Health Law Advisor

On Tuesday June 16^th, the U.S. Court of Appeals for the District of Columbia Circuit upheld a District Court decision that invalidated a Department of Health and Human Services (“HHS”) rule requiring pharmaceutical companies to include the wholesale prices of their drugs in direct to consumer TV advertising.  See Regulation to Require Drug Pricing Transparency, 84 Fed. Reg. 20732 (May 10, 2019) (the “Disclosure Rule”).  Ruling in favor of Merck & Co., Inc., Eli Lilly and Company and Amgen, Inc., the Appeals Court held that HHS lacked statutory authority to establish the Disclosure Rule.

The Court found that HHS “acted unreasonably in construing its authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs.  Because there is no reasoned statutory basis for its far-flung reach and misaligned obligations, the disclosure rule is invalid and is hereby set aside.”

Just a few months ago, the idea of a virtual jury trial probably seemed inconceivable to most judges and lawyers.  Now, with the COVID-19 pandemic shuttering courthouses throughout the nation and most in-person proceedings suspended, many judges and attorneys are left wondering when and how civil jury trials will be able to safely resume.  We suspect that most prospective jurors will not be enthralled with the idea of sitting shoulder to shoulder in a jury box while the outbreak is still raging.  As litigators and the courts become comfortable with Zoom and other videoconferencing tools, it is apparent that we have the technology to hold virtual trials – the questions is should we?

The prospect of remote jury trials raises a host of serious issues ranging from how to overcome the constitutional hurdles to ensuring that witnesses, parties and jurors have access to high-speed internet so that they can participate in the first place.  Some potential solutions for accessibility concerns are having pre-wired government offices for those who lack access or distributing common technology (such as an iPad, with a cellular connection).  In addition to technology access, there will also be questions of whether a potential juror has access to a room where they can be alone and deliberate in private.

In a previous post, we discussed the appropriate use of the Provider Relief Funds authorized and appropriated by Congress under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. Within that post, we specifically discussed the limitation imposed on use of the Relief Funds for payment of salaries, a topic of great interest to many recipients. Under the Terms and Conditions, recipients are prohibited from using the funds for salaries in excess of the Senior Executive Service Executive Level II amount – an annual salary of $197,300 – or $16,441 a month. We noted that, although the Department of Health and Human Services (“HHS”) had not spoken to this requirement with respect to the Provider Relief Funds, HHS permits other HHS grant Recipients to pay individuals’ salaries in excess of the $197,300 limit with non-federal funds.[1] Also, HHS’ federal contract regulations similarly limit use of federal contract funds for salary costs to the Executive Level II amount, but allow for amounts in excess of that limit to be paid with non-federal funds.[2]

The Supreme Court of New Jersey unanimously held in Linda Cowley v. Virtua Health System (A-47-18) (081891) that the “common knowledge” exception of the Affidavit of Merit Statute applies only when a simple negligence standard is at issue, and does not apply when a specific standard of care must be evaluated.  In this case involving if and how to reinsert a removed nasogastric tube, the Court reversed the judgement of the Appellate Division and dismissed the plaintiff’s complaint with prejudice because she failed to submit an affidavit of merit within the time required by the Affidavit of Merit Statute.

Enacted in 1995, the Affidavit of Merit Statute requires that plaintiffs in medical malpractice cases “provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.” N.J.S.A. 2A:53A-27. The statute’s primary purpose “to require plaintiffs in malpractice cases to make a threshold showing that their claim is meritorious, in order that meritless lawsuits readily [can] be identified at an early stage of litigation.” Cornblatt v. Barow, 153 N.J. 218, 242 (1998). Failure to provide an affidavit or its legal equivalent is “deemed a failure to state a cause of action,” N.J.S.A. 2A:53A-29, requiring dismissal with prejudice.

An exception to this rule is the judicially-created “common knowledge” exception which provides that an expert is not needed to demonstrate that a defendant professional breached some duty of care “where the carelessness of the defendant is readily apparent to anyone of average intelligence.” Rosenberg v. Cahill, 99 N.J. 318, 325 (1985). In those exceptional circumstances, the “jurors’ common knowledge as lay persons is sufficient to enable them, using ordinary understanding and experience, to determine a defendant’s negligence without the benefit of the specialized knowledge of experts.” Hubbard v.  Reed, 168 N.J. 387, 394 (2001). Thus, a plaintiff in a malpractice case is exempt, under the common knowledge exception, from compliance with the affidavit of merit requirement where it is apparent that “the issue of negligence is not related to technical matters peculiarly within the knowledge of [the licensed] practitioner[].” Sanzari v.  Rosenfeld, 34 N.J. 128, 142 (1961).

On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit[] exposure of healthcare providers, patients, and staff to COVID-19 and conserve[] critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.

In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.

In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.

Our colleagues Adam C. Abrahms, Steven M. Swirsky, and Brock Olson at Epstein Becker Green has recently published a post on the Management Memo blog that will be of interest to our readers in the health care industry: “Tie Goes to the Employer: National Labor Relations Board Overrules Past Precedent Regarding Dual-Marked Ballots."

Following is an excerpt:

The National Labor Relations Board (“Board” or “NLRB”) on Wednesday, May 13, 2020, overruled decades of convoluted Board precedent regarding “dual-marked ballots” in union representation elections – ...

To limit exposure and reduce the spread of COVID-19, New York and New Jersey are requiring long-term care facilities to implement testing for staff.

New York

On May 11, 2020, New York Governor Andrew Cuomo issued Executive Order 202.30 requiring nursing homes and adult care facilities, including all adult homes, enriched housing programs and assisted living residences (“facilities”), to test all staff for COVID-19 twice per week.  Staff who refuse to be tested will be deemed to have incomplete health assessment and will be prohibited from providing services until the test has ...

To address the COVID-19 public health emergency fiscal burdens, Congress authorized and appropriated the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act[1], Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. The Department of Health and Human Services (“HHS”) has begun to distribute several tranches of the Relief Funds. All totaled, Congress provided $175 billion to the Public Health and Social Services Emergency Fund (“Relief Fund”) through the CARES Act and the Payroll Protection Program and Health Care Act.[2]

As of May 7, 2020, HHS identified $50 billion for general distribution to Medicare providers. HHS distributed to Medicare providers the Relief Fund’s initial $45 billion tranche in April 2020, and is distributing the Relief Fund’s second $20 billion tranche. Also, HHS allocated Relief Funds to: hospitals in COVID-19 high impact areas ($10 billion); rural providers ($10 billion); Indian Health Services ($400 million), and skilled nursing facilities, dentists, and providers that take solely Medicaid (unidentified amounts).[3]

Failing a drug test may not kill the buzz for medical marijuana patients in the Empire State.  In contrast to courts in California and other jurisdictions, a New York state court has held that medical marijuana users are entitled to reasonable accommodations, even if they only obtain certification after testing positive for marijuana.

In Gordon v. Consolidated Edison, Inc., Kathleen Gordon failed a random drug test by her employer, Consolidated Edison, Inc. (“CEI”).  After testing positive, but before her termination, Gordon became a certified medical marijuana patient to ...

Our colleague David J. Clark at Epstein Becker Green has recently published a post on the Trade Secrets & Employee Mobility blog that will be of interest to our readers in the health care industry: “New Indiana Law Will Restrict Physician Non-Competes.”

Following is an excerpt:

Joining many other states that in recent years have enacted laws regarding physician non-competition agreements, Indiana recently enacted a statute that will place restrictions on such agreements which are originally entered into on or after July 1, 2020.

Under Pub. L. No. 93-2020 (to be ...