Healthcare Law

New Jersey State: Selected Proposed and Adopted Legislation  

• A.B. 4843 – Introduced – Requires certain nurses to complete continuing education courses regarding issues related to prescription opioids.
• A.B. 4831 – Introduced – Makes reforms to mental health treatment, specifically by making adjustments to the definition of “in need of involuntary commitment,” among other things, that dictate how healthcare professionals are to respond to certain treatment scenarios.
• A.B. 647/S. 1183 – Amended/Substituted – This bill introduced in January of 2014, which reduces the ratio of nurses to patients in hospitals and ASCs, passed committee.
• A.B. 3314/S. 1232– Amended/Substituted - Establishes Office of State Dental Director and New Jersey Oral Health Commission.
• S. 854 – Adopted – Requires that certain healthcare facilities be generator ready and allows healthcare facilities to qualify for NJEDA loans for the cost of the generators.
• A.B. 3421 – Adopted – Revises the “Self-Funded Multiple Employer Welfare Arrangement Regulation Act."  This will allow new types of “MEWA” plans to be created for employers in a field that previously had been fairly restrictive.  Due to the complexity of the law there are only three registered MEWAs in the state, so this legislation hopes to expand the health insurance options for small and mid-size businesses.

Federal: Selected Proposed Legislation

• S. 2368 – Placed on Calendar – The “Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 2015” provides, among other things, increased resources for the Office of Medicare Hearings and Appeals, establishes magistrate review of appeal decisions, and expedites access to appeals of Medicare payment disputes.
• H.R. 4155/S. 2343 – Introduced – Requires CMS to test the effect of including telehealth services in Medicare healthcare delivery reform models.
• S. 2354 – Introduced – Would amend the Internal Revenue Code of 1986 to provide a tax credit to employers who provide paid family and medical leave.
• H.R. 4185 – Introduced – Makes adjustments, including amending Title XVIII of the Social Security Act, relating to the competitive bidding program for durable medical equipment under the Medicare program.
• S. 2364 – Introduced – Permits occupational therapists to conduct the initial assessment visit under a Medicare home health plan of care for certain rehabilitation cases.

Federal: Selected Proposed Regulation

• 80 FR 75488-01 – (Dec. 2, 2015) This proposed rule sets forth payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs for federally-facilitated Exchanges.  It also provides additional standards for the annual open enrollment period for the individual market for the 2017 benefit year, essential health benefits, cost-sharing requirements, qualified health plans and network adequacy, among others.

State Litigation

• The New Jersey hospitals challenging a state law allowing elite trauma care centers to exclusively take over paramedic services in their host towns said that there was "no rational distinction” between the favored centers and the less comprehensive facilities when it comes to effective ambulance operations.  Ultimately, the Trial Court agreed and invalidated the law on December 22, 2015.  Since then, an emergent appeal has been made by the State to revive the law, resulting in a stay of the Trial Court’s decision. Virtua has since challenged the stay.  For more information on this case, see, Virtua Health Inc. and Capital Health System Inc. v. State of New Jersey and Christopher J. Christie, case number L-1720-15, in the Superior Court of New Jersey in Mercer County.

Federal Litigation

• Vermont has pushed the Supreme Court to overturn a ruling for Liberty Mutual Insurance Co. finding that ERISA preempts the state’s law requiring self-insured employee health plans to report claims data to the state.  On December 2, 2015, during oral argument, the Supreme Court Justices expressed skepticism over the position taken by Vermont, fearing that Vermont’s position could lead to 50 different regulations in 50 different states.  For more information, see, Gobeille v. Liberty Mutual Insurance Co., case number 14-181, in the Supreme Court of the United States.
• St. Luke’s Health System Ltd. has struck a deal with the Federal Trade Commission laying out the process for divesting itself of Saltzer Medical Group after the Ninth Circuit ruled that the Idaho hospital system violated antitrust laws.  For more information, see, St. Alphonsus Medical Center-Nampa et al. v. St. Luke's Health System Ltd., case number 1:12-cv-00560, in the U.S. District Court for the District of Idaho.
• The Federal Trade Commission announced that it will move to stop the merger of Penn State Hershey Medical Center and PinnacleHealth System in Pennsylvania district court, saying the merger would harm healthcare competition in the region.  The FTC claims that the combined hospitals would dominate general acute care inpatient hospital services in Pennsylvania's Dauphin, Cumberland, Perry and Lebanon counties, controlling 64 percent of the market for 500,000 residents.  The Pennsylvania Attorney General has joined the FTC’s fight to block the merger.  For more information, see, Federal Trade Commission et al v. Penn State Hershey Medical Center et al, case number 1:15-cv-02362, in the U.S. District Court for the Middle District of Pennsylvania.
• Almost every federal circuit court has weighed in on the implied false certification doctrine. In the First, Fourth, and D.C. Circuits, a violation of a contract, statute, or regulation that can be viewed as a prerequisite to payment will give rise to liability under the False Claims Act as a “knowing and material” violation.  By contrast the Second, Third, Sixth, Ninth, Tenth and Eleventh Circuits apply a narrower view of the doctrine, rejecting liability unless compliance with the contract, statute, or regulation is an express prerequisite to payment.  As of now, the Supreme Court has agreed to decide if companies billing the federal government can face False Claims Act liability under the implied false certification doctrine.  For more information, see,  Universal Health Services v. Escobar, case number 15-7, in the Supreme Court of the United States.
• Millennium filed a Chapter 11 petition in Delaware bankruptcy court on Nov. 10, as part of a prenegotiated deal with lenders to help the medical testing company pay off a $200 million False Claims Act deal with DOJ over lab tests billed to Medicare.  See In re: Millennium Lab Holdings II LLC et al., case number 15-12284, in the U.S. Bankruptcy Court for the District of Delaware.  Millennium pushed Dec. 9 for a “do-or-die” confirmation of its $1.8 billion prepackaged bankruptcy plan in a Delaware courtroom.  As of Dec. 18, 2015, all challenges to the plan have been rejected and attempts to take interlocutory appeals were denied.   For more information, see, In re Millennium Lab Holdings II LLC, case number 15-12284, in the U.S. Bankruptcy Court for the District of Delaware.

In the News

• Shareholders of Anthem Inc. and Cigna Corp. overwhelmingly approved a previously announced $54 billion merger that will cover approximately 53 million medical members, although the consolidation still has to pass scrutiny by antitrust regulators.  The transaction is expected to close in the second half of 2016, pending the approval by the relevant government agencies.
• California’s attorney general on Dec. 17 granted conditional approval of the sale of Daughters of Charity Health System to Integrity healthcare LLC and certain funds managed by BlueMountain for a reported $260 million.

The list above does not include every proposed or adopted legislation, litigation or guidance document that may impact the healthcare 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.