Riker Danzig Health Care Update June 17, 2016
New Jersey State: Selected Proposed Legislation
- S. 2164 – Introduced – Requires health benefits coverage of hearing aids for children 17 years of age and younger.
- S. 2222 – Introduced – Requires health insurance carriers to use standard explanation of benefits form.
- A. 3685 – Introduced – Requires Division of Mental Health and Addiction Services to facilitate establishment of four new recovery community centers.
- A. 3708 – Introduced – Requires health insurance carriers to provide notice of termination of coverage to covered persons in certain circumstances.
- A. 3743 – Introduced – Requires certain health benefits plans to provide coverage for behavioral health care services determined to be medically necessary, including 90 days per year of inpatient residential care.
New Jersey State: Selected Proposed Regulation
- S. 2858 – Introduced – Amends Part D of Title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate for lower prices for Medicare prescription drugs.
- H.R. 5088 – Introduced – The bill is largely aimed at perceived abuses of the in-office ancillary services exception, specifically perceived abuses by diagnostic imaging, anatomic pathology, radiology and physical therapy providers.
- H.R. 5195 – Introduced – Requires that health plans provide coverage for a minimum hospital stay for mastectomies, lumpectomies, and lymph node dissection for the treatment of breast cancer and coverage for secondary consultations.
- H.R. 5267 – Introduced – Amends Title XI of the Social Security Act to expand the permissive exclusion from federal health programs to include certain individuals with prior interest in sanctioned entities and entities affiliated with sanctioned entities and to provide a criminal penalty for the illegal distribution of Medicare, Medicaid, or CHIP beneficiary identification or provider numbers.
- H.R. 5284 – Introduced – Eliminates the individual and employer health coverage mandates under the Patient Protection and Affordable Care Act in an effort to expand beyond the ACA the choices in obtaining and financing affordable health insurance coverage.
Federal: Selected Proposed and Adopted Regulations
- 81 FR 33155-01 – Proposed – The Department of Veterans Affairs recently proposed amending its regulations to permit full practice authority to advanced practice registered nurses (APRNs) when they are acting within the scope of their VA employment. 81 FR 31376-01 – Adopted – Implements Section 1557 of the ACA, which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. This rule is intended to provide clarification on existing nondiscrimination requirements and new standards with respect to the prohibition of discrimination.
- 81 FR 31143-01 – Adopted – This EEOC final rule amends the regulations in GINA as they relate to employer-sponsored wellness programs. Specifically, this rule addresses the extent to which an employer may offer an inducement to an employee for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a health risk assessment administered in connection with an employer-sponsored wellness program.
- 81 FR 31126-01 – Adopted – This EEOC final rule amends the regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act to provide guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to divulge disability-related information and/or undergo medical examinations.
- The New Jersey Appellate Division recently dismissed eight New Jersey hospitals’ challenges to a state requirement to provide charity care on the grounds that the care’s subsidies are insufficient. The claims were tossed for largely jurisdictional reasons with the court finding that the complaints should have been raised at the trial court level and/or that the parties should have waited for the Health Commissioner to make a final decision, which would have granted the Appellate Division jurisdiction. For more information on the cases, see, In the Matter of Englewood Medical Center’s SFY 2014 Charity Care Subsidy Appeal, matter number A-1555-13T2 and the other related cases.
- The New Jersey Appellate Division granted summary judgment in favor of Robert Wood Johnson University Hospital against a claim by plaintiff that Robert Wood Johnson imposed a billing protocol on the plaintiff based on national origin as opposed to a response to complaints by patients of excessive billing practices by plaintiff. For more information on the case, see, Patel v. Robert Wood Johnson University Hosp., matter number A-0294-14T4, in the Appellate Division.
- The United States Supreme Court on June 16, 2016 kept alive a controversial theory of FCA liability, the so-called “implied certification” theory, which holds that companies implicitly certify compliance with regulations when seeking payment from the government and may commit fraud if they are actually out of compliance. While the Justices backed the theory that violated regulations do not have to be explicit conditions of payments to trigger liability, they did vacate the First Circuit’s decision on what they viewed to be an overbroad reading of the materiality requirement for FCA violations. For more information on the decision, see, Universal Health Services Inc. v. U.S. et al. ex rel. Escobar et al., case number 15-7, in the Supreme Court of the United States.
- In a recent FCA suit, an Illinois federal judge ruled that an employee who brought FCA violations to the government’s attention cannot be sued for handing over confidential information to regulators and attorneys in the process. For more information on the case, see, United States of America v. LifeWatch Services Inc., case number 1:13-cv-04052, in the U.S. District Court for the Northern District of Illinois.
- A Pennsylvania federal district court judge had ruled in early May that the FTC and State of Pennsylvania could not put the merger of Penn State Hershey Medical Center and PinnacleHealth System on hold for an administrative challenge. However, the Third Circuit recently ruled to temporarily bar the pending merger while the court hears an appeal of that decision. For more information on the case, see, Federal Trade Commission et al. v. Penn State Hershey Medical Center et al., case number 16-2365, in the U.S. Court of Appeals for the Third Circuit.
- The pharmaceutical company Eisai recently asked the Third Circuit to revive their antitrust suit against another pharmaceutical company, Sanofi. The Third Circuit, however, rejected Eisai’s argument on June 9, 2016, saying that it was not convinced that allowing Sanofi to enter arrangements with hospitals that would exclude competition for the drug would be harmful to consumers. For more information on the case, see, Eisai Inc. v. Sanofi-Aventis U.S. LLC et al., case number 14-2017, in the U.S. Court of Appeals for the Third Circuit.
- The California Supreme Court recently ruled that health care providers could not be held liable for neglect under California’s elder abuse laws if they are not the ongoing caretaker of the harmed individual. This decision reverses an appellate court decision that had found that neglect did not require a custodial relationship. For more information on the case, see, Kathleen A. Winn et al., v. Pioneer Medical Group Inc. et al., case number S211793, in the Supreme Court of California.
- A recent claim filed in D.C. federal court alleges that an ACA regulation related to emergency care reimbursement fails to ensure that providers will be paid and should be invalidated. Specifically, the regulation ties payment to the largest of three payments: (1) the plan’s in-network amount, (2) the Medicare amount; and (3) the usual, customary and reasonable amount (UCR). The complaint alleges the UCR is usually the greatest amount, but, as recent litigation has shown, the UCR is almost always manipulated down by insurance plans, meaning that providers do not get paid what they should. For more information on the case, see, American College Of Emergency Physicians v. Burwell et al., case number 1:16-cv-00913, in the U.S. District Court for the District of Columbia.
- A recent lawsuit was brought against Anthem Blue Cross in California state court by a dermatologist who claims that the insurer is hurting patients by keeping its network narrow. Specifically, the physician claimed that the insurer restricts the number of physicians in its network to take in larger profits, without considering the fact that it limits patients’ access to quality care. For more information on the lawsuit, see, LA Laser Center PC et al v. Anthem Blue Cross et al., case number BC 617436, in the Superior Court of the State of California for the County of Los Angeles.
In the News
- Following the wake of last year’s Morristown Medical Center decision, 30 municipalities have filed tax appeals against their local area hospitals. For a full list of the hospitals and towns involved, click here.
- Mount Sinai Beth Israel recently announced that it would close its 825-bed Manhattan facility and relocate to a smaller facility two blocks away. The move to the new $500 million 70-bed facility will take about four years. In the meantime, the current Beth Israel facility will remain open. The employer has vowed to keep as many employees with the company as possible.
- In the Missouri Department of Insurance, Financial Institutions and Professional Registration, state regulators recently held that the proposed merger between Aetna and Humana would cause excessive harm to competition in Missouri and, therefore, must be restructured in order to obtain approval. For more information on the agency’s decision, see, Division of Insurance Co. Regulation v. Aetna Inc. et al., case number 160325191C, in the Missouri Department of Insurance, Financial Institutions and Professional Registration.
- Despite the dismissal of a physician’s claims in Patel v. Allstate New Jersey Insurance Co., No 15-2513 (3d Cir. May 3, 2016) on standing grounds, experts warn that insurance companies should be careful about the agreements they enter into with the State of New Jersey. In Patel, the physician had claimed that the insurer, by virtue of its agreement with the State, was a state actor and, therefore, had violated his constitutional rights by engaging in a criminal investigation into his activities. While the case was dismissed on the grounds that the physician lacked standing, since no criminal claims were ever brought against him, the case left open the possibility that insurers could violate constitutional rights as state actors by engaging in investigations for the purpose of criminal prosecutions rather than civil actions.
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