New Jersey Legislature Passes Lithotripsy Exception to Codey Law

The New Jersey self-referral law, commonly known as the Codey Law, prohibits health care practitioners from referring patients to health care services in which the practitioner has a financial interest, but the law provides a number of exceptions from the prohibition. On December 19, 2013, both houses of the New Jersey legislature passed a new exception for lithotripsy services.

Currently, a practitioner is permitted to refer patients to a health care service in which the practitioner has a financial interest if the practitioner held a financial interest in the health care service prior to the effective date of the Codey Law. However, if the new exception is signed into law by the Governor, referrals will be permitted by practitioners who invest in a licensed facility that provides lithotripsy services even if the practitioner obtained their financial interest in the facility after the effective date of the Codey Law.

Expansion of the Definition of “Health Care Service Firm”

A recent bill in the New Jersey Senate expands the definition of health care service firms to include firms that place, or arrange for the placement of, personnel to provide companion services. The bill defines “companion services” as “nonmedical basic supervision and socialization services which do not include direct physical contact with the individual and which are provided in the individual’s home.” Because of the expanded definition, health care service firms that provide companion services must obtain accreditation and comply with annual auditing requirements. The previous definition included only firms that placed or arranged for the placement of personnel to provide health care or personal care services.

Nursing Home Patients Have Private Right of Action not Provided to Those in Assisted Living

According to the U.S. District Court for the District of New Jersey, the private right of action against  facilities that fail to protect specific rights provided to nursing home residents by the New Jersey Nursing Home Responsibilities & Rights of Residents Act (NHRRRA) does not equally apply to residents of assisted- living facilities. Although the definition of “nursing home” within the NHRRRA is broad, the Court found that the NHRRRA does suggest a distinction between nursing homes and assisted-living facilities. While individuals in assisted living are afforded protections by means of a different New Jersey law, a private right of action for a constitutional violation is not among them.

New Rules Adopted for Out-of-State Hospital Medicaid Reimbursement

Effective July 1, 2014, new amendments to New Jersey Administrative Code (N.J.A.C.) 10:52-4.5 by the Division of Medical Assistance and Health Services provide significant changes to current out-of-state hospital Medicaid reimbursement. Under the amendments, inpatient services provided by participating hospitals shall be reimbursed by the lesser of either the New Jersey Diagnosis-Related Group (DRG) payment rate, 100 percent of the out-of-state Medicaid agency’s claim-specific reimbursement methodology, or total charges. Inpatient services provided in a non-participating hospital shall be reimbursed by either the lesser of the negotiated rate, the New Jersey DRG payment rate, or total charges. Similarly, outpatient services from a participating hospital shall be reimbursed by the lesser of the average cost-to-charge ratio or fee schedule rate of New Jersey, 100 percent of the out-of-state Medicaid agency’s claim-specific reimbursement methodology, or total charges. Lastly, outpatient services from a non- participating hospital shall be reimbursed by either the lesser of the average cost-to-charge ratio of New Jersey, the fee schedule rate of New Jersey, or total charges.