Riker Danzig Health Care Update February 19, 2016

Riker Danzig Health Care Update February 19, 2016
Riker Danzig Health Care Update February 19, 2016

New Jersey State: Selected Proposed and Adopted Legislation  

S. 3323 – Introduced – Restricts State and municipal government employee health plans to gold level and directs related savings to property tax relief.
S. 362/A. 1805 – Introduced – This bill will limit the settings in which certain cosmetic surgeries may be performed.  
S. 115 – Introduced – Requires managed care plans to allow any clinical laboratory to participate in provider network.
S. 178 – Introduced – Requires the Department of Health to license additional angioplasty facilities, with at least one facility in each county.
S. 291 – Introduced – Authorizes health care practitioners to provide health care services through telemedicine.
S. 635 – Introduced – Requires health insurance carriers to comply with certain network adequacy requirements.
A. 1560 – Introduced – Caps noneconomic damages in medical malpractice actions at $250,000.
A. 442 – Introduced – Establishes a cap on the amount that hospitals can charge patients for laboratory services to 150 percent of Medicare. 
A. 1558 – Introduced – “The New Jersey Healthcare Choice Act” permits health insurers licensed in other states to provide coverage in New Jersey under certain circumstances.
A. 1693 – Introduced – Requires DOBI to develop a system to require carriers to consult with health care providers on tiered network managed care plans.
S.R. 126 – Adopted – This Senate resolution urges hospitals to establish protocols for notifying next of kin when treating patients who lack decision-making capacity.
P.L. 2015, c. 187 – Adopted – Clarifies that Alzheimer’s disease and related disorders may be listed as secondary cause of death on death certificate when appropriate.
P.L. 2015, c. 216 – Adopted – Raises workers’ compensation fees for evaluating physicians.
P.L. 2015, c. 193 – Adopted – Establishes a process to integrate certain health data and other data from publicly supported programs for population health research.
P.L. 2015, c. 215 – Adopted – Permits administration of epinephrine auto-injector device by persons who complete an approved educational program.
P.L. 2015, c. 179 – Adopted – Regulates pharmacy benefits managers and requires certain disclosures concerning multiple source generic drug pricing.
P.L. 2015, c. 296 – Adopted – Allows dispensation of certain nutritional supplements by physician or podiatrists.
P.L. 2015, c. 293 – Adopted – Requires development and maintenance of a database to advise the public about open bed availability in residential substance use disorder treatment facilities.
P.L. 2015, c. 284 – Adopted – Requires sober living homes and other substance abuse aftercare treatment facilities to provide certain notifications to next-of-kin when patients are released from care; designated as “Nick Rohdes’ Law”.
P.L. 2015, c. 256 – Adopted – Provides that if a minor appears to have been sexually assaulted, health care professionals may authorize forensic sexual assault examination and medical care without parental consent.
P.L. 2015, c. 234 – Adopted – Requires Medicaid managed care organizations to meet certain conditions prior to reducing reimbursement rates for personal care assistant services and home-based supportive care services.
P.L. 2015, c. 245 – Adopted – Establishes requirements for training programs for homemaker-home health aides in care of patients with Alzheimer’s disease and related disorders.
P.L. 2015, c. 305 – Adopted – Prevents out-of-state hospitals from owning certain surgical practices and ambulatory care facilities licensed in this state.
P.L. 2015, c. 283 – Adopted – Provides for licensure of chiropractic assistants.
P.L. 2015, c. 224 – Adopted – Revises requirements for licensure and creates a physician-delegated scope of practice for physician assistants.

Federal: Selected Proposed Legislation

H.R. 4362 – Introduced – This bill amends the Social Security Act to replace the Medicaid program and the Children’s Health Insurance program with a block grant to the states, among other things.  

Federal: Selected Proposed and Adopted Regulation

81 FR 7654-01 – Adopted – This final rule eases the Affordable Care Act’s requirement that health care providers who identify Medicare overpayments report and return them within 60 days.  Specifically, the new rule limits the “lookback” period, i.e. the number of years one has to look back in time to find possible violations, to six years and allows for generally six months to investigate overpayments before the 60-day clock to report and return starts.  
81 FR 5824-01 – Introduced – This proposed rule under the Medicare Shared Savings Program is aimed at incentivizing ACOs to improve their performance.  It essentially modifies the methodology that is used to assess the performance of ACOs.

State Litigation

The New Jersey Supreme Court denied Virtua Health’s motion to vacate a stay regarding the EMS takeover law.  In essence, this means that the challenged law, which allows hospitals with top-tier trauma centers to exclusively take over ambulance services in their host towns, will remain in effect while the State’s appeal is under deliberation in the Appellate Division.  For more information on the case, see Virtua Health Inc. et al. v. New Jersey et al., case number L-1720-15, in the Superior Court of the State of New Jersey, County of Mercer.
The New Jersey Supreme Court held that a person can be convicted under New Jersey’s insurance fraud statute even if the insurer did not pay and was not duped into paying the fraudulently submitted claim. For more on this case, see State of New Jersey v. Robert Goodwin, case number 074352, in the New Jersey Supreme Court.
Horizon removed to Federal Court its suit against Valley Hospital Inc. and Holy Name Medical Center Inc. alleging that the hospitals engaged in a “smear campaign” to deter patients from enrolling in its OMNIA plan.  Since then, Valley and Holy Name dropped some of the statements that Horizon viewed as problematic  resulting in speculation that the matter might be resolved.  For more information on this suit, see Horizon Healthcare Systems Inc. v. Valley Health System et al., suit number 2:16-cv-00545, in the U.S. District Court for the District of New Jersey.
The New Jersey Supreme Court declined to review a September 2015 Appellate Division holding that a $2.5 million medical malpractice award granted against Atlantic Health Systems was subject to the $250,000 monetary limit of the Charitable Immunity Act, which insulates certain nonprofits from tort liability.  For more information, see Keith Kulper and Denise Kulper et. al. v. Jeanne Schwartz et. al., case numbers A-3512-12T2 and A-3536-12T2, in the New Jersey Appellate Division. 

Federal Litigation

More than 50 hospitals from Oregon to South Carolina joined the fight against CMS’s proposed “two-midnight."  The CMS rule, which anticipates an increase of 40,000 inpatient stays would be offset with a .2% cut in reimbursement rates, has come under fire.  For more information on the case, see Asante Rouge Valley Medical Center et al v. Sylvia Burwell, case number 1:16-cv-00032 in the U.S. District Court for the District of Columbia.
The Fourth Circuit upheld a lower court’s decision not to completely void an insurance policy after it was discovered that a doctor that had been added to the policy was an imposter.  The Circuit Court upheld the lower court’s decision to invalidate the policy only as to the offending “doctor,” leaving the rest of the policy intact.  For more information on this case, see Evanston Insurance Co. v. Agape Senior Primary Care Inc., case number 14-2268, in the U.S. Court of Appeals for the Fourth Circuit.

Selected Guidance Documents

On January 19, 2016, CMS announced that it would be stepping up its enforcement actions to block exploitation of unintended loopholes created by special enrollment periods in the Affordable Care Act’s health insurance marketplaces.  Specifically, CMS announced that it would be eliminating six unnecessary special enrollment periods and better defining others.  One of the reasons for this increased enforcement is that special enrollment period abuses have caused significant problems for insurers resulting in some insurers even jumping ship from coverage due to millions of dollars in losses.
On February 1, 2016, CMS announced an extension of six months on its already two-year ban on new home health providers and ambulance suppliers in areas that it viewed as hot beds for billing fraud.   The extension will block new home health providers from registering in Florida, Illinois, Michigan, and Texas and ambulance suppliers from registering in Houston and Philadelphia, along with nearby areas in New Jersey.

In the News

Two hospitals, which are subsidiaries of CarePoint Health, announced that they have severed their in-network agreement with New Jersey’s largest insurance company, Horizon Blue Cross Blue Shield of New Jersey.  The two hospitals both located in Hudson County are Bayonne Medical Center and Hoboken University Medical Center.  The termination of in-network benefits will not be effective until May 1, 2016 for Bayonne and June 2, 2016 for Hoboken.
Select Medical Holdings Corp reached a deal to buy fellow Pennsylvania outpatient physical rehabilitation provider Physiotherapy Associates Holdings, Inc. for $400 million in cash.  This will enhance Select’s portfolio  in the U.S. by adding over 500 more facilities nationwide.
CMS recently informed Cigna that it was stopping Medicare enrollees from joining the insurer’s plans after an audit of Cigna’s compliance with Medicare regulations found substantial noncompliance with certain policies.  

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