HHS Announces New Payment Model for EMS Services

On February 14, 2019, the United States Department of Health and Human Services (“HHS”) announced the launch of a new payment model for emergency ambulance services, Emergency Triage, Treat, and Transport (“ET3”), with the goal of allowing emergency medicine services (“EMS”) and ambulance service providers to triage and treat Medicare beneficiaries more efficiently and effectively. According to HHS Secretary Alex Azar, “this model will create a new set of incentives for emergency transport and care; ensuring patients get convenient, appropriate treatment in whatever setting makes sense for them.”

Currently, Medicare regulations only allow EMS and ambulance service providers to obtain reimbursement for services only if the patient has been transferred to a hospital (including the emergency department), a critical access hospital, a skilled nursing facility or a dialysis center. Because of this restriction, Medicare patients that have dialed 911 for a medical emergency are transported to one of the aforementioned facilities even if that patient does not require the level of care that these destinations provide. For example, if a Medicare patient has a laceration on his or her wrist, the patient would likely be transferred to the closest emergency department for sutures or in some cases, a bandage.  Under the ET3 model, EMS providers and ambulance service providers will now have greater flexibility to address the health care needs of Medicare beneficiaries requiring medical transport for a medical emergency for which they have accessed 911 services. ET3 broadens the scope under which the Centers for Medicare and Medicaid Services (“CMS”) will reimburse the transportation provider by now paying for (i) patient transfer to a hospital emergency department, (ii) patient transfer to a primary care physician office or urgent care clinic, and (iii) any treatment provided by a qualified health care practitioner in place (i.e., emergency medical technician (“EMT”)) or via telehealth. In addition, ET3 will encourage the development of telephonic triage centers for low-acuity 911 calls in regions where Medicare enrolled ambulance suppliers and providers operate in an effort to improve the quality of care and lower costs by reducing unnecessary transports to hospital emergency departments and unnecessary hospitalizations. Along with lowering the cost to the government payor, the patient who received treatment at a lower acuity facility, on scene, or through telemedicine, may also save on out-of-pocket costs that are not covered by their Medicare plan. Using the prior example, under ET3, the patient with a laceration on his or her wrist could now be treated at an urgent care facility or receive sutures from a licensed EMT or paramedic, reducing the cost and also keeping a bed open in the emergency department for higher acuity patients needing such care.

The ET3 model will be available to all Medicare-enrolled ambulance service providers and hospital-owed ambulance providers.  As part of a multi-payor alignment strategy, CMS plans to encourage ET3 model participants to partner with other payors, including state Medicaid agencies to provide the benefit of the program to those not receiving Medicare fee-for-service benefits. CMS anticipates releasing a Request for Applications (“RFA”) in Summer 2019 to solicit Medicare-enrolled ambulance suppliers and providers.  Following the RFA, in Fall 2019, a Notice of Funding Opportunity (“NOFO”) will be issued as a tool to implement the triage lines for low-acuity 911 calls. This NOFO will be available to local governments, their designees, or other entities that operate or have authority over one or more 911 dispatches in geographic locations where ambulance suppliers and providers have been selected to participate. It is anticipated that there may be up to three rounds of RFAs/NOFOs issued to stagger start dates and allow for any improvements in the ET3 model. The anticipated start date for the first participants is January, 2020.

This change in payment structure signals that CMS is recognizing alternative models of patient care, including telemedicine, as it explores ways to decrease unnecessary costs while maintaining the quality of care offered to the patient.

Will the Broadly Drafted Eliminating Kickbacks in Recovery Act Lead to Compliance Complications for Providers?

As opioid use continues to rise in the United States and the number of opioid related deaths increases year over year, the federal government and some state governments have enacted legislation to deal with an array of opioid related topics including, but not limited to, patient treatment and provider regulations. On October 24, 2018, Congress enacted the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (“SUPPORT”) for Patients and Communities Act as a comprehensive bill to combat opioid use. One component of the SUPPORT Act is the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”), eliminating kickbacks in arrangements with clinical treatment facilities, sober living homes, and laboratories or “patient brokering.” While similar to the current federal Anti-Kickback Statute (the “AKS”) that prohibits the knowing and willful payment of remuneration to induce or reward patient referrals of federal health care program business, the EKRA is not limited to services payable by federal health care programs. EKRA makes it a criminal offense to engage in the following: (a) solicit or receive any remuneration, directly or indirectly, in return for referring an individual to a clinical treatment facility, recovery home, or laboratory; or (b) offer or pay a kickback to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory, or in exchange for an individual using the services of a recovery home, clinical treatment facility, or laboratory.

While the intent of the EKRA seems straight-forward, the language contains many ambiguities leaving providers uncertain as to its scope. For example, EKRA adopts the definition of “laboratory” as used in the statute governing federal licensure of clinical laboratories, including facilities used to examine biological, microbiological, hematological, and pathological materials derived from the human body. Because EKRA chose to define laboratory in such a way, criminal liability under EKRA could extend to any clinical laboratory, even those that do not provide services related to substance abuse. Similarly, the definition for “clinical treatment facility” is overly broad. Under that definition, any facility that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use can be considered a clinical treatment facility. Like with laboratories, a medical provider could be subject to criminal charges due to the referral of patients to another medical provider that provides these types of treatments to patients.

The EKRA contains many safe harbors similar to those in the AKS. Most notably, the EKRA contains safe harbors for the following: (a) a payment to a bona fide employee or independent contractor, if the payment is not tied to the number of individuals referred, number of tests or procedures performed, or amount billed to or received from the referred individual’s health care benefit program; (b) a payment made as compensation under a personal services and management contract that meets the requirements of 42 C.F.R. § 1001.952(d); (c) a waiver or discount of any coinsurance or copayment by a health care benefit program if it is not routinely provided and is provided in good faith; and (d) discount or price reduction under a health care benefit program if properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity.

Unlike the AKS, which allows for incentive based compensation for employees, the safe harbor under the EKRA explicitly states that payment to bona fide employees or independent contractors cannot vary based upon the number of individuals referred, the number of tests performed, or the amount billed or received. Because of this narrow safe harbor, laboratories that were mentioned above (i.e., those that do not perform substance abuse testing) could be in violation of the EKRA while still in compliance with the AKS. Because of this potential compliance issue, clinical laboratories must be aware of the EKRA and ensure compliance with the strict requirements or risk violation of the statute. Clinical laboratories should evaluate their relationships with all referral sources to ensure that there is no remuneration in exchange for patient referrals. Similarly, laboratories should ensure that employees are not being paid on a per test performed basis or receive a bonus payment based on the number of tests performed or the amount billed for testing.

CMS Proposes Expansion to Telehealth Reimbursement

CMS recently released its proposed 2019 Medicare Physician Fee Schedule and Quality Payment Program, containing several amendments meant to expand telehealth and remote patient monitoring. These proposed changes signal that CMS is recognizing that telemedicine (including remote patient monitoring) is going to play a role in the future of health care.

With regards to remote patient monitoring, CMS has introduced three new codes (CPT 999X0, 999X1, and 994X9). Currently, remote patient monitoring is billed under 99091 “Collection and interpretation of physiologic data (e.g., ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (where applicable) requiring a minimum of 30 minutes of time.” The current code is restrictive as it requires at least 30 minutes of time, and the services must be provided by a physician and/or qualified health care professional. The new codes reduce the timeframe to 20 minutes per calendar month, allow for clinical staff to provide the services, and also allows for reimbursement for work incident to providing services such as setting up the patient’s remote monitoring account, educating the patient on the application, and onboarding the patient into the system.

The fee schedule also introduced the concept of the virtual check-in (CPT GVC11), which is a brief face-to-face visit with a patient through a technology platform, allowing the provider to assess whether the patient requires an office visit. The virtual check in has some restrictions such as a limited timeframe of 5 to 10 minutes of evaluation and management; the patient must be an established patient; and the services cannot originate from a related e/m service provided within the past 7 days or cannot relate to services that are to be provided (in person) within the next 24 hours or at the soonest available appointment. If the virtual check-in is related to either a visit within the past 7 days or a future appointment, such services must be bundled with those in-person services.

Similarly, CMS expanded the fee schedule to include photo and video evaluations (CPT GRAS1). Unlike the previous edition, this new service will allow providers to bill for the review of previously recorded videos or images. The same restrictions apply regarding bundling. Further, if the photo and video evaluation leads to an in-person evaluation, such services must be bundled together and not separately billed.

The proposed codes for virtual check-ins and photo/video evaluations is a step in the direction from the rigidity of in-person health care to a more flexible style of providing health care to patients. Under the proposed rules, patients no longer have to make an appointment or visit an emergency department or urgent care center to have a simple question answered by a provider. Aside from the convenience provided to the patient, this change in the delivery of health care can also alleviate the problem of overcrowding in emergency departments and the inability to quickly obtain an appointment with a physician. The patient also is more likely to seek medical attention early before his or her condition worsens if the patient believes that he or she can obtain quick and efficient advice. Further, the interaction will be cheaper for the patient.

CMS also proposes to expand covered preventative services in office and outpatient settings, services that are reimbursable under the current fee schedule, to include codes for situations where the direct patient contact is prolonged. CPT code G0513 can be used for the first 30 minutes of the prolonged in-person visit while G0514 can be used for each additional 30minute period until the visit concludes.

Although many of the proposed changes appear to be small, the changes made under the fee schedule signal that CMS understands that telemedicine is an important tool that can be used to provide quality and timely health care to people not only in rural areas but throughout the country. It also signals that CMS understands the role that telemedicine will play in population health.

What You Need To Know About New Jersey’s Out-of-Network Legislation

The New Jersey legislature recently passed the Out-Of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act”, a bill that has been heavily contested since its introduction. Drafters of the bill believe that its passage will lead to a reform of the current health care delivery system by (i) increasing transparency in pricing for health care services, (ii) enhancing consumer protections, and (iii) creating an arbitration system to resolve certain health care billing disputes. Those that have questioned the bill worry it will be a mechanism for carriers to avoid covering out-of-network bills for health care services by providers. What is undisputed is that this new system for handling out-of-network care is likely the first of its kind in the country and will have a significant impact on health care in New Jersey. Following passage by both houses the bill now goes to the governor’s desk for review.


The bill requires health care providers (including both health care facilities and health care professionals) to disclose certain information to patients prior to rendering services to the patient. For non-emergency or elective procedures, the facility must disclose to the patient: (i) whether the facility is in-network or out-of-network with respect to that patient’s health plan, (ii) advise the patient to confirm his or her provider’s status (i.e., in-network vs. out-of-network) with respect to the patient’s health plan and (iii) advise the patient that for in-network facilities, the patient will have a financial responsibility applicable to an in-network procedure. If the facility is out-of-network under that patient’s health plan, the bill requires the facility to advise the patient of the out-of-network status and explain that any such service may carry out-of-network costs and encourage the patient to discuss with his or her health plan.

Further, the bill requires that the facility’s website contain a list of standard charges for items and services provided by the facility, including but not limited to: (i) the health plans in which the facility participates; (ii) a statement that (a) physician services provided in the facility are not included in the facility’s charges; (b) physicians who provide the services at the facility may or may not participate in the same health plans as the facility, and (c) advise the patient to check with the physician and their insurance carrier for further information; (iii) when applicable, the name, mailing address, and telephone number of hospital-based physician groups with whom the facility contracts; and (iv) when applicable, the name, mailing address, and telephone number of physicians employed by the facility whose services may be provided at the facility and the health plans in which they participate.

The bill includes a similar requirement for health care professionals. Prior to performing non-emergency services, a health care professional must disclose, either in writing or via its website, the health benefit plans in which it participates and the facilities with which the health care professional is affiliated. This information must also be provided to the patient at the time of the patient’s appointment. As with the facility, if the professional is considered out-of-network under the patient’s heath plan, the professional must inform the patient of its out-of-network status and provide an estimate of the cost of services. For all patients, including in-network, the professional must also inform the patient of any other health care provider scheduled to perform services (i.e., anesthesiology, laboratory, pathology or radiology) in connection with the patient’s care and provide the patient with instructions on how to determine the health plans accepted by those providers.

Carriers are also affected by the bill. The bill requires carriers to update their website within 20 days of the addition or termination of a health care provider from its network. The carrier is also required to provide the patient with a clear and understandable explanation of the plan’s out-of-network health care benefits, including the amount the plan will reimburse under the carrier’s methodology to determine reimbursement for out-of-network services. The carrier’s website also must provide examples of anticipated out of pocket costs for frequently billed out-of-network services and also contain enough information to allow the patient to calculate the out of pocket costs for out-of-network services in their geographical region or zip code. Carriers also are given the responsibility of notifying a patient of a facility’s change of in-network status if the patient had previously received carrier’s authorization to obtain services at such facility. If the carrier does not provide this notice at least 30 days prior to the scheduled service, the patient will be billed as if the services were in-network.

Limits on Out-of-Network Billing/Balance Billing

Aside from transparency, the bill also addresses out-of-network charges to a patient. The bill limits out-of-network reimbursement in two scenarios: (i) if a patient receives emergency or urgent medical treatment at an out-of-network facility and (ii) in the event of inadvertent out-of-network services. An “inadvertent out-of-network service” is a service that is covered under a managed care contract that provides a network, but the service is provided by an out-of-network provider at an in-network facility due to unavailability of in-network services in that facility.

For emergency or urgent medically necessary services, the facility and/or provider cannot bill the patient in excess of any deductible, copayment, or coinsurance amount applicable to in-network services per the patient’s health plan. If the carrier and the facility are unable to agree on the reimbursement rate within 30 days of the carrier being billed for the services, the carrier and the facility may enter into binding arbitration. This requirement is also present when a patient receives inadvertent out-of-network services on an emergency or urgent basis. The facility may not bill the patient in excess of any deductible, copayment, or coinsurance amount. If unable to agree on an amount, the carrier and the facility must arbitrate. In other words, the facility cannot “balance bill” or bill the difference between what the carrier will reimburse and the cost of the services to the patient. Further, the bill requires any in-network facility to ensure that medical professionals contracted to provide services at the facility are in-network for the same health plans as the facility and that providers of emergency care accept reimbursement rates in accordance with the bill’s provisions.


For carriers that choose to “opt-in” to arbitration, upon receipt of an out-of-network bill, the carrier will have 20 days under the proposed legislation to either pay the billed amount or, if the carrier believes that the amount billed is excessive, notify the provider of its determination. If the carrier provides such notice of its determination, the carrier and the facility will have 30 days to negotiate the amount that the carrier will reimburse the facility. If the facility and the carrier cannot agree on a final offer and the difference between the final offers of each is not less than $1,000, then either party may initiate binding arbitration and at the conclusion of the 30 days the carrier shall pay the provider the carrier’s final offer. If a carrier does not elect to opt-in to the arbitration and balance-billing protections of the bill, the plan member or out-of-network health care provider may initiate binding arbitration to determine payment for the services by filing a request with the department.

Arbitration will begin with a review of a final offer from both the carrier and the provider. The “baseball style” of arbitration will be applied, meaning that the arbitrator will choose to accept either the provider’s offer or the carrier’s offer. The decision will be issued within 30 days after the request is filed with the department. In most cases, the arbitration fees will be split evenly among the two parties, with the one exception occurring if the arbitrator believes that the payment made by the carrier was not in good faith, requiring the carrier to pay all fees associated with the arbitration. While a prior version of the bill required the arbitrator, in making his/her decision, to review the level of experience and training of the health care professional, the provider’s usual charge for comparable services provided in-network and out-of-network, the circumstances and complexity of the services, the individual patient’s characteristics, and the average in-network and average out-of-network amount paid for the service by the carrier, the final version passed by the legislature eliminated that language.


In addition to the impacts on providers, carriers and patients, the legislation also is intended to increase overall transparency of our health care system. For example, the commissioner of the Department of Banking and Insurance (“DOBI”), in consultation with other agencies, will be required to annually publish certain data including: (1) a list of all arbitrations filed and the award amounts; (2) the percentage of facilities in-network for each carrier in the State; (3) the number of out-of-network complaints received by the department relating to out-of-network health care charges; (4) the number of physician specialists in the State and whether they are in-network or out-of-network; and (5) the results of the network audit required by the legislation. Carriers will also be required to calculate, and report to DOBI, the savings that result from the provisions of the bill and DOBI is required not only to publish this information but produce a report to the Governor each year on the savings to policyholders and the healthcare system.

Now that both houses of the legislature have approved the bill, the Governor has 45 days to act on the bill.  As with all proposed legislation, he can either conditionally veto the bill, pocket veto the bill or sign the bill into law.  If the bill is signed by the Governor, it will go into effect 90 days thereafter. During that 90 day period, DOBI will promulgate rules to implement the new law. The regulations proposed by DOBI could either strengthen the bill or provide some flexibility to providers, especially those specialty providers, who choose to remain out-of-network.

Has CMS been overpaying for Telehealth Services?

The Office of the Inspector General (“OIG”) of the Department of Health and Human Services (“HHS”) recently completed a review of Medicare payment for telehealth services. From 2001 to 2015, the Medicare reimbursement for telehealth services increased from $61,302 to $17.6 million. A study performed by the Medicare Payment Advisory Commission in 2009 determined that the professional fee (the fee paid to the practitioner performing the services at a distant site) without a corresponding originating site fee (the fee paid to the facility where the patient receives the services) was more likely to be associated with unallowable telehealth payments than those professional fees with a corresponding originating site fee. Further, an OIG audit of 2014 and 2015 claims discovered that more than half of the professional fees did not have a corresponding originating site fee. Due to these discrepancies, the OIG did a deep dive on telehealth payments for professional fees without a corresponding originating site fee to determine whether the Centers for Medicare and Medicaid Services (“CMS”) were paying practitioners for telehealth services that did not meet the telehealth Medicare requirements as set forth in the statutes and regulations.

The OIG’s review consisted of 191,118 Medicare paid distant-site telehealth claims without corresponding originating site claims. Of those claims, 100 were extracted for further review. The OIG obtained data and supporting documentation of the 100 claims to determine if the payments were in accordance with the Medicare telehealth reimbursement requirements. The OIG found that 69 of the 100 claims were substantiated. The remaining 31 claims had one or more deficiency.

The largest deficiency that the OIG discovered was that the patient received telehealth services at non-rural originating sites. Of the 31 claims that the OIG found to be deficient, 24 were unallowable because the patient received telehealth services at a non-rural originating site. 42 CFR 410.78(b)(4) sets forth the requirements of an originating site, including that the site be (i) located in a health professional shortage area (“HPSA”) that is outside of a metropolitan statistical area (“MSA”) as of December 31 of the preceding calendar year or within a rural census tract of an MSA as of December 31 of the preceding calendar year or (ii) located in a county that is not included in a MSA as of December 31 of the preceding calendar year.

Additionally, 7 claims were billed by ineligible institutional providers. Distant site practitioners may bill telehealth services to Medicare if an exception is met. The two exceptions are (i) the facility is a critical access hospital (“CAH”) that elected the method II payment option an the practitioner reassigned his or her benefits to the CAH or (ii) the facility provided medical nutrition therapy (MNT) services. For these seven claims, neither exception was met and therefore the auditor believed that the claim should not have been paid.

A smaller number, 3 claims, arguably should have been denied because the patient received services at an unauthorized originating site. An originating site, as set forth in 42 CFR 410.78(b)(3) must be either a practitioner officer, hospital, CAH, rural health clinic, FQHC, hospital based or CAH based renal dialysis center, skilled nursing facility, or community mental health center. Two of the claims originated at the patient’s residence while the third originated at a private renal dialysis center, which is not classified as an originated site according to the regulations.

The regulations also require that, in order for a telehealth service to receive Medicare reimbursement, the telehealth service must have been provided using an interactive (i.e., voice and video) telecommunication system. Store and forward technology is only allowed in certain circumstances, including for the use in federal telemedicine demonstration projects in Alaska and Hawaii. For two claims, store and forward technology was used but no exception was met. Lastly, one unallowed claim was for a non-covered service and one un-allowed claim was for services provided by a physician located outside of the United States. All services that are allowable are set forth on the CMS website.

Along with the findings of claims that were not allowed, the OIG’s audit revealed that the deficiencies occurred because CMS did not ensure that there was oversight to deny payments for errors where telehealth claim edits could not be implemented (i.e., CMS form does not have a field to identify geographic location), all Medicare Administrative Contractor (“MAC”) claim edits were implemented, and practitioners were not properly educated on Medicare telehealth requirements. The OIG report concluded by recommending that CMS take the following three steps: conduct periodic post-payment reviews to disallow payments for errors for which telehealth claim edits cannot be implemented; work with Medicare contractors to implement all telehealth claim edits listed in the Medicare Claims Processing Manual; and offer education and training sessions to practitioners on Medicare telehealth requirements and related resources.

Due to the large number of claims that the OIG found to be unallowable, it is probable that the OIG will continue to monitor telehealth billing and continue to audit telehealth billing practices. If the error rate does not decline, the future of telehealth could become even more heavily regulated with more oversight and stricter regulations around the services that qualify for reimbursement and the procedures for requesting such reimbursement.

Can a Corporation Practice Medicine in New York?

A corporation cannot practice medicine in the state of New Jersey due to New Jersey’s strict Corporate Practice of Medicine (“CPOM”) regulation. Similarly, many other states also prohibit this practice. Like New Jersey, New York State bans the corporate practice of medicine. This post will focus on New York State’s approach to CPOM. The prohibition on CPOM in New York State is codified in the regulation 8 CRR-NY 29.1 and supported by the New York State Business Corporation Law and The New York State Education Law.

As set forth in New York State’s Business Corporation Law, groups of physicians can practice medicine through a professional corporation, a professional service limited liability company, or a registered limited partnership in which all shareholders must be licensees of one profession and whose members practice only that profession. The Business Corporation Law also requires that a professional service corporation can only provide professional services in the field within which its members are licensed.

New York State also bans the practice of fee splitting with a non-licensed professional. New York State Education Law prohibits licensed professionals or professional corporations from splitting fees with individuals or entities not licensed to provide health care services. In other words, a provider may not split a fee with a non-physician. This prohibition extends to business corporations and individuals who do not possess a license to provide the relevant health care services. Section 21(b)(4) of the New York Regulations prohibits any person from sharing in the fees for professional services, other than: a partner, employee, associate in a professional firm or corporation, professional subcontractor or consultant authorized to practice the same profession. Most notably, the regulation states, “This prohibition shall include any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a professional licensee constitutes a percentage of, or is otherwise dependent upon, the income or receipts of the licensee from such practice.” An arrangement with an Management Services Organization (“MSO”) which provides that the MSO is paid a portion of the collections obtained from the physician practice is strictly prohibited under this regulation. Instead, the MSO must be paid fair market value for the services that it provides to the physician practice or organization.

As with the New Jersey CPOM regulation, New York has several specific exceptions to prohibition on fee splitting. Health maintenance organizations and hospitals regulated under the Public Health Law may hire licensees to offer professional services to the public. An exemption is also codified for Insurance companies and managed care companies, allowing those providers to employ licensed professionals for utilization review.

As recently as 2015, an Assurance of Discontinuance was issued by the New York Attorney General against a dental management company for violation of the New York CPOM, signaling that New York State is not poised to loosen its CPOM prohibition in the near future. After opening an investigation into the practices of the dental management company, the Attorney General found that the management company had a significant role in the clinical, operational, and financial aspects of the dental practices, including sharing in the profits of the practices. In explaining the reasoning for prohibiting the corporate practice of medicine and prohibiting this arrangement to continue, the Attorney General stated, “medical and dental decisions should be made by licensed providers using their best clinical judgment, and should not be influenced by management companies’ shared interest in potential profits.” Under the settlement, the dental management company was required to reorganize so that it no longer received a percentage of the collections from the dental practices, it no longer employed any clinical staff, and it no longer was in the day to day operations of the individual dental practices. Financially, the settlement also required the management company to pay a civil penalty of $450,000 and also pay the cost of an independent monitor to oversee the management company’s adherence to the settlement.

In conclusion, New York State has strict regulations governing the Corporate Practice of Medicine. If a healthcare provider is looking to form a MSO, super group, or other practice structure, the healthcare provider must understand and review New York’s CPOM regulations and laws to avoid any potential penalties or costs associated with litigation.

How Telemedicine May Change the Landscape of Health Care In New Jersey

Technological advances such as EMR, remote patient monitoring, and the use of tablet based patient registration have revolutionized the health care industry. Today, a patient can use an app on their phone to schedule an appointment, obtain their medical records, and locate physicians in the area. It is no surprise that over the past five years, telemedicine has become a popular form of treatment for physicians and patients. New Jersey recently unanimously passed legislation that establishes the requirements for the practice of telemedicine in the state of New Jersey. The passage of this legislation signals the importance of telemedicine to the state of New Jersey and the health care field.

The New Jersey bill defines key terms as follows: “health care provider” as an individual who provides a health care service to a patient, which includes, but is not limited to, a licensed physician, nurse, nurse practitioner, psychologist, psychiatrist, psychoanalyst, clinical social worker, physician assistant, professional counselor, respiratory therapist, speech pathologist, audiologist, optometrist, or any other health care professional acting within the scope of a valid license or certification issued pursuant to Title 45 of the New Jersey Statutes; and “Telemedicine” as the delivery of a health care service using electronic communications, information technology, or other electronic or technological means to bridge the gap between a health care provider who is located at a distant site and a patient who is located at an originating site. The term telemedicine, as explained in the bill, does not include “the use, in isolation, of audio-only telephone conversation, electronic mail, instant messaging, phone text, or facsimile transmission.”

The New Jersey legislation sets standards that those providing telemedicine services must follow. Prior to engaging in telemedicine, a provider-patient relationship must be established. The provider must (i) properly identify the patient using, at a minimum, the patient’s name, date of birth, phone number, and address; (ii) disclose and validate the provider’s identity and credentials, such as the provider’s license, title, and, if applicable, specialty and board certifications; (iii) review the patient’s medical history and any available medical records before initiating the telemedicine consult; and (iv) determine whether or not he/she will be able to meet the same standard of care as if the services were provided in person. When necessary, the provider also must refer the patient to appropriate follow up care, including making appropriate referrals for emergency care, if needed.

The newly passed law allows telemedicine to be covered under New Jersey Medicaid and commercial health insurance plans. As currently written, the law does not go as far as to require that the reimbursement rates for telemedicine be equal to the reimbursement rates that would be paid if the service was provided in-person. The language of the bill reads, “The State Medicaid and NJ FamilyCare programs shall provide coverage and payment for health care services delivered to a benefits recipient through telemedicine or telehealth, on the same basis as, and at a provider reimbursement rate that does not exceed the provider reimbursement rate that is applicable, when the services are delivered through in-person contact and consultation in New Jersey.” The language for commercial plans reads the same regarding parity of payments for telemedicine. As expected, the law sets the in-person reimbursement rate as the maximum reimbursement for telemedicine services. The law allows reimbursement to be paid to either the provider or the facility/organization with whom the provider is associated with, depending on the appropriate billing practices.

The emergence and acceptance of telemedicine as a viable option in the health care setting is extremely beneficial to patients who find themselves within the service area of a community hospital. Many community hospitals do not offer the array of service lines that large facilities offer. In situations where time is of the essence, telemedicine saves lives. One example of telemedicine at work in the community hospital setting is with pediatrics. Prior to telemedicine, when a child was brought into an emergency department without pediatric capabilities, the hospital and the patient’s family was faced with quickly transporting the patient to a facility with pediatric capabilities. Often, had the hospital had the ability to diagnose the patient, the transport would not have had to occur. Telemedicine allows the hospital to connect with a pediatric physician at another facility for a quick and accurate diagnosis. It must be noted that once a diagnosis is made, the patient may still require transportation, but the transportation is now only made in situations where it is medically necessary. For other situations, a physician, via telemedicine, can diagnose and prescribe treatment options that can be carried out in the community hospital or through prescription medicines, eliminating the stress and cost of transportation for the patient and the patient’s family.

Teleneurology, another important use of telemedicine, makes prompt neurological care available to patients in even the most remote locations—an important consideration since, with the treatment of stroke symptoms, every second counts. Teleneurology allows a patient, presenting to a hospital without a neurologist on-site, to have his or her symptoms observed by a physician via tele-conference for diagnosis purposes. The diagnosing physician can observe and converse with the patient and obtain close images of the patient’s eyes to determine if the patient is expecting or has experienced a stroke. Ischemic strokes, which are most commonly treated by giving the patient an injection of tissue plasminogen activator (“tPA”). tPA is used to dissolve the blood clot to improve blood flow to the part of the brain being deprived of blood. tPA, while highly effective, must be administered within three hours of the patient experiencing a stroke. Subtracting the time that it takes for a patient to arrive at a hospital for treatment, the patient may now have less than two hours to be given lifesaving medication. Given this shorter timeframe, it is essential for a hospital to quickly and accurately diagnose stroke symptoms. The use of teleneurology gives the patient the best possible chance of receiving a quick diagnosis and obtaining tPA within the three hour timeframe.

Telemedicine can also be utilized in hospitals to facilitate patient discharge. Often, a patient is ready to be discharged, but continues to wait at the hospital until his or her physician can physically discharge the patient from the hospital. For physicians with robust offsite practices, this step may not be immediate. A patient waiting to be discharged can cause patient flow and capacity issues for the hospital and can cause frustration for the patient and their family, ultimately leading to low patient satisfaction scores for the hospital. Allowing a physician to evaluate the patient via telemedicine would alleviate some of these issues. The physician could have a face to face discussion with the patient, asking the necessary questions prior to discharge, while not having to leave his or her office.

As technology advances and health care becomes more reliant on technology, the uses of telemedicine will continue to grow. Telemedicine will become engrained in the culture of providing top level care to patients, regardless of geographical location. Providers seeking to utilize this technology to implement this new means of delivering medical services must be sensitive to the current laws regulating this area and the fact that this area is continually evolving and developing, especially in New Jersey where the law is brand new.

The Senate Continues to Shape Its Version of A Health Care Insurance Bill

Recently Republican Senate Majority Leader Mitch McConnell released the Senate’s updated version of the Better Care Reconciliation Act (“BCRA”). Although a similar version of the bill passed in the House, the BCRA failed to obtain the necessary support in the Senate, leaving Republican leaders and the American people asking the question of “what next?” A summary of the key provisions of the BCRA are below. While this list is not exhaustive, it serves as the Republican party “wish list” of changes to the Affordable Care Act. Any further legislation will most likely have all, if not many, of the below provisions included.

  • The BCRA eliminates Employer and Individual Mandate Penalties enacted under the Affordable Care Act (“ACA”). The Individual Mandate Penalty has been a hot topic since the ACA was enacted.
  • The BCRA repeals taxes that were enacted under the ACA such as the excise tax on medical devices, the health insurance tax, the Medicare surcharge tax, the net investment tax, the branded prescription tax, the health insurance executive tax, the Medicare tax on high income taxpayers and the tanning tax. The bill would also temporarily repeal the “Cadillac tax” through 2026.
  • The BCRA ends the exclusion of coverage for over-the-counter medications from HSA or FSA funds, allows individuals to use HSA funds to pay insurance premiums, allow individuals to use HSA funds to cover health care related expenses incurred up to 60 days before HSA coverage becomes effective, and increase the amount that an individual can contribute annually to an HSA.
  • The BCRA eliminates the ACA’s small business tax credit by the year 2020.
  • The BCRA amends the IRS code to allow small business health plans to be treated as a group health plan.
  • The BCRA provides $45 million in federal funding to combat the current opioid crisis.
  • The BCRA will restructure the premium tax credits beginning in year 2020. Subsidies will be available to those below 350% of poverty. Subsidies are geared to a plan with an actuarial value of 58%, just below a bronze-level plan. The current subsidies are tied to the silver plans, which cover 70% of costs for most customers.
  • Cost Sharing Reduction (“CSR”) payments will be fully repealed by year 2020.
  • An additional $70 billion in stabilization funding will be provided to insurers as a way of reducing premiums and reducing out of pocket costs. This is an increase from the first version of the Senate’s BCRA, which provided for $112 billion dollars in stabilization funding.
  • The BCRA begins to phase out the enhanced federal match for Medicaid expansion over a three year period beginning in calendar year 2021.
  • Medicaid payments to beneficiaries will be capped for each Medicare beneficiary beginning the calendar year 2020. Blind and disabled children are not subject to the cap.
  • BCRA provides safety-net funding over a five years period to states that did not expand Medicaid under the ACA.
  • The BCRA has an incentive program in the form of a bonus payment for states in if states can demonstrate that on a set of child and adult quality measures, they were able to achieve results while also showing lower-than-expected aggregate Medicaid expenditures during an annual performance year.
  • The BCRA, like the AHCA will impose more frequent eligibility redeterminations. Although the BCRA makes this an optional exercise, the Senate bill would increase by 5 percentage points the federal contribution to state costs in connection with a more frequent eligibility redetermination process.
  • The BCRA allows the states to impose work requirements on non-disabled, nonelderly, and non-pregnant adults using the TANF work rules as the basis of a new Medicaid work policy.
  • The BCRA allows states to offer Medicaid coverage of “qualified inpatient psychiatric hospital services” to persons age 21 through 65. Under this provision, qualifying stays cannot exceed 30 consecutive days in a month or 90 total days in any calendar year.
  • As with the AHCA, the BCRA prohibits using tax credits to purchase health plans that cover abortion.
  • Also the same as the AHCA, the BCRA prohibits for one year any Medicaid, CHIP, Maternal and Child Health Services Block Grant, and Social Services Block Grant funding for Planned Parenthood.
  • The BCRA loosens 1332 waiver requirements.

Ted Cruz’s amendment to the BCRA will allow consumers to buy health insurance plans that do not meet the current requirements for health plans under the ACA. In essence, these plans would be cheaper and offer less coverage. Insurers could offer these plans if the insurer also offers a plan that does include all of the current ACA requirements, allowing those with pre-existing conditions to obtain coverage at a reasonable rate. This is a heated topic in the discussions surrounding the passage of the BCRA. One of the most population functions of the ACA is that individuals with pre-existing conditions can obtain affordable health insurance.  Because all Americans are currently required to purchase health insurance, risk shifting takes place between those with preexisting conditions and those who are generally healthy but still paying high premiums. Opponents of the Cruz legislation argue that all Americans will purchase the bare bones plan, essentially making health insurance costs rise for those purchasing the more comprehensive plans. With less being collected by insurance companies in the form of premiums, the funds will have to be recaptured elsewhere.

After the failure of the BCRA, Senate Republicans attempted a “skinny repeal” of the Affordable Care Act, repealing only some of the provisions of the ACA, allowing further legislation to be passed in the future. The skinny repeal would have included repealing the unpopular individual mandate, defund planned parenthood while diverting funds to community health centers, eliminate the medical device tax for three (3)  years, allow for increased contribution to Health Savings Accounts, allow states to have more flexibility in determining waivers for essential health benefits, and eliminate the employer mandate for eight (8) years. The hot button topic of Medicaid was not discussed in the skinny repeal. Even without some of the more controversial topics being included, the skinny repeal of the ACA did not pass. Again, Republicans and the American people are asking themselves the question of what will happen next. Regardless of what side of the political spectrum you fall, health care and health insurance affects every American.

There is great uncertainty surrounding the Republican effort to repeal and replace the Affordable Care Act. Thus, it is unclear whether the Republican “wish list” outlined above or any other version can ultimately muster up sufficient votes to make it through both chambers of Congress to get to the President’s desk.

Has the DOJ Investigation Into eClinicalWorks Opened a Can of Worms?

eClinicalWorks, a provider of electronic health record software (“Software”) to physician offices and hospitals nationwide, recently reached a settlement with the United States government for its alleged involvement in falsely certifying the capabilities of its Software.  After Brendan Delaney, a former employee of the New York City Division of Health Care Access and Improvement alerted the government of perceived issues with the Software, the Department of Justice brought suit against eClinicalWorks for violating the False-Claims Act, more specially for allegedly misrepresenting the capabilities of the software and for allegedly paying kickbacks to customers in exchange for those customers certifying its product.

The American Recovery and Reinvestment Act of 2009 established the Electronic Health Record Incentive Program, which offered incentive payments to health care providers that switched from traditional paper medical records to an electronic health record system. In order to obtain an incentive payment, the health care provider was required to switch from paper records to an electronic medical record system that had been certified as having met certain technological specifications.

eClinicalWorks has held itself out as having certification for its Software under the requirements set forth in the American Recovery and Reinvestment Act. The Department of Justice stated that when obtaining such certification for its Software, eClinicalWorks did not disclose all information to the certifying body, ultimately rending the certification null and void. By creating and selling non-compliant Software, it is also alleged that eClinicalWorks knowingly caused health care providers who purchased its software to submit unknowingly fraudulent claims seeking incentive payments under the Electronic Health Records Incentive Program. 

In explaining the deficiency with the Software, the Department of Justice alleges that the Software does not comply with data portability requirements. Data portability is essential in patient care because it allows health care providers to exchange data. The Department of Justice gave the following example of a deficiency in the Software, “in order to pass certification testing without meeting the certification criteria for standardized drug codes, the company modified its software by ‘hardcoding’ only the drug codes required for testing. In other words, rather than programming the capability to retrieve any drug code from a complete database, [eClinicalWorks] simply typed the 16 codes necessary for certification testing directly into its software. [eClinicalWorks’s] software also did not accurately record user actions in an audit log, and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks.”

So what now? As part of the settlement, eClinicalWorks entered into a five-year Corporate Integrity Agreement, which requires that the company retain an independent software quality overseer, and provide semi annual compliance reports to the Office of the Inspector General. eClinicalWorks must also provide free software updates to the Software to all current customers. Current customers will also have the opportunity to transfer their patient data to another electronic health record provider. This data transfer will be free of charge to customers who make this choice. Customers choosing this option must be cautioned, while switching vendors free of charge may appear on its face to be the best solution, the provider has to consider the pitfalls associated with switching to a different electronic health record system, including but not limited to time and capital spent on training staff and physicians on the new system, any hardware or software upgrades to ensure compatibility with the new electronic medical record system, and the resources that will be needed to back up the current system prior to migration.

The investigation into eClinicalWorks also raises the question of whether other electronic health record software vendors will undergo heightened scrutiny when submitting for certification or if those vendors will be required to submit for recertification under a heightened set of security standards. If it is found that other vendors are also non-compliant, health care providers could be at risk of unknowingly violating HIPAA.