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Sustainable Growth Rate

November 19, 2014 | No Comments
Posted by Frank Ciesla

The CBO has now issued its estimate for the “doc fix” legislation at $144 billion over the next 10 years.  At the moment, there is no proposal on the table to fund this $144 billion and while an unpopular legislative proposal resolving the issue could be proposed and could pass in the lame duck session, there is little time for such a proposal.

In the new Congress, while it will be Republican controlled, and there is clearly an appetite to correct the sustainable growth rate issue as it applies to physicians, it will not be any easier to find a solution to this $144 billion price tag and the new Congress will have until March 31, with all of the other items on its agenda, to resolve the issue or to kick it down the road either for another short period of time or for another year.


November 7, 2014 | No Comments
Posted by Frank Ciesla

South Dakota, not New Jersey, passed an initiative that requires health care insurance plans to admit any willing and qualified provider onto their provider lists, if that provider is willing to accept the terms, primarily reimbursement of the health care insurance plan.

New Jersey neither has such a statute or is even considering at this time such a statute, nor does New Jersey have the legal process by which a taxpayer initiative can be placed upon the ballot.

One can surmise that this is a response by the public to narrowing networks under the Affordable Care Act.

October 20, 2014 Regulatory Developments

November 5, 2014 | No Comments
Posted by Beth Christian

Here are the most recent health care related regulatory developments as published in the New Jersey Register on October 20, 2014:

  • On October 20, 2014 at 46 N.J.R. 2080-2085 and 46 N.J.R. 2096-2098, the following professional boards published notice of their proposal of amendments to their rules governing credit for education, training and experience needed for licensure:   Board of Examiners of Ophthalmic Dispensers and Ophthalmic Technicians; Alcohol and Drug Counselor Committee; Physician Assistant Advisory Committee; Board of Physical Therapy Examiners; Board of Respiratory Care; Board of Social Work Examiners; Board of Polysomnography.  The proposed rules would require the applicable licensing Boards to credit applicants for licensure for education, training, and experience which the applicant received while serving in the Armed Forces.

Sustainable Growth Rate

November 3, 2014 | No Comments
Posted by Frank Ciesla

As we have discussed over the past years, the physicians are again confronted with the potential of a crippling reduction in reimbursement under the Medicare program, pursuant to the Sustainable Growth Rate (SGR).  Congress has traditionally kicked this can down the road one year or a little bit longer.  The clock is again running for the year 2015.  The policy adopted on October 31, 2014, by the Center for Medicare and Medicaid Services has reduced the Medicare reimbursement by 21.2%, starting in the Spring of 2015.

The question now is whether or not the lame duck Congress will be able to permanently fix the SGR, just kick the can for a year or to the new Congress, and then it will be up to the new Congress either to permanently correct the SGR, kick the can down the road for a year, as Congress has done on an annual basis, or fail to do anything and have the SGR implemented, which will have a major impact not only on the reimbursement to the physicians but on the entire Medicare beneficiary population.


October 31, 2014 | No Comments
Posted by Frank Ciesla

As pointed out in our blog of October 16th, the State of Connecticut is putting in place a review process for the merger of or acquisition of physician practices.

The State of New York has now proposed regulations to be followed by the New York Commissioner of Health, when issuing certificates for accountable care organizations.  The proposed regulations will immunize the accountable care organization from federal antitrust law liability under the state action doctrine and also protect them from the State of New York antitrust laws.

In an attempt to establish active state oversight, the proposed regulations are requiring among other things that (1) the Commissioner consider the potential benefits of the ACO, (2) the market conditions in the ACO’s primary service area, (3) the potential disadvantages of the ACO’s collaborative activities, (4) for the availability of less competitive restrictive arrangements and (5) the extent to which such state supervision is likely to mitigate any disadvantages.

This is now the second Northeast/Midatlantic state to actively propose state review and oversight of activities, that are otherwise exempt from pre-approvals under the federal Hart-Scott-Rodino Act.  While neither of these approaches have been enacted by the New Jersey State Legislature or proposed by New Jersey administrative agencies, the above is just an indication of the tenor of what is occurring in the health care industry, particularly now as it involves physicians and physician practices.

Antitrust and Physician Mergers

October 16, 2014 | No Comments
Posted by Frank Ciesla

Co-Authored by Frank Ciesla, Esq. and Patrick S. Convery, Esq.

While the acquisition or merger of most physician practices generally will not rise to the level which would require approval from the Federal Trade Commission or the United States Justice Department under the Hart-Scott-Rodino Act, a statute adopted earlier this year in the State of Connecticut (P.A. 14-168) has now taken effect that mandates that parties to any transaction resulting in “material changes” to a group medical practice must notify the Attorney General at least 30 days in advance of the effective date of the transaction.  While there is no such requirement in the State of New Jersey, the State of New Jersey has in the past floated, and on a limited basis implemented, proposals under which the New Jersey Department of Health (as opposed to the Board of Medical Examiners) would regulate certain aspects of the private practice of medicine.  Those efforts have largely been suppressed by various decisions rendered over the years, including the decision of the New Jersey Appellate Division in Marsh v. Finley, 160 N.J. Super. 193 (1978), in which the Appellate Division found that New Jersey’s Health Care Facilities Planning Act (and the regulations adopted thereunder) did not apply to a physician’s private practice.

In a statement released on September 29, 2014, Connecticut Attorney General George Jepsen noted that  “[a]cquisitions and mergers often make business sense, and may lead to some efficiencies and more integrated care, but they also may lessen competition, leading to higher prices and fewer consumer options”.  Jepsen further noted that “[t]he notice requirement enacted this year will allow us to better monitor the health care market and, where appropriate, to enforce antitrust laws designed to protect Connecticut consumers.”   The new law was apparently proposed in response to a number of mergers and consolidations of physician practices in Connecticut.

While there are other technical requirements in the new Connecticut law, it is clear that the overall purpose of the law is to enable the state to proactively enforce the State’s antitrust laws against “anticompetitive” results, when, as determined by the Connecticut Attorney General, there is a possibility that a proposed merger, consolidation or acquisition involving a physician practice could raise the price of services or severely lessen competition.  At the federal level, the St. Alphonsus Medical Center v. St. Luke’s Health System case, in which the United Stated District Court for the District of Idaho held that the acquisition of a large physician practice (the largest independent multi-specialty group in the state) by a health care system that operated seven hospitals throughout the state violated the antitrust laws and rejected a defense involving the concept of the accountable care organizations, is clear notice that such transactions are being closely monitored and may be challenged if not properly structured to comply with state and federal antitrust laws.

The application of both federal and state antitrust laws (even in New Jersey, which has a state antitrust statute), therefore must be considered by physicians practicing in the State of New Jersey, whenever a transaction involving the acquisition or merger of a physician practice with or into a health care system or other physician practice is proposed.  Although neither New Jersey law nor the federal Hart-Scott-Rodino law contains a notification requirement similar to the  notification requirement adopted in Connecticut,  a transaction involving the acquisition or merger of a physician practice with or into a health care system or other physician practice can still, as in the St. Luke’s case, be challenged under the federal or state antitrust laws if it is not carefully planned and structured to comply with antitrust laws.

OIG Issues Advisory Opinion Re: Municipal Payment for Medical Transportation Services

October 15, 2014 | No Comments
Posted by Beth Christian

The OIG has issued an Advisory Opinion regarding a municipality’s use of tax revenues for payment of a stipend to a volunteer ambulance squad to cover the cost of co-payments and deductibles that would otherwise be incurred by residents, as well as the cost of transports provided to residents without insurance coverage.  In Advisory Opinion 14-09, the OIG concluded that the arrangement would not constitute grounds for the imposition of civil monetary penalties.  The OIG also concluded that while the arrangement could potentially violate the anti-kickback law if the requisite intent to induce or reward referrals were present, the OIG would not impose administrative sanctions in connection with the arrangement.  Under the arrangement reviewed by the OIG, the volunteer ambulance squad did not bill residents of the municipality, some of whom were Medicare and Medicaid beneficiaries.  The OIG relied on the earlier guidance it had issued within its Compliance Program Guidance for Ambulance Suppliers, which state in pertinent part that:

A city or other political subdivision of a state…may not require a contracting ambulance supplier to waive copayments for residents, but it may pay uncollected, out-of-pocket copayments on behalf of its residents.  Such payments may be made through lump sum or periodic payments, if the aggregate payments reasonably approximate the otherwise uncollected cost-sharing amounts.

The OIG found that because the municipality pays the ambulance supplier an annual stipend that the ambulance supplier has certified reasonably approximates out-of- pocket amounts for residents, the non-billing of residents for cost-sharing amounts did not constitute a routine waiver that implicates the anti-kickback statute or the civil monetary penalty law.

October 6, 2014 Regulatory Developments

October 14, 2014 | No Comments
Posted by Beth Christian

Here are the most recent health care related regulatory developments as published in the New Jersey Register on October 6, 2014:

  • On October 6, 2014 at 46 N.J.R. 2007, the Board of Examiners of Master Plumbers published notice of its proposal of amendments to its rules governing medical gas piping.  The proposed rule would require that individuals who install, improve, repair, or maintain medical gas piping within the office of a licensed dentist or a dental clinic or an animal or veterinary facility must be certified as a medical gas piping installer.
  • On October 6, 2014 at 46 N.J.R. 2008, the State Board of Medical Examiners published notice of its proposal of a new rule governing the standards for the supervision and/or administration of hyperbaric oxygen therapy by a licensed podiatrist.
  • On October 6, 2014 at 46 N.J.R. 2009, the State Board of Medical Examiners published notice of its proposal amendments to its continuing education rules.  The proposed amendments would require physicians to obtain continuing medical education credits in programs or topics relating to end-of-life care.
  • On October 6, 2014 at 46 N.J.R. 2010, the State Board of Nursing re-proposed a notice of its proposed repeal of N.J.A.C. 13:37-5.6.  The existing rule requires an individual who is licensed as a registered professional nurse or licensed practical nurse to be held to the standard of practice associated with his or her licensure, regardless of his or her employment status.  The New Jersey Hospital Association has raised concerns that the rule might prohibit hospitals and other health care facilities from employing a nurse in any role outside of a registered professional nurse or licensed practical nurse role.

Appellate Division Holds That Applicants For A Professional License Need Not Exhibit An Intent To Deceive In Order To Have Their License Application Denied Due To Misrepresentation

October 7, 2014 | No Comments
Posted by Beth Christian

The Appellate Division recently issued a decision in which it found that an applicant’s failure to disclose information on their application for a license could be denied based on a finding that their application contained a misrepresentation, even if the failure to disclose was unintentional.  In Matter Of Y.L., an applicant for a license as a massage and bodywork therapist had been arrested on prostitution charges some years prior to her application for New Jersey licensure.  The charges were later dismissed.  When the applicant applied for New Jersey licensure, she swore that she had never been arrested for any crime or offense.  When the licensing board discovered this, the applicant indicated that she had misread the application, that English was not her first language, and that she had not engaged in prostitution.   She argued that in order to have her license denied based on misrepresentation, the board was required to show that she had an “intention to deceive.”  The Appellate Division rejected her argument, finding that the failure to disclose the information constituted at least negligent misrepresentation, and could be used as a basis to deny her application.  The Appellate Division referenced an earlier decision in which a pharmacy applicant’s request to participate in the Medicaid program was denied because the applicant failed to disclose that one of its employees had entered a guilty plea to a drug possession charge.  We reported on that development here: The K.L. decision serves as an important reminder of the need for full and honest disclosure on professional licensure applications.

Beth Christian Receives the 2014 Distinguished Service Award by NJSBA’s Health Law Section

October 3, 2014 | No Comments
Posted by Beth Christian

Beth Christian, a Shareholder in GH&C’s Health Care Practice Group was recently presented with the 2014 Distinguished Service Award by the Health Law Section of the New Jersey State Bar Association. The honor was given to her in recognition of her outstanding service and contributions.

For full press release please click here.

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