Every year, the New Jersey legislature passes statutes that impact healthcare beyond rate increases under the Medicaid program. Last year was no different, and the discussion below highlights some of those statutes, such as statutes further regulating pharmacy benefit managers, requiring manufacturers to report an increase in drug pricing, increasing the time allowed for involuntary commitment of patients, and extending parity rates for telemedicine through December 31, 2024.
New Jersey Further Regulates Pharmacy Benefit Managers’ Business Practices to Address Prescription Drug Affordability
Approved Bill A536 supplements Title 17B of the New Jersey Statutes and provides more oversight of pharmacy benefit managers (PBMs) to address affordability and business activities that drive up costs. The bill prohibits any business entity from acting as a PBM without the proper licensure from the state. It also establishes new transparency standards, data and record reporting requirements, and cost establishment modifications.
Notably, the bill imposes the responsibility to enforce PBM compliance with the new mandates on the insurance carriers. It requires any funds the PBMs receive for their services to be credited to the patient at the point of sale or to the carrier to offset premiums. The bill also precludes a carrier from entering a contract with PBMs that prohibits the pharmacy from providing patients the option of paying for their prescription in cash instead of filing a claim with their carrier if the cash price is less than the patient’s cost-sharing amount.
A carrier, or PBM under contract with a carrier, must establish a single maximum allowable cost list to use with each pharmacy provider to show the maximum amount to be paid by a health plan to a pharmacy for generic drugs or brand-name drugs that have a least one generic equivalent available. For any drug for which a generic equivalent is not available or a prescription drug is not included on the maximum allowable cost list, the carrier and PBMs must use the average wholesale price. For each pharmacy provider, a carrier or PBM must use one national drug pricing source during a calendar year and make it publicly accessible on the carrier’s or PBM’s website.
Additional Respiratory Therapist Exam to Qualify for Licensure
Approved Bill A4616 amends N.J.S.A. 45:14E-1 et seq. and allows passage of the Certified Respiratory Therapist Examination offered by the National Board for Respiratory Care (NBRC) to qualify an individual for licensure as a respiratory therapist. Currently, the Registered Respiratory Therapist Examination offered by the NBRC is the only examination necessary to qualify for licensure. The law became effective immediately.
Hospitals to Provide Acute Care Outside Their Facilities
Approved Bill A4914 establishes the Hospital at Home Act and authorizes the Department of Health to permit a hospital to provide acute care services to an individual outside their licensed facility and within a private residence. The program must also be consistent with the federal Centers for Medicare & Medicaid Services (CMS) Acute Hospital Care at Home Program. Additionally, any insurance carrier offering health benefits in the state, including Medicaid and NJ FamilyCare programs, must provide coverage for acute hospital services by a credentialed provider delivered through the program. Any hospital with a waiver to operate under CMS’ federal program before the act’s effective date would be fully integrated into the New Jersey program.
Data and Transparency System for Prescription Drug Supply Chain
Approved Bill S1615 addresses prescription drug prices and implements new data reporting requirements across the prescription drug supply chain. The bill requires the Division of Consumer Affairs (Division) to publish emerging trends in prescription drug pricing annually.
Drug manufacturers, including product packagers, repackagers, labelers, relabelers, and distributors, will be subject to the reporting requirements if they increase the wholesale acquisition cost of a brand drug by more than 10 percent during any 12-month period; a generic drug priced between $10 to $100 by more than 40 percent during any 12-month period; or a generic brand priced at $100 or more by more than 10 percent during any 12-month period.
Manufacturers must provide written notice of such price increases to the Division within 10 days following the effective date, and the Division will notify consumers of the increase on its website. The manufacturer must also report to the Division within 20 days of the price increase proprietary and nonproprietary names, pricing units, volume, sales, revenue, and annual change in prescription drug transactions. The bill provides similar reporting and notification requirements for manufacturers related to market introduction of drugs.
The bill also imposes reporting requirements on pharmacy benefits managers (PBMs), including total rebates, discounts, and price concessions received or negotiated by PBMs with the manufacturer for each drug. The Division may audit the data submitted by any reporting entity at a cost covered entirely by the reporting entity and may require the entity to submit an action plan to correct any deficiencies.
Lastly, the bill establishes the Drug Affordability Council to review the reports submitted and collect data to formulate legislative and regulatory recommendations to tackle the high costs of prescription drug products. Each member of the council must have expertise in healthcare economics, healthcare policy, or clinical medicine.
Involuntary Civil Commitment for Mental Health Treatment
Approved Bill S3929 amends N.J.S.A. 30:4-27.1 et seq. to allow a general hospital, a short-term care or psychiatric facility, or a special psychiatric hospital to detain a person admitted involuntarily for an additional 72 hours from the time a screening certificate is executed. Within 24 hours of admission, the facility should initiate court proceedings for the involuntary commitment and request a temporary court order permitting the continued hold pending the date of the involuntary commitment hearing. This hearing should take place no more than 20 days from the initial commitment.
Prior to this bill, the facility could not detain a person admitted involuntarily for more than 72 hours; however, under the amendment, if a temporary court order has not been rendered within the first 72 hours—or a temporary court order has been granted, but the admitting facility does not have the capacity to accommodate the person—the facility may detain the person for an additional 72 hours.
The facility may detain them for this additional time if the person is reevaluated by a psychiatrist at least once every 24 hours; the evaluating psychiatrist recommends the person be detained due to risk of rehospitalization or if the person is a danger to themselves or others; and the person is not detained for a total of more than 144 hours from the time the screening certificate was executed.
Certain Military Medical Trainings as Nursing License Credits
Approved Bill A2722 amends N.J.S.A. 45:11-23 et seq. to permit veterans to receive credit from completing certain military medical training programs toward requirements for licensure as a licensed practical nurse (LPN). The goal is to provide a path for honorably discharged veterans with applicable medical training from the military to become an LPN. The bill includes a list of six specific military training programs to count as credit for the licensure and allows the New Jersey Department of Military and Veterans Affairs to determine other programs that may qualify.
Revisions to State False Claims Act to Comply with Federal Law in Medicaid Fraud Recovery
Approved Bill A5584 revises N.J.S.A. 2A:32C-1 et seq., New Jersey’s False Claims Act (FCA), to conform with federal law under which the state is eligible for greater recoveries in Medicaid fraud cases.
Under federal law, a state is entitled to enhanced recovery in Medicaid fraud cases if the inspector general of the Department of Health and Human Services determines the state’s FCA is “at least as effective” as the federal FCA in furthering whistleblower actions. The inspector general determined New Jersey’s FCA was not as effective as the federal FCA and recommended the state make modifications.
This bill implements the inspector general’s suggestions and modifies the state’s definition of the term “claim” to better align with the federal definition, and it adds definitions of the terms “material” and “obligation” to the statute. The bill also adds language to better follow the remedies available under the federal FCA and calculations for the state’s share of New Jersey FCA claim recoveries.
Counseling Compact to Allow Out-of-State Licensed Counselors to Practice in the State Via Telehealth
New Jersey approved Bill A5311 to increase access to professional counseling services and allow licensed counselors from other states to practice in the state through telehealth without needing multiple state licenses. There are currently 31 states, including New Jersey, that have joined the compact. This bill also comes on the heels of the emergency COVID-19 program that ended in August 2022, which provided temporary reciprocity for mental health services during the pandemic.
Expanding Number of Behavioral Health Providers and Services under NJ FamilyCare
Approved Bill S2716 requires NJ FamilyCare to reimburse for certain claims submitted by clinical social workers, professional counselors, and marriage and family therapists. To qualify, the services must be rendered to a NJ FamilyCare beneficiary and must be covered under the NJ FamilyCare program; the provider must hold a current, valid license in New Jersey; and the provider must be an approved provider under the program. The bill also expands eligibility for reimbursable services under the program and is effective immediately.
Discounts for Drugs and Telehealth Services through Certain Internet-Based Healthcare Platforms
New Jersey approved Bill S3604, which amends N.J.S.A. § 17B:27F-6 and aims to make prescription drugs more affordable and authorizes patients to utilize discounts from internet-based healthcare platforms as part of payment for prescription and nonprescription drugs or devices and for telehealth and telemedicine services. The bill also prevents pharmacy benefits managers from disincentivizing the use of such discounts.
Telehealth Payment Parity for One Additional Year
New Jersey approved Bill A5757, which extends the telemedicine and telehealth payment parity to December 31, 2024. The bill requires a state health benefits plan to cover payment for a covered individual for services delivered through telemedicine or telehealth at a rate equal to the provider reimbursement rate when the service is delivered in person.