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New Jersey Seeks to Regulate Urgent Care Centers

Month: November 2023

New Jersey Seeks to Regulate Urgent Care Centers

Posted on by Christie Bowness

On November 20, 2023, the New Jersey Assembly introduced Bill A5731 to supplement Title 45 of the New Jersey Statutes and require urgent care facility healthcare providers to possess the same credentials and degrees as would be required if they were employed as a hospital emergency room healthcare provider pursuant to N.J.S.A. 26:2H-1 et seq.

The bill defines “health care provider” as an individual providing a healthcare service to patients including, but not limited to, a licensed physician, physician assistant, nurse, nurse practitioner, or any other healthcare professional acting within the scope of a valid license or certification issued pursuant to Title 45 of the Revised Statutes and “urgent care facility” as a healthcare facility that offers episodic, walk-in care for the treatment of acute, but not life-threatening, health conditions.

This bill will clearly impact how urgent care centers are operated. We will keep track of this bill along the legislative process, and inform you if and when the bill passes both houses and is approved by the Governor.

Court Allows Medicare Drug Price Negotiations to Continue

Posted on by Christie Bowness

A federal court recently denied the U.S. Chamber of Commerce (the “Chamber”) and their state and local chapters' request for a preliminary injunction to block Medicare from negotiating drug prices with manufacturers under the Biden Administration’s new program. The program was established under the Inflation Reduction Act ("IRA") in 2022 and gave Medicare Parts B and D the power to select prescription medicines with no generic or biosimilar competition and negotiate a “maximum fair price” to go into effect in 2026.

U.S. District Judge Michael J. Newman in Ohio’s Southern District rejected the Chamber’s argument that the program forces drugmakers to accept unfairly low prices because participating in Medicare is “completely voluntary.” Also, Judge Newman issued no opinion on the government’s argument that the Chamber had no standing to sue on behalf of pharmaceutical companies, which potentially leaves the door open for future motions.

With the preliminary injunction denied, the program is proceeding as scheduled and selected drugmakers were required to sign an agreement with the Centers for Medicare & Medicaid Services ("CMS") by October 1 to begin negotiating for the first round of selected drugs. CMS will then publish the negotiated prices for the first round of selected drugs by September 1, 2024, and those prices will become effective January 1, 2026. Thereafter, CMS will select 15 more Part D drugs for negotiation in 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year following.

The 10 prescription drugs and their participating manufacturers selected by the U.S. Department of Health and Human Services (“HHS”) for the first round include:

  1. Eliquis, a preventive drug and treatment for blood clots — Bristol Myers Squibb
  2. Jardiance, a Type 2 diabetes and heart failure drug — Boehringer Ingelheim
  3. Xarelto, a blood clot preventive drug and treatment, and a medication for coronary and peripheral artery disease — Janssen Pharms
  4. Januvia, a Type 2 diabetes drug — Merck Sharp Dohme
  5. Farxiga, a medication for Type 2 diabetes, heart failure, and chronic kidney disease — AstraZeneca AB
  6. Entresto, a heart failure drug — Novartis Pharms Corp
  7. Enbrel, a therapy for rheumatoid arthritis, psoriasis, and psoriatic arthritis — Immunex Corporation
  8. Imbruvica, a blood cancer treatment — Pharmacyclics LLC
  9. Stelara, a drug for psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis — Janssen Biotech, Inc.
  10. Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill; Type 2 diabetes drugs — Novo Nordisk Inc.

AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Johnson & Johnson, Novartis, Merck, and Novo Nordisk are among the companies challenging the new drug price negotiation program.

Georgia Appellate Court Addresses Notice Provided by Unsigned Security Deed

Posted on by Jessica Civetta

Introduction

In a thorough and detailed opinion, the Court of Appeals of Georgia, Second Division, held that a security deed lacking the necessary signature can still provide inquiry notice to the purchaser even if the purchaser fails to conduct due diligence and investigate the chain of title. After competing motions were filed by the Plaintiff, WW3 Ventures, and Defendant, BNY Mellon, the Court appointed a special master who recommended that title vest in the Plaintiff, subject to the defendant’s security interest. In a two-part analysis, the Court agreed with the Plaintiff that the trial court erred when it determined that the security deed provided constructive notice. But because the Court agreed with the trial court that the Plaintiff was under inquiry notice of the defendant’s security interest, the Court affirmed the lower court’s judgment. WW3 Ventures v. Bank of N.Y. Mellon, Nos. A23A0719, A23A0720, 2023 Ga. App. LEXIS 536 (Ct. App. Nov. 3, 2023)

Background

Laurie and George Warren bought residential property in Gwinnett County, Georgia in 1999. In 2006, the couple decided to refinance their mortgage with Novastar Mortgage, Inc. and subsequently conveyed a security deed to a nominee for Novastar. The security deed, recorded in the Gwinnett County land records, was executed by the Warrens and notarized, but it did not contain an attestation by a witness. BNY Mellon was assigned the security deed in 2010. Five years later, WW3 Ventures successfully bid on the Warrens’ home after the homeowners association secured a judgment for $13,500 in unpaid homeowner assessment liens.

A quiet title action then ensued after WW3 became aware of BNY Mellon’s interest. The trial court appointed a special master to hear the matter. As its principal evidence in support of its summary judgment motion, BNY Mellon submitted “affidavits from the notary public who witnessed the security deed and a purported unofficial witness who was present when the Warrens executed the security deed but “erroneously failed to sign [the security deed] in the designated spaces as unofficial witness.” In turn, WW3 filed its own motion for summary judgment asserting that it had neither actual nor constructive knowledge of BNY Mellon’s security interest before the sale in that it did not conduct a title search prior to the foreclosure.

The special master held that the security deed was defective due to the missing signature. However, WW3 had constructive notice of the security deed because it was cross-referenced in a plat and the 2010 assignment. The trial court adopted the special master’s report entirely in its final judgment. As a result, BNY Mellon’s security deed was a valid lien on the Property. Special master fees were enforced against BNY Mellon.

The Appeal

On appeal, WW3 contended that the trial court erred in awarding title to BNY Mellon’s interest because a defective security deed does not itself provide constructive notice or inquiry notice under Georgia law. However, it concluded that WW3 was under inquiry notice of BNY Mellon’s security interest and therefore affirmed the trial court’s judgment.

In so doing, the Court found first that “[i]f a mortgage is duly signed, witnessed, filed, recorded, and indexed, such recordation shall be deemed constructive notice to subsequent bona fide purchasers…a mortgage without due attestation shall not be held to be notice to subsequent bona fide purchases.” (Ga. Code Ann. § 44-14-39).  As to BNY Mellon’s security deed, the Court found that “[a]lthough the security deed is signed by the maker and is attested by a notary public, it lacks the attestation of an unofficial witness. … The absence of an official witness signature confirms that BNY Mellon’s security deed ‘was not in recordable form as required by OCGA § 44-14-33 and did not provide constructive notice.’” (citations omitted)

However, the Court of Appeals found that “[i]ndependent of the security deed’s lack of constructive notice, however, other documents in the chain of title referenced the security deed, and those documents [namely, the 2010 Assignment] placed future purchasers — including WW3 — on inquiry notice.” The Court elaborated that if the description of land in a recorded instrument is sufficient to identify the property, the purchaser is chargeable with all notice he would have if he made an inquiry into the instrument. Here, the 2010 Assignment had the property’s postal address and was indexed under the parties’ names.  In other words, the security deed would been picked up in a title search if WW3 did one.  As such, the Court affirmed and held that BNY Mellon had a valid lien on the Property.

Takeaway

This case is important in that it clarifies whether a security deed lacking the necessary signature can still provide inquiry notice to the purchaser. The takeaway is that, just because constructive notice is absent from the transaction, inquiry notice is still at issue, and buyers of real estate cannot ignore compelling evidence of liens or property interest and must conduct proper due diligence, including having a title search done on the acquired property.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, James Mazewski at jmazewski@riker.com, Thomas Persico at tpersico@riker.com, Kevin Hakansson at khakansson@riker.com, or Kori Pruett at kpruett@riker.com.

HHS Office of Civil Rights Issues New Resources on Privacy and Security During Telehealth Encounters

Posted on by Christie Bowness

The United States Department of Health and Human Services (“HHS”) – Office of Civil Rights (“OCR”) recently issued two new resources designed to help providers explain to patients the privacy and security risks to their protected health information (“PHI”) during telehealth encounters. Available through the HHS website, the guidance offers a primer on relevant PHI privacy and security laws as well as best practices for telehealth encounters.

The first resource, entitled “Educating Patients about Privacy and Security Risks to Protected Health Information when Using Remote Communication Technologies for Telehealth” is aimed at healthcare providers and offers an overview of the privacy and security rules under the Health Insurance Portability and Accountability Act (“HIPAA”). Additionally, the resource provides suggestions for discussing with patients: (i) the telehealth options available; (ii) the potential risks to PHI when using telehealth modalities; (iii) the privacy and security practices of telehealth technology vendors; and (iv) the applicability of certain civil rights laws.

The second resource, “Telehealth Privacy and Security Tips for Patients,” is directed towards patients and provides recommendations for protecting and securing their PHI during telehealth encounters. Such recommendations include: (i) conducting telehealth appointments from a private location; (ii) utilizing multi-factor authentication, if available; (iii) using encryption, when available; and (iv) avoiding public Wi-Fi networks for telehealth encounters.

The provider resource, “Educating Patients about Privacy and Security Risks to Protected Health Information when Using Remote Communication Technologies for Telehealth,” is available here.

The patient-targeted resource, “Telehealth Privacy and Security Tips for Patients,” is available here.

New OIG Opinion On Bonuses and CMS Recognizes Street Medicine

Posted on by Jessica Civetta

OIG Advisory Opinion on Physician-Employee Bonuses

The Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issued Advisory Opinion No. 23-07, which elaborated on which physician-employee bonuses based on profits do not violate the federal Anti-Kickback statute.

The Advisory Opinion assessed the regulatory implications under the federal Anti-Kickback statute and sanctions or penalties under the Social Security Act (the “Act”) for a multi-specialty physician practice (the “Requestor”) to implement an employment compensation bonus structure for their physician-employees (the “Physician Employees”) based on net profits from when they perform outpatient surgical procedures at one of the Requestor’s ambulatory surgical centers (“ASCs”) per calendar quarter (“the Proposed Arrangement”).

Under the federal Anti-Kickback statute, it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, the referral of an individual to a person for the furnishing of, or arranging for the furnishing of, any item or service reimbursable under a federal health care program. The OIG has interpreted the statute to cover any arrangement where only one purpose of the remuneration is to induce referrals for items or services reimbursable by a federal health care program.

Per the Advisory Opinion, the safe harbor for employees may be applicable. The regulation for the employee relationship exception provides that the term “remuneration” does not include “any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer, for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other federal health care programs.” 42 C.F.R. § 1001.952(i).

Under the Proposed Arrangement, the Physician Employee would receive a bonus of 30% of the Requestor’s net profits from the ASC’s fee collections attributable to that Physician Employee’s procedures performed at the ASC for that quarter, in addition to their base employment compensation.

According to the OIG, the Physician Employees under the Proposed Arrangement would be protected by the statutory exception and regulatory safe harbor because they would be bona fide employees of the Requestor and the bonus compensation would constitute an amount paid by the Requestor, as an employer, to the Physician Employees for furnishing any item or service for which payment may be made in whole or in part under Medicare, Medicaid, or other federal health care programs.

The OIG emphasized “payment structures that tie compensation to profits generated from services furnished to patients referred by the compensated party are suspect” under the federal Anti-Kickback statute. However, despite the potential risks, the Proposed Arrangement satisfied the statutory exception and regulatory safe harbor requirements. As such, the OIG found that the remuneration to the Physician Employees as bonuses was not prohibited under the Proposed Arrangement.

CMS Recognizes “Street Medicine” as Billable Care

Effective October 1, 2023, the Centers for Medicare and Medicaid Services ("CMS") began recognizing medical care given at a non-permanent location on the street, also known as “street medicine,” as a billable service for Medicare, Medicaid and other private insurers. The description for the new place of service ("POS") code includes care given at a “non-permanent location on the street or found environment, not described by any other POS code, where health professionals provide preventive, screening, diagnostic, and/or treatment services to unsheltered homeless individuals.” This change makes it easier for medical professionals to assist homeless individuals in the place where they are, rather than having to bring them to a medical facility. Before this change, medical professionals could treat a homeless person on the street, but such care would be on a volunteer basis. Now, providers may submit for reimbursement for such care.

CMS provides a process for requesting new codes or modification of existing codes, in which a CMS Place of Service Workgroup reviews such requests and analyzes whether a service code should be added or modified. According to the Street Medicine Institute, the addition of this service code for “Outreach Site/Street” was the result of a multi-year effort on the part of leaders of USC Street Medicine and the Street Medicine Institute to have CMS create a POS code for the street. The official submission to CMS was submitted in December 2021.

The CMS Transmittal containing the addition to the POS list can be found here.

Balance Billing Claims Rejected by Federal Court Under No Surprises Act

Posted on by Christie Bowness

The Federal District Court of New Jersey recently granted Defendants Cigna Health and Life Insurance Co. and Connecticut General Life Insurance Co.’s (collectively “Cigna” or “Defendants”) motion to dismiss the amended complaint of Plaintiffs Hudson Hospital OPCO, LLC; IJKG PROPCO LLC; and HUMC OPCO, LLC’s (collectively “Plaintiffs”).

In Hudson Hosp. Opco, LLC v. CIGNA Health & Life Ins. Co., The three affiliated New Jersey hospitals operated by Plaintiffs filed a complaint against Defendants for underpayment and/or refusal to pay claims. Notably, prior to June 1, 2021, Plaintiffs did not have contracts with Cigna and were out-of-network providers. Plaintiffs alleged that between March 16, 2016 and May 31, 2021, before they became in-network providers with Defendants, the Defendants “underpaid and/or refused to pay” Plaintiffs for millions of dollars in emergency and elective services claims. The claims for benefits amounted to millions of dollars for thousands of beneficiaries of the insurance plans.

Regarding elective services reimbursement rates, Plaintiffs challenged Cigna’s Maximum Reimbursable Charge (“MRC”) for out-of-network services and argued under the three MRC plans available, Defendants were required to calculate reimbursement amounts on Plaintiff’s normal charges, or data compiled by FAIR Health, Inc, but that the payments Defendants made during this time period fell below that amount. Plaintiffs also challenged Defendants’ payments for emergency services and their failure to comply with the Affordable Care Act (“ACA”) Greatest of Three regulation and the No Surprises Act limiting out-of-pocket maximums and subscriber cost-sharing.

In granting Defendants’ motion to dismiss, without prejudice, the Court emphasized Plaintiffs failed to submit any of the subscriber plans at issue as evidence or identify specific provisions in the plans. As to the claim regarding payments for elective services falling below Defendants’ MRC, the Court stated: “Plaintiffs do not point to, describe, or quote any language from the actual Cigna Plans that, they claim, entitle them to reimbursement for elective services on thousands of allegedly underpaid claims.”

The Court held Plaintiffs’ pleadings were “plainly insufficient,” as they must do more than vaguely plead benefits were due under the plan and must tie allegations to specific provisions of the plans. Because only language of the specific plan can create an entitlement to benefits, Plaintiffs failed to state a claim upon which relief could be granted. Regarding emergency services, the Court held that Plaintiffs’ claim that Defendants violated the Greatest of Three rule and did not correctly calculate reimbursement for emergency services at the applicable MRC under the plan, failed for the same reasons.

In addition, the Court held Plaintiffs’ second ACA argument, that Defendants’ violated the No Surprises Act regulations (the “Regulations”) because their underpayments for emergency services claims left subscribers with balances due to Plaintiffs far above their out-of-pocket maximum of their plans, is insufficient. The Regulations limit cost-sharing when an amount owed by subscribers exceeds what the services would be if provided in-network, but not the total amount billed by the provider for an out-of-network charge. See 29 CFR § 2590.715-2719A(b)(3)(i). Under a general insurance plan, an insurer is obligated to pay a percentage of the covered amount for the subscriber’s out-of-network emergency claim and the subscriber is obligated to pay a percentage via a copayment, coinsurance, or deductible, called a cost-share. But subscribers may also be responsible for the amount billed by the provider above the covered reimbursement rate determined by the plan, i.e., the balance bill. Here, Plaintiffs did not allege subscribers were responsible for the cost-share amount, rather than the balance-bill, above any applicable out-of-pocket maximums under the plans and thus failed to show how Defendants violated the Regulations.  In addition, the Court noted that the Regulations do not provide that insurers are responsible for any balance bill.

Lastly, the Court dismissed Plaintiffs’ breach of fiduciary duties claims because they all derived from the allegation that Defendants underpaid Plaintiffs in violation of their plans, an allegation that Plaintiffs did not adequately plead under any specific identified provisions of their Cigna plans. Because the Court dismissed all federal claims in the case, it declined to exercise supplemental jurisdiction over the remaining state law claims.

The Court’s opinion can be accessed here.

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