On January 5, the Federal Trade Commission (FTC) issued an extremely broad Notice of Proposed Rulemaking which, if adopted in its current form, would prohibit nearly all private employers from entering into or enforcing non-compete agreements with their employees. In this Client Alert, our partner Thomas C. Senter outlines key provisions of the proposed rule, including the circumstances under which it would supersede any state laws related to non-compete agreements, New Jersey-specific considerations, and how limited exceptions to the rule in its current form might impact both non-profit and for-profit healthcare sector employers.  

The COVID-19 pandemic created a paradigm shift in the world of telehealth and telemedicine by presenting challenges and opportunities to expand the delivery methods used to access healthcare.  With the continued advancement of the technology behind it, telemedicine offered opportunities for healthcare practitioners to practice medicine across state lines when the patient was in a different state – further increasing access to healthcare services while the country was in quarantine. Recognizing an increased need for the use of telehealth and digital platforms, the federal government temporarily relaxed many federal regulations concerning telehealth. The HHS Office of Inspector General’s website states that “the use of telehealth increased dramatically during the first year of the pandemic” and that Medicare beneficiaries used “88 times more telehealth services during the first year of the pandemic than they did in the prior year.” This dynamic presented challenges for healthcare practitioners licensed to practice in their own state but not in the patient’s state, forcing them to understand the potentially limiting interplay of state laws across state lines.

Telehealth is the use of digital technologies to access healthcare services outside the traditional, in-person medical settings. More specifically, telemedicine refers to the remote clinical services while telehealth also includes non-clinical healthcare services. The state where the healthcare practitioner is located is referred to as the “home state”; the state where the patient is located is the “remote state”. 

As the last few years have unfolded, telehealth – which was once limited by the federal government to only Medicare, Medicaid, and other beneficiaries receiving federal healthcare benefits who were residing in rural areas – has become an integral part of the post-pandemic world. It remains a moving target, however, especially given the temporary expansions put in place by the federal government and many states across the country. Accordingly, telehealth providers must continue to monitor developments in federal and state laws, regulations, and policies to not only capitalize on telehealth opportunities, but also to ensure compliance – especially with licensing requirements to avoid sanctions for the unlicensed practice of medicine – and to maintain the quality of healthcare. 

The Tenth Amendment of the United State Constitution grants each state the power to control licensure. As such, when a healthcare practitioner provides medical advice via an online telemedicine platform to a patient residing in a remote state, the laws of the remote state govern.  Therefore, to treat a patient in a remote state, the healthcare practitioner must, in almost all situations, have a license to practice in that state and will be subject to the laws governing that remote state. 

To prevent licensure from being a significant roadblock to telemedicine, the Federation of State Medical Boards (the Federation) streamlined the process to make it easier for healthcare practitioners to treat patients in remote states. It developed the Interstate Medical Licensure Compact (IMLC) to qualify healthcare practitioners to practice medicine across state lines as long as they meet certain eligibility requirements. By creating a fast-track option to complete one application, the healthcare practitioner receives licenses from multiple states included in the IMLC and will be able to fully practice medicine in whichever remote state they obtain a license from.  Indeed, the healthcare practitioner will remain subject to each remote state’s medical laws as the IMLC will not supersede any state’s law. Currently, thirty-two states, the District of Columbia, and Guam have entered the IMLC. New Jersey enacted and entered it on March 5, 2020.

The Federation also created a Model Policy for Appropriate Use of Telemedicine Technologies in the Practice of Medicine. Although it is not law, many states have adopted some, if not all, of the policies as their own telemedicine law. At a baseline, the Federation’s Model Telemedicine Policy requires a physician-patient relationship to provide telehealth services and the patient must have consented to the diagnosis and/or treatment irrespective of whether the initial encounter is in-person. 

Those states which have adopted the Federation’s Model Telemedicine Policy face an interesting wrinkle when a healthcare practitioner treats a patient in a remote state if there is not a pre-existing physician-patient relationship.  In this scenario, to establish the physician-patient relationship, the healthcare practitioner virtually treating a patient in a remote state must:

  • Verify and authenticate the patient’s location and identity;
  • Disclose and validate the identity of a remote provider if the healthcare practitioner is assisted by a provider in the remote state;
  • Disclose the benefits and limitations of telemedicine consultation prior to obtaining appropriate consent; and
  • Ensure the patient knows the identity of the healthcare practitioner.

Provided the healthcare practitioner is appropriately licensed in both the home state and the remote state, the healthcare practitioner is expected to practice informed consent and use the same standard of care as one would during an in-person visit.  Additionally, the healthcare practitioner is expected to maintain accurate medical records, respect the patient’s privacy of those records, keep the exchange of information confidential, and otherwise abide by the laws and ethical responsibilities of both states. This could form the basis for various other sanctions pursuant to state and federal laws.

Given the evolution of telemedicine, healthcare practitioners providing telemedicine should consider how it is regulated not only nationally, but also from state to state, to avoid the unlicensed practice of medicine. The most critical considerations should always be establishing a patient-physician relationship and obtaining informed consent to avoid the potential for any grievances filed against the healthcare practitioner. Moreover, careful review and consideration of all applicable state and federal laws is important to ensuring a healthcare provider does not run afoul of a unique legal requirement, especially given the interplay between state and federal laws, in addition to potential limitations in payor agreements.

New Jersey enacted the Medical Aid in Dying for the Terminally Ill Act (MAID) in 2019, becoming one of eleven jurisdictions including the District of Columbia to recognize a patient’s ability to obtain physician assistance for the purpose of obtaining medication to end a life burdened by terminal illness.

Massachusetts is not one of the jurisdictions adopting a statute permitting medical aid in dying. In 2012, a Death with Dignity Act proposed by ballot initiative was defeated at the polls. Other bills, including some as recent as the 2021-2022 legislative session, have not proceeded to a vote. On December 19, 2022, the Supreme Judicial Court of Massachusetts issued an opinion rejecting a claimed constitutional right to physician-assisted suicide for a terminally ill patient based on the state constitution. The case had been initiated by a patient with advanced prostate cancer and a physician willing to provide assistance with his dying but for the fear of criminal prosecution. While the patient’s claim was dismissed as not presenting an actual controversy since he had not received a terminal diagnosis and possibly would not for years, the court addressed the merits of the claims being made by the physician. In Kligler v. Attorney General, the court determined that under the Massachusetts Declaration of Rights physician-assisted suicide was not a fundamental right within the protections of substantive due process rights for liberty guaranteed in several articles of the state constitution. The court noted that “physician-assisted suicide” was a term of art equivalent to medical aid in dying. It chose to use that term rather than the more ambiguous terminology of aid in dying.

The court declined to follow the “narrow approach” taken by the United States Supreme Court in Dobbs v. Jackson Women’s Center for determining whether a right was “fundamental” and entitled to protection with more exacting judicial review of governmental action. It concluded that the Supreme Court’s narrow approach did not adequately protect the rights protected by the Massachusetts Declaration of Right. It chose instead to apply a more comprehensive approach utilizing “reasoned judgment” to determine whether a right is fundamental, even if it has not been recognized explicitly in the past, guided by history and precedent. It framed the issue before it as whether physician-suicide ranks among fundamental rights.

Starting with English common law in the days of Blackstone through the early colonies including Massachusetts, the court reviewed the history of suicide as a crime and the discontinuation of that characterization as an unnecessary punishment of the family without reaching the real perpetrator of the act. But even when suicide became not technically a crime, it was considered a “grave public wrong” and a “serious social ill that the State has a strong interest in preventing.” The court added that assisting another to commit suicide has largely been and continued to be a serious crime, with the fact that the decedent was close to death being legally irrelevant.

Focusing more specifically on the context of the case before it involving a patient with advanced cancer and a physician willing to provide assistance with his dying but for the fear of criminal prosecution, the court began its analysis with the observation that physician-assisted suicide had long been controversial but that “[t]hroughout history, physicians have assisted patients in hastening death, most often in secret.” It further noted that no American professional medical association had adopted an official stance in favor of physician-assisted suicide. The source of this somewhat misleading observation was a published review that had relied on a list of organizations that had been recognized by the American Medical Association – but which does not include such groups as the American Public Health Association or the American Women’s Medical Association, each of which has a position supporting physician assistance in dying. The list also did not include the relatively newly formed American Clinicians Academy on Medical Aid in Dying. The authors pointed out a limitation to their research arising from the limited number of professional societies that had issued position statements on this issue.  Lastly, many of the position statements take a stance of “studied neutrality” leaving the decision as to whether to participate in providing medical aid in dying to the conscience and ethical judgment of individual physicians.

The court found no support in history for inclusion of physician-assisted suicide as an individual right protected by the Massachusetts constitution. It made the profound statement: “Of course, that something may have been unprotected, or even prohibited, throughout history is not determinative, as our Constitution evolves alongside newly discovered insights about the nature of liberty.” It rejected the contention that the right to physician-assisted suicide was a natural outgrowth of the right to refuse medical treatment that had been recognized in case law of the most recent 40 years.  It found the analysis in that body of law did not extend to medical assistance in dying since it did not implicate either the common law right of bodily integrity to be free from unconsented intrusions or the right of privacy encompassing an individual’s ability to assert personal autonomy.  It perceived an important distinction between the refusal of medical treatment and physician assistance in dying.  Invoking the fundamental legal principle of cause and effect, the court stated that “whereas withdrawing or withholding medical care is not the primary cause of a patient’s death, physician-assisted suicide is.” The refusal of medical treatment, whether a withholding from the start or withdrawing so to discontinue the course of treatment, only allowed a disease or condition to takes it natural course rather than the death being the result of a self-inflicted injury.  It further remarked that “although courts in other jurisdictions widely protect the right to refuse medical treatment, none has concluded that physician-assisted suicide constitutes a fundamental right.” (Emphasis added.)  The court ended its analysis of this point as follows:

In sum, given our long-standing opposition to suicide in all its forms, and the absence of modern precedent supporting an affirmative right to medical intervention that causes death, we cannot conclude that physician-assisted suicide ranks among those fundamental rights protected by the Massachusetts Declaration of Rights. Thus, application of the law of manslaughter to physician-assisted suicide would not impinge on an individual’s right to substantive due process.

The opinion has other aspects including discussion of standing, mootness, vagueness,

The court briefly discussed the argument that the criminalization of physician-assisted suicide resulted in a denial of equal protection by treating terminally ill adults who wish to avail themselves of the practice differently from individuals who wish to hasten death through other means, such as voluntarily stopping eating or drinking, withdrawing life support, or palliative sedation. The court rebuffed this assertion by pointing out that application of the law of manslaughter to physician-assisted suicide did not treat any person differently from any other. Because there was no fundamental right at issue, the court employed the usual rational basis standard and concluded that the law on manslaughter was reasonably related to the State’s legitimate interest in protecting life, the integrity of the medical profession, and vulnerable people from pressures to end their lives.

In concluding the opinion, the court acknowledged that the issues of the case presented both weighty philosophical questions and practical technical questions concerning regulation of the medical field. “These questions are best left to the democratic process, where their resolution can be informed by robust public debate and thoughtful research by experts in the field.”

While all six justices agreed with the decision that there was no fundamental right to prescribe medication to assist the terminally ill in ending their life, two separate opinions were filed.

The concurring opinion of one justice focused additional attention on the circumstances of patients presently experiencing the objective limitations of late-stage palliative care, a group faced “not with the choice of whether to live, only of how to die.” Reviewing a number of Massachusetts precedents, he commented that the case law was arcing close to encompassing a right to medical aid in dying. In particular, in Brophy v. New England Sinai Hospital, the court authorized removal of a noninvasive plastic tube that provided nourishment and hydration to a patient in a persistent vegetative state who was otherwise medically stable. Justice Cypher pointed out that other deliberate efforts by medical personnel to hasten a patient’s death were legal in Massachusetts. These included turning off ventilators, discontinuing intravenous life-sustaining medications, and the practice of palliative sedation, commonly known as “terminal sedation.” With some apparent irony, he questioned whether there was a difference between injecting a drug that sedates a patient to the point of unconscious and prescribing lethal medication. “What the State-sanctioned practice of terminal sedation makes clear, however, is that no one can really say just where that line is.”

The other separate opinion written by Justice Wendlandt was a concurrence with a partial dissent as to the dismissal of the patient’s claim. Chief Justice Budd joined in the concurring portion of the opinion but not the dissent as to the dismissal.

The legal status of palliative sedation was similarly a touchstone in this opinion. In the context of a patient who was mentally competent but terminally ill and approaching the final stage of the dying process, even using the lower rational basis standard of review to evaluate the nonfundamental right to physician-assisted suicide, the governmental interest in criminalizing physician-assisted suicide was reduced to a “nullity.”

[T]he individual’s liberty interest in choosing a peaceful death that comports with the individual’s values and dignity, specifically through physician-assisted suicide, strengthens to its zenith; death is looming and inevitable, and the question is no longer “whether to live, only of how to die.”

These justices also found no meaningful distinction physician-assisted suicide and palliative sedation to unconscious. Especially when followed by withdrawal of nutrients causing dehydration and starvation, palliative sedation did not have a compelling rationale or even a rational interest so as to exclude the less-intrusive option of access to physician-assisted suicide.

The Massachusetts decision in Kligler joins the New York Court of Appeals, which had rejected arguments for physician-assisted suicide as a right protected by state constitutional guarantees in its 2017 decision in Myers v. Schneidermen. A recent law review article notes that no appellate court has upheld the constitutionality of non-statutory physician-assisted dying measures.

However, the separate opinions of three justices raise questions as to the strength of the opposition to medical aid in dying in the context of a terminally ill patient considering palliative sedation. Only six justices of the Supreme Judicial Court had heard the case. With half of the court being inclined to recognize a right to medical aid in dying in this context, one can speculate as to the outcome of a case with an appropriate factual presentation which would necessarily be burdened by the likelihood of mootness given the time required for the initial litigation and the appellate process.  It should be noted that in Myers, a similar reservation as to rejection of a right to medical aid in dying by Justice Rivera in what was labelled a concurring opinion but was referred to as a dissent in Justice Cypher’s concurring opinion in Kligler. While agreeing that the State had compelling and legitimate interests in prohibiting the broad claim of physician-assisted suicide, she wrote:

These interests, however, are not absolute or unconditional. In particular, the State’s interests in protecting and promoting life diminish when a mentally-competent, terminally-ill person approaches the final stage of the dying process that is agonizingly painful and debilitating. In such a situation, the State cannot prevent the inevitable, and its interests do not outweigh either the individual’s right to self-determination or the freedom to choose a death that comports with the individual’s values and sense of dignity. Given that the State already permits a physician to take affirmative steps to comply with a patient’s request to hasten death, and that the State concedes that the legislature could permit the practice sought by plaintiffs, the State’s interests lack constitutional force for this specific subgroup of patients. Considering the State’s sanctioning of terminal sedation in particular, the statute does not survive rational basis review. Therefore, in my view, the State may not unduly burden a terminally-ill patient’s access to physician-prescribed medication that allows the patient in the last painful stage of life to achieve a peaceful death as the end draws near.

Opponents of medical aid in dying defend and distinguish the use of palliative sedation on the basis of the supposed difference in the physician’s intent. With palliative sedation, the physician’s intent is to alleviate pain and provide comfort as the patient moves toward death from the underlying condition even though the physician knows that one of the consequences of the medication being used is respiratory depression and death. This justification is based on the ethical concept known as the Doctrine of Double Effect, which is derived from the justification for killing in self-defense, where the attacker is killed when the intention is to save oneself, not kill the attacker. The United States Supreme Court approved of the use of the Doctrine of Double Effect in connection with palliative sedation in Vacco v. Quill. However, its ethical validity continues to prompt debate.  

It all starts with the contract, but let’s face it … most consider provider-payer contracts obsolete on the day they are inked. A managed care contract is the quintessential tornado in a bottle, attempting to fix the terms and conditions that will apply for the course of the contract while the healthcare finance and delivery system rages on. This post will focus on the mechanics of reimbursement and risk contracting in this dynamic environment.

Providers enter into contracts projecting the revenues the contract will produce, and the expenses the delivery of services will entail. The contract must, of necessity, be based on the best information the parties have on the date it is signed. The best contracts try to anticipate, to the extent practicable, how emerging technologies will alter the practice of medicine, how consolidations and closures will affect the competitive environment on both the provider and payer sides, how government programs will change the ways in which they reimburse managed care plans and providers paid directly, and any other issues that may exert influence on the economics of the contract.

Past experience provides some guardrails that can be baked into contracts if the economic assumptions that go into negotiations go sideways, and it is always prudent to consider the potential landmines in the mix when negotiating a new deal.

Defining Reimbursement

Fixed dollar contracts are going the way of the dinosaur. Particularly with the rates of inflation we have been seeing, fixing rates that will extend into the future is fraught with difficulty. Tying increases to some variation of a consumer price index helps but does not account for shifts in the practice of medicine over time for different indications – from inpatient to outpatient, from hospital-based to ambulatory surgery center-based, from ASC-based to doctor’s offices.

An alternative becoming more common is tying reimbursement to Medicare pricing. A hospital contract may pay based on some function of Medicare’s reimbursement for Diagnosis-Related Groups for in-patient services, and Outpatient Prospective Payment Systems for outpatient services, for example. For such reimbursement arrangements, it is important to nail down in the contract which Medicare fee schedule applies (year and geography), how quickly reimbursement is changed as CMS makes updates, and how any trailer or carve-out billing would be treated.

Providers may also be subjected to retroactive review by carriers, who second-guess DRG groupings as billed by facilities, whether hospitals stays are appropriately billed as observation rather than admission, and whether health records support the level of services professionals have billed for. It is important to reach an understanding in the contracting phase as to who makes these determinations and how, and what guidelines the payer will apply (Milliman Care Guidelines, for example). It is also important to understand whether those guidelines may legally be applied – commercial guidelines, for example, can never trump Medicare’s local or national coverage determinations.

When in doubt, document, document, document.

Risk-Based Models

The historical model for provider-payer contracting created adversarial economic incentives between the providers and the payers. Payers look to use their ability to fill hospital beds and waiting rooms to extract price concessions and outright denials based on homegrown medical necessity criteria. Providers who use their best efforts and incur additional expenses to practice consistently with state-of-the-art best clinical practices and who coordinate care with other practitioners saw their overheads increase, while payers reaped all the benefits of more efficiently delivered care.

The concept of gainsharing therefore gained ground. Integrated networks were already catching hold with like-minded professionals and facilities agreeing amongst themselves to utilize best clinical practices for the treatment of patients (or a subset of patients) with a common indication, the use of compatible software to capture and transmit electronic health records within the group, and the capture of data elements which affiliated doctors could use to measure their outcomes.

A common payment model for risk contracting includes payments from carriers in three tranches: fee-for-service payments, advanced performance payments, and shared-savings payments.

Fee-for service payments are “old school” reimbursements billed at the point of service. The carrier holds direct contracts with each participating provider and pays per service. Layered on top of that, a unifying entity is used or created to coordinate payments to participating providers across the integrated network. Advance performance payments are regular fixed payments based on ‘attributed’ members in the network. The intention of the advance payments is to encourage practices that contribute to efficient, effective care that may not be reimbursed through traditional mechanisms. Data showing specific diabetics who are not getting regular A1c tests, or not filling medications timely, can be used to focus communications tailored to the specific patients.

The concept of attribution is key not only to determining the population base for the advance performance payments, but to gain or loss sharing. These may be based on the existing patient panels of participating providers, or a broader population based on geography. Because of this direct connection between attributed members and advanced and risk-sharing payments, any provider would be well advised to ensure the method of attribution is well-defined and well documented in the contract.

Risk-based models got a shot in the arm with the passage of the Affordable Care Act, and the ability and incentive to establish Accountable Care Organizations for enrollees in traditional Medicare. Many organizations that built the infrastructure for ACOs, or created clinically integrated networks, looked around to see how they could leverage those investments to apply to other carrier-based insurance programs.

Most gainsharing models start with an examination of total claims experience for a defined cohort that would resemble the universe of patients to be attributed to the integrated network.  Target total medical expenses are projected based on that past experience, with some adjustments for medical inflation. Gainsharing is calculated by measuring the actual total medical expenses for a measurement period against the target. If the integrated network is successful in bringing down the costs while still meeting quality metrics, the gain may be split with the entity managing the network, which is free to decide how to allocate that amount to participating providers.

Entities that contract with carriers to make networks or joint services available should consult with an attorney knowledgeable about the laws related to Organized Delivery Systems (ODS), even if they do not undertake to assume risk.

Arrangements under which provider groups and healthcare systems band together and take on downside risk bring risk-sharing to the next level. Generally, New Jersey law and regulations prohibit risk assumption by non-insurers. An exception applies to entities licensed by the Department of Banking and Insurance as ODSs. A careful analysis is required to ensure proper navigation of these laws.

Any healthcare system looking seriously at the assumption of downside risk should become familiar with the requirements of and apply for approval as an ODS. Carriers have proven their willingness to offer greater gainsharing to provider groups willing to accept loss-sharing. The general structure is the same as for gainsharing: Target medical costs for an attributed group, measurement of total medical expenses for a measurement period, and payments are based on a deviation. For loss-sharing, the formula may include a corridor that excludes outliers on an individual or aggregate basis, or a flat claim cap, for example, excluding claims that exceed $100,000 per member per year.

Managed care contracts are not for the faint of heart. They require careful consideration as a provider attempts to navigate the many factors and pitfalls that can arise. Providers should strongly consider coordinating their efforts with counsel, consultants, and others familiar with this area of the healthcare industry to ensure they are not stuck with an unfavorable arrangement.

The United States District Court’s 2021 ruling in Milton S. Hershey Medical Center v. Becerra is one example of a successful legal challenge to federal agency action, but a number of more recent cases reaffirm that lower federal courts may not hesitate to overturn agency action deemed outside the bounds of the agency’s legislative authority. This is an important trend for hospitals to note when considering potential challenges of reimbursement determinations made by the Centers for Medicare & Medicaid Services.

In Hershey, a number of teaching hospitals challenged one of the elements that the Secretary of Health and Human Services (HSS) used in fiscal years dating back to 2005 to determine a hospital’s direct Graduate Medical Education (DGME) payment: specifically, each hospital’s weighted number of full-time equivalent (FTE) residents. After students graduate from medical school, they often continue their training in an initial residency period (IRP) which, by statute, is defined to last five years. Some residents additionally complete a fellowship which typically occurs outside the 5-year IRP. Under the Medicare statute, the rules for calculating the weighted average number of FTEs are required to provide a weighing factor of 1.00 for a resident who is in the resident’s IRP, and a weighing factor of .50 for a resident who is not in the resident’s IRP. Thus, the Medicare statute requires that a resident’s time be fully counted but only one-half of a fellow’s time be counted for purposes of the FTE calculation.

In addition, in 1997, Congress amended the Medicare statute to set a limit on how many FTEs a hospital may factor into its count before application of the weighing factors. That limit was capped at the hospital’s 1996 levels.

In 1998, the HHS Secretary amended the agency’s regulation which effectively reduced the weighted number of FTEs a hospital may claim for reimbursement when the hospital’s unweighted FTE count exceeds its 1996 cap. When a hospital exceeds the cap, its weighted FTE count is reduced commensurate with the amount by which the hospital exceeds the cap.  As the Hershey Court explained, assuming a hospital’s cap of 100 which is met by employing 90 residents and 10 fellows, after weighing the fellows at 0.5, the hospital’s post-weighted FTE count is 95. The math is as follows:

100/100   x   95   =   95

 

 

However, if that hospital adds ten more fellows (for a total of 90 residents and 20 fellows), thereby exceeding the cap, its post-regulation weighted FTE count is reduced to 90.91. The math is as follows:

100/110   x   100   =   90.915

 

 

Recognizing, under the rules of statutory construction set forth in Chevron v. Nat’l Resource Defense Council, that it owed no deference to the Secretary’s interpretation of the Medicare statute because the statutory language speaks to the precise issue and is clear, the Court held that the express text of the Medicare statute did not give the Secretary the latitude to decide, when a hospital exceeds its cap or not, to change the weights that Congress assigned to residents and fellows when calculating the FTE residents for each hospital. Consequently, the Hershey Court struck down the agency’s regulation, and thus, the DGME calculation because it violated the express language of the Medicare statute.

Over the past year-and-a-half, we have seen a number of lower federal courts not hesitate to overturn federal agency action when an agency acted outside the bounds of the authority granted to it by Congress in its enabling legislation. The Hershey case is one such example. However, more recently, the United States Supreme Court reinforced this approach in American Hospital Association v. Becerra (Case No. 20-1114 and decided on June 15, 2022), in which the Court limited HHS’s authority to set two separate hospital reimbursement rates under the 340B drug program where Congress spoke clearly in the Medicare statute as to how the rates are to be determined. Further, in West Virginia v. Environmental Protection Agency (Case Nos. 20-1530, 20-1531, 20-1778 and decided June 30, 2022), the Court struck down as not authorized by the Clean Air Act EPA’s sweeping rules to devise carbon emissions caps based on a generation shifting approach away from coal-powered plants, thereby opening the door for more robust challenges to agency action.

The lesson? Aggrieved hospitals are in as good a position as they have ever been to challenge the methodology and calculations made by CMS when determining hospitals’ Medicare rates, DSH and GME payments, or 340B reimbursement.

In an article recently published in the MDAdvisor Journal, Greenbaum attorney John Zen Jackson analyzes the number of times the option to self-administer medication under the Medical Aid in Dying Act (MAID) has been used in New Jersey on an annual basis. Resources in this article include statistics from five demographic categories, a comparison of data available from other jurisdictions with similar laws, and reasons for the relatively low utilization of the Act in New Jersey. The article can be viewed on the website of MDAdvantage, a New Jersey-based leading provider of medical professional liability insurance.

Although the Hospital Price Transparency Rule – which requires hospitals to make public a comprehensive list of charges for items and services – has been in effect for almost two years, the Congressional House Committee on Energy and Commerce advises that hundreds of warning letters and requests for civil monetary penalties to hospitals that are still not fully compliant have been issued by CMS. In this Client Alert, our partner John W. Kaveney reports that the House Committee recently asked the Government Accountability Office (GAO) to take action to address this lack of compliance, and suggests that now is the time for hospitals to review their compliance and consult with legal counsel and other advisors to ensure that the legal requirements of the rule have been fully met in order to avoid significant financial ramifications.

In fiscal year 2020, Medicare paid over $16 billion to hospitals throughout the United States in the form of Graduate Medical Education (GME) payments. This Client Alert by Greenbaum attorneys James A. Robertson, John W. Kaveney and Paul L. Croce is an overview of the basic details of those Medicare GME payments.

The Affidavit of Merit Statute was originally enacted in 1995. Over the ensuing twenty-five years, it has been the focus of numerous opinions from the New Jersey Supreme Court and the Appellate Division examining numerous facets of the statute. In the 2003 decision in Knorr v. Smeal, the Supreme Court observed that “[o]n repeated occasions, we have addressed the obligation of plaintiffs who file malpractice actions to conform to the procedural requirements of the Affidavit of Merit statute.” Some degree of frustration was subsequently expressed in the 2016 decision in Meehan v. Antonellis with the statement: “In this appeal, we return to the vexing and recurring issue of whether an affidavit of merit submitted by a plaintiff in an action alleging negligence by a licensed professional satisfies the requirements of the Affidavit of Merit statute.”

Most recently, in a November 9, 2022 decision in Gilligan v. Junod approved for publication, the Appellate Division again addressed “a question of first impression.” The straightforward issue in Gilligan was whether a licensed practical nurse (LPN) was a “licensed person” for whom an affidavit of merit was required in a malpractice lawsuit involving the LPN’s liability. The Appellate Division panel noted that “licensed person” was a defined term in the statute. As originally enacted, in addition to a healthcare facility, the statute set forth a list of nine professions that were within the term and to whom the affidavit requirement applied. Five more professions were added with an amendment in 2001, another in 2010, and still one more in 2019. None of these referred to or added licensed practical nurses.

In Gilligan, the court followed the same analysis that had been used in Saunders by Saunders v. Capital Health System, a case involving a licensed midwife. Notwithstanding that the tort reform effort leading to enactment of the original affidavit of merit statute had its foundations in the healthcare field, the court rejected the contention that the statutory requirement applied to any healthcare professional. It examined the specific language of the statutory text. The legislature had initially included only ten categories of licensed professionals. When it amended the statute six years later, it added five additional professions. The court reasoned that “[t]he absence of midwives as ‘licensed persons’ strongly suggests that the list contained in N.J.S.A. 2A:53A-26 is an exclusive one and implies that the omission of other licensed health providers ‘was intentional, not an oversight.’” It noted that the legislature could have used the common phrasing of “including but not limited to” if it had intended a more expansive approach. In response to the Saunders decision, the legislature passed an amendment in 2010 to specifically add “a certified midwife, certified professional midwife, or certified nurse midwife” but still without the broader “including but not limited to” language.

The court examined the Nursing Act which provides for separate licensure of both professional registered nurses (RNs) and licensed practical nurses (LPNs). Moreover, the Nursing Act states that scope of practice for an LPN is to work under the direction of “a registered nurse or licensed or otherwise authorized physician or dentist.”

Further support for the Appellate Division’s approach was found in the more recent Supreme Court decision of Haviland v. Lourdes Medical Ctr. of Burlington Cty. decided in April 2022. The court held that an affidavit of merit was not required when the conduct of an unlicensed person employed by a “licensed person” such as a healthcare facility that gave rise to the employer’s potential vicarious liability. The factual context involved the actions of a radiology technician, an unlicensed position, during an imaging study of the plaintiff’s shoulder. The court concluded that the statute “explicitly limits the term ‘licensed person’” to the listed professions.

Although the court in Gilligan held that no affidavit of merit was required, that is only a preliminary procedural requirement. Expert testimony as to the standard of care to be followed by an LPN would still be necessary to prevail at trial.

There is as yet no published decision involving the Affidavit of Merit Statute and a nurse practitioner. It remains to be seen how that category of increasingly utilized healthcare professional is assessed. The statute does not include any reference to nurse practitioners. There is no separate licensure for a nurse practitioner (also referred to as an advanced practice nurse) but there is an additional certification as well as educational and experience requirements. However, one cannot become a nurse practitioner without having first achieved the status of a registered professional nurse. Thus, at least an affidavit of merit from an RN will have to be submitted which will satisfy another section of the Affidavit of Merit Statute requiring “particular expertise in the general area or specialty involved in the action.”

A recent holding by the Eighth Circuit Court of Appeals in United States ex rel. Cairns v. D.S. Med., LLC took a stance on the causation standard for False Claims Act (FCA) cases premised on violations of the Anti-Kickback Statute (AKS) and may provide defendants in those cases with the ability to raise a valid new defense. In this Client Alert, Greenbaum attorneys Christopher D. Adams, Rachel A. Frost and Robert B. Hille analyze the reasoning behind – and significance of – the Court’s decision. They further note that in conflicting with a previous Third Circuit holding, it is not far-fetched to imagine that such a circuit split could eventually bring this issue before the U.S. Supreme Court.