Riker Danzig Health Care Update October 16, 2017

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Riker Danzig Health Care Update October 16, 2017
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New Jersey State: Selected Adopted Legislation       


  • P.L. 2017, c. 234 – Adopted – This law clarifies the Department of Community Affair’s rulemaking authority over free-standing residential health care facilities, and prohibits eviction of residents from such facilities, except for good cause.

New Jersey State: Selected Proposed Regulation  


  • 49 N.J.R. 2877(a) – Proposed – The Department of Banking and Insurance proposes this rule to amend the rules governing the prompt payment of health benefit claims. Specifically, the amendment requires, in part, insurance carriers to include certain information in EOBs and notices to providers when rejecting a claim, and subjects carriers to the penalty provisions if they fail to include the information.
  • 49 N.J.R. 2876(a) – Proposed – The Department of Banking and Insurance proposes this rule to amend certain rules to clarify impermissible practices related to health benefits claim processing, and the timing of authorization of services and payment of claims after an independent utilization review organization determination adverse to the carrier or health maintenance organization.
  • 49 N.J.R. 2880(a) – Proposed – The Department of Banking and Insurance proposes to change N.J.A.C. 11:24, which governs health maintenance organization, and N.J.A.C. 11:24A, which implements the provisions of the Health Care Quality Act to reinforce the existing rights of a covered person to request to receive services from an out-of-network provider, but pay only network level cost sharing when the network associated with the covered person’s plan does not contain a qualified, accessible, and available provider to perform the needed service.
  • 49 N.J.R. 2895(a) – Proposed – This proposed rule would add the new exception to N.J.S.A. 45:9-22.11’s prohibition against dispensing more than a seven-day supply of certain drugs and medications found in P.L. 2015, c. 296 to the regulations.

Federal: Selected Adopted Regulations 


  • 82 FR 42748-01 – Adopted – This final regulation will correct errors to a September 6, 2016 final regulation that adjusted the maximum civil monetary penalty amounts for the various civil monetary penalty authorities for all agencies within the Department of Health and Human Services for inflation.
  • 82 FR 45511-01 – Adopted – This final rule will further delay the effective date of the Health Resources and Services Administration’s final rule calculating the ceiling price and application of civil monetary penalties for all drug manufacturers that violate rules requiring them to make their drugs available to covered entities under the 340B Drug Pricing Program.

Federal: Selected Proposed Legislation


  • H.R. 3767 – Introduced – Amends the Public Health Service Act to provide for the participation of pediatric subspecialists in the National Health Service Corps program.
  • H.R. 3770 – Introduced – Amends the Public Health Service Act to reauthorize and extend funding for community health centers.
  • H.R. 3820 – Introduced – Permits occupational therapists to conduct the initial assessment visit and complete the comprehensive assessment under a Medicare home health plan of care for certain rehabilitation cases.
  • S. 870 – Engrossed – Amends Title XVIII of the Social Security Act to implement Medicare payment policies designed to improve management of chronic disease, streamline care coordination, and improve quality outcomes without adding to the deficit.

New Jersey State Litigation


  • A New Jersey State Court judge recently dismissed a lawsuit filed against Horizon’s tiered coverage plan, the Omnia Health Alliance Plan, by an association of New Jersey chiropractors.  Specifically, the organization had argued that the Omnia plan gives lower-tier chiropractors an unfair business advantage.  For more information on the suit, see, Association of New Jersey Chiropractors Inc. et al. v. Horizon Healthcare Services Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey Inc., case number L-1211-16, in New Jersey Superior Court.

Federal/Other State Litigation


  • The Department of Justice recently filed new criminal charges against the former CEO and two executives of Tenet Healthcare Corp. accused of running a $400 million kickback scheme. Specifically, the executives are charged with having paid millions in bribes to Clinica so that it would send patients to Tenet hospitals after they had given birth, thereby boosting Tenet’s share of low-income patients and, by extension, its reimbursements from government programs like Medicare and Medicaid. For more information on the suit, see, U.S. v. Holland et al., case number 1:17-cr-00234, in the U.S. District Court for the Northern District of Georgia.
  • A New Mexico hospital and its Texas-based partner recently agreed to pay the Department of Justice $12.24 million to settle FCA claims that had been brought against them. Specifically, a whistleblower had accused Christus St. Vincent Regional Medical Center and Christus Health of illegally donating money to Medicaid for which they were then reimbursed. For more information on the suit and alleged scheme, see, U.S. ex rel. Stepan v. Christus St. Vincent Regional Medical Center Corp. et al., case number 11-cv-00572, in the U.S. District Court for the District of New Mexico.
  • An en banc Mississippi State Appellate Court recently ruled that a nursing home could not force a wrongful death suit brought against it into arbitration. Specifically, the Court found that the patient’s wife did not have the authority to sign an arbitration agreement because the patient’s physician had not directly stated that the patient was incompetent at the time.  For more information on the suit, see, Estate of Jack Howard Bankston et al. v. CLC of Biloxi, case number 2016-CA-01190-COA, in the Court of Appeals of the State of Mississippi.
  • The Florida Supreme Court, in a recent unanimous decision, ruled that Florida statute 542.335, which governs non-compete agreements and lists only five kinds of protected business interests, is not meant to be an exhaustive list of protected business interests. As such, the Florida Supreme Court ruled that referral sources, which are not among the five protected business interests listed in the statute, could be entitled to protection. For more information on the suits, see, White v. Mederi Caretenders Visiting Services of Southeast Florida LLC et al., case number SC16-28, and Americare Home Therapy Inc. v. Hiles, case number 16-400, in the Supreme Court of Florida.
  • A Texas Appellate Court recently declined to revive a suit against a nursing facility accused of transferring an elderly patient without her consent and allowing her to be injured thereby. Specifically, the Appellate Court ruled that the Decedent’s daughter had failed to provide an expert report substantiating her claim and had failed to show that she herself had suffered damages as a result of her mother’s death. For more information on the suit, see, Patricia Shaw v. Daybreak Inc. et al., case number 05-16-01251-CV in the Court of Appeals, Fifth District of Texas.
  • A California judge recently ruled to deny actress Sofia Vergara’s ex-fiancé’s anti-SLAPP motion seeking to toss a suit brought by her against him over his desire to bring frozen pre-embryos they had created during their relationship to term. Specifically, her ex-fiancé sought to establish a trust for the pre-embryos in Louisiana where the embryos would allegedly have had more rights than in California. This effort triggered Vergara to file breach of contract claims against her ex-fiancé in California, where they now will battle over ultimate custody of the pre-embryos. For information on the suit, see, Vergara v. Loeb et al., case number BC650580 in the Superior Court of the State of California, for the County of Los Angeles.

In the News     

  • It was recently announced that Cathleen Bennett, the Commissioner of the Department of Health in New Jersey since 2015, will leave Trenton this month to join the New Jersey Hospital Association. Ms. Bennett will be joining the organization as its new president and CEO. Ms. Bennett had been with the Department of Health since 2010.
  • A plan was recently announced for three New Jersey-based Catholic hospitals owned by Trinity Health to merge with Camden-based Cooper University Health Care. Specifically, it was announced that Our Lady of Lourdes Medical Center in Camden, Lourdes Medical Center of Burlington County and St. Francis Medical Center would merge with Cooper University Health  Care.
  • The Office of Inspector General recently issued an advisory opinion regarding an undisclosed retail pharmacy chain’s efforts to expand a paid membership program for pharmacy discounts to allow the enrollment of consumers with federal health care benefits. The OIG said that the arrangement’s proposed design avoided improperly influencing consumer health care decisions in such a way as would violate the Anti-Kickback Statute. For more information on the advisory opinion, click here.
  • Pennsylvania’s House Judiciary Committee recently voted to approve a bill out of committee that would cap the amount of punitive damages available in lawsuits accusing nursing homes of substandard care. Specifically, if approved, the bill would cap the amount of punitive damages available in nursing home neglect cases to 250 percent of any compensatory damage award that plaintiffs receive, except in cases where there is a finding that there had been an intent to harm the victim.

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. We send these Updates to our clients and friends to share our insights on new developments in the law. Nothing in this Update should be relied upon as legal advice in any particular matter. © 2017 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