New Jersey Passes Statutes on Nursing Homes Including Staffing Mandates, New Jersey Pharmacists Can Administer COVID-19 Tests, HHS Updates Provider Relief Fund Reporting Requirements, and New Information on Medicare Advantage Programs Banner Image

New Jersey Passes Statutes on Nursing Homes Including Staffing Mandates, New Jersey Pharmacists Can Administer COVID-19 Tests, HHS Updates Provider Relief Fund Reporting Requirements, and New Information on Medicare Advantage Programs

New Jersey Passes Statutes on Nursing Homes Including Staffing Mandates, New Jersey Pharmacists Can Administer COVID-19 Tests, HHS Updates Provider Relief Fund Reporting Requirements, and New Information on Medicare Advantage Programs

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander Berlajolli, or Daniel J. Parziale.

The New Jersey State Legislature Passes Bill Requiring New Direct Care Staff-to-Resident Ratios for Nursing Homes and Establishes a New Task Force on Direct Care Worker Retention

The New Jersey Legislature passed a bill (A4652/S2712) which requires nursing homes to maintain certain minimum direct care staff-to-resident ratios.  The bill expressly requires: (i) one certified nurse aide to every eight residents for the day shift; (ii) one direct care staff member to every 10 residents for the evening shift, provided that no fewer than half of all staff members are to be certified nurse aides, and each staff member will sign in to work as a certified nurse aide and will perform certified nurse aide duties; and (iii) one direct care staff member to every 14 residents for the night shift, provided that each direct care staff member is to sign in to work as a certified nurse aide and perform certified nurse aide duties.

The bill also establishes a Special Task Force on Direct Care Workforce Retention and Recruitment (the “Task Force”) in the Department of Labor and Workforce Development.  The purpose of the 16 member Task Force is to, among other things: (i) evaluate current direct care staffing levels in the state; (ii) examine policies and procedures used to track data on direct care staffing, including workforce turnover rates in long-term care, staffing statistics, and vacancy rates; and (iii) examine the effectiveness of staff retention and recruitment strategies and initiatives that are in place for direct care staff.

The New Jersey State Legislature Passes Bill Requiring Long-Term Care Facilities to Have Written Policies Preventing Social Isolation for Residents

The New Jersey Legislature passed a bill (A4007/S2785) requiring each long-term care facility in the state, as a condition of facility licensure, to adopt and implement written policies, and have appropriate technology, staff, and other capabilities in place, to prevent the social isolation of facility residents at all times during operation.  Moreover, the bill requires the social isolation prevention policies adopted by each long-term care facility to authorize, and include specific protocols and procedures to encourage and enable, residents of the facility to engage in in-person contact, communications, and religious and recreational activities with other facility residents and with family members, friends, and other external support systems, except when such in-person contact, communication, or activities are prohibited, restricted, or limited, as permitted by federal and State statute, rule, or regulation.

The New Jersey State Legislature Passes Bill Creating Two Programs to Provide Supplemental Payments to Long-Term Care Facility Staff

The New Jersey Legislature passed a bill (A4479/S2788) that establishes two programs that provide supplemental payments to long-term care facility staff providing direct care services during the COVID-19 pandemic.  First, the bill requires the State Treasurer to establish one program to make a one-time, lump-sum payment to any employee of a long-term care facility who, during the period commencing from March 9, 2020 through the effective date of the bill: (i) worked at least 10 consecutive or non-consecutive weeks during which the employee provided direct care services at a long-term care facility; (ii) during each of those 10 weeks, provided at least 25 hours of direct care services at a long-term care facility, which 25 hours may have been provided in a single long-term care facility or in multiple long-term care facilities during that week; and (iii) during each of those 10 weeks, earned an hourly wage of less than $25 per hour or a salary that is equivalent to a wage of less than $25 per hour.  Second, the bill requires the State Treasurer to establish a grant program for long-term care facilities to provide supplemental payments to certain staff who provide direct care services at the facility.  The bill also provides that a facility will be eligible for a grant award under this program if the facility, among other things, provides supplemental pay to staff members who deliver at least 25 hours of direct care services per week.

The New Jersey State Legislature Passes Bill Allowing Pharmacists to Administer COVID-19 Tests

The New Jersey Legislature passed a bill (A4012/S2436) which allows licensed pharmacists, consistent with federal guidance and waivers, to order and administer to any person any test for COVID-19 that the federal Food and Drug Administration (“FDA”) has authorized.  The bill expressly requires, among other things, that: (i) the manufacturer of the test be registered with the FDA and the pharmacy distributes personal protection equipment to all pharmacy staff and ensures that policies and protocols are in place to ensure all people presenting at the pharmacy for any reason maintain a level of social distancing appropriate to prevent the transmission of COVID-19.  Finally, the bill requires a pharmacy to comply with reporting requirements, advising about isolation, and to advise patients with severe symptoms to promptly seek treatment at a hospital.

The Department of Health and Human Services (“HHS”) Unveils Reporting Requirements for COVID-19 Provider Relief Funds

On September 19, 2020, HHS released more details about the reporting requirements for healthcare organizations that received one or more payments exceeding $10,000 in COVID-19 relief payments. HHS details the data healthcare organizations must report and  follows an August  2020 document that HHS previously issued.  Providers must report how they used the provider relief fund payments by disclosing expenses incurred as well as lost revenue and must submit information about the healthcare-related expenses incurred due to the COVID-19 pandemic that another source has not reimbursed or is obligated to reimburse.   HHS’s guidance states that providers should report expenses in two categories: (1) general and administrative expenses and (2) other healthcare-related expenses. General and administrative expenses include items such as personnel or mortgages.  Other healthcare-related expenses include costs for supplies and equipment, among other things.   In addition, providers must provide information on how they applied provider relief funds to lost revenue, represented as a negative change in year-over-year net patient care operating income.  If providers do not use their funds by the end of this year, they will have six months to use remaining amounts toward COVID-19-related expenses or to apply them toward lost revenue up to the amount gained from healthcare services in 2019.

Providers must report within 45 days of the end of calendar year 2020 on their expenditures through the period ending December 31, 2020.

The Centers for Medicare & Medicaid Services (“CMS”)  Extends Prior Authorization for Ambulance Transport

On September 22, 2020, CMS announced that it is expanding the Medicare Prior Authorization Model for Repetitive, Scheduled Non-Emergent Ambulance Transport (“RSNAT”) nationwide. CMS reports that it has saved Medicare about $650 million over four years with this program.  Scheduled, repetitive ambulance services are often used by Medicare beneficiaries who need an ambulance ride to medical appointments. These types of ambulance transports are usually among the top Medicare Part B services with improper payments.  Based on initial results, the prior authorization model, which began in multiple East Coast states, will be expanded nationally.

CMS Announces Decreased Medicare Advantage Premiums and New Payment Model to Increase Insulin Affordability for Seniors

CMS has announced that average Medicare Advantage premiums for 2021 are expected to decrease by 11 percent to an estimated $21.  The average number of Medicare Advantage plan choices per county will increase from 39 plans in 2020 to 47 plans in 2021, and over 94 percent of Medicare Advantage plans will offer additional telehealth benefits.  Additionally, seniors who use insulin will be able to choose a plan in their area that offers insulin savings through the Part D Senior Savings Model and provides coverage on a broad set of insulins, each for no more than $35 per month.  Medicare Open Enrollment begins on October 15, 2020 and ends on December 7, 2020.

Ninth Circuit Holds HOLA Preempted California State Law Regarding Escrow Interest, Even After Assignment of Mortgage to National Bank

In a
split decision, the United States Court of Appeals for the Ninth Circuit
recently found that the Home Owners’ Loan Act of 1933 (“HOLA”) and its
regulations preempted a California state law that required banks to pay
borrowers interest on escrow accounts, even after the original savings
association assigned the mortgage to a national bank. See McShannock
v. JP Morgan Chase Bank NA
, 2020 WL 5639700 (9th Cir. Sept. 22,
2020). Plaintiffs obtained loans from Washington Mutual between 2005 and
2007. Under California law, money held in escrow accounts for residential
mortgages are required to accrue interest at a rate of 2% per year, with the
money credited to the borrowers. See California Civil Code Section
2954.8. However, Washington Mutual was a federal savings association
regulated by HOLA, which preempted the state escrow law. 12 C.F.R. §
560. This regulation was recently removed and replaced by new regulations
that hold that “[s]tate law applies to the lending activities of federal savings
associations and their subsidiaries to the same extent and in the same manner
that those laws apply to national banks and their subsidiaries.” 12 C.F.R.
§ 160.2. The parties nonetheless agreed that 12 C.F.R. § 560 applied
because that was the regulation in effect at the periods at issue in this case.

In 2008, Washington Mutual
failed, and JP Morgan Chase eventually purchased its assets. Chase is a
national bank regulated by the National Bank Act, which does not preempt the
California law. In 2018, plaintiffs brought this class action complaint,
claiming that Chase violated the state escrow law by not paying interest to
plaintiffs after it purchased the loan. Chase filed a motion to dismiss,
arguing that it was not required to pay interest to plaintiffs because the loan
was originated by a federal savings association and was governed by HOLA,
regardless of whether it was later assigned to a national bank. The
District Court denied the motion, finding that any HOLA preemption evaporated
once the loan was transferred to a national bank.

On appeal, the Ninth Circuit
reversed. It found that the preemption regulations are “not so limited in
scope to cover only the conduct of a federal savings
association.” Instead, “we hold that field preemption principles extend to
all state laws affecting a federal savings association, without reference to
whether the conduct giving rise to a state law claim is that of a federal
savings association or of a national bank.” The Court further noted that
Congress amended HOLA in 1978 to allow the sale of mortgages to the secondary
market. “Thus, there is little doubt that Congress intended HOLA to cover
the sale of mortgages belonging to federal savings associations” because 12
C.F.R. § 560.2(c)(6)(ii) preempted state laws that have more than an
“incidental effect on the lending operations of” federal savings
associations. The Court further stated: “We agree with Chase that a state
law, such as California's interest-on-escrow law, that directly or indirectly
imposes conditions on a federal savings association’s ability to convey a loan
is preempted under HOLA. Thus, California's interest-on-escrow law is also
preempted by section 560.2(b)(10) because it affects the sale, purchase of,
investment in, and participation in loans originated by savings associations.”

Finally, Judge Gwin issued a
dissent in which he disputed the majority’s finding that the HOLA preemption
carried over to a national bank assignee. “The majority does not show that
12 C.F.R. § 560.2 preemption was meant to flow through to a third party that
purchased a loan from a federal savings association. Once Chase held the loans,
the loans were no longer a part of ‘the operation of federal savings
associations,’ and the regulation does not govern Chase's conduct.” This
case is important for banks who have been assigned loans from savings
associations, particularly in light of a 2018 9th Circuit decision
that found that the National Bank Act does not preempt California’s escrow
interest law in a case where the national bank originated the loan. See
Lusnak v. Bank of Am., N.A., 883 F.3d 1185 (9th Cir.), cert.
denied,
 139 S. Ct. 567 (2018).

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

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