A&B Healthcare Week in Review, August 15, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On August 11, 2014, the Food and Drug Administration (FDA) issued a notice entitled “Formal Dispute Resolution: Scientific and Technical Issues Related to Pharmaceutical Current Good Manufacturing Practice”. This notice solicits comments on the proposed collection of information resulting from the guidance to manufacturers of veterinary and human drugs, including human biological drug products, on how to resolve disputes of scientific and technical issues relating to current good manufacturing practice (CGMP). Responses are due October 10, 2014.
• On August 11, 2014, FDA issued a proposed information collection entitled “Guidance for Industry on Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During an Influenza Pandemic”. This notice solicits comments on the guidance which discusses FDA's approach to enforcement of adverse event reporting requirements during an influenza pandemic. Responses are due October 10, 2014.
• On August 11, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a notice entitled “Medicare Program; Evaluation Criteria and Standards for Quality Improvement Networks Quality Improvement Program Contracts [Base and Task Order(s)]”. This notice with comment period describes the general criteria CMS intends to use to evaluate the effectiveness and efficiency of the Quality Innovation Network (QIN) Quality Improvement Organizations (QIOs) that will enter into contracts with CMS under the Quality Innovation Network Quality Improvement Organizations (Solicitation Number: HHSM-500-2014-RFP-QIN-QIO) Statement of Work (SOW) on August 1, 2014. To be assured consideration, comments must be received no later than 5 p.m. on September 10, 2014.
• On August 11, 2014, FDA issued an information request entitled “Blood Establishment Registration and Product Listing, Form FDA 2830—21 CFR Part 607 (OMB Control Number 0910-0052)—Extension”. Among other uses, this information assists FDA in its inspections of facilities and is essential to the overall regulatory scheme designed to ensure the safety of the nation's blood supply. Form FDA 2830 is used to collect this information. Respondents to this collection of information are human blood and plasma donor centers, blood banks, certain transfusion services, other blood product manufacturers, and independent laboratories that engage in quality control and testing for registered blood product establishments. Comments are due October 10, 2014.
• On August 14, 2014, FDA issued a notice announcing that it is reopening the comment period for a draft guidance for industry entitled “Best Practices in Developing Proprietary Names for Drugs”, which was originally published in the Federal Register of May 29, 2014 (79 FR 30852). FDA is reopening the comment period in response to several requests for additional time and to allow interested persons more time to submit comments. Comments are now due September 15, 2014. More information may be found here.
• On August 14, 2014, FDA announced the availability of a revised draft guidance for industry entitled “Clinical Pharmacology Labeling for Human Prescription Drug and Biological Products—Considerations, Content, and Format.” This draft guidance is one of a series of guidance documents intended to assist applicants in complying with FDA regulations on the content and format of labeling for human prescription drug and biological products. The guidance describes the recommended information to include in the Clinical Pharmacology section of labeling that pertains to the safe and effective use of human prescription drug and biological products. Comments must be received by October 14, 2014, before the Agency begins drafting final guidance. More information may be found here.
• On August 14, 2014, FDA announced the availability of a draft guidance entitled “De Novo Classification Process (Evaluation of Automatic Class III Designation)”. The purpose of this document is to provide FDA's proposals for guidance to FDA staff and industry on the process for the submission and review of petitions submitted under the Evaluation of Automatic Class III Designation section of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), also known as the de novo classification process. FDA is issuing this draft guidance to provide proposed updated recommendations for efficient interaction with FDA, including what information to submit when seeking a path to market for a novel device via the de novo process. This draft guidance has been revised and is being reissued for comment because the Food and Drug Administration Safety and Innovation Act (FDASIA), which became law on July 9, 2012, amended the FD&C Act to provide for the submission of de novos without a preceding premarket notification (510(k)) submission. Comments must be received by October 14, 2014, before the Agency begins drafting final guidance. More information may be found here.
• On August 14, 2014, FDA announced the availability of a guidance for industry entitled “Immunogenicity Assessment for Therapeutic Protein Products.” Therapeutic protein products may elicit immune responses, which may lead to serious or life-threatening adverse events for the patient or loss of efficacy of the product. This guidance is intended to assist manufacturers and clinical investigators in developing a risk-based approach in both the nonclinical and clinical phases of product development that will allow them to evaluate and reduce the likelihood that the immunogenicity of the product will cause harm to patients. This guidance finalizes the draft guidance issued in February 2013. More information may be found here.
• On August 15, 2014, CMS announced that it has requested Office of Management and Budget (OMB) approval for an information collection entitled “Hospital Conditions of Participation and Supporting Regulations”. The information collection requirements described in this information collection request are needed to implement the Medicare and Medicaid conditions of participation (CoP) for 4,890 accredited and non-accredited hospitals and an additional 101 critical access hospitals (CAHs) that have distinct part psychiatric or rehabilitation units (DPUs). CAHs that have DPUs must comply with all of the hospital CoPs on these units. This package reflects the paperwork burden for a total of 4,991 (that is, 4,890 hospitals and 101 CAHs which include 81 CAHs that have psychiatric DPUs and 20 CAHs that have rehabilitation DPUs). The information collection requirements for the remaining 1,183 CAHs have been reported in a separate package under CMS-10239. Comments are due September 15, 2014.
• On August 15, 2014, FDA announced that the Agency is soliciting proposals to participate in a pilot program for Medical Device Development Tools (MDDT) qualification (MDDT Pilot Program). Under the MDDT Pilot Program, FDA intends to work together with developers of tools that meet the criteria for the proposed program, to determine whether certain tools may be developed and qualified in order to facilitate more predictable, efficient, and transparent regulatory evaluation when MDDTs are used to generate valid scientific evidence for medical device premarket applications. FDA will begin accepting nominations for participation in the voluntary MDDT Pilot Program September 15, 2014. More information may be found here.
• On August 15, 2014, the Office of Inspector General (OIG) issued an advisory opinion (No. 14-06) regarding a specialty pharmacy’s proposal to pay local retail pharmacies a fee for support services they provide in connection with patient referrals to the specialty pharmacy. OIG determined that the proposed arrangement could potentially generate prohibited remuneration under anti-kickback statute, and that OIG could potentially impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Social Security Act. The full advisory opinion may be accessed here.

Event Notices

• September 5, 2014: This week FDA announced that the Agency will host a public workshop regarding the clinical development of drugs for the prevention of serious infections caused by Staphylococcus aureus in the health care setting. This public workshop is intended to provide information for and gain perspective from health care providers, patients and patient advocacy organizations, academia, and industry on various aspects of clinical development of drugs to prevent Staphylococcus aureus infections including the design of clinical trials. The input from this public workshop will help in developing topics for further discussion. The workshop will be held on September 5, 2014, from 8:30 a.m. to 5 p.m in Silver Spring, Maryland. More information may be found here.
• September 17, 2014: On August 15, 2014, FDA announced a public hearing to solicit public comment on certain topics related to implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA), and the GDUFA Commitment Letter that accompanies the legislation. The public hearing also will provide an opportunity for public input on future policy priorities. FDA is seeking participation in the public hearing and written comments from all interested parties, including, but not limited to, regulated industry, consumers, patients, caregivers, health care professionals, and patient groups. The public hearing will be held on September 17, 2014, from 9 a.m. to 5 p.m. in Hyattsville, Maryland. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• The Senate is in recess for the remainder of the month and will reconvene for regular legislative business on Monday September 8th.

House of Representatives

• The House is in recess for the remainder of the month and will reconvene for regular legislative business on Monday September 8th.
• Late Friday August 8th, President Barack Obama signed into law the Autism CARES Act (H.R. 4631, Public Law 113-157), and the Improving Trauma Care Act (H.R. 3548, Public Law 113-152). The Autism CARES Act, authored by Representatives Chris Smith (R-NJ) and Mike Doyle (D-PA), extends the Combating Autism Reauthorization Act of 2011 to continue federal research, early identification and intervention, and education related to autism as well as the activities of the Interagency Autism Coordinating Committee. The legislation also asks the Secretary of Health and Human Services (HHS) to collaborate with other federal agencies to prepare and submit a report concerning young adults with autism spectrum disorder and the challenges related to their transition into adulthood. The Improving Trauma Care Act, introduced by Representative Bill Johnson (R-OH), amends the Public Health Service Act to improve the definition of trauma by including injuries caused by thermal, electrical, chemical, or radioactive force.
• On August 12, 2014, House Energy and Commerce Committee Republicans issued a press release stating that the Committee’s records suggest that 80% of people who selected a health plan in the ACA Federally Facilitated Marketplace (FFM) had paid their first month’s premium as of mid-May. The Committee issued letters in mid-March to FFM insurance providers requesting data on premium payments by FFM enrollees, and the Committee’s initial report indicated that 67% of enrollees had paid their premiums as of April 15, 2014. “The White House that once proudly trumpeted transparency has now gone silent when it comes to how the president’s health law is actually working. While the Obama administration was quick to celebrate the end of the first open enrollment period, the reports have since disappeared. It's clear that not everyone who signed up has completed and continued enrollment, and the latest stats from a top insurer could suggest a startling trend. Our efforts for greater transparency will continue,” said Committee Chairman Fred Upton (R-MI).
• On August 13, 2014, Representative Diane Black (R-TN) sent a letter to HHS Secretary Sylvia Mathews Burwell regarding the Department’s announcement that the Federal Health Insurance Marketplace began sending notices to consumers with unresolved citizenship or immigration data inconsistencies this week. Black notes that HHS indicated that consumers who have not yet responded must submit appropriate supporting documentation by September 5th or lose Marketplace coverage on September 30th. The letter asks for more information to “…better understand this process and the intentions of the Department moving forward”. Specifically, Black requested several pieces of information from HHS, including details on the internal verification process the Department will use to validate these returned applications, as well as whether an action plan has been developed by HHS, as recommended by the Office of Inspector General (OIG), to respond to income inconsistencies.
• On August 14, 2014, the House Committee on Veterans’ Affairs held a field hearing in Hot Springs, South Dakota entitled “Challenges in Rural America: Infrastructure Needs and Access to Care”. More information on the hearing may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On August 13, 2014, the Government Accountability Office (GAO) released a Medicare program integrity report on CMS’ efforts to reduce duplicative post-payment claims reviews. GAO reviewed Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs), and Comprehensive Error Rate Testing (CERT) contractors, and found that CMS nether has reliable data nor provides sufficient oversight and guidance to measure and fully prevent duplication. GAO found that although CMS has in place baseline requirements for post-payment review correspondence with providers, contractors vary in their compliance, which can lead to “…providers receiving less information about the reviews and thus decrease effective communication with them.” GAO found particularly low compliance rates for requirements that pertain to communicating providers’ rights, which, the report suggests, could affect providers’ ability to exercise their rights. GAO recommended that CMS take actions to improve the efficiency and effectiveness of contractors' post-payment review efforts, which include providing additional oversight and guidance regarding data, duplicative reviews, and contractor correspondence. In its comments, HHS concurred with the recommendations and noted plans to improve CMS oversight and guidance. The report was requested by Sen. Ron Wyden, Finance Committee Chairman; Sen. Orrin Hatch, Finance Committee Ranking Member; Sen. Tom Carper, Homeland Security and Governmental Affairs Committee (HSGAC) Chairman; Sen. Tom Coburn, HSGAC Ranking Member; Sen. Chuck Grassley, Judiciary Committee Ranking Member; Sen. Claire McCaskill, HSGAC Subcommittee on Contracting Oversight Chairwoman; Sen. Bob Corker; Rep. Fred Upton, Energy and Commerce Committee Chairman; Rep. Henry A. Waxman, Energy and Commerce Committee Ranking Member; Rep. Charles Boustany, M.D., Ways and Means Subcommittee on Oversight Chairman; Rep. John Lewis, Ways and Means Subcommittee on Oversight Ranking Member; and Rep. Dianna DeGette, Energy and Commerce Subcommittee on Oversight and Investigations Ranking Member. A statement by Energy and Commerce members regarding GAO’s findings may be accessed here.
• According to a recent estimate by PricewaterhouseCoopers (PWC), the average health insurance market rate increase across states reporting data for 2015 is 7.5%, while the average monthly premium (without subsidies) is around $384. Using publicly released data across 27 states and the District of Columbia, PWC found that rates varied from a low of -23% in Arizona to a high of +36% in Nevada. Researchers suggest that year two of the Affordable Care Act’s (ACA) Health Insurance Exchanges is expected to see an upswing in participation from several major commercial insurers. PWC also reports that new healthcare CO-Ops—nonprofit insurers created under the ACA—are priced comparably to or lower than competitors in Arizona, Colorado, Connecticut, Kentucky, Maine, Maryland, Nevada, and Tennessee. Arizona’s CO-OP is the lowest-priced plan in the state, with a 23% proposed rate decrease from 2014. More information on PWC’s findings may be accessed here.
• On August 8, 2014, an article published in Health Affairs online found that despite substantial progress made in electronic health record (EHR) adoption, Health Information Exchange and patient engagement remain low in office settings. Using data from the 2009–13 Electronic Health Records Survey, researchers found that EHR adoption continues to grow: In 2013, 78 percent of office-based physicians had adopted some type of EHR, and 48 percent had the capabilities required for a basic EHR system. However, they also found persistent gaps in EHR adoption, with physicians in solo practices and non–primary care specialties lagging behind others. Physicians’ electronic health information exchange with other providers was limited, with only 14 percent sharing data with providers outside their organization. Finally, researchers found that 30 percent of physicians routinely used capabilities for secure messaging with patients, and 24 percent routinely provided patients with the ability to view online, download, or transmit their health record. These findings suggest that although EHR adoption continues to grow, policies to support health information exchange and patient engagement will require ongoing attention. More information may be found here.
• On August 12, 2014, the RAND corporation issued a new analysis entitled “The 340B Prescription Drug Discount Program: Origins, Implementation, and Post-Reform Future”. The federal 340B Drug Pricing Program lowers outpatient drug prices for specific categories of "covered entity" hospitals and clinics. Covered entities can access 340B drug pricing for all of their eligible patients, including those with insurance. Federal officials estimate that the 340B program accounts for $6 billion in outpatient drug spending, about 2 percent of all U.S. prescription drug spending in 2011. This translates into savings of $1.6 billion for eligible safety net providers. RAND researchers found these savings are small in comparison to the disproportionate share hospital payments and primary health care grants that play a large role in financing care in the safety net. However, some estimates suggest that the size of the program could double under ACA provisions. In this analysis RAND researchers reviewed the available information about the 340B Drug Pricing Program and developed a set of key issues policymakers should consider as changes are discussed.
• On August 13, 2014, the National Business Group on Health released the results of a survey of 136 large US employers conducted in June 2014. According to the responses, healthcare benefit costs at large employers are expected to increase 6.5% in 2015, slightly lower than this year’s rate of increase (7%). However, employers expect to keep increases to 5% next year after making changes to their plans, such as increasing cost-sharing provisions, implementing and expanding consumer-directed health plans (CDHPs), and broadening their use of wellness programs and Centers of Excellence. The survey also found that only one-fourth of employers (26%) include a narrow network in any of their plans. Half of those (13%) offer a plan that incents employees to use a narrow network within the plan. Some employers reported that they are adopting techniques specific to specialty medications to help control costs. One third (33%) said they use a freestanding specialty pharmacy while 29% only approve coverage for a 30-day initial supply. “Despite the many distractions that the Affordable Care Act has created, large employers haven’t lost sight of the fact that rising health care costs remain a significant issue that needs to be constantly addressed,” said Brian Marcotte, president and CEO of the group. “Our survey shows that many employers are, in fact, taking necessary steps to rein in costs. This includes partnering with workers to engage in health care decisions and educating them to be better health care consumers, as well as sharing more costs with workers and narrowing their benefit options.”
• On August 14, 2014, the American Action Forum released a study entitled “Breaking Down Barriers to Medicaid Innovation: Rethinking Medicaid Waiver Approval”. The study finds that the approval process for states to obtain Medicaid waivers—which allow states to tailor their Medicaid programs—averages 190 days. Further, the study finds that the average number of days for a state to gain approval for an entirely new Medicaid waiver is 337 days. The study authors note that the “methods through which the waivers are approved are not highlighted”, therefore “additional transparency is needed…CMS is not accountable for the length of time taken to approve a waiver often leaving states in limbo as they await approval.”
• The Agency for Healthcare Research and Quality (AHRQ) Healthcare Cost and Utilization Project (HCUP) released a statistical brief this week which examines hospital inpatient utilization related to opioid overuse among adults between 1993 and 2012. The study found that the rate of adult hospital inpatient stays related to opioid overuse increased, on average, by 5 percent annually over this period. The percentage of stays with opioid overuse that were admitted from the emergency department increased from 43 percent in 1993 to 64 percent in 2005 and remained relatively constant from 2005-2012. In addition, researchers found that the proportion of inpatient stays for opioid overuse billed to Medicaid decreased over time, while the proportion billed to Medicare more than doubled.

IV. OTHER HEALTH POLICY NEWS

• On August 12, 2014, CMS released a press release entitled “Federal Health Insurance Marketplace: Send in Requested Documents Now to Keep Marketplace Coverage”. The document announces that the Federal Health Insurance Marketplace began sending notices this week to consumers with a citizenship or immigration data matching issue (inconsistencies) who have not responded to previous notices via mail, email, and phone. While the Federal Marketplace has already received documents and cleared a large number of data inconsistencies related to citizenship or immigration status, the notice states, consumers who have not yet responded must act now and submit supporting documents by September 5 or their Marketplace coverage will end on September 30. CMS issued the letters to approximately 310,000 consumers with citizenship or immigration inconsistencies. HHS also released a map showing warning notices generated for citizenship/ immigration data matching issues by state, available here. “Since this is an urgent matter, we are activating our networks on the ground to reach people directly in the communities where they live,” said CMS Administrator Marilyn Tavenner. “Whether it is online, via our call center, or with one of our local partners, consumers will have a number of ways to find the help they need to continue their coverage.”
• On Friday August 8, 2014, Massachusetts officials announced that the state will retain a state-based Health Insurance Exchange for the next ACA open enrollment period. Earlier this year state leadership indicated that Massachusetts would adopt a “dual-track” approach allowing the state to pursue a state-based model while also laying the groundwork for a switch to the Federal Marketplace if necessary. Governor Deval Patrick’s office made the announcement last week, noting that that the state will use “hCentive” as the Exchange software platform. The announcement states: “By proving hCentive’s IT readiness for Fall 2014 Open Enrollment, the Commonwealth can remain a state-based Marketplace, stop its contingency planning to join the Federally Facilitated Marketplace (FFM) and focus exclusively on expanding access to affordable, quality health insurance through hCentive… The Commonwealth front-loaded core technology into early releases of the hCentive software in order to demonstrate key functionality to CMS, and to be in a position to conduct rigorous system testing in advance of go-live on November 15, 2014. As a result, the state is poised to offer consumers a streamlined, single-point-of-entry shopping experience this fall and a solution that meets – and in some instances exceeds – current FFM Exchange capabilities.”
• CMS announced today that the Open Payments system is once again available for physicians and teaching hospitals to register, review and, as needed, dispute financial payment information received from health care manufacturers. The system was taken offline on August 3 to resolve a technical issue. To account for system down time, CMS is extending the time for physicians and teaching hospitals to review their records to September 8, 2014. The public website will be available on September 30, 2014. “CMS takes data integrity very seriously and took swift action after a physician reported a problem,” said CMS Deputy Administrator and Director of the Center for Program Integrity Shantanu Agrawal, M.D. “We have identified the root cause of the problem and have instituted a system fix to prevent similar errors. We strongly encourage physicians to review their records before the deadline and before the data are posted publically to identify any discrepancies.”

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.