July 16, 2018 Regulatory Developments
August 1, 2018
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on July 16, 2018:
- On July 16, 2018, at 50 N.J.R. 1517(a), the Office of the Governor issued a reorganization plan to return the Division of Mental Health and Addiction Services (“DMHAS” or “Division”) to the Department of Human Services (“DHS”). The transfer of DMHAS to DHS is effective August 20, 2018.
- On July 16, 2018, at 50 N.J.R. 1534(a), the Department of Law and Public Safety, Division of Consumer Affairs issued a notice of adoption of administrative corrections to the Prescription Monitoring Program regarding the effective date for the Division’s provision of online access to PMP information.
- On July 16, 2018, at 50 N.J.R. 1672(a), the Department of Health, Public Health Services Branch, Division of Medicinal Marijuana published a request for application for additional alternative treatment centers.
July 2, 2018 Regulatory Developments
July 5, 2018
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on July 2, 2018:
- On July 2, 2018, at 50 N.J.R. 1468(a), the State Board of Pharmacy issued a proposal to amend the regulations regarding the effective date for complying with Chapter 800 of the United States Pharmacopoeia/National Formulary (USP 800), which sets forth standards for compounding antineoplastic agents (i.e., anti-tumor) and other hazardous substances. The Board is, therefore, proposing to amend the effective date for pharmacies to meet the requirements of USP 800 from July 1, 2018, to the official (effective) date of General Chapter 800 which is currently December 1, 2019.
- On July 2, 2018, at 50 N.J.R. 1494(a), the Department of Health issued a notice of readoption of N.J.A.C. 8:31B, Hospital Financial Reporting, which was scheduled to expire June 29, 2018. The readopted rules includes technical amendments to the existing rule and will be in effect for a period of seven years.
- On July 2, 2018, at 50 N.J.R. 1500(a), the Department of Law and Public Safety, Division of Consumer Affairs issued a notice of adoption of amendments to the Prescription Monitoring Program. The program is now accessible to certified medical assistants, registered dental assistants and licensed mental health practitioners. The rule adoption gives the Division authority to review the PMP information submitted by a pharmacy permit holder. The rule adoption also amends recordkeeping requirements and names non-compliance with the PMP regulations as grounds for professional misconduct.
June 18, 2018 Regulatory Developments
June 27, 2018
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on June 18, 2018:
- On June 18, 2018, at 50 N.J.R. 1398(a), the Department of Health published a notice of proposed readoption of rules, amendments and repeal of its rules governing medicinal marijuana use implementing the New Jersey Compassionate Use Medical Marijuana Act codified at N.J.S.A. 24:6I-1. Comments due August 17, 2018.
- On June 18, 2018, at 50 N.J.R. 1412(a), the Department of Banking and Insurance, New Jersey Individual Health Coverage Program Board published a notice of proposed readoption of rules with amendments and repeal of its rules governing the Individual Health Coverage Program. The proposed readoption with amendments and repeal remove provisions that are no longer necessary. Comments due June 4, 2018.
- On June 18, 2018, at 50 N.J.R. 1423(a), the Department of Banking and Insurance, New Jersey Small Employer Health Benefits Program Board published a notice of proposed amendments of its rules governing Small Employer Health Benefits Programs. Specific language for policy forms, certificates, contract forms for HMO Plans, and evidence of coverages are set forth in the proposed appendices. Comments due May 29, 2018.
June 4, 2018 Regulatory Developments
June 6, 2018
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on June 4, 2018:
- On June 4, 2018, at 50 N.J.R. 1333(a), the Higher Education Student Assistance Authority published a notice of proposed rule adoption governing the policy, administration, and procedures of the Tuition Reimbursement Program for Psychiatrists. The Commissioner of Health will designate the underserved areas that have a shortage of psychiatrists. Comments due by August 3, 2018.
- On June 4, 2018, at 50 N.J.R. 1338(a), the State Board of Medical Examiners published a notice of proposed adoption of rules governing the practice of licensed midwives and proposed amendments to these rules to reflect current practice standards for midwifery. Among the proposed amendments are license renewal requirements for licensed midwives and procedures that a licensed midwife must follow when a patient is at increased risk during pregnancy. Comments due by August 3, 2018.
- On June 4, 2018, at 50 N.J.R. 1368(a), the State Board of Medical Examiners published notice of adoption of amendments to its rules governing the scope of practice of physician assistants. Notably, it removes the requirement for the supervising physician’s full name to be printed on a prescription blank and clarifies that the supervisory ratio does not limit the number of physician assistants with whom a supervising physician may enter into a delegation agreement.
- On June 4, 2018, at 50 N.J.R. 1372(a), the State Board of Optometrists published a notice of readoption of its rules governing the practice of optometry, such as the application process and requirements for optometrists; the processes for licensure renewal, reactivation, and reinstatement; the renewal process for registration certificates; the requirements for therapeutic pharmaceutical agents certification; limitations on prescribing, dispensing, or administering controlled dangerous substances; and standards for records of examination and prescription. The readopted rules shall be in effect for a seven-year period.
Out of Network Legislation Signed by Governor Murphy
June 5, 2018
Posted by Anjali Baxi
The Governor enacted the “Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act” legislation banning “surprise medical bills” on June 1, 2018 to be effective by the end of the summer. As highlighted previously in this blog, the legislation is a healthcare consumer protection statute that takes the patient out the equation of the reimbursement dispute between the providers and insurance companies. The statute only requires that the patient be responsible for “in-network” amounts. Health care professionals and health care facilities are required to provide disclosures of out‑of‑network status and obtain specific, knowing and voluntary consent from patient who wish to receive out of network services at the out‑of‑network cost. The health care providers and insurance companies still remain at odds regarding reimbursements and may negotiate or go to arbitration for a disputed fee amount. However, the providers cannot look to the patient for payment of out‑of‑network balances unless the patient has given a specific consent to do so.
Needless to say, there is much uncertainty in the private practice realm as to how out‑of‑network practices will continue to provide treatment and obtain reimbursement from insurance companies.
May 21, 2018 Regulatory Developments
May 24, 2018
Posted by Beth Christian
Here are the most recent health care related regulatory developments as published in the New Jersey Register on May 21, 2018:
- On May 21, 2018 at 50 NJR 1247, the Alcohol and Drug Counselor Committee of the Board of Marriage and Family Therapy Examiners published notice of proposed amendments to the rules governing clinical supervision of alcohol and drug counselor interns, as well as clinical supervision of a supervised practice for certified alcohol and drug counselors.
- On May 21, 2018 at 50 NJR 1249, the Board of Orthotics and Prosthetics Examiners published notice of the proposal of amendments to the rules governing the scope of practice for orthotists; orthotist assistants; prosthetists; prosthetist assistants; and prosthetist-orthotist assistants.
- On May 21, 2018 at 50 NJR 1260, the Department of Health published notice of its readoption with technical changes to the regulations governing the Newborn Hearing Screening Program.
- On May 21, 2018 at 50 NJR 1261, the Department of Human Services published notice of its readoption with amendments to its rules governing hospital services under Medicaid.
- On May 21, 2018 at 50 NJR 1278, the Department of Human Services published notice of its adoption of new rules governing eligibility standards and applications for the Catastrophic Illness in Children Relief Fund.
- On May 21, 2018 at 50 NJR 1282, the State Board of Dentistry published notice of its adoption of amendments to its rules governing the scope of practice for dental hygienists; registered dental assistants; limited registered dental assistants in orthodontics; and unregistered dental assistants.
- On May 21, 2018 at 50 NJR 1284, the State Board of Medical Examiners published notice of its adoption of amendments to its rules governing delegation of administration of subcutaneous and intramuscular injections and the performance of venipuncture to certified medical assistants. The amendments set forth a definition for eligible certified medical assistants, as well as criteria for training in order to perform certain tasks.
- On May 21, 2018 at 50 NJR 1285, the State Board of Medical Examiners and the Board of Pharmacy jointly adopted amendments to their rules and jointly adopted new rules governing procedures for physician ordered immunizations performed by licensed pharmacists. The rules also incorporate requirements for pharmacists to administer the influenza vaccine to patients under 18 years of age.
- On May 21, 2018 at 50 NJR 1286, the State Board of Nursing published notice of adoption of amendments to its rules governing the fee schedule for licensure, as well as amendments to the rules governing continuing education for advanced practice nurses.
- On May 21, 2018 at 50 NJR 1292, the Division of Consumer Affairs published notice of its adoption of amendments to its rules, as well as the adoption of a new rule, governing health care service firms. The rules add a new definition for the term “companion services” and amends the definition of the term “health care service firm”. In addition, the rules incorporate health care service firm accreditation and audit requirements.
- On May 21, 2018 at 50 NJR 1324, the Department of Banking and Insurance published a public notice of an increase in the minimum net worth requirements for health maintenance organizations to take into account the increase in the medical component of the consumer price index.
Out of Network Legislation Passes Awaiting Governor Murphy’s Signature
May 18, 2018
Posted by Anjali Baxi
The long awaited legislation to outlaw surprise out-of-network medical bills (A-2039) passed the New Jersey legislature on April 12, 2018 and still awaits Governor Murphy’s signature to become law. The issue and various forms of this legislation have been debated for over eight years. This bill, if signed into law, will substantially impact all of the stakeholders-patients, insurance companies, medical practices, hospitals and other licensed healthcare facilities. The current bill, as presented to Governor Murphy, has strong consumer protections for “covered persons” (patients) that require providers to disclose their out-of-network status with particular insurance plans.
This bill also outlines disclosure requirements for carriers (insurance companies), healthcare facilities and health care professionals and creates limitations on the amount and methodology by which healthcare facilities and health care professionals would be paid by the insurance company. This post is focused on the bill as it affects healthcare professionals –individuals licensed by their respective NJ licensing boards, and effectively medical practices that utilize out-of-network professionals (“OON Professionals”). It is worthy to note that the bill’s provisions related to OON Professionals primarily focus on outpatient non-emergency services.
Who does this bill protect?
This bill protects “covered persons” who participate with certain companies authorized to offer health benefits, from “surprise” out-of-network bills, especially in the instances when the person is treated by an “inadvertent out of network provider,” in the case of an emergency treatment or when the person had no choice in selecting his or her provider. In the case of elective procedures, the OON Professional, the bill requires the patient to affirmatively acknowledge that he or she knowingly, voluntarily and specifically selected an out of network provider to provide the services.
This bill does not apply to patients/individuals who participate with Medicaid, Medicare, Medicare Advantage, accident only, credit, disability, long-term care, TRICARE supplement coverage, coverage arising out of a workers’ compensation or similar law, automobile medical payment insurance, PIP and hospital confinement indemnity coverage. This bill does not cover patients that are participants in a self-funded health plan unless the patient elects to be subject to the protections of this bill.
What are the disclosure requirements for Healthcare Professionals?
Healthcare professionals are required to disclose in writing or on a website the health benefits plans with which it participates prior to the provision of non-emergency services, and then again verbally or in writing, at the time of an appointment. If the healthcare professional is OON Professional, then:
- Prior to the scheduling of the non-emergency procedure, inform the patient that the professional is out of network and that amount or estimated amount for the services will be made available upon request.
- Upon receipt of a request for the cost of the services, the healthcare professional would use the CPT code to provide a written estimate for the bill that the patient would receive, and a list of CPT codes associated with that service that may arise when the service is provided.
- Inform the patient that he or she will have a financial responsibility applicable to healthcare services provided by an out of network professional in excess of his or her copayment, deductible, or coinsurance and the person may be responsible for amounts in excess of the allowed amounts under their plan.
- Advise the patient to contact their insurance company for further consultation on the costs.
- A physician must provide to the patient, to the extent the information is available, name, practice name, mailing address and phone number of any health care provider schedule to perform anesthesia, laboratory, pathology, radiology or assistant surgeon services in connection with care provided in the physician’s office for the patient or coordinated or referred by the physician for the patient at the time of the referral coordination of services with that provider.
- For a patient’s schedule facility admission, the physician shall provide the patient and the facility with the name, practice name, mailing address and telephone number of any other physicians whose services would be arranged by the physician and are scheduled at the time of the pre admission testing, registration or admission at the time of the non-emergency services are scheduled.
- The physician must provide instructions as to how to determine the health benefits plans in which the provider participates and recommend that the covered person should contact the carrier for consultation on costs and associated with services.
Notably, the receipt or acknowledgement by patient of any required disclosure does not waive any protection regarding in network health benefits plan coverage available to the patient.
How would an OON Professional be paid by the patient under this bill?
Unless the patient “knowing, voluntary and specifically” selects the OON Professional, the OON Professionals may not bill a “covered person”, except for the applicable deductible, copayment or coinsurance amounts that would apply if the covered person utilized an in-network health care provider for the covered services. The OON Professional would be required to accept the patient’s in-network co-pay or co-insurance amount. Balance billing for the out-of-network charge is not permissible under this bill unless the patient had selected the OON Professional as noted above. However, if the OON Professional wishes to bill the patient at the out of network patient balance, the OON Professional will likely resort to obtaining documentation acknowledging that the patient’s had “knowingly, voluntary and specifically” selected the out of network provider.
How would the OON Professional get paid by the insurance company and how much?
Under this bill, the OON Professional gets paid by either negotiating with the insurance company or entering into a binding arbitration with the insurance company for a specified amount.
The OON Professional may still bill the insurance company for the services rendered. Then, much how it is done today, the insurance company would either pay the claim or determine whether it is excessive. If the insurance company is attempting to negotiate the settlement of the claim, it must provide a notice to the health care provider.
If the difference between the insurance company and the OON Professional’s final offer is $1,000, then the insurance company and/or the OON Professional may initiate binding arbitration to determine the payment for the services by filing a request for arbitration with the Department of Banking and Insurance (“DOBI”). The arbitration decision will be one of the two amounts submitted by the parties submitted as their final offers and is binding. The decision of the arbitrator must be written and issued within 30 days after the request is submitted to the DOBI. Generally, the parties must split the arbitration fees and shall pay their costs and fees including legal fees.
Can the OON Professional write off the patient balance?
It is unclear. As the bill is currently written, an out of network health care provider may not knowingly waive, rebate, give or pay or offer to waive, rebate, give or pay all or part of the deductible, copayment or coinsurance owed by a covered person’s health benefits plan as an inducement for the covered person to seek health care services from the provider without violating this statute. However, this would not include waivers, rebates, gifts, payments or offers that fall within a safe harbor under federal laws related to fraud and abuse-such as anti-kickback and self-referrals. DOBI, Department of Health and the Division of Consumer Affairs in the Department of Law and Public Safety (various professional health care licensing boards) are empowered to promulgate rules and regulations to effectuate this and other provisions of the law.
What is the penalty for a healthcare provider to not comply with this statute?
The Commissioner of DOBI would assess a penalty for a health care professional would be not more than $100 per violation. Every day upon which a violation occurs shall be considered a separate violation, but the person shall not be liable for more than $2,500 for each occurrence.
On balance, this bill is a boon to the patients who hold certain private insurances. However, it is the OON Professional whose financial predicament is uncertain—more disclosure obligations, inability to bill patients for out of network copayment, and unsure of what the insurance reimbursement for each procedure will be. Will the negotiations with the insurance carrier remain the same as they are today? How many claims will be sent to arbitration? How will this affect the OON Professional’s financial viability and ability to remain in practice? These are the types of questions that the Governor’s office is likely considering as this bill awaits signature.
Pharmaceutical Pricing
May 17, 2018
Posted by Frank Ciesla
The pricing of pharmaceuticals is a complicated situation. The pharmaceutical company in pricing a particular pharmaceutical is not just recovering the costs of making that pharmaceutical, which generally is insignificant, but must also recover the cost of the research, development and approval process expenses incurred in regard to that particular pharmaceutical. Pharmaceutical companies also need to recover the research, development and approval costs for those pharmaceuticals which failed and never obtained FDA approval, generate a sufficient return to fund the research, development and approval process for new drugs, and make a profit. There is no simple formula or methodology that can be used, either by politicians or by bureaucrats, in determining what a reasonable price for a given pharmaceutical product would be in light of the components that it contains.
It appears, however, that the drug pricing proposals, whether they are from President Trump, or from Republicans, Democrats or other commentators, have not zeroed in and effectively addressed how a government bureaucrat or a government elected official could determine the reasonableness of a particular price for a particular pharmaceutical.
There is an alternative, however. That alternative would be the concept of “Most Favored Nations”. Under that concept, the United States would mandate by statute, that no one could sell a pharmaceutical in the United States for a price higher than the lowest price that it was sold anywhere else in the world. The United States would, therefore, get the benefit of the various worldwide negotiations of numerous purchases of that pharmaceutical, since a pharmaceutical company would no longer have the ability to make up the shortfall of revenue it needs to cover the various cost components of the pharmaceutical by imposing a much larger price on American consumers/payors to make up the shortfalls. President Trump’s recent proposal to address pharmaceutical cost disparities, so that the United States consumers and payors are not subsidizing the pharmaceutical industry for the benefit of other countries, can be accomplished with use of a Most Favored Nations concept.
It would be up to the pharmaceutical company, not up to a government bureaucrat or a government elected official, to determine what price they need to charge throughout the world, realizing that the lowest price that they can charge will be the price that they can charge in the United States. That may have, and more likely will have, an adverse effect upon the pricing that is now offered in other parts of the world. While many, if not most purchases of pharmaceuticals, other than the United States, do not have an oligopolistic or monopolistic impact on the pricing, the United States clearly has, because of its direct or indirect purchase of pharmaceuticals, an oligopolistic impact on the pricing. This concept would eliminate many, if not all of the problems, resulting from a market in which there is an oligopolistic affecting what the pricing would be.
We would still need governmental oversight in such an arrangement. The government must ensure that the prices are consistent with the Most Favored Nations concept and to take enforcement steps in cases of noncompliance. More essentially, the government will need to aggressively ensure that the intellectual property of the pharmaceutical companies is not infringed or otherwise compromised by other purchasers, who no longer will be able to obtain pharmaceuticals at prices significantly less than those paid by the American consumer.
Obviously, under the Most Favored Nation concepts, there would be no need to import pharmaceuticals from Canada since pharmaceuticals could no longer be sold in Canada at a price lower than those being sold in the United States.
May 7, 2018 Regulatory Developments
May 9, 2018
Posted by Beth Christian
Here are the most recent health care related regulatory developments as published in the New Jersey Register on May 7, 2018:
- On May 7, 2018 at 50 NJR 1194, the Occupational Therapy Advisory Council proposed amendments to its rules, as well as the proposal of new rules, governing licensure requirements for occupational therapists.
- On May 7, 2018 at 50 NJR 1211, the Department of Health published notice of its readoption of its regulations regarding death records.
- On May 7, 2018 at 50 NJR 1212, the Board of Chiropractic Examiners published notice of its adoption of amendments to its rules, as well as the adoption of new rules, governing chiropractic practice. Among other things, the amendments incorporate a list of additional items which may be delegated by a licensed chiropractor to a licensed chiropractic assistant.
- On May 7, 2018 at 50 NJR 1219, the Division of Consumer Affairs published notice of its adoption of amendments to its rules governing the prescription monitoring program. The amendments to the rules incorporate human growth hormone or gabapentin as a prescription that must be recorded under the prescription monitoring program.
District Court Holds that Medical Staff Medical Executive Committee May Be Sued As An Unincorporated Association
May 2, 2018
Posted by Beth Christian
The United States District Court for the District of New Jersey has issued a decision holding that the Medical Executive Committee (“MEC”) of a hospital’s Medical Staff may be sued separately from the hospital. If the decision is upheld, it will have important implications for hospitals, members of their Medical Staff, and hospital leadership.
The lawsuit in question was filed by Dr. Frederick Nahas against Shore Medical Center and its MEC. Frederick Nahas, M.D. v. Shore Medical Center, et al, 2018 WL 1981474 (April 27, 2018). Dr. Nahas filed the lawsuit after his privileges to perform endovascular surgery at Shore Medical Center were adversely affected. Dr. Nahas sued both the Medical Center and its MEC.
The court found that the MEC is a type of unincorporated association, and therefore has the capacity to sue or be sued under the laws of the State of New Jersey. The court referenced N.J.S.A. 2A:64-1, which provides in pertinent part that “any unincorporated organization or association, consisting of 7 or more persons and having a recognized name, may sue or be sued in any court of the state … in any civil actions affecting its common property, rights and liabilities, with the same force and effect … as if the actions were prosecuted by or against all of the members thereof.” The court found that Shore Medical Center’s Medical Staff had the capacity to sue or be sued, because the Medical Staff pays dues, which implies an association with defined membership and defined boundaries. The court found that under the Medical Center’s bylaws, the Medical Staff was established by the Board of Trustees and existed in a contractual relationship with the Board of Trustees. The court also found that under the bylaws, Shore Medical Center indemnified members of the Medical Staff under certain circumstances. The court held that if Shore Medical Center’s Medical Staff was an unincorporated association with the capacity to sue or be sued, then the MEC could also sue or be sued.
In addition to finding that the MEC was an unincorporated association which could be sued pursuant to N.J.S.A. 2A:64-1, the court also found that the Health Care Quality Improvement Act provided authority for the proposition that the MEC could be sued. The court found that “The very fact that Congress decided to immunize professional review bodies–of which the MEC is undoubtedly such an entity—shows it contemplated both their capacity to be sued and their separate and distinct nature from their own committee members.” The court also referenced the New Jersey statute which provides immunity for committees engaged in peer review activities. N.J.S.A. 2A:84-22.10. The court concluded that “although this court has its misgivings about the analytical rigor of treating a group of people on a committee as a singular committee for purposes of legal capacity, the clear trend under New Jersey law is to regard such groups as unincorporated associations.”
Absent from the court’s decision is any discussion of the fact that it is generally a hospital’s Board of Trustees which is the final decision maker in cases involving a grant or termination of Medical Staff privileges. The MEC is not the final decision maker, and only makes recommendations to the Board, which the Board is free to accept or reject.
Federal and state statutes and regulations applicable to hospitals, as well as the accreditation standards of The Joint Commission, mandate the use of many different committees in order to ensure quality of care and carry out other important hospital functions. The role of many of these committees is to make recommendations to the Hospital’s Board and administration in order to meet the applicable statutory, regulatory and accreditation requirements. It will be interesting to see whether or not the Nahas decision results in an increase in claims filed against hospital Medical Staffs, MECs and other hospital committees.
Docs #3204979-v1
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