CMS Clarifies Subsidiaries and Group Practices Under Stark Law

Centers for Medicare and Medicaid Services (“CMS”) issued an Advisory Opinion clarifying the ability for wholly-owned subsidiary physician practices to meet the Group Practice requirement of the In-Office Ancillary Services Exception under the federal Stark Law. The Stark Law is a federal law that prohibits individuals from making referrals for certain designated health services ("DHS") payable by federal healthcare programs to entities in which they, or an immediate family member, possess a financial interest unless a statutory exception is met, such as the Group Practice exception.

Hospitals Lose Outlier Payment and S-10 Audit Litigations

In this case, eight years ago, a number of acute-care hospitals sued the Department of Health and Human Services (“HHS”), challenging the amount of so-called Medicare “outlier” payments they had received from the HHS for the years 2008-2011. Generally speaking, outlier payments are intended to protect health care facilities from unexpected losses by providing Medicare reimbursements in instances of rare and costly treatments. 

New Jersey's DOH Adopts Registration Rules for Telehealth and Telemedicine Organizations

New Jersey’s Department of Health (“DOH”) adopted new rules, 53 N.J.R. 1378(b), effective August 16, 2021, outlining registration standards for telehealth and telemedicine organizations, including submission of an annual registration form to the DOH with a $1,500 fee. These rules were issued pursuant to N.J.S.A. 45:1-64. The rules apply only to organizations that are organized for the primary purpose of administering services in the furtherance of telehealth or telemedicine.

CMS Delays Transparency Rules for Health Insurers

On August 20, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released guidance with respect to the timeline for implementation and enforcement of the new insurance price transparency rule. Citing the number of provisions that insurers are required to “implement by January 1, 2022 and the considerable time and effort required to make the machine-readable files available in the form and manner required in the TiC Final Rules at the same time,” the Departments of Labor, Health and Human Services, and the Treasury have decided to defer enforcement of the Transparency in Coverage (“TiC”) Final Rules requirement to publish the remaining machine-readable files until July 1, 2022. 

Proposed and Final Federal Payment Rules

CMS Releases Proposed Payment Rules

86 FR 35874: Under the 2022 Home Health Prospective Payment System proposed rule, Centers for Medicare & Medicaid Services (“CMS”) would increase payments to home health agencies by 1.8 percent, which CMS estimates to be $330 million.  However, CMS noted that home health agencies may see an aggregate 0.1 percent, or $20 million, decrease in payments due to the reductions made in the rural add­‑on payment.  CMS also proposed a nationwide expansion of the Home Health Value‑Based Purchasing model, which was originally implemented in nine states on January 1, 2016.

Federal Regulation Update: CMS Seeks to Yank Most Favored Nation Model

86 FR 43618: This proposed rule rescinds the Most Favored Nation (“MFN”) Model – a drug pricing model that matches payments for Medicare Part B drugs and biologicals to the lowest price paid by other comparable countries. The MFN was intended as an innovative way to lower prescription drug costs, reduce Medicare reimbursement rates to healthcare facilities, and open negotiations to discounts with drug manufacturers.

Recent New Jersey Rule Adoptions

Adopted Telemedicine Rules

The below rules were adopted to establish the standards for providing services through telemedicine and telehealth for the following licensees:

  • 53 N.J.R. 1283(a)licensees of the State Board of Marriage and Family Therapy Examiners
  • 53 N.J.R. 1285(a)licensees of the Professional Counselor Committee of the State Board of Marriage and Family Therapy Examiners
  • 53 N.J.R. 1288(a)physician assistants licensed by the State Board of Medical Examiners (the “BME”)
  • 53 N.J.R. 1290(a)electrologists licensed by the Electrologists Advisory Committee and the BME

What Does the Presidential Executive Order on Non-Competes and Consolidation Really Mean, if Anything?

On July 9, 2021, President Biden signed an Executive Order on Promoting Competition in the American Economy (“Executive Order”) intended to increase competition across numerous industries, including health care, by reigning in trends of corporate consolidation and non-compete agreements.   The Executive Order garnered a significant amount of media attention, especially media outlets focused on health care, since there has been a significant amount of consolidation in healthcare in recent years. 

Once Again, CMS Retracts Major Policy Decision

CMS Continues to Reverse Some Policy Decisions With Its Release of the Outpatient Prospective Payment System Proposed Rule

Centers for Medicare & Medicaid Services (“CMS”) released its Outpatient Prospective Payment System (“OPPS”) proposed rule for 2022, which reverses some of last year’s major policy changes that were applauded by ambulatory surgery centers (“ASCs”). Significantly, CMS proposes reinstatement of the inpatient‑only (“IPO”) list. Under the proposed rule, the 298 services removed from the IPO list this year would be added back to the IPO list in 2022. CMS also proposes eliminating the 258 procedures added to the ASC covered procedures list in January 2021.

Fifteen New Statutes in New Jersey Impacting Healthcare

As a follow-up to our previous post, below is a list of fifteen New Jersey Statutes that either have been approved by the Governor or await the Governor’s approval.

New Jersey Approves Hospital Wrap-Around Services    

S1676: As noted in our previous update, Governor Murphy previously issued a conditional veto of this bill, which allows hospitals to provide wrap-around services for individuals who are homeless or housing insecure. After factoring in the Governor’s comments, the bill has now been approved.