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Over Thirty Charged in Scheme to Bilk Insurance Companies of $12M Westchester County District Attorney Jeanine Pirro was joined by New York State Police Major Frank Koehler, Yonkers Police Commissioner Robert Taggart, Westchester County Police Commissioner Thomas Belfiore, New York City Police Department Deputy Inspector Alan Cooper, New York State Insurance Frauds Bureau Director Charles Bardong, the National Insurance Crime Bureau, the New Jersey Attorney General’s Office and numerous insurance carriers to announce the results of a three-year investigation into the systematic fraudulent billing of no-fault accident claims by a major medical mill operating in Westchester County. It is alleged that Elm Street Medical, PC operating out of One Elm Street, Tuckahoe, New York, bilked insurance companies by exploiting the no-fault provisions of the New York State Comprehensive Motor Vehicle Insurance Reparations Act. (This act entitles persons injured in automobile accidents to a minimum of $50,000 of medical coverage regardless of who is at fault.) Over a period of approximately three years, Elm Street Medical bilked dozens of insurance companies by upcoding (i.e. the submission of claims containing codes for expensive medical services never provided) or by submitting bogus claims for medical services on behalf of patients who had not been in a car accident. Elm Street’s physicians would routinely recommend numerous tests or treatments including physical therapy treatment; chiropractic services; dental evaluations, testing and treatment; orthopedic evaluations; psychiatric evaluations and treatment; psychological evaluations and treatment; neurological evaluations and testing; durable medical goods; and excessive diagnostic testing all provided for at the Elm Street facility. Some of the procedures that were billed for were never performed and others were shams. Additionally, a simple five minute procedure would be routinely upcoded and billed for a more complicated and longer higher reimbursement procedure. All of the patients were required to assign all insurance payments to Elm Street. Patients also received a promise of proceeds from any potential lawsuit as a result of their injuries. In order to further the operation, LEONARDO VELEZ, an emergency room employee at Saint Joseph’s Hospital in Yonkers and BARRY SUAREZ, a paramedic employed at Empress Ambulance Service, forwarded confidential patient information about individuals involved in accidents from numerous Westchester County hospitals to co-defendant BRUCE NIXON. Nixon, posing as a doctor or hospital patient care coordinator, would refer these patients, most of whom were in minor fender bender accidents, for unnecessary follow-up medical treatment at Elm Street. Nixon would make approximately $1,500 for each referral. Another defendant, JEAN RICHARDSON, actively participated in this criminal enterprise by setting up fictitious accidents. It is alleged that Richardson, while a shelter director at Westhab, Inc., a non-profit organization that administers the daily operation of Westchester County’s homeless shelter system, used Westhab employees and residents to pose as injured car accident victims for the purpose of creating false insurance claims. Not only did uninjured Westhab residents and employees pose as injured patients, but they were also shuttled to the Elm Street offices in official Westhab vans. Richardson is no longer employed by Westhab, Inc. The Elm Street Enterprise, through its office managers, ALEXANDER KARSHENBOYM and SERGEY CHIZHOV, paid runners (recruiters), including, BRUCE NATHANIEL NIXON, JEAN RICHARDSON and others, to steer claimants to medical clinics owned and operated by the Elm Street Enterprise. The runners paid BARRY SUAREZ and LEONARDO VELEZ, and others to steal confidential patient information to permit the runners to contact the patients and turn them into claimants at the medical clinics owned by the Elm Street Enterprise. Many of these claimants had been in real, but minor automobile accidents. Others, such as ROBERT WECHSELBLATT and runner JEAN RICHARDSON, were not in automobile accidents, but knowingly permitted their names and pedigree information to be placed on fictitious accident reports and thereafter told insurance carriers and others that they had been involved in actual automobile accidents. In order to legitimatize the false insurance claims submitted by the Elm Street enterprise, it is alleged that SHARON DAVIS, a former New York City Police Department Administrative Aide, and LORETTA STOKES, a former New York City Police Department Administrative Aide, assisted in the creation of forged police accident reports by knowingly entering false data about fictitious accidents into the New York City Police Department database, so that an accident report number could be assigned. These defendants received up to $300 per report for their criminal activity. They are charged with Criminal Facilitation in the Fourth Degree. The enterprise also included corrupt medical professionals and staff employed by the Elm Street Enterprise, including VLAD MEISHER, MD; JOHN GELFAND, MD; YEFIM SOSONKIN, MD; TOBIAS SHKLOVER, MD; HERBERT FENTON, DDS and others, purportedly rendering and providing medical treatment to these claimants and creating reports documenting the services they purportedly provided. The fraudulent reports and claims submitted to insurance carriers detailed fictitious, unnecessary and/or underperformed medical visits and procedures as well as treatment contrary to generally accepted medical practice. On June 23, 2004, the Westchester County District Attorney’s Office, the New York State Police, and the New York State Insurance Frauds Bureau executed three search warrants resulting in the seizure of hundreds of patient files from the Elm Street Medical offices. It is believed that the Elm Street operatives received over $12 million dollars during a five year period from 1999 to 2004 as a result of running this criminal enterprise. Of the 34 charged, fourteen (14) individuals and six (6) corporations were indicted. All twenty (20) indicted defendants were part of the Elm Street enterprise operating to defraud insurance carriers through the submission of fraudulent no-fault automobile claims. Those indicted were ALEXANDER KARSHENBOYM; SERGEY CHIZHOV; ELLA CHIZHOV; VLAD MEISHER, MD; JOHN GELFAND, MD; TOBIAS SHKLOVER, MD; YEFIM SOSONKIN, MD; HERBERT FENTON, DDS; BRUCE NATHANIEL NIXON; BARRY SUAREZ; LEONARDO VELEZ; JEAN RICHARDSON and ROBERT WECHSELBLATT. One indicted individual remains at large. Corporate summons were also issued for six corporations owned and operated by the enterprise; ELM STREET MEDICAL, PC; ELM NEUROLOGICAL CARE, PC; COMPAS MEDICAL, PC; BOGART AVENUE MEDICAL, PC; ANDA MANAGEMENT CORPORATION; and ALL-SHURE CORPORATION. Moreover, the following 14 individuals were arrested and charged by felony complaint: ANDREW CHEVANNES, ALLAN BAILEY, SHEENA GRAVES, KEVIN GOEFF, GISELLE RIVAS, ROSE ORTIZ, VINCENT JENKINS, LEON AKERY, SHARON CLARK, ANDRE CABAN, KEN COLEMAN, DENISE AHMAD, IBRAHIM AHMAD and PATRICIA TERRY. The investigation is continuing. Among the crimes charged against defendants are Enterprise Corruption, Insurance Fraud in the First Degree and Money Laundering in the First Degree, all class “B” felonies, as well as Insurance Fraud in the Second Degree and Grand Larceny in the Second Degree, class “C” felonies. If convicted, those defendants charged with class “B” felonies face a maximum of twenty-five years in state prison. District Attorney Jeanine Pirro thanked the following insurance companies for their investigative assistance: Allstate, GEICO, Liberty Mutual, Nationwide, Countrywide, State Farm, Progressive, One Beacon and AutoOne. DA Pirro also thanked Lawrence Hospital, the Westchester Medical Center, Saint Joseph’s Hospital, Saint John’s Riverside Hospital, Mount Vernon Hospital, Sound Shore Hospital, Empress Ambulance Service and the NYPD Fraudulent Accident Investigation Unit. DA Pirro also thanked the New York State Motor Vehicle and Insurance Fraud Prevention Board for their assistance. -END – In compliance with Disciplinary Rule 7-107A of the Code of Professional Responsibility, you are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.

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Challenges in Manufacturing Sector Emphasizes Need for Dramatic Reforms Plan Strikes Balance by Reducing Costs for Businesses and Increasing Benefits for Injured Workers Governor George E. Pataki today proposed a comprehensive plan to reform New York’s Workers’ Compensation system by reducing costs for businesses while increasing benefits for injured workers. The new measures proposed by the Governor would further improve New York’s business climate, expand the State’s job-creation efforts and keep New York business -- especially manufacturing-based business -- competitive in the global marketplace. The Governor’s plan would reduce Workers’ Compensation costs for businesses by more than 15 percent, while increasing benefit levels for injured workers by 25 percent. The new reforms come on top of the historic workers’ compensation reforms the Governor fought to achieve in 1996 that have already reduced costs by 25 percent on average. The Governor proposed a series of additional reforms to the workers’ compensation system in 2004, but the Legislature failed to act on them. “Whether it’s cutting taxes, eliminating unnecessary regulations or reducing workers’ compensation costs, we know that lowering the cost of doing business is a proven way to create new jobs and that’s exactly what we’ve done in New York during the past 11 years,” Governor Pataki said. “In 1996, we worked together to achieve historic and long overdue reforms to the Workers’ Compensation system, which have already reduced costs for businesses by 25 percent. But Workers’ Compensation is one of the biggest costs for businesses and if left unchecked can be an impediment to creating new jobs.” “We’re working hard to help manufacturing-based businesses, such as Delphi in Western New York, stay competitive in the global economy and protect thousands of New York jobs, and these new reforms mark another step in those efforts,” the Governor said. “These new reforms strike a balance between controlling costs for those who create jobs – businesses -- with the needs of workers who risk their health and safety to provide for their families and keep New York’s economy growing. “The time to act is now. I urge the Legislature to work with me to enact these important reforms so that we can help New York businesses better compete, protect tens of thousands of jobs across the State and ensure benefits for injured workers,” the Governor added. The Governor’s plan would reduce workers’ compensation costs for businesses by 15 percent by creating a system of tiered benefit levels for injuries that are not currently scheduled under the law, reducing litigation, better coordinating anti-fraud efforts and authorizing comprehensive fee schedules for medical goods and pharmaceuticals. It would also increase benefit levels for workers injured on and off the job, increasing the maximum weekly indemnity benefits paid to injured workers by 25 percent from $400 to $500 per week. Daniel Walsh, President of the Business Council of New York State said, “We welcome this new initiative by Governor Pataki to craft a comprehensive workers' compensation package which recognizes the many inequities in the current comp system. Taken as a whole, this initiative will help employers of all sizes and types, particularly those in New York's manufacturing community. We look forward to working with the Governor and the Legislature in a good faith effort to bring the comp system more in line with that of our competitor states.” Randy Wolken, President of the Manufacturing Association of Central New York said, “It is imperative that New York realizes the impact workers comp costs truly have on employers, and our competitiveness with other states. The recent premium increase particularly impacts manufacturers; with MACNY members reporting increases of 15-29% since October 1st. Last year closed without a resolution to New York’s workers comp crisis. Now, more than ever, it is crucial to resolve this issue, and move forward on meaningful reform. We look to work with the Governor, the Legislature, labor, and others on this crucial issue to preserve high-paying manufacturing jobs in New York.” Andrew J. Rudnick, President & CEO, Buffalo Niagara Partnership, said, “For upstate employers, especially in manufacturing, workers comp costs are a particularly heavy burden. The Governor's proposed reforms go a long way to relieve that burden, and increased investment and jobs should be a direct result.” Mark Alesse, New York State Director of the National Federation of Independent Business said, "Governor Pataki’s exciting new Workers’ Compensation reform bill is welcomed news for the state’s 1.5 million small businesses and their workers. If the Legislature passes this initiative, worker benefits will rise, and overall Workers Comp costs will drop, fostering new employment growth.” Workers’ Compensation Board Chairman David P. Wehner said, “These reforms strike a balance between controlling costs and the needs of workers --addressing the major concerns of both the business and labor community. The Governor clearly understands that while New York must support injured workers, we must also keep our economy strong. We can fulfill and balance these obligations without piling unnecessarily high workers’ compensation rates on our businesses.” The Governor’s plan generates savings of more than 15 percent by reducing frivolous claims against the Second Injury Fund, expanding the Alternate Dispute Resolution program to include the unionized manufacturing sector and by joining 37 other states that have created a system of tiered benefit levels for permanent partial disabilities. Specifically, the Governor’s proposed legislation also addresses the following issues: PROTECTING INJURED WORKERS ● - Authorizes the phasing in of the first workers’ compensation benefit increases for workers injured on-the-job and their beneficiaries in New York State since 1992. ● - Authorizes a 100 percent increase in the maximum disability benefit for workers injured off-the-job (Disability Benefits) from the current $170 maximum to a maximum of $340. ● - Enables workers to protect themselves better by allowing for supplemental benefits in amounts up to two-thirds of their average weekly wages. ● - Allows claimants to receive non-emergency medical procedures costing less than $1,000 without prior insurer authorization. Currently injured workers must seek authorization before any non-emergency procedure over $500. ● - Requires employers to file an injury report (C2) to their carrier within 3 business days of notification of injury and to the Board within 5 days. ● - Requires that carriers or self insured employers provide the injured workers the option of a Section 32 settlement agreement on all claims. ● - All claims that are unresolved within one year or controvert will be transferred to the expedited hearing calendar giving this claim a higher priority status. ● - Requests for discretionary Full Board Review (Appeals) must be filed within 30 days and imposes a fine of $500 on employers, carriers or claimant representative for filing frivolous appeals. ● - Requires the Board to schedule a pre-hearing conference within 45 days upon learning that a claim is disputed. ● - Expands the successful “payment without prejudice” provision to include prescription medicines. Under this program, insurers may provide benefits for up to one year while a case is litigated, without admitting liability. ● - Accelerates the delivery of benefits to injured workers by enhancing the conciliation process to lessen potentially lengthy litigation. REDUCING COSTS FOR EMPLOYERS ● - Reduces employer assessment for the Second Injury Fund by more than $190 million by adjusting the calculation used to determine the assessments from 150 percent of the previous year’s disbursements to 115 percent. ● - Expands the Alternate Dispute Resolution (ADR) program to include the unionized manufacturing sector. Currently only unionized construction can utilize this cost savings program that enables employers to reduce litigation and trim costs by resolving claims outside of the workers’ compensation system under rules that are collectively bargained. ● - Establishes a Pilot Program to encourage the voluntary delivery of compensation and medical benefits to injured workers without intervention by the Board, but subject to the Board’s supervision. ● - Enacts savings by creating a tiered system with regard to the duration of benefits for permanent partial disabilities (PPD). This system would provide for benefits to be coordinated with the severity of an individual’s disability. (An independent study of New York’s workers’ compensation system conducted in 2001 by the Workers’ Compensation Research Institute concluded that New York’s average indemnity cost per PPD claim is 110 percent above the median state.) ● - Establishes a medical committee to develop objective medical criteria for determining the level of impairment sustained by injured workers. • Reduces the assessment for the Second Injury Fund by initiating a $250 filing fee for carriers or businesses seeking reimbursement from the Fund, of which $200 is returnable if the carrier/employer is successful in its claim for reimbursement. ● - Directs the Chair of the Workers’ Compensation Board to adopt a schedule of maximum fees allowable for prescription medicines and durable goods such as prosthetic devices, and requires that generic medicinal equivalents be used whenever possible. ● - Deems ineligible for benefits, all persons incarcerated and convicted of a crime. ● - Enables carriers or self-insured employers to contract with a network or networks to perform diagnostic tests, x-ray examinations, MRI’s or radiological exams and require claimants to use facilities within that network (except in emergency cases), giving employers greater control over medical costs. ● - Amends the Executive Law, the Insurance Law, requiring the Workers’ Compensation Board Fraud Inspector General, the State Insurance Department’s Insurance Fraud Unit and the State Insurance Fund’s fraud investigations unit to work with increased collaboration, including quarterly meetings to coordinate enforcement efforts. Workers' compensation is a no-fault wage replacement and health care benefit system that serves workers who are injured on the job. Payments of benefits are the responsibility of the injured worker's employer who is required by law to obtain insurance or self-insure to cover the costs of workers' compensation benefits. The Workers’ Compensation Board maintains permanent jurisdiction over injured worker claims whether they are opened or closed.

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Chiropractic Coverage Expanded Under Federal Employee Plan Benefit for 2006

The Federal Employee Plan Benefit for 2006 has been updated. These updates include expanded chiropractic coverage under the Standard Option Plan. Previously under the Standard Option there was no benefit for spinal manipulation. Attached please find the details of the new 2006 benefit. Under the Standard Option, benefits may be provided for covered services in a Medically Underserved Area as long as they are within the scope of licensure. American Chiropractic Association Kara Murray Project Manager Office of Professional Development and Research 800.986.4636 ext. 242 703.243.2593 (fax)

WellPoint Inc. to buy WellChoice Inc.

WellPoint, Inc. (NYSE: WLP) and WellChoice, Inc. (NYSE: WC) jointly announced today that they have signed a definitive merger agreement whereby WellChoice would operate as a wholly owned subsidiary of WellPoint. The transaction brings together WellChoice, the parent company of Empire Blue Cross Blue Shield, the largest health insurer in the State of New York, and WellPoint, the nation's leading health benefits company. The combined company will now serve more than 33 million medical members as a Blue Cross or Blue Cross Blue Shield licensee in 14 states and through its HealthLink and UniCare subsidiaries. "This merger brings together two very strong companies focused on providing consumers with the best possible value in health benefits," said Larry C. Glasscock, president and chief executive officer of WellPoint. "Additionally, both companies share the strength and tradition of the Blue Cross Blue Shield brand, one of the most trusted brands in America." "Our companies also share a vision of improving health care," Glasscock said. "Together, we can make that vision a reality by continually developing innovative products that meet customers' needs, by enabling consumers to make better informed health care decisions, and by working collaboratively with hospitals and physicians to improve quality and safety. In doing so, we will help hold down the rising cost of health care." "While premiums must keep pace with rising health care costs, we can assure our members in all of our states that this merger will not add in any way to premium increases," Glasscock added. "Both WellPoint and WellChoice have strong track records of reducing administrative costs while improving customer satisfaction. The synergies we can achieve through this merger, along with the ability to spread administrative costs over a larger membership base, will contribute to our ongoing efforts to keep premiums affordable for customers. Because both WellChoice and WellPoint believe that all health care is local, our merger provides that WellChoice customers will continue to be served by the same local health plan they know today, with decisions made by local management based in New York City." After the close of the transaction, Michael Stocker, M.D., president and chief executive officer of WellChoice, will become president and chief executive officer of a newly combined Northeast Region of WellPoint. As such, Dr. Stocker will have responsibility for business operations in New York, Connecticut, New Hampshire and Maine. He will serve on WellPoint's Executive Leadership Team and report directly to Glasscock. The headquarters for the Northeast Region will be located in lower Manhattan. "This transaction serves the best interests of all our important constituencies and we are very pleased to become part of an enterprise that shares our vision and focus on quality health care at an affordable price," said Dr. Stocker. "Our customers will experience no disruption, and there will be no changes in our networks or benefits as a result of the merger. When combined, our companies will be ideally positioned to promote preventative health care, to engage consumers in maintaining their own good health, and to make the investments necessary to lead positive change in our country's health care system. At the same time, we will be able to draw upon the resources of the nation's leading health benefits company to serve our customers even better." Glasscock added, "It is more important today than ever before for companies to be socially responsible and actively involved in helping make their communities better places to live and work. Both WellChoice and WellPoint have long histories of significant charitable contributions and community involvement, and combined, our role in the community will be even more effective." The merger will strengthen WellPoint's leadership in providing health benefits to National Accounts - large employers with multi-state operations. New York City is the headquarters of more Fortune 500 companies than any other U.S. city, and the merger gives WellPoint a strategic presence in this important market. Both companies have achieved growth among large national employers, building on the strength of the Blue brand and its broad national networks of physicians and hospitals. With Blue plans in 14 states, the combined company can offer large national employers leading local presence in more markets than any other health benefits company. The merger will also enhance the combined company's ability to offer consumer-driven health solutions, which are a growing choice of consumers and employers alike. In June, WellPoint acquired Lumenos, a pioneer and leader in consumer-driven health plans, and WellChoice has incorporated Lumenos technology into its Empire Total Blue consumer-driven product. "Our recent acquisition of Lumenos, combined with WellChoice's successful deployment of Lumenos features in Empire Total Blue, will allow us to immediately offer Lumenos' full product line to new and existing National Accounts headquartered in WellChoice's service area," Glasscock said. Both companies believe that maintaining a strong local presence is very important in the delivery of health benefits, and that philosophy will continue with the merger. In addition, opportunities for professional growth could be created for employees of both WellPoint and WellChoice as a result of the merger. This transaction is expected to be neutral to 2006 earnings per share and accretive thereafter. At least $25 million in pre-tax synergies are expected to be realized in 2006 and approximately $50 million in 2007, with annual pre- tax synergies of at least $125 million expected to be fully realized on an annual basis by 2010. The transaction is structured as a merger of WellChoice, Inc. with a wholly owned subsidiary of WellPoint and is intended to be tax free with respect to the WellPoint stock to be received in the transaction by WellChoice stockholders. The consideration of $77.23 per share to be received by the stockholders of WellChoice will be comprised of $38.25 in cash and WellPoint stock at a fixed exchange ratio of .5191 of a share of WellPoint stock for each share of WellChoice stock (valued at $38.98 per share at the market close on September 26, 2005). The transaction will be accounted for under the purchase method of accounting. The New York Public Asset Fund, which currently owns approximately 52 million shares of WellChoice common stock, will receive approximately $1.989 billion in cash and approximately 27 million shares of WellPoint common stock from the merger based on Monday's closing stock price. The New York Public Asset Fund has agreed to vote its shares, representing approximately 62% of the outstanding shares of WellChoice, Inc., in favor of the transaction. The transaction will be subject to customary closing conditions, including approval of WellChoice's stockholders and various regulatory approvals. WellPoint and WellChoice currently expect the transaction to close in the first quarter of 2006.

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Nearly $285 Overbilled for Chiropractic Work Under Medicare

According to the Inspector General (IG) report, the government overpaid nearly $285 million in 2001 for chiropractic services. To prevent abuses, the IG recommends that caps should be placed on the number of treatments a chiropractor could bill Medicare. The ACA said that the government instituted new procedures last year to help Doctors of Chiropractic avoid improperly billing Medicare, nothing that the IG’s data cited is four years old. To examine the IG’s report click on the link below:

Insured But Not Protected: How Many Adults Are Underinsured?

ABSTRACT: Health insurance is in the midst of a design shift toward greater financial risk for patients. Where medical cost exposure is high relative to income, the shift will increase the numbers of underinsured people. This study estimates that nearly sixteen million people ages 19–64 were underinsured in 2003. Underinsured adults were more likely to forgo needed care than those with more adequate coverage and had rates of financial stress similar to those of the uninsured. Including adults uninsured during the year, 35 percent (sixty-one million) were under- or uninsured. These findings highlight the need for policy attention to insurance design that considers the adequacy of coverage. You can view the article (full text) by clicking on the link below:


ACN, ASHP and Landmark Receive Most Complaints in ACA Managed Care Data Collection Campaign

ACA Asks Doctors Nationwide for More Data into Problems Affecting Patient Care and Reimbursement (Arlington, Va) The American Chiropractic Association (ACA), as part of its ongoing aggressive campaign to correct the wrongful practices of certain chiropractic managed care networks, is asking doctors of chiropractic nationwide to provide additional information that will assist in putting an end to these practices. Among the wrongful practices that the ACA is gathering information about are the following: • Automatic downcoding or limiting physician discretion in the planning of care: The doctor submits the network's forms after examining the patient and is advised of the frequency, duration and type of care that will be covered. Requested treatment is often reduced or denied. Claims are downcoded without the doctor of chiropractic being provided the opportunity to provide any documentation supporting the claim as submitted. • Bundling: The submitted CPT code is incorporated into another submitted CPT code. • Improper utilization review including refusal to recognize coding modifiers: Managed care organizations sometimes refuse to recognize "modifiers" that chiropractors append to CPT codes to report a service or procedure that has been performed and which has been altered by some specific circumstance. • Performance management issues: Managed care networks often disregard the doctor's discretion to diagnose and treat, and limit the number of visits, x-rays and modalities. Doctors say they are reprimanded and threatened with the loss of their contract when the care they prescribe is outside the managed care organization's set standards. "For too long, there has been a misguided perception within the profession that ACA somehow condones the unfair practices of certain chiropractic networks," explained ACA President Donald Krippendorf, DC. "In reality, the ACA strongly denounces these practices and needs your support and information to put an end to what we view as unconscionable activity by these groups." The latest campaign to correct these harmful practices is an outgrowth of a resolution passed by the ACA House of Delegates in March 2002 formally outlining ACA's opposition to the improper practices of chiropractic networks and authorizing ACA staff to collect data identifying the types of abuses doctors of chiropractic experience at the hands of third-party administrators. As part of this effort, ACA recently retained the services of Milberg Weiss, one of the nation's largest class action law firms, to assist in the collection and analysis of this information. Over the past three years, hundreds of doctors of chiropractic have contacted ACA and completed "managed care data collection" forms detailing their troubling experiences with chiropractic networks - and the names of several specific organizations and trends have emerged. According to the data collected by ACA, doctors of chiropractic are most troubled by the actions of American Chiropractic Network (ACN), American Specialty Health Plans (ASHP) and Landmark Healthcare. These carriers routinely deny requested treatment and improperly reduce and deny reimbursement, putting patients and quality of care at risk, according to doctors who contacted ACA. ACA's data collection efforts have uncovered an array of serious concerns with these carriers, but more information is needed regarding particular problem areas. "We have heard your complaints, and we are further analyzing our options to deal with these activities," added Dr. Krippendorf. "We need your continued support and information to protect not only your practice and profession, but also the quality of care you provide your patients." In addition to canvassing the chiropractic profession for more data into specific problem areas, the ACA is also contacting certain chiropractic networks and demanding that they cease the misleading use of ACA's name and trademark in their communications and treatment forms. In a May 13, 2005, letter to ASHP President George DeVries, ACA Executive Vice President Garrett F. Cuneo demands that ASHP remove the "unauthorized and misleading reference and use of the ACA name" in the company's "Clinical Treatment Form." "Please be advised that the ACA views this unauthorized use of its name in connection with the misleading representation contained in your form as defamatory, a violation of its trademark and a continuing unfair trade practice that has resulted and continues to result in damage to the association," Cuneo wrote. The full letter can be found on ACA's Web site at: letter to American Specialty Health (ASHP). The ACA is requesting that doctors of chiropractic who have experienced problems with ACN, ASHP, and Landmark in the areas of restriction of treatment, downcoding, bundling and improper use of modifiers fill out the data collection form found on ACA's website at: CARE DATA COLLECTION FORM. Please fax the completed form to (703) 243-2593, Attention: PDR Department. Your information will be kept in strict confidence and your name will not be released to any managed care network. You will also find additional information and resources regarding ACA's data collection campaign and what you can do to assist in this effort on ACA's Web site at: Are You Having Problems with Chiropractic Networks and Managed Care Organizations? For more information: Felicity Feather Clancy Vice President, Communications [email protected] phone: (703) 276-8800, ext. 241 or Angela Kargus Communications and Public Relations Manager [email protected] phone: (703) 276-8800. ext 240


The CIGNA Settlement . . . What It Means To You

In January, health care providers, including chiropractors, psychologists, counselors, podiatrists, acupuncturists, optometrists, physical and occupational therapists, nurse midwives, nurse practitioners, nurse anesthetists, nutritionists, orthotists, prosthetists, audiologists and speecfh and hearing therapists received Notice of a proposed settlement in a consolidated class action lawsuit brought against CIGNA and several other defendant insurers by thirteen individuals and six or more state and national organizations. The settlement proposes prospective relief as well as payment of cash compensation to providers who file valid claims. Click on the link below to open a slide presentation that explains the rudiments of the proposed CIGNA Settlement and what it could mean to you. Even if you treated no CIGNA Healthcare subscribers you still could be entitled to a portion of the cash settlement. Click on the link below to open the slide presentation to find out more.



As you are aware the changes with Blue Cross and Blue Shield will dramatically affect your practice. Now is the time for you to get involved. On February 15, 2005, the ACA Blue CCHIP representatives met with Empire Blue Cross/ Blue Shield and ASH representatives to discuss the implementation of the Empire Blue Cross/ Blue Shield Chiropractic utilization process. Present at the meeting were representatives from both the New York State Chiropractic Association and the New York Chiropractic Council. What is Blue CCHIP? The Blue Chiropractic Clinical Healthplan Integration Program (CCHIP) is a program developed by the American Chiropractic Association in conjunction with the national Blue Cross/Blue Shield association. This Clinical Integration Program has chiropractic liaisons throughout the country, in almost every state, working with the local Blue Cross/Blue Shield plans to provide the most effective chiropractic care. The following issues were addressed 1. At our request, Empire BC/BS is re-evaluating an issue that we feel may violate our scope of practice where the doctor of chiropractic is required to refer patients back to the medical doctor for necessary diagnostic tests and laboratory services. 2. All doctors will need to be credentialed by ASH to treat Empire patients in network, even if you are already in any Blue Cross/Blue Shield plans. The March 1, 2005 is not the deadline for credentialling, but it is the hard deadline for the start of this program. All doctors who wish to join ASH should get their application in as soon as possible. For those doctors who wish to withdraw from the Empire plans and become non-participating, written notice is required to be sent to Empire. 60 days after receipt of this letter your participation will be terminated (should be sent certified/return receipt requested). 3. Out of network benefits rendered by non participating doctors are not subject to ASH authorization parameters. The fee schedule for out of network will remain as it has been, subject to any deductible or policy limits. 4. A Blue CCHIP grievance committee will be set up for direct contact with both BC and ASH with representatives from the New York State Chiropractic Association and the New York Chiropractic Council. Additional points will be forthcoming as we receive clarification from Empire and/or ASH. The New York State Chiropractic Association and the New York Chiropractic Council are working for YOU! Attend your next district meeting to find out the full information and what you can do!


Attorney General Eliot Spitzer said today that 21 health plans operating in New York have agreed to take new steps to ensure that consumers have the information they need to intelligently shop for health coverage and obtain medically necessary care. Under the agreements, the health plans have pledged to be more responsive to requests from consumers for so-called "clinical review criteria," which is used to determine whether health care claims will be covered. In the past, health plans have sometimes failed to disclose these criteria and other essential coverage information, discouraging access to needed care. "Consumers need clear and complete information from health care plans," Spitzer said. "These agreements obligate the health plans to provide that information and help consumers make the right decisions in choosing a health plan and obtaining medically-necessary care. The agreements may also make it easier for chronically-ill New Yorkers to enroll in plans that meet their special coverage needs." The agreements stem from a March 2004 report by Spitzer's Health Care Bureau. The report found that all of the plans offering individual coverage in New York failed to comply with state coverage information disclosure requirements. In compiling the report, members of Spitzer's staff posed as prospective health plan enrollees. For example, one letter stated that the writer was a diabetic who wanted to buy an individual insurance policy. The writer requested information about how the health plan would decide whether an insulin pump would be a covered expense. Information was also sought for coverage of nutritional supplements and more serious procedures, including arthroscopic knee surgery, breast reduction surgery and surgery for Crohn's disease. Five letters were sent to each plan requesting information on the standards used to determine whether or not a treatment for five different conditions was medically necessary and therefore covered by insurance. Disclosure of this information is specifically required under the state's Managed Care Consumer Bill of Rights. Spitzer's staff analyzed the responses from the health plans and assigned the plans grades based on the number of satisfactory responses. Out of 22 plans studied, half (11) received an "F" for compliance, seven plans received a "D," three plans received a "C," and only one plan got a "B." No plan received an "A." Twenty-six percent of the 110 letters received no response from the plans at all. The clinical review criteria are extremely important to consumers with existing medical conditions because they contain the standards that the health plans use to determine whether a specific treatment is medically necessary; if not, coverage is denied and the consumer is left with the choice of either foregoing medical care or paying out-of-pocket. The State Managed Care Consumer Bill of Rights requires health plans to disclose these criteria to both current and prospective enrollees upon written request. Noting that all of the plans cooperated fully with the inquiry, Spitzer commended certain plans for agreeing to present the required information in a way that was particularly useful to consumers. For example, Excellus Health Plans, based in Rochester, agreed to make its clinical review criteria available to all consumers on its Internet website. MDNY, a Long Island health plan, agreed to translate the medical jargon in some of its criteria into simpler, lay language. Spitzer renewed his call on the Governor and State Legislature to pass legislation originally proposed by the Attorney General in 2001, to establish clear penalties for violations of the Managed Care Consumer Bill of Rights. Currently, there are no specific penalties for violations of this consumer protection statute. The settlements announced today specifically require the health plans to ensure that all consumer requests for clinical review criteria are honored and to submit annual compliance reports to the Attorney General's Office. Each plan will also pay $5,000 in costs to the state. The case was handled by Assistant Attorneys General Paul Beyer, Heather Hussar and Susan Kirchheimer, and Section Chief Troy Oechsner under the supervision of Joseph Baker, Health Care Bureau Chief. The full text of the report is available on the Attorney General's website: Consumers and providers with questions or concerns about health care matters can call the Attorney General's Health Care Bureau Hotline at 1-800-771-7755. NEW YORK HEALTH PLANS PARTICIPATING IN SETTLEMENT Aetna US Healthcare Atlantis Health Plan Capital District Physicians' Health Plan (CDPHP) CIGNA Healthcare of New York ConnectiCare of New York Empire HealthChoice Excellus Health Plan Group Health Inc. (GHI) HealthFirst New York Health Insurance Plan of Greater New York (HIP) Health Net of New York HealthNow New York Horizon Healthcare of New York Independent Health Association MDNY Healthcare MVP Health Plan Oxford Health Plans of New York Preferred Care United Healthcare of New York Vytra Health Plans WellCare of New York

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Centers for Medicare & Medicaid Services (CMS) announces the implementation of a demonstration mandated under Section 651 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173), which will expand coverage of chiropractic services under Medicare beyond the current coverage for manipulation to correct a neuromusculoskeletal condition. To view the entire announcement from the Federal Register regarding the protocols (which is three pages long) please go to: The Federal Register on Friday, January 28, 2005


Supersedes Subject No. 150-18.1 dated December 18, 2003 In accordance with the Board resolution adopted on February 20, 1990, the mileage rate for reimbursement to claimants for travel by automobile is to be the same rate at which management/confidential state employees are reimbursed for travel by automobile. The mileage rate for reimbursement to claimants for travel by automobile on or after January 1, 2005 shall be 40.5 cents per mile. In those instances where claimants are entitled to reimbursement for travel expenses, carriers and self-insurers will allow claimants reimbursement for travel in accordance with this rate. For your information, a table of the travel reimbursement rates from 1970 to the present is below. David P. Wehner Chairman

Submitting Workers’ Compensation Claims Online

▪ Other forms available online for completion Overview/Features Workers’ Compensation (WC) allows parties of interest, including health care providers to complete claims forms, like a C-4*, and submit it online to the Workers' Compensation Board. Other Adobe Acrobat PDF versions of WC forms may be filled out online first, saved to the doctor’s computer locally, then printed and mailed to WC, or the online form may be saved to the doctor’s computer locally first, then printed out, completed and mailed to WC. For a list of forms available online, please refer to the "List of Available Forms" below. Click on the link and go to the members only section. Not a member? Click on the application on the left and join today!

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New York’s Medicare Carriers have reported that they will be sending the 2005 Medicare Physician Fee Schedule (MPFS) on a CD-ROM this month to all those providers who usually receive the Fee Schedule in booklet format. Watch for additional information on your carrier’s website. This change comes as a result of a successful pilot project conducted a year earlier.


The Centers for Medicare and Medicaid Services (CMS) released yesterday, four sites CMS will use for a chiropractic demonstration projected required under section 651 of the Medicare Prescription Drug, Improvement, and Modernization Act. Making the announcement, CMS Administrator, Mark B. McClellan, M.D., Ph.D., announced that Medicare will conduct a demonstration project in Maine, New Mexico, Illinois and Virginia expanding coverage of chiropractic services for neuromusculoskeletal conditions. “We recognize that many Medicare beneficiaries seek the services of chiropractors for back pain and other conditions,” McClellan said. “This demonstration provides the opportunity to evaluate whether expanding coverage of chiropractic services reduces overall Medicare expenditures for neuromusculoskeletal conditions.” Beginning in April 2005, chiropractors that are located in the demonstration areas will be able to provide services to any beneficiary enrolled under Medicare Part B. The demonstration will expand coverage for the services that chiropractors provide for the care of neuromusculoskeletal conditions, including diagnostic and other services such as the provision of x-rays and therapy services. Current Medicare coverage for chiropractic care is limited to manual manipulation of the spine to correct a subluxation, which is defined as a malfunction of the spine. Treatment may only be provided for the active correction of a documented subluxation, and not for prevention or health maintenance. Treatment for the subluxation must be related in terms of a neuromusculoskeletal condition where there is a reasonable expectation of recovery or functional improvement. The goal of the demonstration is to evaluate the feasibility and desirability of covering additional chiropractic services under Medicare beyond the current coverage. CMS has scheduled an Open Door Forum on November 18 to solicit input from interested groups regarding benefits of this demonstration and implementation of its budget neutrality requirements. The demonstration will be conducted in the entire states of Maine and New Mexico, and in the Chicago Metropolitan Statistical Area (MSA) and 17 central counties in Virginia. The statue specified that the demonstration must include four sites, two urban and two rural, and one site of each must be in a health professional shortage area (HPSA). The statute requires an evaluation of the demonstration to assess cost effectiveness, cost benefit, beneficiary satisfaction, and other issues as the Secretary of Health and Human Services determines to be appropriate. ▪ ACA Concerns After fighting hard to have the demonstration project language included in the language of the Medicare Prescription Drug, Improvement, and Modernization Act, the ACA notes with some chagrin that is has some concerns with how the proposed demonstration project may be carried out. ACA staff met with CMS officials last Friday, November 6, to receive information on the status of planning for the demonstration. Subsequently, the ACA has identified several areas of concern with regard to the design, including possible infringements on full scope of practice under existing Medicare program benefits. ACA is preparing a formal and detailed response to CMS that will be available prior to CMS's November 18th, Open Door Forum on the chiropractic demonstration project. More on the project will be forthcoming in the not too distant future.


The Centers for Medicare and Medicaid Services (CMS) released yesterday, four sites CMS will use for a chiropractic demonstration projected required under section 651 of the Medicare Prescription Drug, Improvement, and Modernization Act. Making the announcement, CMS Administrator, Mark B. McClellan, M.D., Ph.D., announced that Medicare will conduct a demonstration project in Maine, New Mexico, Illinois and Virginia expanding coverage of chiropractic services for neuromusculoskeletal conditions. “We recognize that many Medicare beneficiaries seek the services of chiropractors for back pain and other conditions,” McClellan said. “This demonstration provides the opportunity to evaluate whether expanding coverage of chiropractic services reduces overall Medicare expenditures for neuromusculoskeletal conditions.” Beginning in April 2005, chiropractors that are located in the demonstration areas will be able to provide services to any beneficiary enrolled under Medicare Part B.



Arlington, Va. (Oct. 19, 2004) — The American Chiropractic Association (ACA) has vowed to appeal a recent decision by a U.S. District Court judge to dismiss its lawsuit against the Department of Health and Human Services (HHS), a lawsuit that protects the very heart of the chiropractic profession’s services under Medicare – manual manipulation of the spine to correct a subluxation. ACA officials said they would continue the battle until doctors of chiropractic are the only providers who can offer the profession’s core service. “While we are understandably disappointed in the judge’s decision, we take pride in the fact that our lawsuit has already put an end to years of discrimination against doctors of chiropractic and their patients,” said ACA President Dr. Donald J. Krippendorf. “Before we filed our lawsuit, Medicare HMOs were given the green light to misappropriate taxpayer dollars to pay non-physician physical therapists to deliver the chiropractic physician service of 'manual manipulation of the spine to correct a subluxation’ under Medicare – or to deny the service to beneficiaries altogether. That unfair and illegal practice has ended as a direct result of our lawsuit. We strongly believe that we owe it to our patients – and have a strong legal basis – to continue our battle in an effort to prohibit medical doctors and osteopaths from correcting subluxations, a service that is uniquely chiropractic.” Dr. Krippendorf also noted the “monumental victories for Medicare patients” already achieved through the lawsuit, including: • Compelling the government to prepare and release a study showing the virtual elimination of chiropractic services to Medicare beneficiaries entering the Medicare Managed Care system; • Prohibiting federal payments to physical therapists providing manual manipulation of the spine to correct a subluxation to Medicare patients; • And, mandating that all Medicare Managed Care plans must make available and pay for manual manipulation of the spine to correct a subluxation. In his Oct. 14 decision, U.S. District Judge John Garrett Penn granted HHS a motion for summary judgment, stating that Congress did not intend for only chiropractors to provide “manual manipulation of the spine to correct a subluxation” when it established the Medicare program in 1972, and that the Medicare statute is “neither silent nor ambiguous” in this regard. According to ACA officials, the judge’s rationale is “perplexing,” given the fact that even the U.S. government itself admitted ambiguity in the 32-year-old language governing the Medicare program – and, according to the government’s own position with the court, that “Congress has not directly spoken to the precise issue of who may provide manual manipulation of the spine to correct a subluxation to Medicare beneficiaries.” “We have a responsibility to our Medicare patients to continue this fight. They deserve to have chiropractic services delivered by doctors of chiropractic,” added Dr. Krippendorf. “We believe the use of the term ‘subluxation’ at the time it was inserted in the Medicare statute was meant to assign the correction of the subluxation exclusively to doctors of chiropractic.” The ACA first filed its lawsuit in November 1998, claiming that HHS guidelines unlawfully allowed Medicare Managed Care plans to substitute the services of other health care providers for services that should legally be performed by doctors of chiropractic and that chiropractic services were not being provided under Medicare Managed Care programs. Specifically challenged in ACA's lawsuit was a 1994 “Operational Policy Letter” stating: “Managed care plans contracting with Medicare are not required, however, to offer services of chiropractors, but may use other physicians to perform this service. In addition, managed care plans may offer manual manipulation of the spine as performed by non-physician practitioners, such as physical therapists, if allowed under applicable state law.” In January 2002, as a direct result of the ACA lawsuit, HHS issued a new policy directive that, under Medicare, physical therapists could not be reimbursed for providing manual manipulation of the spine to correct a subluxation, and also added that manual manipulation to correct a subluxation must be provided by Medicare managed care plans. In a revision to the 1994 Operational Policy Letter, Medicare's Center for Beneficiary Choices wrote: “The (Medicare) statute specifically references manual manipulation of the spine to correct a subluxation as a physician service. Thus, Medicare+Choice organizations must use physicians, which include chiropractors, to perform this service. They may not use non-physician physical therapists for manual manipulation of the spine to correct a subluxation.” (emphasis added) In addition, the new policy provides: “As a standard of Medicare Part B benefit, manual manipulation of the spine to correct a subluxation must be made available to enrollees in Medicare+Choice plans.” (Updated OPL#23, Jan. 15, 2002 emphasis added.) The ACA has 30 days to file a notice of appeal to the U.S. Court of Appeals for the District of Columbia – a court that has been coined “the second highest court in the land” because many of its judges are ultimately appointed to the U.S. Supreme Court. From there, the court will issue a briefing schedule. Typically, the U.S. Court of Appeals for the District of Columbia makes a decision on cases within 12 months. “We thank the thousands of supporters and contributors within the chiropractic profession who continue to stand with us through this monumental legal battle,” Dr. Krippendorf said. “Because of your commitment to the cause, we will continue to ensure that Medicare beneficiaries receive the safe and effective chiropractic care they need and deserve, and that they receive it only from health care providers appropriately trained and skilled to provide manual manipulation of the spine to correct a subluxation – doctors of chiropractic.” FOR MORE INFORMATION: Angela Kargus or Felicity Feather Clancy 800.986.4636 | [email protected] Copy of the opinion can be found at:


Reminder: New Requirements for Chiropractic Billing of Active/Corrective Treatment and Maintenance Therapy.

According to CMS, “Chiropractors have been submitting a very high rate of incorrect claims to Medicare. Medicare only pays for chiropractic services for active/corrective treatment (those using HCPCS codes 98940, 98941, or 98942). Claims for medically necessary services rendered on or after October 1, 2004, must contain the Acute Treatment (AT) modifier to reflect such services provided or the claim will be denied. Read more in the Members' Only Section. Not a member? Click on the application on the left of your screen and stay informed.

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NYSCA Comments Helps Prod Insurance Department Into Dropping Offending No-Fault Provisions

In response to comments the State Insurance Department (SID) received from the New York State Chiropractic Association (NYSCA) and other professional groups, individuals and organizations, on August 18, the Department published a “revised” regulatory proposal floated earlier this year that, among other things, would have pegged the fees for durable medical equipment (DME) at Medicaid levels, and, in one of the other more controversial amendments referred to as the "Concurrent Care Rule," would have required the “sharing of fees among licensed health providers or the payment of a fee only to the provider whose specialty was most relevant to the diagnosis, if more than one licensed health provider treated the patient at the same time, and the treatment involved overlapping or common services.” Read more in "Members' Only" section. Not a member? Consider joining NYSCA today to access this and other regularly updated information.



10 People, 5 Corporations Indicted For Operating Fraud Ring in Hollis, Queens Superintendent of Insurance Gregory V. Serio and Attorney General Eliot Spitzer today announced the indictment of 10 individuals and five corporations accused of operating an insurance fraud ring out of SZ Medical, a clinic in Hollis, Queens. The defendants include nine health care providers and are alleged to have fraudulently billed an insurance carrier for months of treatment and extensive testing, including medical evaluations, diagnostics tests, physical therapy, chiropractic treatment and acupuncture. Gregory V. Serio, Superintendent of Insurance, said, "It’s particularly disturbing that this fraud ring was comprised of doctors and health care providers, professionals who are here to protect us and not betray the public’s trust by defrauding our insurance system. Thanks to our strong partnership with Attorney General Spitzer, these people have been exposed and this case will help us build more momentum in the fight against fraud." "This case demonstrates the sustained and coordinated effort required to combat the pervasive nature of auto insurance fraud," Attorney General Spitzer said. "My office will continue to work with the State Insurance Department, law enforcement, and industry officials to bring these cases. While we are making progress, there is still an extraordinary amount of work yet to do." Under the State's no-fault auto insurance law, insurance carriers reimburse medical facilities for services provided to persons injured in motor vehicle accidents. It is alleged that the defendants submitted fraudulent claims to a no-fault insurance carrier for services never provided or for services that were not medically necessary. The charges stem from a long-term investigation of SZ Medical which began in Spring, 2003. According to the indictment, the defendants fraudulently billed an insurance carrier for months of treatment and extensive testing, including medical evaluations, diagnostics tests, physical therapy, chiropractic treatment and acupuncture. The indictment charges that fraudulent claims were submitted by three medical doctors, Sergey Zavilyansky, 48, of Brooklyn; Gary Friedman, 51, of Manhattan; and Lee Craig Nagourney, 52, of Brooklyn. Zavilyansky is the owner of SZ Medical. All three are charged with fabricating medical diagnoses and submitting claims for services not provided or not medically warranted. The indictment additionally charges the following defendants with fraudulent claim submissions: Stanley Frankel, 69, of Manhattan, a dentist; Michael Ferrato, 56, of Suffolk County, a psychologist; Juby Uralil, 26, of Queens County, a physical therapist; Joel Santos, 34, of Queens County, a physical therapist; Peter Pramberger, 51, of Suffolk County, a chiropractor; and Ji Yong Kim, 39, an acupuncturist. The indictment also charges that defendant Nelson Bloom, 57, of Brooklyn, a paralegal, held himself out as a licensed attorney and directed a no-fault patient to undergo medical tests and attend the clinic for several months, without regard to medical need, in an effort to increase the potential settlement of a bodily injury claim. Five corporations are also charged in the indictment: SZ Medical, P.C.; Almaz Medical Services, P.C., owned by physician-defendant Lee Craig Nagourney; Ferrato Psychological Services, P.C., owned by psychologist-defendant Michael Ferrato; Life Chiropractic P.C., owned by defendant Peter Pramberger; and Somun Acupuncture, P.C., owned by acupuncturist-defendant Ji Yong Kim. The defendants are facing charges of Insurance Fraud in the Third Degree, a D felony; Insurance Fraud in the Fourth Degree, an E felony; Falsifying Business Records in the First Degree, an E felony; Insurance Fraud in the Fifth Degree, an A misdemeanor, Attempted Grand Larceny in the Fourth Degree, an A misdemeanor; Practicing or Appearing as an Attorney-At-Law Without Being Admitted and Registered, an A misdemeanor; Conspiracy to Commit Grand Larceny in the Fourth Degree, an A misdemeanor; and Attempted Petit Larceny, a B misdemeanor. New York is aggressive in its fight against insurance fraud. To report suspected incidents of insurance fraud call 1-888-FRAUD-NY (1-888-372-8369). It should be noted that an arrest is merely an accusation and that a defendant is presumed innocent until proven guilty.

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