Category: Health and Human Services

Dying with Dignity in New Jersey: New Jersey’s Aid in Dying for the Terminally Ill Act

New Jersey residents should be aware that on August 1, 2019, New Jersey’s Aid in Dying for the Terminally Ill Act went into effect.  The Aid in Dying for the Terminally Ill Act permits qualified terminally ill patients to self-administer medication to end their life in a humane and dignified manner. Both patients and physicians are protected by several safeguards built into the recently enacted New Jersey statute.

The patient must be a New Jersey resident who is at least 18 years of age and can document his or her residency with a driver’s license or identification card issued by the New Jersey Motor Vehicle Commission; a New Jersey resident gross income tax return filed for the most recent year; or other government record that demonstrates residency. The patient must be able to communicate health care decisions and be capable of making informed decisions. The patient’s attending physician and consulting physician will make the determination regarding a patient’s mental capacity.  Finally, the patient must be terminally ill, as defined in the statute. If a patient is in the terminal stage of an irreversibly fatal illness, disease, or condition with a prognosis, based upon reasonable medical certainty, of a life expectancy of six months or less, he or she will be considered “terminally ill” under the statute.

Some of the requirements for the attending physician include: (i) examining the patient and confirming that the patient is terminally ill; (ii) informing the patient of the feasible alternatives to taking the life-ending medication, including, but not limited to: concurrent or additional treatment opportunities, palliative care, comfort care, hospice care and pain control; (iii) referring the patient to a consulting physician for medical confirmation of the diagnosis and prognosis and a determination that the patient is capable of decision-making and is acting voluntarily; (iv) referring the patient to counseling with a mental health care professional; and (v) recommending the patient participate in consultation regarding the alternatives to self-administering the life-ending medication. 

Prior to providing a prescription for the medication, the physician is required to recommend that the patient notify their next of kin. Whether the patient decides to withhold notice to their next of kin is left entirely up to the patient. The patient must make two oral requests and one valid written request, in the written form set forth in the statute, to their attending physician to receive a prescription for the life-ending medication.

The State of New Jersey is now the 8th state in the United States to enact a compassionate death with dignity statute. Presently, each of California, Colorado, District of Columbia, Hawaii, New Jersey, Maine (will be effective in September 2019), Oregon, Vermont, and Washington have death with dignity statutes. The State of Montana relies on case law to permit physician-assisted deaths.

Should you wish to receive additional information, or if you have any questions relating to this topic, we invite you to contact our firm’s Private Clients Services and/or Health Care Practice Groups for further discussion.

HHS Actually Takes Action to LOWER the Penalties For One Of Its Enforcement Laws

On April 29, 2019, the United States Department of Health and Human Services (“HHS”) announced in the Federal Register through a Notification of Enforcement Discretion that effective immediately, it would be exercising its discretion regarding the application of HHS regulations concerning the assessment of Civil Monetary Penalties (“CMPs”) under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology for Economic and Clinical Health (“HITECH”) Act. Specifically, HHS has changed its uniform cumulative annual CMP limit across the four categories of culpability and replaced it with tiered annual CMP limits increasing as the categories of culpability increase in severity.

In 2009, HITECH established four tiers of culpability with increasing penalties based on increasing severity. Those categories included: (1) the person did not know (and, by exercising reasonable diligence, would not have known) that the person violated the provision; (2) the violation was due to reasonable cause, and not willful neglect; (3) the violation was due to willful neglect that is timely corrected; and (4) the violation was due to willful neglect that is not timely corrected.

At the time of enactment of the HITECH Act, discrepancies were identified in the descriptions of the penalty ranges and uncertainty existed surrounding whether the $1,500,000 annual cap on CMPs should be applied to all of the categories of culpability. In the final regulations implementing HITECH that were adopted by HHS in 2013, the $1,500,000 annual cap was confirmed by HHS to apply to all categories. And, ever since then, HHS has been issuing penalties under the following framework:

Culpability Min. Penalty per Violation Max. Penalty Per Violation Annual Limit
No Knowledge $100 $50,000 $1,500,000
Reasonable Cause $1,000 $50,000 $1,500,000
Willful Neglect  – Corrected $10,000 $50,000 $1,500,000
Willful Neglect – Not Corrected $50,000 $50,000 $1,500,000

However, in a sudden change of position, HHS’ guidance this past week states that upon further review of the statute, it believes a better reading of the statute is to provide a tiered annual limit. Thus, under HHS’ new interpretation, there are new maximum annual limits to HIPAA enforcement actions as follows:

Culpability Min. Penalty per Violation Max. Penalty Per Violation Annual Limit
No Knowledge $100 $50,000 $25,000
Reasonable Cause $1,000 $50,000 $100,000
Willful Neglect  – Corrected $10,000 $50,000 $250,000
Willful Neglect – Not Corrected $50,000 $50,000 $1,500,000

It is unclear how the “No Knowledge” category will work given that the maximum penalty per violation remains at $50,000 while the annual limit is only $25,000. A review of the Federal Register entry from HHS confirms these to be the numbers published by HHS, and thus, until HHS offers further guidance or begins applying these new figures to specific cases, there remains some uncertainty for this category of culpability.

Nevertheless, these changes should come as welcome news to providers and business associates trusted with protected health information (“PHI”) as a penalty for a HIPAA violation can add up quickly. Thus, these new annual limits will help to curb the financial sting of a violation, especially when the provider or business associate either is genuinely unaware of the violation or takes appropriate action in response to a violation. Only time will tell whether HHS’ clarification of its reading of the statute to require lesser annual CMP penalty caps marks a general shift toward lower penalties or fewer enforcement actions overall.

In the meantime, it would be wise for providers and business associates to continue demonstrating good faith compliance efforts to try and minimize the tier of culpability within which a particular penalty falls. Only through ongoing reviews, audits and assessments of privacy policies and procedures and general compliance programs will providers and business associates remain prepared and help to mitigate the penalty of a potential HIPAA violation.  Certainly with these new tiered annual CMP caps, those that handle PHI have an even greater incentive to remain focused on effective compliance efforts.

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.

United States Department of Health and Human Services Pushes for the Elimination of Certificate of Need Laws among States in an Effort to Decrease Healthcare Costs

In December 2018, the United States Department of Health and Human Services (“HHS”) issued a report entitled “Reforming America’s Healthcare System Through Choice and Competition” (the “Report”) in which HHS recommended “state action to repeal or scale back Certificate of Need laws.”  This recommendation was motivated by HHS’s desire to decrease healthcare costs through competition, by allowing additional competitors into certain healthcare markets. 

Most states adopted Certificate of Need laws following the enactment of the Health Planning Resources Development Act of 1974 (the “Act”).  The Act required states to create agencies or programs to oversee the creation or expansion of healthcare facilities.  The enactment of the Act was motivated by the assumption that healthcare costs were rising due to the overbuilding of healthcare facilities.  Specifically, due to an abundance of hospitals and other healthcare facilities, these facilities were unable to fill their beds, resulting in fixed costs being met through higher charges to patients.  Therefore, under the Act, a Certificate of Need would only be issued following the demonstration of actual need or demand by the entity seeking to expand an existing facility or build a new facility.  

Congress repealed the Act in 1986 for various reasons.  To date, fifteen states have eliminated their Certificate of Need requirements altogether.  New Jersey continues to maintain its Certificate of Need requirements.  Furthermore, between 2011 and 2016, the items covered under New Jersey’s Certificate of Need laws increased from twelve (12) to twenty-six (26), placing it amongst the top five most restrictive states when it comes to issuing a Certificate of Need. 

Based on the Report, Certificate of Need laws, in actuality, impose costs, including loss of beneficial competition; fail to improve healthcare quality or access; and foster unintended competition problems.  According to the Report, repealing Certificate of Need laws leads to “greater competition [which] incentivizes providers to become more efficient” and “hospitals faced with a more competitive environment have better management practices.”  Further, “evidence suggests [Certificate of Need] laws are ineffective,” and “[t]here is no compelling evidence suggesting that [Certificate of Need] laws improve quality or access, inefficiently or otherwise.”  Lastly, Certificate of Need laws impose costly barriers to provider entry and interfere “with market forces that normally determine the supply of facilities and services,” which can lead to the suppression of supplies, misallocation of resources, and shielding of “incumbent healthcare providers from competition from new entrants.” 

Since the publication of the Report, several states, including Georgia, South Carolina, Virginia, and Alaska, have proposed legislation to either reduce the scope of Certificate of Need laws or to repeal them altogether.  Interestingly enough, moving in the opposite direction, Indiana has introduced legislation that would create a new Certificate of Need law. 

With legislators across the aisle concerned about the increasingly high costs of healthcare, and the Report’s arguments that Certificate of Need laws have been ineffective, the Report may serve as a catalyst to repealing individual Certificate of Need requirements in various states, including New Jersey. 

Down With the Two-Midnight Rule

On April 14, 2014, the American Hospital Association, New Jersey Hospital Association, and other hospital associations and systems (“Plaintiffs”) filed a federal lawsuit in the United States District Court for the District of Columbia, case 1:14-cv-00609, against Kathleen Sebelius as Secretary of Health and Human Services (“HHS”) challenging three “unlawful” Medicare policies.[1] One of these policies is known as the two-midnight rule and involves Medicare Part A reimbursement.[2]  This involves reimbursement for “inpatient” hospital services.

Neither HHS nor its administrative agency, the Centers for Medicare and Medicaid Services (“CMS”), has ever formally defined “inpatient.” CMS has recognized that the decision to admit a patient is a “complex judgment” call involving various factors including medical history, current medical needs, severity of signs and symptoms, types of facilities available, hospital by-laws and admissions policies, the medical predictability of something adverse happening to the patient, and the relative appropriateness of the treatment.  Medicare Benefit Policy Manual  Ch. 1 §10.  Indeed, hospitals and physicians have been instructed by CMS that “generally, a patient is considered an inpatient if formally admitted as [such] with the expectation that he or she will remain at least overnight, and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a bed overnight.”  Id. According to CMS, a physician should “use a 24-hour period as a benchmark; i.e., [physicians] should order admission for patients who are expected to need hospital care for 24 hours or more.” Id.

Despite its own guidance, CMS published a final rule in August 2013 that a Medicare beneficiary is not an “inpatient” unless the admitting physician expects the patient to require care in the hospital spanning two midnights (admitted on Day 1 and discharged on Day 3).  Thus, CMS will not pay for an inpatient stay that spans less than two midnights (regardless of level of care, i.e., intensive care unit).  Instead, that patient stay will be converted to an outpatient stay and one reimbursed under Medicare Part B.

The Plaintiffs allege this CMS rule is “arbitrary and capricious” and undoes decades of Medicare Policy.  The Plaintiffs find it “unwise” to supplant physician judgment with a government rule.  It “defies common sense” for “inpatient” to mean “a person who stays in the hospital until Day 3.”

This, allege the Plaintiffs, is contrary to the Administrative Procedures Act (“APA”).  The policy deprives hospitals of reimbursement to which they are entitled and forces them to spend an exorbitant amount of money and time and change their medical records systems, admissions policies and procedures and documentation protocols to comply with the rule.  It further redirects resources that would otherwise be invested in patient care.  Thus, request the Plaintiffs, the policy must be set aside.

As of May 14, 2014 an Answer by the Government has not been filed.


 

[1] A second federal lawsuit was also filed contending that the 0.2 percent Medicare payment based on CMS’ expectation of more patients being admitted for a two-midnight stay is unlawful.

[2] The other two policies being challenged are (1) requiring rebilling of denied claims within one year of service when many claims are at least a year old when audited and (2) expecting that physicians certify at admission that a Medicare patient is expected to need treatment for a period spanning two midnights.

As Open Enrollment Closes, Secretary Sebelius Steps Down

On Friday April 11, 2014 President Obama announced the resignation of Health and Human Services Secretary Kathleen Sebelius.  The announcement comes after months of derision and calls for her resignation from Republican lawmakers following the troubled rollout of the HealthCare.gov website.

Despite the difficulties of the past several months, Secretary Sebelius’ resignation comes at what many supporters consider a high point, only days after the March 31, 2014 enrollment deadline under the Affordable Care Act during which more than 7 Million people enrolled for insurance coverage.

In connection with the resignation announcement, President Obama nominated Sylvia Mathews Burwell, the current Director the Office of Management and Budget, as Secretary Sebelius’ replacement.

The choice of Burwell as replacement may signal that the President wants to avoid a contentious election year fight to fill the HHS post as Burwell was unanimously confirmed by the Senate to her current post just last year.  However, given the current contentious atmosphere in Washington, particularly as it relates to the Affordable Care Act, it is hard to believe the confirmation process will be as easy this time around.

Nevertheless, Burwell’s confirmation is nearly assured. With the recent rule changes on most executive and judicial branch nominations, Democrats need only 51 votes to confirm her, and the party controls 55 votes in the chamber.

Proposed HIPAA Rule Change Potentially Threatens Second Amendment Rights Without Due Process of Law

On January 7, 2014 the U.S. Department of Health and Human Services (“HHS”) issued a notice of proposed rulemaking to modify the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule to expressly permit certain HIPAA covered entities to disclose to the National Instant Background Check System (“NICS”) the identities of individuals who are subject to a Federal “mental health prohibitor” which disqualifies them from shipping, transporting, possessing, or receiving a firearm. The proposed rule would permit disclosure of only the fact that the individual is subject to the prohibitor, not the underlying diagnosis, treatment records or other protected health information (“PHI”).

Among the persons disqualified from receiving firearms under the “mental health prohibitor” are individuals who have been “adjudicated as a mental defective” or “committed to a mental institution.” 27 C.F.R. 478.32(a)(4). Included in those “adjudicated as a mental defective” are individuals found incompetent to stand trial or not guilty by reason of insanity as well as those determined by a court, board, commission, or other lawful authority to be a danger to themselves or others or lacking the capacity to contract or manage their own affairs. “Committed to a mental health institution” includes not only commitment for mental illness, but also commitment for other reasons, such as drug use. 27 C.F.R. 478.11.

HHS indicates that the rule is designed to address perceptions that HIPAA creates a barrier to entities reporting information to NCIS. In this regard, HHS notes that the vast majority of determinations of incompetence and involuntary commitments are originated in the justice system by entities which are not HIPAA covered entities. Thus, HHS believes the proposed rulemaking merely resolves any perceived ambiguity and clarifies the authority of these entities to report information to NCIS.

However, it has been suggested that the rule change may have a more significant impact. While HHS states the rule change is an attempt to balance individual privacy rights against the public safety, opponents suggest additional considerations should be weighed. Commitment procedures vary from state to state and some states permit mental health providers to commit individuals without prior adjudication. HHS responded to earlier comments on this subject by noting that those states still require the information to eventually be shared with the judicial system. Opponents of the rule argue that by permitting disclosure by the mental health provider directly, rather than limiting disclosure to non-covered entities such as the judicial system, the proposed rule change fails to ensure the individual has received appropriate judicial review prior to reporting. Thus, it is argued by some that reporting of a commitment will result in a deprivation of an individual’s Second Amendment rights and, therefore, it is essential that the individual be provided appropriate due process protections, if not prior to commitment, prior to reporting.

To address these issues, amendments would be required to the definition of “committed to a mental institution” to ensure an individual receives appropriate procedural protections prior to being committed and reported to NCIS. The U.S. Department of Justice (“DOJ”) issued a proposed rule change related to that definition on the same day HHS issued its proposed rule. However, the proposed DOJ rule addresses whether the term includes both inpatient and outpatient treatment, and whether it applies to commitments of individuals while under the age of majority. The DOJ’s proposed rule does not address what procedural protections would be provided to a patient prior to being “committed to a mental health institution” and subject to the mental health prohibitor.

It is fair to expect that these and other concerns will be addressed during the comment periods on the proposed rules; the comment periods for the proposed HHS and DOJ rules expire on March 10, 2014 and April 7, 2014 respectively.