Riker Danzig Health Care Update July 18, 2016
New Jersey State: Selected Proposed Legislation
- A. 1952 – Advanced – This bill, which requires providers to give advance notice of out-of-network health care charges, was advanced out of committee by the NJ State Assembly.
- A. 3831 – Introduced – Requires electronic health records systems to meet requirements to accept, process, and transmit prescriptions for Schedule II controlled dangerous substance.
- A. 3872 – Introduced – Requires preliminary finding of liability for professional malpractice by panel of three experts appointed by licensing authority prior to institution of action.
- A. 3905 – Introduced – With regard to SHBP/SEHBP, sets level for health care benefits; requires employee contributions; prohibits reimbursement of Medicare Part B; requires retirees to purchase health care through exchanges.
- A. 3877/S. 2319 – Introduced – Establishes guidelines for termination of patient-health care professional relationship.
- S. 296 – Advanced – This bill, one of three bills proposed to regulate multi-tier insurance plans, such as Horizon’s OMNIA, recently passed out of the Senate Commerce Committee. If passed it would require insurance companies to explain the differences in cost between different tiers on their website. It also requires these costs to be reasonable.
- S. 2317 – Introduced – Establishes performance and training standards for certain Medicaid transportation services and requires DHS to report compliance with standards.
New Jersey State: Selected Proposed Regulation
- 48 N.J.R. 878(a) – Proposed – Amends and creates new regulations regarding N.J.A.C. 8:43D, which provides Standards for Licensure of Pediatric Community Transitional Homes.
Federal: Selected Proposed Legislation
- H.R. 5396 – Introduced – Amends Title XVIII of the Social Security Act to provide for coverage of dental, vision, and hearing care under the Medicare program.
- H.R. 5497 – Introduced – Amends the Public Health Service Act to provide for the public disclosure of charges for certain hospital and ambulatory surgical center treatment episodes.
Federal: Selected Proposed and Adopted Regulations
- 81 FR 39448-01 – Proposed – This proposed rule would update the requirements that hospitals and critical access hospitals (CAHs) must meet to participate in the Medicare and Medicaid programs.
- 81 FR 37950-01 – Adopted – Under the Medicare Shared Savings Program, providers of services and suppliers that participate in an Accountable Care Organization (ACO) continue to receive traditional Medicare fee-for-service payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements.
- 81 FR 40518-01 – Adopted – These final regulations provide guidance to Blue Cross and Blue Shield organizations, and certain other organizations, on computing and applying the medical loss ratio and the consequences for not meeting the medical loss ratio threshold.
- 81 FR 41036-01 – Adopted – This final rule implements the requirements of section 216 of the Protecting Access to Medicare Act of 2014 (PAMA), which significantly revises the Medicare payment system for clinical diagnostic laboratory tests. These rules will go into effect on January 1, 2018.
- The New Jersey Appellate Division recently ruled in a case involving a dispute between Aetna and a New Jersey emergency room physician. The Appellate Division found that Aetna’s claim of “excessive fees” is not grounds for a claim of insurance fraud, but rather a fee dispute. Further, the Appellate Division found that, as the physician was an out-of-network provider and had rendered services to Aetna patients expecting to be paid, Aetna had been unjustly enriched and had to pay him at the rates he set for his services. For more information on the case, see, A-2035-14T2 in the Appellate Division.
- An Ohio Co-Op, InHealth Mutual, joined the ranks of failed ACA nonprofits recently when an Ohio state judge ordered its liquidation. For more information, see, Mary Taylor, Superintendent of Insurance v. Coordinated Health Mutual Inc., case number 16CVH-5048, in the Court of Common Pleas, Franklin County, Ohio.
- A Texas federal judge recently found health insurer Cigna liable for more than $13 million owed to a physician-owned hospital. The Court found that the insurer breached the terms of its benefits plans by refusing to cover out-of-network health care services provided by the facility. For more information on the case, see, Connecticut General Life Insurance Co. et al. v. Humble Surgical Hospital LLC, suit number 4:13-cv-03291, in the U.S. District Court for the Southern District of Texas.
- Blue Cross and Blue Shield of North Carolina recently sued the Department of Health and Human Services over claims that the federal government has only reimbursed them for roughly $18 of the $147 million in costs they have incurred under the Affordable Care Act’s Qualified Health Plan program. For more information on the case, see, Blue Cross and Blue Shield of North Carolina v. USA, case number 1:16-cv-00651, in the United States Court of Federal Claims.
- The Department of Justice and North Carolina recently sued Carolinas HealthCare System over “patient steering.” Specifically, the complaint alleges that Carolinas HealthCare System has used its market share power in the Charlotte area to prevent large health insurers like Aetna and Cigna from sending patients to lower-cost hospitals. For more information on the case, see, United States of America et al. v. The Charlotte-Mecklenburg Hospital Authority, case number 3:16-cv-00311, in the U.S. District Court for the Western District of North Carolina.
- The Third Circuit recently ruled not to reconsider its May decision dismissing a group of Cigna-administered health plan subscribers' claims that the insurer schemed with database runner Ingenix Inc. to reduce employer-sponsored health benefits by using manipulated data. For more information on the cases, see, Darlery Franco et al. v. Connecticut General Life Insurance Co. et al., case numbers 14-3395 and 14-3396, in the U.S. Court of Appeals for the Third Circuit.
- The FTC and State of Illinois recently were successful in obtaining a stay of the merger of Advocate Health Care and NorthShore University HealthSystem, while the FTC and State of Illinois appealed the district court’s decision not to enjoin the merger for antitrust concerns. For more information on the case, see, Federal Trade Commission et al. v. Advocate Health Care et al., case number 1:15-cv-11473, in the U.S. District Court for the Northern District of Illinois. The appeal is number 16-2492 in the U.S. Court of Appeals for the Seventh Circuit.
- Recently an Arkansas hospice appealed to the Supreme Court to take up the Eighth Circuit’s ruling requiring the facility to continue caring for Medicare patients after the government has reached its annual reimbursement limit. Essentially, the provider is arguing that such a holding is an illegal taking of private property in violation of the Fifth Amendment. For more information on the case, see, Southeast Arkansas Hospice Inc. v. Sylvia Burwell, case number 15-1495, in the Supreme Court of the United States.
- The New York Court of Appeals recently ruled that Aetna cannot seek reimbursement from auto insurer Hanover Insurance Co. for payments it made to health care providers that treated a car crash victim. The Court of Appeals held that the state’s no-fault law does not allow a health insurer to pursue such a claim, because a health insurer does not fall under the definition of a “health care provider” to whom an insured can assign their benefits. For more information on the case, see, Aetna Health Plans v. Hanover Insurance Co., case number 97, in the New York Court of Appeals.
- Recently, a New Jersey federal judge preliminarily signed off on a $33 million class-action settlement between Horizon Blue Cross Blue Shield of New Jersey and a group of chiropractors who had claimed that the insurer had improperly denied benefit claims for chiropractic treatments in direct violation of ERISA. For more information on the case, see, DeMaria et al. v. Horizon Healthcare Services Inc., case number 2:11-cv-07298, in the U.S. District Court for the District of New Jersey.
- A recent suit was filed in Maryland federal court alleging that the so-called risk adjustment payments under the Affordable Care Act, designed to offset the costs of sicker consumers, have been improperly designed and disadvantage new health insurers. Specifically, the insurer, Evergreen Health Cooperative, argues that the risk adjustment methodology hasn’t accounted for partial-year enrollments that can understate the health risks posed by enrollees and hasn’t incorporated data on prescription drug usage to more accurately gauge enrollee health. For more information on the suit, see, Evergreen Health Cooperative Inc. v. U.S. Department of Health and Human Services et al., case number 16-cv-02039, in the U.S. District Court for the District of Maryland.
In the News
- Recently, CarePoint Health’s Bayonne Medical Center and Hoboken University Medical Center both ended their in-network agreements with New Jersey’s largest health insurer, Horizon Blue Cross Blue Shield of New Jersey. The decision comes largely on the heels of both hospitals’ classification as Tier 2 providers in Horizon’s controversial OMNIA plan.
- California’s Department of Managed Health Care recently announced its support for Aetna’s proposed $37 billion purchase of Humana. The approval is conditioned on Aetna’s promise to invest $49.5 million in California communities.
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
Stephen M. Turner, Associate