Riker Danzig Health Care Update April 15, 2016
New Jersey State: Selected Proposed Legislation
- S. 1864 – Introduced – Provides for a philosophical exemption to mandatory immunizations.
- S. 1934 – Introduced – Places a freeze on future enrollment in tiered network health benefits plans until new legislation and regulations governing those plans are in effect.
- S. 1909 – Introduced – Requires persons and entities to report to DHS regarding their distribution or administration of opioid antidotes.
- S. 1940 – Introduced – Limits rescheduling, cancellation, and no-show fees providers of health care services may charge in certain instances.
- S.C.R. 89 – Introduced – Proposes an amendment to the Constitution to prohibit State or federal law or regulation from compelling a person to obtain, provide, or participate in health care coverage.
Federal: Selected Proposed Legislation
- S. 483 – Engrossed in Senate – This bill was passed by the Senate on March 17, 2016 and is meant to improve enforcement efforts related to prescription drug diversion and abuse.
- S. 2701 – Introduced – Requires that prior to a decision to suspend payments to Medicaid providers on allegations of fraud, the state agency must consider the impact on beneficiary access to care that the suspension would have.
- S. 2671/H.R. 4732 – Introduced – Amends Title XVIII of the Social Security Act to establish rules for payment for graduate medical education (GME) costs for hospitals that establish a new medical residency training program.
- H.R. 4805 – Introduced – Amends the Health Information Technology for Economic and Clinical Health (HITECH) Act to provide that information held by health care clearinghouses is subject to privacy protections that are equivalent to the protections that apply to information held by other types of covered entities under the HIPAA Privacy Rule.
- H.R. 4774 – Introduced – Amends Title XVIII of the Social Security Act to provide for the distribution of additional residency positions.
- H.R. 4861 – Introduced – Amends the Public Health Service Act to authorize grants to health centers to expand access to evidence-based substance abuse treatment services.
- H.R. 4848 – Introduced – Delays and suspends implementation of a comprehensive care for joint replacement (CJR) payment model for episode-based payment for lower extremity joint replacement (LEJR) under the Medicare program in a budget neutral manner.
Federal: Selected Proposed and Adopted Regulations
- 81 FR 15173-02 – Introduced – This proposed rule by the Food and Drug Administration proposes a ban on powdered surgeon’s gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon’s glove.
- 81 FR 17639-01 – Introduced – The purpose of this proposed rule is to expand access to medication-assisted treatment (MAT) by allowing eligible practitioners to request approval to treat up to 200 patients for opioid use disorder under section 303(g)(2) of the Controlled Substances Act.
- 81 FR 18390-01 – Adopted – This final rule addresses the application to Medicaid and CHIP of certain mental health parity requirements added to the Public Health Service Act by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.
- A California jury awarded Aetna Inc. over $37.4 million in damages capping four years of litigation related to a complex kickback scheme at a network of Northern California out-of-network surgical centers. Specifically, Aetna alleged that the out-of-network surgical centers were recruiting patients by offering waivers of co-pays and other fees and were charging allegedly excessive rates for procedures. For more information on the case, see, Aetna Life Insurance Co. v. Bay Area Surgical Management LLC et al., case number 1:12-cv-217943, in the Superior Court of California, County of Santa Clara.
- A California judge recently expressed his intention to approve, pending minor adjustments, Anthem Blue Cross’ more than $15 million dollar deal to settle four class actions claiming that the insurer misled hundreds of thousands of insureds about their coverage after the plans switched to Affordable Care Act compliant plans. For more on the case, see, Anthem Blue Cross Affordable Care Act Cases, case number JCCP4805, in the Superior Court of the State of California for the County of Los Angeles.
- A Florida Appeals Court recently ruled that a nursing home’s arbitration agreement with residents was unenforceable because of a cap placed on damages. For more information, see, Estate of Yetta Novosett v. Arc Villages IL LLC et al., case number 5D14-4385, in the Fifth District Court of Appeal of the State of Florida.
- The U.S. Supreme Court ruled that statistical sampling could be used to prove liability in employees’ class actions. For more information on the case, see, Tyson Foods Inc. v. Bouaphakeo et al., case number 14-1146, in the Supreme Court of the United States. This may convince lower courts to use such statistical sampling in False Claims Act cases, which, as we previously reported, is currently being decided in the U.S. ex rel Michaels et al. v. Agape Senior Community, Inc. et al., case numbers 15-2145 and 15-2147, in the U.S. Court of Appeals for the Fourth Circuit.
- Following up its prior decision that Aetna was not bound by the Texas Prompt Payment Act as an administrator of self-funded plans, the 5th Circuit decided not to rehear the case. The outcome means that the Texas hospitals involved will not be able to seek the more than $73 million in late payments they argue is owed to them by Aetna. For more information on the case, see, Aetna Life Insurance Co. v. Methodist Hospitals of Dallas et al., case number 15-10210, in the U.S. Court of Appeals for the Fifth Circuit.
- Respironics, Inc., a Pennsylvania-based Koninklijke Philips NV unit, will pay nearly $35 million to settle claims that it defrauded the government by providing free call center services to medical equipment suppliers that bought its sleep apnea masks in violation of the FCA. For more information, see, United States of America et al v. Philips Electronics North America et al., case number 2:14-cv-02077, in the U.S. District Court for the District of South Carolina.
- The U.S. Supreme Court ruled that the government had no right to freeze the “untainted assets” of a defendant who was accused of a $45 million Medicare fraud scheme. Therefore, to the extent the defendant's assets are untainted by the scheme, those assets are available to pay her attorneys. For more information on the case, see, Luis v. U.S., case number 14-419, in the Supreme Court of the United States.
- An Alabama federal judge tossed a jury verdict in favor of the Department of Justice against AseraCare. This case was originally bifurcated into two parts, one in which DOJ was to prove that the billing was objectively false and another in which the DOJ was to show AseraCare did so knowingly. The judge found that DOJ had failed to meet their burdens of proof by presenting merely one expert who did not agree with AseraCare’s diagnoses of terminal illness. For more information on the case, see, U.S. ex rel. Paradies et al. v. AseraCare Inc. et al., case number 2:12-cv-00245, in the U.S. District Court for the Northern District of Alabama.
- The final blow was dealt to a lawsuit brought by 186 hospitals against the U.S. Department of Health and Human Services in relation to a regulation that dealt with Medicare payment calculations for unusually expensive payments. The hospitals argued that they should have received more reimbursement from HHS, but the Court found that the Agency had sufficiently explained the sole remaining issue on turbocharging. For more information on this case, see, Banner Health et al. v. Burwell, case number 1:10-cv-01638, in the U.S. District Court for the District of Columbia.
- The U.S. Supreme Court rejected certiorari on a multiemployer trust’s bid to have the Court review whether ERISA can preempt state law breach of contract claims. Previously, the Ninth Circuit had held that the Oregon Teamster Employees Trust’s claims were preempted by ERISA. For more information on the case, see, Oregon Teamster Employers Trust v. Hillsboro Garbage Disposal Inc. et al., case number 15-929, in the Supreme Court of the United States.
In the News
- It was recently announced that Robert Wood Johnson University Health had finalized the terms of its merger with Barnabas Health, which has been an ongoing process since July 2015. The new nonprofit, RWJ Barnabas Health, will include 11 acute-care hospitals, 32,000 employees, in addition to 9,000 physicians, and over 1,000 residents and interns, which will make it the second-largest private employer in New Jersey behind Wakefern Food Corporation.
- Governor Christie proposed a two-year moratorium on property tax rates for previously exempt nonprofit hospitals, who are now facing a wave of litigation after last year’s Morristown Memorial Hospital tax court ruling, and the establishment of a commission to review the state’s property tax exemption law. This proposal comes after Governor Christie had pocket-vetoed a similar bill, S-3299, back in January.
- U.S. Citizenship and Immigration Services recently adopted a policy that extended the physician national interest waiver, which had been primarily used to bring primary care physicians in on visas, to allow medical specialists willing to practice in areas of need to receive visas as well.
- The CDC released new guidelines asking providers to limit and monitor patient access to prescription pain killers. The CDC cites the growing epidemic of overdoses in this country, which results in the death of more than 40 Americans each day, as the basis for the new proposed guidelines.
- The FDA proposed new research requirements on generic drug makers requiring them to develop opioid medications that are harder to abuse. This comes on the heels of the FDA’s Tuesday, March 22, 2016 announcement that it would require black box warnings on immediate-release opioids that highlight the risk of “misuse, abuse, addiction, overdose and death.”
- A $550 million dollar merger between RegionalCare Hospital Partners Inc. and Capella Healthcare, Inc. is expected to close, pending regulatory approval, in the second quarter of 2016. As the regional-based providers have reportedly no overlap between their respective markets, approval is expected.
- The California Department of Managed Health Care announced its approval of a merger between Medicaid insurer Centene Corp. and Health Net, Inc. Centene Corp.’s acquisition of Health Net, Inc. is reportedly valued at $6.8 billion.
- West Virginia Governor Earl Ray Tomblin officially signed into law a bill that exempts hospitals and providers under the state health care agency’s jurisdiction from antitrust scrutiny from the FTC.
- On March 21, 2016, federal regulators began much anticipated audits to gauge compliance of covered entities, i.e. health care providers, insurance plans, and clearinghouses, and business associates with the patient privacy provisions of HIPAA. Somewhere around 200 audits are planned.
- A New York law that requires physicians to issue prescriptions electronically went into effect on March 27, 2016. The hope is that this law will aid in the fight against opioid addiction by limiting the ability of addicts to forge paper prescriptions, which the State had viewed as a major source of abuse. The law also allows physicians to see if the patient has already been prescribed opioids by someone else to avoid “doctor-shopping”.
- CMS recently announced a new payment model for nursing facilities and practitioners in an effort to reduce avoidable hospitalizations among beneficiaries eligible for Medicare and/or Medicaid by providing new payments to practitioners for engagement in multidisciplinary care planning activities and to skilled nursing facilities for providing additional treatment for common medical conditions that often lead to avoidable hospitalizations. The new payment model will begin in fall 2016 and will be implemented through cooperative agreements with providers in 7 states (Alabama, Nevada, Colorado, Indiana, Missouri, New York and Pennsylvania).
The list above does not include every proposed or adopted legislation, litigation or guidance document that may impact the health care industry. Instead, it includes only a select few chosen by the authors, and any information in this Update is not intended to provide legal advice. If you are concerned that a proposed or adopted legislation, litigation or guidance document may impact your practice, then you should seek legal advice. Nothing in this Update should be relied upon as legal advice in any particular matter. © 2016 Riker Danzig Scherer Hyland & Perretti LLP.
If you have any questions about the issues discussed in this Update, please contact the following Riker Danzig attorneys:
Glenn A. Clark, Partner
Khaled John Klele, Partner
Stephen M. Turner, Associate