Long Term Care, Home Health and DME

Since the advent of the Medicaid managed care program there has been a lingering question as to when a Medicaid dollar stopped being a Medicaid dollar.

With fee-for-service providers that were paid directly by the Medicaid program, the answer was always clear-cut – each dollar received from the Medicaid program was a Medicaid dollar and therefore it and the provider who received it were subject to the audit authority of the New York State Office of the Medicaid Inspector General (“OMIG”).

But what about providers contracted through Medicaid managed care organizations (“MCO”) and not directly enrolled as Medicaid providers? Before Governor Cuomo issued his Executive Budget earlier this month, there was debate as to where the OMIG’s audit authority stopped with arguments on either side of the line.  Many argued that the OMIG’s authority stopped with at the doors of the MCO.  After the money was paid to the MCO it was able to negotiate contracts directly with providers and disburse the funds as it saw fit, with each MCO operating independently of each other.  The other side of the coin was that a dollar spent with the purpose of providing care to a Medicaid recipient established that the dollar was a Medicaid dollar from start to finish, regardless of whether it was passed through a MCO.

With the Executive Budget, however, all confusion and debate will be settled.  Per the proposed language of the Health and Mental Hygiene Article VII Legislation, Social Services Law Section 364-j will be amended to state that “[a]ny payment made pursuant to the state’s managed care program, including payments made by managed long term care plans, shall be deemed a payment by the state’s medical assistance program.”

The Executive Budget goes further, clearly defining the OMIG’s ability to recover overpayments made by a MCO to its contracted providers that were discovered during an OMIG audit or investigation, as well as during an investigation or prosecution by the New York State Office of the Attorney General Medicaid Fraud Control Unit (“MFCU”).  If the OMIG is unable to recover the overpayment, the MCO may be required to act on the OMIG’s behalf to recoup the overpaid funds and repay the State within six months of receiving notice of the overpayment.

The legislation sets January 1, 2018 as the start of the review period and, without any amendments to the budget bill by the Legislature, will go into effect immediately upon the Governor signing the bills into law.  With the OMIG poised to begin these audits, MCO-contracted providers should familiarize themselves with the OMIG’s audit protocols and procedures.

Medicaid providers, both fee-for-service and those contracted with MCO, who are interested in taking a proactive stance in preparing for an OMIG or MFCU audit or investigation, or providers who are already the subject of one are encouraged to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com to plan your next move.

As New Yorkers are preparing for Thanksgiving and the official start to the holiday season (although some could argue it started a month ago), required Medicaid providers should also be reviewing their Compliance Programs in preparation to submit their Annual Provider Compliance Program Certification to the New York State Office of the Medicaid Inspector General (“OMIG”).  Required providers must submit a certification at the time of their enrollment and each December thereafter.

As defined by Social Services Law Section 363-d (“Section 363-d”) and Part 521 of Title 18 of the New York Code of Rules and Regulations (“Part 521”), required providers are considered any provider that can answer “Yes” to one of the following questions and therefore must implement a comprehensive Compliance Program:

  1. Is the provider organization subject to Article 28 or Article 36 of the NYS Public Health Law?
  2. Is the provider organization subject to Article 16 or Article 31 of the NYS Mental Hygiene Law?
  3. Does the provider organization claim or order, or can be reasonably expected to claim or order, Medicaid services or supplies of at least $500,000 in any consecutive 12-month period?
  4. Does the provider organization receive Medicaid payments, or can be reasonably expected to receive payments, either directly or indirectly, of at least $500,000 in any consecutive 12-month period?
  5. Does the provider organization submit Medicaid claims of at least $500,000 in any consecutive 12-month period on behalf of another person or persons?

There are two important concepts to be aware of when answering these questions.  First, as defined by the OMIG, Indirect Medicaid Reimbursement is any payment that a provider receives for the delivery of Medicaid care, services, or supplies that comes from a source other than the State of New York.  An example of this is when a provider provides covered services to a Medicaid beneficiary who is enrolled in a Medicaid Managed Care Plan, any payment from the Managed Care Organization is considered an indirect payment.

The second important concept is that the OMIG considers any consecutive 12-month period to be exactly that, any twelve consecutive months.  This determination should not be considered solely on a calendar year.  For example, if a provider established her practice on April 1, 2018 and will not reach $500,000 in either claims or payments by December 31, 2018 but can reasonably expect to hit that mark by March 2019, then that provider should have a Compliance Program in place and be prepared to certify to its implementation by December 31, 2018.

To assist providers, the OMIG’s website identifies seven compliance areas that a provider’s Compliance Program must apply to, as well as eight elements that should be included in all Compliance Programs, regardless of provider type.

The Seven Compliance Areas are:

  1. Billings;
  2. Payments;
  3. Medical necessity and quality of care;
  4. Governance;
  5. Mandatory reporting;
  6. Credentialing; and
  7. Other risk areas that are or should with due diligence be identified by the provider.

The Eight Elements required in every Compliance Program are:

Element 1: Establish written policies and procedures that clearly describe and implement compliance expectations, as well as provide guidance to employees and others on dealing with potential compliance issues.  The written policies and procedures must also identify how to communicate compliance issues to appropriate compliance personnel and describe how potential compliance problems are investigated and resolved.

Element 2: Designate a Compliance Officer who is responsible for the day-to-day operation of the Compliance Program.

Element 3: Establish an effective training and education program for all affected employees and persons associated with the provider, including executives and governing body members (“affected persons”).

Element 4: Establish clear lines of communication to the Compliance Officer that allow all affected persons report compliance issues.  Providers must also establish anonymous and confidential reporting systems.

Element 5: Establish disciplinary policies that are fairly and firmly enforced to encourage good faith participation in the Compliance Program by all affected persons.  The policies must include clear expectations for the reporting or and assistance in resolving compliance issues.  The policies must also include defined sanctions for:

  • failing to report suspected problems;
  • participating in non-compliant behavior; or
  • encouraging, directing, facilitating or permitting either actively or passively non-compliant behavior.

Element 6: Conduct routine compliance assessments for those risk areas specific to the individual provider type, including but not limited to self-audits. These self-audits can be conducted internally or a provider may choose to have an external party conduct the audit.

Element 7: Establish a system for responding to and investigating potential compliance problems as the Compliance Officer becomes aware of them, either by a report received from an affected person or as the result of an internal assessment.  Compliance Program must also establish systems for the provider to report compliance issues the OMIG, as well as repay any related overpayments.

Element 8: Establish a policy of non-intimidation and non-retaliation for good faith participation in the Compliance Program, including but not limited to reporting potential issues, investigating issues, self-evaluations, audits and remedial actions, and reporting to appropriate officials as provided in sections 740 and 741 of the New York State Labor Law.

As mentioned above, each December, required providers must submit a Provider Compliance Program Certification, attesting that they have a Compliance Plan in place and that Compliance Plan satisfies each of the OMIG’s Eight Elements.  If a provider is unable to unequivocally state that their plan meets these requirements then a certification should not be submitted and immediate steps must be taken to all necessary modifications to establish a satisfactory Compliance Plan.  Any provider who submits a false certification may be subject to sanctions, including monetary fines or provider enrollment termination.

If you are unsure whether your Compliance Plan would satisfy the OMIG’s Eight Elements, or if you are a provider who believes you are required to implement a Compliance Plan and have not done so, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

 

As recounted in our recent analysis of the 2018-19 New York State Budget (“Enacted Budget”), the Enacted Budget included new restrictions on fiscal intermediaries participating in the Consumer Directed Personal Assistance Program (“CDPAP”) designed to prevent the dissemination of “false or misleading” advertisements.  Effective April 1, 2018, the newly enacted § 365-f(4-c) of the New York Social Services Law requires fiscal intermediaries to seek pre-approval for advertisements directed at Medicaid program recipients before they are released, and imposes escalating penalties for non-compliance – including revocation of the fiscal intermediary’s license to provide services after two or more false or misleading advertisements are distributed.

By way of background, the CDPAP program is a Medicaid program that allows chronically ill or physically disabled individuals to exercise a greater degree of control and choice with respect to the provision of essential services ranging from assistance with activities of daily living (ADLs) to skilled nursing services.  The program – which allows recipients to hire almost anyone other than their spouse, child or parent to provide these services – provides a marked level of independence over traditional home care models where recipients must accept whatever provider is sent by the program’s vendor.  In addition to freedom of choice, CDPAP aides are able to perform a host of services that ordinarily can only be performed by nurses or certified home health aides.

Unlike traditional home care models, CDPAP aides are employed by the consumer.  Fiscal intermediaries help consumers facilitate their role as employer by: providing wage and benefit processing for consumer directed personal assistants; processing income tax and other required wage withholdings; complying with workers’ compensation, disability and unemployment requirements; maintaining personnel records; ensuring health status of assistants prior to service delivery; maintaining records of service authorizations or reauthorizations; and monitoring the consumer’s/designated representative’s ability to fulfill the consumer’s responsibilities under the program.

On June 26, 2018, the Consumer Directed Personal Assistance Association of New York State, Inc. and various  fiscal intermediary members (collectively plaintiffs) filed a complaint against the New York State Department of Health (DOH) and its Commissioner Howard Zucker (Commissioner) (collectively defendants) in the Northern District of New York, alleging in sum and substance that § 365-f(4-c) violates their right to commercial free speech as protected by the New York and United States Constitutions.  Plaintiffs sought a temporary and permanent injunction enjoining defendants from implementing the new restrictions and a declaration that § 365-f(4-c) is unconstitutional.  See Consumer Directed Personal Assistance Association of New York State, Inc. et al v. Zucker et al, Index. No. 1:18-cv-00746.

More specifically, the plaintiffs allege that the advertisements regarding CDPAP are protected commercial speech because they concern a lawful activity and express the plaintiffs’ support for self-direction and consumer choice provided by the program and the requirement that they submit their advertisements for approval burdens, restricts and otherwise infringes upon those rights.  plaintiffs also claim that the DOH lacks a substantial interest in reviewing the advertisements and that prior approval of advertisements does not advance any legitimate governmental interest – particularly in light of the fact that the state already has laws governing false and deceptive advertising (i.e., General Business Law § 349).  Furthermore, the plaintiffs maintain that even if the DOH had a legitimate interest in preventing false and misleading advertisements, requiring prior approval is not sufficiently narrowly tailored to serve that interest.

As explained below, because plaintiffs moved for, and were denied, a preliminary injunction – prohibiting the DOH from implementing § 365-f(4-c)  until the legality of the new law can be fully decided – we now more or less know how this case will ultimately be decided.  In this case, as in all cases where preliminary relief is sought, it does not bode well for plaintiffs that the court denied the preliminary injunction, given that such relief is only withheld where the movant fails to establish a clear or substantial likelihood that they will ultimately be able to succeed on the merits.

In concluding that plaintiffs failed to establish a sufficient likelihood of success, the court applied the four-part inquiry laid out by the Supreme Court in Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980)), to determine whether § 365-f(4-c) is an impermissible regulation of commercial free speech in violation the First Amendment: “[1] whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask [2] whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine [3] whether the regulation directly advances the governmental interest asserted, and [4] whether it is not more extensive than is necessary to serve that interest.”

The parties did not dispute the first element.  With respect to the second element, the plaintiffs argued that had the State’s true purpose been to regulate false or misleading advertisement, such a purpose would be substantial, but here the true purpose for instituting the new restrictions was to decrease awareness of the CDPAP program in order to limit the State’s own expenditures on the program.  According to the plaintiffs, the evidence of the DOH’s ulterior motive was evident from the fact that the restrictions were passed as part of the Enacted Budget.  The court was not distracted by this argument, finding instead that where, as here, the statute’s intentions are facially obvious they need not consider such “extra-textual ‘evidence.’”  Even if the court had considered the issue, the fact that the restrictions were passed as part of the 2018-19 Executive Budget is hardly evidence that the restrictions are fiscally motivated.  Indeed, the Governor traditionally uses the budget process to advance his policy agenda, and the inclusion of § 365-f(4-c) appears to be no exception to that rule.  It is also worth noting that requiring vendors of Medicaid services to submit advertisements for approval is not a new phenomenon in New York.  Indeed, Managed Long Term Care plans have long been subject to such requirements – both as part of their contracts with the State and in regulation.  We are unaware of any claim that such a program was intended to, or has resulted in a decrease in enrollment in these plans.

The court also gave short shrift to the plaintiffs’ arguments regarding the fourth element – whether the restrictions were more extensive than necessary.  Although the plaintiffs and the court would agree that less restrictive means are available, the standard does not require that the Legislature implore the least restrictive means conceivable, only one that is reasonable and in proportion to the interest to be served.

Ultimately, the resolution of this case will likely turn on the evidence marshaled by both sides in support of the third element – whether the regulation directly advances the State’s interest in preventing false and misleading advertising by CDPAP fiscal intermediaries.  As noted by the court, for purposes of this element, “a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.”  The State need not “produce empirical data . . . accompanied by a surfeit of background information” in order to meet its burden in this respect, and can rely instead on “reference to studies and anecdotes pertaining to different locales altogether.”

Here, the DOH tendered an affidavit of Donna Frescatore, the Medicaid Director of New York State and Deputy Commissioner of DOH to meet its burden.  Deputy Commissioner Frescatore noted, inter alia, that CDPAP recipients must be able to rely on the materials they receive to evaluate and choose the best available options and that false and misleading advertising not only complicates this process, it often leads ineligible individuals to request services, burdening local authorities.  Mrs. Frescatore also identified a host of “[e]xamples of advertisements that misstate, misrepresent, or overstate what the [Fiscal Intermediaries] and CDPAP provide have: [1] failed to explain that Medicaid eligibility is required to receive services; [2] suggested that CDPAP pays people to stay at home; [3] stressed that no training is required, without explaining that the consumer is responsible for training their assistants through CDPAP; [4] failed to explain that the service has to be a Medicaid covered service to be obtained through CDPAP; and [5] included services like dog walking and escort services when in actuality, such services are rarely, if ever,. . . covered by Medicaid.”

At oral argument, the DOH confirmed to the court that these were examples of advertisements that the DOH had actually seen – a contention they will now have to prove.  Should the DOH be unable to substantiate these claims, they may well find themselves unable to meet their burden on this issue.  Indeed, the court noted that while these representations are sufficient standing alone at this early point in the litigation, a different result may be warranted upon a more fully developed record.  For now, we will have to await the completion of discovery and the likely filing of a summary judgment motion(s) to know how this case will ultimately come down, a process that generally takes eight months to a year to complete in the Northern District of New York.

Having failed to secure the desired preliminary injunction, § 365-f(4-c) remains the law of the land.  In September of 2018, the DOH issued specific guidance on the program for all advertising by fiscal intermediaries on or after November 1, 2018.  According to the guidance, “inaccurate descriptions of the CDPAP program or the roles and responsibilities of CDPAP participants, designated representatives, fiscal intermediaries, and/or aides will be considered false or misleading.”  The guidance further prohibits cold-calling and door-to-door solicitation.

Advertisements may be submitted by email, however if the advertisement is a website, a hard-copy must also be submitted.  The DOH will have thirty days to review the advertisements, the advertisements may not be utilized by the provider until approved by the DOH or thirty days has passed without response from the DOH.  In the event an adverse decision is issued, the fiscal intermediary will have thirty days to appeal the decision, if the decision is upheld, however, the fiscal intermediary will be required to pay a penalty.

Advertising materials that were used prior to November 1, 2018 are not required to be submitted for review.  That being said, however, providers have the option of submitting such materials by December 31, 2018 for review and inclusion in the DOH’s “amnesty” program.  In the event that voluntarily submitted advertisement is found to be false or misleading the fiscal intermediary will be required to discontinue use of the advertisement within thirty days, but the advertisement will not count for purposes of determining whether to revoke the fiscal intermediary’s license for distributing two or more false or misleading advertisements.

If you have any questions or would like additional information on any of the above referenced issues, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

 

New York State Court of Appeals, Albany, New York

Earlier this Summer, the Court of Appeals overturned the Appellate Division Third Department’s (the “Third Department”) unanimous decision in The Matter of Anonymous v. Molik, where it ruled that the New York State Justice Center for the Protection of People with Special Needs (“Justice Center”) exceeded its authority by substantiating a report against a facility or provider agency based upon a “concurrent finding” of neglect.[i]  With its decision, the Court of Appeals has not only clarified the Justice Center’s scope of authority, but also reopened the floodgates to a large number of investigations and appeals that have been existing in a state of limbo since the Third Department’s June 2, 2016 decision.[ii]

Pursuant to Executive Law §§ 551-562 and Social Services Law §§ 488-497, the Justice Center was established in 2013 to protect “vulnerable persons who receive care from New York State’s human services agencies.”[iii] It was created to protect all vulnerable persons, or those “who, due to physical or cognitive disabilities, or the need for services or placement, [are] receiving services from a facility or provider agency.”[iv]

All reportable incidents, including any allegation of neglect,[v] must be reported by a facility to the Statewide Vulnerable Persons’ Central Register (“VPCR”)[vi], whereby the Justice Center is mandated to investigate the allegation(s) and submit its findings to the VPCR.[vii]  The Justice Center’s findings are “based on a preponderance of the evidence and indicate whether the alleged abuse or neglect is substantiated in that it is determined the incident occurred and the subject of the report, facility or provider agency are responsible; or the allegation is found to be unsubstantiated because the event did not occur, or the subject of the report was found not responsible.”[viii] Additionally, the Justice Center may make “a concurrent finding . . . that a systemic problem [at the provider agency or facility] caused or contributed to the occurrence of the incident.”[ix]

In Molik, a male resident engaged in inappropriate sexual conduct with a female resident after two staff members momentarily left a common room at the Petitioner’s facility.[x] This assault was the third incident in a six month period, with the previous two assaults being known to the Petitioner.[xi]  The Justice Center investigated the incident, but did not substantiate a report of neglect against the two individuals because “there were no policies or requirements in place prohibiting staff from leaving the room unattended while residents were gathered there.”[xii] However, since the male resident had previously engaged in similar conduct, the Justice Center substantiated a concurrent finding of neglect against the Petitioner, the operator of the residential facility, “for failing to implement clear staff supervision protocols and for failing to modify [the male resident’s] care plan to increase his level of supervision after the first two attacks.”[xiii]

The Petitioner requested that the Justice Center amend its finding to unsubstantiated, which was denied, leading to the Petitioner’s Article 78 action where it received unanimous support from the Third Department.[xiv]  In its decision, the Third Department overturned the Justice Center’s concurrent finding, stating that it did not have to “defer to the Justice Center’s interpretation of the statutory provisions in question . . . [but rather defer to the] pure statutory interpretation dependent only on accurate apprehension of legislative intent.”[xv] “[T]he only circumstance under which the Justice Center could substantiate a report of neglect against a facility or provider agency is where an incident of neglect has occurred but the subject cannot be identified — a situation that is plainly not present here.”[xvi] The Third Department continued by saying, while the Justice Center does, in fact, have the authority to make a concurrent finding, “the only concurrent finding that may be made is that a systemic problem caused or contributed to the occurrence of the incident.”[xvii] Accordingly, since the controlling statute did not provide the Justice Center with the clear ability to categorize a concurrent finding it necessarily followed that such a finding could not constitute neglect on the part of a provider agency.[xviii]

The Court of Appeals, however, did not share in the Third Department’s view, stating that courts may look beyond the literal text of a statute when “the plain intent and purpose of the statute would otherwise be defeated.”[xix] Consequently, the Court viewed the Petitioner’s, and the Third Department’s, narrow interpretation of the law as “leav[ing] the Justice Center powerless to address many systemic issues, defeating the purpose of the Act and preventing the Justice Center from protecting vulnerable persons where it is most critical to do so.”[xx]  The Court, in light of the particular underlying events in Molik, ruled that to uphold this construction “would perversely allow this dangerous cycle to continue: employee conduct could not be substantiated because it does not violate facility policies, but facility policies would remain ineffective because the Justice Center lacks authority to implement change.”[xxi]

In her dissenting opinion, Judge Rivera stated that she agreed with the majority that “[i]t would lead to absurd results if [N.Y. Soc. Serv. Law § 493(3)(a) were interpreted] to permit a facility or provider agency to be found responsible in those situations where an incident occurs and no subject can be identified, but not where an identified subject is found not responsible for a confirmed incident of abuse or neglect.”[xxii]  However, Judge Rivera points out that a ‘concurrent’ finding should be viewed as an ‘adjunct’, requiring that an initial finding of neglect must be made before a provider agency could be found to have concurrently committed neglect, even if the initial subject is ultimately found not responsible.[xxiii]  In Molik, as reasoned by Judge Rivera, the initial step of establishing a finding of abuse or neglect was never reached because the allegation of neglect against the two identified subjects was declared unsubstantiated; therefore, a ‘concurrent’ finding could not be made.[xxiv]

In a post-Molik world, it is imperative that all provider agencies subject to Justice Center oversight review their internal policies, procedures, and processes, understanding that they too are now clearly within the Justice Center’s reach.  Provider agencies should evaluate previous incidents that occurred within the facility to determine whether the necessary corrective actions have been taken or if further steps are needed.  Furthermore, staff training curriculum should be reevaluated to determine whether opportunities for improvement exist.

If you have any questions or would like additional information regarding the Justice Center, or would be interested in assistance reviewing, developing or revising your policies, processes, and training programs, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com

————————————————————————————————————————

[i] Anonymous v. Molik, 2018 WL 3147607 (N.Y. Jun. 28, 2018).

[ii] Matter of Anonymous v. Molik, 141 A.D.3d 162, (App. Div. 3 Dep’t, June 2, 2016)

[iii] 14 N.Y.C.R.R. § 700.1(a).

[iv] N.Y. Soc. Servs. Law § 488(14).

[v] 14 N.Y.C.R.R § 624.3(b)(8).

[vi] N.Y. Soc. Serv. Law § 492(1)(a).

[vii] Id. at (3)(c)(i); Id. at (3)(c)(viii); N.Y. Soc. Serv. Law § 493(1).

[viii] N.Y. Soc. Serv. Law § 492(3)(a).

[ix] Id. at (3)(b).

[x] Molik, 2018 WL 3147607 at *1.

[xi] Id.

[xii] Id.

[xiii] Id.

[xiv] Id. at *2.

[xv] Molik, 141 A.D.3d. at 166 (internal citations omitted).

[xvi] Id. at 167 (citing N.Y. Soc. Serv. Law § 492(3)(a)).

[xvii] Id. at 167–168 (internal citations and quotations omitted).

[xviii] Id.

[xix] Id. at *4.

[xx] Molik, 2018 WL 3147607 at *5.

[xxi] Id.

[xxii] Id. at 8

[xxiii] Id. at 9.

[xxiv] Id. at 10.

As we previously reported, the 2018-19 New York State Budget passed in March includes significant provisions intended to reduce the number of Licensed Home Care Services Agencies (LHCSAs) around the state. Among these provisions are a two-year moratorium on the establishment of new entities, a limit on the number of LHCSAs with which Managed Long Term Care Plans can contract, and a new requirement that in the future LHCSA applicants will need to demonstrate public need and financial feasibility for a post-moratorium certificate of need. Additional information was provided by the Department of Health (DOH) in early May, when it released a new guidance document, as well as a new Certificate of Need (CON) application and instructions. These documents provide a fairly clear road map to assist LHCSAs in navigating the CON process during the moratorium, which is set to expire on March 31, 2020.

DOH has recently taken the next step in implementing the 2018-19 Budget provisions, and given the long term care community an opportunity to impact what the LHCSA landscape will look like after the expiration of the moratorium. In July, DOH issued a Request for Information (RFI) to gather input for the new need methodology that will apply when the moratorium ends.

An RFI is a mechanism commonly used by state agencies to obtain stakeholder feedback on pending state actions. It is not a Request for Proposals or Request for Applications – no award is made in connection with an RFI, and it would be highly unusual for the state to declare a “winning” methodology. Rather, responses to the RFI will allow stakeholders to outline their positions on what the new methodology should look like. Proposals received from stakeholders and/or portions of those proposals can be accepted or rejected at DOH’s discretion. The presumption is that DOH will use the information obtained from stakeholder submissions to craft a methodology that will implement the applicable statutory mandates as effectively as possible.

This does not mean that DOH is looking for a methodology that is agreeable to the LHCSA community. However, this does provide an excellent opportunity for LHCSAs to point out potential pitfalls to be avoided in the development of the new methodology. Specifically, DOH will likely be most interested in avoiding actions that would undermine the goals of the CON process and/or DOH’s more general goal to ensure that patients have a robust selection of quality providers.

It should be noted that the information sought by the RFI goes beyond what is normally considered to be part of a need methodology. Traditionally, CON review is intended to ensure four things: (1) public need for the services in question, (2) the character and competence of the proposed provider(s), (3) the fiscal feasibility of the proposed project, and (4) compliance with architectural and other regulatory standards. A “need methodology” generally relates primarily to the first item – whether or not there is a public need for the services. This is often presented as a mathematical function, based on the typical number of patients in the service area and the number of services already present in that area. In practice, there is almost always a significant discretionary element that allows DOH and the Public Health and Health Planning Council (which must approve all new establishments) substantial leeway in determining whether a particular provider is necessary.

The RFI seeks information not only on how to assess public need for LHCSA services, but also on character and competence and other potential elements of a CON application. Until now, LHCSAs were not subject to formal public need or fiscal feasibility analysis, which is part of what makes the new legislation so significant – and which makes this opportunity to impact the new rules so important. It is therefore a good thing that DOH has written the RFI so expansively.

In regard to traditional need analysis, DOH is seeking information on all the elements of a typical need methodology, including:

  1. Planning Area: This is part of the denominator of the need methodology equation – should need be determined by county (as is often the case), multiple counties, regions, etc. DOH references issues impacting this analysis, including driving time, availability of public transportation and availability of existing service providers.
  2. Need Factors: This is the other part of the denominator – within the planning area, should need be weighed against total population, population based on demographics (e.g., age), disease and disability prevalence, capacity of existing providers, etc.
  3. Timing: How often should need be recalculated? This is potentially significant. Traditionally, the CON process has been a snapshot in time – applications are judged based on need at the time of application, and that is all. Conceivably, DOH could opt instead to reevaluate overall need at periodic intervals, which could place even existing providers at risk. Other open questions specifically asked by DOH include whether the need methodology should apply in regard to potential service expansions or change of ownership. And while all the foregoing relates to the question when the need methodology should be applied, DOH also asks the related question of how frequently the need methodology itself should be reviewed, and if necessary revised.
  4. Exceptions: As noted, there are almost always exceptions to any formulaic need methodology. These exceptions can go both ways. On the one hand, should there be an arbitrary cap on the number of LHCSAs in a particular planning area? On the other hand, should the provision of specialized services (DOH mentions Traumatic Brain Injury and Nursing Home Transition and Diversion waiver services, pediatrics, IV infusion, and flu shot services in particular) be exempt from the general rule and/or be subject to a special rule? Similarly, DOH asks whether applicants proposing to provide only personal care services be treated differently from other applicant – suggesting that this is an option under consideration.

In regard to character and competence, DOH asks a few questions, as well:

  1. Experience: DOH seeks input on what type of experience should be required of a LHCSA operator. This reflects an issue that has plagued the CON process for a long time – namely, the fact that an applicant with absolutely no experience, who therefore has a pristine record, may have a better chance of being approved that a competent provider of long standing, who inevitably has had some compliance issues. This can be ameliorated by requiring some baseline experience in applicants.
  2. Performance: In addition to evaluating what an applicant has done, DOH asks for input concerning the extent to which it ought to review how successful the applicant has been. In particular, DOH asks whether any quality measures should be considered when reviewing an application for licensure or change of ownership, and whether applications for service area expansions should consider character and competence (which also implicates the timing issue mentioned above).

Finally, the RFI includes a more general catch-all question, giving responders the opportunity to opine on any other factors that might be appropriate to include in the CON process. DOH even goes so far as to suggest a couple:

  1. Staffing: LHCSA staffing can be cyclical (given the nature of the work, more staff tends to be available when the economy as a whole is worse), but in some places staffing shortages are persistent. DOH asks whether the availability of staff should be considered when determining public need. It also asks the inverse question – whether an applicant proposing to provide training programs for personal care aides and home health aides should be prioritized.
  2. Medicare/Medicaid: DOH also asks whether the extent to which an applicant intends to serve Medicare or Medicaid beneficiaries should be taken into account. In general, the CON process has historically favored the provision of care to Medicaid beneficiaries and individuals who otherwise cannot pay for such care, even going so far as to require applicants to promise to provide a particular amount of such services in some instances. Presumably, DOH would be more inclined to approve a LHCSA applicant offering a high percentage of its services to such individuals.

While the question of services for Medicaid beneficiaries certainly carries implications for the fiscal feasibility of applicants, it is interesting that fiscal feasibility by itself is not a strong focus of the RFI. This may simply be a function of the fact that, unlike some other DOH licensees, LHCSAs do not require an extensive bricks and mortar presence – so the ability of an applicant to make significant capital investments is less important. But DOH still has an interest in not approving LHCSAs that cannot sustain their business model – and so fiscal feasibility should be important.

The other surprising absence from the RFI is any specific discussion of cultural competency. The RFI refers to services for “special populations”, and presumably this would include racial, ethnic and national groups as well as individuals with particular disabilities or illnesses and other distinct populations (as opposed to distinct services), but that is not stated explicitly. It remains an open question whether a particular demographic group constitutes a “special population” sufficient to define the target population for a needs analysis, to justify an exception to the general needs analysis, or to otherwise be considered during the CON process.

In general, LHCSA providers who are considering responding to the RFI would be well-advised to consider all the factors that make their services unique, honestly evaluate whether those factors are appropriate for inclusion in the CON process, and respond accordingly. They might also consider additional outreach to state policymakers, either alone or in collaboration with other similarly-situated providers, and either through any of the several excellent trade associations that serve the LHCSA sector, or, where their interests diverge from their competitors, via separately retained counsel. Responses to the RFI are due no later than October 12, 2018.

If you have any questions or would like additional information on any of the above-referenced issues, or would be interested in assistance in responding to the RFI, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com

This past July 26, 2018 was the 28th anniversary of the Americans with Disabilities Act (“ADA”), landmark civil rights legislation designed to protect the rights of individuals with disabilities. Specifically, the ADA prohibits discrimination on the basis of disability in employment, state and local government, public accommodations, commercial facilities, transportation and telecommunications. It protects anyone with a “disability”, defined as “a physical or mental impairment that substantially limits one or more major life activities,” which include but are not limited to “caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.” This is clearly a broad list – and consequently, the ADA impacts many individuals and organizations on almost a daily basis.

ADA requirements impact the healthcare sector no less than any other sector, and more than most. In particular, the 2002 Supreme Court case of Olmstead v. L.C., 527 U.S. 581 (1999), held that the ADA requires individuals with disabilities receiving services from the state to be served in the most integrated setting appropriate to their needs –meaning in practice that they must be served in community settings rather than institutions if that (1) is appropriate, (2) is not opposed by the recipient, and (3) can be reasonably accommodated taking into account the resources available to the state and the needs of others. That case specifically addresses individuals with mental disabilities residing in a psychiatric hospital, but courts subsequently extended the principle to individuals with other disabilities in other settings, and has helped to drive healthcare policy nationwide, particularly in the long term care space.

To coordinate the implementation of the Olmstead decision, in late 2002 New York State established the Most Integrated Setting Coordinating Council, an interagency council comprised of representative of various state agencies that attempted to address the Olmstead mandate in a coordinated way. Governor Cuomo expanded on that effort in 2012, when he issued an Executive Order establishing the Olmstead Plan Development and Implementation Cabinet, a similar collection of agency representatives charged with issuing recommendations on how best to implement the Olmstead mandate. The Cabinet issued a report in October 2013 that identified four areas of focus: (1) the need for strategies to address specific populations in unnecessarily segregated settings, including psychiatric centers, developmental centers, intermediate care facilities, sheltered workshops and nursing homes; (2) the general need to increase opportunities for people with disabilities to live integrated lives in the community; (3) the need to develop consistent cross-systems assessments and outcome measurements regarding how New York meets the needs and choices of people with disabilities in the most integrated setting; and (4) the need for strong Olmstead accountability measure. This report informed many of the subsequent reforms implemented by Governor Cuomo in the health and human services space.

On July 26, 2018, the Governor expanded the State’s commitment to the ADA and furthered the State’s Olmstead compliance by announcing the first phase of the “Able New York” agenda, a series of regulatory initiatives designed to enhance the accessibility of a variety of state programs and services. This first phase focuses on the Department of Health (DOH), and includes a series of policy initiatives aimed at supporting community living for individuals with disabilities. Specifically, the Governor has charged DOH to take the following actions:

  • Dear Administrator Letter: DOH will issue a “Dear Administrator Letter” (DAL) to all nursing facilities reminding them of their obligations to provide assistance to any resident that wishes to return to the community. DALs are a form of subregulatory guidance used by DOH to set policy without issuing a formal regulation.
  • Immediate Need Program: DOH will issue new guidance to Local Divisions of Social Services regarding the immediate need program for authorizing personal care services. The Immediate Need Program, which was established pursuant to legislation enacted in 2015, is not a separate program so much as a set of procedures requiring expedited eligibility and assessment determinations for individuals who (1) have no informal caregivers, (2) are not receiving needed assistance from a home care services agency, (3) have no third party insurance or Medicare benefits available to pay for needed assistance, and (4) have no adaptive or specialized equipment or supplies that meet their need for assistance. In such cases, Medicaid eligibility must be determined within seven days. DOH has been instructed to intervene in counties that are not complying with the program.
  • MLTC Housing Disregard: DOH will provide education to nursing homes, adult homes, local governments, and Managed Long Term Care (MLTC) plans about the MLTC Housing Disregard, which provides nursing home residents who are discharged back to the community with additional housing allowance should they join a MLTC plan.  The Housing Disregard was established in 2013, and allows individuals to retain a dollar amount per month for housing without jeopardizing their Medicaid eligibility. The amount varies by region. In order to be eligible for the disregard, a person must (1) be at least 18 years of age, (2) have been a resident of a nursing home for at least 30 days, (3) have had nursing home care paid by Medicaid; (4) require community-based care for more than 120 days; and (5) have a housing expense such as rent or mortgage.

In addition to the foregoing, DOH will also “explore” (but presumably not necessarily implement) the following measures: 

  • Certification of Assessment & Discharge Education: DOH might require Medicaid-enrolled nursing homes to certify each year that they have (a) assessed all residents’ functional capacity; (b) asked residents about their interest in receiving information regarding returning to the community; and (c) provided sufficient preparation and orientation to residents to ensure safe and orderly discharge from the facility.
  • HCBS Evaluations as Part of Certificate of Need Review:  DOH might require any new application for additional nursing home beds or change of ownership to include, as part of its business plan, an assessment of the home and community based services (HCBS) in the service area, a description of its current or planned linkages to such HCBS services, and how its admission policies will ensure that residents are placed in the most appropriate and least restrictive setting. 
  • Discharge Rights Letter and Notice: DOH might require all nursing homes to inform residents and their families and representatives in writing of their discharge rights, including information on HCBS and community transition programs. DOH might also require all nursing homes to publicly post information regarding available resources and services that can assist residents in moving to the community, and explore additional ways to highlight discharge options. DOH may also engage the Long Term Care Ombudsman Program on this effort.
  • Nursing Home Discharge Incentive: DOH might incentivize nursing home discharges by developing a quality metric that rewards facilities that discharge long stay residents to the community, provided those residents are successfully maintained in the community for at least 90 days.

Thus, the new guidance to be issued by DOH to nursing homes and other long term care provider could be significant, particularly if it includes a new quality incentive for discharges. Even if DOH opts not to implement any of the proposed new initiatives, the obligations to be outlined in the new DAL could still impose significant new regulatory requirements on nursing home administrators.

We will continue to monitor the implementation of this phase of the Able New York agenda, as well as future phases. For additional information on this or other legislative or regulatory matters, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

 

In January 2018, during the Executive budget address, Governor Cuomo directed the Department of Health (DOH) to review the health, criminal justice and economic impacts of regulating recreational marijuana in New York. In doing so, he requested DOH to act in consultation with other NYS agencies and to evaluate the experience, consequences and effects of legalized marijuana in neighboring states and territories.  Seven months later, on July 13, the DOH released their highly anticipated assessment and recommendations.  The report follows DOH’s recent promulgation of emergency regulations that added opioid use as a qualifying condition for medical marijuana and allowing medical marijuana to be used as an alternative treatment for pain relief in lieu of opioids.  Additionally, the Governor recently directed the Department of Financial Services to issue guidance to encourage NYS chartered banks and credit unions to consider establishing banking relationships with medical marijuana-related businesses in New York that are operating in full compliance with all applicable State laws and regulations, including the Compassionate Care Act.

DOH’s report reviews the current landscape of state laws surrounding marijuana usage in the United States: Twenty-nine states and Washington D.C. have adopted medical marijuana programs, and 8 states and Washington D.C. have legalized marijuana for regulated recreational use by adults.  The report concedes the recent activities in surrounding states and Canada have prompted the need for New York to consider the legalization of marijuana thoughtfully and responsibly.  The report examines how the prohibition of marijuana led to a significant number of arrests for possession of marijuana and caused adverse and disproportionate economic, health, and safety impacts for individuals with low incomes and communities of color.  Additionally, the report highlights several studies that have illustrated reductions in opioid prescribing and overdose deaths with the availability of marijuana products.    

While the report acknowledges marijuana use is not without its risks, it concludes that the benefits of an adult regulated marijuana program would have significant health, social justice and economic benefits that outweigh any potential negative impacts for New York.  The report recommends harm reduction strategies and principles be incorporated into the regulated marijuana program to help ensure consumer and industry safety.  For example, a regulated adult-use only marijuana program should prohibit use by youth (those under 21 years of age) and simultaneously implement strategies to reduce youth use of marijuana.  Regulating marijuana would allow for laboratory testing, product labeling, guidance and consumer education at dispensaries.  This would allow consumers to be better informed about the products they are purchasing, understand the dosage options, various ingestion methods, what products and techniques may work best for them, as well as understand potential adverse consequences and potential harms of marijuana use.  An adult regulated marijuana program could also help promote marijuana as an effective alternative pain treatment to opioids.  Additionally, a regulated marijuana program should create guidelines to ensure packaging is child proof and contains appropriate warning labels to avoid accidental consumption.    

The report outlines the impact marijuana legalization would have on the criminal justice system.  In 2010, the marijuana arrest rate in New York was the highest in the country and twice the national average.  Unfortunately, despite equal marijuana use among racial groups, black individuals were nearly four times more likely than whites to be arrested for possession.  Subject matter experts echoed similar sentiments to DOH and stated the most appropriate way to rectify this issue would be to legalize marijuana.  Marijuana-related convictions have a lasting impact on individuals, their families and the communities where these individuals live.  Individuals with a criminal record typically experience lifelong challenges with securing stable employment, housing and economic stability.  The DOH report indicates if marijuana was regulated, there would be a reduction of expenditures related to enforcement, prosecution and punishment for illegal marijuana offenses.  This would allow law enforcement to devote more of their time to community oriented policing and other more pressing focus areas.

The DOH study illustrates that NYS would be one of the largest regulated marijuana markets in the country and that there is great potential for tax revenue for the State.  DOH stated this funding could be used to help provide financial support for other programs, such as public health, community reinvestment, education, transportation, research, law enforcement, workforce development, and employment initiatives.  The report estimates there is projected to be 1,290,000 consumers in NY that would access regulated marijuana within the first year.  Based on certain inputs, assumptions, and average retail prices for marijuana, the estimated revenue for the first year could be between $1.7 billion and $3.5 billion annually – based on the sale of 6.5-10.2 million ounces being sold at $270 – $340 per ounce.  It should be noted, however that the average price of an ounce of marijuana in the United States, according to a recent Forbes article is around $247 an ounce.  Thus, these projections are arguably inflated.   Furthermore, depending on the retail tax rate that is ultimately imposed (the analysis used 7% and 15% for comparison purposes), NYS could receive between $248 million to upwards of $677 million in tax revenue annually.  However, the higher the tax rate imposed, the more likely users will continue to resort to the black market to obtain marijuana.          

The report acknowledges the implementation of a regulated marijuana program would require legislative and regulatory actions to appropriately address the diverse geographic needs throughout New York.  NYS must determine what type of licenses to offer under the regulated marijuana program and whether or not vertical integration would be allowed.  DOH recommends NYS limit the number of licenses available initially, and adopt a licensure model that is similar to Massachusetts, which prioritizes applicants for licensure based on providing equal opportunities for individuals who meet certain criteria (those living in areas of disproportionate impact, employment of residents in such areas, employment of people with drug-related criminal offender record that are otherwise employable, and ownership by persons of color).  Additionally, NYS would need to develop regulations and requirements for each element of the supply chain, cultivation and production practices, laboratory guidance, packaging and tamper proofing of products, and how marijuana will be retailed.  DOH recommends NYS place limits on the amount of THC allowed in marijuana, the types of products that may be offered for sale, and limit the maximum amount an individual may purchase to one ounce.

Regarding the taxation of regulated marijuana products, DOH recommends NYS begin with a low taxation rate, between 7% and 10%, to help encourage users to transition to the legalized market.  The report also emphasized that the workforce needs for this emerging industry must be addressed as the program continues to be developed to ensure safe working conditions.

Lastly, the DOH report recommended NYS convene a workgroup of subject matter experts, with relevant public health expertise, to: (1) contemplate the nuances of a regulated marijuana program; (2) review existing legislation; and (3) make recommendations to the State that are consistent with the overarching goals of harm reduction and public education.

For additional information on this report or other legislative or regulatory matters, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

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Unlike most other types of employment arrangements involving physicians, physicians acting as a medical director are compensated purely for the performance of administrative services related to patient care services. That is not to say that a medical director does not play a crucial role in the operation of a health care provider. In fact, the New York State Department of Health recommends, or even requires, medical directors be put in place for certain types of providers, and federal law similarly requires medical directors for certain types of services and facilities.

 

Because medical directors are not performing medical services, many physicians feel comfortable entering into medical directorship with little or no written documentation. However, physicians should proceed with caution when undertaking a medical director role. In particular, medical director arrangements are often scrutinized by the Office of the Inspector General (“OIG”) of the U.S. Department of Health and Human Services to determine whether the arrangement is, in reality, being used as a vehicle to provide remuneration to physicians for patient referrals. For this reason, where the contracting provider participates with federal payors and the physician may refer patients to the contracting provider, the physician should enter into a written medical director agreement that is structured to fall within an exception (or safe harbor) to the federal Stark and anti-kickback statutes.

Most often, the exception used under both Stark and anti-kickback laws will be the “personal services” safe harbor. Although slightly different under each statute, some key elements in complying with the “personal services” safe harbor are as follows:

 

  • Written Agreement: The agreement between the physician and the provider should be in writing, with a term of not less than one year. [1]
  • Duties: The agreement should provide for all of the services which the physician is expected to perform.[2]
  • Commercially Reasonable: The services provided by the medical director should be necessary to the provider and not exceed the amount of services required by the provider. This analysis is focused not only on whether the contracting physician’s services in and of themselves are necessary, but also whether there are other medical directors and whether numerous medical directors are performing duplicative services.[3]
  • Compensation: [4]
    • Fair Market Value – The physician should be paid fair market value for the services provided. To this end, it might be helpful to obtain a fair market value analysis, taking into account the geographic location, the experience of the physician, the certification of the physician, and they type of facility. While having such an analysis is not an absolute defense in an investigation, it is useful to demonstrate that fair market value was analyzed and that the remuneration falls within what was believed to be an acceptable range.
    • Hourly Rate – It is recommended that the medical director be paid on an hourly basis, with such hourly rate being paid at the fair market value rate.
    • Cap on Compensation – it is also recommended that the aggregate compensation a physician can earn for his documented hours be capped, to further ensure reasonableness.[5]
  • Documentation: The physician should keep daily time logs of services performed and the time spent on each service. This shows that the physician is performing real work, for which he or she is being paid fair market value, and also can be used to demonstrate that the services being performed are necessary for the facility.

While it is always best to consult with an experienced professional before entering into medical director arrangement, adhering to the criteria set forth above can offer protection for both the physician and the facility.

[1] 42 CFR 1001.952(d)(1): “The agency agreement is set out in writing and signed by the parties.” 42 CFR 1001.952(d)(4): “The term of the agreement is for not less than one year.” 42 U.S.C. 1395nn(e)(3)(A)(i): “the arrangement is set out in writing, signed by the parties, and specifies the services covered by the arrangement.” 42 U.S.C. 1395nn(e)(3)(A)(iv): “the term of the arrangement is for at least 1 year.”

[2] 42 CFR 1001.952(d)(2): “The agency agreement covers all of the services the agent provides to the principal for the term of the agreement and specifies the services to be provided by the agent.” 42 U.S.C. 1395nn(e)(3)(A)(ii): “the arrangement covers all of the services to be provided by the physician.”

[3] 42 U.S.C. 1395nn(e)(3)(A)(iii): “the aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement.”

[4] 42 CFR 1001.952(d)(5): “The aggregate compensation paid to the agent over the term of the agreement is set in advance, is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs.” 42 U.S.C. 1395nn(e)(3)(A)(v): “the compensation to be paid over the term of the arrangement is set in advance, does not exceed fair market value, and . . . is not determined in a manner that takes into account the volume or value of any referrals of other business generated between the parties.”

[5] In OIG Advisory Opinion No. 01-17 (2001), the OIG said that even though total aggregate compensation over the contract has not be set in advance, the totality of facts and circumstances in the specific circumstances at hand yield a conclusion that there is no significant increase in risk of fraud and abuse – however, this finding was likely due to the presence of a monthly payment cap. In 2003, in Advisory Opinion 03-8, the OIG found that a proposed arrangement does not qualify for protection under the safe harbor because the aggregate compensation paid under a management agreement would not be set in advance.

The latest installation in our series on legislation recently passed by the New York State Legislature (introduced here) addresses legislation in the long term care and aging space.  It follows upon descriptions of legislation in the pharmacy space (here) and hospital space (here).  Like those areas, the long term care area was impacted by the same political turmoil that limited the number of bills passed – but some significant legislation was enacted nonetheless.

One of the more interesting aspects of the long term care and aging space is that it tends to be comprised of two very different regulatory regimes.  The first, primarily overseen by the Department of Health (DOH), regulates licensed long term healthcare providers like nursing homes, assisted living residences, home care and others.  The second, overseen by the State Office for the Aging (SOFA), focuses on the elderly more generally.  Sometimes, it can seem like these two agencies occupy two entirely different worlds; other times, they coordinate comprehensively and effectively.  Bills passed this year by the Legislature affect both agencies.

Except where otherwise indicated, these bills all await action by the Governor.

Assisted Living Programs and Hospice (A10459-A by Assemblymember Lupardo/S8353-A by Senator Hannon):  Continuing the State’s recent focus on expansion of assisted living program services (see our post on long term care provisions in the State Budget, here), this bill would allow hospice services to be delivered to individuals residing in assisted living programs.  Current Medicaid policy does not allow the delivery of hospice services in an assisted living program, requiring many residents to transfer to a nursing home in their last few weeks of life, compounding the issues they already face at the end of their lives.

Adult Care Facility Temporary Operators (A8159 by Assemblymember Wright/S766 by Senator Stewart-Cousins):  This bill would require the DOH to provide written notice when a temporary operator is appointed at any adult home, enriched housing program, residence for adults or assisted living program.  Temporary operators are entities appointed by DOH to operate a facility where an operator’s license has been suspended.

Deaths in Adult Care Facilities (A9034 by Assemblyman Gottfried/S7282 by Senator Alcantara):  This bill is a chapter amendment (see discussion of chapter amendments in our introductory post here) to Chapter 459 of the Laws of 2017, which added enriched housing programs to the list of adult care facilities that must report the death or attempted suicide of a resident or any felony committed against a resident to DOH, and to the Justice Center for the Protection of People with Special Needs, if they are receiving mental hygiene services.  That bill also reduced the time within which facilities must make such a report from 48 to 24 hours.  This bill eliminates the statutory time period in which a report must be made.  The bill was signed by the Governor on June 1, 2018.

Long Term Care Ombudsman (A11050 by Assemblymember Lupardo/S9002 by Senator Dilan):  This bill would make various changes to bring the provisions of state law establishing the Long Term Care Ombudsman Program (LTCOP) in line with federal statute and regulations.  The LTCOP investigates and resolves complaints made by or on behalf of residents, promotes the development of resident and family councils, and informs government agencies, providers and the general public about issues and concerns impacting residents of long term care facilities.  The bill would clarify (1) the structure of the LTCOP and the relationship between the LTCOP and the SOFA; (2) the required qualifications of the state ombudsman and assistant ombudsmen; (3) the state ombudsman’s duty to refer complaints to appropriate investigative agencies; (4) the state ombudsman’s duty to comment on actions pertaining to the health, safety, welfare, and rights of the residents of long term care facilities and services; (5) the state ombudsman’s duty to provide timely access to LTCOP services; (6) the state ombudsman’s duty to recommend changes to law, regulation and policy; (7) the state ombudsman’s duty to develop a certification training program and continuing education for ombudsmen; (8) the state ombudsman’s duty to provide administrative and technical assistance to ombudsmen; (9) the state ombudsman’s duty to support citizen organizations, resident and family councils, and other statewide systems advocacy efforts; and (10) the state ombudsman’s duty to advise SOFA in regard to plans or contracts governing local ombudsman entity operations.  The bill requires the state ombudsman to develop a grievance process to offer an opportunity for reconsideration of any decision regarding the appointment of any local ombudsman, and any decision of an ombudsman.  The bill also clarifies (a) the records to which ombudsmen must have access and the limitations on the use and further disclosure of such records; (b) that ombudsmen must be granted access to and cooperation from long term care facilities, and facilities may not retaliate against anyone for cooperating with ombudsmen; and (c) the conflict of interest rules applicable to the LTCOP.

Informal Caregiver Best Practices (A3958 by Assemblymember Dinowitz/S8730 by Senator Sepulveda):  This bill would require SOFA to develop a guide for businesses containing best practices for retaining employees who are also informal caregivers (i.e., who care for elders at home), and make that guide available on the agency’s website or via paper copy.

Veterans in Nursing Homes (A9981-A by Assemblymember Wallace/S8968 by Senator Helming):  This bill would add “assisted living” (presumably assisted living programs), assisted living residences, and adult care facilities to the list of entities which may report to SOFA on the veteran status or veteran spouse status of residents, so that SOFA may link them to counselors for review and potential linkage to veteran services.  SOFA would be required to include the number of such reports within its annual report.

Locator Technology Businesses (A1118-A by Assemblymember Rosenthal/S5221-A by Senator Stavisky):  This bill would require DOH to develop a list of businesses that manufacture, distribute or otherwise offer locator technology services designed to assist in the expedited location of individuals afflicted with Alzheimer’s disease or dementia who become lost or disoriented.  DOH must make the list available to physicians and the general public.  “Locator technology” includes, e.g., wrist transmitter tracking systems, software programs, data bases and products like necklaces and bracelets that contain identifying information.

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For additional information on any of the foregoing bills, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

The scheduled 2018 New York State Legislative Session concluded last week amid many of the same speculations and controversies that have characterized all of the Legislature’s activities in recent years.  Once again, much of the activity turned on the Legislature’s tense relationship with the Governor, ongoing questions about control of the Senate, and a backdrop of corruption trials that continue to erode public confidence in State government.  This year, legislative activity was more constrained than usual, owing to the Senate’s inability to maintain a commanding majority on a consistent basis, which was attributable to the recent dissolution of the Independent Democratic Conference and the absence of one majority Senator serving in the United States Navy.  While the Senate was not entirely paralyzed, and at one point even accomplished a rare override of a gubernatorial veto, many legislative initiatives that were anticipated to move did not.

But even in this challenging year, many bills were passed in the health and mental hygiene space.  Examples include:

  •  Pharmacy:  The Legislature passed bills requiring manufacturers engaged in the manufacture of covered drugs sold in New York State to develop and operationalize a statewide pharmaceutical take back program, and authorizing the reclassification of controlled substances by regulation rather than by statute.
  •  Hospitals:  Legislation was passed that would require the Department of Health (DOH) to establish a sexual assault victim bill of rights, which hospitals must provide to every sexual offense victim presenting at the hospital.  Other legislation would authorize hospitals to establish standing orders for nurses caring for newborns, allow a nurse practitioner to witness and serve as a health care proxy, establish new standards for clinical laboratory supervision, and require the Office of Mental Health to supply educational materials to hospitals regarding discharge planning for individuals with mental health disorders.
  • Long Term Care:  Bills were passed related to virtually all aspects of the long term care continuum, including bills allowing residents of an assisted living program to access hospice services, requiring DOH to provide written notice to residents of adult care facilities when a temporary operator has been appointed, and clarifying the scope of the long term care ombudsman program.
  • Behavioral Health:  The Legislature approved bills related to maternal depression, the mental health impacts of tick-borne diseases, geriatric mental health services, and suicide prevention, among other mental health issues.  Bills passed in the substance use disorder space include a bill making it a crime for providers of substance abuse services to offer or accept kickbacks in exchange for patient referrals, a bill requiring the Office of Alcoholism and Substance Abuse Services to provide information to school districts regarding the misuse and abuse of alcohol, tobacco, prescription medication and other drugs, and a bill allowing the use of medical marijuana as an alternative to opioids.
  • Intellectual/Developmental Disabilities:  Bills passed in this space include bills to establish identification cards for individuals with developmental disabilities, to allow individuals with developmental disabilities to be accompanied by staff of the same gender when utilizing transportation, to require 85% of the proceeds from the sale of Office for People with Developmental Disabilities (OPWDD) property to be used for state-operated residential or community services, to prohibit OPWDD from changing the auspice of any individualized residential alternative that is operated by the state, and to study and improve outreach concerning autism spectrum disorder.
  • Public Health: A number of the bills passed this session did not deal with specific types of providers, but rather addressed more general public health concerns.  Among these bills were a bill prohibiting discrimination in the provision of insurance based on the fact that an insured is a living organ or tissue donor and authorizing family leave to provide care during transplant preparation and recovery, bills prohibiting smoking in private homes where licensed child care services are provided or within 100 feet of library entrances, further restricting minors’ access to tanning facilities, a bill restricting minors’ access to electronic cigarettes, and bills addressing prostate cancer, Lyme disease, lupus, lymphedema, and lead poisoning.

Each of the bills mentioned above, and many others, now await action by the Governor, and it remains possible that the Legislature will return this year – possibly even in the very near future – to act on additional priority legislation that could not be moved before the conclusion of the scheduled session.  Once a bill is passed by the Legislature, it can be sent to the Governor for action at any point prior to the end of the calendar year, and in practice the bills are sent in several batches over the remainder of the year.  The Governor and Legislature work together to coordinate the timing of those batches, to ensure that the Governor’s staff has adequate time to review each bill and brief the Governor on it.

Once a bill is sent, the Governor has ten days to either approve it or veto it (not including Sundays); if by some chance the Governor fails to act (a very rare occurrence), the bill becomes law.  The only exception to these rules occurs at the end of the year, when the Governor is given thirty days to act, and the failure to act constitutes a veto (the so-called “pocket veto”).

If he vetoes a bill, the Governor will produce a veto message explaining his position.  He may also provide an approval message explaining his position on bills he has approved.  Where a bill comes close to something that the Governor could approve, but the Governor does not want to approve it in its current form, it is not uncommon for the Governor to negotiate “chapter amendments” with the Legislature, pursuant to which the Governor agrees to sign the bill in return for a promise from the Senate and Assembly that they will pass additional legislation at the next available opportunity to amend the bill language to address the Governor’s concerns.

This article represents the first in a series that will review the key bills in each of the foregoing categories in more detail, including both the bills listed above and others.  At this time, in most cases it is impossible to say with certainty how the Governor will act on each bill, but where appropriate, we will provide our best guess.  In the meantime, if you have any questions concerning the foregoing, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.