Riker Danzig Health Care Update March 22, 2016
New Jersey State: Selected Proposed Legislation
- A. 2727 – Introduced – Provides for conscientious exemption to mandatory immunizations.
- S. 1282 – Introduced – “Consumer Access to Health Care Act”; eliminates requirement of joint protocol with physician for advanced practice nurses to prescribe medication.
- S. 1018 – Introduced – Establishes minimum Medicaid reimbursement rate for personal care services.
- S. 1172 – Introduced – Requires DHS to make a list of drugs with “black box” warnings accessible through its website.
- S. 1275 – Introduced – Clarifies DHS authority to regulate sober living homes and halfway houses as residential substance abuse aftercare facilities; requires background checks and other protections for residents of residential substance abuse facilities.
- S. 1174 – Introduced – Increases Medicaid reimbursement rates for certain evidence-based behavioral health services.
- S. 1312/A. 3266 – Introduced – Prohibits anti-tiering clauses in managed care health benefits plans.
- A. 2585/S. 1511 – Introduced – Requires health insurance carriers offering tiered network health benefits plans to protect covered persons from excess cost sharing in certain circumstances.
- A. 2586 – Introduced – Establishes up to a four-month extension for expiring carrier contracts with acute care hospitals while parties engage in contract renegotiation.
- S. 1317 – Introduced – Provides premium assistance to certain small employers who purchase health benefits plans; appropriates $10 million.
- S. 1198 – Introduced – Establishes a Medical Malpractice Court.
- S. 1263 – Introduced – Strengthens requirements for accreditation, inspection, and general oversight of “surgical practices.”
- S. 1075 – Introduced – Establishes certain network adequacy and standard application requirements for health insurance carriers; requires determination of hospital diversity for tiered networks.
- S. 1347 – Introduced – Requires insurers and SHBP to provide coverage for expenses incurred in screening for ovarian cancer.
- S. 1346 – Introduced – Requires managed care plans to deem a valid referral for a covered health care service as satisfying requirements for prior notification.
- A. 3014 – Introduced – Allows gross income tax deduction for first $200,000 earned by certain new physicians in their first seven taxable years of practice in New Jersey.
- A. 2984 – Introduced – Establishes a waiver, rebate or payment of insured’s deductible, copayment, or coinsurance by health care practitioner as a form of insurance fraud subject to criminal and civil penalties.
- A. 2976 – Introduced – Requires practitioners to disclose business relationship with out-of-state facilities when making patient referrals to those facilities.
- S. 2935 – Introduced – Requires in-network hospitals to notify patients of out-of-network health care professionals who provide services in a hospital.
- A. 3101 – Introduced – Permits registered surgical practices to convert to or combine with ambulatory care facilities; provides for phased-in gross receipts assessment; authorizes non-profit hospitals to acquire joint ownership interest in practices.
- 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. 1724 – Introduced – Requires a health care provider participating in a carrier network to give notice to a covered person whenever a referral is made to an out-of-network provider. This notice must include the financial responsibilities the covered person would face for receiving out-of-network care, as well as a list of in-network providers, if any, that provide the same service as the out-of-network provider to which the provider is referring the covered person.
- A. 3404 – Introduced – Permits hospitals to establish a system for making performance-based incentive payments to physicians.
- A. 3434 – Introduced – Permits abandoned prescription medication to be re-dispensed up to one year after original preparation.
New Jersey State: Selected Proposed Regulation
- 48 N.J.R. 339(a) – Introduced – This proposed rule would allow the expansion of nursing homes, pursuant to the issuance of a certificate of need, to provide additional beds for recipients suffering from Huntington’s Disease and appropriate $1,000,000 for that purpose.
Federal: Selected Proposed Legislation
- H.R. 3716 – Introduced –Amends Title XIX of the Social Security Act to require states to provide to the Secretary of Health and Human Services certain information with respect to provider terminations, and for other purposes. On March 2, 2016, this bill was unanimously passed in the House and now has been sent to the Senate.
- S. 2592 – Introduced – Amends the Fair Credit Reporting Act by instituting a 180-day waiting period before medical debt will be reported on a consumer’s credit report and removing paid-off and settled medical debts from credit reports that have been fully paid or settled. This act would also amend the Fair Debt Collection Practices Act by providing for a timetable for verification of medical debt and increase the efficiency of credit markets with more perfect information.
Federal: Selected Proposed and Adopted Regulation
- 81 FR 12204-01 – Adopted – This final rule sets numerous parameters and provisions related to the ACA. Specifically, it sets payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally-facilitated exchanges. It also, among other things, provides additional amendments regarding the annual open enrollment period for the individual market for the 2017 and 2018 benefit years.
New Jersey State Litigation
- A dozen New Jersey hospitals have appealed the Division of Banking and Insurance’s final approval of the OMNIA plan, arguing that Horizon’s new plan was greenlit before ensuring that it met health network adequacy requirements, as the Division of Banking and Insurance was required to find. For more information on the case, see, Capital Health Regional Medical Center et. al. v. The New Jersey Division of Banking & Insurance, case number A-1211-15T3, in the Superior Court of New Jersey, Appellate Division.
- In the wake of last year’s Morristown Medical Center tax court decision that netted the township $15.5 million from Morristown Medical Center, North Bergen has joined the more than dozen municipalities, including Belleville, Freehold, Long Branch, New Brunswick, Rahway, Raritan Township and Summit, that have filed complaints in New Jersey Tax Court saying that their local hospital’s, Palisades Medical Center’s, tax exemption is unconstitutional. For more information on the case, see, Township of North Bergen v. North Hudson Hospital Association et al., case number 11721-8122, in the Tax Court of New Jersey.
- In the Supreme Court of Texas, the justices have taken up a case involving whether a hospital may be held vicariously liable for the actions of an investor physician regarding the delivery of a child. The hospital argues that doctors are usually independent contractors, which allows them to use their independent judgment to treat patients without being permitted to control the doctor’s medical judgment. For more on the case, see, Doctors Hospital at Renaissance Ltd. et al. v. Andrade et al., case number 15-0563, in the Supreme Court of the State of Texas.
- Florida’s insurance regulator approved the deal that would allow Aetna to buy Humana as part of its $37 billion nationwide merger. The consent order that was entered does require that Aetna continue or expand certain practices that Florida’s Insurance Commissioner believes will ensure that no reduction in competition takes place in years to come. For more on this matter, see, In the matter of: Application for the Indirect Acquisition of Humana Health Insurance Company of Florida Inc., Humana Medical Plan Inc., Careplus Health Plans Inc. and CompBenefits Company by Aetna Inc., case number 185926-16-CO, in the Florida Office of Insurance Regulation.
- A California judge certified a class of Blue Shield of California policyholders, who allege that the insurer’s “Vital Shield” plan, while marketed as a low or moderate priced plan, actually has hidden deductibles and costs that the health care giant failed to mention. Specifically the class says that, while claiming the deductible is $2900, policyholders actually have to pay at least $5900 before they obtain coverage for essential services. For more information, see, Arthur Bodner et al. v. Blue Shield of California Life and Health Insurance Co., case number BC516868, in the Superior Court of the State of California, County of Los Angeles.
- The Fifth Circuit ruled that several Texas hospitals could not seek $20 million in late-payment penalties from Aetna Life Insurance Co. under the Texas Prompt Payment Act because the Act does not apply to self-funded plans. The plaintiffs in this case have subsequently asked for a rehearing on the issue. For more information on the case, see, Aetna Life Insurance Co. v. Methodist Hospitals of Dallas et al., case number 15-10210, in the U.S. Court of Appeals for the Fifth Circuit.
- An Alabama federal judge ordered a group of health care providers suing Blue Cross Blue Shield of Alabama in an antitrust multidistrict litigation to turn over all documents that relate to facilities closing as a result of Blue Cross’s alleged conduct. The providers’ argument is that by dividing the country into regions and refusing to compete against each other, the Blue Cross plans prevent lower rates that might otherwise be obtained from competition. For more information on this multi-district litigation, see, In re: Blue Cross Blue Shield Antitrust Litigation MDL 2406, case number 2:13-cv-20000, in the U.S. District Court for the Northern District of Alabama.
- A New York appeals court ruled that a CVS pharmacist, who filled a strong-prescription pain killer, could not be held liable for filling the prescription that led to the patient’s death. The court said that, as they filled the prescription exactly as prescribed and as the prescription did not stray dramatically from what is considered ordinary, there was no basis for liability against CVS or the pharmacist. In essence, what the court held is that where a pharmacist fills a prescription exactly as written and where the prescription does not clearly contradict the “ordinary prudence” required of a pharmacist that such persons cannot be held liable. For more information on the case, see, Abrams v. Bute, index number 500293/09, in the Supreme Court of the State of New York, Appellate Division: Second Judicial Department.
- Amarin and the FDA finalized a settlement of their long-standing dispute over Amarin’s First Amendment right to make off-label promotion of their omega-3 drug, Vascepa. Specifically, the settlement will allow Amarin to engage in truthful and nonmisleading speech promoting the off-label use of Vascepa, i.e., to treat patients with persistently high triglycerides. It is unclear now how the FDA and DOJ will pursue misbranding cases involving off-label promotion. For more information on this case, see, Amarin Pharma Inc. et al. v. Food and Drug Administration et al., case number 1:15-cv-03588, in the U.S. District Court for the Southern District of New York.
In the News
- On Feb. 24, 2015, the Obama administration announced that it would take new steps to prevent consumers from allegedly abusing the Affordable Care Act’s special enrollment periods in response to insurer’s concerns that they were taking losses from those periods. Specifically, the changes proposed would close the loophole that allowed Americans to purchase insurance when medical needs arose and then immediately drop coverage after they receive treatment. The changes will also require prospective enrollees to provide proof of eligibility.
- A recent study published by federal researchers on February 25, 2016, shows that the number of Medicare beneficiaries who are readmitted to hospitals within 30 days of discharge has declined since the ACA introduced a program that penalizes hospitals with higher than average readmission rates. The journal article can be found in the New England Journal of Medicine.
- The State of New Jersey gave its approval to Prime Healthcare Service’s $62.2 million acquisition of Saint Michael’s Medical Center in Newark, New Jersey, meaning that all that remains now in the sale of the previously bankrupt hospital is for a state Superior Court judge to give final approval of the sale.
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