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.

 

Last week, in LeadingAge New York, Inc. v. Shah, the New York Court of Appeals addressed Department of Health regulations limiting executive compensation and administrative expenditures by healthcare providers receiving state funds. The Court upheld limits related to state funding, but struck down a limit that applied regardless of the source of funding.

In 2012, Governor Cuomo directed agencies providing state funding to service providers to regulate provider use of state funds for executive compensation and administrative costs. DOH responded with regulations restricting state-funded expenditures on administrative expenses and executive compensation for certain defined “covered providers.”

The regulations had two “hard caps,” one limiting administrative expenses to 15% of covered operating expenses paid with State funds, and one limiting the use of State funds for executive compensation to $199,000, absent a waiver. The regulations also had one “soft cap,” providing for penalties to a covered provider if executive compensation exceeded $199,000 from any source of funding, with specified exceptions concerning comparable provider compensation and board approval. Covered executives included those for whom salary and benefits were administrative expenses, and excluded clinical and program personnel.

Several petitioners challenged the regulations, including nursing homes, assisted-living programs, home-care agencies and trade associations.

The Court of Appeals grounded its decision in the separation of powers doctrine, which requires that “the Legislature make the critical policy decisions, while the executive branch’s responsibility is to implement those policies.” Chief Judge DiFiore looked to the Court’s prior decision in Boreali v. Axelrod for guidance in finding “the difficult-to-define line between administrative rule-making and legislative policy-making.”

The Court first reviewed the function of DOH, which manages state funds earmarked for public health, oversees the Medicaid program, and contracts with private entities. The Court said that DOH carries out these functions with the goal of ensuring that the limited public funding available be directed as efficiently as possible toward high-quality services.

The Court concluded that the hard cap regulations on both administrative expenses and executive compensation did not exceed DOH’s authority. The Legislature directed that DOH oversee the efficient expenditure of state health care funds. The hard caps are tied to the specific goal of efficiently directing state funds toward quality medical care for the public by limiting the extent to which state funds may be used for non-service-related salaries and disproportionately high administrative budgets. The Court found the hard cap regulations to be directly tied to the Legislative policy goal without subverting it in favor of unrelated public policy interests.

In contrast, the Court struck down the soft cap regulation, which restricted executive compensation over $199,000 regardless of funding source, because it represented “an unauthorized excursion by DOH beyond the parameters set by the Legislature.” The Court found that while the hard cap regulations capped the use of public funding, the soft cap imposed an overall cap on executive compensation, regardless of the funding source. “The soft cap thus pursues a policy consideration – limited executive compensation – that is not clearly connected to the objectives outlined by the Legislature but represents a distinct ‘value judgment.’” The soft cap restriction on executive compensation was not “sufficiently tethered” to the enabling legislation which largely concerned state funding. The Court concluded that the soft cap regulation exceeded DOH’s administrative authority as it envisioned the additional goal of limiting executive compensation as a matter of public policy.

All members of the Court of Appeals agreed that the hard cap on administrative expenditures was permissible, but the dissenting Judges differed on executive compensation.  Judge Garcia would have stricken both hard and soft caps on executive compensation, because they represented a “policy choice about reasonable compensation aimed at influencing corporate behavior,” which is “law-making beyond DOH’s regulatory authority.”  In contrast, Judge Wilson would had found both limits to be permissible.  He criticized the majority’s reliance on Boreali, and saw the proper analysis to be whether the regulation exceeded the executive power.  He would have used that rationale to uphold the hard cap on executive compensation, and also would have found the soft cap permissible because it advance the statutory goals of preventing providers from circumventing the hard cap and advising providers the State may allocate taxpayer funds away from undesireable or inefficient vendors and toward competitors who provide superior value.

At least where State funds are at issue, LeadingAge provides the Governor and executive agencies with broad authority to police and restrict the use of State funding.

 

Just over one year ago, I wrote about the Department of Health and Human Service’s (“HHS”) $105 million award to support 1,333 federally qualified health centers (“Health Centers”) across the United States improve the quality of comprehensive care provided to patients. It seems like déjà vu, as it was announced last month that HHS set aside $125 million in quality improvement grants to be allocated among 1,352 Health Centers. A list of recipients can be found here.

Health Centers receive funding through the Health Resources and Services Administration (“HRSA”), a branch of the federal government with a primary purpose of delivering comprehensive healthcare to patients who cannot otherwise afford such care. Treatments offered at Health Centers, include, without limitation, physician services, homebound visits by nurses in geographic locations where home health agencies are sparse, and clinical psychology services. The overarching goals set by HRSA with respect to Health Centers are to:

  • Make available high quality healthcare treatments and ancillary services, including education and transportation to facilities;
  • Offer care at affordable rates and charge patients in accordance with a practical scale;
  • Have community stakeholders serve on the governing boards to communicate the specific needs of the locality; and
  • Create a patient-centered foundation to address the diverse needs of the medically underserved.

In accordance with those goals, the grants are designed to improve Health Centers. Specifically, the funds will be used for “[e]xpanding access to comprehensive care, improving care quality and outcomes, increasing comprehensive care delivery in a cost-effective way, addressing health disparities, advancing the use of health information technology, and delivering patient-centered care.”

Speaking on the new grants and reflecting on the preceding year, HRSA Administrator George Sigounas, MS, Ph.D., said “[n]early all HRSA-funded health centers demonstrated improvement in one or more clinical quality measures from the year prior, and these funds will support health centers’ work to improve the quality of care they deliver in their communities around the country.”

As healthcare costs continue to rise in many parts of the country, eligible patients have an alternative route to obtain affordable healthcare without the burdens associated with visiting the local hospital. Health Centers are a bright spot in an otherwise gloomy healthcare system.

 

 

 

 

 

 

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.

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.

This post marks the end of our series on recent activity by the New York State Legislature in the health sector (introduced here), and follows posts on legislation impacting the pharmaceutical industry (here), hospitals (here), long term care and aging (here), behavioral health (here), and intellectual/developmental disability services (here).  As the last entry in the series, it serves as a bit of a catch-all for significant bills that have not been included in previous posts.  We have brought those bills together under the rubric of “public health.”

The challenges tackled by the Legislature in this space were wide and varied.  As is typical of public health legislation year after year, the bills largely focus on restricting unhealthy behaviors, shifting the cost of screening and prevention, deploying resources more efficiently and effectively, and educating the public and healthcare providers on the State’s various existing and newly created public health programs.  The following public health bills passed both houses of the Legislature and were either already signed into law (where noted) or currently await the Governor’s signature (more information on the legislative process can be found here).

Living Donor Protection Act (A297C Assemblymember Gunther /  S2496B Senator Hannon):  This bill, entitled the “Living Donor Protection Act of 2018” (the “Act”), seeks to encourage live organ donation, protect those who choose to donate their organs from insurance discrimination and provide paid family leave benefits to organ donors.  The Commissioner of Health, in cooperation with the Transplant Council and other interested parties, would be tasked with developing and distributing (online and in paper format) informational material expressing the benefits of live organ and tissue donation, including the impact on the donor’s access to insurance and assistance, the available state and federal tax credits for live organ donors, and the protections and benefits granted pursuant to the Act.

With respect to discrimination by insurers, the bill would make it unlawful for insurers who are authorized to provide life, accident, or health insurance to discriminate against a live organ donor by: declining or limiting insurance coverage under any life or accident and health insurance policy; or in the premium rating offering, issuance cancellation, amount of coverage or any other condition based solely on the donor’s status; or from precluding or preventing any individual from donating all or part of an organ or tissue as a condition of receiving or continuing to receive life or accident and health insurance coverage.

The bill further amends § 201(18) of the Workers Compensation Law to include transplantation and recovery from surgery related to organ or tissue donation one of the “serious health conditions” covered under paid family leave.

Smoking in Private Homes Licensed for Child Care (A397B Assemblymember Gunther / S7522-A Hannon):  This bill takes aim at reducing the harmful effects of “third hand smoke” – “residual contamination from cigarette smoke toxicants that can linger on surfaces” on children.  The bill would prohibit smoking at all times in private homes that are required to be licensed or registered for child care services, including but not limited to, registered, certified or licensed care in family day care homes, group family day care homes, school-age child care programs; head start programs, day care centers; child care which may be provided without a permit, certificate or registration in accordance with this statute; early childhood education programs approved by the state education department; and care provided in a children’s camp, regardless of whether or not children receiving such services are present.

Smoking Near Public Libraries (S169B Senator Rivera / A330-B Assemblymember Dinowitz):  This bill prohibits smoking within 100 feet of an entrance or exit of a public or association library (as defined in § 253(2) of the Education Law); unless such area falls within the boundaries of a private home or property, in which case, the prohibition shall not apply within the boundaries of such home or property.   

Marketing of Electronic Cigarettes to Minors (S1223 Senator Akshar / A8014 Assemblymember Rosenthal):  This bill prohibits the distribution of free electronic cigarettes to persons who appear to be less than 25 years old without first demanding proof of identification establishing the recipient is at least 18 years old.  This legislation was signed by the Governor on April 18, 2018, and became effective immediately.

Use of Tanning Facilities by Minors (A7218A Assemblymember Jaffee / S5585-A Senator Boyle):  Citing evidence that the use of tanning booths before the age of 35 increases the risk of melanoma by 59%, squamous cell carcinoma by 67% and basal cell carcinoma by 29%, the Legislature passed this bill to prohibit minors from using indoor tanning facilities, and eliminate the procedures under § 3555(2) of the Public Health Law that currently allow 16 and 17 year olds to access tanning facilities where the facility witnesses a parent or guardian sign a consent form in person at the facility.

Prostate Cancer Screening (S6882A Senator Tedisco / A8683A Assemblymember Gottfried):  This bill seeks to eliminate barriers to prostate cancer screening by providing diagnostic screening at no cost to certain populations of men considered to be at risk, and would require the Commissioner of Health to develop and distribute information about these no-cost screenings.  More specifically, the bill requires insurance companies to provide diagnostic testing for prostate cancer at no cost to men with a prior history of prostate cancer, to those men who are over 40 with a family history of prostate cancer, and men 50 and over who are asymptomatic.  A similar measure was passed in 2015 regarding women’s access to breast cancer screening.

Lyme and Tick-Borne Disease Work Group (S7170A Senator Serino / A8900-A Assemblymember Hunter):  This bill would create a Lyme and Tick-Borne Disease Work Group under the auspices of the Executive.  The work group will be made up of the Commissioners of the Department of Health, the Office of Mental Health, and the Department of Environmental Conservation, the Superintendent of Financial Services, six additional members to be appointed by the Governor at his sole discretion, and eight additional members on the recommendation of the Legislature (three by the Temporary President of the Senate, three by the Speaker of the Assembly, and one each by the Senate and Assembly Minority leaders).  The membership of the work group must include an infectious disease specialist, general practitioner, mental health practitioner, entomologist, epidemiologist, health insurance representative, and a representative of a tick-borne disease advocacy organization; all of whom must have prior experience working with tick-borne illness.

The work group would be required to meet at least bi-annually, and shall have the following powers and responsibilities:

  • Review  current  best  practices for the diagnosis, treatment and prevention of Lyme and tick-borne diseases, as well as  any  reports  or recommendations  from  the  Twenty-first  Century Work Group for Disease Elimination and Reduction, which is charged with  reviewing existing vaccines, international research and development for vaccines, as well as health threats which could be addressed by the development of vaccines;
  • Provide recommendations including, but not limited to:
    • Improvements to the delivery of care for patients and suspected patients of Lyme and tick-borne diseases, particularly those from endemic areas of the state;
    • Collaborations among county departments of health to promote effective  strategies to combat Lyme and tick-borne diseases, including best practices for prevention and reporting;
    • Collaborate with other agencies to streamline state efforts to combat the spread of Lyme and tick-borne diseases;
    • Identifying opportunities to collaborate with the federal government, non-profit entities, or private organizations on projects addressing these diseases;
    • Data collection and reporting requirements of Lyme and tick-borne disease, including but not limited to those for healthcare providers; and
    • Any other regulations or guidelines concerning Lyme and tick-borne diseases.

The work group would be required to submit a report detailing its findings and recommendations to the Governor and Legislature by May 1, 2019.

Lupus Education (A2788B Assemblymember Peoples-Stokes / S5489-B Senator Parker):  This bill would establish the Lupus Education and Prevention Fund, and would allow the fund to be financed by optional contributions through a taxpayer check-off on New York State corporate and personal income tax forms.

Lymphedema Education (A8819B Assemblymember Rosenthal L / S7765-B Senator Golden):  The Legislature has expressed concern that despite the fact that lymphedema afflicts 10 million people in the United States, the disease is relatively unknown – even among medical providers.  Accordingly, this bill would require every hospital or general hospital to distribute information to patients at high risk of developing lymphedema.  The information will assist patients to understand and identify the signs and symptoms of lymphedema and provide instructions on how to seek appropriate care.

The bill defines high risk patients as those with:

    • Any significant injury to soft tissue that could reasonably be expected to compromise or cause to be ineffective the drainage of the lymphatic system;
    • Recurrent or persistent bacterial infections that could reasonably be expected to compromise or cause to be ineffective the drainage of the lymphatic system; or
    • Have had corrective surgical procedures performed that may have interfered with the lymph drainage by severing local lymphatics in a manner that may jeopardize reconstitution and recovery of lymph drainage.

Lead Poisoning (S7295 Senator Alcantara / A8992 Assemblymember Dinowitz):  Section § 1373 of the Public Health Law permits the Commissioner of Health to designate any geographic area within the State as having a high risk of lead contamination, and upon written notice, may demand that lead abatement be conducted on any building within such area within a specified time period.  This bill amends § 1373 to also allow the Commissioner of Health to “take enforcement action as deemed appropriate by the Commissioner or his or her representative” in the event that such abatement is not undertaken.  Formal action may include a formal hearing and/or penalties not to exceed $500.  This bill was signed by the Governor on April 18, 2018.

Testing for Cytomegalovirus in Newborns (A587C Assemblymember Rosenthal / S2816-B Senator Hannon):  Cytomegalovirus is four times more prevalent than Zika virus in the United States and is the leading non-genetic cause of deafness in children.  Parents infected with the disease may not show any signs or symptoms, making it difficult to prevent the passing of this infection to their newborn babies.  This bill seeks to prevent the spread of this virus by educating pregnant women regarding the manner in which the disease is transmitted, and promote earlier detection of the disease in infants by requiring infants suspected of having hearing impairment to undergo a urine polymerase chain reaction test, unless the parent objects.

New Born Safe Sleep Study (S7408 Senator Hannon / A8957 Assemblymember Simotas):  This bill makes technical amendments to Chapter 401 of the Laws of 2017, which established the Newborn Health and Safe Sleep Pilot Program under the Department of Health (DOH).  This pilot program would have required the Department of Health to provide baby sleeping boxes in areas of NYS with high infant mortality rates or poor birth outcomes.  However, the 2018 bill instead amends § 2508 of the Public Health Law to require the Department of Health, in consultation with health care providers, hospitals, safe sleep product manufacturers, provider groups, the New York State Office of Children and Family Services, and other interested parties to conduct a study on the effectiveness of existing safe sleep practices that reduce infant mortality rates, as well as review baby boxes and other products designed to encourage safe and healthy sleeping among infants.  The Department will be required to utilize the study to conduct a pilot program aimed at improving caregiver education and continued safe sleep practices in counties or areas with high infant mortality rates, and to pursue public private partnerships and funding opportunities to obtain donations for these purposes.  This legislation was signed into law by the Governor on April 18, 2018.

Blood Drive Support (A2381 Assemblymember Gottfried / S2701 Senator Parker):  This bill would authorize the Commissioner of Health to issue grants to not-for-profits and elementary, secondary and post-secondary schools to help pay for the costs of conducting local blood drives.  This legislation was also passed by the Legislature in 2015 but was vetoed by the Governor due to the “increased and unbudgeted costs” the measure would inflict on the Department of Health.  This version of this bill is exactly the same as the prior version.

Physical Fitness Education Campaign (A4426 Assemblymember Cusick / S8716 Senator Sepulveda):  In an attempt to reduce the public health costs associated with obesity and obesity related illness (estimated to be $117 billion annually nationwide), this bill would create the New York Physical Fitness and Activity Education Campaign to increase awareness regarding the health and economic problems associated with obesity and to promote recreational and physical fitness activities within the State.  The Campaign would utilize social and mass media, including the internet, radio, and print advertising and recruit public ambassadors to promote the message, including professional and amateur athletes, fitness experts, and celebrities.  The Campaign would focus on seniors, youth, and other populations at high-risk for obesity.

Emerging Contaminant Education (S6655 Senator Hannon / A10927 Assemblymember Gottfried):  As part of the 2017-18 Enacted Budget, the Department of Health was instructed to create certain information and educational materials related to emerging contaminates and notification levels for emerging contaminants within the public water system.  Emerging contaminants are defined as any physical, chemical, microbiological or radiological substance listed as an emerging contaminant pursuant to §1112 (3) (c) of the Public Health Law.  The current list of contaminants includes: 1,4-dioxane, perfluorooctanesulfonic acid, and perfluorooctanoic acid.  This bill would build on the former educational material requirements to direct the Department to post this information on their website so it is easily accessible to the public and public water systems.

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If you have any questions concerning the foregoing legislation, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

Our series highlighting recent activity by the NYS Legislature (introduced here) continues with a recap of bills passed in 2018 that relate to intellectual and developmental disabilities (I/DD). This synopsis follows previous summaries we have done concerning the pharmaceutical industry (here), hospitals (here), long term care and aging (here), and behavioral health (here).

In a session characterized by intermittent paralysis in the Senate, the Legislature was still able to come together on several key initiatives in the I/DD space. Many of these create additional burdens on the Executive (e.g., requiring the Executive to create identification cards for individuals with I/DD).  Others focus on curtailing Executive authority in the I/DD space (e.g., prohibiting any change of auspice in state-operated individualized residential alternatives or setting a statutory minimum for reinvestment of facility sale proceeds).  In particular, an increasing amount of legislative activity in the I/DD space focuses on the identification of and services for autism spectrum order.

The following bills in the I/DD space currently await action by the Governor:

Identification Cards (A249C by Assemblymember Santabarbara/S2565C by Senator Helming):  This bill would require the Commissioner of the Office for People with Developmental Disabilities (OPWDD) to develop an identification card denoting that a person has been medically diagnosed with a developmental disability, which can be presented to law enforcement, firefighters and medical services personnel as necessary.  The front of the card would have to indicate that it was issued by OPWDD and include the bearer’s name, address, date of birth, and a specific statement that the bearer has a developmental disability, may have difficulty following directions, and may become physically agitated.  The reverse of the card would have to include, at the bearer’s discretion, a contact name and phone number, and a space for inclusion of additional information.  OPWDD may charge a fee for the card.

Same Gender Transportation (A10708 by Assemblymember Gunther/S8592 by Senator Ortt):  Under a current law adopted in 1927, a female patient receiving services for mental disability who is being transported to or from a facility must be accompanied by another female, unless accompanied by her father, brother, husband or son.  This bill, which was introduced at the request of OPWDD, would amend that law to make it gender-neutral, make it permissive rather than mandatory, and provide that it is conditioned upon applicable staffing limitations and upon request.

Care Demonstration Program (A8990 by Assemblymember Gunther/S7291 by Senator Ortt):  This bill is an agreed-upon chapter amendment (see discussion of chapter amendments in our introductory post here) to Chapter 491 of the Laws of 2017, which was intended to codify OPWDD care demonstration programs originally developed and implemented in 2015, pursuant to which members of the state workforce provide community-based care to individuals with developmental disabilities.  The services provided by such programs include, but are not limited to, community habilitation, in-home respite, pathways to employment, supported employment, and community prevocational services.  The original bill requires OPWDD to monitor the quality and effectiveness of these programs, requires OPWDD to issue a report by December 31, 2020, and expires March 31, 2021.  This bill would eliminate the reporting requirement, make the selection of services provided by those programs permissive rather than mandatory, and change the expiration date to March 31, 2020.

Change of Auspice of State-Operated Individualized Residential Alternatives (A10442 by Assemblymember Gunther/S8200 by Senator Marcellino):  Current law imposes expansive notice requirements on any effort by OPWDD to close or transfer a state-operated individualized residential alternative (IRA), which is a type of community residence that provides room, board and individualized service options.  This bill would prohibit any change of auspice of any IRA currently operated by OPWDD, thus completely preventing OPWDD from outsourcing such IRAs to private entities.

Reinvestment of Sale Proceeds (A10951 by Assemblymember Lentol/S8633 by Senator Ortt):  This bill would require that 85% of the proceeds from the sale of any property that was previously used, operated or maintained by OPWDD be used exclusively to increase funding for state-operated residential or community-based services.

Study on Early Diagnosis and Long-Term Treatment of Autism (A261 by Assemblymember Abinanti/S3895 by Senator Parker):  This bill would require the Commissioner of OPWDD, the Commissioner of the State Education Department, the Commissioner of the Department of Health, the Commissioner of the Office of Children and Family Services, and the Commissioner of the Office of Mental Health to conduct a study to be performed on the future costs to the state for the early diagnosis and long-term treatment of autism spectrum disorder.  The report, along with legislative recommendations, is due to the Governor and the Legislature on or before April 1, 2021.

Autism Outreach to Minorities (A7976 by Assemblymember De La Rosa/S5534-A by Senator Hamilton):  This bill would require the Autism Spectrum Disorders Advisory Board established in 2016 to identify strategies and methods of improving coordination of services associated with autism spectrum disorders for minority group members, including but not limited to African American, Latino and Asian children.

Autism Screening for Children Aged 3 and Under (A9868A by Assemblymember Santabarbara/S8955 by Senator Ortt):  Current law requires the Commissioner of Health to establish best practice protocols for the early screening of children for autism screening disorder, which must incorporate standards and guidelines established by the American Academy of Pediatrics.  This bill would provide that those standards must include developmental screening for children aged 3 and under, and must be updated at least once every two years.

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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 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.

During a year in which legislative activity was restrained by a variety of factors, most notably the Senate’s inability to maintain a consistent majority, the New York State Legislature nonetheless still passed 641 bills, several of which would affect the pharmaceutical sector. While the Governor has until the end of the year to consider and act on these proposals, we wanted to provide a brief summary of this legislation as it currently stands.

Drug Take Back Act (S.9100 by Senator Hannon / A.9576-B Assemblywoman Gunther): This bill would establish a statewide pharmaceutical take back program that would be overseen by the Department of Health. Pharmaceutical manufacturers engaged in the manufacture of covered drugs sold in New York would be required to either individually or jointly develop, and fully fund all administrative and operational fees associated with this take back program.

Under this legislation, the definition of “covered drugs” includes substances recognized under 21 USC §321 (g) (1) that are sold or offered for sale in NYS, but does not include:

  •  drugs used in the clinical setting;
  •  biological drugs if the manufacturer already provides a take back program;
  •  drugs that are already part of a manufacturer FDA managed Risk Evaluation and Mitigation Strategy (REMS) program;
  •  emptied injector products or emptied medical devices and their component parts or accessories;
  • vitamins, supplements and herbal remedies;
  • cosmetics;
  • soaps and shampoos;
  • household cleaning products;
  • sunscreens;
  • personal care products;
  • pet pesticide products contained in collars, powders, shampoos or other topical applications.

Affected manufacturers would be required to submit a proposed drug take back plan to the Department of Health (DOH) for approval which specifies their intent to either:

  • operate a program individually or jointly with other manufacturers;
  • enter into an agreement with a take back organization to operate and implement a take back program; or
  • enter into an agreement with DOH to operate a program on its own behalf.

Manufacturers of covered drugs must submit their proposed plan to DOH within 180 days after the bill is signed into law. The proposed plan must:

  • ensure the program will take back all covered drugs, regardless of who produces them;
  • include contact information for the person charged with submitting and overseeing the manufacturer take back initiative;
  • detail how the program will provide convenient, geographically distributed, ongoing collection services to all individuals wishing to dispose of such items;
  • describe other collection efforts by which covered drugs are collected;
  • explain how covered drugs will be safely and securely tracked and handled during the collection, disposal and destruction process;
  • outline the public education and outreach activities, including advertising of locations on a website, signage, other written materials and how effectiveness will be evaluated;   
  • detail how the cost of pharmacy collection will be reimbursed, retroactive to the effective date of legislation, and if there is more than one manufacturer involved in the take back program, a plan for fair and reasonable allocation of costs that is reasonably related to the volume or value of covered drugs sold in NY.

The DOH, in consultation with the Department of Environmental Conservation, will review and determine if the manufacturer take back plan meets the program requirements within 60 days of receipt and will notify the manufacturer of their decision in writing.  If the plan is not approved, the manufacturer will have 30 days to submit a revised plan to DOH. If a subsequent plan is rejected by DOH, the manufacturer(s) will be out of compliance with take back statutory requirements and will be subject to enforcement provisions. The DOH will put a list on their website of all manufacturers that are participating in an approved drug take back program and will update this website annually.    

Moreover, affected manufacturers are required to update their drug take back program at least once every three years and to submit an updated proposal to DOH.  Any proposed change to the take back program must be submitted in writing and approved by DOH.

Additionally, a manufacturer who begins to offer a covered drug after the effective date of this bill, is required to notify the DOH they have joined an existing approved take back program or submit a proposal to operate a take back program within 90 days after the initial sale of the covered drug.

Each approved take back program is required to submit a report, at a date and in a manner set forth by DOH. The DOH is then required to submit an annual report to the Legislature which details:

  • all drug take back program activities;
  • the weight collected by each program;
  • a description of collection activities;
  • the name and location of all collection sites;
  • public education and outreach activities;
  • evaluation of efficacy of the program and each collection method; and
  • manufacturers that are out of compliance or subject to penalties.

This legislation would also require all pharmacy chains that operate 10 or more establishments and all registered non-resident pharmacies that provide covered drugs to state residents by mail, to offer one or more of the following take back options to consumers:

  • on-site collection,
  • drop box or receptacle;
  • mail back collection by voucher for a prepaid envelope; or
  • any other federal DEA approved collection methods.

Participation in the drug take back program by other authorized collectors is voluntary. All program costs incurred by pharmacies and other authorized collectors will be paid or reimbursed by the affected manufacturers, either jointly or individually.

Additionally, the Commissioner of Health will establish a drug take back distribution plan by regulation for cities with a population of 125,000 or more that ensures collection receptacle placement is accessible yet provides for program cost efficiency.

Lastly, this legislation preempts any county/municipal action on drug take back and includes language to clarify the jurisdiction of all matters relating to drug disposal is vested at the State level.   

Reclassification of Controlled Substances by Regulation (A.10468-B by Assemblymember Ryan / S.8275-B by Senator Jacobs): This bill would allow the Commissioner of Health to reclassify any drug (compound, mixture or preparation) containing any substance listed in Schedule I of §3306 of the Public Health Law as a Schedule II, III, IV, or V substance, or exempt it from the schedules entirely, by regulation or emergency regulation instead of through the enactment of legislation, as is currently required.  The Commissioner of DOH would only be able to reclassify or delete drugs that have been similarly reclassified or deleted under the federal Controlled Substances Act. The Commissioner would be permitted to reclassify drugs to the same numbered schedule or a higher numbered schedule. This bill seeks to increase treatment options for those seeking compassionate care, and corrects a long-standing barrier that sometimes resulted in inconsistencies between the federal and state schedules.

Medical Marihuana as Alternative Treatment for Pain and Substance Use Disorder (S8987-A by Senator Amedore / A. 11011-B by Assemblymember Gottfried (Rules): This legislation would help provide alternative treatment options for pain management and substance use disorder by including “pain that degrades health and functional capability where the use of medical marihuana is an alternative to opioid use” and “substance use disorder” to the list of qualifying conditions for patients to access medical marihuana.

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It is unclear when and how the Governor will act on these bills.  However, all of these issues have been the focus of increased attention and advocacy this year.  As discussed in our previous post, the Governor must consider and act upon these bills by the end of 2018.  The Governor may also negotiate any additional language or “chapter amendments” he believes may be necessary to fully implement such provisions.

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.