Healthcare Law

New Jersey State: Selected Proposed Legislation  

• S. 2010 – Introduced – Concerns disputed medical fees in workers’ compensation claims.  For services rendered on or before June 30, 2016, a medical fee dispute must be filed with the Division of Workers’ Compensation not later than 18 months after the date payment was received, but for services rendered after June 30, 2016 the claim must be filed no later than 12 months after the date payment was received.
• S. 2130 – Introduced – Establishes maximum fees for providing copies of patient medical records.
• A. 3554 – Introduced – Requires physicians to inform consumers of pharmacy dispensing procedures for different brand or nonbrand drug products prior to prescribing drug products.
• A. 3621 – Introduced – Prohibits attachment of homestead in medical malpractice judgment.
• A. 3663 – Introduced – Establishes a pilot program for an incentive-based value payment system for nursing homes.
• A. 3661 – Introduced – Establishes a pilot program for an incentive-based value payment system for home health agencies and healthcare service firms.

New Jersey State: Selected Proposed Regulations  

• 48 N.J.R. 619(a) – Proposed  – The New Jersey Department of Health proposed new rules at N.J.A.C. 8:30 to implement portions of the healthcare Professional Responsibility and Reporting Enhancement Act.  The new rules would incorporate the form and procedures at N.J.A.C. 13:45E as the form and procedures under N.J.A.C. 8:30.  The new rules also prescribe penalties for failing to report as required and create a standardized form for requesting information and responding to information requests.
• 48 N.J.R. 626(a) – Proposed – This regulation would implement new N.J.A.C. 8:43G-5.6, which relates to the Independent healthcare Appeals (IHCA) Program notice and posting, to require general hospitals to post the IHCA Program notice in conspicuous places in each of their waiting rooms, in the form that the DOBI promulgates and posts to its website.

Federal: Selected Proposed and Adopted Legislation

• S. 2503 – Introduced – Establishes requirements for reusable medical devices relating to cleaning instructions and validation data.
• S. 2511 – Introduced – Improves Federal requirements relating to the development and use of electronic health records technology.
• S. 2762 – Introduced – Amends the Internal Revenue Code of 1986 to provide for full recapture of the refundable credit for coverage under a qualified health plan in the case of individuals who are not lawfully present in the United States or who are incarcerated.
• P.L. 114-145 – Adopted – Known as the “Ensuring Patient Access and Effective Drug Enforcement Act of 2016,” this act improves enforcement efforts related to prescription drug diversion and abuse.

Federal: Selected Proposed and Adopted Regulations

• 81 FR 24718-01 – Proposed – This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year 2017.
• 81 FR 24230-01 – Proposed – This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for 2017.
• 81 FR 20946-01 – Adopted – This final rule changes the definition of a fiduciary of a plan (including an IRA under the Internal Revenue Code) for ERISA purposes by including persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA.
• 81 FR 21002-01 – Adopted – This rule creates an exemption that allows entities such as registered investment advisers, broker-dealers, and insurance companies, and their agents and representatives, that are ERISA or Code fiduciaries by reason of the provision of investment advice, to receive compensation that may otherwise give rise to prohibited transactions as a result of their advice to plan participants and beneficiaries, IRA owners and certain plan fiduciaries (including small plan sponsors).  The exemption is subject to some safeguards for plan participants and beneficiaries.
• 81 FR 26872-01 – Adopted – This final rule will amend the fire safety standards for Medicare and Medicaid participating hospitals, critical access hospitals (CAHs), long-term care facilities, intermediate care facilities for individuals with intellectual disabilities (ICF-IID), ambulatory surgery centers (ASCs), hospices which provide inpatient services, religious non-medical healthcare institutions (RNHCIs), and programs of all-inclusive care for the elderly (PACE) facilities.

State Litigation

• A  New Jersey appeals court held that a hospital’s medical records processor could not enforce a mandatory arbitration clause included in an invoice to a patient’s attorney seeking the client’s medical records.  Specifically, the court held that the processor had a pre-existing legal duty to produce the records under statutory law, thus rendering the arbitration clause void for lack of consideration in the agreement.  For more information on the case, see, Bernetich Hatzell & Pascu LLC v. Medical Records Online Inc., case number A-0657-15T3, in the Superior Court of New Jersey, Appellate Division.
• The New Jersey Supreme Court recently held that treating physicians in cases under the New Jersey Law Against Discrimination can provide testimony regarding the diagnosis and treatment of their patients regardless of whether they are named as experts or not.  This comes in the wake of a trial court’s decision to restrict a former police dispatcher’s treating physician to testifying only to what he was treating her for without being able to discuss treatment, symptoms, and the effect it had on her.  For more information on the scope of what a physician may testify to, see, Del Vecchio v. Township of Bridgewater, case number 074936, in the Supreme Court of the State of New Jersey.
• The New Jersey Appellate Division recently ruled that a hospital report documenting the cause of a patient’s fatal fall from a bed cannot be compelled because the information is privileged under New Jersey’s patient safety law, despite his widow’s protestations in her medical malpractice lawsuit.  For more information on the case, see, Patricia T. Conn et al. v. Babylin Rebustillo et al., case number A-1421-15T3, in the Superior Court of the State of New Jersey, Appellate Division.

Federal Litigation

• The Seventh Circuit recently ruled that a church-affiliated hospital could not prevent a putative class of employees from challenging a noncompliant benefits plan.  It became the second circuit court, following the 3rd Circuit, to rule that retirement plans established and maintained by church-affiliated organizations, like hospitals, are not excluded from ERISA as “church plans” under the statute.  Most recently, the Seventh Circuit stayed their ruling pending the filing of a petition for a writ of certiorari and the stay will remain in force until the end of the related high court proceedings.  For more information on the case, see, Maria Stapleton et al. v. Advocate healthcare Network et al., case number 15-1368, in the U.S. Court of Appeals for the Seventh Circuit.
• In a recent Fourth Circuit decision, the Court found that Travelers must defend Portal healthcare against the class claim that its failure to secure a server caused records to be accessible to unauthorized users, agreeing with the district court that the security breach was covered under Travelers’ commercial general liability policy.  For more information on the case, see, Travelers Indemnity Co. of America v. Portal healthcare Solutions LLC, case number 14-1944, in the U.S. Court of Appeals for the Fourth Circuit.
• The Department of Justice recently reached a settlement with two West Virginia hospitals in their antitrust suit by each hospital agreeing not to advertise in each other’s geographic territory.  The agreement also provided that these hospitals would stop sharing marketing information with one another.  For more details of the settlement, see, U.S. v. Charleston Area Medical Center Inc. et al., case number 2:16-cv-03664, in the U.S. District Court for the Southern District of West Virginia.
• The Eleventh Circuit recently affirmed a decision that extracting multiple doses from a single-dose vial of medication is not medically reasonable.  Therefore, the physician involved overbilled Medicare, in the Court’s eyes, by nearly $9 million.  For more information on the holding, see, Vitreo Retinal Consultants of the Palm Beaches PA v. U.S. Department of Health and Human Services, case numbers 14-15342 and 15-12005, in the U.S. Court of Appeals for the Eleventh Circuit.
• The Third Circuit recently ruled that a group of out-of-network doctors has standing to pursue class claims against Cigna over allegations that the insurer schemed with Ingenix Inc., a database runner, to reduce compensation owed to them for their work.  This partial revival of the ERISA Benefits Class suit did not, on the other hand, revive the claims of the subscribers of Cigna-administered health plans and a group of medical associations that had previously attempted to obtain class certification.  For more information on the case, see, Darlery Franco et al. v. Connecticut General Life Insurance Co. et al., case numbers 14-3395 and 14-3396, in the U.S. Court of Appeals for the Third Circuit.
• House Republicans won a potentially critical challenge to the Affordable Care Act, when a D.C. federal district court judge found that the ACA doesn’t earmark funds for cost-sharing subsidies that reduce deductibles and copayments for ACA shoppers with income below 250 percent of the poverty line.  This ruling does not, however, affect subsidies that reduce premiums for ACA plans.  For more information on the case, see, U.S. House of Representatives v. Burwell et al., case number 1:14-cv-01967, in the U.S. District Court for the District of Columbia.

In the News

• Florida’s insurance regulator gave approval to the proposed merger of Anthem and Cigna stating that, as neither company is a dominant force in the Florida insurance market, there would be no meaningful adverse impacts from the merger.  The purchase of Cigna’s Florida business by Anthem is but one part of the $54 billion nationwide merger.
• Centers for Medicare and Medicaid Services (CMS) finalized the Medicare Advantage policies for 2017 leading to a slightly lower pay boost than expected.  Under these final policies, which also cover Medicare Part D, reimbursement will rise 3.05 percent after accounting for the usual uptick in the intensity with which Medicare Advantage insurance plans code for patient illnesses.  This increase in reimbursement rate is intended to off-set the expected climb of .85 percent in base industrywide payments.
• The New Jersey state Assembly Regulatory Oversight Committee has approved four bills thus far that would require more disclosure on how hospitals and doctors are selected for tiered networks, such as OMNIA.  These bills will now reach the full Assembly.
• CMS recently announced the launch of the largest ever multi-payer initiative to improve primary care in America.  This Comprehensive Primary Care Plus (CPC+) model will be implemented in up to 20 regions, which can accommodate up to 5,000 practices and more than 20,000 doctors and clinicians.  The idea behind the model is to provide doctors the freedom to care for their patients the way they think will deliver the best outcomes and to pay them for achieving results and improving care.
• The Governor of Florida signed House Bill 1175, which  requires hospitals to post costs of healthcare services in a database that will allow consumers to compare prices and also learn about financial assistance policies and collection procedures.  He also signed House Bill 221, which prohibits balance billing.  In signing these bills, specifically House Bill 1175, Florida becomes just the fourth state to require hospitals and other healthcare facilities to post the average amount they are paid for a specific procedure.
• CMS recently decided to eliminate the $220 million pay cut tied to the agency’s controversial “two-midnight rule” on patient admissions and offered to refund three years’ worth of reduced reimbursement to hospitals in the form of a one-time .6 percent pay increase.  The original .2 percent cut (valued at $220 million) had been intended to offset a projected rise in inpatient spending after the adoption of the two-midnight rule, which requires that patient visits usually must last two midnights to qualify for inpatient reimbursement rates.
• The recently formed Rutgers Health network will unite all parts of its medical practices, clinics and schools into a single entity.  It will become the largest academic healthcare provider organization in the state by encompassing an expected more than 1,000 healthcare professionals who teach at Rutgers and participate in faculty practices.
• CMS has finalized its Quality Measure Development Plan, which is a strategic framework for clinician quality measure development to support the new Merit-based Incentive Payment System (MIPS) and advanced alternative payment models (APMs).  MIPS performance will be judged by a score that’s measured against a performance threshold.  Under the rule, the threshold will be set at a level where half of eligible clinicians fall below the threshold and half of them wind up above it.  Negative or positive adjustments will start at 4 percent in 2019 and gradually rise to 9 percent for 2022 and beyond.
• Prime healthcare and Horizon Blue Cross Blue Shield of New Jersey recently announced that they have reached an agreement to continue in-network coverage for patients at St. Michael’s Medical Center located in Newark.
• The FDA recently announced a final rule that expands its ability to regulate tobacco products.  Now, retailers may not sell e-cigarettes, hookah and pipe tobacco and cigars to juveniles under 18 years old.  Prior to the implementation of this rule, minors had been able to purchase these products in some states without state regulations on tobacco products.

The list above does not include every proposed or adopted legislation, litigation or guidance document that may impact the healthcare industry.  Instead, it includes only a select few chosen by the authors, and any information in this Update is not intended to provide legal advice.  If you are concerned that a proposed or adopted legislation, litigation or guidance document may impact your practice, then you should seek legal advice. Nothing in this Update should be relied upon as legal advice in any particular matter. © 2016 Riker Danzig Scherer Hyland & Perretti LLP.