would still be up to the courts.

These claims are particularly difficult because few death certificates were issued in extermination camps and Nazis routinely confiscated or destroyed contracts, deeds and other records. ICHEIC agreed to relax its standards for evidence, but it closed in 2007, the year before the Weiss suit arrived in federal court. Supporters of the commission say that other non-adversarial avenues still exist and site agreements from the insurance companies that participated in ICHEIC to voluntarily continue to process such claims.

When faced with the Weiss case, the Second Circuit Court of Appeals wanted to know if ICHEIC was still the forum for resolution, or if policy-holders were barred from even suing in US courts. It asked the State Department to clarify, kicking off the discussions accidentally disclosed to Dubbin this summer.

This month, the U.S. Supreme Court declined to hear the case. A dozen law professors specializing in international and constitutional law filed a brief with the high court in support of the case, including American University law professor Steven Vladeck.

“While not affirmatively misrepresenting the government position,” Vladeck says, the memos that the Justice Department gave the court “obfuscated it in a way that made it difficult for the court to know what’s going on.”

Reprinted by Permission Center of Public Integrity

Reprinted by Permission © 2010, The Center for Public Integrity®. All Rights Reserved.