A&B Healthcare Week in Review, June 27, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On June 25, 2014, the Food and Drug Administration (FDA) announced the availability of draft guidance for industry entitled “Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communication Devices”. FDA issued this document to inform manufacturers, distributors, and other entities that the Agency does not intend to enforce compliance with the regulatory controls that apply to Medical Device Data Systems (MDDS), medical image storage devices, and medical image communications devices, due to the low risk they pose to patients and the importance they play in advancing digital health. Comments on the draft guidance must be received by FDA by August 25, 2014, before the Agency begins work on a final version of the guidance. In the document FDA is also proposing changes to its guidance entitled “Mobile Medical Applications,” issued on September 25, 2013, to conform to the proposed policy discussed in this draft guidance document. More information on the announcement may be found here.
• On June 26, 2014, the Office of Management and Budget (OMB) received a proposed rule from the Centers for Medicare and Medicaid Services (CMS) entitled “Medicare Shared Savings Program; Accountable Care Organizations”. The proposed rule would address changes to the Medicare Shared Savings Program (MSSP) and contains provisions relating to Medicare payments to providers of services and suppliers participating in Accountable Care Organizations (ACOs) under the MSSP. These changes would apply to existing ACOs and approved ACO applicants participating in the program beginning January 1, 2016.
• On June 25, 2014, OMB received a proposed rule from CMS entitled “CY 2015 Hospital Outpatient Prospective Payment System (PPS) Policy Changes and Payment Rates, and CY 2015 Ambulatory Surgical Center Payment System Policy Changes and Payment Rates”. This annual proposed rule would revise the Medicare hospital outpatient prospective payment system (PPS) to implement statutory requirements and changes arising from our continuing experience with this system. The proposed rule describes changes to the amounts and factors used to determine payment rates for services. In addition, the rule proposes changes to the ambulatory surgical center payment system list of services and rates.
• On June 26, 2014, the Department of Health and Human Services (HHS) filed a proposed rule at the Office of the Federal Register entitled “Annual Eligibility Redeterminations for Exchange Participation and Insurance Affordability Programs”. This proposed rule would specify additional options for annual eligibility redeterminations and renewal and re-enrollment notice requirements for qualified health plans (QHPs) offered through the Affordable Care Act (ACA) Exchanges, beginning with annual redeterminations for coverage for plan year 2015. In particular, this proposed rule would provide additional flexibility for Marketplaces, including the ability for Marketplaces to propose unique approaches that meet the specific needs of their state, while streamlining the consumer experience. The rule will be published in the Federal Register on July 1, 2014, and comments will be due July 28, 2014.
• On June 24, 2014, FDA announced that it is extending the comment period for a proposed rule entitled “Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Regulations on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products”. In the proposed rule, FDA requested comments, including comments on FDA's proposed options for regulation of cigars, regulatory approach to electronic cigarettes and other non-combustible tobacco products, pathways to market for proposed deemed tobacco products, and compliance dates for certain provisions, among other issues. FDA is taking this action in response to requests for an extension to allow interested persons additional time to submit comments. Comments are now due August 8, 2014.
• On June 25, 2014, FDA announced that a proposed information collection entitled “Additional Criteria and Procedures for Classifying Over-the-Counter Drugs as Generally Recognized as Safe and Effective and Not Misbranded” had been submitted to OMB for review and clearance.
• On June 24, 2014, the National Institutes of Health (NIH) announced that the National Center for Advancing Translational Sciences (NCATS) and its collaborator, the University of Delaware, are seeking Cooperative Research and Development Agreement (CRADA) partners to collaborate in the final stages of lead optimization, evaluation and preclinical development of a novel series of selective and potent small-molecule inhibitors of the human USP1/UAF1 complex for the treatment of cancer. Interested potential CRADA partners will receive detailed information about the project after signing a confidential disclosure agreement (CDA) with NCATS and University of Delaware. Interested candidate partners must submit a statement of interest and capability to the NCATS point of contact before July 24, 2014 for consideration. More information may be found here.
• On June 25, 2014, the Office of Inspector General (OIG) issued a Special Fraud Alert: “Laboratory Payments to Referring Physicians”. The Special Fraud Alert addresses compensation paid by laboratories to referring physicians and physician group practices for blood specimen collection, processing, and packaging, and for submitting patient data to a registry or database. The document supplements prior related guidance documents and advisory opinions and describes two specific trends OIG has identified involving transfers of value from laboratories to physicians that OIG believes present a substantial risk of fraud and abuse under the anti-kickback statute.
• On June 26, 2014, FDA issued a notice soliciting comments on information collection associated with the “Medical Device ISO 13485:2003 Voluntary Audit Report Submission Pilot Program”. Responses are due August 25, 2014.
• On June 26, 2014, FDA issued a proposed information collection entitled “Requirements for Submission of Bioequivalence Data”. The notice solicits comments on the requirement for an abbreviated new drug application (ANDA) applicant to submit data from all bioequivalence (BE) studies the applicant conducts on a drug product formulation submitted for approval. Comments are due August 25, 2014.
• On June 27, 2014, FDA announced the availability of guidance entitled “Global Unique Device Identification Database (GUDID): Guidance for Industry and Food and Drug Administration Staff.” This guidance finalizes, as a single document, all sections of, “Global Unique Device Identification (GUDID): Draft Guidance for Industry.” The guidance includes, with minor modifications, the previously finalized sections on how device labelers will interface with the GUDID, establish GUDID accounts and begin initial submissions. The guidance also finalizes the sections on the Device Identifier (DI) record, Health Level 7 Structured Product Labeling (HL7 SPL) submission, search/retrieval of devices information, and GUDID submissions and maintaining and submitting electronic records. The guidance also finalizes Appendix A—GUDID Package Information Examples. More information on the guidance document may be found here.
• On June 27, 2014, FDA announced the availability of guidance entitled “Guidance for Industry: Considering Whether an FDA-Regulated Product Involves the Application of Nanotechnology”. This guidance explains FDA's current thinking on determining whether FDA-regulated products involve the application of nanotechnology. The guidance identifies two Points to Consider, which address both particle dimensions and dimension-dependent properties or phenomena. If either point applies to a given product, industry and FDA should consider whether evaluations of safety, effectiveness, public health impact, or regulatory status of that product have identified and adequately addressed any unique properties or behaviors of the product. These two Points to Consider are intended to provide an initial screening tool that can be broadly applied to all FDA-regulated products, with the understanding that these points are subject to change in the future as new information becomes available. More information may be found here.
• On June 27, 2014, the Agency for Healthcare Research and Quality (AHRQ) issued a request for scientific information submissions. Scientific information is being solicited to inform the Agency’s review of Interventions to Improve Appropriate Antibiotic Use for Acute Respiratory Tract Infections, which is currently being conducted by the Evidence-based Practice Centers for the AHRQ Effective Health Care Program. Submissions are due July 28, 2014. More information may be found here.
• On June 27, 2014, CMS announced that the following information collection requests had been submitted to OMB for review: 1) Health Insurance Benefits Agreement and Ambulatory Surgical Request for Certification or Update of Certification Information in the Medicare Program; 2) Psychiatric Unit Criteria Work Sheet and Supporting Regulations; 3) Basic Health Program Report for Health Insurance Exchange Premium; 4) Organ Procurement Organization/Histocompatibility Laboratory Cost Report; 5) Consumer Assistance Tools and Programs of an Exchange and Certified Application Counselors; Exchange and Insurance Market Standards for 2015; 6) Healthcare Common Procedure Coding System (HCPCS)—Level II Code Modification Request Process; 7) Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel; and 8) Public Health Agency/Registry Readiness to Support Meaningful Use. Comments are due July 28, 2014. More information may be found here.
• On June 27, 2014, CMS issued the following information collection requests: 1) Skilled Nursing Facility and Skilled Nursing Facility Health Care Complex Cost Report; 2) Cost Sharing Reduction Reconciliation; 3) Independent Renal Dialysis Facility Cost Report and Supporting Regulations; 4) Medicare Authorization to Disclose Personal Health Information; and 5) Data Use Agreement (DUA) for Data Acquired from the Centers for Medicare & Medicaid Services (CMS). Comments are due August 28, 2014. More information may be found here.

Event Notices:

• July 17-18: The Centers for Disease Control and Prevention (CDC) announced that the Healthcare Infection Control Practices Advisory Committee (HICPAC) will hold meetings on July 17th from 9:00 AM to 5:00 PM and July 18th from 9:00 AM to 12:00 PM. The agenda will include updates on the Draft Guideline to Prevent Surgical Site Infections; the Draft Guideline to Prevent Infections in Neonatal Intensive Care Units; CDC's activities for prevention of antimicrobial resistant healthcare associated infections; updates on prevention and surveillance of catheter-associated urinary tract infections; and HICPAC core infection prevention and control practices. The meeting will take place at the CDC Global Communications Center in Atlanta, Georgia. More information may be found here.
• July 21, 2014: A public meeting of the Advisory Council on Alzheimer's Research, Care, and Services will be held July 21, 2014 from 9:00 AM to 5:00 PM in Washington, DC. The Advisory Council on Alzheimer's Research, Care, and Services provides advice on how to prevent or reduce the burden of Alzheimer's disease and related dementias on people with the disease and their caregivers. During the July meeting, the Advisory Council will review and discuss its recommendations on informal caregiving, hear presentations on statistics about caregivers and existing programs to provide them with help, and hear presentations from the four subcommittees (Research, Clinical Care, Long-Term Services and Supports, and Ethics). The Advisory Council will also discuss the G7 Dementia Summit that was held on June 19th, 2014 in the UK.
• September 3-5, 2014: he National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM) announces a workshop on “Adverse Outcome Pathways: From Research to Regulation.” The workshop proposes to initiate stakeholder interaction and collaboration to enhance scientific development of the Adverse Outcome Pathway (AOP) concept with the goal of improving regulatory assessment of chemical toxicity. Registration is requested for attendance and required to access the webcast. Information about the meeting and registration is available at http://ntp.niehs.nih.gov/go/41374.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On June 26, 2014, the Senate Finance Committee and the House Ways and Means Committee introduced bipartisan legislation to standardize the assessment of patients among the four post-acute care (PAC) settings: Long Term Care Hospitals (LTCHs), Inpatient Rehabilitation Facilities (IRFs), Skilled Nursing Facilities (SNFs), and Home Health Agencies (HHAs). The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) requires data standardization to enable Medicare to: 1) compare quality across different PAC settings; 2) improve hospital and PAC discharge planning; and, 3) use this information to reform PAC payments (via site neutral or bundled payments or some other reform) while ensuring continued beneficiary access to the most appropriate setting of care. The Medicare Payment Advisory Commission (MedPAC) first raised the need for a common PAC assessment tool in 2005. MedPAC also included a recommendation to move forward with a common assessment tool in its March 2014 report. A summary of the legislation may be found here.

House of Representatives

• On June 23, 2014, the House Veterans’ Affairs Committee held a hearing entitled “Evaluating the Capacity of the VA to Care for Veteran Patients”. Witnesses for the hearing included Thomas Lynch M.D., Assistant Deputy Under Secretary for Health for Clinical Operations, Veterans Health Administration (VHA), U.S. Department of Veterans Affairs (VA), and Carolyn M. Clancy M.D., Assistant Deputy Under Secretary for Quality, Safety, and Value at the VA. More information on the hearing may be found here. The same day a letter from the Office of Special Counsel was issued to the White House updating the President with findings on whistleblower disclosures from employees at the Veterans Affairs Medical Center in Jackson, Mississippi. The letter states, “The Jackson VAMC cases are part of a troubling pattern of responses by the Department of Veterans Affairs (VA) to similar disclosures from whistle blowers at VA medical centers across the Country. The recent revelations from Phoenix are the latest and most serious in the years-long pattern of disclosures from VA whistleblowers and their struggle to overcome a culture of non-responsiveness. Too frequently, the VA has failed to use information from whistle blowers to identify and address systemic concerns that impact patient care.” The following day, Senator Tom Coburn (R-OK) released an oversight report on delays at VA facilities, entitled “Friendly Fire: Death, Delay, and Dismay at the VA.” A press release from Coburn’s office states “The report is based on a year-long investigation of VA hospitals around the nation that chronicled the inappropriate conduct and incompetence within the VA that led to well-documented deaths and delays. The report also exposes the inept congressional and agency oversight that allowed rampant misconduct to grow unchecked.”
• On June 24, 2014, the House Energy and Commerce Subcommittee on Health held a roundtable entitled “21st Century Cures Roundtable: Digital Health Care”. During the roundtable the Committee and participants discussed what steps Congress can take to bridge the gap between advances in digital healthcare and the regulatory policies that govern them. Participants in the discussion included Dr. Jeff Shuren, Director of the Center for Devices and Radiological Health (CDRH) at the Food and Drug Administration (FDA); Dr. Joseph M. Smith, Chief Medical and Science Officer at West Health; Dr. Brian Druker, Director of the Knight Cancer Center at the Oregon Health and Science University; Gina Gavlak, RN, BSN, Chair, National Advocacy Committee for the American Diabetes Association; Sean Hogan, Vice President for Health Care at IBM; Martin Harris, Chief Information Officer of The Cleveland Clinic; Anne Wojcicki, CEO & Co-Founder of 23andMe; Dr. Mark Blatt, Worldwide Medical Director of Intel Corporation; Jonathon Bush, CEO & President of Athenahealth, Inc.; and Paul Magelli, CEO of Pervasive Health. More information on the roundtable may be found here.
• On June 25, 2014, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled “Medicare Program Integrity: Screening Out Errors, Fraud, and Abuse”. Witnesses for the hearing included Shantanu Agrawal M.D., Deputy Administrator and Director, Center for Program Integrity (CPI), Centers for Medicare and Medicaid Services (CMS); Gary Cantrell, Deputy Inspector General for Investigations, Office of Inspector General (OIG), Department of Health and Human Services (HHS); Gloria L. Jarmon, Deputy Inspector General for Audit Services, OIG; and Kathleen M. King, Director, Health Care, U.S. Government Accountability Office (GAO). More information on the hearing may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On June 24, 2014, PricewaterhouseCoopers' (PwC) Health Research Institute released an analysis which finds that medical inflation is projected to rise to 6.8% in 2015, up from 6.5% projected for 2014. The report suggests that as the nation recovers from an economic recession, the health sector is “reverting to historical patterns of bouncing back”. They note that other factors moderate this growth, including adoption of standardized processes by doctors and hospitals and new financial accountability models for healthcare providers. The report says specialty drugs will play an inflationary role in the short-term; however in some instances long-term savings from the medications could be substantial.
• On June 25, 2014, a brief published online in the journal Health Affairs recommended shifting the open enrollment period for ACA Marketplaces. The document cites research by experimental psychologists and behavioral economists which strongly suggests that when people’s decision-making capacity is stretched thin, either they cannot make decisions or they make poor choices. Using data from nearly a decade of US-based Internet search queries to measure population behavior, the authors found considerable seasonality in measures of financial stress and in when people seek out information on health insurance plans. They suggest that a more opportune time for scheduling open enrollment for the ACA Marketplaces may be between February 15 and April 15—weeks when low-income people typically receive income tax refunds and Earned Income Tax Credit payments. Such lump-sum payments could be applied to pay individuals’ share of premiums, the authors suggest.
• An analysis from Avalere Health, published June 26, 2014, finds that many consumers in exchange plans who receive federal assistance to reduce their monthly premiums will face substantial premium increases unless they switch insurance plans in 2015. Under the ACA, federal premium assistance is tied to the second lowest cost silver in a given region. Subsidized Exchange enrollees who select a more expensive plan must pay the difference—dollar for dollar—between the benchmark plan premium and their selection. In six of nine states analyzed by Avalere, the 2014 benchmark silver plan will lose benchmark status in 2015. Further, in seven of the nine states, the lowest cost silver plan will also change in 2015.
• A reduction in health care spending contributed to a contraction in the economy in the first quarter, according to revised estimates by the Commerce Department released June 25th. Smaller business inventories and bad winter weather were also cited as factors.

IV. OTHER HEALTH POLICY NEWS

• On June 20, 2014, Virginia Governor Terry McAuliffe (D) vetoed a portion of the state budget that would have blocked Medicaid expansion in the state. In announcing the veto, McAuliffe asserted that regardless of whether the veto is sustained, he will find a way to extend health coverage to the approximately 400,000 uninsured low-income Virginians.
• On June 27, 2014, the Alliance for Health Reform hosted a briefing entitled “Rates of Change: Putting 2015 Insurance Premiums into Context”. Panelists included Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology, Cori Uccello, actuary and senior health fellow at the American Academy of Actuaries, David Cusano, senior research fellow at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute, and Elizabeth Hall, vice president for federal affairs at WellPoint. During the discussion Hall indicated that WellPoint has seen a slight increase in sign-ups since the ACA’s open enrollment period ended in April, and projects that it will cover about 750,000 people this year. More information on the briefing may be found here.
• On June 27, 2014, HHS Secretary Burwell announced that about 76 million Americans in private health insurance plans are newly eligible to receive expanded coverage for one or more recommended preventive health care services, such as a mammogram or flu shot, with cost sharing, as a result of the ACA. “Today’s findings are just one more indicator that the Affordable Care Act is delivering impact for millions of people nationwide,” said Secretary Burwell. “Seventy-six million is more than just a number. For millions of Americans, it means no longer having to put off a mammogram for an extra year. Or it means catching a problem early enough that it’s treatable.” The entire HHS brief detailing the Department’s data may be found here.

This advisory is published by Alston & Bird LLP’s Health Care practice area to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered attorney advertising under court rules of certain jurisdictions.