The New York State Education Department (“SED”) has implemented a major procedural change, requiring that new professional practice entities submit an affidavit to SED when applying for Certificates of Authority to operate in New York State (whether in connection with original formation or foreign qualification to do business in New York). SED’s new process also requires that an affidavit be submitted for professional practice entity name changes.

The affidavit requires that a licensed professional who is either an owner or an authorized shareholder attest to whether the professional practice entity has any “relationship, ownership interest, affiliation or association with any other business and/or professional practice entity.” If there is such a connection, the licensed professional must name the affiliated/associated entity, state the nature of relationship, and attest that the relationship is fully compliant with all applicable rules and regulations of the New York Education Law and Business Corporation Law.

As of this time, SED has not provided any instructions for completing the affidavit or any guidance on how a professional practice entity determines whether a relationship that requires disclosure exists. Likewise, SED has not provided information on whether there will be a consequence for completing an affidavit in a manner that it deems incorrect. Although SED has not indicated how the affidavits will be used, the new requirement suggests that they may be used to identify and review relationships among entities and evaluate whether they are compliant with applicable law.

SED has advised that any request for a Certificate of Authority or name change submitted to SED without the affidavit will be rejected and will require the applicant to begin the submission process anew.  SED will not allow applicants to supplement their filings with a completed affidavit.

We are in dialogue with SED about issues concerning this procedural change and the significance of the same.

Click Here to download the Legal Alert.

* * * * *

If you have any questions about this alert, please contact the Garfunkel Wild attorney with whom you regularly work.


Challenged by Nursing Homes

On October 9, 2019, New York State Department of Health (DOH) announced that it will be implementing a new methodology for adjusting nursing home Medicaid reimbursement rates, commonly referred to as the “case mix adjustment.” The revised methodology will apply retroactively to July 1, 2019. Under DOH’s revised methodology, adjustments will continue to be made in January and July of each calendar year based on the (Medicaid–only) case mix data for the previous case mix period.  However, the calculation for the initial adjustment will be made using the case mix data submitted by nursing homes to Centers for Medicare & Medicaid Services (CMS) for the August 2018 – March 2019 period. All future case mix adjustments (i.e., post July 2019) will be made based on the case mix data submitted to CMS for the previous six month period (e.g., April – September for the January case mix adjustment; October – March for the July case mix adjustment). This represents a departure from DOH’s previous practice which relied on data for two specific days each year (January 25 and July 25), to calculate the adjustment.  This change in methodology is expected to provide the State with savings of approximately $350 million in the upcoming budget year.

In response to the announced change, a coalition of nursing home provider associations has filed a lawsuit on behalf of over 100 nursing homes.  The lawsuit seeks both preliminary and permanent injunctions enjoining DOH from implementing the new case mix adjustment methodology.  The lawsuit claims, among other things, that the change poses an immediate threat to nursing home residents and employee staffing levels and impermissibly bypasses CMS’s prior approval process.  A ruling has not yet been issued on the request for a preliminary injunction.

Click Here to download the Legal Alert.

* * * * *

If you have any questions about this alert, please contact the Garfunkel Wild attorney with whom you regularly work.


The New York SHIELD Act has gone into effect today (October 23, 2019) and entities that maintain electronic information regarding New York residents will need to ensure compliance. At the very least, for entities that have HIPAA compliance programs, this will mean that each entity’s HIPAA breach policy will need to be updated and the revised policy implemented.  For entities that do not have HIPAA compliance programs this may also mean that administrative, technical and physical safeguards need to be developed.  In addition, for all entities, there are a number of new reporting considerations when there is an intrusion (e.g., a hack, ransomware, phishing attack) or unauthorized access into an entity’s electronic systems.

Click Here to download the Legal Alert.

* * * * *

If you need any assistance in implementing the requirements of the SHIELD Act, please contact the Garfunkel Wild attorney with whom you regularly work.


On October 17, 2019, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule to update and clarify certain aspects of the federal physician self-referral law (“Stark Law”). On the same date, the Office of Inspector General (“OIG”) also issued a proposed rule to update the federal anti-kickback statute and civil monetary penalties law, as part of the Department of Health and Human Services’ “Regulatory Sprint to Coordinated Care,” which aims to reduce regulatory barriers, facilitate the transition to value based care and promote care coordination.  This Client Alert provides a brief summary of both proposed rules.

Stark Law Proposed Rule.

Generally, the Stark Law prohibits a physician from making referrals for certain “designated health services” (“DHS”) payable by Medicare if the physician (or an immediate family member) has a financial relationship with the entity performing the service, unless a Stark Law exception is satisfied.  The Stark Law also prohibits persons/entities from submitting claims to Medicare for services provided pursuant to a prohibited referral.  The Stark Law is a “strict liability” law, such that no intent to violate the Stark Law is necessary for the government to prove a violation.

If adopted, the proposed rule would create new exceptions to the Stark Law for value-based arrangements, as well as for donations of certain cybersecurity technology. There are three separate value-based care exceptions, each of which has unique requirements.  Of note, the new value-based exceptions would not prohibit remuneration that takes into account the volume or value of a physician’s referrals, but they would prohibit remuneration conditioned on referrals of patients who are not included in the target population, or business that is not covered by the value-based arrangement.

The proposed rule also, among other updates and clarifications, proposes to revise certain standards and concepts that are common to many Stark law exceptions, including: (i) the “set in advance” standard; (ii) the “fair market value” standard; (iii) the “commercially reasonable” standard; and (iv) the “volume or value of referrals” and “other business generated” standards. Each of these standards is critically important to providers seeking to comply with a Stark Law exception, and if adopted, the revisions should ease the burden of compliance.

CMS also proposed to revise (i) the “group practice” regulations by, among other changes, revising the definition of overall profits and restructuring certain aspects of the special rule for productivity bonuses and profit sharing; and (ii) the special rules on compensation arrangements, by extending the current 90 day period to document and sign a compensation arrangement, provided all other requirements of an exception are satisfied.

This summary is not intended to capture all of the proposed revisions to the Stark Law, which are nuanced and complex. We strongly encourage anyone who would like additional information to contact the GW attorney with whom you normally work.  Comments to the proposed rule are due by December 31, 2019.

Anti-Kickback/CMPL Proposed Rule.

The OIG’s proposed rule would revise safe harbors to (i) the federal anti-kickback statute, which makes it a crime to knowingly and willfully offer, pay, solicit, or receive remuneration (i.e., virtually anything of value) to induce or reward the referral of business reimbursable by a Federal health care program; and (ii) the beneficiary inducement provision of the civil monetary penalties law, which provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or State healthcare program beneficiary that the person knows, or should know, is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State healthcare program.  If adopted, the proposed rule would create a number of new safe harbors, and modify existing safe harbors, in an attempt to promote coordinated patient care and foster improved quality, efficiency and outcomes.

In the proposed rule, the OIG created new anti-kickback safe harbors for: (i) remuneration exchanged between or among eligible participants in a value-based arrangement that fosters better coordinated and managed patient care; (ii) certain tools and support furnished to patients to improve quality, health outcomes and efficiency; (iii) remuneration provided in connection with a CMS-sponsored model, which should reduce the need for separate and distinct fraud and abuse waivers for new CMS-sponsored models; and (iv) donations of cybersecurity technology and services. These new safe harbors, if implemented, should provide greater flexibility to providers.

In addition, the rule proposes to modify existing safe harbors in order to: (i) add protections to the existing safe harbor for electronic health records items and services for certain cybersecurity technology, update provisions regarding interoperability, and remove the sunset date; (ii) modify the existing safe harbor for personal services and management contracts by adding flexibility with regard to outcomes-based payments and part-time arrangements; (iii) revise the definition of “warranty” and provide protection for bundled warranties for one or more items and related services; (iv) modify the local transportation safe harbor to expand and modify mileage limits for rural areas and for transportation for patients discharged from inpatient facilities; and (v) codify the statutory exception to the definition of “remuneration” related to Accountable Care Organization Beneficiary Incentive Programs for the Medicare Shared Savings Program.

Finally, the proposed rule would amend the definition of “remuneration” in the civil monetary penalties law interpreting and incorporating a new statutory exception to the prohibition on beneficiary inducements for “telehealth technologies” furnished to certain in-home dialysis patients. The modifications are intended to facilitate arrangements that do not pose a significant risk of fraud and abuse, while improving efficiency and outcomes.

Comments to the OIG’s proposed rule are due 75 days from the date of publication of the Notice of Proposed Rulemaking in the Federal Register, or by December 31, 2019.

Click Here to download the Legal Alert.

* * * * *

The proposed changes, once finalized, may create opportunities for providers to enter into new arrangements or require revisions to existing arrangements.  If you have any questions about this alert, please contact the Garfunkel Wild attorney with whom you regularly work.


In September 2019, the U.S. Department of Health & Human Services, Office of Inspector General (“OIG”) published a “Data Brief” regarding State oversight of Ambulatory Surgery Centers (“ASCs”).   The Data Brief focused on the responsibility of the States to survey those ASCs: (1) that are not accredited by third party accreditation agencies (“Non-Deemed Status ASCs”); and (2) about which serious complaints are received, regardless of whether the ASC is accredited.

Although the purpose of the Data Brief is to summarize State compliance with their survey obligations, the findings illuminate issues for ASCs to consider, including the following:

  • The category of the Conditions of Coverage (“CfC”) with the most deficiencies between FY 2013 – FY 2017 was Infection Control with Infection Control findings being approximately one-fifth of all deficiencies. In other words, States cited more than half (55%) of all Non-Deemed Status ASCs with one or more Infection Control deficiencies.
  • The categories with the most deficiencies after Infection Control were: Pharmaceutical Services, Environment, Patient Rights and Patient Admission, Assessment and Discharge.
  • 77% of Non-Deemed Status ASCs had at least one deficiency during survey and 25% had serious deficiencies.
  • Between FY 2013 – FY 2017, there were a fairly limited number of complaints nationwide, with complaints regarding less than 4% of ASCs. Nevertheless, accredited ASCs should keep in mind that they may be surveyed by the States for complaints in the same manner as Non-Deemed Status ASCs.

A complete copy of the Data Brief can be found out at:

Click Here to download the Legal Alert.

* * * * *

Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work. For information regarding surveys and, in particular, compliance with Infection Control CfCs, please join us at Garfunkel Wild’s ASC and HealthCare Management Symposium. For additional information, visit our website at or call 516-393-2294