Regulatory and Litigation Update and New Model Applications

For more information about this blog post, please contact Khaled J. KleleLatoya Caprice Dawkins, or Ryan M. Magee.

New Jersey and Federal Regulatory Update

S3075 – Passed – This bill prohibits any person from conducting, maintaining, or operating an embryo storage facility in this state unless licensed by the Department of Health pursuant to the provisions of the bill.  Specifically, the bill requires the DOH to regulate and license embryo storage facilities.

84 FR 65718-01 – Proposed – In this proposed rule, the Department of Defense is suggesting to amend its methodology to its reimbursement of ambulatory surgery centers (ASC) and outpatient services provided in Cancer and Children's Hospitals (CCHs). Proposed revisions are in line with the TRICARE Statute that requires TRICARE's payment methods for institutional care to be determined, to the extent practicable, in the same manner that apply to payments to providers of services under Medicare. TRICARE proposes to adopt Medicare's payment methodology for ASC, and adopt Medicare's payment methodology for outpatient services provided in CCHs.


In Adcare Hospital v. Alex  M. Azar, II, Secretary of Health and Human Services, et al., more than 600 hospitals from around the country initiated a lawsuit against the Health and Human Services Department (HHS) in an effort to force the agency to end a Medicare pay cut that they say cost them approximately $124.4 million per year in 2018 and 2019.  The hospitals accuse HHS of exceeding Congressional directives on a program to recoup Medicare overpayments caused by a change in the Inpatient Prospective Payment System (“IPPS”).  Specifically, HHS reduced inpatient hospital reimbursements by 0.7% in 2018 and 2019, but the hospitals claim Congress only approved the cuts for 2014 through 2017 to recover $11 billion of overpayments dating back to 2008.   A copy of the lawsuit can be found here.

Model Applications

Primary Care First, Direct Contracting and Kidney Care Choices model applications are now open.  The PCF and Kidney Care Choices applications are due by January 22, 2020 and the applications for Direct Contracting are due by February 25, 2020.