New Jersey Proposes New Statute on PBMs, CMS Expands Coverage for COVID-19 Testing and More

New Jersey’s Proposed Pharmacy Benefits Manager Licensure and Regulation Act

This bill, A5410, first introduced to the New Jersey Assembly on March 1, 2021, provides for the licensure of pharmacy benefits managers ("PBM"). Under the bill, the Commissioner of Banking and Insurance is to create the application for a license to operate in New Jersey as a PBM and establish the accompanying licensing, fees, application, financial standards, and reporting requirements of PBMs.

New Jersey and Federal Legislation and Regulatory Update

New Jersey recently approved several statutes that reinstated the tax exemption for non-profit hospitals, with some caveats, and changed the standard for trauma care. On the federal side, several federal courts enjoined the “most favored nation” payment model rule and The Department of Health and Human Services (“HHS”) issued a notification of enforcement discretion relaxing HIPAA when it comes to arranging for COVID-19 vaccination appointments.

Proposed Changes to New Jersey’s Out-of-Network Transparency Act

A bill, S3458, is currently being proposed in the State Senate. This proposed statute amends the arbitration provisions of the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act. Besides increasing the time frames for when parties can attempt to reach a settlement before initiating arbitration, the proposed statute eliminates the requirement that the final offers submitted by the insurer and provider be more than $1,000 apart.

New Opioid and COVID-19 Reporting Developments

New Proposed Rules Limit Prescribing, Administering, or Dispensing Controlled Dangerous Substances

The New Jersey State Board of Dentistry, New Jersey Board of Nursing, and New Jersey State Board of Optometrists (collectively, the “Boards”) each released a proposed rule aimed at addressing New Jersey’s ongoing opioid epidemic and further increasing the public availability of the overdose‑reversal drug, naloxone. 

Vicarious Liability Claims and Affidavits of Merit

In Haviland v. Lourdes Med. Ctr. of Burlington County, Inc., the Appellate Division addressed, in a matter of first impression, whether an Affidavit of Merit (“AOM”) is required for vicarious liability claims against a licensed facility for the alleged negligence of an employee, where the Affidavit of Merit Statute (the “Statute”), N.J.S.A. 2A:53A-26-29, applies to the licensed facility, but not the employee.  

Regulatory Update, Including Changes to HIPAA and Opioid Treatment

HHS Proposes Changes to HIPAA/HITECH Privacy Rule

The United States Department of Health and Human Services (“HHS”) issued its Notice of Proposed Rule Making (“Proposed Rule”) to modify the Standards for the Privacy of Individually Identifiable Health Information (“Privacy Rule”) under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH Act”). 

Federal Update, Including a New HIPAA Safe Harbor

HIPAA Safe Harbor Bill Becomes Law, Providing Protections to Entities That Have Taken Appropriate Safeguards 

On January 5, 2021, H.R. 7898 became law. The law benefits covered entities and business associates that are subject to the Health and Human Services ("HHS") investigations as a result of a security incident but have taken steps to document their compliance with the HIPAA Security Rule and other standardized security practices.

NJ Proposes Changes to Office-Based Surgery and Other Regulations

NJ Board of Medical Examiners Proposes to Substantially Change Regulation Governing Surgery in the Office Setting

The New Jersey Board of Medical Examiners (“BME”) has proposed a new rule that replaces the phrase “minor surgery” with “minor procedure” and further expands the definition of “special procedure.”  The purpose of these changes is to remove restrictions relating to where and by whom abortion care may be provided, and regulates abortions like other office-based surgical and special procedures.   By making these changes, however, the proposed rule expands who and where minor procedures may be performed. 

Five Recent OIG and HHS Advisory Opinions

The Office of Inspector General (“OIG”) issued four advisory opinions at the end of 2020 addressing gift cards and paying for expenses, among other issues. With regard to all of these requests, the OIG analyzed whether the proposed arrangements in these requests would constitute grounds for the imposition of sanctions under the Social Security Act (the “Act”) and the federal anti‑kickback statute (the “Anti-Kickback Statute”).