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EEOC TO RESUME DATA COLLECTION APRIL 26, 2021

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The Equal Employment Opportunity Commission (“EEOC”) enforces federal laws applicable generally to employers with 15 or more employees (age discrimination requires 20 employees) and prohibits discriminating against a job applicant or employee because of an employee’s protected characteristics such as race, gender and age, among others.  The laws apply to all work activities such as hiring, promotion, wages and benefits and firing.

On March 29, 2021, EEOC announced it will resume collecting work force data from private employers. The deadline for submitting 2019 and 2020 EEO-1 component data will be Monday, July 19, 2021. Public employers also have to submit, but at a later date.

Work place data is summary pay data that provides EEOC wage information broken down by race, ethnicity and gender.  It is used by EEOC to help identify pay trends, inform investigations and focus resources.  It is human resource summary data, not individual pay dat., The goal is to help identify and evaluate pay disparities.

The collection had been suspended last year due to COVID.  Therefore, employers are being given 12 weeks (rather than ten weeks) to enter their data into the EEOC’s portal because it is a two year collection.  This obligation to produce and file the data through their portal is incumbent upon employers with 100 or more employees and federal contractors with 50 plus employees.

Employers can obtain more information at https:/EEOCdata.org. You should receive an email from the EEOC beginning March 29, 2021.  When collection begins, there are resources available at that website to help employers with their filings.  

Weiss Zarett Brofman Sonnenklar & Levy, P.C provides legal counsel and solutions to businesses and individuals for a broad variety employment law matters. If you need guidance with a matter concerning a current or prospective employment issue, including matters relating to discrimination, please contact David Zarett at 516.627.7000.

Weiss Zarett is a Long Island law firm with an Albany, New York presence, providing a wide array of legal services to the members of the health care and financial services industries, including corporate and transactional matters, employment maters, civil and administrative litigation, regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

HHS Exercises Discretion and Declines to Enforce HIPAA Privacy Rules for Use of Web-Based COVID-19 Vaccine Appointment Scheduling Platforms

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On January 19, 2021, the U.S. Department of Health and Human Services (HHS) issued a notification that the Office of Civil Rights (OCR), the entity responsible for enforcement of HIPAA privacy rules, would exercise its discretion and decline to impose penalties against certain covered entities or their business associates with respect to the use of online scheduling applications to schedule individual patient appointments to receive a COVID-19 vaccination. 

Per the notification, OCR recognizes that certain covered health care providers or their business associates have chosen to use web-based scheduling applications (“WBSA’s”) to schedule patients in connection with large-scale COVID-19 vaccination efforts. These WSBA’s are “non public facing,” in that they are not viewable by the public and are only intended to be viewed by the patient, provider and scheduling entity. WSBA’s and the companies which provide them, by their very nature, are also considered “business associates” of the HIPAA-covered healthcare entities which use their platforms.

Generally, the HIPAA Privacy Rules allow a covered entity to share Protected Health Information (PHI) with a business associate, but only pursuant to a written business associate agreement (BAA) or in accordance with pre-existing federal regulations established by HHS. However, recognizing the public need to schedule large numbers of COVID-19 vaccine appointments within  a short period of time, OCR has opted not to impose penalties for noncompliance with these regulatory requirements when either covered entities or their business associates are, in good faith, using WSBA’s to schedule such appointments.

As to the requirement of good faith, the notification outlines the recommended and reasonable safeguards that these entities should employ in their use of WSBA’s, which mirror the general requirements for the handling of HIPAA-protected information. These include: (1) using and disclosing only the minimum PHI necessary for the purpose of scheduling; (2) use of encryption technology; (3) enabling maximum privacy settings on the scheduling software; (4) ensuring that storage of PHI is only temporary; and (5) ensuring that WBSA vendors do not disclose PHI to any third party in a manner which is inconsistent with HIPAA rules.

HHS explicitly states that “[failure] to implement recommended reasonable safeguards above will not, in itself, cause OCR to determine that a covered health care provider or its business associate failed to act in good faith” for the purposes of the notification. However, from a practical compliance standpoint, a covered entity or business associate should still take tangible steps to implement reasonable safeguards, such that they may more easily be able to show good faith efforts in meeting OCR’s requirements should they later be required to do so. HHS also encourages covered health care providers to use WBSA’s which explicitly represent that they support compliance with applicable HIPAA rules.

It should be noted that the scope of the notification does not extend to appointment scheduling technology that links directly to a covered entity’s EHR system. The notification likewise does not extend to any activities other than the scheduling of COVID-19 vaccinations, including other activities related to COVID-19 vaccination or treatment in any other respect. This includes determining an individual’s eligibility for receiving a COVID-19 or screening a patient for COVID-19 prior to an appointment. The notification also does not extend to activities undertaken without any reasonable safeguards in place, underlining the importance of documenting that at least some manner of safeguarding is implemented.

Although announced in late-January, the notification is retroactive to December 11, 2020, and will remain in effect until the expiration of the public emergency declaration, or until HHS determines in its discretion that the public emergency no longer exists. A copy of HHS’s notification may be found here.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

Parentage Proceedings Under the Child Parent Security Act

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This is the fourth installment in the four-part series 

The Child-Parent Security Act: Embarking on the Surrogacy Journey

The Child Parent Security Act is poised to impact thousands of New Yorkers seeking to start or grow families through third party reproduction. Set to take effect February 15, 2021, the CPSA sets forth clear legal procedures for obtaining a judgment of parentage for children born through sperm, egg or embryo donation and/or with the assistance of a gestational carrier. In addition to being neutral with respect to gender and marital-status, parentage under the CPSA is determined by the intention to parent rather than by genetic connection. The CPSA also permits cryopreserved embryos created by spouses or partners to enter into an agreement transferring sole dispositional control of the embryo(s) to one party and absolving the former spouse of parental responsibility.

While the CPSA also addresses parentage of children conceived through assisted reproduction (i.e., where there is a gestating intended parent and no surrogate), its most detailed provisions address the parentage of children born through surrogacy arrangements. The following information is helpful understanding the requirements under New York’s surrogacy law to secure legal parentage of children born through third-party reproduction.

An overview of parentage proceedings under the CPSA.

Once the surrogate becomes pregnant, the CPSA sets forth procedures for securing a Judgement of Parentage. Ideally, the parties should file a petition in the 2nd trimester for a prebirth order so that the baby is the legal child of the intended parents at birth. Since intended parents and surrogates may not live close to one another, it is important to select the county where the petition will be filed ahead of time and memorialize decisions related to travel and attendance at the birth in the surrogacy agreement; the petition may be filed in any county where the parent or surrogate resided any time after the surrogacy agreement was executed, or where the child was born or resides.

The surrogate and the intended parents must be named parties to the petition. The parties’ attorneys must certify that the surrogacy agreement meets all the requirements set forth under the applicable provisions of the Family Court Act, as described above, including compliance with as-yet unpromulgated requirements established by the commissioner of health. The petition must also include a statement from all parties that they knowingly and voluntarily entered into the surrogacy agreement and that they are jointly requesting that a judgment of parentage be entered. 

If the court finds that the agreement is substantially in compliance with the statute and that the required statements are true, it must enter a judgment of parentage. The self-executing nature of the petition means that once filed, the court has little discretion to deny a petition if all statutory requirements are met. Since the petition is essentially confirming an existing parental relationship, as opposed to transferring parentage, the court may not require parents to submit to a home study or any other requirement typically associated with adoption proceedings.

The judgment of parentage declares that, upon the birth of the child, the intended parent(s) is/are the only legal parents of the child, and that neither the surrogate, the surrogate’s spouse, nor any donor is a legal parent of the child. The judgment also orders the surrogate and/or the surrogate’s spouse to transfer the child to the intended parents if this has not already occurred, and orders the intended parent(s) to assume responsibility for the maintenance and support of the child immediately upon birth. Upon receipt of the judgment, the local registrar must report the parentage to the appropriate department of health and issue an original birth certificate.

Embryo Disposition and Posthumous Conception.

Embryo disposition agreements between former spouses or partners are permissible under the CPSA. Cryopreserved embryos are treated similarly to marital property and are divided at the time a marriage is dissolved; they may also be divided by written agreement between unmarried partners. Prior to the passage of the CPSA, New York did not provide a path for releasing a former spouse or partner from parental obligations, even if the former spouse or partner did not object to the other’s use of the embryo for conception. With the passage of the CPSA, former spouses or partners with joint dispositional control of cryopreserved embryos may enter into a written agreement to transfer sole dispositional control to the intended parent. The parties must be represented by independent counsel, and spouses may only enter into the agreement after they are divorced. Upon execution of the dispositional agreement, a spouse or partner who transfers legal rights and dispositional control of a cryopreserved embryo is not a parent of any child conceived from that embryo, unless the agreement states that he or she consents to be a parent and such consent is not timely withdrawn prior to transfer of the embryo.

Where a consenting intended parent who provided genetic material dies before the transfer of eggs, sperm, or embryos, the deceased may nevertheless be recognized as the child’s parent for the purpose of granting the child the deceased’s benefits, provided that the record complies with the estates, powers and trusts law. However, even if the deceased signed a record consenting to be a parent by assisted reproduction, he or she will not be recognized as a parent of the resulting child unless the deceased specifically consented to be a parent of the child if assisted reproduction were to occur after death.

___________________________

For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

New York’s Novel Surrogate’s Bill of Rights Provides Unprecedented Protection for Gestational Surrogates

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This is the third installment in the four-part series 

The Child-Parent Security Act: Embarking on the Surrogacy Journey

Beginning on February 15, 2021, New Yorkers will be able to legally enter into compensated gestational surrogacy arrangements for the first time. One of the last holdout states in the country, New York legislators resisted surrogacy for years, largely out of concerns surrounding the economic disparity between surrogates and the typical intended parent(s), and the risk of exploitation. With the passage of the Child Parent Security Act, New York’s standout new surrogacy law includes the first-in-the-nation Surrogates’ Bill of Rights, codifying the strongest set of protections under any parentage statute in the country.

At the time of the consult, the surrogacy matching program must provide all parties to a surrogacy agreement with written notice of the Surrogate’s Bill of Rights (“SBR”), as set forth under the newly added Article 5-C Part 6 of the Family Court Act. The SBR effectively codifies a set of best practices, affording the surrogate robust rights with respect to health care decision-making, independent legal counsel, health insurance, medical care, life insurance, and behavioral and mental health counseling. With few exceptions, these costs must be covered by the intended parents.

Health care decisions. 

The surrogate has the right to make all health and welfare decisions regarding themself and their pregnancy, including but not limited to whether to consent to a cesarean section or multiple embryo transfer, choice of health care provider(s), whether to terminate or continue the pregnancy, and whether to reduce or retain the number of fetuses or embryos they are carrying.

While the SBR explicitly provides that the surrogate is entitled to make decisions regarding her health and welfare, including whether and when to terminate the pregnancy, questions remain as to the intended parents’ financial obligations if the surrogate declines a request by the intended parent(s) request to terminate or not to terminate. This topic should be considered carefully and memorialized in the agreement.

Independent legal counsel. 

While it is widely accepted that the surrogate is entitled to independent counsel, whether the attorneys must all be licensed in New York was somewhat contentious. Ultimately, it was determined that the parties’ attorneys must be licensed in New York and may not be affiliated, either with one another or with the licensed and registered surrogacy program that matched the intended parent(s) with the surrogate. The SBR also requires the intended parent(s) to pay the surrogate’s legal fees.

Health insurance. 

After the parties are screened by the surrogacy program and a successful match is identified, but before the surrogacy agreement is negotiated, an insurance review must be conducted to ensure there are no exclusions. The surrogate has the right to comprehensive health insurance covering preconception care, prenatal care, major medical treatments, hospitalization, and behavioral health care, not only for the duration of the pregnancy but for one year after the birth of the child, a stillbirth, a miscarriage, or termination of the pregnancy. The cost of all required health insurance coverage must be paid for by the intended parent(s), including all co-payments, deductibles, and any other out-of-pocket medical costs associated with the pregnancy; this includes all unreimbursed expenses, including appeals should coverage be denied for required care at any time while the agreement is in effect. Coverage should be in place at the time of the embryo transfer and may only be waived by the surrogate if the surrogate is not receiving compensation. The insurance coverage requirement may be complicated further as insurance carriers begin offering surrogacy-specific plans.

While the above protections guarantee the surrogate’s right to no-cost health care associated with the pregnancy, the SBR does not address pro-rata sharing of costs where the surrogate’s existing health insurance is more comprehensive than the statute requires, or where an existing policy covers individuals other than the surrogate. For example, a surrogate and the surrogate’s spouse and/or children may be covered under a family plan, the cost of which far exceeds the coverage requirements enumerated in the SBR. Under these circumstances, the attorneys for the parties must carefully negotiate fair and reasonable terms that conform to the statute without rendering the surrogacy arrangement financially untenable for the intended parents.

Mental health counseling. 

The surrogate has the right to obtain a comprehensive health insurance policy that covers behavioral health care and will cover the cost of psychological counseling to address any issues resulting from the surrogate’s participation in the surrogacy arrangement. As with the required health insurance policy, the cost of the counseling coverage must be paid for by the intended parent(s).

Life insurance. 

The surrogate has a right to be provided with a life insurance policy that takes effect prior to the surrogate’s taking any medication or commencing treatment to further embryo transfer. The policy must provide a minimum benefit of $750,000 and must extend throughout the duration of the expected pregnancy and for twelve months after the birth of the child, a stillbirth, a miscarriage, or termination of the pregnancy. The surrogate may choose the beneficiary and the policy must be paid for by the intended parent(s).

___________________________

For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

Entering Into Surrogacy Agreements Under the Child-Parent Security Act

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This is the second installment in the four-part series

 The Child-Parent Security Act: Embarking on the Surrogacy Journey

On February 15, 2021, the Child-Parent Security Act (“CPSA”) will take effect, eliminating New York’s longstanding proscription against compensated gestational surrogacy. Signed into law by Governor Andrew Cuomo on April 2, 2020, the CPSA will not only allow New Yorkers to contract with gestational surrogates for the first time, but also streamline the process for establishing parentage of children born through third-party reproduction.

Gestational surrogacy contracts in New York will be subject to strict statutory requirements. Before entering into a surrogacy arrangement, it is essential to understand how New York law will affect parties’ respective surrogacy journeys. Navigating these complex waters requires the skill and experience of a licensed attorney. In fact, the statute requires that the parties to a surrogacy agreement must be represented by separate legal counsel; that the attorneys must be licensed to practice in New York; and that the attorneys are not affiliated with one another, or with the licensed and registered surrogacy program that facilitated the intended parent-surrogate match. Depending on your situation, the following considerations are important in planning your surrogacy journey.

Eligibility Requirements for Intended Parent(s).

The following requirements must be met in order to meet the definition of an “Intended Parent” for purposes of entering into a surrogacy agreement in New York:

  • At least one intended parent must be a United States citizen or lawful permanent resident.
  • At least one intended parent must have been a New York resident for at least six months.
  • The intended parent(s) must be represented by independent legal counsel licensed to practice in New York throughout the contractual process and for the duration of the contract, and the attorney may not be affiliated with counsel for the surrogate or with the surrogacy program that matched the intended parent(s) with the surrogate.
  • Spouses must enter into the agreement as intended parents together; an adult individual who is in a spousal relationship may enter into a surrogacy agreement without his or her spouse only if the spouses are living separate and apart for at least three years prior to execution of the agreement, or if the spouses are living separate and apart pursuant to a written separation agreement or a judgment of separation or divorce. Where the spouse of an intended parent is not a necessary party to the contract, he or she has no rights or obligations to the child.

Eligibility does not depend on an intended parent’s gender or marital status. Unmarried individuals may enter into a surrogacy agreement, as may any two adult who are “intimate partners” together. This last requirement is noteworthy in that “intimate partners” is not defined to include only romantically involved partners; rather, the language of the statute appears to allow any two individuals to undertake a surrogacy journey together, regardless of the platonic nature of their relationship. Likewise, same- and opposite-sex couples and single parents alike can obtain a Judgement of Parentage.

Eligibility Requirements for Gestational Surrogates.

The following requirements must be met in order to meet the definition of a “Surrogate” for purposes of entering into a surrogacy agreement in New York:

  • The surrogate is at least 21 years old.
  • The surrogate is a United States citizen or a lawful permanent resident. If at least one intended parent is not a resident of New York for at least six months, the surrogate must be.
  • The surrogate did not provide the egg used to conceive the child.
  • The surrogate has undergone a medical evaluation and has been screened for health conditions that may pose risks to the surrogate or embryo during the pregnancy.
  • The surrogate gives fully informed consent.
  • The surrogate and/or the surrogate’s spouse, if applicable, are represented by independent legal counsel, presumably throughout the contractual process and for the duration of the contract. 
  • The surrogate has a comprehensive health insurance policy as required under the statute, which must take effect before the surrogate begins taking medication or commencing treatment to further embryo transfer. 
  • The surrogate has a life insurance policy as required under the statute, which must take effect before the surrogate begins taking medication or commencing treatment to further embryo transfer. 
  • The surrogate’s legal fees, health insurance policy, and life insurance policy are paid for by the intended parent(s). The surrogate may waive this requirement only if the surrogate is not receiving compensation.
  • The surrogate meets all other requirements deemed appropriate by the commissioner of health regarding the health of the prospective surrogate, once the commissioner promulgates rules and regulations as required by the statute.

Disputes arising from surrogacy agreements.

No matter how carefully a surrogacy agreement is drafted, disputes may arise. Because New York’s surrogacy law is in its infancy, these novel matters will have to be explored in the coming months and years. In the case of a dispute related to the agreement itself, the parties will be entitled to all remedies other than specific performance. Likely disputes include compensation and payments to donors and surrogates; surrogates’ rights under the SBR; attorneys’ fees; and inheritance rights in cases where an intended parent dies before the child’s birth. Disputes with insurance companies are also likely, especially as insurance carriers begin offering coverage under new types of policies specific to gestational surrogacy. Disputes related to acknowledgments of parentage may also arise. 

Whatever the reason for a potential dispute, it is essential to craft an agreement that anticipates and addresses the risks, complications, and sources of conflict in advance. These concerns include:

  • Access by the intended parent(s) to the surrogate’s medical information during the pregnancy.
  • Prenatal testing and contingency plans in the event of abnormal test results.
  • The number of embryos transferred and the possibly of reducing the number of fetuses during pregnancy.
  • The relationship and frequency of contact between the intended parent(s) and the surrogate during the pregnancy and after the birth.
  • Expectations related to the surrogate’s behavior and habits during pregnancy, including diet and nutrition, exercise, safety precautions, and limitations on travel.
  • Potential additional expenses in the event of complications requiring convalescence or other limitations that prevent the surrogate from working.
  • Disclosure to non-parties of the surrogacy arrangement.

Careful consideration of these and other potential conflicts can help guard against unanticipated disputes and encourage a harmonious relationship between intended parents and surrogates.

___________________________

For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

Compensated Surrogacy Brings Sweeping Change for New York Families

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This is the first installment in the four-part series 

The Child-Parent Security Act: Embarking on the Surrogacy Journey

On February 15, 2021, the Child-Parent Security Act (“CPSA”) will take effect, eliminating New York’s longstanding proscription against compensated gestational surrogacy. Signed into law by Governor Andrew Cuomo on April 2, 2020, the CPSA will not only allow New Yorkers to contract with gestational surrogates for the first time, but also streamlines the process for establishing parentage of children born through third-party reproduction. Prior to the passage of the CPSA, compensated gestational surrogacy was illegal in New York State and punishable by fines and criminal sanctions. New York was one of the last states to recognize intended parents’ right to contract with gestational surrogates; when the CPSA takes effect this month, Michigan will be the only state in the country that criminalizes compensated gestational surrogacy. 

Gestational surrogacy contracts in New York will be subject to strict statutory requirements. Before entering into a surrogacy arrangement, it is essential to understand how New York law will affect parties’ respective surrogacy journeys. The CPSA also addresses procedures for securing a judgment of parentage, sets forth strict requirements for drafting enforceable surrogacy agreements, and directs the Department of Health to promulgate rules and regulations for surrogacy programs and assisted reproduction providers to assure the health and safety of surrogates and gamete donors. This Part I of the series will give a general overview of the scope and breadth of the CPSA. Part II will discuss eligibility for entering into surrogacy agreements. Part III will discuss The Surrogate’s Bill of Rights. Part IV will discuss parentage proceedings. 

Surrogates’ rights.

Compared to other states’ surrogacy statutes, the CPSA is uniquely protective of surrogate’s rights. The newly-minted Surrogate’s Bill of Rights, unprecedented in surrogacy law, specifically enumerates robust surrogates’ rights relating to: health and welfare decision-making; independent legal counsel; cost-free health insurance, medical care, mental health counselling, and life insurance; and termination of the surrogacy agreement prior to becoming pregnant. For a more detailed discussion of the Surrogate’s Bill of Rights, see part III of this series,New York’s Novel Surrogate’s Bill of Rights Provides Unprecedented Protection for Gestational Surrogates.

The CPSA applies to gestational surrogacy only.  

While CPSA legalizes gestational surrogacy in New York for the first time, this only applies to surrogacy arrangements wherein the surrogate has no genetic relationship to the child. This means that “traditional” (i.e., genetic) compensated surrogacy agreements remain prohibited under New York law. Traditional surrogates who accept compensation are subject to severe criminal sanctions, and any agreement between the surrogate and the intended parents is unenforceable.

Compensation concerns.

The surrogate’s base compensation is determined by the medical risks, physical discomfort, inconvenience, and responsibilities of the surrogate. The surrogate may not be compensated for releasing her parental rights, nor may compensation be based upon genotypic or phenotypic characteristics of the child. 

The surrogate’s base compensation and reasonably anticipated expenses must be placed in escrow with an independent escrow agent before the surrogate begins taking medication or commencing treatment to further embryo transfer. The escrow agent must consent to the jurisdiction of New York courts for all enforcement proceedings; must be licensed in New York; must be independent from all attorneys representing the parties to the agreement. 

Surrogacy programs must be licensed and registered by New York State.

The CPSA requires that all surrogacy programs operating in New York must be licensed and registered. The New York State Department of Finance and the New York State Department of Health are required to draft and implement “best practices” regulations for surrogacy professionals. However, while these programs are subject to regulation, it is unclear whether intended parents’ use of a surrogacy program is required under the statute.

Department of Health to regulate the practice of gestational surrogacy.

Under the newly added Article 25-B of the Public Health Law, the Department of Health will create a voluntary central tracking registry of consenting surrogates. The purpose of this anonymous registry is to establish a means for gathering and maintaining accurate information about surrogates, including the number of times a person has acted as a surrogate, the surrogate’s health information, and other information deemed appropriate by the commissioner. 

Under the statute, the Department of Health is also required to promulgate guidelines and procedures for obtaining fully informed consent from potential surrogates, including but not limited to a full disclosure of any known or potential health risks and mental health impacts associated with surrogacy. Further, the Department must develop and distribute general information relating to gestational surrogacy and develop guidelines and protocols to assist physicians in screening potential surrogates and to reduce conflicts of interest among physicians providing health care services to surrogates. 

Parentage proceedings under the CPSA.

The CPSA sets forth clear legal procedures for obtaining a judgment of parentage for children born through sperm, egg or embryo donation and/or with the assistance of a gestational carrier. While the CPSA also addresses parentage of children conceived through assisted reproduction (i.e., where there is a gestating intended parent and no surrogate), its most detailed provisions address the parentage of children born through surrogacy arrangements. Under the new statute, parentage is determined by the intention to parent rather than by genetic connection. The CPSA also permits cryopreserved embryos created by spouses or partners to enter into an agreement transferring sole dispositional control of the embryo(s) to one party and absolving the former spouse of parental responsibility. While the CPSA streamlines these procedures, securing a judgment of parentage is complicated and time consuming, requiring careful planning with the assistance of a knowledgeable attorney. For a more detailed discussion of Parentage Proceedings, see part IV of this series,Parentage Proceedings Under the Child Parent Security Act.

___________________________

For many intended parents, the decision to pursue gestational surrogacy is arrived at after a series of hardships and heartbreaks. Even after the decision is made, the process may be as complicated as it is rewarding. Before entering into a surrogacy agreement in New York, intended parents and surrogates alike should be certain that surrogacy is the right choice. This means committing to work together with knowledgeable professionals who can successfully guide you through this complex process while ensuring that you understand the risks and benefits of surrogacy arrangements.

If you are considering gestational surrogacy, either as an intended parent or a prospective surrogate, our firm can help you determine whether surrogacy is right for you. From explaining how New York surrogacy law applies to your unique circumstances, to negotiating and drafting compliant surrogacy agreements, to securing parental rights as soon as possible after the birth of a child, Weiss Zarett can guide you through the process even as the CPSA continues to be developed.

___________________________

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a New York law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, employment counseling and controversies, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

OCR’s Audit Report Reveals Concerns that Continue to Guide HIPAA Enforcement

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By Mathew J. Levy, Esq.
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Recently, the Office of Civils Rights (OCR) within the U.S. Department of Health and Human Services (HHS) published its 2016-2017 Health Insurance Portability and Accountability Act (HIPAA) Audits Industry Report. HHS is required to periodically audit a sample of covered entities and business associates for HIPAA compliance under the Health Information Technology for Economic and Clinical Act (HITECH) Act. 

Across this sample, OCR found failures with the Notice of Privacy Practices requirements, the HIPAA Breach Notification Rule, the individual right of access to health information rule and the HIPAA Security Rule. Since the Audit was completed in 2016-2017, we would expect that a number of the fundamental deficiencies that OCR identified have been rectified by covered entities and business associates, as the OCR has been very aggressive in its enforcement activities during the last five years imposing significant financial penalties on non-compliant entities. Nonetheless, it is worth noting that these are the areas that OCR chose to focus on then and they remain as serious in 2021 as they were during this audit period:

  • Notice of Practices: of the 166 covered entities sampled, 98% failed to fully include required content for HIPAA-mandated Notice of Privacy Practices including content related to individual rights and the use of plain language as required by the Privacy Rule.
  • Breach of Notification to Individuals: findings uncovered failures to include the required description of Protected Health Information (PHI) and steps for individual protection. 
  • Individual Right of Access: the majority of covered entities failed to correctly implement individual right-of-access requirements, such as  granting reasonable access to PHI records within 30 days and charging a reasonable cost-based fee – due to Electronic Health Record (EHR), health care entities and business associates should only charge per-page fees that represent actual cost of the paper and manpower to print the record.
  • HIPAA Security Rule: findings showed failures to implement the detailed requirements for risk analysis and risk management. 

These areas of concern will continue to guide OCR’s continuing HIPAA enforcement efforts, which is intended to ensure that covered entities (and business associates) carefully and thoroughly identify security risks to protected health information in their custody and meet their duty to provide patients with understandable documents that describe their HIPAA rights and their timely and cost-based access to their medical records. 

It is critical for covered entities, including health care entities, and business associates to know the minimum requirements for HIPAA compliance. One way to assess whether your practice is ready for audit is to familiarize yourself with “Self-Audit For HIPAA Compliance – Is Your Practice Ready?”

Should you have any questions regarding HIPAA compliance, please contact Mathew Levy at 516-926-3320 or MLevy@weisszarett.com.

About the Author: 

Mathew J. Levy is a Partner of the firm and co-chairs the Firm’s corporate transaction and healthcare regulatory practice. Mr. Levy has extensive experience in, defending healthcare professionals in actions brought by State licensing authorities and the Federal agencies (OIG, Medicare, OMIG, Medicaid, DEA, OSHA, OCR OSHA, Hospital Review Boards, Office of Professional Medical Conduct and Office of Professional Discipline.) Mr. Levy has successfully defended numerous healthcare providers in actions involving the US Attorney’s Office investigations, Medicare Fraud Waste and Abuse investigations, Medicaid Fraud Control Unit investigations, OPMC, OPD, Medicare, Medicaid as well as commercial insurance audits including Prepayment Review, Post Payment Review, Medicare Hearings and Hospital Discipline Investigations.

Mr. Levy has successfully structured and negotiated joint venture agreements, private equity transactions, venture capital transactions, stock purchase agreements, asset sale agreements, shareholders agreements, partnership agreements, employment contracts, managed care agreements and commercial leases. Among the areas in which he focuses are coordinating mergers and acquisitions, compliance programs, ambulatory surgery centers, the establishment of diagnostic and treatment centers, HIPAA privacy regulations, fee-splitting issues, Stark law issues, fraud and abuse rules and regulations and Medicare/ Medicaid, Oxford, Americhoice, Fidelis, Healthfirst and other third-party payor settlements.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

IT IS TIME TO CONGRATULATE STACEY LIPITZ MARDER, ESQ. ON BECOMING A PARTNER

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Weiss Zarett Brofman Sonnenklar & Levy, P.C., is pleased to announce that Stacey Lipitz Marder, Esq.  as been promoted to a Partner of the Firm. Ms. Marder has been an integral part of the Weiss Zarett team since 2015 and has been practicing law since 2007. Ms. Marder focuses her practice in the area of healthcare law, with an emphasis on transactional matters and regulatory compliance. She has represented clients in both New York and New Jersey in connection with the formation and structure of professional practices and Article 28 facilities, joint ventures, stock and asset acquisitions, employment and consulting agreements, commercial leases, license agreements, buy/sell agreements, settlement agreements, and general corporate counseling. Ms. Marder  also has experience advising healthcare clients on a wide range of regulatory issues including Stark, the Anti-Kickback Statute and HIPAA, managed care disputes, Medicare and Medicaid investigations, and licensure matters. She is also a frequent lecturer on health care topics including employment agreement negotiations and fraud and abuse.

“Since the day she joined us, Stacey has truly been an asset to the firm. She has consistently demonstrated high quality business and legal acumen, with a proven track record of serving clients. We are honored to have Stacey become a Partner, and we are excited to have Stacey meaningfully contribute to the development and growth of our law practice for many years to come,” commented Mathew Levy, Esq., on behalf of all the Partners at the Firm.  

Please join us in congratulating Stacey on such a significant milestone in her professional career.

CLIENT ALERT: CMS and OIG Move to Expand Exceptions and Safe Harbors to Stark Law and Anti-Kickback Statute

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By Mathew J. Levy, Esq. & Mauro Viskovic, Esq. 
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On November 20, 2020, the Centers for Medicare and Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”) adopted significant changes to regulations regarding the Anti-Kickback Statute (“AKS”) and the Physician Self-Referral Law (“Stark Law”).  Among the changes are those that expand, and create new, AKS safe harbors and Stark Law exceptions.

Background:

As a general matter, AKS and the Stark Law and AKS prohibit medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs such as Medicare and Medicaid, and from entering into certain kinds of financial relationships.  There are various exceptions to the Stark Law, together with certain safe harbors to AKS, that permit certain referrals under limited circumstances.  The recent changes adopted by CMS and OIG aim to expand those exceptions and safe harbors in order to modernize and clarify regulations that were enacted back in 1989.  Summarized below is a general overview of the key AKS and Stark Law changes.  

AKS Changes:  

The main AKS revisions are as follows:

  • Value-Base Arrangements:  Three new AKS safe harbors will be added to protect certain arrangements entered into with, or by, a value-based enterprise (VBE) and its eligible participants for a number of value-based network arrangements, as follows:
  • Care coordination arrangements to improve quality, health outcomes, and efficiency, involving “no risk”, where in-kind renumeration such as technology or services are exchanged between VBE participants used to engage in value-based activities directly connected to care coordination for the target patient population.
  • Value-based arrangements involving both monetary and in-kind renumeration between a VBE and VBE participants where the VBE assumes “substantial downside financial risk” for providing or arranging for the provision of items and services for the target patient population, and the VBE participants assume a “meaningful share” of that risk.
  • Value-based arrangements involving both monetary and in-kind renumeration between a VBE and VBE participants where the VBE assumes “full financial risk” for all items and services covered by a payor for each patient in the target population for a term of at least one year.

These “value-based” safe harbors vary by the type of remuneration protected, the type of entities eligible to rely on the safe harbors, and the types of safeguards included as safe harbor conditions. The value-based safe harbors exclude pharmaceutical manufacturers, distributors, and wholesalers; PBMs; pharmacies that primarily compound or dispense compounded drugs; laboratories; medical device and supply manufacturers; medical device distributors and wholesalers; DMEPOS suppliers; and physician-owned medical device companies. The care coordination safe harbor can be accessed by medical device and DMEPOS manufacturers to protect digital technology arrangements under certain conditions.

  • Patient Engagement:  A new safe harbor will be added for patient engagement tools and supports to improve care quality, outcomes and efficiency, furnished by a VBE participant or “eligible agent” to a patient in a “target patient population,” subject to a $500 annual cap, with an inflation adjuster. This safe harbor includes the same general exclusions as outlined above but allows medical device and supply manufacturers to provide some digital health technology.
  • CMS-Sponsored Models:  A new safe harbor will be added for CMS-sponsored model arrangements and CMS-sponsored model patient incentives that is expected to reduce the need for separate fraud and abuse waivers for new CMS-sponsored models.
  • Cybersecurity:  A new safe harbor will be added to protect non-monetary donations of certain cybersecurity technology, including both software and hardware, and related services. This safe harbor permits the donation of cybersecurity technology to physician groups or other providers so long as the technology is “necessary and used predominantly to implement, maintain, or reestablish cybersecurity.” The safe harbor limits donors from making donation decisions considering volume or value of referrals or other business generated between the parties.
  • Electronic Health Records:  The existing electronic health records (EHR) safe harbor will be modified to update provisions regarding interoperability, remove the prohibition on donation of equivalent technology, and provide clarification to protections for cybersecurity technology and services included in an electronic health records arrangement.
  • Personal Services and Management Contracts:  The existing personal services and management contracts safe harbor will be modified to increase flexibility for part-time or unpredictable compensation arrangements, and to provide new protection for outcome-based payment arrangements, with the same entity-exclusions that are applied to the new value-based safe harbors.
  • Warranties:  The existing safe harbor for warranties will be modified to revise to definition of “warranty” and provide protection for warranties for one or more items and related services.
  • Local Transportation:  The existing safe harbor for local transportation will be modified to increase mileage limits from 50 to 75 miles for rural areas, and to eliminate distance limitations for transporting patients discharged home from an inpatient or observation setting.

The AKS changes will become effective January 19, 2021.

Stark Law Changes:

Many of the Stark Law changes track similar revisions made to AKS, with some distinctions.  The main revisions are as follows: 

  • Exceptions for Value-based Arrangements. As with the AKS changes, new, permanent exceptions for value-based arrangements were adopted to permit value-based arrangements that satisfy certain requirements based on the level of financial risk undertaken (full financial risk, meaningful downside financial risk, or no risk).  These exceptions will allow health care providers to design and enter into more flexible value-based arrangements without fear that legitimate activities to coordinate and improve the quality of care for patients and lower costs would violate Stark Law.
  • New Guidance and Clarifications. SMS provided additional guidance on key requirements of the exceptions to the Stark Law to make it easier for health care providers to comply with the law. For instance, compensation provided to a physician by another health care provider must generally be at “fair market value.” The new rules clarify how to determine whether compensation meets this requirement.  An additional clarification was effected by adding new definition of “commercially reasonable”, which requires that an arrangement “furthers a legitimate business purpose of the parties to the arrangement and is sensible, considering the characteristics of the parties, including their size, type, scope, and specialty” and clarifies that an arrangement may be commercially reasonable even if it does not result in a profit for one or more of the parties.
  • Other New Exceptions. The final rule establishes new exceptions to protect non-abusive, beneficial arrangements between physicians and other health care providers that apply regardless of whether the parties operate in a fee-for-service or value-based payment system—such as donations of cybersecurity technology that safeguard the integrity of the health care system. In addition, CMS finalized a new exception to protect compensation not exceeding an aggregate of $5,000 per calendar year, adjusted for inflation, to a physician for the provision of items and services without the need for a signed writing and compensation that is set in advance if certain conditions are met, including that the compensation does not exceed fair market value and is not determined in any manner that takes into account the volume or value of referrals or other business generated.

The new Stark Law regulations will become effective January 19, 2021. Certain provisions relating to value-based care arrangements will not be effective until January 1, 2022.

Should you have any questions regarding the foregoing rule changes, please contact Mathew Levy at 516-926-3320 or MLevy@weisszarett.com.

About the Authors: 

Mathew J. Levy is a Partner of the firm and co-chairs the Firm’s corporate transaction and healthcare regulatory practice. Mr. Levy has extensive experience in, defending healthcare professionals in actions brought by State licensing authorities and the Federal agencies (OIG, Medicare, OMIG, Medicaid, DEA, OSHA, OCR OSHA, Hospital Review Boards, Office of Professional Medical Conduct and Office of Professional Discipline.) Mr. Levy has successfully defended numerous healthcare providers in actions involving the US Attorney’s Office investigations, Medicare Fraud Waste and Abuse investigations, Medicaid Fraud Control Unit investigations, OPMC, OPD, Medicare, Medicaid as well as commercial insurance audits including Prepayment Review, Post Payment Review, Medicare Hearings and Hospital Discipline Investigations.

Mr. Levy has successfully structured and negotiated joint venture agreements, private equity transactions, venture capital transactions, stock purchase agreements, asset sale agreements, shareholders agreements, partnership agreements, employment contracts, managed care agreements and commercial leases. Among the areas in which he focuses are coordinating mergers and acquisitions, compliance programs, ambulatory surgery centers, the establishment of diagnostic and treatment centers, HIPAA privacy regulations, fee-splitting issues, Stark law issues, fraud and abuse rules and regulations and Medicare/ Medicaid, Oxford, Americhoice, Fidelis, Healthfirst and other third-party payor settlements.

Mauro Viskovic is a Partner in the Firm’s corporate and transactions practice group, where he focuses on providing high quality and cost-effective solutions to clients’ legal matters.  He represents entrepreneurs through all stages of their ventures’ development, including advice on structure, initial company formation and organization, private financings, commercial transactions, mergers and acquisitions and liquidity events.  In addition, Mauro represents investors in all aspects of corporate finance transactions and also focuses his practice on the representation of private investment fund advisers and portfolio managers

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

New OPMC Signage Requirements: Updates to New York Public Health Law Mandate that Medical Practices Post Visible Sign Directing Patients to OPMC Website

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Effective October 7, 2020, updates to New York’s Public Health Law have imposed a new requirement on physician practices to post conspicuous signage directing patients to the website of the Office of Professional Medical Conduct (OPMC) and advising them that they may visit the OPMC website to report suspected instances of professional misconduct. Specifically, the new Public Health Law § 230(11)(h) provides as follows:

The office of professional medical conduct shall post on its website information on patients’ rights and reporting options under this subdivision regarding professional misconduct, which shall specifically include information on reporting instances of misconduct involving sexual harassment and assault. All physicians’ practice settings shall conspicuously post signage, visible to their patients, directing such patients to the office of professional medical conduct’s website for information about their rights and how to report professional misconduct.

Notably, the new provision does not specify the exact contents of the required signage other than to state that it should “direct” the patients to OPMC’s website “for information about their rights and how to report professional misconduct.” At a minimum then, the sign should contain a link to OPMC’s website (located at https://www.health.ny.gov/professionals/doctors/conduct/) and contain a short statement that patients may learn more about their rights or report suspected physician misconduct using the information at that link.

Likewise, the law does not specify precisely where in a medical office the sign should be posted, beyond saying that it should be posted “conspicuously” and be “visible to their patients.” Presumably, placing the sign where it can be plainly viewed in a practice’s waiting room or near a reception desk would likely be considered satisfactory for these purposes. 

Although practitioners and practice associations, including the Medical Society of the State of New York (MSSNY), have taken umbrage at this new rule, it remains effective as of this writing. This being so, physicians should take immediate steps to comply with the signage requirement in their respective practices to the extent they have not already done so.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

NYS OMIG STREAMLINES COMPLIANCE CERTIFICATION REQUIREMENTS

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By Mathew J. Levy, Esq.
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Effective immediately, the New York State Office of the Medicaid Inspector General (OMIG) implemented changes to the annual Compliance Certification Requirement (NYS Social Services Law (SSL) §363-d) which we discussed in a prior Blast. 

This change impacts ALL NYS PROVIDERS AND BILLING COMPANIES that have received or billed at least $500,000 in Medicaid payments directly or indirectly (through managed care companies or insurers) in any consecutive 12-month period, as well as prior certification obligations under the Deficit Reduction Act (DRA).

The annual certification requirements have been simplified in the following ways: 

NYS providers are no longer required to complete the annual December certification also known as the SSL Certification, which was previously completed using a form available on the OMIG website. 

Instead, providers and billing companies must now submit an annual Certification Statement to eMedNY. That filing now satisfies and hence eliminates the DRA Certification required for providers billing or receiving over $5 million dollars annually. 

Deadline: The Certification Statement is due on the anniversary of the provider’s Medicaid enrollment. Providers can locate this date in their initial Medicaid enrollment welcome letter. Additionally, providers can expect to receive a NYSDOH reminder by mail approximately 45-60 days before their enrollment anniversary.

Impact: In response to a request for clarification, the OMIG has told us that there will be additional changes in the upcoming months to the financial threshold for Medicaid certification. Those changes will be noticed in Medicaid Updates. We will also provide updates in future Blasts.

Keep in mind that providers who have withdrawn from Medicaid due to sale or closure but are  still collecting Medicaid monies for services rendered prior to withdrawal from the program, will still be required to file if they hit the $500,000 threshold during the relevant time period.

Remember—the recent changes do not alter other requirements which are continuously evaluated by OMIG’s Bureau of Compliance to reduce fraud, waste, and abuse. Providers can take steps to ensure compliance by reviewing “Understanding Compliance.”

Should you have any questions regarding mandatory compliance program requirements please contact Mathew Levy at 516-926-3320 or MLevy@weisszarett.com.

About the Author: 

Mathew J. Levy is a Partner of the firm and co-chairs the Firm’s corporate transaction and healthcare regulatory practice. Mr. Levy has extensive experience in, defending healthcare professionals in actions brought by State licensing authorities and the Federal agencies (OIG, Medicare, OMIG, Medicaid, DEA, OSHA, OCR OSHA, Hospital Review Boards, Office of Professional Medical Conduct and Office of Professional Discipline.) Mr. Levy has successfully defended numerous healthcare providers in actions involving the US Attorney’s Office investigations, Medicare Fraud Waste and Abuse investigations, Medicaid Fraud Control Unit investigations, OPMC, OPD, Medicare, Medicaid as well as commercial insurance audits including Prepayment Review, Post Payment Review, Medicare Hearings and Hospital Discipline Investigations.

Mr. Levy has successfully structured and negotiated joint venture agreements, private equity transactions, venture capital transactions, stock purchase agreements, asset sale agreements, shareholders agreements, partnership agreements, employment contracts, managed care agreements and commercial leases. Among the areas in which he focuses are coordinating mergers and acquisitions, compliance programs, ambulatory surgery centers, the establishment of diagnostic and treatment centers, HIPAA privacy regulations, fee-splitting issues, Stark law issues, fraud and abuse rules and regulations and Medicare/ Medicaid, Oxford, Americhoice, Fidelis, Healthfirst and other third-party payor settlements.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

SEC Proposes Eliminating a Significant Burden on Raising Capital in Private Markets

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By Mauro Viskovic, Esq. 
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Startup, developmental and emerging growth businesses nationwide welcomed a recent proposal from the Securities and Exchange Commission that, if adopted, would make it considerably less difficult for them to raise capital.  

For many businesses seeking to raise start-up or working capital, banks are simply not an option due to the stringent credit requirements, asset encumbrances and overall rigidity that are associated with bank loans.  Accordingly, an alternative capital source for them are individual “angel” investors and, in some cases, venture capital and private equity funds.  

“Finders” are individuals who can connect businesses to these sources of investment capital in exchange for commission-based compensation; however, under current SEC regulations, such finders must be registered with the SEC as brokers.  Such registration is prohibitively costly and burdensome for finders seeking to assist small to middle market businesses.  As a result, many businesses are unable to connect with important sources of capital, leading to many of such businesses failing to execute on their business plan and, in many cases, reaching the unfortunate conclusion of ceasing operations.    

To address this issue, the SEC recently proposed a new exemption from broker registration requirements for finders who assist companies with raising capital in private markets from accredited investors.  If adopted, the proposed exemption would, under certain circumstances, permit individuals to solicit investments on behalf of companies seeking capital from accredited investors without registering with the SEC as brokers.  

The SEC’s proposal addresses a problem area in the SEC’s regulatory framework and, in doing so, seeks to facilitate investments for smaller businesses, including women- and minority-owned businesses.  Smaller businesses and their investors frequently encounter challenges connecting with each other in the private market, particularly in regions that lack established robust capital-raising networks.  In these areas, finders can play an important and discrete role in bridging the gap between small businesses that need capital and investors who are interested in supporting emerging enterprises.

Under current federal law, such finders are subject to essentially the same regulations and registration requirements as brokers who facilitate the trading of Fortune 500 companies in public exchanges.  The cost and burden of both the initial registration and the ongoing administration and reporting are enormous and the SEC seeks to address the current regulatory structure which makes it difficult for an individual to connect an investor to a small business seeking to raise start-up capital.  

The effect of the proposal on finder’s obligations would be sweeping.  Finders would not be required to register with the SEC or FINRA, and they would not need to notify the SEC of their intent to rely on the relief offered under the proposed exemption.  Moreover, finders would not be subject to periodic inspections or examinations, nor would they be required to maintain records of their activities.  Further, the proposal does not impose any limitations on the amounts that can be raised from investors, the size of the offerings, or the types of companies that can take advantage of the relief.  

This proposal would not affect the investment restrictions applicable to physician practices and other healthcare providers, which are subject to the prohibition on the “corporate practice of medicine” in most states.  The corporate practice of medicine doctrine has traditionally limited the ability of non-professional individuals and entities from investing in an ownership interest in healthcare providers.  

The SEC’s press release and summary of the proposal can be found here.  It is important to note that the proposed exemption on federal registration, if adopted, would not preempt related state regulations on finders and, as such, finders would need to analyze applicable state laws to ensure they are complying with relevant requirements.  In New York, a recent proposal would require all finders to be subject to all of the filing and exam requirements of brokers, broker-dealers and salespersons under New York law.  Such requirements, however, would be less onerous than the current federal broker registration requirements.  We will continue to monitor and provide updates on the New York proposal. 

Weiss Zarett represents business owners and investors in connection with a broad range of private investment transactions. If you are raising capital for your business venture or considering to participate as an investor in a private offering, please email Mauro Viskovic, Esq. at mviskovic@weisszarett.com or call us at (516) 627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care and financial services industries, including corporate and transactional matters, employment, civil and administrative litigation, regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

Proposed Rule for 2021 Medicare Fee Schedule Includes Changes to Telehealth Billing and Use of Evaluation and Management Codes

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On August 3, 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued its Proposed Rule for the 2021 Medicare Physician Fee Schedule (“Proposed Fee Schedule”). The Proposed Fee Schedule incorporates several proposals which could affect future physician billing, including changes to rules regarding use of Evaluation and Management (“E&M”) codes, billing for telehealth services, and others.

Telehealth Provisions

CMS has made several proposals related to telehealth services. Notably, at the outset of the COVID-19 pandemic, CMS temporarily added numerous codes to the list of approved telehealth services. In the intervening months, many providers have urged that CMS make these additions permanent. Accordingly, CMS has proposed permanently adding certain services to its permissible telehealth list. Some of these services include group psychotherapy, neurobehavioral status exams, care planning for patients with cognitive impairments and domiciliary, rest home or custodial care services. The list of permanent additions also includes general codes for prolonged services or home visits.

Additionally, CMS has proposed temporarily continuing to reimburse for certain services which have been added to its list on an emergency basis, which will remain in effect through the calendar year in which the public health emergency ends – which presumably includes 2021. These include domiciliary, rest home or custodial care services, home visits, and psychological and neuropsychological testing. CMS is continuing to solicit comments related to services added during the pandemic which do not appear on the list.

The Proposed Fee Schedule also would (a) relax rules regarding the frequency with which providers are permitted to check on nursing home residents via telehealth; (b) clarify supervision requirements for mid-level providers performing “incident-to” services via telehealth, and; (c) amend the definition of “interactive telecommunication systems” to mean any “multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication,” opening the door to the use of smartphones as a permissible means of delivering telehealth services.

E&M Codes

            In the hope that practitioners may be able to spend less time documenting patient visits and more time treating their patients, CMS has proposed overhauling key elements required to be documented when billing for E&M services. Specifically, these changes include eliminating history and physical exams as elements for selecting the appropriate E&M code. Additionally, physicians would be allowed to choose whether the documentation submitted includes the medical decision-making, or is simply a function of total time spent with patients. For example, 99213 would represent 20-29 minutes, and 99214 would represent 30-39 minutes. Such “time” would refer to total time spent, including non-face-to-face work done that day, and does not need to be limited to time spent counseling the patient on their medical issue.

Other Additions and Changes

           MIPS Quality Payment Program – CMS has proposed continuing to allow physicians to opt out of the Merit-Based Payment System (“MIPS”) based on the ongoing realities of the pandemic. Performance thresholds, performance categories, and incentive payment amounts would also be subject to revisions in 2021.

            Decreased Conversion Factor – the Proposed Plan includes a decrease of the Medicare Work Relative Value Unit (wRVU) conversion factor for physician services from $36.09 to $32.26. It includes significant wRVU decreases for radiology services, CRNA’s, and chiropractors to offset program spending in other areas.

            Diagnostic Test Supervision by Mid-Level Providers – Whereas previously midlevel providers were only authorized under Medicare rules to “order” and “furnish” diagnostic tests, CMS has proposed adding the supervision of diagnostic tests to the scope of practice of nurse practitioners, certified nurse midwives, clinical nurse specialists, and physician assistants. This would represent a permanent extension of rules implemented during the pandemic which allowed mid-level providers to perform these supervision activities for the first time.

More information about the Proposed Fee Schedule may be found at CMS’s website here. Assuming no subsequent changes are made, the Proposed Fee Schedule will be finalized and go into effect as of January 1, 2021. 

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

ATTORNEY ADVERTISING: PRIOR RESULTS DO NOT GUARANTEE FUTURE OUTCOMES.

2020 OIG COMPLIANCE WORK PLAN

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By Mathew J. Levy, Esq., & Stacey Lipitz Marder, Esq.
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Investigations by Medicare and Medicaid are constantly on the rise. Each year, a Work Plan is published by the Office of the Inspector General (OIG) (which is updated monthly) showing the priorities and major initiatives that it intends to investigate during the fiscal year. The OIG’s updated 2020 Work Plan has been announced on its website: https://oig.hhs.gov/.

The OIG has recently advised that it has added new items to its 2020 Work Plan addressing concerns surrounding COVID-19 treatment. As a result of COVID-19, Centers for Medicare & Medicaid Services (CMS) has made a number of changes that allow Medicare beneficiaries to access a wider range of telehealth services, and providers have been engaging in these new and innovative ways to treat patients. While these forms of treatment have certainly provided a great benefit to patients, the government is concerned that providers are taking advantage and not being compliant, putting patients at risk, and costing the government a significant amount of money. 

As per the OIG’s most recent Work Plan, some of the key Target areas are as follows:

  • The OIG will continue investigations of fraud, waste, and abuse in the Medicare and Medicaid programs. Such reviews often result in providers being subject to an overpayment demand, and potential prepayment audit review.
  • The OIG will be reviewing the top 25 laboratory tests and analyzing the payments made under the new payment system.
  • The OIG will continue to monitor and combat the current opioid crisis which remains a public health emergency. The OIG has expressed concern that individuals with opioid use disorder could be hit particularly hard by the current pandemic.  

In connection with the COVID-19 pandemic, the OIG has further recently advised that it will be targeting the following areas:

  • Audit of CMS’ controls over the expanded “Accelerated and Advance Payment Program,” which serves to provide healthcare providers and suppliers with emergency funding and address cash flow issues when there is a disruption in claims submission or claims processing.
  • Review of Medicare and Medicaid telehealth utilization, including how the use of these services compares to the use of the same services delivered face-to-face, and the different types of providers and beneficiaries using telehealth services. The OIG will also be identifying program integrity risks with telehealth services. Data will also be reviewed in order to determine providers’ appropriate use and reimbursement during the COVID-19 pandemic in compliance with applicable state and federal law.  
  • Review of laboratory testing, specifically concerning add-on tests in conjunction with COVID-19 testing, particularly related to potentially fraudulent billing for associated respiratory pathogen panel (RPP) tests, allergy tests, and genetic tests. 

For a complete list please refer to the OIG’s website.

Based upon the OIG’s updated Work Plan, healthcare providers need to be ever more diligent in assuring that services being provided and billed are compliant with applicable rules and regulations, including those relating to telehealth and COVID-19. Healthcare providers should review and update their current compliance programs, as well as educate their staff with respect to their compliance programs. Providers should consult with a coding/billing expert and work with their legal team to conduct internal and external audits to determine whether the practice is compliant. To assist providers in reaching these goals, Weiss Zarett Brofman Sonnenklar & Levy, P.C. is providing a free initial snap shot review with a certified coder. All providers should take advantage of this program. Establishing an effective compliance plan taking into consideration the OIG’s targeted areas, as well as applicable federal and state rules and regulations, can help providers avoid or limit potential liability. It is imperative that providers take compliance seriously as failure to comply can result in serious repercussions, including for instance an audit and subsequent overpayment demand in connection with services previously rendered and paid for, criminal action and potential loss of license. 

Should you have any questions regarding the OIG Work Plan, compliance, or the free snap shot audit of documentation and coding please contact Mathew Levy at 516-926-3320 or MLevy@app-60705ed4c1ac183264fb7857.closte.com or Stacey Marder at 516-926-3319 or SMarder@app-60705ed4c1ac183264fb7857.closte.com.

About the Authors: 

Mathew J. Levy is a Partner of the firm and co-chairs the Firm’s corporate transaction and healthcare regulatory practice. Mr. Levy has extensive experience in, defending healthcare professionals in actions brought by State licensing authorities and the Federal agencies (OIG, Medicare, OMIG, Medicaid, DEA, OSHA, OCR OSHA, Hospital Review Boards, Office of Professional Medical Conduct and Office of Professional Discipline.) Mr. Levy has successfully defended numerous healthcare providers in actions involving the US Attorney’s Office investigations, Medicare Fraud Waste and Abuse investigations, Medicaid Fraud Control Unit investigations, OPMC, OPD, Medicare, Medicaid as well as commercial insurance audits including Prepayment Review, Post Payment Review, Medicare Hearings and Hospital Discipline Investigations.

Mr. Levy has successfully structured and negotiated joint venture agreements, private equity transactions, venture capital transactions, stock purchase agreements, asset sale agreements, shareholders agreements, partnership agreements, employment contracts, managed care agreements and commercial leases. Among the areas in which he focuses are coordinating mergers and acquisitions, compliance programs, ambulatory surgery centers, the establishment of diagnostic and treatment centers, HIPAA privacy regulations, fee-splitting issues, Stark law issues, fraud and abuse rules and regulations and Medicare/ Medicaid, Oxford, Americhoice, Fidelis, Healthfirst and other third-party payor settlements.

Stacey Lipitz Marder is Senior Counsel at Weiss Zarett Brofman Sonnenklar & Levy, P.C., with experience representing healthcare providers in connection with transactional and regulatory matters including the formation and structure of business entities, negotiating and drafting contracts and commercial real estate leases, stock and asset acquisitions and general corporate counseling. Ms. Marder also has experience advising healthcare clients on a wide range of regulatory issues including Stark, the Anti-Kickback Statute, fraud and abuse regulations, HIPAA, reimbursement and licensing matters.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

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Out and Back: COVID-19 Paid Leave Changes in New York

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In previous articles, we summarized the federal paid-leave laws and regulations under the Families First Coronavirus Response Act (“FFCRA”) and the New York State Paid Sick Leave for COVID-19, and the benefit interplay between the federal, state and New York City laws and regulations.

As previously reported, under the New York State Paid Sick Leave for COVID-19, New York employees who were self-quarantined because they voluntarily traveled for non-business purposes to a country with a level 2 or 3 CDC notice, and knew of the restriction and were provided with the travel notice, were ineligible for the New York State Paid Sick Leave for COVID-19.  Until now, no similar disqualification restriction existed for interstate travel. 

With COVID-19 cases escalating across the United States, Governor Cuomo took immediate and decisive steps to sustain New York’s positive recovery by requiring travelers coming into New York from a list of hot-spot states to self-quarantine for 14 days.  This list, which continues to change based on “a seven day rolling average, of positive tests in excess of 10%, or number of positive cases exceeding 10 per 100,000 residents”, currently includes 16 states.

On June 26, Governor Cuomo issued Executive Order No. 202.45 (effective through July 26), stating that New York employees required to self-quarantine because they traveled domestically to a hot spot will not be eligible to receive any paid COVID-19 sick leave benefits during their 14-day mandatory self-quarantine.  Keep in mind that New York employees working for employers with over 500 employees, are already ineligible for sick leave benefits under FFCRA, and the only available paid COVID-19 sick leave would otherwise be under the New York State Paid Sick Leave for COVID-19.  Clearly, this recent Order was designed to further discourage New York workers from travelling to states with high rates of COVID-19.

Consequently, going forward, if:

  • The New York employee travels after June 25, 2020; and
  • The employee travels to a “hot spot” state as designated by the NYS Commissioner of Health; and
  • The travel is voluntary (“not taken as part of the employee’s employment or at the direction of the employee’s employer”) 

then the New York employee may be eligible for paid sick leave under FFCRA (if the employer has less than 500 employees), but will be ineligible for the New York State Paid Sick Leave for COVID-19.  

Notwithstanding an employer’s obligations under the FFCRA and/or the New York State Paid Sick Leave for COVID-19, if an employee is subject to an order of quarantine, but remote work is available, the New York self-quarantined worker could avoid unpaid leave by working remotely. In addition, please keep in mind that employers have always had the discretion to refuse paid sick leave under FFCRA to medical providers and other enumerated workers.

As the COVID-19 leave laws continue to evolve to meet changing circumstances and policy considerations, employers are encouraged to review their particular circumstances with counsel to avoid making errors in benefit determinations.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including employment, corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.

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Preliminary Injunctive Relief and Medical Staff Privileging Disputes

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By David A. Zarett, Esq.
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Adverse action by a hospital against a physician’s medical-staff appointment or clinical privileges—such as summary suspension, termination or non-renewal—poses potentially catastrophic consequences to a physician’s practice and career. While most hospitals afford the physician internal “due process” hearing rights to challenge the adverse action, such a remedy could drag on for months and afflict serious ongoing damage to the physician while the adverse action remains in effect. After the internal “due process” mechanism is complete, the physician must then proceed to an administrative review by the New York Public Health and Health Planning Council (“PHHPC”), which only has the power to request that the hospital reconsider its determination. See Public Health Law Sections 2801-b and c. Again, while the PHHPC’s review process drags on, the hospital’s sanction remains in place, and the damages and harm to the physician mount.   

Compounding that problem, New York’s highest court in Gelbard v. Genesse Hospital ruled that a physician is precluded from running to court to seek preliminary injunctive relief to “stay” the adverse action imposed by the hospital, until the physician first exhausts administrative remedies both within the hospital and before the PHHPC. See Gelbard v. Genesee Hosp., 87 N.Y.2d 691, 664 N.E.2d 1240 (1996); see also Farooq v. Millard Fillmore Hosp., 172 A.D.2d 1063, 569 N.Y.S.2d 320 (1991) (“Physician’s claim for injunction based on hospital’s allegedly wrongfully denying him staff privileges was premature where physician had failed to allege that he had exhausted administrative remedies by presenting claim to Public Health Council”); see also Raggi v. Wyckoff Heights Med. Ctr., 123 A.D.3d 1044, 999 N.Y.S.2d 174 (2014) (“Physician and professional corporation seeking reinstatement of physician’s clinical privileges at medical center were required to file an administrative complaint with New York State [PHHPC] and await the administrative disposition of that complaint before seeking redress in the courts”). This exhaustion requirement significantly handcuffs physicians, because the physician would have already suffered irreparable harm that could not be undone even by an ultimate court victory.

However, a recent decision by the Appellate Division, First Department may change the legal landscape when it comes to the availability of preliminary injunctive relief. Specifically, in Anyichie v. Lincoln Medical and Mental Health Center, the First Department held that a claim by a physician that a hospital did not follow its own bylaws in imposing the adverse corrective action—such as the summary suspension—was not subject to PHHPC review in the first place. See Anyichie v. Lincoln Med. & Mental Health Ctr., 176 A.D.3d 616, 110 N.Y.S.3d 674 (2019). 

Accordingly, it should follow under Anyichie that if a physician’s challenge to the hospital’s action were based on a claim the hospital failed follow its own bylaws, a physician could immediately seek judicial intervention and request immediate injunctive relief—since his or her claims were beyond the jurisdiction of the PHHPC and the doctrine of exhaustion of administrative remedies articulated in Gelbard would not apply. 

While Anyichie was decided only recently, it will be interesting to see whether this quite significant court decision alters the procedural landscape in which physicians dispute these types of issues with hospitals.

David A. Zarett, Esq., is a founding member of Weiss Zarett Brofman Sonnenklar & Levy, P.C., a Long Island law firm providing a wide array of legal services to the members of the health care industry, including physicians. Mr. Zarett devotes a substantial amount of his time counseling physicians who are the subject of adverse or corrective action imposed by hospitals. 

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