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NEW JERSEY REGISTER
VOLUME 41, ISSUE 3
ISSUE DATE: FEBRUARY 2, 2009
RULE PROPOSALS
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
STATE BOARD OF PSYCHOLOGICAL EXAMINERS

Proposed Readoption with Amendments: N.J.A.C. 13:42
Proposed Repeal: N.J.A.C. 13:42-10.15

Rules of the State Board of Psychological Examiners

Authorized By: State Board of Psychological Examiners, J. Michael Walker, Executive Director. Authority: N.J.S.A. 45:14B-13.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2009-44.
Submit written comments by April 3, 2009 to:

[page=713] J. Michael Walker, Executive Director
State Board of Psychological Examiners
124 Halsey Street
P.O. 45017
Newark, N.J. 07101

The agency proposal follows:

Summary

The State Board of Psychological Examiners (the Board) proposes to readopt N.J.A.C. 13:42 with amendments. These rules are scheduled to expire on September 8, 2009 pursuant to N.J.S.A. 52:14B-5.1c. In compliance with Executive Order No. 66 (1978), the Board undertook a thorough review of the existing provisions of N.J.A.C. 13:42 in order to delete unnecessary or unreasonable rules and to propose new rules that the Board believes are needed for clarification and to assist in the practice of psychology. The Board believes that the rules proposed for readoption are necessary, reasonable, understandable and responsive to the purpose for which they were originally promulgated. These rules have had an advantageous impact on the regulation and conduct of the psychologic profession by enabling the Board to have in place procedures, which serve and protect the public's best interest. The following summarizes each subchapter in N.J.A.C. 13:42 and amendments proposed to the existing rules. Subchapter 1 contains rules concerning the scope of psychological practice, requirements for licensure, exemptions to licensure requirements and unlicensed practice. The Board proposes to amend N.J.A.C. 13:42-1.2 to delete paragraph (a)3, which is reserved. N.J.A.C. 13:42-1.3(e) refers to a deadline of July 19, 1995. As this deadline has passed, the Board proposes to amend this section to remove reference to the deadline. N.J.A.C. 13:42-1.5(a)13 includes licensed marriage counselors as individuals who are exempt from licensing requirements. The correct title for these individuals is licensed marriage and family therapist and the Board proposes to amend N.J.A.C. 13:42-1.5 to correct this title. Subchapter 2 sets forth application procedures, qualifications to sit for the licensing examination and requirements for applicants who have degrees in fields allied to psychology. The subchapter also requires the submission of specific information when an applicant seeks licensure based on equivalent training. N.J.A.C. 13:42-2.1(g) indicates that the Board has the authority to consult with a chairperson of a graduate department of psychology if it believes that a psychological dissertation does not meet the requirements of N.J.A.C. 13:42-2.1. The Board has the authority to consult with any individual or group it deems necessary in order to verify an applicant's qualifications without need for specific regulatory authority. The Board is concerned that N.J.A.C. 13:42-2.1(g) could be interpreted as limiting its consultations to chairpersons of graduate departments, in order to ensure that an applicant is sufficiently prepared to safely and effectively practice as a licensed psychologist. In order to avoid such misinterpretation, the Board is proposing to delete N.J.A.C. 13:42-2.1(g). The deletion of this subsection in no way indicates that the Board cannot consult with a chairperson of a graduate department to assess the validity of a dissertation, rather, the deletion indicates that the Board is not limited to consulting solely with the chairperson.

Subchapter 3 sets forth requirements for the issuance of one-year unsupervised and three-year supervised temporary permits. The rules in this subchapter govern the limitation, suspension or revocation of permits, the extension of temporary permits and return of temporary permits to the Board upon expiration. Subchapter 4 requires that an applicant for licensure have at least two years supervised experience in the practice of psychology. The rules specify standards for supervisors, supervision requirements for individuals who are exempt from licensure and financial arrangements between supervisors and supervisees. N.J.A.C. 13:42-4.6(a)1 permits a supervisor to designate his or her supervisee as an independent contractor under supervision, if permitted by tax authorities. Under the Internal Revenue Service of the United States Department of the Treasury rules, an independent contractor cannot be supervised as to the means and methods by which he or she accomplishes a result. As the very nature of supervising a supervisee entails influence over the means and methods by which the supervisee accomplishes a result, a supervisee cannot be an independent contractor. Accordingly, the Board proposes to delete N.J.A.C. 13:42-4.6(a)1.

Subchapter 5 sets forth requirements for written and oral examinations, examination review procedures, admitting out-of-State psychologists to the oral examination, licensure without examination and the process for retaking the written and oral examination. Subchapter 6 sets forth the charges for examinations, licensure and other services provided by the Board. The Board is proposing to amend N.J.A.C. 13:42-6.1(a)2 to raise the fee for the oral portion of the examination from $ 200.00 to $ 300.00. This fee is being increased as the fee currently being charged does not cover the costs the Board incurs for administering the oral examination.

Subchapter 7 specifies the acceptable forms of professional practice. The rules in this subchapter set forth practice requirements for licensees who practice independently or in partnerships, professional service corporations or limited liability entities. The rules also govern the provision of biofeedback services, employment of neuropsychometric technicians, offering of health care services by a shareholder or employee of a general business corporation, provision of services through managed health care plans and permissible real estate arrangements. Existing N.J.A.C. 13:42-7.2(a) contains several provisions regarding business practices. The Board proposes to amend N.J.A.C. 13:42-7.2(a), so that each of these provisions will be codified in separate subsections. The provisions of existing subsection (a) are proposed for recodification in amended subsection (a) and new subsections (b) and (c) without any substantial change in the text of the rule. The Board also proposes to amend N.J.A.C. 13:42-7.5 to delete subsection (d), which contains a deadline of May 1, 1994. Subchapter 8 addresses the preparation and maintenance of client records, the use of computers to prepare client records, access to client records and the confidentiality of information obtained from a client. The Board proposes to delete N.J.A.C. 13:42-8.2(e), which sets forth procedures with which licensees must comply prior to November 1, 1994. As this deadline has passed, the subsection is no longer necessary. N.J.A.C. 13:42-8.3(d) permits licensees to charge a reasonable fee for the reproduction of records. The Board proposes to delete this subsection and to propose a new subsection (d) that clarifies what fees a licensee may charge. Pursuant to the new subsection, licensees may charge a fee of $ 1.00 per page or $ 100.00 total, whichever is less, for the reproduction of records requested by a client. If a requested record is less than 10 pages, licensees may charge up to $ 10.00 to cover expenses. The Board also proposes to amend N.J.A.C. 13:42-8.4 to include a citation for the Peer Review Law, N.J.S.A. 45:14B-31 et seq.

Subchapter 9 deals with advertising. The rules in this subchapter set forth the minimum content required in advertising. The rules also set forth standards for the use of professional credentials and certifications in advertising, required disclosures when a licensee advertises fees and standards for the use of testimonials in advertisements. Subchapter 10 sets forth professional practice requirements for licensees. The subchapter requires licensees to post a specific notice at practice sites about filing complaints, to notify the Board of a change of address, to report specific violations and the misconduct of other licensees to the Board and to disclose financial arrangements for psychological services to clients. The subchapter also sets forth standards for testing and research, the termination of professional relationships with clients and billing. Licensees are prohibited from engaging in sexual contact with clients, charging excessive fees, entering into professional relationships when there is a conflict of interest or a dual relationship with a client, from paying or receiving referral fees and from splitting fees. The subchapter also sets forth requirements for license renewal and the reinstatement of suspended licenses. The Board proposes to amend N.J.A.C. 13:42-10.1 to require that licensees display their current renewal certificates in every place in which they are conducting independent practice. The Board proposes to amend N.J.A.C. 13:42-10.12(b)1 to delete a provision that dealt with supervisees practicing prior to the effective date of the rule. The effective date of the rule was November 1, 1993. As this date has passed, this provision is no longer necessary. The Board also proposes to amend N.J.A.C. 13:42-10.14 for clarity.

[page=714] N.J.A.C. 13:42-10.15 repeats supervision provisions that exist in N.J.A.C. 13:42-4.5. As it is unnecessary to repeat these provisions, and it is appropriate to include supervision provisions in the subchapter that deals with supervision of candidates for licensure, the Board proposes to repeal this rule. Subchapter 11 sets forth procedures by which a client may authorize a licensee to disclose confidential information upon the request of an insurer or other third-party payor. As the Board has provided a 60-day comment period on this notice of proposal, this notice is exempted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The rules proposed for readoption with amendments and a repeal will continue to have a positive social impact as they have protected the health, safety and welfare of the citizens of New Jersey by identifying those individuals who are qualified to engage in the practice of psychology. These rules establish standards for psychology licensure in the State. The proposed readoption of N.J.A.C. 13:42 is essential for the Board to continue to regulate the practice. The readoption of, and proposed amendments and repeal to, these rules continues the accepted standards of practice of psychology and by so doing provides licensees and candidates for licensure a clear and comprehensive set of rules to guide them in their professional practice. Candidates for licensure will benefit by having a set of rules, which govern the manner in which they may qualify for licensure. Licensees will benefit from the assurance that uniform standards will be applied in the profession. The overall impact of the readoption of these rules and proposed amendments and repeal on the public is expected to be advantageous because the rules enhance consumer information and protection in areas such as billing, client records, confidentiality and advertising. In addition, the public is protected by requiring that each licensee display notice that he or she is licensed by the Board. The rules prohibit a licensee from referring a client to a health care service in which the licensee has a financial interest, prohibit sexual relationships between licensees and clients and prohibit the charging of excessive fees. The rules proposed for amendment and repeal will have an impact on society as well. The Board believes that deleting the specific reference to consulting with department chairs in N.J.A.C. 13:42-2.1 will clear up possible misinterpretations of its authority to verify the validity of information submitted as part of an application for licensure. The Board believes that deleting provisions in N.J.A.C. 13:42-4.6 that allow supervisors to designate supervisees as independent contractors will clarify that such designations are not permitted by Federal tax law, thus keeping supervisees from running afoul of Federal tax law. Proposed amendments to N.J.A.C. 13:42-10.1 that require licensees to display the current biennial renewal certificate will benefit clients by facilitating their ability to verify a licensee's licensure status.

Economic Impact

Some of the rules proposed for readoption or amendments will have an economic impact on applicants for licensure and licensees. Subchapter 2 has an economic impact on applicants for examination. Applicants will incur costs for submitting the required application, supporting materials, transcripts and abstracts and are required to pay the application and initial license fees. Subchapter 5 imposes costs on applicants by requiring them to pay oral and written examination fees. Subchapter 6 has an economic impact as it sets forth the fees charged by the Board. The proposed amendment to N.J.A.C. 13:42-6.1(a)2, which increases fees for the oral examination will have an economic impact on applicants for licensure.

Subchapter 7 has an economic impact on licensees as the rules preclude practitioners from investing in forms of business entities that are not solo practices, partnerships, limited liability companies or professional associations. Subchapter 8 has an economic impact on licensees by requiring them to prepare and maintain client records. Proposed amendments to N.J.A.C. 13:42-8.3 that set forth the amount that licensees may charge for reproducing client records will have an economic impact on clients who request records. Subchapter 9 has an economic impact on licensees by regulating how licensees may advertise. N.J.A.C. 13:42-9.8 imposes costs on licensees by requiring them to retain advertisements for three years.

Subchapter 10 will impose costs on licensees. N.J.A.C. 13:42-10.1 requires that a licensee post notice wherever practicing that he or she is licensed by the Board. Proposed amendments to this rule require licensees to post his or her current renewal certificate as well. Licensees will incur slight costs in posting these items. N.J.A.C. 13:42-10.2 imposes costs on licensees by requiring them to notify the Board when they change an address. N.J.A.C. 13:42-10.10(b) has a positive economic impact on clients who receive psychological services performed by a supervisee because fees charged for such services must be less than the usual, reasonable and customary fees charged by the supervisor to his or her own clients. N.J.A.C. 13:42-10.13 prohibits licensees from referring clients to health care services in which they have financial interest unless they disclose their financial interest and provide an alternative referral source. The costs of providing this disclosure and alternative referral are borne by licensees. N.J.A.C. 13:42-10.14 imposes an economic impact on licensees as this rule prohibits referral fees and fee splitting.

Subchapter 11 establishes procedures by which licensees may disclose confidential client information to insurers or third-party payors. Licensees who furnish client information upon request according to the rules will experience the corresponding paperwork and mailing costs in providing the information.

Federal Standards Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the rules proposed for readoption with amendments and a repeal.

Jobs Impact

The Board does not believe that the proposed readoption of N.J.A.C. 13:42 with amendments and a repeal will result in an increase or decrease in the number of jobs in this State.

Agriculture Industry Impact

The Board believes the rules proposed for readoption with amendments and a repeal will have no impact upon the agriculture industry in New Jersey.

Regulatory Flexibility Analysis

Since psychologists are individually licensed by the Board, they may be considered "small businesses" under the Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq. The costs imposed on small businesses by the rules proposed for readoption with amendments and a repeal are the same costs that are imposed on all psychologists as set forth in the economic impact statement. The Board does not believe that psychologists will need to employ any professional services to comply with the rules proposed for readoption with amendments. The proposed readoption with amendments impose compliance, reporting and recordkeeping requirements as detailed in the Summary. As the compliance, reporting and recordkeeping requirements contained in the rules proposed for readoption with amendments are necessary to adequately regulate psychologists and protect consumers who use their services, the Board believes that the rules must be uniformly applied to all psychologists and no exemptions are provided based on the size of the psychologist's business.

Smart Growth Impact

The Board does not believe that the rules proposed for readoption and proposed amendments or repeal will have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Housing Affordability Impact

The rules proposed for readoption with amendments and a repeal will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the rules would evoke a change in the average costs associated with housing because the rules concern the licensure and regulation of psychologists.

[page=715] Smart Growth Development Impact

The rules proposed for readoption with amendments and a repeal will have an insignificant impact on smart growth and there is an extreme unlikelihood that the rules would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the rules concern the licensure and regulation of psychologists.

Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 13:42.

Full text of the proposed amendments and repeal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 1. SCOPE OF PRACTICE; PERSONS REQUIRING LICENSURE; EXEMPTIONS FROM LICENSURE; UNLICENSED PRACTICE

13:42-1.2 Persons requiring licensure; persons not requiring licensure

(a) Persons requiring licensure include all those whose conduct is within the scope of practice set forth in N.J.A.C. 13:42-1.1 and whose practice is not otherwise exempt pursuant to N.J.S.A. 45:14B-6, [N.J.S.A.] and 45:14B-8, N.J.A.C. 13:42-1.4 and 1.5[,] and (b) below, including the following:

1. Persons offering services to the public in private practice, in partnership with other licensed health care professionals, in professional service corporations as shareholders or employees, and in or affiliated with all forms of managed health care organizations (for example, HMO, PPO, IPA, etc.); and

2. Employees of general business corporations to the extent such practice is permitted pursuant to N.J.A.C. 13:42-7.5[; and].

[3. (Reserved)]

(b) (No change.)

13:42-1.3 Employment by a nonprofit bona fide community organization; exemption from licensure

(a)-(d) (No change.)

(e) [By July 19, 1995 or at] At the time employment of the unlicensed psychologist employee commences, [whichever is later,] the exempt entity or exempt practitioner shall submit to the Board a notice specifying the following information:

1.-3. (No change.)

(f)-(g) (No change.)

13:42-1.5 Member of other professional group doing work of psychological nature; exemption from licensure

(a) The following individuals, who do work of a psychological nature consistent with the accepted standards of their respective professions, are exempt from licensure under the Practicing Psychology Licensing Act provided they do not hold themselves out to the public by any title or description stating or implying that such person is a psychologist or is licensed to practice psychology:

1.-12. (No change.)

13. A licensed marriage [counselor] and family therapist;

14.-17. (No change.)

SUBCHAPTER 2. INITIAL QUALIFICATIONS

13:42-2.1 Application; qualifications to sit for examination

(a)-(f) (No change.)

[(g) If the Board finds the psychological nature of the dissertation or of any course submitted as fulfilling the requirements of this section to be questionable, the Board may, prior to making a determination, consult with the chairperson of the graduate department of psychology of the degree-granting institution and the chairperson of the graduate department in which the degree was earned, or with any other expert designated by the Board.]

Recodified existing (h) and (i) as (g) and (h) (No change in text.)

SUBCHAPTER 4. SUPERVISION OF CANDIDATES FOR LICENSURE

13:42-4.6 Financial arrangements between supervisor and supervisee

(a) Financial arrangements between the supervisor and supervisee shall be reasonable and may take into account the special teaching arrangement [which] that forms the context of the relationship. For example, the supervisor may:

[1. Designate the supervisee as an "independent contractor under supervision," if permitted by tax authorities;]

Recodify existing 2. and 3. as 1. and 2. (No change in text.)

(b) (No change.)

13:42-6.1 Board fees

(a) Charges for examinations, licensure and other services are:

1. (No change.)

2. Examination fee: $ 350.00 written, $[200.00]300.00 oral.

3.-10. (No change.)

(b) (No change.)

SUBCHAPTER 7. ACCEPTABLE PROFESSIONAL PRACTICE

13:42-7.2 Partnership, professional service corporation, or limited liability entity

(a) A licensee shall not practice psychology in a general business corporation except as provided in N.J.A.C. 13:42-7.5. A licensee may practice in any of the following business entities: [partnership, professional service corporation, limited liability company, or limited liability partnership as long as the owners (partners, shareholders, members) of the entity consist solely of New Jersey licensed health care professionals. A licensee may practice in a business entity described in this section which itself is owned by one or more of the entities described so long as all of the owners of such entities are New Jersey licensed health care professionals and as allowed by law pursuant to N.J.S.A. 42:2B-1 et seq. In all business entities described in this section, each licensee who is an owner shall retain authority to exercise his or her own professional judgment within accepted standards of practice regarding care, skill and diligence in examinations, diagnosis and treatment of the licensee's individual clients.]

1. Partnership;

2. Professional service corporation;

3. Limited liability company; or

4. Limited liability partnership, as long as the owners (partners, shareholders, members) of the entity consist solely of New Jersey licensed health care professionals.

(b) A licensee may practice in a business entity described in this section which itself is owned by one or more of the entities described, so long as all of the owners of such entities are New Jersey licensed health care professionals and as allowed by law pursuant to N.J.S.A. 42:2B-1 et seq.

(c) In all business entities described in this section, each licensee who is an owner shall retain authority to exercise his or her own professional judgment within accepted standards of practice regarding care, skill and diligence in examinations, diagnosis and treatment of the licensee's individual clients.

Recodify existing (b), (c) and (d) as (d), (e) and (f) (No change in text.)

13:42-7.5 Shareholder or employee of a general business corporation

(a)-(c) (No change.)

[(d) Licensees who have been providing professional services in a business format which is inconsistent with the provisions of this section shall complete a transfer to an acceptable practice form as soon as possible but no later than May 1, 1994.]

SUBCHAPTER 8. CLIENT RECORDS: CONFIDENTIALITY

13:42-8.2 Use of personal or other computer to prepare client records

(a)-(d) (No change.)

[(e) A licensee wishing to continue a system of computerized client records which does not meet the requirements of this section shall promptly initiate arrangements for modification of the system, which [page=716] must be completed by November 1, 1994. In the interim, the licensee shall, on the date of the first treatment of each client treated subsequent to November 1, 1993, print out a hard copy of the entire computer recorded client record. The printout shall be dated and initialled by the licensee. Thereafter, a hard copy shall be prepared for each subsequent visit, continuing to the date of the changeover of computer program, with each page initialled by the licensee. The initial printout and the subsequent hard copies shall be retained as a permanent part of the client record.]

13:42-8.3 Access to copy of client record

(a)-(c) (No change.)

[(d) A licensee may charge a reasonable fee for the preparation of a summary and reproduction of records, which shall be no greater than an amount reasonably calculated to recoup the costs of transcription or copying.]

(d) A licensee may charge a fee for the reproduction of records requested pursuant to (b) above, which shall be no greater than $ 1.00 per page or $ 100.00 for the entire record, whichever is less. If the record requested is less than 10 pages, the licensee may charge up to $ 10.00 to cover postage and the costs associated with retrieval of the record.

(e)-(h) (No change.)

13:42-8.4 Access by a managed health care plan to information in client record

(a) (No change.)

(b) A psychologist whose client has explicitly waived the psychologist-client privilege established by N.J.S.A. 45:14B-28 may release requested information deemed professionally appropriate, not limited by the constraints of the Peer Review Law, N.J.S.A. 45:14B-31 et seq., to a third-party payor whose benefit plan is qualified under the Federal Employee Retirement Income Security Act (ERISA); that is:

1.-2. (No change.)

SUBCHAPTER 10. GENERAL OBLIGATIONS OF A LICENSEE

13:42-10.1 Posting of practice authorization

Every licensee shall prominently display in every place of conducting independent practice his or her current renewal certificate, or current duplicate renewal certificate, and the following notice:

(Name of Individual) is licensed by the Board of Psychological Examiners, an agency of the Division of Consumer Affairs. Any member of the consuming public may notify the Board of any complaint relative to the practice conducted under this license at the Division of Consumer Affairs, Board of Psychological Examiners, Post Office Box 45017, 124 Halsey Street, Newark, New Jersey 07101.

13:42-10.12 Billing

(a) (No change.)

(b) A licensee billing for services rendered by a permit holder or an exempt professional practicing under supervision shall include all of the following information on the bill in addition to the information required pursuant to (a) above:

1. The name and permit number of the supervisee. [If the supervisee is practicing pursuant to a Board letter of authorization issued prior to the effective date of this rule, a copy of said letter shall be provided to the client with the first billing statement;]

2.-3. (No change.)

13:42-10.14 Prohibition on referral fees and fee splitting

(a) (No change.)

(b) A licensee shall not permit the division of fees for professional services other than among licensed health care professionals in the same or in a closely allied professional health care field engaged in a bona fide partnership, professional service corporation, limited liability company, limited liability partnership, employment relationship, or between a licensee and an applicant for licensure who is working under the supervision of the licensee pursuant to a Board issued temporary permit. A licensee shall not divide fees for professional services rendered to a client with a psychologist practicing as an independent contractor. This subsection shall not prohibit a licensee from charging a flat fee to an independent contractor on a per hour or per service basis to [coverage] cover expenses.

(c) (No change.)

13:42-10.15 [Supervision of individuals exempt from licensure] (Reserved)

[(a) A psychologist may supervise services of a psychological nature rendered in

1. A private practice setting by a health care professional exempt from licensure pursuant to N.J.S.A. 45:14B-8; and

2. An exempt non-profit bona fide community organization as defined in N.J.S.A. 45:14B-6(a)3.

(b) The supervisor shall ensure that the exempt supervisee complies with all Board regulatory requirements (including preparation of client records) and with accepted standards of professional and ethical practice of the exempt agency or exempt health care professionals.]

   
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