Update on N.J. Developments

The threat to ambulatory surgery centers (ASCs) in New Jersey in the wake of the November 2007 Garcia decision still is brewing. WolfBlock law firm sent the an update to its clients this week. In it, they note the following:

“The New Jersey Attorney General has notified the Board of Medical Examiners (BME) to pursue regular rulemaking versus emergency rulemaking in reaction to the Garcia decision. This means that the status quo will prevail for the time being.

“Senator Codey’s bill S-787, which would grandfather existing ASCs and certain ASCs in development, was reported out of the Senate Health Committee late last week.”

WolfBlock says that the fact that insurance companies continue to pay for services performed in physician owned ASCs by the referring physician underscores how much the insurance industry “values the ASC-provided services as a cost effective solution and considers them a vital part of the healthcare economy.”

The letter follows.

“First, Attorney General (AG) Anne Milgram notified the Board of Medical Examiners (BME) that it should pursue regular rulemaking, as opposed to emergency rulemaking, in reaction to the Garcia decision. Second, Senator Richard J. Codey's bill S-787, which would grandfather existing ASCs and certain ASCs in development, was reported out of the Senate Health Committee on February 14.

“In a letter to the BME dated February 11, 2008, the AG wrote that she did not find evidence that an emergency exists because insurance companies continue to pay for services performed in physician-owned ASCs by the referring physician.  The insurance industry recently met with the Governor's staff and advised that they would continue to pay for ASC services, which undoubtedly factored into the AG's decision making.  We are extremely pleased that our efforts have resulted in maintaining the status quo while a legislative solution works its way through the process.  However, should you find that an insurer is not reimbursing for ASC services, please notify us and we will contact the Governor and the AG immediately.  The AG advised that the normal rule-making process would serve as the proper channel for clarifying the BME's ASC regulations, and we anticipate publication of the BME's proposal within the next 4-8 weeks.

“In the meantime, the legislative solution is moving expeditiously.  Senator Codey's bill would grandfather from New Jersey's self-referral ban licensed ASCs and surgical practices (i.e., one-room centers) where (1) the referring physician performs the procedure; (2) written disclosure of ownership in the facility as well as whether the services provided will be considered "out-of-network" is given; and (3) investor returns are proportional to their ownership interests.  The bill would also (1) prohibit future ASCs except for those that have filed architectural plans prior to the effective date of the legislation; (2) permit corporate ownership; (3) permit the transferability of ownership as well as the expansion and relocation of grandfathered ASCs; and (4) deem all prior referrals to grandfathered ASCs compliant with the Codey Law.  This last component is critical as it would prohibit retrospective denials and recoupment actions by insurance carriers based on a Codey Law violation.  We are hopeful that S-787 will be voted on by the full Senate in the beginning of March.  S-787 has also been introduced in the Assembly by Herbert Conaway as A-1933, and we are working towards movement of the bill there as well.

WolfBlock’s clients include: New Jersey Association of Ambulatory Surgery Centers; Medical Society of New Jersey; Orthopedic Surgeons of New Jersey; Alliance for Quality Care; New Jersey Academy of Ophthalmologists; Orthopedic Surgery Center of Northwest Jersey, LLC; and the New Jersey Association of Osteopathic Physicians and Surgeons.

Source: WolfBlock

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