A&B Healthcare Week in Review, December 5, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule entitled “Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations”. This proposed rule addresses changes to the Medicare Shared Savings Program, including provisions relating to the payment of Accountable Care Organizations (ACOs) participating in the Shared Savings Program. Under the Shared Savings Program, providers of services and suppliers that participate in an ACO continue to receive traditional Medicare fee-for-service (FFS) payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. Comments on the proposed rule are due January 30, 2015. A CMS fact sheet on the proposed rule outlining its key provisions may be found here.
• On November 28, 2014, CMS released a rule entitled “Medicaid Program; Disproportionate Share Hospital Payments – Uninsured Definition”. This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under 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.” This rule provides that, in auditing DSH payments, the quoted test will be applied on a service-specific basis; so that the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage. The rule is effective December 31, 2014.
• On December 1, 2014, CMS extended the comment period for the October 9, 2014 proposed rule entitled ‘‘Conditions of Participation for Home Health Agencies’’ (79 FR 61164). The comment period for the proposed rule, which would have ended on December 8, 2014, is extended for 30 days. The comment period is extended to 5 p.m. Eastern Standard Time on January 7, 2015. More information may be found here.
• On December 1, 2014, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) released a guidance document for issuers entitled “2015 Reenrollment in the Federally-facilitated Marketplace (FFM)”. The guidance outlines the process that the FFM and issuers will follow to send and receive enrollments for current 2014 enrollees. This bulletin also describes the “Enrollee Switched List” and its role in reenrollment, describing the process by which issuers will 1) non-renew 2014 coverage for existing enrollees who have actively selected another issuer for 2015; and 2) reenroll remaining enrollees in advance of receiving the passive reenrollment 834 transaction from the FFM. This guidance works in conjunction with final rules related to annual eligibility redeterminations and notice requirements for renewals and reenrollments issued on September 5, 2014.
• On December 2, 2014, the Department of Health and Human Services (HHS) released a notice entitled “Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children’s Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2015 Through September 30, 2016”. The Federal Medical Assistance Percentages (FMAP), Enhanced Federal Medical Assistance Percentages (eFMAP), and disaster recovery FMAP adjustments for Fiscal Year 2016 have been calculated pursuant to the Social Security Act (the Act). These percentages will be effective from October 1, 2015 through September 30, 2016. This notice announces the calculated FMAP rates that the U.S. Department of Health and Human Services (HHS) will use in determining the amount of federal matching for state medical assistance (Medicaid), Temporary Assistance for Needy Families (TANF) Contingency Funds, Child Support Enforcement collections, Child Care Mandatory and Matching Funds of the Child Care and Development Fund, Foster Care Title IV–E Maintenance payments, and Adoption Assistance payments, and the eFMAP rates for the Children’s Health Insurance Program (CHIP) expenditures. This notice also contains the increased eFMAPs for CHIP as authorized under the Patient Protection and Affordable Care Act (Affordable Care Act) for fiscal years 2016 through 2019 (October 1, 2015 through September 30, 2019).
• On December 3, 2014, the Office of Personnel Management (OPM) released a proposed rule to amend the Federal Employees Health Benefits (FEHB) Program regulations to add an additional enrollment type called ‘‘self plus one’’ for premium rating and family member eligibility purposes. Comments are due on or before February 2, 2015. More information may be found here.
• On November 26, 2014, the Department of Veterans Affairs (VA) sought comments on the information needed for Veterans, Veteran Representatives and health care providers to request reimbursement from the federal government for emergency services at a private institution. Under the provisions of the Health Care Quality Improvement Act of 1986, which established the National Practitioner Data Bank (NPDB), and a Memorandum of Understanding (MOU) between the VA and HHS, VA medical treatment facilities are required to query the NPDB at the time of initial appointment for all licensed, registered, and certified health care professionals which is followed with the enrollment in the NPDB Continuous Query (CQ) process with annual renewal of all licensed independent practitioners appointed to a VA medical treatment facility. In accordance with 38 CFR, Chapter 1, Part 46, information is collected so that VA can consider if malpractice payments were made related to substandard care, professional incompetence, or professional misconduct on the part of a licensed health care practitioner or if any adjudicated adverse action was taken against the licensure or clinical privileges of a these health care practitioner. Additionally, complete and thorough credentialing is required to assure that only qualified healthcare professionals provide care to veterans. Comments are due January 26, 2015. More information may be found here.
• On November 28, 2014, VA released a direct final rule entitled “Exempting Mental Health Peer Support Services from Copayments”. VA is taking final action to amend its regulation that sets forth the VA services that are not subject to copayment requirements for inpatient hospital care or outpatient medical care. Specifically, the regulation is amended to exempt mental health peer support services from having any required copayment. This removes a barrier that may have previously discouraged veterans from choosing to use mental health peer support services as a viable care option. VA believes that mental health peer support services are a valuable resource for veterans with mental health conditions and wants to ensure that veterans take full advantage of all resources available to them.
• On December 5, 2015, CMS released a final rule entitled “Medicare Program; Requirements for the Medicare Incentive Reward Program and Provider Enrollment”. This final rule implements various provider enrollment requirements. These include: Expanding the instances in which a felony conviction can serve as a basis for denial or revocation of a provider or supplier’s enrollment; if certain criteria are met, enabling us to deny enrollment if the enrolling provider, supplier, or owner thereof had an ownership relationship with a previously enrolled provider or supplier that had a Medicare debt; enabling us to revoke Medicare billing privileges if we determine that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements; and limiting the ability of ambulance suppliers to ‘‘backbill’’ for services performed prior to enrollment. These regulations are effective on February 3, 2015.
• On December 5, 2014, CMS released a notice entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Provider Enrollment Application Fee Amount for Calendar Year 2015”. This notice announces a $553.00 calendar year (CY) 2015 application fee for institutional providers that are initially enrolling in the Medicare or Medicaid program or the Children’s Health Insurance Program (CHIP); revalidating their Medicare, Medicaid, or CHIP enrollment; or adding a new Medicare practice location. This fee is required with any enrollment application submitted on or after January 1, 2015 and on or before December 31, 2015. This notice is effective on January 1, 2015.
• On November 28, 2014, CMS released two proposed information collection activities for public comment. They are entitled: 1) Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey Mode Experiment; and 2) Emergency Department Patient Experience of Care (EDPEC) Survey Mode Experiment. Comments are due January 27, 2014. More information may be found here.
• On December 2, 2014, the Food and Drug Administration (FDA) announced the availability of a final guidance entitled ‘‘Infusion Pumps Total Product Life Cycle; Guidance for Industry and FDA Staff.’’ The recommendations in this guidance are intended to improve the safety and effectiveness of these devices. This guidance also describes considerations in preparing premarket submissions for infusion pumps and identifies device features that manufacturers should address throughout the total product life cycle. More information may be found here.
• On December 2, 2014, FDA announced the availability of guidance entitled “Recommendations for Labeling Medical Products To Inform Users That the Product or Product Container Is Not Made With Natural Rubber Latex; Guidance for Industry and Food and Drug Administration Staff”. The purpose of this guidance is to make recommendations on the appropriate language to include in the labeling of a medical product to convey that natural rubber latex was not used as a material in the manufacture of the product, product container, and/or packaging. FDA is concerned that statements submitted for inclusion in medical product labeling, such as ‘‘latex-free,’’ ‘‘does not contain natural rubber latex,’’ or ‘‘does not contain latex’’ are not accurate because it is not possible to reliably assure that there is a complete absence of the allergens associated with hypersensitivity reactions to natural rubber latex in the medical product. More information may be found here.
• On December 2, 2014, FDA announced the availability of a scale-up and post-approval changes (SUPAC) guidance for industry entitled ‘‘SUPAC: Manufacturing Equipment Addendum.’’ This replaces the draft guidance of the same name that combined and superseded ‘‘SUPAC IR/MR: Immediate Release and Modified Release Solid Oral Dosage Forms: Manufacturing Equipment Addendum,’’ published on January 1, 1999; and ‘‘SUPAC–SS: Nonsterile Semisolid Dosage Forms; Manufacturing Equipment Addendum,’’ published as a draft on December 1, 1998. FDA revised the draft manufacturing equipment addenda to remove the equipment examples and to clarify the types of processes being referenced. More information may be found here.
• On December 2, 2014, FDA announced that the Center for Tobacco Products is establishing a public docket in conjunction with the first public workshop to gather scientific information about electronic cigarettes (e-cigarettes) as announced in Docket No. FDA–2014–N–0001–0079. Regardless of attendance at the public workshop, interested parties are invited to submit comments, supported by research and data, regarding electronic cigarettes and the public health. Comments are due April 15, 2014. More information may be found here.
• On December 4, 2014, FDA released a final rule entitled “Content and Format of Labeling for Human Prescription Drug and Biological Products; Requirements for Pregnancy and Lactation Labeling”. The final rule requires the removal of the pregnancy categories A, B, C, D, and X from all human prescription drug and biological product labeling. For human prescription drug and biological products subject to the Agency’s 2006 Physician Labeling Rule, the final rule requires that the labeling include a summary of the risks of using a drug during pregnancy and lactation, a discussion of the data supporting that summary, and relevant information to help health care providers make prescribing decisions and counsel women about the use of drugs during pregnancy and lactation. The final rule eliminates the ‘‘Labor and delivery’’ subsection because information about labor and delivery is included in the ‘‘Pregnancy’’ subsection. The final rule requires that the labeling include relevant information about pregnancy testing, contraception, and infertility for health care providers prescribing for females and males of reproductive potential. The final rule creates a consistent format for providing information about the risks and benefits of prescription drug and/or biological product use during pregnancy and lactation and by females and males of reproductive potential. These revisions will facilitate prescriber counseling for these populations. This rule is effective June 30, 2015.
• On December 5, 2014, FDA released a notice announced the availability of a draft guidance for industry entitled “How to Obtain a Letter from FDA Stating that Bioequivalence Study Protocols Contain Safety Protections Comparable to Applicable REMS for RLD”. This draft guidance describes how a prospective abbreviated new drug application (ANDA) applicant may request a letter stating that FDA has determined the following: The potential applicant’s bioequivalence (BE) study protocol contains safety protections comparable to those in the risk evaluation and mitigation strategy (REMS) with elements to assure safe use (ETASU) applicable to the reference listed drug (RLD) and FDA will not consider it a violation of the REMS for the RLD sponsor to provide a sufficient quantity of the RLD to the interested generic firm or its agent to allow the firm to perform the testing necessary to support its ANDA. More information may be found here.
• On November 25, 2014, CMS accepted a formal complete request to initiate a National Coverage Analysis (NCA) for cervical cancer screening with a combination of HPV and cytology (Pap smear) testing. CMS has accepted a formal complete request to initiate a NCA for cervical cancer screening with a combination of HPV and cytology (Pap smear) testing. This screening pathway is recommended with a grade A by the USPSTF for females age 30-65 at 5 year intervals as an alternative to triennial Pap smears, which is also recommended with a grade A. Medicare covers a screening pelvic examination and Pap test for all female beneficiaries at 12 or 24 month intervals, based on specific risk factors. See 42 C.F.R. § 410.56; Medicare National Coverage Determinations Manual, § 210.2. CMS’ current coverage does not include the HPV testing; HPV is a sexually transmitted infection that is associated with most cases of cervical cancer. The scope of the agency’s review is limited to screening for cervical cancer with HPV testing. CMS would not change its existing regulation through this NCA. The comment period ends on December 25, 2014.

Event Notices:

• December 15, 2014: HHS has announced a meeting of the Advisory Panel on Outreach and Education (APOE) (the Panel) in accordance with the Federal Advisory Committee Act. The Panel advises and makes recommendations to the Secretary of the U.S. Department of Health and Human Services and the Administrator of the Centers for Medicare & Medicaid Services on opportunities to enhance the effectiveness of consumer education strategies concerning the Health Insurance Marketplace, Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). This meeting is open to the public. The meeting will take place December 15, 2014 from 8:30 AM to 4:00 PM EST at the HHS Hubert H Humphrey Building in SW Washington, DC. Registration is due December 1, 2015. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On December 3, 2014, the Adding Ebola to the FDA Priority Review Voucher Program Act (S. 2917) passed the House, following Senate passage the previous day. S. 2917 would add Filoviruses, a family of viruses that includes Ebola and Marburg viruses, to the list of tropical diseases that qualify for an FDA priority review voucher program. It also would authorize FDA to expand the list of qualifying diseases through administrative order (rather than through formal rulemaking). The legislation would remove the limitation on the number of times vouchers can be sold or transferred and would reduce the period required between notice by a sponsor and use of a voucher from one year to 90 days. The measure moves to President Obama’s desk for his signature.

House of Representatives

• On December 2, 2014, House Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX) and Ranking Member Jim McDermott (D-WA) introduced the Protecting the Integrity of Medicare Act (PIMA) of 2014. The legislation would reform Medicare’s anti-fraud programs and emphasizes preventing fraud, waste, and abuse before it happens. A summary of the measure may be found here. Upon releasing the document, Chairman Brady explained: "This draft includes bipartisan priorities, ranging from finally removing social security numbers from Medicare cards, a priority for Sam Johnson and Lloyd Doggett, to provisions of Peter Roskam’s bipartisan PRIME Act which would increase efficiencies and education for providers to reduce fraud, waste, and abuse within the system.”
• On November 21, 2014, House Speaker John Boehner (R-OH) announced that the House had filed litigation over President Obama’s “unilateral actions on his health care law”. Earlier this year the House passed a resolution (H. Res. 676) authorizing the House to initiate the lawsuit, which addresses two Executive Branch actions: 1) delaying the ACA employer mandate, and 2) expending public funds under Section 1402 of the ACA that Congress has not appropriated. The lawsuit charges that the administration will pay approximately $175 billion over the next ten years to insurance companies under a cost-sharing program, even though “Congress has not, and never has, appropriated any funds (whether through temporary appropriations or permanent appropriations) to make any Section 1402 Offset Program payments to Insurers”. Said Boehner upon initiation of the lawsuit: “The administration is…unlawfully and unconstitutionally using funds from a separate Treasury Department account – authorized for other purposes – to pay insurance companies and thereby unilaterally altering the structure of the health care law.”
• On December 3, 2014, the House passed the Achieving a Better Life Experience (ABLE) Act of 2014 (H.R. 647). The ABLE Act amends the Internal Revenue Service code to create tax-free savings accounts for individuals with disabilities. It passed by a vote of 404-17 and now moves to the Senate.
• On December 3, 2014, the House Energy and Commerce Health Subcommittee convened a hearing entitled “The Future of the Children’s Health Insurance Program”. Witnesses for the hearing included Evelyne Baumrucker, Health Financing Analyst at the Congressional Research Service (CRS); Alison Mitchell, Health Care Financing Analyst at CRS; Carolyn Yocom, Director of Health Care at the Government Accountability Office (GAO); and Anne Schwartz, PhD, Executive Director of the Medicaid and CHIP Payment and Access Commission (MACPAC). During the hearing Members and witnesses discussed the Children’s Health Insurance Program (CHIP), which was created in 1997 and reauthorized by the Children’s Health Insurance Program Reauthorization Act (CHIPRA) in 2009. The 2010 ACA contained provisions to extend CHIP funding until September 30, 2015, and required states to maintain eligibility standards through 2019. On July 29, 2014, the Chairmen and Ranking Members of the House Committee on Energy and Commerce and the Senate Finance Committee sent letters to all 50 governors asking for their input to inform Congress’ action on CHIP. In formal responses to the House Committee on Energy and Commerce and the Senate Finance Committee, governors from 39 states expressed support for CHIP and urged Congress to extend the program. During the hearing Subcommittee Chairman Joe Pitts (R-PA) asserted that Congress must be “thoughtful and data-driven” in its approach to CHIP, noting that the program has widespread bipartisan support. He said that funding must be extended “in some fashion” so that current enrollees do not “…end up in Medicaid and on the Exchanges—programs which may offer poorer access to care or higher cost-sharing for lower-income families”. Subcommittee Ranking Member Frank Pallone (D-NJ) urged Congress to pass a CHIP funding extension during the current Lame Duck session. He noted that his bill, the CHIP Extension and Improvement Act of 2014 (H.R. 5364), would extend program funding levels through 2019. More information on the hearing may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On December 5, 2014, the HHS Assistant Secretary for Planning and Evaluation (ASPE) released a brief presenting an analysis of Qualified Health Plan (QHP) data in the Marketplace for 35 states, providing a look at the plan choice and premium landscape that new and returning consumers will see for 2015. 5 It also examines plan affordability in 2015 after taking into account premium tax credits. The findings presented include states for which sufficient plan data were available for both 2014 and 2015. Key findings include: 1) there are over 25 percent more issuers participating in the Marketplace in 2015; 2) premiums for the benchmark (second-lowest cost) silver plan will increase modestly, by 2 percent on average this year before tax credits, while premiums for the lowest-cost silver plan will increase on average by 5 percent; and 3) over 70% of current Marketplace enrollees can find a lower premium plan in the same metal level before tax credits by returning to shop. The report also found that nearly 8 out of 10 consumers in general could find coverage for less than $100, taking tax credits into account. The brief may be accessed here, and an HHS press release on the findings may be found here.
• On December 2, 2014, the Agency for Healthcare Research and Quality (AHRQ) released an interim update on “2013 Annual Hospital-Acquired Condition Rate and Estimates of Cost Savings and Deaths Averted From 2010 to 2013”. Preliminary estimates for 2013 show a further 9 percent decline in the rate of hospital-acquired conditions (HACs) from 2012 to 2013, and a 17 percent decline, from 145 to 121 HACs per 1,000 discharges, from 2010 to 2013. A cumulative total of 1.3 million fewer HACs were experienced by hospital patients over the 3 years (2011, 2012, 2013) relative to the number of HACs that would have occurred if rates had remained steady at the 2010 level. AHRQ estimates that approximately 50,000 fewer patients died in the hospital as a result of the reduction in HACs, and approximately $12 billion in health care costs were saved from 2010 to 2013.
• On December 1, 2014, the U.S. Government Accountability Office (GAO) released the results of a study entitled “Private Health Insurance: Concentration of Enrollees among Individual, Small Group, and Large Group Insurers from 2010 through 2013”. The ACA requires GAO to study competition and market concentration in the health insurance market. For this study, GAO examined individual, small group, and large group health insurance markets prior to the implementation of key ACA provisions that went into effect in 2014 and that could affect competition and market concentration among health insurers. GAO found that while several insurers participated in each state’s individual, small group, and large group health insurance markets in 2013, enrollment was concentrated among the three largest insurers in most states. In each of the three market segments, the three largest insurers had at least 80 percent of the total enrollment in at least 37 states. In more than half of these states, a single insurer had more than half of the total enrollees and in 5 of these states there was at least one market segment in which the largest insurer had at least 90 percent of all the enrollees. In the remaining states—12 states’ individual markets, 14 states’ small group markets, and 11 states’ large group markets—more insurers participated and the market segments were less concentrated, with enrollment spread out among more insurers. The individual, small group, and large group health insurance markets in most states remained concentrated from 2010 through 2013. Specifically, for each of these market segments, there were at least 30 states for which the three largest insurers had at least 80 percent of the total enrollment in each of the 4 years. GAO also examined the companies that comprised the largest insurers in each state and found that, in addition to holding at least half of the enrollment in most states from 2010 through 2013, these same companies generally remained the top insurers during the time period. The report does not include any recommendations.
• On December 2, 2014, Avalere Health released the results of a new analysis entitled “Exchange Plans Increase Costs of Specialty Drugs for Patients in 2015”. The study finds that patients accessing specialty medications – drugs often used to treat life threatening illnesses, such as cancer, rheumatoid arthritis, or multiple sclerosis – through exchange plans are more likely to experience higher out-of-pocket costs in 2015 than in 2014. In particular, the incidence of plans charging coinsurance greater than 30 percent for specialty medications has increased from 27 percent of Silver plans in 2014 to 41 percent in 2015. Approximately two-thirds of exchange enrollees picked Silver plans in 2014.
• According to a recent report from the HHS Office of Inspector General (OIG), the Massachusetts Executive Office of Health and Human Services, Office of Medicaid (State agency), did not always pay electronic health record (EHR) incentive payments to eligible hospitals in accordance with Federal and State requirements. The State agency made incorrect EHR incentive payments to 19 hospitals totaling $3.3 million. Specifically, the State agency overpaid 13 hospitals a total of $2.7 million and underpaid 6 hospitals a total of $564,000, for a net overpayment of $2.1 million. Additionally, the State agency did not report two hospital incentive payments to CMS's National Level Repository (NLR). In the report OIG recommended that the State agency 1) refund to the Federal Government $2.1 million in net overpayments made to the 19 hospitals; 2) adjust the 19 hospitals' remaining incentive payments to account for the incorrect calculations, which will result in future cost savings of $1.7 million; 3) review the calculations for the hospitals not included in the 25 we reviewed to determine whether payment adjustments are needed, review supporting documentation for the numbers provided in the cost reports, and refund any overpayments identified; 4) modify the hospital calculation worksheet to state that inpatient nonacute-care services should be excluded from the incentive payment calculation; and (5) work with CMS to ensure that the 2 hospital incentive payments not posted to the NLR are posted and establish a policy to reconcile the CMS-64 report to the NLR each quarter.

IV. OTHER HEALTH POLICY NEWS

• On November 24, 2014, CMS announced that it is extending the deadline for Eligible Hospitals and Critical Access Hospitals (CAHs) to attest to meaningful use for the Medicare Electronic Health Record (EHR) Incentive Program 2014 reporting year from 11:59 pm EST on November 30, 2014 to 11:59 pm EST on December 31, 2014. CMS said it also has delayed the deadline for hospitals that are electronically submitting clinical quality measures to meet requirements for the Hospital Inpatient Quality Reporting program and meaningful use. Hospitals will be able to continue to submit their quality data through the federal Quality Net portal until December 31st.
• On November 26, 2014, HHS released the first weekly snapshot of Federal Marketplace Open Enrollment activity. Similar to last year, each month CMS will produce a report that provides a detailed look at plan selection across the Federally Facilitated Marketplace and State-Based Marketplaces. In addition, CMS will release weekly snapshots of preliminary data. The data for November 15th through the 21st may be found here, and the data for November 22nd through the 28th may be found here. As of November 28th, a cumulative 765,135 plan selections had been made, 48% of which were selected by new consumers.

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.