Monthly Archives: September 2012

Patient Disclosure Bill in Assembly

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The Senate unanimously passed S-1533, which, if passed into law, would permit health care providers to report certain patient health problems to New Jersey’s Motor Vehicle Commission (MVC). As currently drafted, health care providers will be permitted to report to the MVC a patient’s name, age, address and a description of the alleged impairment diagnosed by the health care provider that, in the health care provider’s judgment, will significantly affect the person’s ability to safely operate a motor vehicle. Health care providers will only be able to report such information for patients 16 years of age or older. The bill defines “health care provider” to include physicians, surgeons, podiatrists, dentists, optometrists and advanced practice nurses. We will continue to monitor the progress of the bill.

Kevin M. Lastorino | 973.403.3129 | klastorino@bracheichler.com

DOH Issues Warning Regarding Privacy and Photographs

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The New Jersey Department of Health (DOH) recently distributed a letter to administrators of licensed and/or certified health care facilities. The letter seeks to address reports of cell phone cameras being used to photograph patients and residents in licensed health care facilities, including the sharing of photographs with employees, acquaintances of employees and others through social networking sites, as well as an instance of a YouTube upload.

The DOH reminded recipients of the letter that all patients and residents have a right to privacy as well as a right to be treated with dignity and respect, and that such sharing is in violation of both state and federal regulations. The DOH promises to take enforcement action at the highest level for these types of violations. The letter serves as a reminder to health care facilities to review confidentiality policies and procedures, and to ensure frequent employee training.

Carol Grelecki | 973.403.3140 | cgrelecki@bracheichler.com

Defuse Disruptive Docs

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Taking action against disruptive docs may result in that doctor filing a lawsuit against the facility.  There may be an even bigger concern of lawsuits if your facility takes action against a disruptive physician who’s not a part-owner.  The courts, however, have generally supported facilities in such actions by expressly recognizing a connection between disruptive behavior and the potential for patient harm.

The most effective way to discipline physicians is to address the problem up front in accordance with established policies and procedures that should:

  • define disruptive, abusive behavior as unacceptable;
  • notify physicians and staff of the consequences for engaging in such behavior; and
  • provide a clear process through which you’ll address it.

Don’t shy away from dealing with disruptive behavior.  Early intervention is key.  It protects your staff and patients, and can also help turn the perpetrator’s professional career around.

Todd C. Brower | 973.403.3103 | tbrower@bracheichler.com

DCA Proposes Two Rules

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The New Jersey Division of Consumer Affairs (DCA) recently issued a proposed rule that would permanently add synthetic cannabinoids to controlled dangerous substances (CDS) Schedule I, including synthetic cannabinoid products that are currently available and classes of cannabinoides from which new synthetic cannabinoid products with altered chemical structures may emerge. If passed, the manufacture, possession, sale and distribution of products containing these substances will be a crime of the third degree, punishable by 3-5 years in prison and a penalty of up to $25,000. Comments to the proposed rule are due by October 5, 2012.

The DCA also proposed to amend rules pertaining to CDS under N.J.A.C. 13:45H, to allow for electronic prescriptions for CDS. Presently, the rules of both the Board of Medical Examiners and the Board of Pharmacy allow for electronic prescriptions for CDS if permitted by federal law. On March 31, 2010, the federal Drug Enforcement Agency issued an interim final rule permitting prescribers to issue prescription electronically and for pharmacies to receive them. The rules under N.J.A.C. 13:45H are being amended to make them consistent with the rules of the Board of Medical Examiners and the Board of Pharmacy to allow electronic prescriptions for CDS. Comments to the proposal are due by October 19, 2012.

Keith J. Roberts | 973.364.5201 | kroberts@bracheichler.com

Patient Safety Act Limited in Scope

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The Superior Court of New Jersey, Appellate Division, recently held that the privilege provided by the New Jersey Patient Safety Act, which allows health care facilities to avoid disclosure of post-incident investigative materials, applies only to materials developed exclusively for and through the Act’s investigation and documentation requirements. The decision was published in connection with the Court’s holding in the case of Applegrad v. Bentolila, et al., A-1261-11.

The Act was designed to improve patient safety in hospitals and other health care facilities by establishing a medical error reporting system. Pursuant to the Act, health care facilities
are required to report preventable and serious adverse events to the New Jersey Department of Health (DOH). The Act provides confidentiality to any documents created in connection with a health care facility’s obligation to investigate or report adverse events under the Act, in order to encourage the disclosure of such adverse events to the DOH.

The confidentiality provided under the Act, or privilege, prevents documents from being discoverable or admissible as evidence in any legal action or proceeding. Documents
that are not created exclusively in order to comply with the Act, or not created in accordance with the Act’s requirements, are not extended the privilege of confidentiality, and are instead reviewed under the common law privilege described by the New Jersey Appellate Court in another case, Christy v. Salem, 366 N.J. Super. 535 (App. Div. 2004). Under the Christy standard, purely factual information contained in a health care facility’s internal investigative documents is discoverable in a legal proceeding. Non-factual portions of such documents are discoverable if a plaintiff can demonstrate a compelling need to obtain the information.

In the Applegrad case, the appellate court confirmed that the “absolute privilege” of the Act for post-adverse event investigatory and analytic documents extends only to documents created for purposes of compliance with the Act, and not for any other purpose.

Joseph M. Gorrell | 973.403.3112 | jgorrell@bracheichler.com

Governor Conditionally Vetoes Hospital Transparency Bill

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Last month, Governor Christie conditionally vetoed Senate Bill 782, entitled the “New Jersey Hospital Disclosure and Public Resource Protection Act,” which would have required hospitals to submit either a copy of their IRS 990 form to the Department of Health (DOH) or the equivalent information required by the 990 for those for-profit hospitals that are not required to submit such information to the IRS. The proposed bill also would have required the DOH to post the information on its website.

The Governor instead charged the Commissioner of Health to conduct a six-month review of the bill’s impact, along with existing hospital financial reporting requirements. At the end of the study, the Commissioner is expected to report to the Governor with her findings as well as recommendations on how the state can more effectively make this data publicly available.

Keith J. Roberts | 973.364.5201 | kroberts@bracheichler.com

State Health Insurance Exchange Blueprint

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In implementing the health reform law, the Department of Health & Human Services (HHS) recently issued a final “blueprint” that states can use to operate their own health insurance exchange market. This blueprint outlines the functions that will be performed by various types of exchanges, including exchanges operated by states, partnerships between the federal government and states, and federally facilitated exchanges.

States seeking to operate a state-based exchange or electing to participate in a state partnership exchange must submit a complete blueprint, comprised of a declaration letter and an exchange application, to HHS by November 16, 2012 for plan years beginning in 2014. HHS must approve or conditionally approve state-based exchanges or state partnership exchanges by January 1, 2013. HHS will approve exchanges if the state adequately demonstrates its ability to perform all the required exchange functions.

Mark E. Manigan | 973.403.3132 | mmanigan@bracheichler.com

Electronic Fund Transfers Potentially Saves Physicians and Hospitals

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The Department of Health & Human Services (HHS) recently announced the release of a new rule for making health care claim payments electronically, projecting a reduction in “red tape” and possible savings of up to $9 billion over the next ten years for physicians, hospitals and health plans.

The new rule implements operating rules for making electronic health care claim payments and describing claim payment adjustments. Because many physician practices and hospitals accept and deposit paper checks and manually post these payments in their accounting systems, the average physician practice spends approximately three weeks per year on billing and insurance-related tasks. These operating rules will allow physician practices and hospitals to receive and post payments electronically, significantly decreasing administrative time and costs.

The operating rules expand upon the electronic fund transfer (EFT) standards adopted by HHS in January 2012 and also include guidance on electronic remittance advice (ERA).

Kevin M. Lastorino | 973.403.3129 | klastorino@bracheichler.com

Arrangement for Discounted PT, OT and ST Services

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The Department of Health & Human Services Office of Inspector General (OIG) recently issued Advisory Opinion 12-09, permitting an operator of VA nursing homes to arrange
for outside vendors to provide discounted therapy services.

The nursing home operator solicited bids, through an open competitive bidding process, for provision of physical, occupational and speech therapy services to residents of its facilities. Under their winning bids, the vendors agreed to provide therapy services to VA patients at below Medicare rates and to provide therapy services to Medicare, Medicaid, insured and uninsured residents at Medicare rates.

The OIG determined that the arrangement could implicate the anti-kickback statute, but did not involve an improper swapping situation—that is, providing a discount for therapy referrals for non-Medicare/Medicaid business in order to obtain therapy referrals for Medicare/Medicaid business. The OIG concluded that risk of fraud and abuse was minimized because of the open bidding process, low risk of overutilization and low risk of a negative impact on patient care or competition. The OIG noted, however, the result may have been different under other circumstances, such as the provision of discounted ancillary services.

Carol Grelecki | 973.403.3140 | cgrelecki@bracheichler.com

Cardiologists Released from Non-Compete Clauses

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The Federal Trade Commission (FTC) recently announced that Renown Health, the largest provider of acute hospital services in northern Nevada, will release its staff cardiologists from non-competition clauses in their contracts, allowing up to 10 of them to join competing cardiology practices. The decision is part of Renown’s agreement to settle FTC charges that its recent purchases of two local cardiology practices reduced competition for the provision of adult cardiology services in the Reno area.

In 2010, Renown Health acquired a fifteen-cardiologist medical practice, followed by its purchase in 2011 of a sixteen-cardiologist medical practice. The acquisitions gave Renown control of 88% of the cardiology market in the Reno area, with all of the newly employed cardiologists subject to non-competition agreements.

The FTC charged that Renown’s acquisition of the two local groups reduced competition for the provision of adult cardiology services in the Reno area. Under a proposed order settling the FTC’s charges, Renown Health has agreed to temporarily suspend the non-compete provision currently in place, for a period of 30 days, and allow the employed cardiologists to seek other employment during this time. During this time, the FTC will consider public comments regarding the proposed order. When the order is finalized, the suspension will last an additional 30 days and may continue if less than six cardiologists decide to leave Renown Health.

The action is of interest since hospital acquisitions of medical practices in certain specialties, such as cardiology, family practice and internal medicine, have been occurring at increasing rates. Hospitals and physician practices, alike, should review and consider the impact of non-competition agreements in the relevant marketplace.

John D. Fanburg | 973.403.3107 | jfanburg@bracheichler.com