Health care entities, home health care agencies, and staffing registries considering a transaction in New Jersey will need to keep in mind new obligations to certain employees. On August 18, 2022, Governor Murphy signed into law New Jersey Senate Bill No. 315 (the “Act”), which created broad protections for many employees in the health care sector in the event of a change in control. The Act requires any change in control to be made pursuant to a contract or agreement between the parties that preserves the wages, benefits, and employment status of eligible employees.

On Friday, April 24th, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act (“Act”) into law that will send an additional $75 billion to the Public Health Emergency and Social Services Fund (“Fund”) used to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. These funds will be in addition to the $100 billion previously appropriated to the Fund in the CARES Act. Of that $100 billion, the first $30 billion was distributed through the Health Resources and Services Administration (HRSA) to health care providers proportionally, based on the providers’ share of total 2019 Medicare payments. HHS has outlined how the remaining $70 billion of the initial $100 billion Congress dedicated to the Fund in the CARES Act would be allocated to providers, with additional payments starting April 24^th. However, HHS has not published any additional guidance as to how the Act’s additional $75 billion will be allocated.

On June 1, 2018, New Jersey Governor Phil Murphy signed into law the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (the “Act”), available at: http://www.njleg.state.nj.us/bills/BillView.asp?BillNumber=A2039, which becomes effective on the 90^th day after enactment.

The Act enhances consumer protections related to surprise out-of-network healthcare charges, and affects health care facilities, health care professionals, and health insurance carriers. Requirements under the Act specific to facilities, professionals, and carriers are summarized below.

Health care facilities or carriers that violate any provision of the Act will be liable for not more than $1,000 for each violation, where each day on which a violation occurs is considered a separate violation, up to $25,000 per occurrence. Health care professionals who violate the Act will be liable for up to $100 per violation, where each day on which a violation occurs is considered a separate violation, up to $2,500 per occurrence. Other penalties may be initiated by the Commissioner of Banking and Insurance, the Commissioner of Health, or the relevant professional or licensing board, as appropriate, pursuant to rules that may be adopted under the Act.

The Act also creates an arbitration process to resolve out-of-network billing disputes, so healthcare providers should be prepared for the new, multi-step arbitration process that will be utilized in New Jersey. Continue reading…

Bergen County Superior Court Judge Robert Contillo issued a recent decision deemed favorable by Horizon Healthcare Services Inc. (“Horizon”) in a case involving three healthcare providers (“Providers”) that challenged Horizon’s newer tiered health coverage plan for hospitals: OMNIA. The Providers alleged that Horizon unfairly designated them as Tier 2 Providers, a tier in which OMNIA Members access providers while incurring higher out-of-pocket costs than they would when accessing those providers in Tier 1. Although certain other claims may proceed, Judge Contillo dismissed the breach of contract claim because he determined that Horizon did not breach the network hospital agreements by “failing to include [the Providers] in Tier 1” because “[t]he plain and unambiguous language [under the agreement] does not guarantee that [the Providers] be included in Horizon’s new products, networks or subnetworks.”

This decision illustrates that tiered designation disputes between hospitals and payors may hinge on the language of the applicable network hospital agreements. Hospitals and other providers are encouraged to review their existing contracts and address this issue in future contracts to determine the level of discretion payors may have in including them in tiered and limited network products. As insurers continue to develop new products designed to lower costs, this will continue to be an important consideration for most providers.

State telehealth parity laws, which generally require private payers (and occasionally Medicaid programs) to cover telehealth services if those services would be covered if provided in-person, have long been trumpeted as a means to increase telehealth acceptance.  The argument is simple: given how the availability of health care services is usually directly tied to whether (and how) payers cover a particular service, laws that require payers to cover telehealth services should drive utilization.  A recently published report, however, questions the impact these laws have on telehealth utilization.

The Center for Connected Health Policy (CCHP), the federally funded national telehealth resource center, conducted a five-month study to analyze state telehealth parity laws and the impact these laws may have on telehealth utilization.  In an interesting twist, the report’s authors also interviewed health plan executives to gain insight into how plans cover and reimburse telehealth services, and the issues preventing greater telehealth utilization.  The report should be required reading for all telehealth stakeholders seeking to understand the telehealth reimbursement landscape.

Here are some key general highlights:

• As of September 2016, 31 states and the District of Columbia have passed telehealth private payer laws.
• How a parity law is drafted can determine “the expansiveness of reimbursement and can predict telehealth utilization.”
• Inclusion/exclusion of certain language may create barriers to telehealth utilization by allowing payers to limit the types of services that may be reimbursed.
• Only 3 states have laws that explicitly require payment parity (meaning payers in these states have to reimburse for telehealth at the same rate as they pay for in-person services).
• Live video is the modality most often referenced in the parity statutory definition of telehealth. Approximately 70 percent of state parity laws reference store-and-forward, and about 55 percent include references to remote patient monitoring.
• Only 4 states and the District of Columbia include a site limitation in their parity laws.
• Unlike the Medicare program, parity laws usually do not include explicit exclusions regarding types of services, types of providers, and geographic locations.

Payer Interviews

As I mentioned, the report’s authors interviewed commercial plan executives, medical officers, and other plan representatives in six states (CA, MS, MT, OK, TX, and VA), resulting in a compelling look into how commercial payers view telehealth.  For plans not participating in interviews, CCHP conducted research regarding their telehealth policies.  Some points to highlight from the interviews:

• The majority of selected plans only reimbursed for live video. Some plans provide limited reimbursement for store-and-forward, but only for certain specialties.
• Remote patient monitoring is not being reimbursed by any of the payers that were part of the study.
• The majority of interviewees confirmed that their plans reimbursed telehealth services at the same rate as in-person services.

Plan interviewees also noted that, notwithstanding the increase in state parity laws, telehealth utilization is generally low.  Among the reasons provided:

• Patients are reluctant to use telehealth, although once they try it, many respond positively.
• Patients have a preference to see physicians and other providers in-person.
• Providers are reluctant to use telehealth for a number of reasons ranging from lack of training, skepticism regarding telehealth, or concerns that they could lose business by providing telehealth.
• Lack of education and awareness regarding the availability and efficacy of telehealth.

Medicaid

CCHP also spoke with Medicaid representatives and concluded that private payer laws have little impact on Medicaid telehealth policies unless the laws explicitly include Medicaid.  The Medicaid representatives also noted that providers face significant challenges in implementing telehealth programs, including the cost of equipment and billing issues.

Moving Forward

While the report acknowledges the promise of telehealth, CCHP concludes that many obstacles remain, including what it describes as “a broad misconception that, because telehealth private payer laws are in place in many states around the country, telehealth is achieving its promise of providing the same patient benefit and payment as in-person care.” Specifically, the report warns that parity laws “have been weakened by their lack of clarity and often contain clauses that may negate much of the intent of the legislation.”  The report encourages more careful drafting of laws and a more comprehensive implementation plan.  CCHP concludes by asking policymakers to consider, among other things, the following steps:

• Using explicit language in private payer laws.
• Ensuring that payment or reimbursement parity language is included in the language of these laws assuming it is the intent of policymakers to have telehealth reimbursed at the same rate as in-person services.
• Developing a comprehensive Medicaid telehealth policy.

Conclusion

I believe the report is significant for two reasons.  First, it dispels the notion that the existence of state parity laws alone will drive greater telehealth utilization.  As the report makes clear, some of this is due to poorly drafted laws in some states—but I believe that much of the disconnect between parity laws and telehealth utilization is tied to broader issues regarding telehealth utilization generally. The lack of knowledge and education on the part of consumers regarding telehealth, for example, is as big a stumbling block as any other. Second, it appears that while plans have bought into the benefits of telehealth they are cautious regarding how to drive utilization. The report points out that most plans prefer a slower approach to telehealth expansion and favor using methods such as pilot projects to assess potential expansion.

2017 is setting records for the funding of digital health emerging companies according to two recent reports. Two leading digital health stakeholders StartUp Health and Rock Health published separate reports in the last two weeks highlighting the record number of digital health deals, total investments, and number of deals over $100 million—all great news for the thousands of digital health emerging companies making their way in the health ecosystem. StartUp Health is New York-based organization that brings together a community of innovators, investors, and advisors to help health care-focused companies through various stages of development. Rock Health is a full-service fund based in the Bay Area that supports a wide diversity of digital health emerging companies. Interestingly, while the organizations track funding differently, their reports essentially come to the same conclusion—the funding outlook for digital health emerging companies is as robust as it has ever been.

StartUp Health tracks companies that enable health, wellness and the delivery of care through data/analytics, sensors, mobile, internet-of-things, genomics and personalized medicine. It looks at various levels of funding from accelerator to private equity funding. StartUp Health’s Insights 2017 Mid-Year Report shows that 2017 has surpassed previous years in overall funding and number of new and unique investors focused on digital health. Among the highlights of the report:

• Q2 2017 had a total $3.8 billion invested—larger than the total annual funding for 2010 and
• 2011 combined;
• Mid-year funding stands at a little over $6 billion—setting a record for the most funding by the halfway point of any year;
• 10 deals over $100 million in the first half of 2017 (tied for most deals in any full year);
• Approximately 60 percent of deals are considered early-stage (seed and Series A);
• Mega deals are a trend with 4 deals from 2017 making the top 11 of all deals since StartUp Health began tracking funding in 2010;
• As expected, funding is most significant in the Bay Area with the Northeast (Boston and New York City) and Chicago also the focus of major deals and funding. Growing digital health hubs include Austin, Minneapolis-St. Paul, Denver, and Seattle;
• Close to 600 unique investors so far in 2017—almost as many as all of 2015; and
• No IPOs in the digital health space so far in 2017.

Continue reading…

A recent telemedicine industry benchmark survey published by REACH Health provides great insight into where the industry has been and where it is headed. The survey was conducted among U.S. healthcare executives, physicians, nurses and other professionals. Organizations represented in the survey were diverse and included representatives from organizations with a $1 billion or more in revenue (about a third of respondents), and almost half with revenues under $50 million.

In reviewing the survey report, there were some significant takeaways:

• Telemedicine is evolving from a specialty offering to a mainstream service.
• More than half of respondents consider telemedicine to be a top or high priority.
• Patient-oriented objectives—including improving patient outcomes, improving patient convenience, and increasing patient engagement and satisfaction—are the three top objectives for telemedicine programs.
• There is an emphasis on better leveraging specialists with a large majority of respondents ranking this a top or high priority.
• Nearly half of hospital and integrated delivery network respondents who began their telemedicine programs/initiatives with a departmental approach are transitioning to an enterprise approach.
• The maturity of telemedicine programs varies widely among service lines and settings of care. Generally, settings requiring highly specialized treatment continue to be more mature than those requiring generalized treatment.
• Telemedicine technology, reporting and analytics, as well as in-house physicians are viewed as highly important to the success of a program, whereas outsourced physician coverage services less so.

Continue reading…

The U.S. District of Minnesota has ruled in Peterson v. Unitedhealth Grp. Inc., No. 14-CV-2101 (PJS/BRT), 2017 WL 991043 (D. Minn. Mar. 14, 2017) that ERISA does not permit United Healthcare (“United”) to claw back alleged overpayments related to patients from one plan by reducing or eliminating payments related to patients from different self-insured plans, dealing a potential blow to the use of an effective tool that health insurers have used to recoup alleged overpayments from providers.

In Peterson, the Plaintiffs were healthcare providers who brought suit against United as assignees of patients who were enrolled in United-administered plans. United had allegedly overpaid Plaintiffs for services provided to certain patients, and offset these alleged overpayments by reducing or eliminating payments for services that Plaintiffs provided to other patients, who were members of different United-administered self-insured ERISA plans. This practice is known as cross-plan offsetting. Continue reading…

MedStar, a Washington, D.C.-area hospital chain, became the latest healthcare industry victim of a cyber-attack when hackers breached its systems with a crippling virus. MedStar operates 10 hospitals in the D.C./Baltimore region, employs 30,000 staff, has 6,000 affiliated physicians, and serviced more than 4.5 million patient visits in 2015.

After being paralyzed by the virus, MedStar’s entire IT system for its 10 hospitals was forced to shut down and revert to paper records. The chain’s approximately 35,000 employees do not have access to emails and cannot look up digital patient records in the attack’s wake. The FBI is assisting the chain by investigating the incident. It’s unclear at the moment whether or not the hackers are demanding ransom from MedStar in exchange for removing the virus.

Monday’s cyber-attack at MedStar comes weeks after Hollywood Presbyterian Medical Center in Los Angeles paid hackers 40 bitcoins, or about $17,000, to regain control of its computer system, which hackers had seized with ransomware using an infected email attachment.

Hackers increasingly target healthcare entities as security protections in healthcare often lag behind those in banking and financial sectors. Healthcare information contains a treasure trove of patients’ personal information, and a complete healthcare record is worth at least ten times more on the black market than credit card information. Also, hospitals are considered critical infrastructure that cannot reasonably be closed or incapacitated for any great length of time, and so may be more inclined to bowing to hackers’ demands for ransom.

This latest attack just goes to show the importance of cybersecurity at hospitals and other healthcare entities. In addition to the recent Hollywood Presbyterian Medical Center attack, data breaches and cyber-attacks have also recently occurred at Excellus Blue Cross Blue Shield, UCLA Health System, Premera Blue Cross, and Anthem Inc.

For more information, please contact Dana Petrillo, or another member of Cozen O’Connor’s Health Law team.

Consistent with what we have been seeing in our own practice, and consumers’ growing demand for better access to telemedicine services, a bi-partisan movement is growing in both houses of Congress to expand telehealth services, improve health outcomes, and reduce healthcare costs. On Wednesday February 5, 2016, U.S. Senators Brian Schatz (D-Hawaii), Roger Wicker (R-Miss.), Thad Cochran (R-Miss.), Ben Cardin (D-Md.), John Thune (R-S.D.), and Mark Warner (D-Va.) introduced the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act (s. 2484), which seeks to overhaul Medicare’s treatment of the practice of telemedicine and its related technologies. Companion legislation was introduced in the House of Representatives by U.S. Reps. Diane Black (R-TN), Peter Welch (D-VT), and Gregg Harper (R-MS). According to the Senate bill’s sponsors, the CONNECT for Health Act would:

1. Create a bridge program to help providers transition to the goals of the Medicare Access and CHIP Reauthorization Act (MACRA) and the Merit-based Incentive Payment System (MIPS) through using telehealth and RPM without most of the 1834(m) restrictions contained in the aforementioned Senate bill;
2. Allow telehealth and Remote Patient Monitoring to be used by qualifying participants in alternative payment models, without most of the aforementioned 1834(m) restrictions;
3. Permit the use of remote patient monitoring for certain patients with chronic conditions;
4. Allow, as originating sites, telestroke evaluation and management sites; Native American health service facilities; and dialysis facilities for home dialysis patients in certain cases;
5. Permit further telehealth and RPM in community health centers and rural health clinics;
6. Allow telehealth and RPM to be basic benefits in Medicare Advantage, without most of the aforementioned 1834(m) restrictions; and
7. Clarify that the provision of telehealth or RPM technologies made under Medicare by a health care provider for the purpose of furnishing these services shall not be considered “remuneration.”

So far, the following organizations have publically endorsed the bill:

• AARP
• ACT | The App Association
• Airstrip
• Alliance for Aging Research
• Alliance for Connected Care
• Alliance of Community Health Plans (ACHP)
• Alzheimer’s Foundation of America
• America’s Essential Hospitals (AEH)
• America’s Health Insurance Plans (AHIP)
• American Academy of Neurology (AAN)
• American Academy of Physician Assistants (AAPA)
• American Association of Diabetes Educators (AADE)
• American Heart Association/American Stroke Association (AHA)
• American Medical Association (AMA)
• American Medical Group Association (AMGA)
• American Nurses Association (ANA)
• American Occupational Therapy Association (AOTA)
• American Osteopathic Association (AOA)
• American Psychological Association (APA)
• American Society of Nephrology (ASN)
• American Telemedicine Association (ATA)
• American Well
• Anthem
• Association for Ambulatory Behavioral Healthcare
• Association for Behavioral Health and Wellness (ABHW)
• CAPG
• Cerner
• DaVita
• Federation of State Medical Boards (FSMB)
• Hawaii Medical Service Association (HMSA)
• Health Care Chaplaincy Network
• Healthcare Leadership Council (HLC)
• Healthcare Information and Management Systems Society (HIMSS)
• Intel
• Kaiser Permanente
• LifeWIRE
• NAADAC
• National Association for Home Care & Hospice
• National Association for the Support of Long Term Care (NASL)
• National Association of ACOs (NAACOS)
• National Association of Community Health Centers (NACHC)
• National Council for Behavioral Health
• National Council of State Boards of Nursing (NCSBN)
• National Health IT Collaborative for the Underserved
• Personal Connected Health Alliance (PCHA)
• Population Health Alliance
• Qualcomm Incorporated (and Qualcomm Life)
• Telecommunications Industry Association (TIA)
• The ERISA Industry Committee (ERIC)
• The Evangelical Lutheran Good Samaritan Society
• The Jewish Federations of North America
• Third Way
• University of Mississippi Medical Center (UMMC) Center for Telehealth
• University of Pittsburgh Medical Center (UPMC)
• University of Virginia (UVA) Center for Telehealth

The full text of the bill can be found here.