Tag: health care

Connecticut Enacts Law to Increase Access to Epinephrine Auto Injectors

On June 13, 2019, Connecticut Governor Ned Lamont signed into law Public Act No. 19-19 “An Act Concerning Epinephrine Auto Injectors” (PA 19-19). PA 19-19 went into effect on the same date.

This legislation expands access to epinephrine, which can be lifesaving when treating anaphylactic allergic reactions. PA 19-19 permits “authorized entities” to acquire and maintain a supply of epinephrine cartridge injectors, subject to certain conditions. With a few exceptions, authorized entities are for-profit or nonprofit entities or organizations that employ at least one “person with training.” The new legislation defines a person with training as a person who either:

  • Has completed and received a certification in a first aid course that has been approved by a “prescribing practitioner” pursuant to a medical protocol (as described below); or
  • Has received training in the recognition of the signs and symptoms of anaphylaxis, the use of an epinephrine cartridge injector and emergency protocol by a licensed physician, physician assistant, advanced practice registered nurse or emergency medical services personnel.

Prior to PA 19-19, drug wholesalers and manufacturers were permitted to sell epinephrine cartridge injectors to select categories of purchasers, including hospitals, physicians, nursing homes with a full-time pharmacist, pharmacies and certain other institutions with a full-time pharmacist.

PA 19-19 requires authorized entities who desire to acquire or maintain epinephrine cartridge injectors, together with a “prescribing practitioner,” to establish a medical protocol on the administration of epinephrine cartridge injectors by a person with training. Under PA 19-19, a prescribing practitioner is a Connecticut-licensed physician, dentist, podiatrist, optometrist, physician assistant, advanced practice registered nurse, nurse-midwife or veterinarian, authorized to prescribe medication within his or her scope of practice. The medical protocol must address, among other things, proper storage, maintenance and documentation of epinephrine cartridge injectors, and procedures for emergency medical situations involving anaphylactic allergic reactions at the authorized entity’s place of business. The authorized entity must maintain a copy of the medical protocol at the place of business to which it applies, and must annually review the medical protocol with a person with training and a prescribing practitioner.

In the event of an anaphylactic reaction, a person with training may, in accordance with the medical protocol, provide an epinephrine cartridge injector to the individual or to the individual’s parent, guardian or caregiver, or administer the epinephrine cartridge injector, regardless of whether the individual has a prescription or a prior medical diagnosis of an allergic condition. After any such administration of epinephrine, the authorized entity must notify a local emergency medical services organization as well as the prescribing practitioner.

Notably, PA 19-19 holds prescribing practitioners free from civil and criminal liability for establishing the medical protocol or for use of the epinephrine cartridge injector in accordance with PA 19-19. This legislation also holds persons with training and authorized entities free from civil or criminal liability to the individual who experienced anaphylaxis for the provision or administration, in accordance with PA 19-19, of the epinephrine cartridge injector when the person with training has a good faith belief that the individual is experiencing anaphylaxis.  However, the immunity does not apply to willful or wanton misconduct or acts or omissions constituting gross negligence.

 

Copyright © 2019 Robinson & Cole LLP. All rights reserved.
Read more about healthcare legislation on the National Law Review Health Law and Managed Care page.

340B Drug Ceiling Prices Now Available

On April 1, 2019, the Health Resources and Services Administration (HRSA) launched a secure website that lists the maximum price drug manufacturers may charge 340B-covered entities for 340B-eligible drug purchases (the 340B Ceiling Price Site).  Drug manufacturers and 340B-covered entities may access the 340B Ceiling Price Site through their HRSA Office of Pharmacy Affairs information system (the 340B OPAIS) account here: https://340bopais.hrsa.gov/

Since the creation of the 340B program in 1992, participating covered entities could not verify whether they received the correct price for medication purchased through the program. In 2010, as part of the Patient Protection and Affordable Care Act, Congress directed HRSA to create a secure database that lists the 340B ceiling price.   Nearly nine years later, HRSA launched the 340B Ceiling Price Site which allows covered entities to now access verifiable 340B drug pricing information.

The 340B ceiling price is statutorily defined as a drug’s average manufacturer price (AMP) of a drug reduced by the unit rebate amount (URA).  The URA is calculated by dividing the drug’s Medicaid drug rebate amount (DRA) by the AMP.  The 340B ceiling price can be calculated as AMP – (DRA/AMP).

To populate the 340B Ceiling Price Site, HRSA obtains AMP and URA information from the Centers for Medicare and Medicaid Services (CMS), as well as a third-party drug pricing publisher, First Databank.   Manufacturers are also tasked with providing pricing information to HRSA during quarterly price reporting windows, which will last for two weeks each calendar quarter. If there is a discrepancy between HRSA’s data and manufacturer reported data, the manufacturer may either: (1) accept HRSA’s data as its own, (2) refuse to edit the manufacturer data and provide explanations for each discrepancy, or (3) edit the manufacturer data and provide reasoning for any remaining discrepancies.  After resolving pricing discrepancies, HRSA will publish the calculated 340B ceiling price to the 340B Ceiling Price Site.

Covered entities’ access to the 340B Ceiling Price Site is limited to the covered entity’s authorizing official (AO) and primary contact (PC).  AOs and PCs are strictly prohibited from sharing 340B pricing information outside of their organization and from exporting pricing information from the 340B Ceiling Price Site. They must attest to their compliance with these obligations each time they log into the 340B Ceiling Price Site.

Although the 340B Ceiling Price Site provides covered entities with valuable pricing information, covered entities are reminded that the price they pay for 340B-eligible drugs could differ from the 340B ceiling price depending upon the covered entity’s wholesale pricing contract terms. The price paid for 340B eligible medications may vary for a number of reasons, including wholesale cost-minus/plus calculations and the availability of sub-340B ceiling pricing for drugs through the 340B Prime Vendor Program.

 

© 2019 Dinsmore & Shohl LLP. All rights reserved.
Read more drug pricing news on the Health Care type of law page.

Maryland Proposes New Telehealth Psychology and Therapy Rules

Two Maryland licensing boards – the Board of Examiners of Psychologist and the Board of Professional Counselors and Therapists – issued a pair of proposed rules setting forth practice standards for mental health services delivered via telehealth technologies. The Boards previously did not have specific practice standards or rules unique to telehealth. Once finalized, psychologists, counselors, and therapists using telehealth in their services should read and apply these new requirements to their operations and service models.

The proposed rules closely mirror each other. Both apply to professionals delivering care to patients located in Maryland. Both allow a wide range of modalities, defining telehealth as the “use of interactive audio, video or other telecommunications or electronic media,” but excluding an audio only telephone conversations, email, fax or text.  Both rules prohibit treatment based solely upon an online questionnaire.

The Board of Professional Counselors and Therapists rule allows therapists to conduct the initial patient evaluation via telehealth. The Board of Psychology rule requires an in-person initial evaluation unless the psychologist or psychologist associate documents in the record the reason for not meeting in person. (The rule doesn’t enumerate a list of acceptable or unacceptable reasons; it simply requires the reason to be documented.)

Professionals must confirm the identity of the client/patient, as well as the client’s location and contact information. The professional must also identify contact information for emergency services at the client’s location. Curiously, the rule issued by the Board of Professional Counselors and Therapists refers to the client’s location as the “practice setting.” While this could raise a suggestion that the client must be physically located in a clinical practice setting, it is more likely a drafting error because there is no mention of any originating site requirements in the rule.

Professionals must also identify everyone at the client’s location and confirm those individuals are permitted to hear the client’s health information. The use of the term “permitted” as opposed to “authorized or “legally authorized” and the absence of reference to any state or federal privacy law, suggests another person’s presence is subject to the client’s permission and not legal authority.

With regard to client consent to telehealth services, the Board of Psychology rule requires “written informed consent,” whereas the Board of Professional Counselors and Therapists rule requires the client’s “written and oral acknowledgement.” Both rules state that the standard for services delivered via telehealth is the same as services delivered in-person.

The Boards are considering comments and Maryland providers are awaiting the final regulations.  We will continue to monitor further developments including the passage of these final rules and any changes.

 

© 2019 Foley & Lardner LLP
This post was written by Emily H. Wein and Nathaniel M. Lacktman of Foley & Lardner LLP.

Federal Government Slaps $600K Fine on Wanaque Center After 11 Children Die

The federal government imposed a $600,331 fine on the New Jersey nursing center where a viral outbreak left 11 children dead and 36 sick last year. Investigators reported Wanaque nursing home’s poor infection controls, lack of administrative oversight, and slow response from medical staff “directly contributed” to the rapid spread of the virus and its related death toll.

The 114-page federal inspection report, published in December, claimed the staff at Wanaque failed to correct issues that could have controlled the outbreak, allowing residents and one staff member to contract the virus and placing others in “immediate jeopardy.”

The report alleges the center had a faulty infection-control plan, did not respond appropriately when the outbreak emerged, and failed to properly monitor the infection rate.

Multiple children at Wanaque retained high fevers for days before staff sent them to the emergency room, two of which died within hours of arriving at the hospital. At least two other children, who had been symptom-free, contracted the virus and died after staff failed to separate them from their sick roommates.

Wanaque’s pediatric medical director appeared to be absent during the crisis and claimed he did not fully understand the responsibilities of his position. The director also failed to attend quality assurance and performance meetings and had not filed monthly reports for the last four years.

The Wanaque facility is strongly disputing the findings in the federal investigation report, arguing the staff followed proper protocols and the outbreak was “unavoidable.”

New Jersey ceased all admission to the nursing home following the outbreak, but is now allowing the facility to admit new patients. A restriction does still remain in place barring Wanaque from admitting pediatric ventilator patients until federal and state officials approve the facility’s written infection-control plan.

In addition to the $600,331 federal fine, the New Jersey Department of Health is imposing a $21,000 penalty on the nursing home for each infection-control-related failure.

 

COPYRIGHT © 2019, STARK & STARK
This post was written by Jonathan F. Lauri of Stark & Stark.
Read more Malpractice Enforcement on our Professional Malpractice Page.

The Rise of the Chief Data Officer

There is a new kid on the block . . . the Chief Data Officer (CDO).  There is no surprise in our data-driven world that such a role would exist. Yet, many organizations struggle with defining the role and value of the CDO. Effective implementation of a CDO may be informed by other historical evolutions in the C-Suite.

Examining the rise of the Chief Compliance Officer (CCO) in the 2000’s mirrors some of the same frustrations that organizations faced when implementing the CCO role. While organizations were accustomed to having legal, HR, and internal audit departments working together to ensure compliance, suddenly CCOs stepped in to pull certain functions from those departments into the folds of the newly-minted Compliance department.  Integrating CDOs appears to follow a similar approach. Particularly in health care, the CDO role is still afloat, absorbing functionality from other departments as demand inside of organizations evolves and intensifies to focus on the financial benefits of their data pools.

Corporate evolution is challenging and often uncomfortable, but the writing is on the wall . . . there are two types of companies:  ones that are data-driven and ones that should be.  Which will you be?

What is a Chief Data Officer?

CDO responsibilities will vary depending on the organization. Some organizations position the CDO to oversee data monetization strategies, which requires melding business development acumen with attributes of a Chief Information Officer. In some organizations, the CDO may oversee the collection of all of the company’s data in order to transform it into a more meaningful resource to power analytical tools.

A survey of CDO positions identified three common aspirations that organizations have for the role: Data Integrator, Business Optimizer, and Market Innovator. Data Integrators primarily focus on infrastructure to give rise to innovation. Business Optimizers and Market Innovators focus on optimizing current lines of business or creating new ones. These aspirations will likely vary depending on the nature and maturity of organizations. Regardless of the specific role, CDOs can help organizations bridge the widening gap between business development, data management, and data analytics.

Further, a key component of a CDO’s activity will relate to responsible data stewardship.  CDO activities will heavily depend on developing a data strategy that complies with legal, regulatory, contractual and data governance boundaries around data collection, use and disclosure.  CDOs should work closely with legal counsel and compliance personnel to effectively navigate these challenges.  Further discussion of the legal and regulatory landscape around data use is available here.

The Importance of CDOs in Transforming Healthcare Companies

It is clear that leveraging data will be key to innovating, gaining efficiencies, and driving down costs over time.  Yet, many organizations continue to struggle with making sense of the data they possess.   For some, the CDO may be a critical driving force to advance a business into a new landscape.  Just as the CCO helped address decades of frustration with corporate ethics and practices (and was soon demanded by lawmakers and regulators), the role of the CDO has emerged in response to demand for efficiencies in business practices and the recognition that data has become the world’s most valuable commodity.

In light of the explosion of data in the healthcare industry, organizations should consider whether and how a CDO will fit into the corporate structure. Furthermore, organizations should work to understand how having a person at the table with a keen eye towards giving life to an organization’s data resources can benefit the business long term from internal and external perspectives.  The ultimate question a CDO can help solve is:  What don’t we know that, if we knew, would allow our organization to innovate or operate more efficiently or effectively?

 

©2019 Epstein Becker & Green, P.C. All rights reserved.
This post was written by Alaap B. Shah and Andrew Kuder of Epstein Becker & Green P.C.

Compliance Risk Alert: Opioid Warning Letters issued by the U.S. Department of Justice Target Prescribers

U.S. Attorney’s Offices (“USAOs”) across the country are issuing warning letters to physicians and other prescribers (collectively, “Prescribers”) cautioning them about their opioid prescribing practices (the “Warning Letters”). In just the last week, the USAO for the Eastern District of Wisconsin sent warning letters to over 180 prescribers identified by Drug Enforcement Administration (“DEA”) data as prescribing opioids at relatively high levels. The Food and Drug Administration and the Federal Trade Commission have also been issuing their own warning letters to opioid marketers and distributors over the past several months, evidencing a concerted effort to combat the opioid epidemic on a number of fronts through various federal enforcement and regulatory efforts.

The Warning Letters appear to be based entirely on review and analysis of DEA’s data with no other investigation into the patients who received opioid prescriptions or their medical conditions. Importantly, each of these USAOs has recognized explicitly that the prescribers have not necessarily broken any laws and that the prescriptions may all be medically appropriate. Nevertheless, any warning from an office wielding criminal enforcement authority should never be taken lightly, particularly when related to an issue – opioid overprescribing – that remains a top Department of Justice and U.S. government enforcement priority. While the Warning Letters themselves are issued without meaningful investigation, they may often signal that additional investigatory or enforcement action is forthcoming. In some cases, for instance, prescribers may be visited unannounced and in-person by DEA diversion investigators, special agents, or other law enforcement officers.

Prescribers who have already received a Warning Letter should contact legal counsel to assist in taking measures to assess their degree of risk and preparing for potential further government inquiry. Contacting legal counsel early and preserving privilege could be key to prevent an informal inquiry from becoming a protracted criminal investigation. Experienced counsel can help focus the government’s inquiry, provide the information in a manner that is responsive to the government’s request while also providing relevant context, and limit disruption to the provider’s practice. In collaboration with their counsel, contacted Prescribers should consider:

  • An audit of medical records related to patients who have received opioid prescriptions to confirm their propriety in light of medical documentation;
  • Correction and supplementation of any deficient records, consistent with government requirements for medical documentation to support such prescriptions; and
  • Implementing any required process improvements to mitigate future risk.

Prescribers who prescribe opioids as part of their practices but who have not received a Warning Letter should consider taking prophylactic measures in response to this increased government scrutiny, as should their employers and partners. For instance, Prescribers – and those who employ or contract with prescribers – should consider:

  • Reviewing prescribing patterns against local and national benchmarks;
  • Reviewing a sample of documentation related to opioid prescription decisions to ensure that it sufficiently supports medical necessity and provides additional training on documentation practices as needed;
  • Reviewing and implementing the most current standards of care related to opioid prescribing and patient monitoring, including recommendations issued by the Centers for Disease Control and Prevention’s Guideline for Prescribing Opioids for Chronic Pain; and
  • In larger practices, implementing or updating, as necessary, policies and procedures related to opioid prescribing.
Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.
This post was written by Erica J. Kraus, Michael W. Paddock, David L. Douglass, Danielle Vrabie and A. Joseph Jay, III of Sheppard Mullin Richter & Hampton LLP.
Read more health care compliance news on the National Law Review’s Health Care Type of Law page.

Nursing Shortage Expected to Continue Through 2024: How CMS Is Easing the Burden on Hospice Agencies

The U.S. Department of Labor’s Bureau of Labor Statistics has forecast a nursing shortage through 2024, with the United States projected to need more than half a million new nurses to replace those who leave the profession. This nursing shortage stems from a convergence of factors. First, the healthcare arena has experienced an influx of new patients due to the Affordable Care Act and an aging population, increasing the demand for healthcare services. Second, many baby boomers have already reached or will soon reach retirement age. Finally, there are barriers to education for new nurses, including a lack of programs, faculty, and clinical sites to support training needs.

Extraordinary Circumstance Designation

On December 21, 2018, the director of the Quality, Safety & Oversight Group of the Centers for Medicare & Medicaid Services (CMS) issued a memorandum that officially extends CMS’s designation of the national nursing shortage as an “extraordinary circumstance.” This extension will permit hospice agencies to use contract workers to provide core nursing services through September 30, 2020.

Under 42 C.F.R. 418.64, hospice agencies “must routinely provide substantially all core services” through their own employees. Hospice agencies may use contract staff in their facilities only if there are “extraordinary or other non-routine circumstances.” These circumstances are generally unforeseen temporary events, such as “[u]nanticipated periods of high patient loads, staffing shortages due to illness or other short-term temporary situations that interrupt patient care; and temporary travel of a patient outside of the hospice’s service area.”

CMS’s designation of the nursing shortage as an “extraordinary circumstance” means that hospice agencies are exempt from the general rule requiring them to employ their own nurses to provide core nursing services. While this exemption will allow hospice agencies to hire contractors to supplement their own employee workforces, these agencies still will be responsible for all professional, financial, and administrative functions, as well as counseling, medical social services, and other core hospice services.

The memorandum also eases the paperwork burden on hospice agencies. CMS previously required that hospice agencies provide notification and a stated justification to CMS and the agency’s state survey agency whenever they used contract staff during extraordinary circumstances. Under this memorandum, the notification and justification are no longer required. Documentation, however, is still required if a hospice agency uses contract staff for other reasons and will be reviewed as part of the routine survey process.

Key Takeaways

This may be welcome news for hospice agencies struggling to care for patients, but there are some limitations these agencies may want to keep in mind. Notably, the “extraordinary circumstances” designation permits agencies to use contract staff only to supplement—not replace—their core nursing staff. Additionally, although hospice agencies may hire contract staff for core nursing functions, the exemption does not apply to other professional, financial, and administrative functions. Finally, hospice agencies should remember that they must still document their use of contract staff when it is due to a reason other than the nursing shortage.

 

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

As 2019 Approaches, Private Equity Investment in Health Care Shows No Signs of Slowing Down

As the year draws to a close, it’s clear that 2018 was another record year for private equity investment in health care. In its report on the top health industry issues of 2019, PWC’s Healthcare Research Institute recently highlighted the continued prevalence of private equity in health care transactions, and predicted even more private equity investment in the coming year. Below is an overview of the current and expected trends, as well as a few key considerations for private equity deals in the health care space.

Corporate health care buyers are likely to continue seeing steep competition from private equity firms… 

According to the PWC report, since 2009 the number of health care deals involving private equity buyers or sellers has tripled, and the number of deals is projected to increase further in 2019. Private equity investment in health care remains diversified and frequent, with deals ranging from health care technology to the management of physician practices. Because the health care industry is expected to continue to grow — with CMS projecting national health spending to rise to 20 percent of GDP by 2026 — investment in health care is a relatively safe bet for private equity when compared to more volatile fields like technology. Further, private equity firms tend to be more aggressive in the bid process and more willing to move deals ahead quickly.  As such, traditional health care companies seeking to acquire new lines of business face increased competition from private equity.

…but 2019 may bring additional opportunities for traditional health care companies to partner with private equity in acquisitions.

By partnering with private equity firms, health care companies can diversify their businesses while also mitigating some of the financial and operational risks that come with any deal. Partnerships between private equity and health care companies benefit from the strengths of both parties, enabling further growth while capitalizing on the health care companies’ existing expertise. Private equity firms’ willingness to invest in health care could also mean opportunities for health care companies to divest their non-core assets and refocus on their core business.

Regulatory Considerations for PE Health Care Deals

As with any highly-regulated industry, health care deals present regulatory hurdles for any prospective buyer, some of which may provide additional challenges in the private equity context.

Private equity deals often need to be structured to accommodate corporate practice of medicine (CPOM) issues. In states with CPOM prohibitions, private equity buyers cannot directly acquire medical practices. Instead, the prospective buyer would need to invest in or create a management company through which they manage the practice for a fee, which in many states is capped at a certain percentage of the practice’s revenue.

Regulatory filing requirements and the need for review and approval of deals by regulatory bodies often drive transaction timelines much longer than those to which private equity firms are accustomed. Some states can require up to 120 days’ notice prior to a change in ownership in certain health care companies. Involving regulatory counsel at the beginning of deal negotiations can help set reasonable expectations for timing while also letting the parties get a head start on the sometimes cumbersome filing requirements.

State licensing boards also often require disclosure of detailed information about the prospective ownership and management of licensed health care entities. This information can range from basic background checks to detailed financial information. While many states only require information about individuals who will be actively involved in the day-to-day operations of the health care business, some states require information about anyone with a five percent or greater ownership in the business, which sometimes requires an examination of ownership held by controlling entities, including parent, grandparent and great grandparent companies. Private equity firms should take this into consideration and consult with regulatory counsel about potential disclosure requirements and the feasibility of providing the required information when structuring deals.

Private equity activity in the health care industry presents many evolving opportunities and challenges, but one thing remains clear as 2018 winds down: growth in health care investment is full speed ahead.

©1994-2018 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
This post was written by Cassandra L. Paolillo of Mintz.

No vaccine? No job! Court affirms employer’s ability to condition employment upon vaccinations

On December 7, 2018, the U.S. Eighth Circuit Court of Appeals held that an employee who was terminated for refusing to take a rubella vaccine was not discriminated or retaliated against, under the Americans with Disabilities Act, as amended (“ADA”).  See Hustvet v. Allina Health System, Case No. 17-2963.

In this case, Janet Hustvet worked as an Independent Living Skills Specialist. In May 2013, Hustvet completed a health assessment, during which she stated she did not know whether she was immunized for rubella.  Subsequent testing confirmed she was not.  Her employer — Allina Health Systems — then told Hustvet she would need to take one dose of the Measles, Mumps, Rubella vaccine (“MMR vaccine”).  Hustvet stated to an Allina representative that she was concerned about the MMR vaccine because she had previously had a severe case of mumps and had “many allergies and chemical sensitivities.”  Later, Hustvet refused to take the MMR vaccine, and was terminated for failure to comply with Allina’s immunity requirements.  Hustvet then sued Allina, alleging discrimination, unlawful inquiry, and retaliation claims under the ADA and Minnesota state law.  The district court granted Allina’s motion for summary judgment, and Hustvet appealed.

On appeal, the Eighth Circuit first addressed Hustvet’s unlawful inquiry claim; specifically, Hustvet alleged that Allina violated the ADA when it required her to complete a health screen as a condition of employment.  When affirming the district court’s grant of summary judgment, the court explained that the information requested and the medical exam, which tested for immunity to infectious diseases, were related to essential, job related abilities.  Indeed, Allina sought to ensure their patient-care providers would not pose a risk of spreading certain diseases – such as rubella – to its client base.  Thus, the inquiry was job-related and consistent with business necessity.

The court then did away with Hustvet’s discrimination claim based upon failure to accommodate because Hustvet was not disabled and, thus, she could not state a prima facie case of disability discrimination. There was simply no record evidence to support the conclusion that Hustvet’s purported “chemical sensitivities” or allergies substantially limited any of Hustvet’s major life activities. She was never hospitalized due to an allergic or chemical reaction, never saw an allergy specialist, and was never prescribed an EpiPen.  Rather, Hustvet suffered from “garden-variety allergies,” which was not enough to conclude she was disabled.

Finally, the court affirmed the district court’s grant of summary judgment regarding Hustvet’s retaliation claim. In pertinent part, the court reasoned that Hustvet could not show that Allina’s proffered reason for terminating her employment – her refusal to take an MMR vaccine – was a pretext for discrimination.  The record evidence demonstrated that Allina terminated Hustvet’s employment because her job required her to work with potentially vulnerable patient populations, and she refused to become immunized to rubella, an infectious disease.

This decision comes as welcome news to employers that provide healthcare-related services, and confirms that healthcare providers may condition employment upon taking certain vaccinations, so long as the vaccination is job-related and consistent with business necessity.  Employers with questions regarding implementing or enforcing such policies would do well to consult with able counsel.

 

© Polsinelli PC, Polsinelli LLP in California
This post was written by Cary Burke of Polsinelli PC.

Nurse Staffing Ratios May Be Coming to a Hospital Near You

On November 6, 2018, when Massachusetts voters go to the polls to select a new Governor and other key elected officers, they will also consider Ballot Question 1, which will mandate rigid registered nurse staffing ratios for hospitals across the Commonwealth effective as of January 1, 2019. This proposal would make Massachusetts the second state in the United States to have specific staffing ratios mandated in all units. This initiative follows only California, which passed a less comprehensive law through the legislative process in 1999 and provided over five (5) years for hospitals to implement by 2004.[1] The Massachusetts ballot initiative process, like that of some other states, allows the voters to write entirely new law into books. Question 1 appears to be the most heavily-fought ballot initiative in Massachusetts in recent memory. While Massachusetts seems to be the only state this year with a nurse staffing ratio as a referendum ballot initiative,[2] unions nationally will focus on the results of this year’s effort.

What is Question 1?

Question 1, if passed, would mandate highly-prescriptive and specific nurse-to-patient ratios based on the type of patients/units in hospitals, regardless of market, acuity of the patient, physician orders, or nursing judgement. Hospitals are required to implement a written plan detailing the maximum number of patients to be assigned to a registered nurse by unit at all times, while also “concurrently detailing the facility’s plans to ensure that it will implement such limits without diminishing the staffing levels of its health care workforce.”

Hospitals would also be required to develop a “patient acuity tool” for each unit to be used to determine whether the maximum number of patients that may be assigned should be lower than the assignment limits in the law. Notices regarding the patient assignment limits must be posted in conspicuous places, including each unit, patient room, and waiting area.

What are the Ratios?

The specific ratios mandated are summarized as follows (nurse:patient):

  • Step-down/intermediate care 1:3
  • Post anesthesia care (PACU) 1:1; PACU post-anesthesia 1:2
  • All units with operating room (OR) patients 1:1; OR patients post-anesthesia 1:2
  • Emergency Services Department: 1:1, 1:2,1:3, or 1:5 depending on the emergent or urgent nature of a patient which often changes by the minute
  • Maternal child care patients:
    • Active labor, intermittent auscultation for fetal assessment, and patients with medical or obstetrical complications 1:1
    • During birth and for up to two hours immediately postpartum 1:1 for mother and baby; when the condition of the mother and baby are determined to be stable and the critical elements are met, 1 nurse may care for both the mother and the baby(ies)
    • During postpartum for uncomplicated mothers or babies 1:6 (either 6 mothers or babies, 3 couplets of mothers and babies, or, in the case of multiple babies, not more than a total of 6 patients
    • Intermediate care or continuing care babies is 1:2 for babies
    • Well-babies 1:6
  • Pediatric 1:4
  • Psychiatric 1:5
  • Medical, surgical and telemetry patients 1:4
  • Observation/outpatient treatment 1:4
  • Rehabilitation units 1:5
  • All others 1:4

How Would the New Law be Enforced?

Question 1 also requires the state’s Health Policy Commission (HPC) (as opposed to the Department of Public Health, which is the state authority to license and regulate hospitals and other health care providers) to promulgate regulations and conduct inspections governing the implementation of the initiative.  The HPC is a six year old independent state agency charged with monitoring health care spending growth, it does not have the staff or infrastructure to conduct routine hospital surveys to monitor internal facility management and operations. It is also important to note that the proposed ballot would restrict the HPC by preventing it from issuing any delays, temporary or permanent waivers, or modifications of the ratios. Thus, even if the HPC believed that the January 1st  implementation date was unfeasible, it may be prohibited from offering waivers.

The HPC may report violations to the State Attorney General, who could file suit to obtain injunctions as well as civil penalties of up to $25,000 per violation and up to $25,000/day for continued violations.

The Impact if Question 1 Passes

Coalitions have lined up on both sides of Question 1.  Each side has painted dramatically-different pictures of a future for the industry with mandated nurse staffing ratios. The supportive nursing union has cast the initiative as being relatively small dollars for the industry, costing only $47 Million for all hospitals in the state in total according to their study.[3],[4]  The Massachusetts Health and Hospital Association and a broad-based coalition of health care providers and other nursing organizations opposed to the initiative point to studies estimating that the cost will be in excess of $1 Billion to the industry.[5]  Increased costs are based on the need to recruit new nurses, as well as the across-the-board increases in pay. There will be a need to hire 5,911 registered nurses within 37 business days to comply with January 1st  deadline and this is in a state that already has a shortage of approximately 1,200 registered nurses.[6]  Individual community hospitals are reporting projected additional expenditures that amount to more than the $30 Million per year, with teaching hospitals anticipating increased expenditures higher than that.[7]

On October 4, 2018, the HPC issued its independent report on the estimated costs of Question 1, essentially validating the opposition’s concerns, and projecting annual increased costs of $676 Million to $949 Million, and noted that the projections were “conservative.” The HPC study undercounted costs as it only looked at increased costs in certain units, and excluded costs associated with increased staffing in emergency departments, observation units, outpatient departments, or any costs for implementation or to non-acute hospitals.[8]  Wage increases of 4 – 6% are predicted in the HPC study, based on the California experience with across-the-board staffing requirements in place, and estimated increases of total health expenditures in Massachusetts of 1.1 – 1.6%, with increases of 2.4 – 3.5% for hospital spending alone, again, based on a conservative and partial analysis. Thus, it appears that the industry fears of greater than $1Billion in annual increased expenses are valid.

Ancillary adverse impacts anticipated by the HPC included reduced access to emergency care, increased wait times, decreased patient flow, increased “boarding,” and more ambulance diversions.

The HPC also compared Massachusetts to California hospitals and concluded that there was “no systematic improvement in patient outcomes post-implementation of ratios.”

What Should Hospitals be Doing Now?

Question 1, if passed, would only apply to Massachusetts licensed hospitals.  But hospitals and health systems in other jurisdictions should be prepared for similar efforts in their states. The following are some initial steps hospitals should be considering

Access Management.  Access problems will be common starting in January if Question 1 passes. Elective procedures, non-emergent appointments and other services may need to be curtailed effective January 1, 2019.  Hospitals will need to meet staffing levels on that day with respect to then-current inpatients and outpatients.  Avoiding new admissions in December may be necessary to assure the hospital is not in instant violation on New Year’s Day. Early patient contact to warn about the possibility of rescheduling procedures will prudent.

Payer Contract “Reopeners.”  Payer contracting “reopeners” should be added to managed care contracts now. The hospital community has been watching the interest of the unions in pushing nurse staffing ratios in Massachusetts and other states for a number of years. Health systems and hospitals negotiating long-term contracts with payers have often included “reopeners” to permit the hospital to revisit contract rates even during the term of an agreement if certain extreme events come to pass.  Hospitals in all jurisdictions are encouraged to consider adding such reopeners to their agreements today.

Massachusetts hospitals should review their payer contracts now to confirm if they have the right to a mid-term reopening and, if so, provide notice immediately upon passage to their payers that the hospital will need to renegotiate rates to address the increased costs. Charge masters will also need to be reviewed immediately.

Union status? Based on their efforts to rally public support around Question 1, the Massachusetts Nurses Association is trying to do an end-run around the collective bargaining table where their past efforts on the issue of staffing ratios have failed.  Health systems and hospitals should review their collective bargaining agreements to determine whether they are in a position to trigger a reopener during the term of the contract to address the numerous monetary and non-monetary consequences of rigid staffing ratios contemplated by Question 1.

Unit Closure Plans.  If passed, hospitals in Massachusetts will likely need to immediately assess whether and how they could comply with these new ratios. Units that already operate at a loss, or for which meeting the staffing requirements is impossible, should be closed or reduced to the smallest possible patient compliment.  Closure plans and negotiations will need to commence immediately.

Massive Recruitment Efforts.  While there are believed to be a few hospitals that may already meet these staffing levels (at some times), most hospitals will need to recruit many more registered nurses, as well as have additional nurses standing by for fluctuations in patient loads on various units on a daily basis.  As noted above, the law will require hiring nearly 6,000 RNs in the fourth quarter of this year.[9]

Conclusion

If Question 1 passes, conservative projections estimate extreme new costs will be incurred by Massachusetts hospitals, which will result in both reductions in levels of service, and increased costs to payers and patients.  It is important to note that the dire circumstances of the ballot has led to an increasing large number of nursing organizations and physician groups in Massachusetts to all oppose Question 1. While Massachusetts hospitals are making plans akin to natural disaster preparedness, hospitals in other states should watch carefully these events to be ready should similar initiatives arise locally.

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[1] A few other states have limited ratios in certain special types units (like intensive care units), but Question 1 applies to all hospital units.

[2] See http://www.ncsl.org/research/elections-and-campaigns/ballot-measures-database.aspx(June 6, 2018); downloaded on October 8, 2018.

[3] See https://www.massnurses.org/news-and-events/p/openItem/11083

[4] See https://safepatientlimits.org/wp-content/uploads/Shindul-Rothschild-Esti…

[5] See https://www.protectpatientsafety.com/get-the-facts/

[6]  See Mass Insight Global Partnership, Protecting the Best Patient Care in the Country, Local Choices v Statewide Mandates in Massachusetts (April, 2018)  http://www.bwresearch.com/reports/bwresearch_mha-nlr-report_2018Apr.pdf (“Mass Insight Study”)

[7] See Financial impact of nurses ballot question? Depends who’s counting, Priyanka Dayal McCluskey, Boston Globe (Sept. 17, 2018).  https://www.bostonglobe.com/metro/2018/09/17/financial-impact-nurses-ballot-question-depends-who-counting/mlS4yZa5IB8hcDaFZ7ojXM/story.html

[8] See Analysis of Potential Cost Impact of Mandated Nurse-to-Patient Staffing Ratios, October 3, 2018, https://www.mass.gov/doc/presentation-analysis-of-potential-cost-impact-…

[9] Mass Insight Study.

 

© 2018 Foley & Lardner LLP
This post was written by Lawrence W. Vernaglia and Donald W. Schroeder of  Foley & Lardner LLP.