New Jersey - Volume XIII, Number 9 - September, 2004

MIIX TO BE PLACED INTO RECEIVERSHIP The NJ Department of Banking and Insurance (DOBI) has petitioned the Superior Court for the right to take over operation of MIIX Insurance Company. The action, which is not being contested by MIIX, follows a change in its surplus from a reported estimated positive $21 million on December 31, 2003 to a “negative surplus” of $256 million on August 2, 2004. KACS has asked the Court for permission to intervene in the action on behalf of the Medical Society of New Jersey.

STATE PROVIDES TAX INCENTIVES TO PRIMARY CARE PRACTICES IN HEALTH ENTERPRISE ZONES Under newly enacted legislation, primary care physicians and dentists who practice in a medically underserved area, designated a Health Enterprise Zone (HEZ), will be offered the following tax incentives: 1) deduction from their taxable gross (personal) income an amount of their net income from the practice that is proportionate to their gross receipts from providing health care services to eligible recipients of the Medicaid program and the New Jersey FamilyCare program at their practices located in an HEZ; 2) available low-interest loans to construct and renovate office space in an HEZ and purchase medical equipment for use in an HEZ; and 3) exemption of their qualified medical and dental offices from property tax. Qualified primary care physicians and dentists who practice within five miles of an HEZ will also be allowed the gross income tax deduction and will be eligible for the loan program if at least half of their gross receipts at the practice are from providing health care services to eligible recipients of the Medicaid program and the New Jersey FamilyCare program and at least half of those eligible Medicaid and FamilyCare recipients to whom they provide services are residents of an HEZ. For those interested in taking advantage of this legislation, call Steve Holt, Esq., head of KACS’ corporate and tax section.

FIRST HIPAA PRIVACY PROSECUTION INVOLVES IDENTITY THEFT In August, an employee of a HIPAA covered entity plead guilty to the wrongful disclosure of individually identifiable health information for personal gain. The employee had obtained the name, birth date, and social security number of a patient undergoing care and used the information to obtain credit cards and cash advances. The plea agreement calls for restitution and a prison sentence of 10 to 16 months. This is the first criminal conviction for a violation of the HIPAA privacy law. KACS’ Prepaid Legal Services Plan provides for defense of HIPAA-related complaints and prosecutions. For information, call 908-704-8585.

SCOPE OF PRACTICE EXPANDED FOR OPTOMETRISTS AND APNs A new law removes the current statutory prohibition on optometrists’ use and prescribing of Schedules III, IV, and V controlled dangerous substances (CDS). The law also adds optometrists to those practitioners required to provide personal and professional data to their licensing board to establish a public profile on optometrists. Effective November 2004, advanced practice nurses no longer have restrictions on their prescribing of CDS, but their collaboration agreements must include any physician consultation requirements agreed upon between the APN and the collaborating physician.

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