Recommendations from DOH Biannual Medical Marijuana Report

The New Jersey Department of Health’s recent biannual report recommended ways to improve the New Jersey’s Medical Marijuana Program in three key areas.

The New Jersey Compassionate Use Medical Marijuana Act (“Act”) requires New Jersey’s Department of Health (“DOH”) to report to the Governor and the Legislature on a biennial basis regarding three factors: (1) whether the maximum amount of medical marijuana allowed pursuant to the Act is sufficient to meet the needs of qualified patients; (2) whether any alternative treatment center (“ATC”) has charged excessive prices for the marijuana that the center dispensed; and (3) whether there are sufficient numbers of alternative treatment centers to meet the needs of qualified patients. Below is a brief summary of the recommendations in the DOH’s April 1, 2019 report (“Report”).

1. Ounce Limit Needs to Be Raised

In evaluating the issue of whether the monthly 2 ounce limit (that has to be re-certified every 90 days) meets patients needs, the DOH found that this limit should increase over time and be eliminated entirely for terminal patients. The DOH found that many qualifying conditions are severe and patients needs may increase or decrease over time depending on the progression of the disease or treatment. As a result, the Report found that a 2 ounce limit may be limiting the ability of some chronic patients to obtain needed relief. The Report noted that across the entire NJ patient population the average monthly purchase is about half ounce (although the DOH data for purchases in any given month show that purchase amounts by patients was just over an ounce). In comparison, in Colorado, where medicinal marijuana is also less costly, the average monthly purchase per patient was 1.291 ounces.

2. ATC prices could be cheaper

In analyzing whether prices charged by ATCs were excessive, the DOH looked at whether regulated marijuana was more costly than cannabis on the illegal market. It found that while ATC prices showed no evidence of excessive prices during the evaluation period, prices were higher than on the illegal market for roughly half the patient population. DOH also found that if patient qualified for a discount, then the price they pay is equal to or less than the illegal market prices at New Jersey’s ATCs. If patients did not qualify for a discount, however, they pay greater than illegal market prices. For example, the DOH found that 5 out of 6 of New Jersey’s ATCs charge over $100 more per ounce for whole flower than the average illegal market price. On an annual basis, in New Jersey, buying an ounce of whole flower per month without a discount could cost a patient as much as $6,000.

The report stressed that DOH is interested in keeping the medical cannabis prices below the illegal market because that “is the best way to ensure patients purchase at regulated dispensaries, under supervision of their physician, instead of via the unregulated illegal market.” It therefore recommended that “lowering prices should be an explicit policy goal of the Division of Medicinal Marijuana,” which is “best accomplished by increasing competition, access and supplying the marketplace, with more options for patients to obtain the therapy.”

3. The Number of ATCs Should Increase

The Report found that while the overall current patient demands are met, there have been shortages at every ATC. As a result, the DOH is recommending additional ATCs to meet the current demands of qualifying patients.

The DOH, however, assessed future market needs and found that the program needs to expand. It recommended, for example, expanding the program to include additional 25-50 cultivation cites. In its Report, DOH evaluated the driving distance between patients and dispensaries. It found that less than half the state is within 30 minutes of an ATC under a “best-case” drive time scenario. In other words, many patients have to travel a long time to reach an ATC. Furthermore, when the DOH compared the number of dispensaries serving NJ residents with other states it found that in New Jersey, there are 1.5 million people per open dispensary, whereas the aggregate average of population per dispensary in other states was roughly 100,000 people per dispensary. If New Jersey was at the average, the Report concluded, then the State would have 90 medical dispensaries to serve the population. Based on the dispensary population analysis and the driving analysis the Report stated that: “[t]he analysis strongly supports the need for additional dispensary sites in New Jersey.”

If you have questions about the DOH Biannual Report, the New Jersey Medical Marijuana Program, the New Jersey Compassionate Use Medical Marijuana Act, qualifying patients, provider responsibilities under the Act, qualifying conditions, or have other health law related questions please contact our office.

What Is OIG’s Risk Spectrum

The Office of the Inspector General (“OIG”) recently published the False Claims Act settlements risk spectrum for the first quarter of 2019. The risk spectrum identifies the number of settled cases and their assigned risk category.

Following a settlement of a health fraud case with the OIG the government determines whether a provider or supplier should be excluded. If they continue participating with the Medicare and other Federal healthcare programs the OIG determines whether and the type of oversight would be necessary for the continued participation. The decision to exclude and, if not to exclude, whether the continued participation should involve oversight, is based on the OIG’s determination regarding the future risk that the provider or supplier presents to the Federal healthcare programs. Based on the factors uncovered during an investigation the OIG decides whether a provider or a supplier belongs in the highest, high, medium, lower, or low risk category.

In the first quarter of 2019, five providers/suppliers were excluded, one was placed into a high risk category and 11 entered into Corporate Integrity Agreements (“CIA”) with the OIG. In 32 instances the OIG determined that no further action was needed and 4 providers self-disclosed, putting them in the lowest risk category.

In determining whether to exclude a provider or a supplier or place them into a different risk category, the OIG evaluates specific factors under the following four categories: the nature and circumstances of conduct, conduct during the government’s investigation, significant ameliorative efforts, and history of compliance. Within each category, factors may indicate a higher, lower or a neutral risk assessment.

Highest Risk – If the OIG determines that a provider or supplier poses the highest risk to the Federal healthcare program it will pursue exclusion.

Heightened Scrutiny/High Risk – The OIG may determine that a provider or supplier poses a significant risk to the healthcare program but no agreement on the CIA can be reached. For various reasons the OIG may decide not to exclude a provider or a supplier but it will engage in unilateral monitoring in order to further protect the Federal healthcare programs. As of October 1, 2018, the OIG has started publishing the identities of parties in this category.

Medium Risk/CIAs – Certain settling providers or suppliers are able to avoid exclusion by entering into CIAs with the OIG. The CIAs are designed to show the government a provider’s or a supplier’s willingness to take responsibility for prior conduct and commit to future compliance with program requirements by agreeing to the oversight.

Lower Risk – Based on certain factors, which includes, among others, the absence of egregious conduct, patient harm or the existence a successor owner, the OIG may determine that a provider or supplier poses a lower risk to the Federal healthcare programs. In such instances, the OIG will not exclude or seek a CIA.

Low Risk – If a provider or a supplier self-discloses conduct that raises potential healthcare fraud concerns then the “OIG believes that doing so in good faith and cooperating with OIG’s review and resolution process generally demonstrates that the party has an effective compliance program.” In so doing, the disclosing party may benefit from the OIG’s willingness to work to resolve cases faster and obtain lower settlement amounts as well as a release from potential exclusion with no requirement for a CIA or other oversight requirements.

If you have any questions regarding the OIG’s risk spectrum, enrollment, exclusion, revocation, healthcare audits, overpayment concerns, or have other health law questions please contact our office.

Physicians and Dentists – Know the Hidden Costs of Your Technology/Marketing Contracts

Many website design and development contracts as well as marketing and electronic medical records agreements (“technology contracts”) contain onerous terms and layers of user fees. If a physician or a dentist (“provider”) decides to part ways with the vendor under a technology contract the transition may be costly or cost prohibitive. One of the best ways providers can protect themselves against a slue of additional costs and concerns about possible loss of data is to have the contract reviewed by a healthcare attorney before signing on the dotted line.

Thinking “it’s not a big deal” providers sometimes pay little attention to technology contracts or the legal ramifications of onerous terms may not be evident without legal analysis. But once the relationship has soured they may look for ways to end an unfavorable relationship and move forward without disrupting their workflow while keeping the website running.

Often providers come to us with such questions after the technology contract is well underway. Our evaluation often leads to shock and disappointment as providers discover numerous additional costs and fees as well as other onerous terms embedded in the technology contract. The typical reaction is:

“I already paid them so much money and I still have to pay?”

“It is a website designed for my practice, how is it that I don’t have control over it?”

Based on the contracts we evaluated post-signing there are many problematic terms hidden in microscopic font that become controlling when providers are looking to end a problematic relationship. Equally important to understand is what is included in the fees providers pay for the services and if there are any exclusions that would require additional provider fees. For example, will the website meet or exceed the standards of ADA accessibility requirements or will the provider incur additional costs?

Likewise, it is important to know if the provider’s website or marketing is exposing them to disciplinary Board action or lawsuits and liability from potential patients or their respective Boards for misleading information and marketing.

Technology contracts contain many important and unique terms that may be costly and either prevent a provider from moving to a company of their preference or be so cost prohibitive that, despite being dissatisfied, a provider remains tethered to their existing technology contract for the foreseeable future.

An analysis by a healthcare attorney prior to signing a technology contract can alert a provider to problematic terms and either lead to a contract negotiated with more favorable terms or give the provider an opportunity to find a technology/marketing company that better suits their marketing and legal needs.

If you have questions about your technology contract please contact our office.

OIG Looks to Remove a Safe Harbor for Certain Drug Rebates; Proposes Two New Ones

In a newly proposed rule the Office of the Inspector General (“OIG”) is proposing to exclude from the discount safe harbor certain types of remuneration offered by drug manufacturers to Part D plan sponsors and Medicaid MCOs that may pose a risk to the Federal health care programs and beneficiaries. The OIG is also proposing to add two new safe harbors. The first would protect certain manufacturer point-of-sale reductions, and the second would protect certain fixed service fees that manufactures pay to pharmacy benefits managers for services rendered to the manufacturer that meet specific criteria.

Citing various ways that the current rebate system works to the disadvantage of beneficiaries, and the Federal health care programs, the OIG proposed amending the rebates safe harbor. Under the proposal the safe harbor regulation would be amended so that it would not protect price reductions paid by manufacturers to plan sponsors under Medicare Part D or Medicaid MCOs, either directly or through pharmacy benefits manager (“PBMs”) acting under contract with either, unless the reduction in price is required by law (e.g., rebates under the Medicaid Drug Rebate
Program). The proposed rule would define “plan sponsor under Medicare Part D” to include the sponsor of a prescription drug plan and a Medicare Advantage organization offering a Medicare Advantage prescription drug plan.

OIG is also proposing a new safe harbor that would protect a manufacturer point-of-sale reductions in price on prescription pharmaceutical products to a plan sponsor under Medicare Part D, a Medicaid MCO, or a PBM acting under contract with either. Under the proposal, the reduction in price would have to be set in advance with the plan sponsor under Medicare Part D, a Medicaid MCO, or a PBM. According to the proposed rule, the “set in advance” would mean that the terms of the reduction in price would be fixed and disclosed in writing to the plan sponsor under Medicare Part D or the Medicaid MCO by the time of the initial purchase. OIG has indicated that it intends for this new safe harbor to protect reductions in price for prescription pharmaceutical products without regard to what phase of the benefit the beneficiary is in. Like the current discount safe harbor, OIG proposes for this new safe harbor to exclude from protection price reductions offered to one payor but not to Medicare or Medicaid.

Additionally, the OIG is proposing a new safe harbor to protect certain fixed service fees that pharmaceutical manufacturers pay to PBMs for services rendered to the manufacturers that “relate to PBMs’ arrangements to provide pharmacy benefit management services to health plans.” This safe harbor would protect only a pharmaceutical manufacturer’s payment for those services that a PBM furnishes to the pharmaceutical manufacturer, and not for any services that the PBM may be providing to a health plan. OIG is interpreting the phrase “services that relate to” as those services rendered to manufacturers that depend on or use data gathered by PBMs from their health plan customers (whether claims or other types of data). One example of that would be PBMs that provide services for pharmaceutical manufacturers to prevent duplicate discounts on 340B claims. While the OIG is not proposing to define “pharmacy benefit management services,” it is interpreting the phrase to refer to “services such as contracting with a network of pharmacies; establishing payment levels for network pharmacies; negotiating rebate arrangements; developing and managing formularies, preferred drug lists, and prior authorization programs; performing drug utilization review; and operating disease management programs.”

OIG is soliciting comments on its proposed changes which are due on April 8, 2019.

If you have any questions regarding the proposed rule or have other health law related questions, please contact us.

Recent Expansion of Scope of Practice for Dental Hygienist in New Jersey

The New Jersey Board of Dentistry (Board) recently expanded the scope of practice of licensed dental hygienists, limited registered dental assistants in orthodontics and registered dental assistants. Effected providers should become familiar with these expanded parameters. 

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Expanding Role of Pharmacists and Certified Medical Assistants in New Jersey

The New Jersey Board of Pharmacy and the New Jersey Board of Medical Examiners recently adopted new regulations and amended existing ones that effect the way providers practice. The changes concern pediatric immunizations performed by pharmacists and the administration of subcutaneous and intramuscular injections and venipunctures by certified medical assistants. We briefly summarize these recent changes below. 

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CMS Proposes Sweeping Changes to E/M Service Codes and Telemedicine

The Centers for Medicare & Medicaid Services (CMS) recently published a proposed rule that, if codified, would bring about sweepings revisions to many Medicare payment policies under the physician fee schedule. Among many other changes CMS is proposing to simplify the documentation requirement for evaluation and management (E/M) code levels 2 through 5 but also proposes a flat fee for those levels of services. These and certain other proposed policy changes are briefly summarized below. 

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New York Dentists Face New Dental Anesthesia Requirements

New sweeping regulations went into effect on July 1, 2017 for dental anesthesia services in New York. The regulations, among other things, would require dentists to meet specific practice requirements, maintain more exacting records than previously required and complete additional and specific continued education courses. The regulations will also impose more stringent requirements on dentists providing dental sedation to patients 12 years old and younger. Below is a brief summary of the new requirements. 

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NYS OMIG Focuses on Compliance, Fraud, Waste & Abuse and Detection

New York State Office of the Medicaid Inspector General (OMIG) annual 2018-2019 Work Plan highlights three areas of concern for the agency: (1) provider compliance; (2) identifying and addressing fraud, waste and abuse in the program; and (3) improving methods of detecting fraudulent activities.

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CERT Audit Finds Insufficient Documentation Results in Improper Payments

Recent analysis by the Comprehensive Error Rate Testing (CERT) initiative of physical therapy claims revealed that insufficient documentation contributed to improper payments issued to providers.

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Pharmacies Beware of Potential Gabapentin Reporting Requirements

The Division of Consumer Affairs (Division) is proposing to amend the Prescription Monitoring Program (PMP) rules to require New Jersey licensed pharmacies and registered out-of-State pharmacies to electronically transmit information to the Division about prescriptions filled for gabapentin.

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NJ’s New Rules for Companion Service

The New Jersey Division of Consumer Affairs (“Division”) recently proposed amendments and a new rule to implement a 2014 law concerning health care service firms.

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NY’s OMIG Finds Basic Compliance Program Gaps

The Bureau of Compliance (BOC) within the New York State Office of the Medicaid Inspector General (OMIG) recently performed an assessment of providers’ compliance programs. The results indicate that providers sometimes fail in relatively less complicated and readily addressable ways.

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New Jersey Places New Limitations on Opiod Prescriptions

Several of New Jersey’s professional licensing Boards recently adopted new controlled dangerous substance prescription requirements. Prescribers should be aware of the changes to avoid running afoul of the new regulations. 

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New Blanket Waivers for Electronic Prescribing Approved in NY

In recognition of limitation of certain electronic prescribing software the NYS Health Commissioner approved a new blanket waiver for electronic prescribing requirements. 

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Billing for Dually Eligible Beneficiaries

The Centers for Medicare & Medicaid Services (CMS) has once again issued guidance reminding providers that federal law bars Medicare providers from billing a Qualified Medicare Beneficiaries (QMB) under any circumstances.

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NY Watchdog Releases Its Annual Fraud Fighting Plan

The New York State Office of the Medicaid Inspector General (OMIG or agency) has recently issued its 2017-2018 Workplan. The Workplan identifies key areas of OMIG’s focus impacting health care providers and suppliers.

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Recent Medicare Program Changes

Providers, suppliers and their billing staff need to be aware of the following recent changes to the Medicare program.

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OIG’s Strengthens its Exclusion Authorities

The Office of Inspector General (OIG) recently published a final rule that implements OIG’s expanded statutory exclusion authority. The final rule included a number of provisions that impact providers and suppliers.

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NJ Dentist Beware – When Administering Botox May Lead to Board Troubles

Scope of practice matters and New Jersey dentists who fail to comply with the requirements for administering injectable pharmacologics such as Botox or Restylane may be subject to discipline.

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