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South Carolina Federal Court Grants Title Insurer’s Motion for Summary Judgment on Easement Claim Banner Image

South Carolina Federal Court Grants Title Insurer’s Motion for Summary Judgment on Easement Claim

Month: June 2020

South Carolina Federal Court Grants Title Insurer’s Motion for Summary Judgment on Easement Claim

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The United States District Court for the District of South Carolina recently held that a homeowner was not entitled to coverage from its title insurer for a neighbor’s claims regarding a prior litigation and regarding an easement on the insured property.  See Dudek v. Commonwealth Land Title Ins. Co., 2020 WL 3130232 (D.S.C. June 12, 2020).  Plaintiff entered into a contract to purchase the insured property in 2012.  A third party entered into a backup contract to purchase the property, and both ultimately sued the seller for specific performance.  Plaintiff prevailed in the lawsuit and purchased the property in 2017, and the defendant title insurance company issued a title policy.  In 2017, the third party brought another lawsuit against plaintiff, alleging fraud and abuse of process from the prior lawsuits between the parties.  The court dismissed the action, and the third party appealed.  In 2018, the third party—who had purchased an adjacent property while the lawsuits were pending—filed another action seeking to enforce a contract provision regarding a water and sewer easement across the insured property.  Plaintiff submitted claims for both actions to the title insurance company, who denied the claims.  Plaintiff then brought this lawsuit against the title insurance company, alleging breach of contract and bad faith.  The parties cross-moved for summary judgment.

The Court denied plaintiff’s motion for summary judgment and granted the title insurer’s.  First, the Court found that there was no coverage for the 2017 litigation.  The 2017 litigation was based on claims of fraud and abuse of process arising out of the prior lawsuits between the parties, and the policy included an exception for such claims:  “You are not insured against loss, costs, attorneys’ fees, and expenses resulting from . . . [m]atters, claims, losses arising from or under the lawsuits: 2013CP18-183 and 2016CP18-1706.”  The Court found that “[i]n short, each allegation in [the third party’s] 2017 complaint directly challenges the result of the 2013 Action, the legitimacy of the 2013 Action, or both. Commonwealth did not need to look beyond the allegations of that complaint to determine that the 2017 Action arises from the 2013 Action and thus falls within Policy Exception 10.”  Second, the Court found that the demand for coverage for the 2018 action was excluded under the policy.  The policy contains exclusions for defects “created, allowed, or agreed to by You, whether or not they are in the Public Records” and “that are Known to You at the Policy Date, but not to [Commonwealth].”  Here, plaintiff’s purchase contract contained an addendum stating “[b]uyer shall grant water & sewer easement to adjacent 2 acres [i.e., the third party’s property].”  Thus, the Court found that plaintiff’s claims were not covered.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

Some Wins, Some Losses, and a Proposed Rule on Value-Based Payments for Prescription Drugs

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli or Daniel J. Parziale.

Price Transparency Rule Upheld

In  November 2019, the Department of Health and Human Services (“HHS”) published a transparency rule in the Federal Register requiring hospitals to disclose pricing information.  The American Hospital Association and many other associations and hospital systems sued HHS arguing that HHS lacked statutory authority to require public disclosure of individually negotiated rates between commercial insurers and hospitals.  On June 23, the United States District Court for the District of Columbia granted HHS' motion for summary judgment upholding the rule.  The American Hospital Association has already stated it will appeal the decision.  The case is The American Hospital Association, et al., v. Alex M. Azar, II, Civil Action No. 1:19-cv-03619.

Court Strikes Down Wholesale Prices Rule

The U.S. Court of Appeals for the District of Columbia recently upheld a district court ruling that struck down the disclosure rule from HHS, which required drug manufacturers to put the wholesale prices of their drugs in TV ads.  In May 2019, HHS published the disclosure rule that broadly required drug manufacturers to disclose in their TV ads the wholesale acquisition cost of many prescription drugs and biological products for which payment is available under Medicare or Medicaid. HHS argued that patients deserved transparency and that forcing drugmakers to put prices in ads would incentivize them to create lower list prices. Several of the drug manufacturers challenged the rule in June 2019 arguing that it violated the APA because the rule exceeded HHS’ authority. They prevailed in district court and the Circuit Court affirmed, stating that HHS lacked the authority to establish the disclosure rule and that it acted unreasonably in doing so. The case is Merck & Co., Inc. et al v.  U.S. Department of HHS, et al. Case No 19-5222.

Proposed Federal Rule On Value-Based Payments for Prescription Drugs

On June 17, 2020, Centers for Medicare & Medicaid Services (CMS) released a proposed rule, 85 FR 37286, to remove barriers to the development of payment models based on value for innovative new therapies. Under current regulations, prescription drug manufacturers face obstacles when assessing payments under value-based arrangements with CMS.  These obstacles include requirements for payment based upon quantity of drugs sold instead of quality of drug product as well as efforts by payers to limit access to emerging treatments through management practices like prior authorization and step therapy.   Under the proposed rule, healthcare systems will pay on the basis of value instead of volume.   More specifically, the proposed rule proposes revisions to current regulations regarding: how manufacturers should calculate the average manufacturer price (AMP) of the brand name drug when there is also a sale of an authorized generic; whether manufacturers should include the value of their patient assistance programs in the calculation of “best price,” including when they are impacted by pharmacy benefit managers (PBM) accumulator programs; state and manufacturer reporting requirements to the Medicaid Drug Rebate Program (MDRP); the definitions of CMS-authorized supplemental rebate agreement; line extension, new formulation, oral solid dosage form, single source drug, multiple source drug, and innovator multiple source drug for purposes of the MDRP; payments for prescription drugs under the Medicaid program; and coordination of benefits (COB) and third party liability (TPL) rules related to the special treatment of certain types of care and payment in Medicaid and Children’s Health Insurance Program (CHIP).  Comments are due by July 20, 2020.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

NJDEP’s Common Law Natural Resource Damage Claims Are “Back in Business” Once Again as Defendants Now May Face Jury Trials

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In August 2018, the New Jersey Department of Environmental Protection (“NJDEP”) declared that environmental enforcement was “back in business” and brought its first new litigation seeking natural resource damages (“NRD”) in ten years.  Loyal readers of this blog will recall that we reported in 2019 on a trial court decision that dismissed the Department’s common law claims for NRD related to a former Hess oil refinery and terminal and discussed NJDEP’s pending appeal of the decision:  “NJDEP’s Common Law Natural Resource Damage Claims Temporarily ‘Out of Business.’”  On April 7, 2020, the Appellate Division reversed portions of that trial court decision, reinstating NJDEP’s claim for strict liability for abnormally dangerous activities and clarifying the Department’s ability to recover the cost of abating a public nuisance.  However, the appellate court affirmed the dismissal of NJDEP’s trespass claim.  As noted in our earlier article discussing this case, the survival of these common law claims gives the Department the ability, otherwise not available for NRD claims under the Spill Compensation and Control Act (“Spill Act”), to put its NRD claims before a jury and gives NJDEP a firmer basis to recover damages resulting from discharges that occurred before passage of the Spill Act in 1977.

In finding that operating an oil refinery is not an abnormally dangerous activity, the trial court relied on the decision in Biniek v. Exxon Mobil Corp., 358 N.J. Super. 587 (Law Div. 2002), which held that operating a gas station is not abnormally dangerous.  The trial court also held that, even if operating a refinery was abnormally dangerous, the Spill Act “subsumed” common law claims for strict liability.  The Appellate Division rejected both of these conclusions.  First, it rejected the trial court’s analogy with a gas station as “totally inapposite.”  “The extent of the operations [of the refinery], its proximity to sensitive waterways and environmental areas, and the danger of the pollutants allegedly used in Hess's operations that were discharged, albeit unintentionally,” satisfy the criteria for an abnormally dangerous activity set out in NJDEP v. Ventron Corp., 94 N.J. 473 (1983).  The court did not explicitly hold that all oil refineries constitute an abnormally dangerous activity, so perhaps in a future case, a smaller refinery not located adjacent to sensitive waterways might fare better in resisting a similar claim.

Second, and of greater significance for New Jersey NRD defendants, the Appellate Division held that the Spill Act did not subsume common law claims for strict liability for abnormally dangerous activities.  The court based this conclusion on the savings clause of the Spill Act that provides that the statute’s remedies “are in addition to those provided by existing statutory or common law,” N.J.S.A. 58:10-23.11v, and statements in earlier cases about the coexistence of Spill Act and common law remedies.  This portion of the Hess decision is more significant for New Jersey NRD defendants than the other portion of the abnormally dangerous activities discussion, which focused narrowly on whether a particular oil refinery was abnormally dangerous.  The case seems to foreclose any other defendants from arguing—as Hess successfully argued before the trial court—that common law strict liability claims cannot coexist with NJDEP’s Spill Act claims.

With respect to the public nuisance claim, the Appellate Division largely favored NJDEP’s position as well.  The Appellate Division, like the trial court, held that the government cannot recover money damages in a claim for public nuisance, but can seek an injunction ordering the defendant to abate the nuisance.   The appeals court emphasized, however, that the government can seek reimbursement for the costs of abatement and so it “restore[d] [NJDEP’s] ability to otherwise seek ‘monetary relief’ associated with any judgment ordering abatement of a public nuisance, if plaintiffs succeed on their claim.”  Thus, NJDEP can recover the cost of restoring a damaged natural resource from an NRD defendant.

NJDEP could not convince the Appellate Division to reverse the dismissal of its trespass claim, however.  A trespass occurs when the defendant invades land that is in the exclusive possession of another person.  The appellate court agreed with the trial court that NJDEP cannot assert a trespass for damage to groundwater and surface water resources because the State of New Jersey’s public trust interest in its water resources is shared with all the people of the state; NJDEP lacks the requisite “exclusive” property interest.

After being stymied in the first trial court decision in its new NRD cases, NJDEP will be emboldened now that the Appellate Division has revived some of its common law claims.  The appellate court’s rejection of the proposition that the Spill Act subsumed common law claims for strict liability for abnormally dangerous activities means it is now more likely that defendants in these often highly publicized cases will have to face a jury, which, it is generally understood, is more likely to find a defendant liable and to award higher damages. The Hess decision will strengthen NJDEP’s hand in its pursuit of NRD.

For more information, please contact the author Michael Kettler at mkettler@riker.com or any attorney in our Environmental Practice Group.

New York Federal Court Dismisses Action Against Servicer Regarding Force-Placed Insurance as Moot, Denies Motion to Amend to Add FDCPA, RESPA, and TILA Claims

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The United States District Court for the Eastern District of New York dismissed an action against a loan servicer and denied plaintiff’s motion to amend to add FDCPA, RESPA, and TILA claims, holding that plaintiff’s initial allegations were mooted by defendant’s refund of the allegedly improper charges, and that plaintiff did not sufficiently set forth the elements of these other causes of action.  See Izmirligil v. Select Portfolio Servicing, Inc., 2020 WL 1941192 (E.D.N.Y. Apr. 22, 2020).  Plaintiff purchased a home in 2006, and defendant was the servicer on the mortgage beginning in 2013.  Plaintiff allegedly defaulted in 2009, and defendant’s predecessor brought a state foreclosure action.  In 2013, defendant notified plaintiff that plaintiff did not have the required insurance on the property and that it would force-place a policy.  Plaintiff sent defendant proof that it had the required insurance, but defendant allowed the force-placed policy to continue for six months, billing plaintiff for the same.  Defendant eventually stopped pursuing plaintiff for the premiums paid for the force-placed policy, albeit after plaintiff initiated this action.  In this action, plaintiff alleged a number of state law claims, as well as federal claims under RICO, arising from the force-placed insurance.  Defendant filed a motion to dismiss, arguing that plaintiff lacked standing and/or that the claims were moot because defendant was no longer seeking payment for those premiums.  Plaintiff cross-moved to amend to add claims under the FDCPA, RESPA, and TILA.

The Court granted the motion to dismiss and denied the cross-motion to amend.  The Court first found that plaintiff had standing because, at the time it filed this action, defendant was seeking those force-placed premiums as part of the state court foreclosure action.  However, the Court also found that the claims were now moot because the defendant no longer sought those charges in the foreclosure action.  The Court also denied the motion to amend.  First, the Court found that there could not be an FDCPA claim because any deficient collection notices were sent to plaintiff’s attorneys, not to plaintiff, and that the notices sufficiently explained what plaintiff owed on the debt.  Second, the Court found that plaintiff had not set forth a sufficient nexus between plaintiff’s alleged RESPA claim and his alleged damages, noting that plaintiff’s conclusory claims that he suffered “attorney’s fees, court fees, costs in having to respond to . . . reinstatement letters, pay-off letters, printing, copying, and postage fees, uncorrected late fees, unapplied or misapplied mortgage payments, business loss, loss of retirement funds, mental anguish, embarrassment, nausea, and emesis” was not linked to any RESPA violation.  Third, the Court found that plaintiff’s TILA claim also was deficient.  Among other issues, he sought actual damages without alleging that these damages were caused by “detrimental reliance” on defendant’s incorrect of incomplete disclosures, which is required under TILA.  Nonetheless, the Court gave plaintiff the opportunity to replead these new allegations.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

HHS Changes Reporting Requirements Under the Provider Relief Fund, Direct Contracting Is Open, and New York Expands Telemedicine

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

HHS Says healthcare Providers Will Not Have to Submit Report on How They Spent COVID-19 Relief Grants by July 10

Many providers have received funds pursuant to the Provider Relief Fund and executed the terms and conditions, which require providers to issue reports to the Department of Health and Human Services (“HHS”).   However, HHS has recently announced in its FAQ, under Reporting Requirements, that recipients do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee, as initially required.  To meet the reporting requirements, HHS is posting the names of recipients and their payment amounts on its public website Tracking Accountability in Government Grants System.

CMS Is Accepting Letters of Intent for Direct Contacting Model

Centers for Medicare & Medicaid Services (“CMS”) announced that it is accepting letters of intent from eligible providers that wish to participate in the first performance year of the Medicare Direct Contracting Model.  The model will offer three types of Direct Contracting Entities depending on their level of experience in treating Medicare beneficiaries.  Applications for the first performance year are due July 6, 2020.

New York Expands Telemedicine Services

New York passed a bill that expands the types of telemedicine services covered under Medicaid and the Children’s Health Insurance Program (“CHIP”), including audio- and video-only services.  The legislation will support residents in more rural areas of the state who lack broadband access.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

New Jersey Appellate Division Holds Entire Controversy Doctrine Does Not Bar Foreclosure Complaint Filed After Federal Action on Insurance Proceeds

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In a
decision approved for publication, New Jersey’s Appellate Division recently
held that New Jersey’s entire controversy doctrine did not prohibit a lender
from bringing a foreclosure complaint after the homeowners’ federal lawsuit
against its insurance companies and the lender was dismissed.  See Carrington
Mortg. Servs., LLC v. Moore, 2020 WL 3067503 (N.J. Super. Ct. App. Div.
June 10, 2020).  The defendant homeowners purchased their home in 2010 and
executed a mortgage to a lender, which eventually was assigned to
plaintiff.  In 2012, the home was damaged by Superstorm Sandy.  In
2015, the homeowners defaulted on their mortgage, and brought a federal lawsuit
against their flood insurance and homeowners’ insurance providers, as well as
their lender.  In the federal lawsuit, the homeowners sought payment from
their insurance companies under their policies.  The complaint also sought
a ruling that the homeowners were no longer responsible for their mortgage
payments, that the homeowners should be reimbursed for some of their prior
payments, and that the lender could “instead only get recovery from whatever
insurance proceeds were payable.”  The federal court dismissed the action
against the lender and insurers.  In 2018, the plaintiff lender brought
this foreclosure action.  The homeowners defaulted, and the lender
obtained a final judgment of foreclosure and purchased the property at the
Sheriff’s sale.  The homeowners then brought this motion to vacate the
final judgment, arguing that the entire controversy doctrine barred this
action, and that the lender’s predecessor was required to bring a foreclosure
counterclaim in the federal court action rather than instituting this new
action in state court.  The trial court denied the motion and the
homeowners appealed.

The Court
affirmed the decision.  New Jersey’s entire controversy doctrine
“generally requires parties to an action to raise all transactionally related
claims in that same action” and “disfavors successive suits regarding the same
controversy.”  However “[t]he doctrine should not be applied ‘where to do
so would be unfair in the totality of the circumstances and would not promote
any of its objectives, namely, the promotion of conclusive determinations,
party fairness, and judicial economy and efficiency.’”  In this case, the
Court found that the doctrine did not apply.  First, the Court stated that
it had “substantial doubts that the federal court would have exercised
jurisdiction over a mortgage foreclosure claim by the bank if it had chosen to
plead it as a counterclaim” because the homeowners “did not bring their lawsuit
under diversity jurisdiction and there is no federal question of law implicated
by the . . . claim against Bank of America based on the mortgage
contract.”  Second, the Court found that even if there were jurisdiction
in the federal court, “[i]t would make little practical sense to force the bank
to bring its foreclosure claims in that other forum.”  The Court held that
the federal complaint was essentially an insurance dispute that lacked a
“sufficient transactional nexus” to the foreclosure, and that the “federal
complaint itself does not appear to suggest that there is a transactional
relationship between a potential foreclosure and the insurance claims.”
Finally, the Court found that there were policy considerations that weighed
against the homeowners’ motion.  The homeowners’ argument “could pose
significant problems for homeowners. A requirement that a mortgage holder has a
duty to involve itself in every insurance dispute between a homeowner and
insurance company, or otherwise risk losing the right to foreclose on the
mortgage, would upset the well-established and firmly held rights of mortgage
holders to pursue foreclosure.”

For a copy
of the decision, please contact Michael O’Donnell at modonnell@riker.com or
Anthony Lombardo at alombardo@riker.com.

New Jersey Department of Health Modifies Guidance on the Resumption of Elective Surgeries in Ambulatory Surgery Centers to Address Issues That Were Preventing Surgeries

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, or Labinot Alexander Berlajolli.

Late Tuesday, the New Jersey Department of Health modified its previous guidance on the resumption of elective surgeries in ambulatory surgery centers.  One of the most significant changes was to extend the time for COVID-19 testing.   Under the initial guidance that was issued on May 19, 2020, patients had to undergo COVID-19 testing and receive results within four days before the scheduled surgery.  However, many laboratories could not get COVID-19 test results back within that four-day period, thereby causing the cancellation of surgeries.   The modified guidance extends the four-day period to six days.

The modified guidance also clarifies that the COVID-19 testing by a laboratory must be a nucleic acid amplification test and be either approved by FDA, authorized by the FDA through an Emergency Use Authorization, or approved by the New Jersey Clinical Laboratory Improvement Services as permitted by the FDA.   The modified guidance makes clear that antibody testing may not be used to fulfill the COVID-19 testing requirement.

Surgery centers still cannot perform procedures on patients who test positive for COVID-19 unless, according to the modified guidance, it is excepted in Executive Order 109 as an “urgent case.”

Under the modified guidance, patients without COVID-19 testing can still have procedures performed if the procedure is time-sensitive and the health of the patient would be endangered if the procedure was delayed as long as (1) the physician documents that the patient’s health will be endangered if the procedure is delayed and (2) the surgery center follows certain infection control procedures set forth in the modified guidance.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

Is the Expansion of Telemedicine Here to Stay? Will New Jersey Delay the Assessment on Licensed Ambulatory Surgery Centers?

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

Telemedicine

As we have
mentioned in several of our past updates, the federal and New Jersey
governments have greatly expanded telemedicine because of COVID-19.  Due
to the perceived success of that expansion, the question is will the expansion,
or parts of it, become permanent?  The New Jersey State Senate and
Assembly have already introduced duplicate bills, A4179/S2559,
which, if passed, will require health insurance carriers to reimburse providers
for telemedicine services at the same rates they reimburse providers for
in-person services. Besides maintaining reimbursement levels, these bills would
prevent health insurance carriers, Medicaid and NJ FamilyCare, and the State
Health Benefits Program ("SHBP") and the School Employees'
Health Benefits Program ("SEHBP") from adding “place of
service” requirements on providers as long as such services continue to meet
the same rigorous in-person standard of care, and the platform used meets
federal and State rules and guidelines regarding privacy.

On the
federal level, a new bill, Helping Ensure Access to Local TeleHealth, or
HEALTH Act, is being introduced in Congress, which would provide for permanent
Medicare payments for telemedicine services at federally qualified health
centers and rural health clinics.   It is expected, however, based on
comments from Seema Verma, the Administrator of the Centers for Medicare &
Medicaid Services ("CMS"), that a significant portion of the
telemedicine services that were expanded by CMS because of COVID-19 will become
permanent besides those services identified in the HEALTH Act.

We will
continue to keep track of these bills and other efforts to expand telemedicine
on the federal and State levels.

New Jersey
Ambulatory Surgery Center Assessment

In our
previous post,
we mentioned that A4201 was introduced in the New Jersey Assembly, which would
postpone the June 15, 2020 assessment for licensed ambulatory surgery
centers.  An amended version of the bill was recently introduced in the
Assembly, and is up for a vote in the Assembly on June 18, 2020 – three days
after the assessment is due.   We will continue to keep track of this
bill, but any licensed ambulatory surgery center should call the Department of
Health and seek a postponement of your assessment since A4201 has been delayed.

New Jersey Federal Court Holds Individual’s FDCPA Claim Was Tolled While Similar Class Action Was Pending

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The United States District Court for the District of New Jersey recently held that an individual’s FDCPA claim was not untimely because the three-year litigation of a class action raising similar claims tolled the limitations period for the individual.  See Williams-Hopkins v. Allied Interstate, LLC, 2020 WL 2731101 (D.N.J. May 26, 2020).  The defendant debt collector sent a collection letter to plaintiff in 2015.  The letter demanded payment of a debt owed since 2006.  In 2019, plaintiff brought this action, alleging that the letter was misleading and violated the FDCPA because it made a “settlement offer” that made “Plaintiff believe[] she had a legal obligation to pay this debt even though the six-year statute of limitations on it had expired.”  Plaintiff also argued that the settlement language overshadowed other disclosures required by the FDCPA.  Defendant filed a motion to dismiss, arguing that plaintiff commenced the case outside the FDCPA’s one-year statute of limitations.  Plaintiff opposed, arguing that a class action filed against defendant in 2016 tolled the limitations period.  Specifically, plaintiff claimed that she was an unnamed member of the putative class but that the named plaintiffs settled the action in 2019 before class certification, at which point she filed this action.

The Court denied the motion to dismiss and found that “at this juncture,” the claim is timely.  The Court found that the letter at issue in this action and the letters at issue in the class action “are in the ‘same or similar form.’”  Although the letters had slightly different language with regard to settlement, “both express the creditor’s openness to ‘settlement’ and invite the debtor to settle, without disclosing that the debt expired. As alleged, both also have the same effect—misleading an unsophisticated debtor into believing that the debt is legally enforceable through inviting settlement.”  Similarly, the Court found that plaintiff’s argument that the settlement language “overshadowed the mandatory disclosure requirements of the FDCPA regarding Plaintiff’s right to dispute the debt” was also tolled even though that claim was not raised in the class action.   “Plaintiff’s overshadowing claim shares a ‘common factual and legal nexus’ with the claim in the class action,” and should be tolled.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New Jersey Waives Certain Regulations Applicable to Collection Stations

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, or Labinot Alexander Berlajolli.

In an
effort to increase testing capacity in New Jersey, the Department of Health
waived certain regulations applicable to collection stations, which is when a
licensed clinical laboratory occupies office space in a physician’s office for
the purpose of collecting specimens on the physician’s patients.   According
to a June 5, 2020 Notice of Waiver, New Jersey licensed clinical
laboratories may open collection stations to collect specimens for COVID-19
testing without completing the collection station licensing process or paying
the required fee. Additionally, the temporary collection stations do not need
to comply with the location and layout requirements set out at N.J.A.C.
8:44-2.14(b)(2)-(6). This waiver is limited to only collecting specimens
related to COVID-19 testing.  Clinical laboratories that open a temporary
COVID-19 specimen collection station must contact Patricia Jackman at the
Department via e-mail at Patricia.Jackman@doh.nj.gov,
and provide (1) the name of the parent clinical laboratory; (2) the address
where the temporary collection station will be located; and (3) a contact phone
number and e-mail for a representative from the parent laboratory.

Federal
Final and Proposed Regulations

85 FR
25510 – Final – This final
rule comprises the first phase of policies focused on advancing
interoperability of health information using the authority available to
CMS.  For patients, the rule creates electronic access to stored health
information by creating a patient-facing application programming interface (API)
to which third-party software applications make data available to patients for
personal use.  For clinicians, the rule expands access to health
information about prospective new patients by integrating APIs and removing
procedural limitations that otherwise restrict the flow of health information
between providers and payers.  For payers, such as payers in Medicare
Advantage, Medicaid, and CHIP, the rule requires use of an API to facilitate a
flow of information that follows the patient in the event the patient changes
providers or payers.  Because of potential privacy concerns associated
with the rule’s increased use of technology and introduction of third party
software developers, the rule also promulgates a set of technical approaches
and standards to be implemented to protect health information from unwanted
dissemination.  The rule is effective June 30, 2020

85 FR
33595 – Proposed – The Centers for Medicare & Medicaid
Services ("CMS") proposed a rule
that would change the risk adjustment data validation (“RADV”) error estimation
methodology for states where the Department of Health and Human Services (HHS)
operates the risk adjustment program, starting with the 2019 benefit
year.  These proposals seek to further the HHS-RADV program, address
stakeholder feedback, promote fairness, and improve the predictability of HHS‑RADV
adjustments.  Comments are due by July 2, 2020.

85 FR
32460 – Proposed – The proposed rule
would make payment and policy changes to the Medicare inpatient prospective
payment systems for operating and capital‑related costs of acute care hospitals,
as well as for certain hospitals and hospital units excluded from the IPPS, for
the fiscal year 2021.  CMS also wants to update the payment policies and
annual payment rates for the Medicare prospective payment system for inpatient
hospital services provided by long-term care hospitals.  In an effort to
reduce the disparity between high and low wage index hospitals, CMS is
proposing to increase the wage index values and to apply a budget neutrality
adjustment to the standardized amount so that increases are implemented in a
budget neutral manner.  The rule also includes changes to new technology
add-on payment policies, updated policies for the Hospital Readmissions
Reduction Program and Hospital-Acquired Condition Reduction Program, and new or
revised requirements for quality reporting by acute care hospitals, PPS-exempt
cancer hospitals, and hospitals participating in the Medicare and Medicaid
Promoting Interoperability Programs.  Comments are due by July 10, 2020.

CMS Makes
Changes to Accountable Care Organization (ACO) Models

In
response to COVID-19, CMS issued
a table detailing model adjustments related to financial methodologies,
quality reporting, and model timelines.  Multiple changes have been made
to the financial methodology for the Next Generation ACO (“NGACO”) model,
including capping gross savings upside potential at 5 percent.  CMS also
is reducing 2020 downside risk by reducing shared losses by the proportion of
months during the public health emergency.  The 2020 financial guarantee
requirement and episodes of care that include treatment for COVID-19 will be
removed.  A retrospective regional trend, rather than prospective, will be
used for 2020.  Additionally, CMS is canceling the 2019 quality audit and
continuing to monitor the effect on 2020 quality reporting.  The NGACO
model will also be extended through December 2021.

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