Effective January 1, 2020, the New York State Department of Financial Services (“DFS”) expanded the independent dispute resolution (“IDR”) process for surprise bills and bills for out-of-network (“OON”) emergency to include hospital services. The new IDR process is codified at Financial Services Law § 605.

Although implementation was delayed due to COVID 19, the expanded IDR process applies to emergency hospital services provided on or after January 1, 2020. Eligible hospital services include hospital admissions from the emergency room through the date of discharge.

Payment for Out of Network Emergency Hospital Services May Depend on Prior Participation Agreement.

The expanded IDR process defines how payment for the OON emergency services for a hospital is determined once a patient assigns their benefits to the non-participating hospital. Payment is based on the contractual history between the health care plan and the hospital. If the health care plan and hospital have not previously entered into a participating provider agreement, the health care plan must pay an amount that is determined to be ‘reasonable’ for the services rendered. The criteria the IDR entity should consider in determining ‘reasonableness’ is codified at Financial Services Law § 604.

If the hospital and health care plan have previously entered into a participating provider agreement, the payment made to hospital must be 25% greater than the in-network amount from the previous agreement between the parties. If such agreement expired greater than a year before, the previous in-network rate under the agreement must be adjusted by the medical consumer price index for each year plus the 25% increase. If hospital is participating with other products offered by the health care plan, the dispute can still be submitted to IDR and health plan should pay the ‘reasonable’ amount.

Expanded IDR Process Does Not Apply during Cooling Off or to Safety Net Hospitals.

If the hospital and the health care plan recently terminated their agreement and are still in the statutorily prescribed cooling off period, the services are not eligible for IDR. The new IDR process does not apply to safety net hospitals (hospitals whose inpatient discharged annually consists of at least 60% of Medicaid, uninsured and dual-eligible individuals) as determined by the New York State Department of Health (“DOH”). DFS uses the DOH list of safety net hospitals in effect on the date services were provided.

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DFS has also developed an assignment of benefits form for hospitals to use, available here. Use of this form is not required by DFS at this time but is strongly encouraged. To initiate the IDR process, hospitals and insurers must use this DFS application and follow the Hospital IDR processes. Patients who wish to submit to IDR must use a different application, available here.

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Should you have any questions regarding this Alert, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.


Earlier today the United States Health and Human Services Office for Civil Rights “OCR” issued an alert concerning fraudulent postcards sent to health care organizations claiming to be official communications from OCR. The post cards, with a Washington, D.C. mailing address and claiming to be from the Secretary of Compliance, HIPAA Compliance Division, encourage health care organizations to visit a website, call, or email the sender “to take immediate action on a HIPAA Risk Assessment” and lists potential penalties for noncompliance. Anyone that does contact the sender is diverted to a non-government website offering consulting services.

As a reminder, all communications from OCR will come from either an official office or an email address ending with @hhs.gov. You can find a complete list of OCR’s headquarters and regional offices here: https://www.hhs.gov/ocr/about-us/contact-us/index.html.

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If you have received this communication or any other suspicious compliance alerts, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

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On July 23, 2020, the New York Department of Health issued an invitation to New York State Licensed Home Care Services Agencies to participate in the “NY State of Health Private Pay Home Care Services Program Pilot” (the “Pilot Program”) beginning in 2021, in the counties of Nassau, Suffolk, and Westchester.

The Pilot Program creates an option supported by the NY State of Health Marketplace that would allow individuals to connect to private pay personal care services from LHCSAs that meet their needs and review the home care aides available in their area. The Marketplace will be updated with participating LHCSAs along with information about their employees who are available to accept new consumers, hourly rates, language(s) spoken, and other relevant information.

Upon a LHCSA’s submission of information required by the DOH’s invitation, the DOH will determine whether LHCSAs that respond meet all minimum participation standards for the Pilot Program. If a LHCSA applicant satisfies all minimum standards and signs a new Agreement with the DOH, it will be selected and eligible to offer home care services through the Marketplace. LHCSAs who wish to apply to the Pilot Program must submit non-binding Letters of Interest to the NY State of Health no later than July 29, 2020, and their Participation Proposals by August 12, 2020.

This invitation is the only opportunity for LHCSAs to apply for and receive approval to be included on the Marketplace in the 2021 Pilot Program. LHCSAs that do not apply for participation in the Pilot Program now will have an opportunity at a later date during any expansions of the Pilot Program.

Additional information and the relevant forms from the NY State of Health are available at the following link: https://info.nystateofhealth.ny.gov/LHCSAinvitation

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Should you have any questions regarding this Alert, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

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The U.S. Department of Justice (DOJ) recently announced a $72.3 million settlement with the Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (ASC), as well as related entities and physicians, to resolve a whistleblower lawsuit that alleged kickbacks were paid to surgeons at Southwest Orthopaedic Specialists (SOS). SOS surgeons own and operate the ASC, an affiliate of Tenet Healthcare, and formed a separate anesthesia practice – Anesthesia Partners of Oklahoma (Anesthesia Group) – to be the exclusive anesthesia provider at the ASC. In pertinent part, the lawsuit alleged that anesthesia profits from the Anesthesia Group were distributed to its surgeon owners in a manner that was directly related to the volume and value of their referrals to the ASC, in violation of the federal Anti-Kickback Statute and federal False Claims Act, among other laws.

According to the DOJ, the settlement resolves allegations that between 2006 and 2018, the ASC and a related management entity provided improper remuneration to SOS and certain of its physicians in exchange for patient referrals to the ASC in the form of:

  • free or below-fair market value office space, employees and supplies;
  • compensation in excess of fair market value for the services provided by SOS and certain of its physicians;
  • equity buyback provisions and payments for certain SOS physicians that exceeded fair market value; and
  • preferential investment opportunities in connection with the provision of anesthesia services at the ASC.

This case is notable not only for the amount of the settlement, but because the legal structure used by the parties to provide anesthesia at the ASC – a form of contractual joint venture known as the anesthesia “company model” – has long been considered particularly suspect by the federal DHHS Office of Inspector General (OIG). In a 2003 Special Advisory Bulletin, the OIG indicated that problematic contractual joint ventures include those where a provider in one line of business (Owner) expands into a related health care business by contracting with an existing provider of the related service (Service Provider) to provide the new service to the Owner’s existing patient population. The Service Provider not only manages the new line of business, but may also supply it with inventory, employees, space, billing, and other services. In other words, the Owner contracts out substantially the entire operation of the related line of business to the Service Provider – otherwise a potential competitor – receiving in return the profits of the business as remuneration for its referrals. The OIG believes that these types of arrangements are often intended to allow physicians to do indirectly what they cannot do directly: profit from their own referrals.

In this case, it was alleged that SOS and its surgeon owners did exactly that – expanded into a new line of business, anesthesia, in order to profit from their own referrals to the ASC. In other words, by forming the Anesthesia Group, SOS physicians were able to profit from the provision of anesthesia at the ASC, which was dependent on their surgical referrals.

The DOJ press release can be accessed here: https://www.justice.gov/opa/pr/oklahoma-city-hospital-management-company-and-physician-group-pay-723-million-settle-federal.

The 2003 Special Advisory Bulletin can be accessed here: https://oig.hhs.gov/fraud/docs/alertsandbulletins/042303SABJointVentures.pdf.

Related OIG Advisory Opinions (12-06 and 13-15) can be accessed here: https://oig.hhs.gov/fraud/docs/advisoryopinions/2012/AdvOpn12-06.pdf

and here:

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If you have concerns about a potential or existing arrangement, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.


On April 3, 2020, New York State Governor Andrew Cuomo signed the fiscal year 2021 budget, which included an overhaul of statewide paid sick leave requirements under the New York State Labor Law. Under the new law, all employers must provide sick leave to their employees. Employees will begin accruing sick leave on September 30, 2020, and will become eligible to use accrued leave on January 1, 2021. In advance of September 30, employers should review their sick leave and PTO policies to ensure compliance. In the interim, the New York State Department of Labor is expected to issue additional regulations and further guidance.

The law requires:

Amount of Leave

The amount of leave an employer must provide, and whether it must be paid or unpaid, is based on a combination of the employer’s size and income:

  • Employers with 4 or fewer employees and a net income of $1 million or less in the previous tax year must offer 40 hours of unpaid sick leave each calendar year.
  • Employers with 4 or fewer employees and a net income of greater than $1 million dollars in the previous tax year must offer 40 hours of paid sick leave each calendar year.
  • Employers with between 5 and 99 employees must offer 40 hours of paid sick leave each calendar year, regardless of income.
  • Employers with 100 or more employees must offer 56 hours of paid sick leave each calendar year, regardless of income.

For the purpose of determining an employer’s size, the law defines a “calendar year” as the 12-month period from January 1 to December 31. For all other purposes, including accrual and use of paid or unpaid leave, a “calendar year” is defined as either the 12-month period from January 1 to December 31 or any regular and consecutive 12-month period, as determined by the employer.

Accrual, Usage, Compensation, and Carryover

Whether paid or unpaid, sick leave must accrue at a rate of at least 1 hour per every 30 hours worked. Alternatively, employers may choose to provide the entire amount of leave in a lump sum at the beginning of a calendar year, but cannot later reduce or revoke any sick leave if the employee does not work enough hours to accrue that amount.

Employers may set reasonable minimum increments for the use of sick leave, which may not be greater than four hours. Further, employees must be compensated for sick leave at the greater of (1) their regular rate of pay; or (2) the applicable minimum wage.

An employee’s unused sick leave must carry over to the following calendar year. But, employers with fewer than 100 employees may limit annual usage to 40 hours, while employers with 100 or more employees may limit annual usage to 56 hours.

Covered Uses for Sick Leave

Starting January 1, 2021, employers must permit employees to use accrued sick leave for each of the following purposes:

  • Mental or physical illness, injury, or health condition of an employee or employee’s family member, regardless of whether the condition has been diagnosed or requires treatment at the time the employee requests leave.
  • Diagnosis, care, or treatment of a mental or physical illness, injury, or health condition of, or need for medical diagnosis of, or preventive care for, an employee or employee’s family member.
  • Absence from work for certain needs related to an employee or employee’s family member having been the victim of domestic violence, a sexual offense, stalking, or human trafficking. This includes, among other things, obtaining services from a domestic violence shelter or rape crisis center, meeting with law enforcement or an attorney to facilitate participation in legal proceedings, or taking any other action to maintain the health and safety of the employee or employee’s family member.

Under this section of the law, a “family member” is defined as an employee’s child, spouse, domestic partner, parent, sibling, grandchild, or grandparent, and the child or parent of an employee’s spouse or domestic partner. “Parent” includes biological, foster, step or adoptive parents, along with legal guardians of an employee or any person who stood in loco parentis when the employee was a minor child. Moreover, “child” includes biological, adopted, or foster children, as well as a legal ward or a child of an employee standing in loco parentis.

Proof of Covered Use

Employers cannot require disclosure of confidential information as a condition of providing sick leave. This includes information related to a mental or physical illness, injury, or health condition of an employee or employee’s family member, or any information related to absence from work due to domestic violence, a sexual offense, stalking, or human trafficking, as discussed above.

Effect on Existing PTO Policies & Collective Bargaining Agreements

Any employer who already provides employees with an amount of leave meeting or exceeding these requirements need not provide any additional leave. However, the employer’s policy must otherwise satisfy the accrual, carryover, and usage requirements implemented by this law.

All collective bargaining agreements entered into on or after September 30, 2020 may provide “comparable benefits” in the form of leave, compensation, or other employee benefits – or some combination thereof. Any such collective bargaining agreement must specifically acknowledge the provisions of this law.

Interaction with Local Law

Any city or municipality with a population of one million or more may enact laws or ordinances that meet or exceed the requirements of this law. Further, any existing sick leave programs enforced by a city, county, town, or other municipality remain in effect. Specifically, employers operating in New York City and Westchester County must continue to provide leave that meets or exceeds the requirements of the New York City Earned Safe and Sick Time Act and the Westchester County Earned Sick Leave Law, respectively.

Other Protections

Employers may not retaliate, discriminate against, or penalize any employee for requesting or utilizing sick leave. Also, upon returning from sick leave, employees must be restored to the same position, with the same rate of pay and identical terms and conditions of employment.

Recordkeeping & Documentation Requirements

Employers must record the amount of sick leave provided to each employee, and must maintain these records for a period of 6 years. Also, within 3 business days of any request by an employee, employers must provide a summary of all sick leave accrued and used by the employee.

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If you have questions or require assistance in reviewing existing policies, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.