Riker Danzig Health Care Update January 25, 2016
New Jersey State: Selected Proposed and Adopted Legislation
- A. 4903/S. 3299 – Vetoed – On January 19, 2016, this bill was pocket-vetoed by the Governor. It passed both the State Senate and Assembly and would have maintained a property tax exemption for certain nonprofit hospitals with on-site for-profit medical providers and would have required them to pay community contributions to host municipalities.
- A. 4922 – Introduced – Places moratorium on implementation of certain tiered network health plans until January 1, 2017.
- A. 4916/S. 3286 – Introduced – Establishes certain standards for health plans with tiered network.
- A. 4905/S. 3287 – Introduced – Requires carriers to disclose selection standards for placement of health care providers in tiered health plan network.
- A. 4908 – Introduced – Establishes the “New Jersey Task Force on Tiered Health Insurance Networks”.
- A. 4907 – Introduced – Requires health insurance carriers offering tiered network health plans to protect covered persons from excess cost sharing.
- A. 4904 – Introduced – Establishes certain network adequacy and standard application requirements for tiered plans including hospital diversity.
- A. 3700/S. 2375 – Amended/Substituted – Provides for licensure of ambulatory care facilities to provide integrated primary care services including behavioral health care.
- A. 4341 – Amended/Substituted - Requires development and maintenance of data dashboard report to advise of open bed availability in residential facilities providing behavioral health services.
- A. 3717 – Amended/Substituted – Increases Medicaid reimbursement rates for certain evidence-based behavioral health services – designated as the Mental Health Access Act.
- A. 3228/S. 2499 – Amended/Substituted – Requires sober living homes and other substance abuse aftercare treatment facilities to provide certain notifications to next-of-kin when patient is released from care – designated as “Nick Rohdes' Law”.
- P.L. 2015, c. 224 – Adopted – Revises requirements for licensure and creates physician-delegated scope of practice for physician assistants.
- 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 urgent medical care without parental consent.
- 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. 187 – Adopted – Clarifies that Alzheimer’s disease and related disorders may be listed as secondary cause of death on death certificate when appropriate.
New Jersey State: Selected Proposed and Adopted Regulations
- 47 N.J.R. 3033(a) – Adopted – Makes amendments to N.J.A.C. 11:21 by amending Appendix Exhibits F, G, W, Y, HH, and II as they relate to standard plans under the Small Employer Health Benefits Program.
- 47 N.J.R. 3046(a) – Adopted – Makes amendments to N.J.A.C. 13:39A in a number of ways, most notably with regard to licensing requirements for a physical therapist and assistants.
- 47 N.J.R. 3048(a) – Adopted – Makes amendments to N.J.A.C. 13:39A-3.1 and 3.2 as it relates to the keeping of patient records and the permissibility of the use of personal or other computers to prepare patient records.
Federal: Selected Proposed and Adopted Legislation
- H.R. 4234 – Introduced - Establishes a grant program to facilitate physicians going back to school to become primary physicians to address a growing shortage of such physicians.
- H.R. 4277 – Introduced – Amends Title XVIII of the Social Security Act to classify clinical psychologists as physicians so they can provide services under the Medicare program.
- S. 2432 – Introduced – Amends the Public Health Service Act to require the disclosure of the portion of health insurance premiums attributable to the health insurance tax for policies sold under the Affordable Care Act.
- P.L. 114-74 – Adopted – The Bipartisan Budget Act of 2015, which, among other things, prohibits off-campus hospital outpatient departments created after November 2, 2015 from collecting Medicare reimbursement for non-emergency services under the outpatient prospective payment system starting on January 1, 2017.
Federal: Selected Proposed and Adopted Regulation
- 80 FR 81674-01 – Adopted – Amending 42 C.F.R. 405 and 412, this regulation establishes an authorization program for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), items that are alleged to be frequently subject to unnecessary utilization. This rule also defines unnecessary utilization and creates a new requirement that claims have a prior authorization decision as a condition of payment.
- On December 18, 2015, the judge in the OMNIA litigation agreed with several of the hospitals that Horizon should provide more information on the standards Horizon used to place hospitals into different tiers. For more information on this case, see, Capital Health System Inc. et al. v. Horizon Healthcare Services Inc. in the Superior Court of the State of New Jersey, Chancery Division, County of Bergen.
- On January 20, 2016, the Supreme Court issued an important decision on ERISA. Specifically, in an 8-1 ruling, the Court found that a retirement plan cannot sue under ERISA for reimbursement of medical expenses from a third-party settlement that a plan participant has already spent. In other words, the Justices ruled that “when a participant dissipates the whole settlement on nontraceable items, the fiduciary cannot bring a suit to attach the participant’s general assets under ERISA because the suit is not one for appropriate equitable relief.” For more information on the case, see, Robert Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, case number 14-723, in the Supreme Court of the United States.
- The Northern District of California ruled that ERISA preempts state law claims arising out of Anthem’s data breach in Smilow et al. v. Anthem Life & Disability Insurance Co., et al., No. 15-MD-02617-LHK (N.D. Cal. Nov. 24, 2015) (consolidated as In re Anthem Inc. Data Breach Litigation). In reaching its conclusion, the District Court found that the insurers and plan administrators did not have an independent legal duty to protect the plaintiffs’ privacy under state privacy laws.
- On Dec. 18, 2015, the FTC moved for an injunction to halt the merger of two Chicago-area hospitals, Advocate Health Care Network and NorthShore Community HealthSystem. No case number is available at this time, but it has been filed in the Northern District of Illinois.
- A class of Blue Shield of California customers challenged the insurer’s policy of refusing coverage for a lumbar artificial disc replacement using an FDA-approved medical device under an exclusion for investigational procedures since the government approved the procedure nearly a decade ago. For more information on the case, see, Luis Escalante v. California Physicians’ Service, case number 2:14-cv-03021, in the U.S. District Court for the Central District of California.
- On January 4, 2016, a federal judge in Wisconsin ruled against the EEOC in finding that an ADA provision allows employers to require employees to undergo medical exams as part of wellness programs that are tied to voluntary company-subsidized health insurance. Specifically, the judge found that, because the employees were not at risk of losing their jobs if they did not sign up for the insurance or participate in the program, the ADA’s “safe-harbor” provisions sheltered the company’s actions. For more information on this case, see, Equal Employment Opportunity Commission v. Flambeau Inc., case number 3:14-cv-00638, in the U.S. District Court for the Western District of Wisconsin.
- On January 5, 2016, Rite Aid investors seeking to halt their company’s $17.2 billion merger with Walgreens hit a setback when a Delaware chancery judge declined to fast-track their lawsuit. For more information, see, In Re: Rite Aid Corp. Stockholders Litigation, case number 11663, in the Delaware Court of Chancery.
In the News
- Effective April 1, 2016, acute care hospitals located in 67 geographic areas, as defined in 80 FR 73274-01, which was detailed in our December newsletter, will be subject to the new mandatory payment model for lower extremity joint replacement (LEJR) services. Under the new Comprehensive Care for Joint Replacement (CJR) payment model, the U.S. Department of Health and Human Services places the participating hospitals at risk for the quality and cost of care related to LEJR. The CJR is the first mandatory payment model that makes the hospital responsible for cost and quality of care that may be provided by other healthcare providers entirely outside the control of the hospital itself.
- New Jersey employers of all sizes would have to provide paid sick leave to workers, under recent legislation that the State Senate approved on December 17, 2015, but is still under debate in the Assembly, despite concerns that the requirements could make New Jersey less competitive. Senate Bill 785 would allow workers to accrue one hour of paid sick leave for every 30 hours on the job. Employers with fewer than 10 employees would have to allow up to 40 hours of earned sick leave, and employers with larger workforces would have to allow up to 72 hours.
- On January 6, 2016, the health insurance industry’s lobbying group, America’s Health Insurance Plans (AHIP), lost another member when Aetna Inc. announced that it would not renew its membership for 2016. This comes in the wake of UnitedHealth’s, the largest health insurer in the country, departure from the group in June of 2015.
- On January 7, 2016, the NJ Senate Health Committee Chairman announced that the State’s Prescription Monitoring Program (NJPMP), which is an electronic database that collects prescription data of Controlled Dangerous Substances dispensed in outpatient settings in New Jersey in an effort to identify individuals who are doctor-shopping for opiates and prescribers, is now receiving data from three more states, Rhode Island, Virginia and Minnesota. The hope is that all of this information will cut down the growing problem of heroin addiction and opiate abuse.
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