The New Jersey Board of Medical Examiners (BME) adopted emergency rules yesterday that declare that physician referral to ASCs in which they hold a financial interest do not violate the Codey Law, if certain conditions are met. These emergency rules will become effective upon the N. J. Governor’s written agreement, according to a WolfBlock press release.
Moreover, objections from WolfBlock, its clients and other industry advocates to some of the criteria listed in yesterday’s emergency rules resulted in the removal of the items. These include: regulation of fees, required disclosure on bills submitted to insurance companies, and a requirement to provide patients a copy of facility fee bills. The emergency rules do however still contain a provision limiting ASC ownership to physicians and/or hospitals. The period of time was extended from 60 day to 120 days for ASCs to commence compliance of any non-physician ownership. WolfBlock is hopeful this will allow time to seek legislative relief.
The BME also proposed these emergency regulations as permanent amendments. Written comments and testimony will be allowed.
Stay tuned to www.surgicenteronline.com for regular updates.
Full press release below:
IMPORTANT CLIENT ALERT FROM WOLFBLOCK BRACH EICHLER
The Board of Medical Examiners (the "Board") adopted emergency rules this afternoon, which provide that physicians' referrals to ambulatory surgery centers ("ASCs") where they hold a financial interest do not violate New Jersey's anti-self-referral law (the "Codey Law") if certain conditions are met. The emergency rules are contrary to the decision in Garcia v. Health Net of New Jersey, Inc., where the court found such referrals impermissible.
The emergency rules will be effective upon the Governor's written agreement with the Board's finding that an emergency exists, and will continue for a period not to exceed sixty (60) days. If the rules go into effect, they will extinguish the specter, created by Garcia, that physicians continuing to refer their patients to ASCs in which they have ownership interests amounts to fraud.
Fortunately, as a result of the objections we, our clients and others lodged on behalf of the industry, certain problematic provisions contained in the draft emergency regulations circulated yesterday, such as those regulating fees (i.e., all in-network or out-of-network), requiring the disclosure of all ASC owners on bills submitted to insurance companies, and requiring that patients to be provided with a copy of facility fee bills were removed entirely from the emergency regulations issued by the Board today.
However, the emergency rules still contain a provision limiting ASC ownership to physicians and/or hospitals. As discussed in our last Alert, WolfBlock does not support this type of substantial modification to the ASC industry structure. We strenuously advocated the industry's position to the Board both before and at today's meeting. In light of the controversy surrounding non-physician ownership, the period of time for an ASC to commence compliance with this requirement was extended from sixty (60) days to one hundred twenty (120) days, long after the emergency regulation has sunset. We believe this additional time will allow us the opportunity to seek legislative relief, consistent with the strategy we outlined in our earlier Alert.
Since the Board has also proposed the emergency regulations as permanent amendments to the Board regulations, the community will have the opportunity to submit written comments and testimony on the proposal. WolfBlock will continue to advocate for changes to the proposed amendments to protect the interests of the regulated ASC community and keep you informed as to the status of these efforts.
Please do not hesitate to contact John D. Fanburg, Esq., Mark E. Manigan, Esq. or Joseph M. Gorrell, Esq. with any questions or comments.