A&B Healthcare Week in Review, October 24, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On October 23, 2014, the Centers for Medicare and Medicaid Services (CMS) released the proposed methodology and data sources necessary to determine federal payment amounts made in program year 2016 to states that elect to establish a Basic Health Program under the Affordable Care Act (ACA) to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges. Comments on the proposed methodology are due November 24, 2014.More information may be found here.
• On October 21, 2014, the Office of Inspector General (OIG) released an advisory opinion regarding the use of a “preferred hospital” network as part of Medicare Supplemental Health Insurance (“Medigap”) policies, whereby an insurer would indirectly contract with hospitals for discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide a premium credit of $100 off the next renewal premium to policyholders who use a network hospital for the inpatient stay. In the opinion OIG concludes that the proposed arrangement would not lead to the imposition of administrative sanctions for violations of the federal anti-kickback statute.
• On October 22, 2014, the Food and Drug Administration (FDA) released a draft guidance for industry entitled “Migraine: Developing Drugs for Acute Treatment”. The purpose of this guidance is to assist sponsors in the clinical development of drugs for the acute treatment of migraine. This guidance focuses on specific drug development and trial design issues that are unique to the study of drugs for the acute treatment of migraine. This guidance is intended to serve as a focus for continued discussions among the Division of Neurology Products, pharmaceutical sponsors, the academic community, and the public. Comments on the draft guidance are due December 22, 2014. More information may be found here.
• On October 20, 2014, FDA announced an opportunity for the public to comment on a proposed information collection activity entitled “Current Good Manufacturing Practices and Related Regulations for Blood and Blood Components; and Requirements for Donor Testing, Donor Notification, and ‘Lookback’”. This notice solicits comments on the collection of information requirements relating to FDA’s regulation of current good manufacturing practice (CGMP) and related regulations for blood and blood components; and requirements for donor testing, donor notification, and ‘lookback’.’’ Comments on the proposal must be submitted by December 19, 2014.
• On October 20, 2014, the Government Accountability Office (GAO) released a call for nominations: “Methodology Committee of the Patient-Centered Outcomes Research Institute (PCORI)”. The ACA gave the Comptroller General of the United States responsibility for appointing not more than 15 members to a Methodology Committee of the Patient Centered Outcomes Research Institute (PCORI). Nominations are being accepted for one vacancy on the Committee. Expertise in health informatics, especially expertise in developing data networks or decision support for clinicians and patients, would be beneficial. Letters of nomination and resumes should be submitted by November 17, 2014.
• The proposed rule entitled “2016 Notice of Benefit and Payment Parameters” (CMS-9944-P) is under review at the Office of Management and Budget (OMB) as of this week. This proposed rule would establish the calendar year (CY) 2016 payment parameters for the cost-sharing reductions, advance payments of the premium tax credit, reinsurance, and risk adjustment programs as required by the ACA. The legal deadline for a final rule is by the end of March 2015.
• The final rule entitled “Medicaid Disproportionate Share Hospital Payments Uninsured Definition” (CMS-2315-F) is under review at OMB as of this week. This rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act. Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year."
• On October 20, 2014, CMS announced that the following information collection activities had been submitted to OMB for review and public comment: 1) Generic Clearance for Medicaid and CHIP State Plan, Waiver, and Program Submissions; and 2) Quarterly Medicaid and CHIP Budget and Expenditure Reporting for the Medical Assistance Program, Administration and CHIP. Comments on these proposals are due November 19, 2014. More information may be found here.
• On October 20, 2014, the Department of Health and Human Services (HHS) released an “Announcement of Solicitation of Written Comments on Modifications of Healthy People 2020 Objectives”. HHS solicits written comments regarding new objectives proposed to be added to Healthy People 2020—a national health promotion and disease prevention initiative—since the fall 2013 public comment period, as well as written comments proposing new objectives to be included within existing Healthy People 2020 topic areas. Public participation helps shape Healthy People 2020, its framework, objectives, organization, and targets. Healthy People 2020 will provide opportunities for public input periodically throughout the decade to ensure that Healthy People 2020 reflects current public health priorities and public input. The updated set of Healthy People 2020 objectives will be incorporated on www.HealthyPeople.gov. This set will reflect further review and deliberation by the topic area workgroups, Federal Interagency Workgroup on Healthy People 2020, and other Healthy People 2020 stakeholders. Comments are due November 4, 2014.
• On October 22, 2014, FDA released a request for comment on draft guidance entitled ‘‘Same Surgical Procedure Exception Questions and Answers Regarding the Scope of the Exception’’. The draft guidance document is intended for tissue establishments and healthcare professionals and discusses one of the exceptions for establishments from certain regulatory requirements. Comments are due December 22, 2014. More information may be found here.
• On October 24, 2014, the HHS Office for Human Research Protections (OHRP) announced the availability of a draft guidance for the research community entitled ‘‘Guidance on Disclosing Reasonably Foreseeable Risks in Research Evaluating Standards of Care.’’ OHRP is specifically addressing what risks to subjects are presented by research evaluating or comparing risks associated with standards of care, and which of these risks are reasonably foreseeable and should be disclosed to prospective research subjects as part of their informed consent. OHRP is soliciting written comments from all interested parties, including, but not limited to institutional review board (IRB) members, IRB staff, institutional officials, research institutions, investigators, research subject advocacy groups, ethicists, the regulated community, and the public at large. Comments are due December 23, 2014. More information may be found here.

Event Notices

• November 12-13, 2014: The Centers for Disease Control and Prevention (CDC) has announced the next meeting of the Advisory Committee to the Director (ACD) Health Disparities Subcommittee. The meeting will be held November 12th and 13th in Atlanta, Georgia, and will be available by teleconference. The Health Disparities Subcommittee members will discuss progress-to-date in accomplishing the health equity recommendations approved by the CDC ACD; updates on health disparities training for the public health workforce, and collaborations with the State, Tribal, Local, and Territorial Subcommittee to the ACD. More information may be found here.
• February 5, 2014: FDA has announced a public workshop entitled ‘‘Seventh Annual Sentinel Initiative Public Workshop.’’ Convened by the Engelberg Center for Health Care Reform at the Brookings Institution and supported by a cooperative agreement with FDA, this 1-day workshop will bring the stakeholder community together to discuss a variety of topics on active medical product surveillance. Topics will include an overview of the transition from the Mini-Sentinel pilot program to the full Sentinel System and what that means for patients and other critical stakeholders. Additionally, panelists will discuss the future of the Sentinel System and opportunities to expand its medical product surveillance capabilities. This workshop will also engage stakeholders to discuss current and emerging Sentinel projects. The meeting will take place on February 5th from 9:00 AM to 4:00 PM in Washington, DC. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• The Senate is not in session, and is scheduled to return to session on November 12th. More information about the Senate schedule may be found here.

House of Representatives

• The House is not in session, and is scheduled to return to session on November 12th. More information about the House schedule may be found here.
• On October 24, 2014, the House Oversight and Government Reform Committee held a hearing entitled “The Ebola Crisis: Coordination of a Multi-Agency Response”. Witnesses for the hearing included The Honorable Nicole Lurie, M.D., Assistant Secretary at HHS; The Honorable Michael Lumpkin, Assistant Secretary of Defense, U.S. Department of Defense; Major General James M. Lariviere, Deputy Director, Political-Military Affairs (Africa), U.S. Department of Defense; The Honorable John Roth, Inspector General, U.S. Department of Homeland Security; Deborah Burger, RN, Co-President, National Nurses United; and Mr. Rabih Torbay, Senior Vice President, International Operations, International Medical Corps. Today’s event follows an Energy and Commerce Committee hearing last week featuring CDC Director Dr. Tom Frieden and National Institutes of Health (NIH) National Institute of Allergy and Infectious Disease (NIAID) Director Dr. Anthony Fauci. During last week’s hearing Fauci and Frieden defended the administration’s decision not to instate a travel ban on flights from West African nations that are battling the disease, as has been called for publicly by at least 40 Members of Congress. On October 23, 2014, twenty-eight Republican members of the House Energy and Commerce Committee issued a letter to President Obama, Ebola Response Coordinator Ron Klain, HHS Secretary Sylvia Burwell, and Secretary of Homeland Security Jeh Johnson pressing for additional information on the administration’s response and preparedness efforts to address the Ebola epidemic.

III. REPORTS, STUDIES, & ANALYSES

• On October 21, 2014, the Kaiser Family Foundation released the October 2014 edition of the Kaiser Health Tracking Poll, the last Tracking Poll to be published before the November midterm elections. According to survey results, approximately 9 in 10 of the uninsured in the United States are unaware of when the next open enrollment period begins on the ACA Health Insurance Exchanges. More specifically, two thirds of the uninsured say they know “only a little” or “nothing at all” about the marketplaces where people can shop for insurance, and just over half are unaware of financial assistance available to help low- and moderate-income people purchase insurance. Less than 1 in 10 registered voters (8 percent) identify the ACA as the most important issue to their vote, ranking 5th behind the economy (16 percent), dissatisfaction with government (12 percent), education (10 percent) and the situation in Iraq and Syria (9 percent).
• On October 21, 2014, the RAND Corporation released an analysis entitled “Assessing Alternative Modifications to the Affordable Care Act: Impact on Individual Market Premiums and Insurance Coverage”. Researchers used a micro-simulation model to estimate how eliminating the ACA's individual mandate, eliminating the law's tax credits, and combined scenarios that change these and other provisions of the Act might affect 2015 individual market premiums and overall insurance coverage. The authors find that eliminating the ACA's tax credits and eliminating the individual mandate both increase premiums and reduce enrollment on the individual market. They also find that these key features of the ACA help to protect against adverse selection and stabilize the market by encouraging healthy people to enroll and, in the case of the tax credit, shielding subsidized enrollees from premium increases. Further, they find that individual market premiums are only modestly sensitive to young adults' propensity to enroll in insurance coverage, and ensuring market stability does not require that young adults make up a particular share of enrollees.
• In a Health Affairs blog post this week, analysts discussed the recent slowdown in Medicare Part D spending as a driver of overall Medicare spending slowdown. The Part D trend stems from the “patent cliff,” but the “recent rise of specialty drugs” could reverse the slowdown. The authors conclude that “[t]he decrease in Medicare spending growth has already been a remarkable shift, and prolonging the slowdown in Parts A and B would be a tremendously important contribution. Unfortunately, though, the outsized role that Part D has played in the Medicare slowdown is bad budget news because it may prove fleeting.”
• This week the Pew Charitable Trusts released a report entitled “The Children’s Health Insurance Program: A 50-State Examination of CHIP Spending and Enrollment”. Researchers from the State Health Care Spending Project—a collaborative effort of The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation—examined key facets of the CHIP program and how it is administered, analyzing data on CHIP spending and enrollment for the 50 states and the District of Columbia. To place such data in context, this report also examined data on other insurance coverage and spending, state revenue, and overall national health expenditures.
• On October 22, 2014, the National Committee for Quality Assurance (NCQA) released the 2014 edition of the “State of Health Care Quality Report.” The report summarizes audited Healthcare Effectiveness Data and Information Set (HEDIS) results for calendar year 2013, with data from 814 HMOs and 353 PPOs, representing more than 171 million people, or 54 percent of the U.S. population. Among the 139 measures that make up this year’s report, NCQA finds that over three to five years: 64 measures (46 percent) had consistent and statistically significant performance gains, while 11 measures (8 percent) had consistent and statistically significant performance declines.
• New studies published in the Journal of the American Medical Association (JAMA) this week consider issues related to price, cost, and competition in healthcare. Featured articles include: Association Between Hospital Conversions to For-Profit Status and Clinical and Economic Outcomes; Association Between Availability of Health Service Prices and Payments for These Services; Physician Practice Competition and Prices Paid by Private Insurers for Office Visits; and Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California. The articles may be accessed here.
• On October 23, 2014, the Treasury Inspector General for Tax Administration (TIGTA) released the results of an audit entitled “Affordable Care Act: Expanded Guidance Provided Assistance to the Exchanges, but Greater Assurance of the Protection of Federal Tax Information Is Needed”. This audit was initiated to determine whether the Internal Revenue Service (IRS) Office of Safeguards has implemented sufficient policies and procedures to ensure that the ACA Exchanges are adequately protecting Federal Tax Information (FTI) received from the IRS. The report finds that additional procedures are needed to provide greater assurance that FTI will be protected prior to approving its release. Specifically, IRS procedures did not require the Exchanges or other agencies to submit an initial independent security assessment report that could help to evaluate risk levels and the status of required security controls. TIGTA also found deficiencies in procedures related to obtaining signed system security authorizations and ensure that on-site reviews of agencies that have deployed new systems occur in a timely manner.

IV. OTHER HEALTH POLICY NEWS

• On October 23, 2014, HHS announced an $840 million project to improve patient care and lower costs: the Transforming Clinical Practice Initiative. Through the Initiative, HHS will invest $840 million over the next four years to support 150,000 clinicians with a combination of incentives, tools, and information to encourage doctors to team with their peers and others—by forming “Practice Transformation Networks” or “Support and Alignment Networks”—to move from volume-driven systems to value-based, patient-centered, and coordinated health care services. Applicants for the funding could include group practices, health care systems, medical provider associations and others. “This model will support and build partnerships with doctors and other clinicians across the country to provide better care to their patients. Clinicians want to spend time with their patients, coordinate care, and improve patient outcomes, and the Centers for Medicare & Medicaid Services wants to be a collaborative partner helping clinicians achieve those goals and spread best practices across the nation,” said Patrick Conway, M.D., deputy administrator for innovation and quality and CMS chief medical officer. More information on the initiative may be found here.
• The Health Resources and Services Administration (HRSA), which is responsible for administering the 340B drug pricing program for certain outpatient drugs used by covered entities, sent a letter on October 7, 2014 to more than 50 drug manufacturers, telling them that they were to refund money to 340B hospitals for certain orphan drugs when the hospitals were charged at non-discounted prices. The purpose of the 340B drug pricing program is to allow covered entities to stretch scarce resources in service of their most vulnerable patient populations. In its letter to drug manufacturers, HRSA said that the companies were not following the agency’s orphan drug policy, which states that manufacturers need to provide drug discounts through the 340B program for orphan drugs that are used off-label to treat anything other than a designated “orphan” condition. The letter to the drug manufacturers said that they had 30 days from the date of the letter to notify HRSA of “plans to repay affected covered entities and to institute the offer of the discounted price in the future.” HRSA did not say what enforcement actions (if any) it could take against a manufacturer that does not comply with the directions in the letter and provide refunds to 340B hospitals.

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.