Health Law Advisor

On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit[] exposure of healthcare providers, patients, and staff to COVID-19 and conserve[] critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.

In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.

In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.

Our colleagues Adam C. Abrahms, Steven M. Swirsky, and Brock Olson at Epstein Becker Green has recently published a post on the Management Memo blog that will be of interest to our readers in the health care industry: “Tie Goes to the Employer: National Labor Relations Board Overrules Past Precedent Regarding Dual-Marked Ballots."

Following is an excerpt:

The National Labor Relations Board (“Board” or “NLRB”) on Wednesday, May 13, 2020, overruled decades of convoluted Board precedent regarding “dual-marked ballots” in union representation elections – ...

To limit exposure and reduce the spread of COVID-19, New York and New Jersey are requiring long-term care facilities to implement testing for staff.

New York

On May 11, 2020, New York Governor Andrew Cuomo issued Executive Order 202.30 requiring nursing homes and adult care facilities, including all adult homes, enriched housing programs and assisted living residences (“facilities”), to test all staff for COVID-19 twice per week.  Staff who refuse to be tested will be deemed to have incomplete health assessment and will be prohibited from providing services until the test has ...

To address the COVID-19 public health emergency fiscal burdens, Congress authorized and appropriated the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act[1], Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. The Department of Health and Human Services (“HHS”) has begun to distribute several tranches of the Relief Funds. All totaled, Congress provided $175 billion to the Public Health and Social Services Emergency Fund (“Relief Fund”) through the CARES Act and the Payroll Protection Program and Health Care Act.[2]

As of May 7, 2020, HHS identified $50 billion for general distribution to Medicare providers. HHS distributed to Medicare providers the Relief Fund’s initial $45 billion tranche in April 2020, and is distributing the Relief Fund’s second $20 billion tranche. Also, HHS allocated Relief Funds to: hospitals in COVID-19 high impact areas ($10 billion); rural providers ($10 billion); Indian Health Services ($400 million), and skilled nursing facilities, dentists, and providers that take solely Medicaid (unidentified amounts).[3]

Failing a drug test may not kill the buzz for medical marijuana patients in the Empire State.  In contrast to courts in California and other jurisdictions, a New York state court has held that medical marijuana users are entitled to reasonable accommodations, even if they only obtain certification after testing positive for marijuana.

In Gordon v. Consolidated Edison, Inc., Kathleen Gordon failed a random drug test by her employer, Consolidated Edison, Inc. (“CEI”).  After testing positive, but before her termination, Gordon became a certified medical marijuana patient to ...

Our colleague David J. Clark at Epstein Becker Green has recently published a post on the Trade Secrets & Employee Mobility blog that will be of interest to our readers in the health care industry: “New Indiana Law Will Restrict Physician Non-Competes.”

Following is an excerpt:

Joining many other states that in recent years have enacted laws regarding physician non-competition agreements, Indiana recently enacted a statute that will place restrictions on such agreements which are originally entered into on or after July 1, 2020.

Under Pub. L. No. 93-2020 (to be ...

One of the many relief efforts contained in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), signed into law on March 27^th, 2020, is a hiatus of sequestration as it applies to Medicare payments. Section 4408 of the CARES Act exempts Medicare from the effects of sequestration from May 1, 2020, through December 31, 2020.[1] It also postpones the sunset of sequestration as it applies to Medicare from the end of 2029 to the end of 2030.

As background, on January 2, 2013, “sequestration,” automatic spending cuts applicable to all categories of the Federal budget, went into effect. Sequestration included a 2.0% reduction in most Medicare spending, and as a result of its implementation, many providers experienced reductions in their reimbursement. In addition to traditional fee-for-service Medicare payments, some Medicare Advantage plans reduced reimbursement under their contracts with providers to reflect the effect of sequestration, effectively passing on to providers the reductions in premiums recovered by such plans due to sequestration. Even non-Medicare reimbursement was affected for many providers whose participation agreements with plans contained fee schedules based off of Medicare reimbursement.

While this suspension of sequestration is certainly good news for providers participating in traditional fee-for-service Medicare, and plans offering Medicare Advantage products, the effect the suspension will have on reimbursement for providers participating in Medicare Advantage or commercial lines of business which rely on Medicare rates is slightly less clear.

Certifications, Acknowledgments,
and Reports

The CARES Act[1], passed by Congress and signed into law on March 27, 2020, provides $100 billion for the Public Health and Social Services Emergency Fund (“Relief Fund”) to support eligible health care providers. Less than a month later, Congress passed the Payroll Protection Program and Health Care Act[2], providing an additional $75 billion to the Relief Fund, raising the total funds available to $175 billion. As of the end of April 2020, the Department of Health and Human Services (“HHS”) released to providers two tranches of Relief Funds totaling $50 billion.[3] HHS disbursed the first $30 billion tranche (“Tranche 1”) between April 10 and April 17, 2020. Currently, HHS is disbursing the second $20 billion tranche (“Tranche 2”). Because these are grant funds – not loans – repayment is not required. What HHS requires is that the Recipients attest to and follow the Relief Fund’s Terms and Conditions. Before we turn to the Terms and Conditions, it is important to understand HHS’ Relief Fund disbursement process.

Relief Fund Disbursement Process

HHS disbursed the Tranche 1 Relief Funds as well as some of the Tranche 2 Relief Funds directly to providers participating in Medicare Part A and Part B. (“the Recipients”). Other Recipients must apply for the Relief Funds through the HHS’ on-line portal. No matter how the Recipient received the funds, either through direct payments or through the on-line application, all Recipients must attest to HHS’ published Terms and Conditions through the HHS on-line portal within 45 days after receiving the Relief Funds. Each tranche requires a separate attestation. If the Recipient retains the funds for at least 30 days without contacting HHS regarding the funds’ remittance, HHS deems the Recipient to have accepted the Terms and Conditions discussed below. There are two important considerations in determining whether to accept these funds:

1. The Terms and Conditions for Tranche 2 Relief Funds differ in several respects from the Terms and Conditions for the Tranche 1 Relief Funds; and
2. The Terms and Conditions listed provisions are not exhaustive and Recipients must also comply “with any other relevant applicable statutes and regulations”.

On April 21, 2020, the Drug Enforcement Administration (DEA) published a Request for Information (“RFI”) that reopened the comment period for an interim final rule that was published March 31, 2010 (75 FR 16236) (the “2010 IFR” or the “IFR”). The IFR is being revisited in response to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) mandate for the DEA to update the requirements for the biometric component of multifactor authentication with respect to electronic prescriptions of controlled substances. Prior to the 2010 IFR, the only way that controlled substances could be prescribed was in writing, on paper with a wet signature. The IFR was the first time that an electronic alternative was made available for prescribing controlled substances and the DEA leveraged the technologies that were available at the time to ensure that electronic prescribing applications could not be misused to divert controlled substances.

To that end, the DEA fashioned their regulations to include measures that ensure that the prescriber verifies that they are who they said they are and that they are authorized and have the appropriate credentials to prescribe the medications that are being ordered. In other words, in order for a prescriber to be granted access to the technologies that would create, sign and transmit prescriptions for controlled substances electronically, they have to be appropriately authenticated and credentialed. In addition to requiring identity proofing and logical access controls that relied on multi-factor authentication, credentialing had to be conducted by federally approved credential service providers (CSPs) or by certification authorities (CAs). The IFR also included requirements for audit trails, security event reporting and provisions that governed the signing and transmission of electronic prescriptions to ensure that there was a process to address and resolve transmission failures.

While the IFR contemplated using biometrics to identify and authenticate prescribers, those technologies were still developing and evolving in 2010. Recently, under the SUPPORT Act, Congress required the DEA to update its regulations to identify the biometric component of the multi-factor authentication used to identity proof prescribers. The DEA is looking to the health care provider community who are currently using e-prescribing applications to share their experiences, offer suggestions and recommend new approaches that will encourage broad adoption for e-prescribing for controlled substances while still meeting the DEA’s objectives of ensuring the security and accountability necessary to identify fraud and prevent diversion.

The U.S. Supreme Court decision today in Maine Community Health Options v. United States, is a major decision affecting healthcare and resolving a significant Obamacare dispute. The Affordable Care Act famously established online exchanges where insurers could sell their healthcare plans. It included the now-expired “Risk Corridors” program aimed to limit the plans’ profits and losses during the exchanges’ first three years (2014-16). The Act contained a formula for computing a plan’s gains or losses at the end of each year, providing that eligible profitable plans “shall pay” the Secretary of the Department of Health and Human Services (HHS), while the Secretary “shall pay” eligible unprofitable plans. But the Act did not appropriate funds that the Secretary could dispense or cap the amounts that the Secretary would pay to unprofitable plans. Nor was there any budget neutrality stated in the Act. The program was something less than a great success and, after three years, in which unprofitable plans outnumbered those that were profitable, the net deficit was more than $12 billion. But the Centers for Medicare and Medicaid Services (CMS) couldn't make any payments to unprofitable plans because, each year, its budget appropriation included a rider preventing CMS from using the funds for Risk Corridors payments. Four unprofitable plans brought suit against the government under the Tucker Act, alleging that the ACA obligated the government to pay the full amount of their negative deficit. With Justice Sotomayor writing for seven other Justices (Alito, J. dissented, and Thomas, J. and Gorsuch, J. did not join one section of the majority opinion), the Court agreed with the plans and reversed the Federal Circuit's holding that while the ACA initially created an initial obligation, the subsequent riders vitiated it.