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Recently Approved New Jersey Telemedicine Regulations and CMS Issues Transparency Rules for Insurers Following the Transparency Rules for Hospitals Banner Image

Recently Approved New Jersey Telemedicine Regulations and CMS Issues Transparency Rules for Insurers Following the Transparency Rules for Hospitals

Month: November 2020

Recently Approved New Jersey Telemedicine Regulations and CMS Issues Transparency Rules for Insurers Following the Transparency Rules for Hospitals

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 Proposes and Adopts New Regulations Authorizing healthcare Providers’ Provision of Telemedicine

Since adopting the New Jersey Telemedicine and Telehealth statute, effective July 21, 2017, various governing boards have proposed and adopted telemedicine regulations. Below is a list of the most recent proposals and adoptions:

  • 52 N.J.R. 1897(a) – Rule Proposal – Sets forth standards for physicians’ assistants using telemedicine and telehealth. Comments are due December 18, 2020.
  • 52 N.J.R. 1901(a) – Rule Proposal – Sets forth standards for electrologists using telemedicine and telehealth. Comments are due December 18, 2020.
  • 52 N.J.R. 1911(b) – Rule Adoption – Implements standards for acupuncturists using telemedicine and telehealth.
  • 52 N.J.R. 1913(b) – Rule Adoption – Implements standards for genetic counselors using telemedicine and telehealth.
  • 52 N.J.R. 1916(a) – Rule Adoption – Implements standards for nurses using telemedicine and telehealth.
  • 52 N.J.R. 1918(a) – Rule Adoption – Implements standards for physical therapists and physical therapist assistants using telemedicine and telehealth.
  • 52 N.J.R. 1920(a) – Rule Adoption – Implements standards for psychologists using telemedicine and telehealth.
  • 52 N.J.R. 1925(a) – Rule Adoption – Implements standards for audiologists and speech language pathologists using telemedicine and telehealth.
  • 52 N.J.R. 1927(a) – Rule Adoption – Implements standards for social workers using telemedicine and telehealth.

New Jersey Board of Psychological Examiners Proposes New Rules Regarding Records Retention for Minors

The New Jersey Board of Psychological Examiners (the “Board”) proposed to amend N.J.A.C. 13:42‑8.1 to require that a licensee retain records for a minor for seven years from the date of the last entry or until the client turns 25 years of age, whichever is longer. Currently, N.J.A.C. 13:42‑8.1 only requires licensed psychologists to simply retain client records for at least seven years from the date of the last entry. Comments are due by January 1, 2021.

CMS Issues 2020 Final Transparency Rule for Insurers

As explained in our September 16, 2020 blog post, Centers for Medicare & Medicaid Services (“CMS”) issued its transparency rule for hospitals, effective October 1, 2020. Now, CMS has issued its final transparency rule (the “Rule”) setting forth requirements for group health plans, and health insurance issuers in the individual and group markets, to disclose cost‑sharing information upon request to a participant, beneficiary, or enrollee. Furthermore, per the Rule, the disclosure of cost‑sharing information includes an estimate of the individual’s cost‑sharing liability for covered items or services furnished by a particular provider. Moreover, the Rule requires that plans and issuers make this information available on an internet website and, if requested, in paper form, thereby allowing a participant, beneficiary, or enrollee to obtain an estimate and understanding of the individual’s out‑of‑pocket expenses and to effectively shop for items and services. Finally, the Rule requires plans and issuers to disclose in‑network provider negotiated rates, historical out‑of‑network allowed amounts, and drug pricing information through three machine‑readable files posted on an internet website, thereby allowing the public to have access to health coverage information that can be used to understand healthcare pricing and potentially dampen the rise in healthcare spending.

CMS Announces Coverage for Monoclonal Antibody Infusions to Treat COVID‑19

CMS announced that Medicare beneficiaries can receive coverage for monoclonal antibodies to treat COVID‑19 with no cost‑sharing during the public health emergency.

CMS Issues 2020 Final Rule on the Medicaid and Children’s Health Insurance Program

CMS issued its final rule (the “Rule”) geared towards its efforts to streamline the Medicaid and Children's Health Insurance Program (“CHIP”) managed care regulatory framework.  The Rule is effective on December 14, 2020, with certain of the revisions effective on July 1, 2021. Generally speaking, the Rule aims to, among other things, loosen Medicaid managed care requirements imposed in 2016 that many stakeholders said were too burdensome. The Rule also changes the minimum standards that states must use in creating network adequacy requirements to allow for more telehealth options.

The Rule contains several notable revisions, including:

  1. Eliminating the current policy requiring time and distance standards for managed care organizations (“MCOs”) provider networks and, instead, allowing states to set alternative quantitative network adequacy standards;
  2. Revising the definition of an “adverse benefit determination” to exclude claims denied solely because they do not meet the definition of a “clean claim”;
  3. Permitting states in certain circumstances to develop and certify as actuarially sound a rate range per rate cell (i.e., enrollee category), reversing course on current policy that requires states to develop and certify as actuarially sound each individual rate for each enrollee category covered by the managed care plan (effective July 1, 2021);
  4. Giving states more flexibility in the manner in which they set capitation rate payments to managed care plans (effective July 1, 2021);
  5. Revising the Quality Rating System (“QRS”) by providing states with the flexibility to submit information according to a sate-developed alternative QRS, as opposed to a CMS-developed QRS; and
  6. Permitting states transitioning Medicaid populations or services from a fee‑for‑service (“FFS”) delivery system to a managed care delivery system to require managed care plans to make pass‑through payments for up to three years at an amount that is less than or equal to the amount of their current upper payment limit payments under FFS (effective July 1, 2021).

Maryland Federal Court Holds No Title Insurance Coverage for Water Runoff

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The United States District Court for the District of Maryland recently found that there is no coverage under a title insurance policy when the insured’s neighbor brings a claim due to water runoff from the insured property.  See Batstone v. Chicago Title Ins. Co., No. 2020 WL 6393164 (D. Md. Nov. 2, 2020).  Plaintiffs purchased their home in 2018 and obtained a homeowners’ title insurance policy from the defendant title insurance company.  After closing, plaintiffs’ neighbors informed them that the placement of plaintiffs’ driveway caused excessive water runoff onto the neighbors’ property, and that the neighbors were planning to bring a lawsuit against plaintiffs and the home builder.  Plaintiffs then submitted a claim to defendant, who denied the claim.  After the neighbors filed their lawsuit, plaintiffs again submitted a claim and, after defendant denied it, brought this lawsuit.  The parties then cross-moved for summary judgment.

The Court granted defendant’s motion.  Plaintiffs first argued that their claim was covered under the policy’s Covered Risk 5, which covers the risk that “[s]omeone else has a right to limit Your use of the Land.”  Under plaintiffs’ argument, the neighbors were seeking to force plaintiffs to take affirmative action on plaintiffs’ land to stop the flow of water, which falls under this covered risk.  The Court disagreed, finding that the neighbors’ lawsuit challenged plaintiffs’ right to affect the neighbors’ property, not plaintiffs’.  “When a neighbor seeks to stop a continuing trespass by another neighbor, that effort to enforce their rights is not a limitation on the trespasser's use of his land.”  Second, plaintiffs argued that their claim was covered because title was defective.  The Court rejected this argument outright, holding that no one was challenging plaintiffs’ title to the property.  Finally, the Court found that the policy’s exclusions bar coverage for any claims arising from flooding.

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

CMS Final and Proposed Regulations, Including the Recent Basic Health Program Option

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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.

CMS Issues Proposed Rule on the Basic Health Program Option

The Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule on federal payment amounts to states that elect to establish a Basic Health Program (“BHP”) under the Patient Protection and Affordable Care Act (the “Act”) for program year 2022. Under the Act, BHPs may offer health benefits coverage to low-income individuals. States may find that a BHP is a useful option for several reasons, including the ability to potentially coordinate standard health plans in the BHP with their Medicaid managed care plans, or to potentially reduce the costs to individuals by lowering premiums or cost-sharing requirements.

In states that elect to operate a BHP under the Act, the BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the federal poverty level who are not otherwise eligible for Medicaid, the Children's Health Insurance Program, or affordable employer‑sponsored coverage, as well as for lawfully present non-citizens ineligible for Medicaid, whose income is below these levels. For those states that have expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act, the lower income threshold for BHP eligibility is effectively 138 percent, due to the application of a required 5 percent income disregard in determining the upper limits of Medicaid income eligibility.

Comments are due by December 3, 2020.

CMS Issues Proposed Rule Regarding Medicare Coverage, Payment, and Coding for Innovative New Technologies and Providing Beneficiaries with Diabetes Better Access and More Therapy Choices

CMS issued a proposed rule that changes the Medicare durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”) coverage and payment policies under Medicare Part B. In addition, the proposed rule would expand the interpretation of when external infusion pumps are appropriate for use in the home and covered as DME under Medicare Part B, increasing access to drug infusion therapy services in the home. CMS hopes that this rule will provide more choices for beneficiaries with diabetes, while streamlining the process for innovators in getting their technologies approved for coverage, payment, and coding by Medicare. If finalized, the proposed rule will also expand Medicare coverage and payment for continuous glucose monitors that provide critical information on blood glucose levels to help patients with diabetes manage their disease. Lastly, CMS proposes to continue to pay higher amounts to suppliers for DMEPOS items and services furnished in rural and non‑contiguous areas to encourage suppliers to provide access and choices for those beneficiaries.

Comments are due by January 4, 2021.

CMS Finalizes Home Health Payment Rule for 2021

CMS issued a final rule that sets forth routine updates to the home health payment rates for calendar year 2021. This rule also finalizes the regulatory changes related to the use of telecommunications technology in providing care under the Medicare home health benefit. Under the rule, CMS will increase payments to home health agencies by about 1.9 percent, or $390 million, and will decrease payments to home infusion therapy suppliers by 0.7 percent, or $384,800. The rule also finalizes a 5 percent cap on wage decreases in 2021. For more information, review the fact sheet issued by CMS. The final rule becomes effective January 1, 2021.

CMS Finalizes Dialysis Payment Rule

CMS released a final rule updating and revising the End-Stage Renal Disease Prospective Payment System (“ESRD PPS”) for calendar year 2021. Among other things, the rule caps any decrease in a dialysis facility’s wage index at 5 percent. The final base rate for 2021 is $253.13, a $13.80 increase from the current rate of $239.33. CMS estimates that the aggregate ESRD PPS expenditures in 2021 will increase by approximately 2 percent, or $250 million, as compared to 2020. For more information, review the fact sheet issued by CMS. The final rule becomes effective January 1, 2021.

HHS Says COVID-19 Provider Relief Funds Can Be Used to Pay for Vaccine Distribution

The Department of Health and Human Services (“HHS”) has updated its frequently asked questions to clarify that Provider Relief Fund payments may be used to support distribution of a COVID‑19 vaccine licensed or approved by the Food and Drug Administration (“FDA”). Funds also may be used prior to an FDA‑licensed or approved vaccine becoming available for items such as additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine.

CMS Extends Compliance Dates for Interoperability Due to COVID-19

CMS issued an interim final rule that gives health IT developers and healthcare providers flexibilities to effectively respond to the public health threats posed by the spread of COVID‑19. This rule will extend certain compliance dates and timeframes adopted in the 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program Final Rule (“Cures Act Final Rule”), including compliance and applicability dates for the information blocking provisions, certain 2015 Edition Health IT Certification criteria, and Conditions and Maintenance of Certification requirements under the ONC Health IT Certification Program.

2022 Medicare Advantage Advance Notice

CMS has issued Part II of its Advance Notice of proposed methodological changes for calendar year (“CY”) 2022 for Medicare Advantage capitation rates, and Medicare Advantage (Part C) and Medicare prescription drug (Part D) payment policies. CMS expects these proposed changes to result in a 2.82 percent increase revenue for calendar year (“CY”) 2022.

CMS has proposed that the Part C risk adjustment model fully phase in the hierarchical condition categories (“CMS‑HCC”) model first implemented for CY 2020 (the “2020 CMS‑HCC model”), as required by the 21st Century Cures Act. The 2020 CMS‑HCC model adds variables that count conditions in the risk adjustment model and includes for payment additional conditions for mental health, substance use disorder, and chronic kidney disease. With the proposed phase‑in of the 2020 CMS‑HCC model, the Part C risk score used for payment for CY 2022 would rely entirely on encounter data and Medicare fee‑for‑service (“FFS”) claims as the source of Medicare Advantage diagnoses.

In response to requests from stakeholders, CMS also has proposed an updated version of the Part D risk adjustment (“RxHCC”) model used to adjust direct subsidy payments for Part D benefits offered by stand-alone prescription drug plans and Medicare Advantage prescription drug plans. Consistent with the Part C proposal, the Part D risk score for CY 2022 would be calculated by using only encounter data and FFS claims.

For more information, review the fact sheet issued by CMS. Comments are due November 30, 2020.

California Appellate Court Affirms Adverse Possession of Parking Easement

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The California Court of Appeals recently held that a party adversely possessed an exclusive parking easement by using it for 17 years, even if it did not erect any physical barriers.  See Valles v. Kim, 2020 WL 5088021 (Cal. Ct. App. 2020).  In 1999, M & R Investment Company created an exclusive easement for parking in its parking lot, for the benefit of a related entity that owned property nearby.  Plaintiffs purchased M & R’s property later that year, and the deed did not mention the easement, although the title policy listed it as an exception and plaintiffs were verbally informed of it.  Nonetheless, plaintiffs continually used the parking spaces in the easement for themselves and their tenants.  In 2015, defendants purchased the property that benefited from the easement, and immediately directed plaintiffs to stop using the parking spaces.  In 2016, plaintiffs brought this action, alleging that they had repossessed the disputed property via adverse possession and extinguished the easement.  After a bench trial, the trial court found that plaintiffs had met the elements of adverse possession and entered judgment in favor of plaintiffs extinguishing the easement.

On appeal, the Court affirmed.  Defendants specifically challenged the trial court’s holding that plaintiffs had met the element that their possession was “adverse and hostile to the true owner,” arguing that plaintiffs’ use of parking spaces was transitory, and that, to prevail, “plaintiffs must have actually erected a barrier or made a permanent improvement on the easement that completely prevented defendants from using it.”  The Court rejected this argument, finding that the easement was exclusive and that only defendants had the right to park on it.  “Nonetheless, the evidence and inferences therefrom establish that starting around 1999 and continuing for 17 years, plaintiffs, their tenants, employees, and their deliverers, used the easement for parking, for trucks, and even left a boat trailer on the easement for two of those years.”  Accordingly, the Court affirmed that plaintiffs’ use of the easement was hostile, and that plaintiffs adversely possessed and extinguished the easement.

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

Second Circuit Holds Law Firm’s Threatening Letter May Have Violated FDCPA

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The United States Court of Appeals for the Second Circuit recently reversed a District Court decision and held that a law firm’s letter threatening imminent litigation may have violated the FDCPA.  See Mizrachi v. Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 2020 WL 6494875 (2d Cir. Nov. 5, 2020).  The defendant law firm sent a collection letter to plaintiff seeking to collect a debt.  Although the letter included the standard validation notice informing the debtor of his right to dispute the debt within 30 days, it also include language that the firm had been instructed to commence a lawsuit, that there may be “no further notice” before the filing of the lawsuit, that a lawsuit could be avoided by paying “now,” and that the debtor may be liable for defendant’s attorneys’ fees in the lawsuit.  The debtor then brought this action under the FDCPA, alleging violations because (i) the language about an imminent lawsuit overshadowed the required 30-day validation notice, and (ii) the claim about attorneys’ fees was false.  Defendant filed a motion to dismiss, and the District Court dismissed the action.

On appeal, the Court reversed.  First, the Court found that the threatening language overshadowed the validation notice in violation of the FDCPA.  “Even if the letter does not literally demand immediate payment, these warnings, combined with the all-caps admonition that no further notice might follow before a lawsuit is filed, could have created the misimpression that immediate payment is the consumer’s only means of avoiding a parade of collateral consequences, thereby overshadowing the consumer’s validation rights.”  Likewise, the Court found that the claim regarding attorneys’ fees should not have been dismissed.  Although defendant claimed that plaintiff’s debt was incurred as a result of a contract that allows for such fees – in which case, the claim would not have violated the FDCPA – the Court found that the contract at issue was an “unsigned form contract” that “at most raises a factual dispute” about fees.

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

Name Tags? Yes, You Are Now Required To Wear Certain Name Tags.

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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.

Below are summaries of several laws recently passed by the New Jersey Legislature that impact healthcare providers, including a law requiring healthcare providers to wear certain kinds of name tags. These additional requirements come at a time when New Jersey’s providers are providing continued crucial care in response to the pandemic and experiencing significant financial strain caused by the pandemic.

New Jersey healthcare Transparency Act

The New Jersey legislature passed the New Jersey healthcare Transparency Act (the “Act”) (A4143/S2465). The Act requires any advertisement for a healthcare professional licensed or certified to practice under State law to include the type of licensure the professional was issued. Under the Act, the term “advertisement” is defined as being “any communication or statement that is directly controlled or administered by a healthcare professional or a healthcare professional’s office personnel, whether printed, electronic or oral, that names the healthcare professional in relation to his or her practice, profession, or institution in which the individual is employed, volunteers or otherwise provides healthcare services.” Moreover, under the Act, the term advertisement includes “business cards, letterhead, patient brochures, e-mail, Internet, audio and video, and any other communication or statement used in the course of business or where the healthcare professional is utilizing a professional degree or license to influence opinion or infer expertise in a healthcare topic.” Nevertheless, under the Act, the term advertisement does not include “office building placards or exterior building signage.”

The Act requires a healthcare professional, when providing in-person care, to communicate the specific professional license and professional degree he or she holds. To that end, the Act requires that information to be communicated through a name tag or embroidered identification. If a healthcare professional is providing direct patient care at a hospital, the professional also must wear a recent photograph, unless otherwise directed by hospital administrators.

Long-Term Care Facilities and Hospitals Must Stockpile Personal Protective Equipment

The New Jersey Legislature passed a bill (A4282 and A4150/S2566 and S2677) that specifically requires long-term care facilities and hospitals to make a good faith effort to maintain a stockpile of personal protective equipment (“PPE”) necessary to meet the facility’s needs for such equipment for the following durations: (i) 30 days in the case of a facility that is part of a healthcare system that owns or operates eight or more facilities; (ii) 60 days in the case of a facility that is part of a healthcare system that owns or operates fewer than eight facilities; and (iii) 90 days in the case of a general acute care hospital.

The bill provides that in determining the quantity of PPE, the facility or hospital is to: (i) take into account prevailing conditions in the state that may affect the need for and availability of PPE; and (ii) take into account anticipated surges over the next 90 days. The facilities should utilize any burn rate calculator or other tool as the Department of Health may designate for use in determining the anticipated need for PPE.

Finally, the bill provides that facilities and hospitals will be required to immediately reevaluate the adequacy of their stockpile of PPE upon any declaration of a state of emergency by the Governor or a public health emergency pursuant to P.L.2005, c.222 (C.26:13‑1 et seq.) in response to an outbreak, epidemic, or pandemic involving an infectious disease, and acquire additional supplies of PPE as are necessary to meet increases in the need for and use of PPE during the state of emergency or public health emergency.

Governor Vetoes Bill Providing Extra Dollars to Long-Term Care Facilities

In our October 2, 2020 healthcare Update, we noted that the New Jersey Legislature passed a bill (A4479/S2788) that provides supplemental payments to long-term care facility staff providing direct care services during the COVID‑19 pandemic. The Governor recently vetoed the bill because of budget issues.

The New Jersey Legislature Passes Bill Revising Requirements for healthcare Service Firms to Report Financial Information to the Division of Consumer Affairs

On October 29, 2020, the New Jersey Legislature passed a bill (A2140/S848) revising requirements for healthcare service firms to report financial information to the Division of Consumer Affairs. Under the bill, healthcare services are defined as being “any services rendered for the purpose of maintaining or restoring an individual's physical or mental health or any health-related services, and for which a license or certification is required as a pre‑condition to the rendering of such services.”

Current state law requires all healthcare service firms to complete annual audits, which are to be submitted to the Director of the Division of Consumer Affairs in the Department of Law and Public Safety (the “Director”) every three years. Under this new bill, all healthcare service firms will be required to submit financial statements prepared by the firm to the Director, which statements are to be consistent with the firm’s tax filings with the State. Moreover, under the new bill, any healthcare service firm that receives more than $250,000 for the provision of New Jersey Medicaid Personal Care Assistance services will continue to be subject to the current annual audit requirement, and healthcare service firms that generate $10 million or more in gross revenue in a year will be required to submit an audit for that year. Finally, healthcare service firms with gross revenue for the year that is between $1 million and $10 million, and which receive less than $250,000 for the provision of New Jersey Medicaid Personal Care Assistance services, will, in lieu of an audit, be required to submit a report for that year to the Director that is prepared by an independent third‑party practitioner based on a review of the healthcare service firm’s financial statements and records, general management, and internal controls.

The New Jersey Legislature Passes Bill Amending Training Requirements for Psychologists

The New Jersey Legislature passed a bill (A543/S2582) that amends the training requirements for licensed psychologists in the state. First, current State law requires two years of professional employment for an applicant to qualify for licensure from the State Board of Psychological Examiners (the “Board”). The new bill replaces the term “employment” with “experience” to account and reflect for professional opportunities which may not have entailed employment. Second, current State law requires at least one year of the professional employment to be completed after receiving a doctoral degree. The new bill allows for the two years of experience to be completed prior to receiving the requisite doctoral degree. Finally, the bill also provides that an applicant who has applied to the Board, but is not yet licensed, may update the application for licensure with professional experience earned prior to the applicant receiving a doctoral degree.

The New Jersey Legislature Passes Bill Requiring Certain Provisions in State Contracts for Delivery of Publicly‑Financed Mental Health, Behavioral Health, and Addiction Services

On October 29, 2020, the New Jersey Legislature passed a bill (A4446/S2708) requiring certain provisions in State contracts for delivery of publicly‑financed mental health, behavioral health, and addiction services. The bill requires that any contract entered into or renewed by the Department of Human Services or the Department of Children and Families with a private contractor for the provision of mental health, behavioral health, or addiction services will contain a commitment that the contracted services will not be disrupted or delayed by labor disputes. The commitment may be satisfied by: (i) an agreement between the contractor and any exclusive representative labor organization representing the employees performing the contracted services that contains a provision prohibiting economic or industrial action on the part of all parties and includes a process for the resolution of disputes between them; (ii) an agreement between the contractor and any labor organization seeking to represent the employees performing the contracted services that includes a provision prohibiting the parties from causing, promoting, or encouraging economic, industrial, or other disruptive activity on the part of the contractor or employees performing services under the contract, and includes a procedure for resolution of disputes between parties; or (iii) any other agreement or binding obligation to be maintained through the term of the contract that provides a comparable commitment as paragraphs (i) or (ii). The bill provides the departments the opportunity to discover prior disruptions in service from contractors and a means to address any disputes through the State Treasurer. Additionally, the bill temporarily requires State contracts to contain a COVID‑19 containment and mitigation commitment. The section allows for additional protections concerning COVID‑19 in such contracts or a review of past failures to implement appropriate COVID‑19 safety guidelines.

Ninth Circuit Holds Nevada HOA Statute Giving HOA Liens Superpriority Did Not Violate Takings Clause or Due Process Clause

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The United States Court of Appeals for the Ninth Circuit recently affirmed a District Court’s dismissal of a lender’s claim, holding that the Nevada statute allowing for the HOA sale of a property that extinguished the lender’s deed of trust did not violate the Takings or Due Process Clauses.  See Wells Fargo Bank, N.A. v. Mahogany Meadows Ave. Tr., 2020 WL 6498000 (9th Cir. Nov. 5, 2020).   In 2008, the borrowers purchased a home with a loan from Wells Fargo, and recorded a deed of trust against the property.  In 2011, they stopped paying their HOA fees, and the HOA filed a lien and foreclosed.  The property was sold at public auction for $5,332, extinguishing Wells Fargo’s lien.  Wells Fargo then brought this action against the HOA and the purchaser claiming that the sale was invalid and that Wells Fargo’s lien remained on the property.  Wells Fargo claimed that the Nevada statute allowing HOA liens to take priority over previously-recorded deeds of trust violates the Takings Clause and the Due Process Clause.  The District Court dismissed the action.

On appeal, the Court affirmed.  First, the Court denied the claim under the Takings Clause.  The Court first found that the sale itself could not have violated the Takings Clause because it was not a state action.  Likewise, the enactment of the Nevada statute could not have violated the clause, because the statute was enacted in 1991 and this particular HOA’s covenants, conditions, and restrictions were recorded in 2003.  Thus, “[t]he  interest Wells Fargo is asserting—that is, the right to maintain its lien unimpaired by a later HOA lien—was ‘not part of [its] title to begin with.’”  Second, the Court denied the claim under the Due Process Clause, finding that there was no dispute that Wells Fargo received actual notice of the sale, so its due process rights were not violated.  In rejecting this claim, the Court referred to its prior decision in Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620 (9th Cir. 2019), in which it found the Nevada statute did not violate the Due Process Clause.

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

NJ Hospitals Must Allow Pregnant Patients to Have Support Person Present During Labor, Interoperability Rule Deadlines Extended, CMS Announces Insurance Coverage for COVID-19 Vaccine, and More

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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.

Revised New Jersey Executive Directive No. 20-020 Requires Hospitals to Allow Support Person for Pregnant Patients During Labor

The New Jersey Department of Health has modified its previous guidance to require hospitals to allow at least one designated support person to accompany a pregnant patient during labor, delivery, and the entire postpartum hospital stay. A doula, who is part of the patient’s care team and essential to patient care, shall not count as a support person. The support person(s) and doula must be asymptomatic for COVID-19 and shall undergo symptom screening and temperature checks prior to entering the clinical area, but there is no prior testing requirement. Pregnant patients shall be tested for COVID-19 prior to arriving at the hospital, prior to admission to the labor and delivery unit, or immediately upon admission. Both molecular and antigen testing are acceptable, but only antigen tests that have received an Emergency Use Authorization or approval from the United States Food and Drug Administration (“FDA”) may be used to fulfill the testing requirement.

HHS Extends Interoperability Rule Deadlines

The Department of Health and Human Services (“HHS”) Office of the National Coordinator for Health Information Technology issued a new interim final rule extending the compliance deadlines for certain requirements related to its information‑blocking rules to allow healthcare providers to focus on the COVID‑19 response. For more information regarding the new compliance timeline, review the HHS’s press release.

HHS Issues Transparency Rules for Health Insurers

The HHS, in conjunction with the Department of Labor and the Department of the Treasury, issued Transparency in Coverage final rules, requiring health plans to disclose the rates they negotiate with hospitals and other healthcare providers. The final rules set forth requirements for group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information upon request to a participant, beneficiary, or enrollee (or his or her authorized representative), including an estimate of the individual’s cost-sharing liability for covered items or services furnished by a particular provider. Plans and issuers are also required to make this information available online so as to allow participants to obtain an estimate and understanding of the individual’s out-of-pocket expenses and effectively shop for items and services.

The final rules also require plans and issuers to disclose in-network provider negotiated rates, historical out-of-network allowed amounts, and drug pricing information through three machine-readable files posted on an internet website, thereby allowing the public to have access to health coverage information that can be used to understand healthcare pricing and potentially dampen the rise in healthcare spending.

CMS Issues Interim Final Rule Covering COVID-19 Vaccines

The Centers for Medicare & Medicaid Services (“CMS”) has released an interim final rule with comment period (“IFC”) requiring Medicare, Medicaid, and private insurers to cover a COVID-19 vaccine without out‑of‑pocket costs for beneficiaries and members. Under the IFC, Medicare shall cover any FDA‑authorized vaccine, and Medicaid and the Children’s Health Insurance Program shall administer the vaccine at no cost for most members during the public health emergency (the “PHE”). The IFC also requires most private insurers to cover a COVID-19 vaccine without cost sharing from both in- and out‑of‑network providers during the PHE. Providers administering the vaccine to uninsured Americans will be reimbursed through the Provider Relief Fund administered by the Health Resources and Services Administration. For more information on the IFC, review the CMS fact sheet. Comments are due on January 4, 2021.

HHS Revises Revenue Reporting Rules for COVID-19 Grants

HHS recently reversed a change made in September to COVID-19 relief grant reporting after providers warned it could result in many needing to return funds meant to offset coronavirus-related expenses or lost revenue. The latest change, posted October 22, 2020, allows hospitals to calculate lost revenue by comparing patient revenue from all of 2019 to 2020. In September, HHS amended the reporting requirement and said providers had to compare year-over-year net operating income. HHS said the September formula change was made to restrict some providers from receiving distributions that would make them more profitable than they were before the pandemic. Hospitals argued that the September formula change and definition of lost revenue would require many hospitals to return the funds. As a result, HHS made the change in October to require a comparison of only revenue from patient care as opposed to net operating income.

CMS to Delay Start of Radiation Oncology Payment Model

Recently, CMS announced  that it will delay the start date for its new radiation oncology alternative payment model until July 2021. CMS said it intends to delay the model start date to July 1 through upcoming rule-making. The radiation oncology payment model will provide bundled payments for 16 cancer types and would cover 90-day episodes of care.

CMS Releases Updated COVID-19 Reporting Requirements

CMS has released new regulatory requirements, effective immediately, for all hospitals and critical access hospitals (“CAHs”) to report COVID-19 data elements with a frequency and in a standardized format as specified by the HHS Secretary during the COVID-19 PHE. Hospitals and CAHs that fail to adequately report the specified data will receive notifications through November 18, 2020. After November 18th, non‑compliance may lead to termination of a provider’s participation in Medicare and Medicaid programs. For more information regarding the reporting requirements, review the memorandum published by CMS.

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