Search Icon
A Preliminary Assessment of the Plague Year: How COVID May Interfere with Environmental Due Diligence and Liability Protections in New Jersey Banner Image

A Preliminary Assessment of the Plague Year: How COVID May Interfere with Environmental Due Diligence and Liability Protections in New Jersey

Month: September 2020

A Preliminary Assessment of the Plague Year: How COVID May Interfere with Environmental Due Diligence and Liability Protections in New Jersey

Posted on by rd_admin

The extraordinary events of 2020 have disturbed settled expectations in all areas of business and life, and the environmental field is no exception.  One seemingly minor consequence of public health driven office closures—the difficulty of fulfilling public records requests while in-person government offices are shuttered—may have significant repercussions for the environmental liability faced by purchasers of real property in New Jersey.  Under both State and federal law, prospective purchasers of real property may insulate themselves from liability associated with pre-existing contamination by conducting specified due diligence activities, including a search of public records concerning historic uses of the property.  Before the pandemic, New Jersey has strictly applied the requirement that the buyer review public records before closing, whereas federal law already contemplates that a buyer might still maintain some protection from environmental liability even if it does not receive the requested government documents.  Purchasers of property in New Jersey should be aware that, even if the customary due diligence otherwise is completed, acquiring property before receiving the public records could result in the loss of a defense to environmental liability under state law.  However, there are a few options for purchasers that want to proceed with transactions during this time period while still limiting environmental risk.

Due Diligence and Liability Protection under New Jersey Law

A property owner has a defense to liability for pre-existing contamination under the Spill Compensation and Control Act (the “Spill Act”), N.J.S.A. 58:10-23.11 et seq., if it performed “all appropriate inquiry” into the previous ownership and uses of the property before acquiring it.  New Jersey defines all appropriate inquiry as the performance of a preliminary assessment (“PA”) (consisting of a site inspection and review of paper records) and a site investigation (environmental sampling of the property) if the PA recommends such an investigation.  The regulations of the New Jersey Department of Environmental Protection (“NJDEP”) require that a PA include a “diligent search” of all documents which the person performing the PA has a legal right to access and that are reasonably likely to contain information about a site.  Accordingly, performing a PA customarily includes making Open Public Records Act (“OPRA”) requests to NJDEP and the municipality in which the property is located.  As noted, office closures since the spring have interfered with state government response to OPRA requests.  Although the state continued to provide newer records kept in electronic form, the inability to access archives of paper records created a backlog of requests that NJDEP has not yet fully resolved, despite significant efforts. 

In our experience, NJDEP has strictly applied the requirement that a “diligent search” of public records be completed before acquisition of property.  Where an owner acquired property without receiving documents in response to an OPRA request, NJDEP has taken the position that the owner is liable for contamination, as the required “all appropriate inquiry” was not completed. 

Because of the pandemic, the Department has relaxed some of its regulations, such as timeframes for investigating and remediating contaminated sites, but there has been no indication yet that NJDEP will relieve a property owner of liability when an owner did not receive public records because of the office closures.  Of course, it is possible that NJDEP or a court called on to interpret these provisions will conclude that a buyer conducted a “diligent search” where it requested documents from a government agency but the agency was unable to provide documents at all, or unable to provide them within a reasonable time.  It also might be determined that the party performing a PA did not have a legal right to access documents that an agency was unable to provide within a reasonable time, as circumstances have thwarted the public’s usual right to access government documents.  Despite these potential arguments, neither NJDEP nor a court may provide a more definitive interpretation of the applicable regulations for some time, whereas parties to pending or contemplated real estate transactions must determine now their tolerance for environmental risk.

Due Diligence and Liability Protection under Federal Law

In contrast to New Jersey law, the analogous defense to liability for purchasers of contaminated property that performed “all appropriate inquiries” in the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. 9601 et seq., contemplates that public records may not be available.  Federal regulations define “all appropriate inquiries” as performing a Phase I Environmental Site Assessment (“Phase I”), a similar but not identical exercise to performing a PA under New Jersey law.  Those regulations allow a Phase I report to be completed with “data gaps,” identified missing information that nonetheless may not foreclose a purchaser from relying on the completion of the Phase I as a defense to environmental liability.

Potential Responses to Public Record Limitations

Purchasers of property in New Jersey who performed pre-purchase environmental due diligence during this time while access to public documents remains limited may find that they have a defense to environmental liability under federal law, but not State law.  Although waiting until all government documents can be produced is the safest course, that may not be a realistic option.  Instead, prospective purchasers might seek some measure of protection through a few alternate methods. 

  • Seeking Documents from Other Sources.  Missing documents might be obtained during this time period from the licensed site remediation professional (“LSRP”) if one has been retained for the site, but an LSRP only would be retained if the property was known to be contaminated, and a complete PA is not as valuable to a buyer when known contamination exists.  Documents might also be obtained from other environmental professionals that are (or previously were) involved with the site, whether on behalf of seller or another entity, such as a prior purchaser or tenant.  These other environmental professionals might have older documents that are otherwise only available from the NJDEP.  In fact, legal counsel often maintain detailed records of the environmental reports and correspondence relating to a particular property.  But again, these professionals are only likely to be involved with sites that are known to be contaminated and thus are not helpful in all circumstances. 
  • Conducting Additional Invasive Sampling.  Prospective purchasers (or parties providing financing) also might insist more strongly on performing environmental sampling in light of the uncertainty surrounding the customary defense for prospective purchasers.  While additional sampling is not a perfect replacement for the inability to obtain public documents under the legal requirements for “all appropriate inquiry,” more information about the environmental condition of the site certainly provides valuable information for the parties to evaluate environmental risk and could be another basis for a purchaser to assert that it conducted “all appropriate inquiry” required for a defense to Spill Act liability under New Jersey law, i.e., the site investigation that could be required following the PA.
  • Enhancing Representations and Contractual Protections. Buyers might seek private contractual protections from sellers since the availability of statutory liability protections buyers typically rely on is uncertain.  Representations regarding the condition of the property and indemnities for pre-existing conditions are of heightened importance during this period, as are environmental insurance policies.  But, as was the case before COVID-19, sellers can be expected to push back on such contractual provisions. 

Regardless of how the parties to a particular transaction choose to address this issue, buyers and sellers of New Jersey property should account for the possibility that a purchaser in 2020 may be unable to conduct the “all appropriate inquiry” required for a defense to Spill Act liability.

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

CMS Issues Alert to Providers Regarding Incentive Payments, New CMS Models and Other CMS Action, and New Jersey Establishes Task Force on Long-Term Care

Posted on by rd_admin

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

Centers for Medicare &
Medicaid Services ("CMS") Issues Advisory Alert to Qualifying
APM Participants for Incentive Payment Information

85 FR 57980 – CMS
issued a payment advisory to alert certain clinicians who are Qualifying APM
participants ("QPs") and eligible to receive an Alternative Payment
Model ("APM") Incentive Payment that CMS does not have the current
billing information needed to disburse the payment. Specifically, CMS has
identified those eligible clinicians who earned an APM Incentive Payment in CY
2020 based on their CY 2018 QP status. When CMS disbursed the CY 2020 APM
Incentive Payments, CMS was unable to verify current Medicare billing
information for some QPs and was therefore unable to issue payment. CMS
compiled a list of QPs that have unverified billing information and issued
instructional letters to those qualifying APM participants on September 11,
2020.  QPs, and any others who anticipated receiving an APM Incentive
Payment but have not, should follow the instructions to provide CMS with
updated billing information using this information collection form.

New CMS Alternative Payment Models and
Guidance to Medicaid Agencies on Implementing Models

CMS Announces new ET3 Payment
Model for Ambulance Care Teams

On September 16, 2020 CMS issued new guidance on its new Emergency Triage,
Treat, and Transport (“ET3”) model. The ET3 model is a voluntary, five
year payment model that is designed to provide greater flexibility to ambulance
care teams to address emergency healthcare needs for Medicare Fee-for Service
(“FFS”) beneficiaries following a 911 call. As part of the new ET3 mode,
CMS will pay participating ambulance suppliers and providers to: (i) transport
an individual to a hospital emergency department (“ED”) or other destination
covered under the regulations; (ii) transport to an alternative destination
partner (such as a primary care doctor’s office or an urgent care clinic); or
(iii) provide treatment in place with a qualified healthcare partner, either
on the scene or connected using telehealth. The ET3 model will be
effective January 1, 2021.

CMS Finalizes Specialty Care
Models

On September 18, 2020, CMS
finalized its end-stage renal disease ("ESRD") treatment choices
("ETC") model and radiation oncology payment ("RO")
model. The ETC model focuses on encouraging greater use of home dialysis
and kidney transplants to reduce Medicare expenditures. The RO model
imposes a mandatory payment and testing model and makes prospective episode
payments to hospital outpatient departments ("HOPD") and freestanding
radiation therapy centers for radiotherapy episodes of care. It also seeks
to reduce Medicare program spending through enhanced financial accountability
for RO Model participants. The final rule, which includes both payment
models, can be found here.

CMS Announces New Guidance
Expanding Value-Based Care Strategies for Medicaid

On September 15, 2020, CMS issued
new guidance to state
Medicaid directors designed to advance the adoption of value-based care
strategies across their healthcare systems and align provider incentives across
payers (the “Roadmap”). Value-based care can be defined as being one in
which providers are reimbursed based on their ability to improve quality of
care in a cost-effective manner or lower costs while maintaining standards of
care, rather than the volume of care they provide. As part of its Roadmap,
CMS encourages states to consider the adoption of payment models in the context
of their individual circumstances such as: advanced payment methodologies under
fee-for-service, bundled payments, and total cost of care
models.  CMS issued a fact sheet on the
guidance.

CMS Proposes Payment Changes to Medicare
Advantage and Part D

On Tuesday, September 15, 2020,
CMS issued part one of its proposed 2022 Medicare Advantage Advance,
which updates payment methodologies to Medicare Advantage and Part D plans. CMS
released the first part of the proposed rule three months ahead of schedule to
give insurers more time to prepare bids for 2022 in light of uncertainty
brought by the COVID-19 pandemic. CMS proposes to change how it will
calculate Medicare Advantage risk adjustments for 2022, and wants to fully
phase in a model that adds variables to count conditions in the risk adjustment
model. It includes additional conditions for mental health, substance use
disorder and chronic kidney disease. Under the proposed rule, the Medicare
Advantage risk score used to calculate payment in 2022 would rely entirely on
encounter data as the source of diagnoses. In the past, CMS used a blend of
encounter data and diagnoses submitted to its risk adjustment processing
system. CMS also plans to discontinue its policy of supplementing diagnoses
from encounter data with diagnoses from inpatient records that are submitted to
the risk adjustment processing system for determining risk scores. CMS said
both parts of the Advance Notice will be finalized in the 2022 rate
announcement set to publish by April 5, 2021.

CMS Withdraws Proposed Medicaid Fiscal
Accountability Rule

The Medicaid Fiscal Accountability
Rule, first proposed last November, has been withdrawn by CMS as of September
14. The rule aimed to promote transparency and fiscal integrity by
establishing new reporting requirements for state supplemental payments to
Medicaid providers. However, several hospital associations, including
America's Essential Hospitals and the American healthcare Association, argued
that finalizing the Medicaid fiscal integrity rule would introduce unnecessary
restrictions on states at a time when hospitals are facing challenges and an
uncertain future due to the COVID-19 pandemic.

The New
Jersey State Legislature Passes Bill to Establish the New Jersey Task Force on
Long-Term Care Quality and Safety

On August 27, 2020 the New Jersey
Legislature passed a bill (A4481/S2787)
directing the establishment of the New Jersey Task Force on Long-Term Care
Quality and Safety (the “Task Force”), which will be tasked with developing
recommendations to make changes to the long-term system of care to drive
improvements in person centered care, resident and staff safety, improvements
in quality of care and services, workforce engagement and sustainability, and
any other appropriate aspects of the long-term system of care in New Jersey as
the task force elects to review. The Task Force would be comprised of 27
members.

Kansas Federal Court Holds Lender Did Not Violate Usury Law, FDCPA, RESPA, or TILA, but May Have Breached Contract For Not Immediately Applying Partial Payment

Posted on by rd_admin

The United States District Court for the District of Kansas recently found that a lender did not violate a state usury law or the FDCPA, RESPA or TILA in its handling of plaintiffs’ mortgage, but may have violated the contract by not immediately applying plaintiffs’ partial payments.  See Schneider v. U.S. Bank, N.A., 2020 WL 4673159 (D. Kan. Aug. 12, 2020).  In 2010, plaintiffs obtained a mortgage loan from defendant.  At the time of the loan, the interest rate exceeded the maximum interest rate in Kansas.  In 2020, plaintiffs brought this action, alleging a number of issues with the loan, including that the interest rate was usurious under Kansas state law.  Plaintiffs also claimed that they were required to pay fees to make payments online or on the phone that were split between defendant and another entity, and also that, if they made extra principal payments, the lender would hold the payment and apply it to the next month’s payment rather than applying it immediately, allowing interest to continue to accrue.  In their complaint, Plaintiffs made a number of state law claims, in addition to federal claims under the FDCPA, RESPA, and TILA.  Defendant moved to dismiss the complaint.

The Court granted the motion in part and denied it in part.  First, the Court dismissed the usury claim.  It held that defendant is a national bank, and under the National Bank Act, “a national bank is allowed to export the maximum interest rate it could have charged in its home state to the state where the loan is originated.”  Thus, even if the interest rate exceeded Kansas’s limit, it was not usurious.  Second, the Court dismissed the FDCPA claim, finding that defendant has always serviced the mortgage and “Congress did not intend for the FDCPA to cover mortgage service companies.”  Third, the Court dismissed the RESPA claim, finding that the split fees between defendant and a third party only were taken for monthly payments, and the RESPA prohibition on fee splitting applies only to fees at origination.  Likewise, the Court found that there was not a TILA violation when defendant held partial payments to be applied for subsequent months.  Nonetheless, the Court found that plaintiffs had made a sufficient claim of breach of contract based on the claim that the mortgage required payments to be posted immediately upon receipt.

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

New Jersey Appellate Division Holds Judgment Lien Should Be Discharged Post-Bankruptcy

Posted on by rd_admin

The New Jersey Appellate Division recently discharged a creditor’s judgment lien on the debtor’s property after the debtor declared bankruptcy and had the underlying debt discharged.  See Cooper Electric Supply Co., v. J & Jay Electric, Inc., 2020 WL 5496490 (N.J. Super. Ct. App. Div. Sept. 11, 2020).  In 2008, plaintiff obtained a judgment against defendant and docketed the judgment.  Although plaintiff received a writ of execution, the record was not clear on if plaintiff ever levied on defendant’s house. In 2010, defendant and his wife filed for bankruptcy, and listed plaintiff as an unsecured creditor.  The bankruptcy trustee paid plaintiff about 7% of the judgment amount, and defendant obtained an order of discharge.  Six years later, defendant filed an application under N.J.S.A. 2A:16-49.1 to discharge the judgment lien on his property.  Under that statute, a debtor can discharge a judgment so long as (i) the request is made more than one year after the Bankruptcy Court discharges the debtor’s debts; (ii) the discharge includes the judgment at issue; and (iii) the lien is “subject to be discharged or released under the provisions of the Bankruptcy Act.”  The trial court denied the motion, stating only “Court understands that a writ of execution was issued prior to filing.”

On appeal, the Court reversed.  The Court found that defendant met the first two prongs of the test under the statute, but that “[t]he dispositive issue under the statute is whether the Bankruptcy Court could have discharged the judgment lien. If it could — regardless of whether it did — then the Superior Court is obliged to discharge the lien.”  The Court then determined that, under 11 U.S.C. § 522(f), the lien was subject to avoidance based on the total amount of debts encumbering defendant’s property.  Accordingly, the Court found that it was “subject to be discharged” and discharged it under N.J.S.A. 2A:16-49.1.

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

CMS Maintains Hospital Transparency Price Rule, Other Federal Rules, AMA Releases New CPT Codes, and AAAHC Issues New Standards

Posted on by rd_admin

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

Over
Objections, CMS Maintains Hospital Transparency Pricing Rule in the Inpatient
Prospective Payment System Final Rule for 2021

Centers for Medicare &
Medicaid Services (“CMS”)
has released its Inpatient Prospective Payment System (“IPPS”) final rule for fiscal
year (“FY”) 2021, effective October 1, 2020. The rule affects
approximately 3,200 acute care hospitals. Over the objections of numerous
providers, including the American Hospital Association, CMS maintained the
transparency rule in the final rule, which requires hospitals to report to CMS
the median rate negotiated with Medicare Advantage organizations for inpatient
services. CMS intends to use the data in a new market-based methodology to
set inpatient hospital payments beginning in 2024.

Federal
Interim Final Rule on COVID-19 Reporting

85 FR 54820
– This interim final rule
revises regulations to strengthen CMS’s ability to enforce compliance with CMS
long-term care ("LTC") facility requirements for reporting information
related to COVID-19. Specifically, the rule imposes civil money penalty
amounts for an LTC’s failure to electronically report certain COVID-19 data
each week. The rule also establishes new requirements in the hospital and
critical access hospital Conditions of Participation for tracking the
incidence and impact of COVID-19 and sets forth requirements for all Clinical
Laboratory Improvement Amendments (“CLIA”) laboratories to report COVID-19 test
results to the Secretary of Health and Human Services in such form and manner,
and at such timing and frequency, as the Secretary prescribes throughout the
public health emergency.  The rule was published and became effective
on September 9, 2020.

Proposed
Federal Rule on Breakthrough Technology

85 FR 54327 – CMS
recently issued a proposed rule
establishing a Medicare coverage pathway to provide Medicare beneficiaries
faster access to new, innovative medical devices designated as a breakthrough
by the FDA. The rule proposes a Medicare Coverage of Innovative Technology
("MCIT") pathway, which would begin national Medicare coverage on the
date of FDA market authorization and would continue for four years, covering
services necessary to implant and maintain the devices and any reasonable and
necessary treatments due to complications from the devices. Device
manufacturers would be required to apply to the FDA for breakthrough status,
and then the FDA would review the request to determine whether the device meets
the breakthrough criteria. CMS would subsequently post a list of
breakthrough devices covered through MCIT and the duration of the coverage on
the CMS website. Comments are due on November 20, 2020. CMS issued a fact sheet on the
proposed rule.

The American Medical Association (the
"AMA") Releases 2021 CPT Code Set

On September 1st, 2020, the AMA
released updates to the 2021 Current Procedural Terminology ("CPT")
code set. In total, the AMA announced 329 changes, including 206 new
codes, 54 deletions, and 69 revisions.  These changes reflect a major
overhaul to the codes and guidelines for office and other outpatient evaluation
and management ("E/M") services, such as, eliminating history and
physical exam as elements for code selection. The AMA’s release can be
found here.

The
Accreditation Association for Ambulatory healthcare (the “AAAHC”) Releases New
Standards

The AAAHC has announced
publication of the 41st edition of the Accreditation
Handbook for Medicare Deemed Status, which contains the most
current information and guidance for organizations seeking accreditation and
best practices for patient safety and care in the ambulatory setting. For
further discussion of the new standard, visit the AAAHC’s webinar series.

Second Circuit Holds Collection Letter Did Not Violate FDCPA For Failing to State That Debtor Could Challenge Portion of Debt

Posted on by rd_admin

The United States Court of Appeals for the Second Circuit recently affirmed a lower court’s decision and held that a debt collection letter that did not state that a debtor had the right to challenge a portion of the debt within 30 days did not violate the FDCPA.  See Chaperon v. Sontag & Hyman, PC, 2020 WL 5240609 (2d Cir. Sept. 3, 2020).  In 2019, defendant sent plaintiff a debt collection letter that stated, among other things, that “[y]ou have 30 days from receipt of this notice to dispute the debt.”  Plaintiff then brought this action, claiming that the letter violated 15 U.S.C. 1692g(a)(5) of the FDCPA, which requires that collection letters include “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.”  (Emphasis added).  Plaintiff claimed that the letter was false and misleading based on the failure to include the required “or any portion there” language.  The District Court dismissed the action, finding that the FDCPA does not require that debt collectors use the exact language set forth in the statute, and that even the least sophisticated consumer would not be misled by this language.

On appeal, the Court affirmed.  It held that “a debt collector’s failure to use the FDCPA's precise language in its notices is not a violation, as there is no requirement in the statute that any of its provisions be quoted verbatim.”  It also found that the argument raised by plaintiff here was similar to that in Smith v. Transworld Sys., Inc., 953 F.2d 1025 (6th Cir. 1992), in which the Sixth Circuit denied the same claim and held that the letter “adequately inform[ed] the reader that the debt must be disputed, . . . [and] it is implicit that the claim can be wholly, or partially, challenged.”

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

Did New Jersey Just Cap Profits for Nursing Homes? New Jersey Takes Further COVID-19 Action Via Executive and Administrative Orders, and CMS Requires Positive COVID-19 Test for Add-On Payments.

Posted on by rd_admin

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

New Jersey Passes Bill Requiring New Prevailing Wage for Long-Term Care Facility Staff and Establishes a Direct Care Ratio for Nursing Homes

The New Jersey State Assembly and the New Jersey State Senate passed a new bill (A4482/S2758) establishing the minimum wage for certain long-term care facility staff and establishes direct care ratio requirements for nursing homes. First, the bill provides that the minimum wage for direct care staff in long-term care facilities is to be $3 higher than the prevailing State minimum wage and annually adjusted based on cost-of-living increase. Second, under the bill, the Commissioner of Human Services will be required to establish a direct care ratio reporting and rebate requirement that will take effect no later than July 1, 2021. Under the direct care ratio reporting and rebate requirement, nursing homes will be required to report total revenues collected, along with the portion of revenues that are expended on direct care staff wages, other staff wages, taxes, administrative costs, investments in improvements to the facility’s equipment and physical plant, profits, and any other factors as the Commissioner requires. The direct care ratio will require that 90% of a facility’s aggregate revenue in a fiscal year is expended on the direct care of residents.

New Jersey Passes Bill Establishing Temporary Rate Adjustment for Certain Nursing Facilities to Cover Costs Related to COVID-19

The New Jersey State Assembly and the New Jersey State Senate have passed a new bill (A4547/S2813) requiring a temporary rate adjustment for certain nursing facilities to support wage increases and to cover costs related to COVID-19. Specifically, the bill makes the reimbursement rate for Class I, Class II, and Class III nursing facilities equal to the rate received on September 30, 2020, plus a 10 percent adjustment, for the period running from October 1, 2020 through June 30, 2021. Moreover, under the bill, facilities receiving the rate adjustment will be required to use at least 60 percent of the rate adjustment for the sole purpose of increasing wages or supplemental pay for certified nurse aides providing direct care. Finally, the remainder of the rate adjustment will be used for other costs related to COVID-19 preparedness and response, including enhancing infection control measures, cleaning, reconfiguration of the facility to support cohorting, procurement of personal protective equipment, testing, or other staff wages and needs.

New Jersey Executive Directive No. 2020-17

The New Jersey Department of Health (“DOH”) issued Executive Directive No. 20-027 setting forth new personal protective equipment (“PPE”) stockpile requirements. Hospitals must have a ninety (90) day stockpile of surgical masks, N95 masks, face-shields, gloves, and gowns. Hospitals have two (2) months from the enactment of the Directive, or until October 23, 2020, to acquire the required PPE. By October 23, 2020, hospitals must send an attestation to the DOH via e-mail to CNLHospitalSEPHE@doh.nj.gov certifying compliance with the PPE stockpile requirements. PPE reporting is in addition to, not in place of, other data reporting requirements set forth in Executive Order No. 111.

New Jersey DCA Administrative Order No. 2020-15 and DCA Waiver No. 2020-14

The Division of Consumer Affairs (“DCA”) issued Administrative Order No. 2020‑15 and Waiver No. 2020‑14 to allow healthcare practitioners to utilize telemedicine to prescribe controlled dangerous substances (“CDS”). Pursuant to the Order and Waiver, in-person encounters are not required to issue a prescription for CDS. The Order shall remain in effect until whichever of the following occurs first: (1) the end of the state of emergency or public health emergency declared by Governor Murphy in Executive Order No. 103, whichever is later; or (2) the end of the telemedicine allowance designated by the United States Secretary of Health and Human Services on March 16, 2020, based upon the public health emergency declared by the Secretary on January 31, 2020.

New Jersey DCA Administrative Order No. 2020-17

The DCA issued Administrative Order No. 2020-17, which sets forth plans for resuming in-person education for cosmetology, Registered Nursing ("RN"), Licensed Practical Nursing ("LPN"), and Certified Homemaker-Home Health Aid ("CHHA") Programs.  Plans must be submitted to the appropriate board, i.e. the Board of Nursing, for review prior to resumption of in-person instruction. Among other things, the plans must be distributed to all students, teachers, and staff, social distancing is required, and sanitization and screening policies shall be adopted.

Within 30 days of the resumption of in-person instruction, each RN, LPN, and CHHA Program shall provide a certification to the Board of Nursing that in-person instruction is being conducted in compliance with the requirements set forth in the Order and other previously-issued directives. Cosmetology Programs shall submit a similar certification to the Board of Cosmetology, also within 30 days of the resumption of in-person instruction.

CMS Now Requires Positive COVID-19 Test to Receive Medicare Boost

Centers for Medicare & Medicaid Services (“CMS”) issued new guidance requiring a positive COVID-19 test to be documented in a patient’s medical record for a claim to be eligible for the add-on payment for hospital admissions after September 1, 2020. Previously, under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), a 20 percent add-on payment was added to the inpatient prospective payment system diagnosis-related group rate for treating patients diagnosed with COVID-19 when a physician noted that the patient had COVID-19. Now, to receive the 20 percent add-on payment, the COVID-19 test must be taken within 14 days of the hospital admission and come back positive.
For more information about this Update, please contact any of the authors below.

Kentucky Appellate Court Denies Claim Against Title Searcher as Untimely, Holds There Is No Equitable Estoppel Claim Against Title Insurer Who Initially Gives Coverage for Claim Before Later Denying

Posted on by rd_admin

The Court of Appeals of Kentucky recently held that claims against a closing attorney who performed a title search were untimely, and that insureds did not have a claim against their title insurance company when the company initially found that the claim was “potentially covered” before later denying the claim based on one policy provision, and then later prevailing on summary judgment on another provision.  See Pasha v. Eisele, 2020 WL 4555812 (Ky. Ct. App. Aug. 7, 2020).  Plaintiffs entered into a contract to purchase the property at issue in 2008, and retained the defendant attorney, Eisele, to handle the title search and the closing.  After conducting the title examination, Eisele advised plaintiffs that the property was zoned to allow a multi-level building.  Plaintiffs then purchased the property and obtained a title insurance policy in 2009.  That same year, plaintiffs learned that there was a restriction on the property that prohibited multi-level buildings.  Plaintiffs filed a claim with their title insurer.  Although the title insurer initially found that the claim was “potentially covered,” it reserved its rights and later denied based on the insurer’s conclusion was that plaintiffs did not suffer a loss.  In 2011, plaintiffs retained the Bornstein firm and sued the title insurance company.  At that point, plaintiffs also informed the Bornstein firm that they were considering bringing an action against Eisele, but understood that “the one (1) year statute of limitations on error and omission has passed” and did not bring a claim against him.  The trial court dismissed the action against the title insurer in 2013, finding that the restriction was discoverable in the public record and that the claim was barred by a policy exclusion for “[a]ny easements or servitudes appearing in the public records.”

In 2016, plaintiffs brought this action against Eisele and the Bornstein firm, claiming Eisele was negligent for failing to discover the restriction and Bornstein was negligent for failing to bring a claim against Eisele in 2011.  Plaintiffs also claimed that the Bornstein firm should have raised an equitable estoppel claim against the title insurer based on the fact that the insurer initially accepted the claim, and then denied the claim because plaintiffs did not suffer a loss, but prevailed on summary judgment on other grounds.  The trial court granted defendants’ motion for summary judgment dismissing the claims.

On appeal, the Court affirmed.  The Court found that plaintiffs were required to bring their claim against Eisele within one year of the “occurrence,” or one year “from the date of the actual or constructive discovery of the cause of action.”  In this case, the alleged negligence occurred in 2009 and plaintiffs were aware of it then, as shown when they acknowledged in 2011 that the one-year period had passed.  Further, because any claim against Eisele would have been untimely, plaintiffs’ claim against the Bornstein firm for failing to name Eisele as a party had no merit.  Finally, the Court found that the Bornstein firm was not negligent for failing to raise the equitable estoppel argument against the title insurance company earlier in the case, finding that “even if appellants could establish all other elements of equitable estoppel, it is undisputed that not only were appellants aware of [the title company’s] reservation of any and all defenses, appellants had the means to discover what those defenses might be.”

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

CMS Extends Deadline and Expands Next Round Under the Provider Relief Fund, Additional Guidance on Nursing Homes, New CDC Testing Recommendations, and Federal Regulations on Guidance Documents

Posted on by rd_admin

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

Deadline
for Phase 2 Financial Relief Applications Extended by CMS

Healthcare providers now have
more time to apply for the next round of emergency financial relief under the
Coronavirus, Aid, Relief, and Economic Security Act (the “CARES Act”). Previously,
the deadline to apply for the Phase 2 General Distribution was August 28,
2020. However, on August 25, 2020, the Centers for Medicare & Medicaid
Services (“CMS”) issued new guidance extending
the deadline to September 13, 2020 and expanding the eligible providers.

CDC
Waives Testing Recommendation for People Without COVID-19 Symptoms

The Centers for Disease Control
and Prevention (“CDC”) has updated its COVID‑19
testing guidelines, such that people without symptoms do not always need to be
tested. Previously, the CDC recommended testing for all close contacts of
COVID-19 patients. Now, close contacts no longer need a test if they do not
exhibit symptoms. Vulnerable populations can be excepted, and testing for
asymptomatic people is appropriate if recommended by clinicians or public
health officials.

Federal Action Regarding Nursing Homes

CMS Issues New Guidance Requiring
Mandatory COVID-19 Testing for Staff at Nursing Homes

On August 25, 2020, CMS issued new guidance requiring
nursing homes to regularly test their staff for COVID-19 and offer testing to
residents if there is an outbreak and/or if the resident begins to show
symptoms. Prior guidance only recommended, but did not enforce, mandatory
testing for staff and residents. As part of its August 25, 2020 guidance,
CMS announced it will be sending out surveyors to inspect nursing homes to
ensure they are in compliance. Those nursing homes not in compliance can face
up to four hundred dollars ($400) per day in fines. To offset the
additional financial burden that this will place on nursing homes, the CMS
advised it will allocate new funding through the CARES Act.

CMS Announces Resumption of
Routine Inspections of All Provider and Suppliers, Issues Updated Enforcement
Guidance to States, and Posts Toolkit to Assist Nursing Homes

CMS has announced that it
will resume routine inspections, onsite revisit surveys, non-immediate jeopardy
complaint surveys, and annual recertification surveys of all Medicare and
Medicaid certified providers and suppliers as soon as resources are
available. CMS also is providing guidance on resolving enforcement cases
that were previously on hold due to survey prioritization changes. Once
state surveyors ensure that facilities return back to compliance with federal
requirements for an onsite survey, the desk review policy will also temporarily
be extended to include noncompliance reviews (excluding immediate jeopardy
citations that have not been removed.)

In addition, CMS has issued
updated guidance regarding the re-prioritization of routine state survey agency
activities on Clinical Laboratory Improvement Amendments. Under the
guidance, state survey agencies are afforded flexibility and discretion to
direct resumption of survey activities based on the status of COVID-19
infections in their states.

CMS also has published updates to
the “Toolkit on State Actions to
Mitigate COVID‑19 Prevalence in Nursing Homes.” To better
assist nursing homes’ response to the pandemic, the toolkit details actions and
best practices by organizations, state governments, and U.S.
territories. The information is routinely updated and contains the most
recent information regarding how state governments and other public health
entities nationwide are working to contain the spread of COVID-19 in nursing homes.

CMS Launches Nursing Home
Training Program to Halt COVID-19 Spread

CMS has launched “CMS
Targeted COVID‑19 Training for Frontline Nursing Home Staff and Management,”
which is a national nursing home training program to assist front-line
caregivers and management prevent the spread of COVID-19. The training is
available to staff at any Medicare- and Medicaid-certified nursing home on the
CMS Quality, Safety & Education
portal. Among other things, the training provides guidance on
infection control and prevention, appropriate screening of nursing home
visitors, and the proper use of personal protective equipment. To ensure
that nursing home staff are aware of and participating in the training, CMS has
directed that Quality Improvement Organizations (“QIOs”) include the training
in their existing quality improvement action plans.

Additionally, CMS and the CDC
will also make available subject matter experts on bi‑weekly webinars from
August 27, 2020, through January 7, 2021, from 4:00-5:00pm ET, to answer
questions. To register for the Question and Answer webinars, visit the Zoom webinar registration page.

Federal Regulations on Guidance Documents

On August 20, 2020, the
Department of Health and Human Services (“HHS”) proposed a new rule
governing HHS’s release and maintenance of guidance documents. The
proposed regulations would ensure that the public receives appropriate notice
of new guidance and that HHS’s guidance does not impose obligations on
regulated parties that are not already reflected in duly enacted statutes or
regulations lawfully promulgated under them. The proposed rule, if
finalized, would apply to guidance documents issued by HHS, other than guidance
documents issued by FDA, which has its own good guidance practices regulations
in place. Among other things, the rule proposes establishing an online
guidance repository for electronic documents, imposes procedural guidelines for
HHS issuance of new guidance, and outlines procedures to petition review of
guidance guidelines. Comments are due by September 16, 2020. HHS
later corrected the proposed
rule, amending an error in the date by which HHS would be required to post the
guidance repository of guidance documents.

New Jersey Appellate Court Finds Settlement with Title Company Was Not Election of Remedies Preventing Property Owner from Suing Neighbor for Encroachments, Rejects Neighbor’s Adverse Possession Claim

Posted on by rd_admin

The New Jersey Appellate Division recently held that a property owner’s $600 settlement with her title company did not bar her later action against her neighbor for the neighbor’s encroachments onto her properties, and further held that the neighbor did not adversely possess the disputed property.  See Leonard v. Pantich, 2020 WL 5049098 (N.J. Super. Ct. App. Div. Aug. 27, 2020).  This action concerns a property line dispute between two neighbors.  Plaintiff purchased her property in 2006, and obtained a survey that showed that defendant’s fence encroached on the rear of her property.  She later obtained a $600 settlement from her title insurance company for this encroachment.  In 2010, she sent defendant a letter asking defendant to remove his fence, but he refused.  In 2015, defendant “replenished” his stone driveway located near the front of the parties’ properties.  Although defendant claimed the location of the driveway did not move, plaintiff claimed the driveway was extended across the property line into her property.  In 2018, plaintiff brought this action for quiet title regarding both the fence and the driveway.  Defendant then filed a counterclaim alleging adverse possession or a prescriptive easement.  After a bench trial, the trial court issued a decision in favor of plaintiff.  It held that the fence encroached onto plaintiff’s property by under a foot and the driveway encroached by 3-4 feet, and that defendant had not adversely possessed the same.

On appeal, the Court affirmed.  First, it rejected defendant’s claim that the $600 payment to plaintiff from the title insurance company constituted an election of remedies that barred this claim.  The Court found that the $600 was a “nominal sum” that appeared to be only related to the fence encroachment and, more importantly, that the election of remedies doctrine “has long ago been ‘characterized [as] ‘a harsh and now largely obsolete rule’ and one ‘to be strictly confined within its reason and spirit.’’” Thus, “it would be unreasonable and contrary to the spirit of that equitable doctrine to transfer ownership of plaintiff's property to defendant under the circumstances presented.”  Second, the Court found that defendant’s use of the disputed property was not “adverse or hostile” due to the limited encroachment, and therefore could not form the basis of an adverse possession claim.  Plaintiff mowed the disputed area for a decade and informed defendant that his fence encroached on her property in 2010.  Moreover, the fence encroached by less than a foot, and “a presumption that plaintiff knew of the encroachment would have been improper, especially as defendant did not undertake ‘extensive improvements’ on the property.”  Accordingly, the Court affirmed the decision in plaintiff’s favor.

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

Get Our Latest Insights

Subscribe