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

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

Mental Health and Substance Use Disorder Parity Report (A3694-C by Assemblymember Gunther / S1156-C by Senator Ortt):  This legislation would establish the Mental Health and Substance Use Disorder Parity Report Act, which, beginning September 1, 2019,  would require the Department of Financial Services (DFS) to include in the annual Consumer Guide to Health Insurers (here) information concerning insurers’ and health plans’ compliance with NYS and federal requirements for the provision of mental health and substance use disorder treatment.

Insurers and plans would be required to annually provide the DFS and Department of Health (DOH) all of the information necessary to prepare the report, including:

  • Rates of utilization review for mental health and substance use disorder (SUD) claims as compared to medical and surgical claims, including the rates of approval and denial, categorized by benefits provided by the following classifications: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs;
  • The number of prior or concurrent authorization requests for mental health and SUD services and the number of denials, compared with similar authorization requests for medical and surgical services, categorized by the same classifications noted above;
  • Rates of appeals, adverse determinations, adverse determinations upheld and overturned for mental health and SUD services, as well as such rates for medical and surgical claims;
  • The percentage of claims paid for in-network and out-of-network mental health and SUD services compared with in-network and out-of-network medical and surgical services;
  • The number of behavioral health advocates or staff that are available to assist policyholders with mental health and SUD benefits, pursuant to an agreement with the Attorney General’s office;
  • A comparison of cost sharing requirements, co-payments, co-insurance, and benefit limitations between mental health and SUD services and medical and surgical services;
  • The number and type of providers licensed in NYS that provide mental health and SUD services in-network and the number of providers that are out-of-network;
  • The percentage of providers of services for mental health and SUD who remained participating providers; and
  • Any other information DFS determines necessary to track mental health and SUD parity, including but not limited to an evaluation of: the company’s in-network mental health and SUD provider panels and reimbursement practices for in-network and out-of network services compared with those of medical and surgical services.

Discharge Planning for Individuals with Mental Health Disorder (A10644 by Assemblymember Gunther / S8769 by Senator Ortt):  This legislation would require the Office of Mental Health (OMH), in conjunction with DOH, to develop guidance and educational materials regarding effective discharge planning for individuals with a mental health disorder.  Information will be provided to hospitals across NY and would also be provided to individuals with a documented mental health disorder or those who appear be at risk for a mental health disorder during the discharge planning process.  This legislation was previously highlighted in our post on legislation affecting hospitals (here).

Maternal Depression Treatment (A8953 by Assemblymember Richardson / S7409 by Senator Krueger):  This legislation makes technical amendments to Chapter 463 of 2017 (S4000/A8398), which would have required DOH, in collaboration with the OMH, to compile and maintain a list of providers who treat maternal depression, and ensure adequate investment in treatment resources, including a statewide hotline, peer support, adequate referral networks and telehealth or telemedicine services.  This bill amends that law to instead require DOH, in consultation with OMH, to simply “inform providers of the need to raise awareness and work to address maternal depression,” and to provide information on their websites to assist people in locating mental health professionals, other licensed professionals, peer support, not-for-profit corporations and other community resources that treat or provide support for maternal depression.  The bill was signed by the Governor on June 1, 2018.

Mental Health and Home Care Collaboration (A10938 by Assemblymember Gunther / S8632 by Senator Ortt):  This legislation would allow the existing Geriatric Service Demonstration Program, which provides grants to providers of mental health care to the elderly (here) to foster and support collaboration between mental health providers and home care services, including certified home health agencies and licensed home care service agencies.  It is intended to help promote integrated physical and mental health care services in NYS communities for individuals with co-occurring physical and mental health needs.

Tick-Borne Disease Study (A9019-A by Assemblymember Gunther / S7171-A by Senator Serino):  This legislation would require DOH, in conjunction with OMH, to conduct a tick-borne diseases and blood-borne pathogen impact study to examine their impact on  mental illness rates in endemic areas of the state.  This report would be due by October 1, 2019 and would detail:

  • Considerations on how Lyme, tick-borne illnesses and other blood-borne pathogens or vector-borne diseases may have correlations with mental illness in infected individuals;
  • Populations at risk, including individuals that work outside or that have elevated exposure risks;
  • Diagnostic indicators of mental illness that can be used as guidance for health and mental health providers;
  • Historical considerations of infection rates and mental illness indicators that may have gone undiagnosed or misdiagnosed in endemic areas; and,
  • Recommendations for intervention and coordinated care for individuals who exhibit mental illness symptoms and also have physical health indicators.

Effects of Trauma on Child Development (A10063-B by Assemblymember Joyner / S8000-B by Senator Bailey):  This legislation would require the Commissioner of Education to conduct a study on the effects of trauma on child development and learning.  The study would include, but not be limited to, the following information:

  • The types of trauma experienced by students;
  • The impacts of trauma on child development and learning;
  • Screening and assessments of trauma available in schools;
  • Programs, interventions, and services related to trauma available in schools; and
  • Best practices for school personnel in the area of trauma as it relates to child development and learning.

The State Education Department (SED) would be required to submit its findings and recommendations to the Governor and NYS Legislature within one year.

Suicide Prevention Education (A3210-A by Assemblymember Ortiz / S5860-A by Senator Ritchie):  This legislation would require OMH, in consultation with SED, to develop and publish educational materials regarding suicide prevention measures and signs of depression among students in  NYS universities, community colleges, and city universities.  Such educational materials would include, but not be limited to:

  • Information regarding symptoms of depression;
  • How depression manifests itself in different cultures;
  • Warning signs of suicide;
  • Actions to take once a student is identified at risk of suicide; and
  • A list of educational websites regarding suicide and students attending university or college.

These educational materials would be available to faculty and staff in these educational institutions via the OMH website and by any other means OMH deems appropriate, within 90 days after it is signed into law.

Adolescent Suicide Prevention (A8961 by Assemblymember De La Rosa / S7322 by Senator Alcantara):  This legislation makes technical amendments to Chapter 436 of 2017 (S5500-C/ A7225-B), which would have established a nine-member Adolescent Suicide Prevention Advisory Council to facilitate the coordination of adolescent suicide prevention services.  As outlined in the Governor’s 2017 approval memo, the bill presented implementation challenges.  The current bill would repeal the prior bill and instead require OMH to assure the development of plans, programs, and services in the research and prevention of suicide, to reduce suicidal behavior and deaths through consultation, training, implementation of evidence-based practices, and use of suicide surveillance data.  OMH would develop such plans, programs, and services in cooperation with other agencies and departments in NYS, local governments, community organizations, entities, and individuals.  OMH would also consider the impact of differing demographic groups, gender, race and ethnicity, cultural and language needs.

Substance Use Education (A7470 by Assemblymebmer Davila / S8318 by Senator Comrie):   This legislation would require the Office of Alcoholism and Substance Abuse Services (OASAS), in consultation with SED, to develop educational materials to be provided to school districts and boards of cooperative educational services for use in any drug and alcohol related curriculum regarding the misuse and abuse of alcohol, tobacco, prescription medication and other drugs.  These materials would be age appropriate, and to the extent practicable, include information for parents to identify the warning signs and to address the risks of substance abuse.

Additionally, the bill would require the Superintendent of each school district, in consultation with the related district superintendent of a board of cooperative educational services, to designate a member of the school district’s staff or an employee to provide information to any student, parent, or staff regarding available substance use related services.  Where practicable, this individual should be a school social worker, school guidance counselor, or any other health practitioner or counselor employed by the school.  These designated individuals will be required to undergo any necessary training required by OASAS.  Information received by designated individuals would be kept confidential, however, nothing would relieve them of any legal duty to otherwise report such information.

Substance Abuse Disorder Referrals (A7689-A by Assemblymember Rosenthal / S6544-B by Senator Akshar):  This legislation would prohibit any SUD provider from intentionally soliciting, receiving, accepting or agreeing to receive payment, benefit, or any other consideration to induce the referral of a potential patient for SUD services.  This legislation does not prohibit:

  • Lawful payments by a health maintenance organization or health insurer acting on behalf of their enrollees for such SUD services or benefits to be provided;
  • Lawful payments to or by a provider to a health maintenance organization or health insurer as payment for services provided, a refund for an overpayment, a participating provider fee, or any similar remuneration;
  • Payment for an activity that, at the time of such activity, would have been lawful as specifically exempt, or otherwise not prohibited under any federal statute or regulations, including but not limited to 42 U.S.C. § 1320a-7b, or the regulations promulgated thereafter if conducted by a person, firm, partnership, group, practice, association, fiduciary, employer representative or any other entity providing SUD services;
  • Any employee or representative of a provider conducting marketing activities, where the employee or representative identifies the provider represented for whom the employee works, identifies themselves as a marketer and not a clinician or individual who can provide diagnostic, counseling or assessment services;
  • Commissions, fees or other remuneration lawfully paid to insurance agents as provided under the Insurance Law.

Providers who intentionally violate these provisions would be guilty of a misdemeanor as defined under the Penal Law.

OASAS Provider Directory (A8151 by Assemblymember Rosenthal / S8552 by Senator Golden):  This legislation would require OASAS to maintain a directory of all providers and programs operated, licensed, or certified on their website.  The searchable directory would include the following information:

  • Location(s) of each provider or program;
  • Contact information for each provider or program;
  • Services offered by each provider or program at each location of the provider or program, as well as which medications are available at any medication-assisted treatment provider;
  • Special populations served;
  • Insurance accepted;
  • Availability of beds and services; and
  • Any other information OASAS deems appropriate.

Medical Marihuana as Alternate Treatment for Substance Use Disorder (A11011B Rules, Assemblymember Gottfried / S8987-A by Senator Amedore):  As we previously reported in another blog post, 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.

Notice of Service Reductions at State-Operated Hospitals (A9563-A by Assemblymember Gunther / S7207 by Senator Ortt):  This legislation amends the notice requirements to local governments, community organizations and other interested parties regarding the potential for significant service reductions at state-operated hospitals.  The bill would require notice of closure or significant service reductions at state operated hospitals and state operated research institutes be a maximum length of twenty-four months prior to commencing such service reduction.  This legislation is intended to allow appropriate planning to take place and ensure a thoughtful transition plan is developed for all affected stakeholders.

Continuing Education for Psychologists (A9072-A by Assemblymember Fahy / S7398-A by Senator Valesky):  This legislation would require psychologists to obtain a minimum of 36 hours of mandatory continuing education, including 9 hours of professional ethics, every 3 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.

 

 

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.

*  *  *  *  *  *  *  *  * * *

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.

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.

Responding to the Opioid Crisis and More:  2018-19 NYS Behavioral Health Budget Highlights

Several provisions in the recently adopted 2018-19 New York State Budget (the “Enacted Budget”) are intended to address the ongoing opioid crisis.  As discussed in a prior post (here), some were focused on pharmaceutical manufacturers.  Some of the most significant provisions, however, relate to the behavioral health services available to patients, including both mental health and substance use disorder (SUD) services.  Other provisions will affect behavioral health services more generally. Key provisions are summarized below.

Substance Use Disorder and Mental Health Ombudsman.  The Enacted Budget establishes the Office of the Independent Substance Use Disorder and Mental Health Ombudsman, which will be operated or selected by the Office of Alcoholism and Substance Abuse Services (OASAS), in conjunction with the Office of Mental Health (OMH).  The Ombudsman will assist individuals with SUD and/or mental illness to ensure they receive appropriate health insurance coverage.  The Ombudsman will identify, investigate, refer and resolve complaints that are made by or on behalf of consumers and treatment providers regarding health insurance coverage and network adequacy for substance use disorder and mental health care services.  The Enacted Budget appropriated $1.5 million for this program.

Prohibit Prior Authorization for Outpatient Substance Abuse Treatment.  The Enacted Budget amends several provisions of the Insurance Law to prohibit prior authorization for outpatient, intensive outpatient, outpatient rehabilitation and opioid treatment provided by OASAS-certified facilities that are within the insurer’s provider network.  The coverage provided cannot be subject to concurrent review for the first two weeks of treatment if the facility notifies the insurer of the patient’s initial start date of treatment and the treatment plan within 48 hours.  The facility is also required to perform a patient clinical assessment at each visit and consult with the insurer to ensure the facility is using the appropriate evidence-based/peer reviewed clinical tool utilized by the insurer and designated by OASAS to ensure treatment is medically necessary.  Insurers may deny coverage for any portion of the initial two weeks of treatment if the treatment was deemed not medically necessary and contrary to the insurer-designated, OASAS-approved, evidence-based/peer reviewed tool.  If such coverage is denied by the insurer, the patient is liable for the copayment, coinsurance, or deductible required pursuant to the insurance contract.

Children and Recovering Mothers Program.  The Enacted Budget authorizes the Department of Health (DOH), in consultation with OASAS, to establish the Children and Recovering Mothers Program to provide health care providers, hospitals, and midwifery birth centers with guidance, education and assistance when providing care to expectant mothers with SUD.  The program will provide information to health care providers and expectant mothers on medication-assisted treatment, a referral list of SUD providers in the area, and information on other benefits and services they may be eligible for while expecting or after birth.  The program will develop a statewide system for rapid consultation and referral linkage services for obstetricians and primary care providers who treat expectant mothers.  Additionally, the DOH, in consultation with OASAS, will convene a workgroup of stakeholders, including hospitals, local health departments, obstetricians, midwives, pediatricians and substance use disorder providers, to study and evaluate the obstacles in identifying and treating expectant mothers, newborns and new parents with SUD.  The workgroup is required to submit a report of its findings to DOH, OASAS and the Legislature by April 2019.   The Enacted Budget appropriated $1 million for this initiative and $350,000 to establish an infant recovery pilot program to support up to four recovery centers in NYS.

Peer Recovery Advocate Services.  The Enacted Budget establishes the Certified Peer Recovery Advocate Services Program which builds upon the existing NYS Peer Recovery program.

The program provides patient-centered services that emphasize knowledge and wisdom obtained through life experience, where peers share their own personal journey with SUD to support the recovery goals of others.  The program standards, training and certification process will be developed and administered by OMH.  Certified peer recovery advocate services may include: developing recovery plans; raising awareness and linking participants to existing social and formal recovery support services; working with individuals to model coping skills and develop individual strengths; assisting individuals applying for benefits; attending medical appointments and court appearances; educating program individuals about the various modes of recovery; providing non-crisis support; and working with hospital emergency services, law enforcement departments, fire departments and other first responders to assist patients that have been administered an opioid antagonist establish connections to treatment and other support services.   

Opioid Stewardship Act.  As previously discussed, the Enacted Budget establishes an “Opioid Stewardship Fund” which imposes a “stewardship payment” (essentially a tax) on manufacturers and distributors that sell or distribute opioids in New York.  More detail can be found here.

Opioid Treatment Plans. The final budget includes language which prohibits prescribing opioids beyond three months, unless the patient’s medical record contains a written treatment plan that follows generally accepted national professional or governmental guidelines.  Exceptions are provided for patients being treated for cancer or palliative care.  More detail can be found here.

Social Work, Psychology and Mental Health Practitioners Scope of Practice.  The Enacted Budget includes provisions to clarify the activities and services that may be performed by licensed practitioners and those that do not require licensing.  These provisions eliminate the need to continue the licensure exemption which has been in place for persons employed by programs regulated or operated by OMH, OPWDD, OASAS, DOH, the State Office for Aging, the Office of Children and Family Services, the Office of Temporary and Disability Assistance, the Department of Corrections and Community Supervision, and local government or social services districts since 2002.

Behavioral Health/Primary Care Integration.  The Enacted Budget includes provisions building on the State’s prior efforts to integrate the licensure of behavioral health and primary care services. Prior state regulations established standards to determine how a facility offering integrated mental health, SUD and/or primary care services must be licensed.  Unfortunately, the ability to streamline such licensure was restricted in part by applicable statutes.  The Enacted Budget revises those statutes to clarify that primary care services providers licensed by Article 28 of the Public Health Law, mental health service providers licensed by Article 31 of the Mental Hygiene Law, and SUD providers licensed by Article 32 of the Mental Hygiene Law can each provide the other types of services so long as they are authorized to provide integrated services in accordance with DOH, OMH and OASAS regulations, without obtaining additional operating certificates.

Significant Appropriations

School Mental Health Resource and Training Center.  The Enacted Budget includes $1 million to create a Resource Center to help schools provide mental health education as part of their kindergarten through 12th grade curriculum, as required by Chapter 390 of 2016.

Children’s Mental Health.  The Enacted Budget includes $10 million for services and expenses of not-for-profit agencies licensed, certified or approved by OMH to support the preservation, restructuring or expansion of children’s behavioral health services.

Jail-Based SUD Treatment and Transition.  The enacted budget includes $3.75 million for jail-based SUD and transition services.  The Commissioner of Mental Health, in consultation with local government units, county sheriffs and other stakeholders, will implement a jail-based program that supports the initiation, operation and enhancement of SUD services for individuals incarcerated in county jails.

Mental Health Facilities Capital Improvement Fund.  The enacted budget includes $50 million for the acquisition of property, construction, and rehabilitation of new facilities, to develop   residential crisis programs.  Funds may be used for the renovation of existing community mental health facilities under the auspice of municipalities, and other public or not-for-profit agencies, as approved by the Commissioner of Mental Health.

OASAS Treatment Funding.  The enacted budget includes $30 million for the development, expansion, and operation of treatment, recovery, and/or prevention services for persons with heroin and opiate use and addiction disorders. This funding will be distributed by the Commissioner of Office of Substance Abuse Services, subject to the approval of the Budget Director.

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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 increases Assisted Living Beds in 2018-19 Enacted Budget

While much of the public attention this year on healthcare budget negotiations in New York State was drawn to the pharmaceutical and managed care sectors, the Enacted Budget for 2018-19 also includes some very significant reforms in the long term care space. Continuing its ongoing efforts to rationalize what even the most ardent supporters of New York’s long term care system acknowledge to be an unnecessarily complicated structure, provisions in the Enacted Budget related to Licensed Home Care Service Agencies, Assisted Living Programs, Residential Health Care Facilities and Hospice reflect New York State’s continued efforts to combat fragmentation, inconsistent quality of services and waste across the continuum of care. This year, that has yielded policy outcomes that to the untrained eye can appear inconsistent, or even contradictory – but there is a method to the madness. The following is a list of some the key long term care reforms included in the 2018-19 Enacted Budget.

HOME CARE

Licensed Home Care Services Agencies (LHCSAs) appear to be on the frontline of the battle for consolidation of the community based long term care marketplace in New York. The 2018-19 Enacted Budget clearly articulates a policy in favor of encouraging fewer, larger LHCSAs instead of the current, heavily fragmented LHCSA market, via measures such as:

Limitations on MLTCP Contracting

Beginning October 1, 2018, the Commissioner of Health may limit the number of LHCSAs with which a Managed Long Term Care Plan (MLTCP) may contract, according to a formula tied to (1) MLTCP region, (2) number of MLTCP enrollees,  and (3) timing (the number changes on October 1, 2019).  Exceptions are allowed if necessary to (a) maintain network adequacy, (b) maintain access to special needs services, (c) maintain access to culturally competent services, (d) avoid disruption in services, or (e) accede to an enrollee’s request to continue to receive services from a particular LHCSA employee or employees for no longer than three months.

For more about MLTCPs, look for our upcoming blog analysis of the overall Managed Care provisions in the 2018-19 Enacted Budget.

Moratorium on New LHCSAs

Effective April 1, 2018, there is a new statutory moratorium on the awarding of new LHCSA licenses until March 31, 2020.  This will not apply to:  (i) LHCSA applications submitted as part of an Assisted Living Program application; (ii) application for transfers of LHCSAs licensed for at least five years for the purposes of consolidating one or more LHCSAs; or (iii) applications that address a serious concern reflecting the same considerations that would justify an exception to the new MLTCP contract rule.

Expanded Certificate of Need for LHCSAs

The Public Health and Health Planning Council (PHHPC) must now consider public need, financial feasibility and other factors in addition to character and competence when evaluating a LHCSA application (previously, LHCSAs were technically exempt from those considerations).

Registration Requirements for Existing LHCSAs

Existing LHCSAs must register with the Department of Health, and presumably meet those new CON requirements, by January 1, 2019, and any failing to register for two years may have their licenses revoked.

The question remains whether these regulations will produce the desired effect, i.e., a consolidation of the LHCSA marketplace, and whether that consolidation will occur through large providers formally acquiring smaller providers, or the gradual disappearance of smaller providers altogether as they struggle to maintain market share.

Cost Reporting Requirements for Existing LHCSAs

Under the new provision, the Commissioner is authorized to require LHCSAs to report on costs incurred by the LHCSA in rendering health care services to Medicaid beneficiaries. The commissioner must give the LHCSA 90 days’ notice of the need for the report, and an additional 30 days to correct any perceived inaccuracies. LHCSAs must certify the accuracy and completeness of the reports.

ASSISTED LIVING PROGRAMS

Assisted Living Programs (“ALP”) appear to be the biggest winner among long term care providers in the Enacted Budget. In contrast to the state’s efforts to consolidate and centralize the LHCSA providers, the Enacted Budget authorizes a general expansion of existing ALP providers and encourages the establishment of new beds. Key provisions include:

New ALP Beds at Existing ALP Providers

Each existing ALP provider may apply to DOH for approval of up to nine additional ALP beds. To be eligible, the existing ALP provider must: (a) be in good standing with the DOH; (b) be in compliance with applicable state and local requirements; (c) not require any major renovation or construction to accommodate the new beds; and (d) agree to dedicate new beds to serve only individuals receiving Medicaid.

The number of new ALP beds approved under this program will be based on the total number of previously awarded beds either withdrawn by applicants or which were previously denied. The commissioner is obligated to approve applications under this section on an expedited basis – specifically, within 90 days of the receipt of a satisfactory application.

ALP providers licensed on or before April 1, 2018 will be eligible to apply during a time period to begin no later than June 30, 2018 and ALP providers licensed on or after April 1, 2018 will be eligible to apply during a time period to begin no later than June 30, 2020.

New ALP Beds in Counties with Few ALP Providers or High Utilization

The Commissioner of Health is authorized to create up to 500 new ALP beds in counties where there are one or fewer existing ALP Providers based on criteria to be determined by the Commissioner. The Commissioner is also authorized to solicit and award applications for an additional 500 ALP beds in counties where utilization of existing ALP beds exceeds 85%. To be eligible, the applicant must commit to: (a) dedicate the beds to serve only individuals receiving medical assistance; (b) develop and execute collaborative agreements with at least one of each of the following entities: an adult care facility; a residential health care facility; or a general hospital, within 24 months of applying to DOH; and (c) enter into an agreement with an existing managed care entity. ALP beds sought by, but not awarded to, providers in counties with one or fewer ALP providers may be issued to ALP providers in counties where utilization exceeds 85%.

New ALP Beds Based On Public Need

After April 1, 2023, the Commissioner of Health is authorized to approve additional new beds on a case by case basis wherever a public need exists. In determining whether a public need exists, the Commissioner may consider, but is not limited to, regional occupancy rates for adult care facilities and ALP occupancy rates and the extent to which the project will serve individuals receiving Medicaid. Existing ALP Providers will be eligible for up to 9 additional beds under this provision.

ALP for Individuals with Alzheimer’s or Dementia

The Commissioner is authorized to issue up to two hundred vouchers for Medicaid ineligible people living with Alzheimer’s or dementia covering up to 75% of the cost of ALP based on the average private pay rate in the respective region.

RESIDENTIAL HEALTH CARE FACILITIES

The Enacted Budget includes a mix of quality control and increased support measures directed at Residential Health Care Facilities (RHCFs):

Medicaid Reduction for Underperforming Facilities

The Enacted Budget includes a provision directing the Commissioner to reduce Medicaid revenue to any RHCF in a given payment year by 2%, where that RHCF performed in the lowest two quintiles of facilities based on its nursing home quality initiative data in each of the two most recent payment years for which data is available, and was ranked in the lowest quintile in the most recent payment year. The Commissioner has the authority to waive this provision in the event the Commissioner deems the facility to be in “financial distress”.

Funding For Capital Projects

As discussed in greater detail in our earlier post regarding the Statewide Health Care Facility Transformation Program (SHCFTP), $45 million is dedicated to RHCFs to increase the quality of resident care or experience, or to improve their health information technology infrastructure, including telehealth, to strengthen the acute, post-acute and long-term care continuum, but not for general operating expenses.

Telehealth

The Enacted Budget also expands the definition of an “originating site” for purposes of telehealth to include RHCFs treating populations with special needs.

HOSPICE

The Enacted Budget requires the Commissioner to establish a methodology as of July 1, 2018, subject to federal financial participation, that will ensure a 10% increase in the Medicaid reimbursement rates for hospice providers for services provided on or after April 1, 2018. Furthermore, the Enacted budget carves hospice providers out of the Opioid Drug provisions requiring a care plan for pain lasting more than three months (discussed here).

Hospice facilities shall be eligible for up to $60 million in funding dedicated to community-based providers through SHCFTP (discussed here).

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

Pharmaceutical provisions in the 2018-2019 Enacted New York State Budget

Notwithstanding the enactment of a first-in-the-nation drug spending cap last year, in light of the $4.4 billion deficit and ongoing concerns about the opioid crisis it was inevitable that this year New York State would once again seek to enact substantial reforms impacting the pharmaceutical industry. The recently adopted 2018-19 New York State (“NYS”) Budget included several provisions that relate to access to pharmaceutical treatments, insurance coverage, cost sharing, and reimbursement. Below please find an overview of these key provisions.

Medicaid Drug Spending Cap.  The final budget extends the Medicaid drug cap enacted last year through the 2019-20 fiscal year, at the same amount as the 2018-19 fiscal year (CPI + 4%, less an $85 million savings target). The provisions clarify that the Medicaid drug expenditure growth target shall be calculated and projected on a cash basis and requires the Department of Health (DOH) and Division of Budget to report quarterly to the Drug Utilization Review Board (DURB) the projected (state funds) Medicaid drug expenditures. These reports shall include the aggregate amounts attributable to the net cost of changes in utilization, changes in the number of Medicaid recipients, and changes in the cost of brand and generic drugs. This information cannot be publically released in a manner that will allow for identification of individual drugs or manufacturers. DOH will also be required to provide an annual report (by February 1) to the DURB which details how savings were achieved, calculated and implemented in the last year. Additionally, language was included to clarify the authority the DOH has to require prior approval of drugs and to remove such drugs from managed care formularies when they have not reached a supplemental agreement with a manufacturer.

Opioid Stewardship Act. The final budget establishes an “Opioid Stewardship Fund” which imposes a “stewardship payment” (essentially a tax) on manufacturers and distributors that sell or distribute opioids in New York. The total opioid stewardship payment is $100 million annually, and each manufacturer and distributor that sells or distributes opioids in New York will pay a portion of the total opioid payment amount based on that manufacturer’s or distributor’s ratable share. The ratable share will be calculated based on the total milligram of morphine equivalents (MMEs) sold or distributed during the preceding year, as reported by the manufacturer and distributor, and shall be divided by the total amount of MMEs sold in New York by all manufacturers and distributors. The payment percentage will be multiplied by the total opioid stewardship payment to determine the ratable share. The calculation of total MME’s shall not include opioids sold or distributed to entities certified to operate as hospices and chemical dependence services. Opioid stewardship funds will be used to support programs operated by OASAS for opioid treatment, recovery, prevention, education and the I-STOP program, pursuant to approval of NYS Budget Director. 

Opioid Treatment Plans. The final budget includes language which prohibits prescribing opioids beyond three months, unless the patient’s medical record contains a written treatment plan that follows generally accepted national professional or governmental guidelines. Exceptions are provided for patients being treated for cancer or palliative care.

Direct Negotiations for Supplemental Rebates in Medicaid Managed Care. The enacted budget extends authority through March 31, 2020 to allow DOH to negotiate directly with drug manufacturers to obtain supplemental rebates for pharmaceutical utilization of anti-retrovirals and Hepatitis C treatments for Medicaid managed care recipients. The manufacturer is not required to pay supplemental rebates to a managed care provider, or any of a managed care provider’s agents when NYS is collecting such supplemental rebates. This statute was originally enacted in 2015.

Rebates for Generics.  The final budget agreement extends DOH authority through March 31, 2020 to require additional rebates/penalties for drugs that have a state maximum acquisition cost (SMAC) of more than 75% over a one year period under the Medicaid program. This statute was first enacted in 2016.

Pharmacy Benefit Manager Clawbacks and Pharmacy Gag Prohibition. The final budget includes language to prohibit pharmacy benefit managers (PBMs) and their contracting agents from penalizing a pharmacist or a pharmacy from disclosing pricing information, the availability of therapeutic equivalents, and alternative payment methods that may be less expensive for patients. PBMs are further prohibited from imposing a co-payment that exceeds the total cost of the drug. Moreover, if an individual pays a co-payment, the pharmacy is entitled to retain the adjudicated costs and the PBM is prohibited from recouping the additional funds.

Pharmacy Dispensing Fees.  The final budget increases the professional pharmacy dispensing fee from $10.00 to $10.08 per prescription.

Prescriber Prevails.  The final budget agreement continues prescriber prevails consumer protections in both Medicaid fee-for-service and Medicaid managed care. Under current law, a prescriber’s determination can prevail over prior authorization limitations for any drug in fee-for-services, and for eight protected classes of drugs in managed care.

 

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.