A&B Healthcare Week in Review, September 26, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On September 26, 2014, the Internal Revenue Service (IRS), Employee Benefits Security Administration (EBSA), and the Centers for Medicare and Medicaid Services (CMS) released a final rule entitled “Excepted Benefits Amendments”. This document contains final regulations that amend the regulations regarding excepted benefits under the Employee Retirement Income Security Act of 1974, the Internal Revenue Code (the Code), and the Public Health Service Act. Excepted benefits are generally exempt from the health reform requirements that were added to those laws by the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). In addition, eligibility for excepted benefits does not preclude an individual from eligibility for a premium tax credit under section 36B of the Code if an individual chooses to enroll in coverage under a Qualified Health Plan (QHP) through an Affordable Insurance Exchange. These regulations finalize some but not all of the proposed rules with minor modifications; additional guidance on limited wraparound coverage is forthcoming. These final regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. The rules will be published in the Federal Register on October 1, 2014.
• On September 23, 2014, the Food and Drug Administration (FDA) announced the availability of a draft report entitled “Standardizing and Evaluating Risk Evaluation and Mitigation Strategies (REMS)”. This report describes the Agency's findings concerning strategies to standardize risk evaluation and mitigation strategies (REMS), where appropriate, with the goal of reducing the burden of implementing REMS on practitioners, patients, and others in various health care settings. As part of the reauthorization of the Prescription Drug User Fee Act (PDUFA), FDA has committed to standardizing REMS to better integrate them into the existing and evolving health care system. FDA is publishing this report to allow the public to provide comment on the report as it relates to PDUFA. Comments are due November 24, 2014. More information may be found here.
• On September 23, 2014, CMS issued a notice soliciting nominations for new members to the Advisory Panel on Hospital Outpatient Payment. There are vacancies on the Panel effective September 30, 2014.The purpose of the Panel is to advise the Secretary of the Department of Health and Human Services (HHS) and the Administrator of CMS on the clinical integrity of the Ambulatory Payment Classification (APC) groups and their associated weights, and supervision of hospital outpatient services. The Secretary re-chartered the Panel in 2012 for a 2-year period effective through November 19, 2014. CMS intends to re-charter the Panel for another 2-year period prior to expiration of the current charter. CMS will consider nominations if they are received no later than 5:00 PM on November 24, 2014. More information may be found here.
• On September 23, 2014, CMS issued a proposed notice entitled “Medicare and Medicaid Program; Application From the Joint Commission for Continued Approval of Its Psychiatric Hospital Accreditation Program”. This proposed notice acknowledges the receipt of an application from the Joint Commission for continued recognition as a national accrediting organization for psychiatric hospitals that wish to participate in the Medicare or Medicaid programs. The statute requires that within 60 days of receipt of an organization's complete application, CMS publish a notice that identifies the national accrediting body making the request, describes the nature of the request, and provides at least a 30-day public comment period. Comments are due October 23, 2014.
• On September 22, 2014, FDA proposed to reclassify iontophoresis devices intended for any other purposes, a pre-amendments class III device, into class II (special controls), and to amend the device identification. FDA is proposing this reclassification on its own initiative based on new information. This action implements certain statutory requirements. Comments on the action are due December 22, 2014. More information may be found here.
• On September 24, 2014, FDA announced the availability of guidance entitled “Custom Device Exemption.” FDA has developed this document to provide guidance to industry and FDA staff about implementation of the custom device exemption contained in the Food, Drug, and Cosmetic Act (the FD&C Act). The intent of this guidance is to define terms used in the custom device exemption, explain how to interpret the “five units per year of a particular device type” language contained in the FD&C Act, describe information that FDA proposes manufacturers should submit in the custom device annual report, and provide recommendations on how to submit an annual report for devices distributed under the custom device exemption. More information may be found here.
• On September 25, 2014, FDA announced the availability of a draft guidance entitled “Policy Clarification for Fluoroscopic Equipment Requirements”. This draft guidance describes FDA’s intent to clarify the application of certain aspects of the performance standard requirements for fluoroscopic equipment when manufacturers comply with certain International Electrotechnical Commission (IEC) standards. Comments on the draft guidance are due December 24, 2014. More information may be found here.
• On September 25, 2014, FDA issued a notice entitled “Medical Devices; Availability of Safety and Effectiveness Summaries for Premarket Approval Applications”. FDA is publishing a list of premarket approval applications (PMAs) that have been approved. This list is intended to inform the public of the availability of safety and effectiveness summaries of approved PMAs through the Internet and the Agency’s Division of Dockets Management.
• On September 26, 2014, CMS announced the annual adjustment in the amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process. The adjustment to the AIC threshold amounts will be effective for requests for ALJ hearings and judicial review filed on or after January 1, 2015. The calendar year 2015 AIC threshold amounts are $150 for ALJ hearings and $1,460 for judicial review. The notice is effective on January 1, 2015. More information may be found here.
• On September 26, 2014, the Department of Defense issued the updated “TRICARE Young Adults Premiums for Calendar Year 2015”. This notice provides the updated TRICARE Young Adult program monthly premiums for Calendar Year (CY) 2015: $181 for a TRICARE Standard Plan and $208 for TRICARE Prime Plans.
• On September 26, 2014, FDA announced that it would extend the comment period for a draft guidance entitled “Informed Consent Information Sheet: Guidance for IRBs, Clinical Investigators, and Sponsors”, which was originally published in the Federal Register on July 15, 2014 (see original notice here). The draft guidance is intended to assist institutional review boards (IRBs), clinical investigators, and sponsors involved in clinical investigations of FDA-regulated products in carrying out their responsibilities related to informed consent. The draft guidance provides the Agency's recommendations and requirements for informed consent to assure the protection of the rights and welfare of human subjects in clinical investigations. The Agency has received a request for a 30-day extension of the comment period for the draft guidance. The request conveyed concern that the current 60-day comment period does not allow sufficient time to develop a meaningful or thoughtful response to the draft guidance. Comments are now due October 27, 2014. More information may be found here.
• On September 26, 2014, the Department of Veterans Affairs (VA) issued a notice entitled “Reasonable Charges for Inpatient MS– DRGs and SNF Medical Services; V3.15, Fiscal Year 2015 Update”. This document updates the acute inpatient and the skilled nursing facility/sub-acute inpatient facility charges for FY 2015. The updated charges are based on the 2015 Medicare severity diagnosis related groups (MS–DRGs).
• On September 26, 2014, FDA announced the availability of a draft guidance entitled "Content and Format for Abbreviated 510(k)s for Early Growth Response 1 (EGR1) Gene Fluorescence In-Situ Hybridization (FISH) Test System for Specimen Characterization Devices." This draft guidance provides industry and Agency staff with recommendations for the suggested format and content of an abbreviated 510(k) submission for early growth response 1 (EGR1) gene fluoresce in-situ hybridization (FISH) test system for specimen characterization devices. Comments on the draft guidance are due December 26, 2014. More information may be found here.
• On September 26, 2014, CMS announced that the following information collection activities had been submitted to the Office of Management and Budget (OMB) for review: 1) Cost Sharing Reduction Reconciliation; and 2) Medicaid Incentives for Prevention of Chronic Disease (MIPCD) Demonstration. Comments are due October 27, 2014. More information may be found here.
• On September 26, 2014, FDA announced that a proposed collection of information had been submitted to OMB for review and clearance, entitled “Good Laboratory Practice Regulations for Nonclinical Studies—21 CFR Part 58 (OMB Control Number 0910–0119)— Extension”. Comments are due October 27, 2014.
• On September 26, 2014, CMS announced an opportunity for the public to comment on the following information collection activities: 1) Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans and Prescription Drug Plans (PDP); and 2) CY 2016 Plan Benefit Package (PBP) Software and Formulary Submission. Comments are due November 25, 2014. More information may be found here.

Event Notices

• October 21-22, 2014: FDA announced a public workshop entitled “Collaborative Approaches for Medical Device and Healthcare Cybersecurity”. FDA, in collaboration with other stakeholders within HHS and the Department of Homeland Security (DHS), seeks broad input from the Healthcare and Public Health (HPH) Sector on medical device and healthcare cybersecurity. The vision for this public workshop is to catalyze collaboration among all HPH stakeholders. Participants will identify barriers to promoting cooperation; discuss innovative strategies to address challenges that may jeopardize critical infrastructure; and enable proactive development of analytical tools, processes, and best practices by the stakeholder community in order to strengthen medical device cybersecurity. The public workshop will be held on October 21 and 22, 2014, from 9 a.m. to 5 p.m. More information may be found here.
• October 28-29, 2014: FDA announced a public scientific workshop to discuss the roadmap for applying regulatory science to neonates. This public scientific workshop is being co-sponsored with the FDA, the Critical Path Institute (C-Path) and the Burroughs Welcome Fund (BWF). The purpose of the public scientific workshop is to initiate constructive discussion among regulators, researchers, health care providers, representatives from the pharmaceutical industry and health care organizations, and the general public to determine whether there is sufficient interest on the part of stakeholders to develop a neonatal consortium and to discuss potential working groups dedicated to the regulatory science required to develop neonatal therapeutics. The public scientific workshop will be held on October 28 and 29, 2014, from 8 a.m. to 5 p.m. More information, including registration details, may be accessed here.
• October 29-30, 2014: The Centers for Disease Control and Prevention (CDC) has announced the next meeting of the Community Preventive Services Task Force. The Task Force is an independent, nonpartisan, nonfederal, and unpaid panel. Its members represent a broad range of research, practice, and policy expertise in prevention, wellness, health promotion, and public health, and are appointed by the CDC Director. The Task Force was convened in 1996 by HHS to identify community preventive programs, services, and policies that increase healthy longevity, save lives and dollars and improve Americans' quality of life. CDC is mandated to provide ongoing administrative, research, and technical support for the operations of the Task Force. During its meetings, the Task Force considers the findings of systematic reviews on existing research, and issues recommendations. Task Force recommendations provide information about evidence-based options that decision makers and stakeholders can consider when determining what best meets the specific needs, preferences, available resources, and constraints of their jurisdictions and constituents. The Task Force's recommendations, along with the systematic reviews of the scientific evidence on which they are based, are compiled in the Guide to Community Preventive Services. The meeting will be held on Wednesday, October 29, 2014 from 8:30 a.m. to 6:00 p.m. EDT and Thursday, October 30, 2014 from 8:30 a.m. to 1:00 p.m. EDT. More information, including registration details, may be accessed here.
• October 30-31, 2014: FDA announced a public meeting to discuss the development, assessment, and regulation of abuse-deterrent formulations of opioid medications. The meeting will focus on scientific and technical issues related to the development and in vitro assessment of these products, as well as FDA's approach towards assessing the benefits and risks of all opioid medications, including those with abuse-deterrent properties. FDA is seeking input on these issues from all stakeholders, including patients, health care providers, the pharmaceutical industry, patient advocates, academics, researchers, and other governmental entities. The public meeting will be held on October 30, 2014, from 8:30 a.m. to 5 p.m. and October 31, 2014, from 8:30 a.m. to 3 p.m. Individuals who wish to present at the meeting must register by October 14, 2014. Individuals who wish to attend the meeting but do not wish to make a presentation should register by October 24, 2014. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• • The Senate is not in session. More information about the Senate floor schedule may be found here.

House of Representatives

• The House is not in session. More information about the House floor schedule may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On September 22, 2014, the Government Accountability Office (GAO) released a report entitled “Patient Protection and Affordable Care Act: Procedures for Reporting Certain Financial Management Information Should Be Improved”. GAO was asked to examine the resources that the Center for Consumer Information and Insurance Oversight (CCIIO) used and expects to use in implementing the private health insurance provisions of the ACA, including certain categories of expenditures, the sources of funding, and the total number of staff, along with the number of staff reassigned from other units. GAO reports that CMS provided most of the requested data regarding financial resources used at the agency, but did not provide estimates of fiscal year 2014 obligations for certain categories of CCIIO-related transactions, such as advertising and other public relations activities. GAO identified several issues that contributed to CMS’s inability to provide complete information that is independently verifiable in a timely manner, including: 1) CMS does not have an effective means of identifying CCIIO-related information; and 2) CMS does not have documented procedures to ensure that data requests are reviewed and approved for accuracy. GAO recommended that CMS identify and evaluate options to facilitate reporting CCIIO-related financial management information that is independently verifiable in a timely manner, and develop and implement policies and procedures to document the preparation, review, and approval of information produced for non-routine requests.
• On September 23, 2014, HHS released a report entitled “Health Insurance Issuer Participation and New Entrants in the Health Insurance Marketplace in 2015”. The report examines preliminary data from 36 Federally-Facilitated Exchanges (FFEs) and partnership Exchanges, and eight State-Based Exchanges (SBEs). HHS reports that in the 44 states reporting data, 77 issuers will be newly offering coverage in 2015, of which 67 will operate in FFEs (a 30% net increase over this year). The eight SBEs where data is already available will have a total of six more issuers in 2015, a 10% net increase over this year. Ten issuers in the FFE and four in the SBEs that offered Qualified Health Plans (QHPs) in 2014 have not filed for participation in 2015, but the report notes that some of those issuers’ parent companies continue to be active in the respective Marketplaces. Report authors Munira Gunja and Emily Gee conclude that, “Given that the number of new entrants is expected to be more than five times the number of exiting issuers among the 44 states included in this analysis, the Marketplaces will offer consumers significantly more choice in 2015 and appear to offer an increasingly attractive business opportunity for issuers.”
• On September 23, 2014, the Office of Inspector General (OIG) released a report entitled “Health Insurance Marketplaces Generally Protected Personally Identifiable Information but Could Improve Certain Information Security Controls”. OIG conducted three reviews of the security of certain information technology at the Federal, Kentucky, and New Mexico Health Insurance Marketplaces. Although CMS had implemented controls to secure Healthcare.gov and consumer personally identifiable information (PII) on the Federal Marketplace, OIG identified areas for improvement in its information security controls. OIG found that Kentucky had sufficiently protected PII on its Marketplace Web sites and databases in accordance with Federal requirements. However, opportunities to improve the Kentucky Marketplace's database access and information security controls remain. Although New Mexico management had implemented security controls, policies, and procedures to prevent vulnerabilities in its Web site, database, and supporting information systems, its information technology policies and procedures did not always conform to Federal requirements to secure sensitive information stored and processed by the New Mexico Marketplace. OIG recommended that the Marketplaces' management address the findings identified in its reports.
• On September 24, 2014, HHS released a report entitled “Impact of Insurance Expansion on Hospital Uncompensated Care Costs in 2014”. This report summarizes research on the effect of the major health insurance coverage expansion under the ACA on the drivers of uncompensated care (UCC) and on hospital UCC costs. According to the report, early hospital financial reporting and member surveys from hospital associations indicate that, through second quarter 2014, payor mix is shifting in ways that will likely reduce hospital uncompensated care costs. Initial projections suggest that uncompensated care costs will fall substantially following major insurance coverage expansion, including coverage expansion through both Medicaid and the Health Insurance Marketplaces. The projections further suggest that $4.2 billion of this reduction will come from the 25states plus Washington DC expanding Medicaid as of the beginning of FY2014,representing a 25 percent reduction from baseline uncompensated care spending and 74 percent of total savings. $1.5 billion will come from the 23 Medicaid non-expansion states, representing a 9 percent reduction from baseline uncompensated care spending and 26 percent of total savings.
• On September 25, 2014, Avalere published an analysis which finds that most Medicare Accountable Care Organizations (ACOs) earning shared savings payments were below average on quality. Specifically, 59 percent of Medicare Shared Savings Program (MSSP) participants that earned shared savings payments had below average quality scores. These 29 ACOs earned $169.4 million, or 56 percent, of total shared savings payments distributed after the first MSSP performance year. In contrast, the only ACO that had to repay CMS achieved better than average quality. Overall, the 220 ACOs that completed their first MSSP performance year in 2013 earned on average three-quarters of possible quality points. However, this average skews upward as fewer than two in five ACOs had better than average quality scores. In addition, ACOs with better than average quality scores that did not earn shared savings payments, outnumbered those earning payments by three to one.
• On September 26, 2014, Avalere released the results of a study sponsored by the American Heart Association (AHA), which examined the extent to which qualified health plans (QHPs) offered on the health insurance exchanges included selected comprehensive stroke centers (CSCs) and certain affiliated cardiologists, neurologists and diagnostic radiologists in their provider networks. The findings reveal that in-network coverage of such facilities and specialty physicians is highly variable across the ten analyzed regions. On average, physician coverage ranged from eight percent in Los Angeles to 83 percent in Philadelphia (Louisville, Kentucky was excluded from this range due to lack of physician coverage). Similarly, average facility coverage was highly variable, ranging from 11 percent in Atlanta to 100 percent in New Jersey. Overall, the plans examined included a greater portion of the selected facilities in their networks, as compared to the selected physicians. For the analysis, Avalere selected three lower cost silver QHPs in 10 regions to review in-network coverage of CSCs and selected physicians.
• Last week the Commonwealth Fund released a report entitled “Are Americans Finding Affordable Coverage in the Health Insurance Marketplaces?”. The report tracked people’s experiences shopping for health insurance coverage in the ACA Marketplaces during the first open enrollment period, October 2013 through June 2014. The results show that adults with low or moderate incomes were more likely to say it was easy to find an affordable plan than were adults with higher incomes. Adults with low or moderate incomes who purchased a plan through the Marketplaces this year have similar premium costs and deductibles as adults in the same income ranges with employer-provided coverage. A majority of adults with Marketplace coverage gave high ratings to their insurance and were confident in their ability to afford the care they need when sick.

IV. OTHER HEALTH POLICY NEWS

• On September 22, 2014, HHS announced awards of $99 million to train new mental health providers, help teachers and others recognize mental health issues in youth and connect them to help, and increase access to mental health services for young people. These funds were included in the President and Vice President’s Now Is the Time plan to reduce gun violence. $34 million in funding has been allocated to train just over 4,000 new mental health providers; $48 million will support teachers, schools, and communities in recognizing and responding to mental health issues among youth; and $16.7 million will go to support 17 new Healthy Transitions grants, to improve access to treatment and support services for youth and young adults ages 16 to 25 that either have, or are at high risk of developing, a serious mental health condition.

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.