Physicians and Other Licensed Professionals

 

The Broadest Impact:  2018-19 NYS Managed Care Budget Highlights

This, the last of our posts on the 2018-19 New York State Health Budget (the “Enacted Budget”), focuses on an area of healthcare that has perhaps the broadest impact of the sector as a whole — managed care.  A prior post in the series (here) discussed the central role that hospitals have traditionally played in healthcare reform efforts, but even they have less influence (at least, as a matter of policy) than managed care, which controls the funding that fuels virtually every other part of the healthcare system.  For purposes of this article, “managed care” really means Medicaid managed care in all its various guises, since that is the funding most directly controlled by the State – while the various forms of Medicare managed care (Medicare Advantage, Medicare Part D, etc.) and commercial managed care are important, and even critical, to the healthcare system in New York, they are generally not a focus of State budgeting (at least directly).  So this post will focus on the various forms of Medicaid managed care, including managed long term care (MLTC) that provide long term care services, fiscal intermediaries for consumer-directed consumer assistance, mainstream managed care plans that provide acute and primary care services, health homes that coordinate care for people with chronic illnesses, and others.  Note that one species of Medicaid managed care, Development Disabilities Individual Support and Care Coordination Organizations, are not addressed in this post, but were addressed in a prior one (here).

Just a quick word before examining the key provisions impacting managed care:  this series has not pretended to be a comprehensive analysis of all the healthcare provisions in the 2018-19 New York State Health Budget.  It has merely provided a survey of the highlights of certain key areas in the healthcare space.  Inevitably, some areas have not been directly addressed; particular ones that come to mind include primary care, professional practice, life science research and others.  In part, this was due to the lack of significant reforms in those areas; however, it was also true that the sectors we did address often included references to those other sectors.  Nowhere is this truer than in regard to managed care, which, as noted, touches on every other area of healthcare.  Key provisions in the managed care space are summarized below.

Managed Long Term Care & Fiscal Intermediaries

Managed Long Term Care (MLTC) Eligibility.  Since 2012, adults have been eligible for MLTC enrollment if they require community-based care for more than 120 days.  The Enacted Budget provides that, effective April 1, such individuals are only eligible if that 120 days is a continuous, not aggregate, period.

Changing MLTC Plans.  Effective October 1, 2018, the Enacted Budget allows MLTC enrollees to switch plans without cause anytime within 90 days of notification or the effective date of enrollment (whichever is later), but thereafter, the Department of Health (DOH) is authorized to prohibit changing plans more than once every 12 months, except for good cause.  “Good cause” includes poor quality of care, lack of access to covered services, and lack of access to providers “experienced in dealing with the enrollee’s care needs,” and may include other categories identified by the Commissioner of Health.

Nursing Home Resident Eligibility.  Effective April 1, 2018, the Enacted Budget provides that individuals who are permanently placed in a nursing home for a consecutive period of three months or more will not be eligible for MLTC, but instead will receive services on a fee-for-service basis.  In a side letter, DOH has promised to provide guidance highlighting information about an individual’s rights as a nursing home resident, nursing home and MLTC plan responsibilities, and supports for individuals who wish to return to the community.

Plan Mergers.  Effective April 1, 2018, surviving plans in a plan merger, acquisition or similar arrangement must submit a report to DOH within 12 months providing information about the enrollees transferred, a summary of which DOH will make available to the public.

Licensed Home Care Services Agency (LHCSA) Contracting.  As discussed in a prior post (here), beginning October 1, 2018, the Commissioner of Health may limit the number of LHCSAs with which an MLTC plan may contract, according to a formula tied to region, number of enrollees and timing (before or after October 1, 2019), with some exceptions.  In a side letter, DOH has indicated that it will issue guidance to assist both MLTC programs and LHCSAs in minimizing the disruption of care for Medicaid members and the impacted workforce from this initiative.

Fiscal Intermediary Advertising.  The Enacted Budget includes provisions that limit the advertising practices of fiscal intermediaries under the Consumer Directed Personal Assistance Program (CDPAP).  CDPAP provides chronically ill and/or physically disabled Medicaid enrollees receiving home care services with more flexibility and freedom of choice to obtain such services.  Fiscal intermediaries help consumers facilitate their role as employers 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 (in this regard, they are not truly managed care, although there are some similarities).  The Enacted Budget prohibits false or misleading advertisements by fiscal intermediaries.  Furthermore, fiscal intermediaries are now required to submit proposed advertisements to DOH for review prior to distribution, and are not permitted to disseminate advisements without DOH approval.  The DOH is required to render its decision on proposed advertisements within 30 days.  In the event DOH has determined the fiscal intermediary has disseminated a false or misleading advertisement, or if an advertisement has been distributed without DOH approval, the fiscal intermediary has 30 days to discontinue use and/or remove such advertisement.  If DOH determines a fiscal intermediary has distributed two or more advertisements that are false or misleading or not previously approved by DOH, the entity will be prohibited from providing fiscal intermediary services and its authorization will be revoked, suspended or limited.  Additionally, DOH will maintain a list of these entities and will make this list available to local departments of social service, health maintenance organizations, accountable care organizations and performing provider systems.  These limitations apply to marketing contracts entered into after April 1, 2018.

Fiscal Intermediary Reporting.  The Enacted Budget allows the Commissioner of Health to require fiscal intermediaries to provide additional information regarding the direct care and administrative costs of personal assistance services.  DOH may determine the type and amount of information that will be required, as well as the regularity and design of the reports.  These cost reports must be certified by the owner, administrator, chief administrative officer or public official responsible for the operation of the provider.  The DOH must provide at least 90 days’ notice of this report deadline.  If DOH determines the cost report is not complete or inaccurate, it must notify the provider in writing and specify the correction needed or information required.  The provider will have 30 days to respond to DOH’s request for supplementary information.  In the event a provider cannot meet this filing deadline, DOH may provide an additional 30 day extension if the provider sends written notice prior to the report due date which details acceptable reasons beyond their control which justify their failure to meet the filing deadline.

Mainstream Managed Care and Health Homes

Quarterly Meetings on Medicaid Managed Care Rates.  In a side letter, the Executive has committed to providing quarterly updates to the Legislature regarding Medicaid managed care rates, including the actuarial memorandum which, pursuant to statute, is provided to managed care organizations 30 days in advance of submission to the federal Centers for Medicare and Medicaid Services (CMS).  This is intended to increase the transparency of Medicaid managed care rates.

Separate Rate Cells or Risk Adjustments for Specific Populations.  In a side letter, DOH has committed to exploring separate rate cells or risk adjustments for the nursing home, high cost/high need home and personal care, and Health and Recovery Plan (HARP) populations.  DOH will re-engage CMS regarding this reimbursement methodology with the assistance of health care industry stakeholders impacted by these changes (e.g. advocates, providers and managed care organizations).  This will hopefully lead to a fairer rate structure for plans serving higher-risk patients.

Health Homes Targets.  The Enacted Budget requires the Commissioner of Health to establish reasonable targets for health home participation by enrollees of special needs plans and other high risk enrollees of managed care plans to encourage plans and health homes to work collaboratively to achieve such targets.  The DOH was also empowered to assess penalties for failure to meet such participation targets where they believe such failure is due to absence of good faith and reasonable efforts.

Health Home Criminal History Checks.  The Enacted Budget requires criminal history checks for employees and subcontractors of health homes and any entity that provides community-based services to individuals with developmental disabilities or to individuals under 21 years old.

Health Home Reporting.  Similar to fiscal intermediaries (above) and LHCSAs (here), the Enacted Budget allows the Commissioner of Health to require health homes to report on the costs incurred to deliver health care services to Medicaid beneficiaries.

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So that concludes our series on the 2018-19 New York State Healthcare Budget.  If you have any questions or would like additional information on any of the above referenced issues, or any of the other items covered (or not covered) in the series, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

 

 

 

A Renewed Focus: 2018-19 NYS Intellectual and Developmental Disabilities Budget Highlights

Since the beginning of the administration of Governor Andrew Cuomo, there has been a strong emphasis on reform of the acute, primary, and long term care systems, and, particularly with the recent focus on the opioid crisis, that attention has extended to the behavioral care system, as well.  In contrast, reforms in the developmental disabilities system have been slower in coming, attributable to a variety of factors, including historical issues surrounding service mix and reimbursement, and legitimate concerns about client safety and quality of life. In some ways, the developmental disabilities provisions in the 2018-19 Enacted Budget represent a return of focus on the developmental disabilities sector, with several provisions concentrating on how larger reform efforts – including the movement toward managed care, health homes, and telehealth – intersect with the developmental disabilities community. Highlights of key provisions follow.

Managed Care. The Enacted Budget includes language updating existing provisions related to the movement of developmental disabilities clients and services into managed care. First, it expands the list of individuals who may be required to enroll in managed care and revises provisions regarding eligibility to include individuals with developmental or physical disabilities who receive services via a federal 1115 waiver, and authorizes the Commissioner of Health, in consultation with the Commissioner of Developmental Disabilities, to submit an application for such waiver. The Enacted Budget also extends authority of the Office for People with Developmental Disabilities (OPWDD) to require enrollment in managed care from 2019 to 2023, and makes technical corrections to that authority. The OPWDD Commissioner will also assess the quality, outcomes, experience and satisfaction of managed care for individuals with developmental disabilities, and report to the Legislature by December 31, 2022.

Health Homes. The Enacted Budget amends the Public Health Law to require criminal history checks for employees and subcontractors of health homes and any entity that provides community based services to individuals with developmental disabilities or to individuals under 21 years old.

Telehealth. The Enacted Budget amends the Public Health Law to allow the use of telehealth by certified and non-certified day or residential health care facilities operated by OPWDD, residential health care facilities serving special needs populations, credentialed alcoholism and substance abuse counselors, and early intervention providers. Further, the Commissioner of the Department of Health, in consultation with the Commissioners of Office of Mental Health, OPWDD and the Office of Alcoholism and Substance Abuse Services may identify other providers that should be permitted to provide telehealth services. Additionally, DOH, OMH, OPWDD and OASAS will coordinate on a single guidance document that will identify the discrepancies in regulations and policies by state agencies, and assist consumers, providers and health plans to better understand and facilitate the use of telehealth to address barriers to care.

First Responder Training. The Enacted Budget agreement includes language to require the Commissioner of Mental Health, in consultation with the Department of Health, Office of Fire Prevention and Control, Municipal Police Training Council, and the Superintendent of the State Police, to develop a training program and educational materials to provide instruction and information to firefighters, police officers, and emergency medical personnel on appropriate recognition and techniques for handling emergency situations involving individuals with autism spectrum disorder and other developmental disabilities.

Care at Home Waivers. The Enacted Budget extends the Care at Home I and II waivers until March 31, 2023. These waivers provide community-based services to physically disabled children who require hospital or skilled nursing home level of care.

Extension of OMH Inpatient Psychiatry Demonstration. The Enacted Budget extends this demonstration program, which allows for three or more time-limited demonstration programs to test and evaluate new methods or arrangements for organizing, financing, staffing and providing services for individuals with intellectual or developmental disabilities, through March 31, 2021.

Independent Practitioner Services. The Enacted Budget amends Section 367-a of the Social Services Law to include independent practitioner services for individuals with developmental disabilities as covered services for insurance reimbursement.

Residents Use of Funds for Care and Treatment. The Enacted Budget extends Chapter 111 of the Laws of 2010 and Chapter 58 of the Laws of 2015 to extend the authority of state facility directors that act as federally appointed representative payees to use funds for the cost of a resident’s care and treatment in facilities through June 30, 2018.

For 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.

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.

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.

As we’ve discussed in previous blog posts, marijuana, whether used for medicinal or recreational purposes, is classified as a Schedule 1 drug under the Controlled Substances Act (CSA). The CSA prohibits the manufacturing, distributing, dispensing or possession of certain controlled substances, including marijuana and marijuana-based products and services. In addition, the CSA makes it unlawful to sell, offer for sale or use any facility of interstate commerce to transport illegal substances, including marijuana.

In August 2017, U.S. Senator Cory Booker (D-NJ) and Representative Barbara Lee (D-CA) introduced bills to both chambers of Congress – the Marijuana Justice Act of 2017 – that seek to remove marijuana completely from the list of controlled substances, making it legal at the federal level.

Last year U.S. Senator Ron Wyden (D-CA) was the first senator to co-sponsor the Marijuana Justice Act. On Wednesday, February 14, 2018, New York Senator Kirsten Gillibrand announced that she is also co-sponsoring the Marijuana Justice Act to end the federal prohibition on marijuana.

“Legalizing marijuana is a social justice issue and a moral issue that Congress needs to address, and I’m proud to work with Sen. Booker on this legislation to help fix decades of injustice caused by our nation’s failed drug policies,” Gillibrand said in a statement.

The Marijuana Justice Act aims to implement a number of reforms relating to marijuana. The most significant reform would be the removal of marijuana from the list of controlled substances in the CSA. Such a reform would effectively end the federal criminalization of marijuana.

Other reforms proposed by the Marijuana Justice Act include: (1) providing incentives to states to reduce racial disparities in connection with arrests made for marijuana; (2) expunging federal convictions relating to marijuana possession; (3) allowing individuals serving time in federal prison for marijuana-related offenses to petition the court for resentencing; and (4) developing a community reinvestment fund to invest in communities most impacted by the failed War on Drugs, such as by providing in-job training programs, educational opportunities, public libraries and community centers.

There is growing support for removal of marijuana as a Schedule I drug under the CSA, especially as courts have recently held that only the Drug Enforcement Agency (“DEA”) can make such a change.

Most recently, on February 26, 2018, U.S. District Judge Alvin Hellerstein in Manhattan ruled dismissed a lawsuit seeking to overturn the United States’ prohibition of marijuana on the grounds that the ban was unconstitutional. Judge Hellerstein ruled that the lawsuit must be dismissed because the plaintiffs had failed to use administrative procedures within the DEA to challenge the ban. Judge Hellerstein said his decision “should not be understood as a factual finding that marijuana lacks any medical use in the United States,” but, rather, that the authority to make that decision lies with the DEA, not with the court.

As of now the Marijuana Justice Act has not seen much movement in Congress. Since its introduction it has been read twice and then referred to the Committee on the Judiciary. It will be interesting to see if additional senators act to support the Marijuana Justice Act as the debate over the decriminalization of marijuana continues.

Spurred in large part by the changing landscape of medicine, more and more medical professionals are seeking to become a part of something bigger. Often, they are under the misassumption that they can set up and run their practice like any other business – until New York State’s strong prohibition of the corporate practice of medicine comes knocking on their door.

 

According to a 1998 report from a meeting of the New York State Board of Regents, “[p]rofessional services can be offered only by a licensed person or an organization otherwise authorized by law.” Under New York State law, this means that professional services can only be offered within a professional service corporation (“PC”) or a professional limited liability company (“PLLC”). Article 15 of the New York Business Corporation Law permits the formation of a professional service corporation only if all shareholders (1) are licensees of one profession (Section 1503) and (2) practice only such profession (Section 1506). The prohibition of the corporate practice of medicine extends beyond medical doctors to include an array of licensed professionals, such as dentists, dental hygienists, optometrists, chiropractors, podiatrists, pharmacy, nursing, ophthalmic dispensing, speech-language pathology, audiology, respiratory therapy (and technology), occupational therapists (and assistants) and physical therapists (and assistants).

One area that is a common pitfall for professionals is the sharing of profits or “fee-splitting.” The prohibition of the corporate practice of medicine, codified in 8 CRR-NY 29.1, prevents professionals from directly or indirectly sharing profits or splitting fees with non-licensed professionals.   Most often this comes up in an arrangement where the PC or PLLC employs a management services organization to run its company in exchange for a percentage of revenue.[1] Such an arrangement runs afoul of the prohibition and, in order to comply, all services that the PC or PLLC receives should be paid at fair market value.

 

A violation of the prohibition on the corporate practice of medicine can result in prosecution, fines and penalties. As articulated by Eric T. Schneiderman, Attorney General of the State of New York, in In the Matter of Aspen Dental Management, Inc. (Assurance No: 15-103), the theory underlying the prohibition is that “medical and dental decisions should be made by licensed providers using their best clinical judgment, and should not be influenced by management companies’ shared interest in potential profits.” In Aspen Dental, the management organization – which was not a professional organization – was required to restructure so that it no longer received percentage of gross profit, no longer employed clinical staff, and no longer had discretion over how the individual offices were run. Moreover, Aspen Dental was required to pay a $450,000 civil penalty and pay an independent monitor to oversee the implementation of the settlement for three years.

 

 

It remains to be seen what, if any, changes are made to the prohibition on the corporate practice of medicine in New York as the world shifts to value based reimbursement; however, for the time being professionals should remain cautious, not only when structuring their corporate entities but also when engaging with outside service providers.

 

[1] Note also that for some providers, fee splitting may result in STARK and anti-kickback violations, among others.

It’s flu season again. Your PCP at WPMG is thinking of you!

So began the health care provider’s text message that prompted this month’s Second Circuit decision applying the Telephone Consumer Protection Act to a flu shot reminder, Latner v. Mount Sinai Health System, Inc.

Plaintiff had gone to defendant West Park Medical Group (WPMG) in 2003 for a routine health examination. While there, he provided contact information including his cell phone number, and signed, among other forms, a notification record that consented to defendants using his health information “for payment, treatment and hospital operations purposes.”

In 2011, defendants hired a third party to send mass messages, including flu shot reminder texts for WPMG. In 2014, plaintiff received the text message above, which also stated: Please call us at 212-247-8100 to schedule an appointment for a flu shot. Defendants had sent flu shot reminder texts to all active patients of WPMG who had visited the office within the prior three years. Plaintiff had visited the office in 2011, declining immunizations.

Plaintiff alleged a violation of the Telephone Consumer Protection Act (TCPA), which makes it unlawful to send texts or place calls to cell phones through automated telephone dialing systems, unless the recipient consents or an exemption applies.

The Second Circuit engaged in a two-step process to decide that the defendants did not violate the TCPA. First, the Court held that the flu shot reminder text message was within the scope of an FCC Telemarketing Rule providing that written consent was not needed for text messages that deliver a health care message made by, or on behalf of, a HIPAA covered agency.

The Court next determined that, although the FCC Telemarketing Rule exempts written consent, text messages within the healthcare exception are still covered by the TCPA’s general consent requirement. The Court held, however, that plaintiff had given his prior express consent by providing his cell phone number, acknowledging receipt of privacy notices, and agreeing that defendants could share his information for treatment purposes and to recommend possible treatment alternatives or health-related benefits and services.

The lesson of this case: the pile of forms you sign on the clipboard in the waiting room may lead to texted health care messages down the road.

As we previously discussed in Medical Marijuana 103: Patient and Practitioner Regulations in New York State, practitioners in New York must be registered with the New York State Department of Health (“DOH”) in order to certify patients for medical marijuana use. The DOH maintains a list of registered practitioners on its website, however such list is woefully incomplete. As of the date of this writing there are over 1,360 providers statewide that are registered to certify patients for medical marijuana, but only 32 percent are included on the public list maintained by the DOH.

On Wednesday, November 28, 2017, Governor Andrew Cuomo signed a bill which requires the the DOH to list on its website all practitioners who are certified to recommend medical marijuana to patients.

Sen. Diane Savino (D-Staten Island), the primary sponsor of the bill, stated that one of the biggest complaints from patients in the medical marijuana program was finding a registered doctor.

“People complained that it was difficult to find a doctor near them so they could  be certified as a patient. Because the Department of Health kept the list proprietary, it made it that much harder for patients,” said Senator Savino.

A vote on the bill was held in June 2017, with 62 senators voting in favor of the bill and only 1 senator opposing it. The bill requires that the name, contact information, and other information relating to practitioners registered with the DOH to certify patients for medical marijuana be public information and that the information be maintained on the DOH’s website in searchable form. There is an exception, however – practitioners may still opt-out if they do not wish for their information to be public by informing the DOH in writing. The new requirements will be implemented sixty (60) days after the bill was signed into law by Governor Cuomo.

Sen. Savino was also the main proponent of the bill signed on November 11, 2017 by the Governor which adds post traumatic stress disorder to the list of qualifying conditions treatable with medical marijuana in New York State. The date on which the bill was signed into law is no coincidence, as veterans groups in particular had urged Governor Cuomo to allow those with PTSD to use medical marijuana. According to the Department of Veterans Affairs, about eight million adults suffer from PTSD in any given year, including tens of thousands of Afghanistan and Iraq veterans. Somewhere between 11% and 20% of those vets will suffer from it each year.

The New York State Department of Labor (the “DOL”) issued an emergency regulation clarifying its minimum-wage rules regarding home care employees. The emergency regulation provides that sleep and meal times for home care aides who work shifts of 24 hours or more are not counted as hours worked. Recently, there has been a ringing dissonance between the DOL and decisions set forth by the New York State Appellate Divisions, First and Second Departments, regarding whether home care workers should be paid for an entire 24-hour shift, including sleep and meal time. In fact, the DOL expressly cited the fact that the emergency regulation is being promulgated in direct reaction to decisions issued by the New York State Appellate Divisions. For reference, the decisions triggering the emergency regulation are: Moreno v. Future Care Health Servs., Inc., 2017 N.Y. App. Div. LEXIS 6462 (2d Dept Sept. 13, 2017); (2d Dep’t Sept. 13, 2017); Andreyeyeva v. New York Health Care, Inc., 2017 N.Y. App. Div. LEXIS 6408 (2d Dep’t Sept. 13, 2017); and Tokhtaman v. Human Care, LLC, 149 A.D.3d 476 (1st Dep’t Apr. 11, 2017).

The above-referenced decisions effectively flipped the New York home care industry on its head, each holding, in sum, that home care workers were entitled to pay for all 24 hours worked, including sleep and meal time. Enter the DOL, on October 5, 2017, who quickly put any remaining ambiguity to rest once and for all stating “that hours worked may exclude meal periods and sleep times for home care aides who work shifts of 24 hours or more”. The DOL reasoned that “[t]his regulation is needed to preserve the status quo, prevent the collapse of the homecare industry, and avoid institutionalizing patients who could be cared for at home, in the face of recent decisions by the State Appellate divisions that treat meal periods and sleep time [as hours worked]”.

The emergency regulation is expected to return the home care industry back to normalcy and prevent home care agencies from ceasing to provide “vital, lifesaving care” to thousands of New Yorkers who depend on it. The DOL explained that this “emergency adoption amends the relevant regulations to codify the Commissioner’s longstanding and consistent interpretations that such meal periods and sleep times do not constitute hours worked for purposes of minimum wage and overtime requirements”. And so, the longstanding rule about sleeping on the job still stands: you won’t get paid for it in New York.

Note:  Special thanks to our law clerk, Nicholas G. Moneta, for his assistance in drafting this blog post.

In our previous post, Medical Marijuana 103: Patient and Practitioner Regulations in New York State, we discussed that patients certified for medical marijuana use can designate up to two caregivers. Caregivers can assist patients who are unable to pick up medical marijuana at a dispensing facility or are unable to administer medical marijuana to themselves properly.

Previously the Medical Marijuana Program only allowed for designated caregivers to be natural persons. On October 5, 2017, however, the New York State Department of Health (“DOH”) issued emergency regulations that expand the definition of caregiver to allow certain facilities to be designated caregivers. By expanding the definition in this way, patients who are located in or reside at certain facilities can designate their facility as their caregiver, thus making it easier for such patients to obtain medical marijuana.

The new regulations define a designated caregiver as either a natural person or a facility. The term “facility” is further defined as, among others, hospitals, adult day care facilities, community mental health residences, and private and public schools. In addition, each division, department, component, floor or other unit of a parent facility may be designated as a “facility” for purposes of being designated a caregiver.

Just like natural persons, facilities will need to register with the DOH in order to be designated a caregiver for purposes of the Medical Marijuana Program. Once registered with the DOH facilities will be authorized to lawfully possess, acquire, deliver, transfer, transport and/or administer medical marijuana to certified patients residing in, or attending, that facility.

The DOH considered alternatives prior to issuing the emergency regulations, stating:

The Department could have chosen to keep the status quo and not allow patients to designate facilities as designated caregivers. The Department could have also allowed certified patients to designate an individual within the facility to be a caregiver. However, these options are not viable since patients in facilities may be cared for by multiple staff members in the course of a day. Certified patients have severe debilitating or life-threatening conditions and the regulatory amendments would help to prevent adverse events associated with abrupt discontinuation of a treatment alternative that may be providing relief for certified patients in these facilities.”

The regulations were published in the New York State Register on October 25, 2017. The DOH will accept comments from the public for a minimum of 45 days following the date of publication. After publication in the Register and receipt of public comment, the agency may either adopt, revise or withdraw the proposal. This change is just one of the latest revisions implemented by the DOH in an attempt to strengthen and expand New York’s struggling Medical Marijuana Program.