A&B Healthcare Week in Review, January 9, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On January 6, 2015, the Food and Drug Administration (FDA) released a notice entitled “Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Guidance for Industry on Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During an Influenza Pandemic; Availability”. FDA is announcing that the information collection activities associated with this guidance (Guidance for Industry on Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During an Influenza Pandemic) have been submitted to the Office of Management and Budget (OMB) for review and clearance. The guidance includes recommendations for planning, notification, and documentation for firms that report post-marketing adverse events. The guidance recommends that each firm’s pandemic influenza continuity of operations plan (COOP) include instructions for reporting adverse events, including a plan for the submission of stored reports that were not submitted within regulatory timeframes. The guidance explains that firms that are unable to fulfill normal adverse event reporting requirements during an influenza pandemic should: (1) Maintain documentation of the conditions that prevent them from meeting normal reporting requirements; (2) notify the appropriate FDA organizational unit responsible for adverse event reporting compliance when the conditions exist and when the reporting process is restored; and (3) maintain records to identify what reports have been stored. Comments are due February 5, 2015. 
• On January 9, 2015, FDA released a notice entitled “Medical Device User Fee and Modernization Act; Notice to Public of Web Site Location of Fiscal Year 2015 Proposed Guidance Development”. FDA is announcing the Web site location where the Agency will post two lists of guidance documents that the Center for Devices and Radiological Health (CDRH or the Center) is intending to publish in Fiscal Year (FY) 2015. In addition, FDA has established a docket where stakeholders may comment on the priority of topics for guidance, provide comments and/or propose draft language for those topics, suggest topics for new or different guidance documents, and comment on the applicability of guidance documents that have issued previously. Public responses should be submitted by March 10, 2015. 
• On January 7, 2015, the Office of Personnel Management (OPM) released a proposed rule entitled “Federal Employees Health Benefits Program; Subrogation and Reimbursement Recovery”. OPM is issuing a proposed rule to amend the Federal Employees Health Benefits (FEHB) Program regulations to clarify the conditional nature of FEHB Program benefits and benefit payments under the plan’s coverage as subject to a carrier’s entitlement to subrogation and reimbursement recovery, and therefore, that such entitlement falls within the preemptive scope of the U.S.C. FEHB contracts must include a provision incorporating the carrier’s subrogation and reimbursement rights and FEHB plan brochures must explain the carrier’s subrogation and reimbursement policy. Comments on the proposed rule are due February 6, 2015. 
• On January 7, 2015, OPM release a proposed rule entitled “Federal Employees Health Benefits Program; Rate Setting for Community-Rated Plans”, to make changes to the Federal Employees Health Benefits Acquisition Regulation (FEHBAR). These changes would: Define which subscriber groups may be included for consideration as similarly sized subscriber groups (SSSGs); require the SSSG to be traditional community rated; establish that traditional community-rated FEHB plans must select only one rather than two SSSGs; and make conforming changes to FEHB contract language to account for the new medical loss ratio (MLR) standard for most community-rated FEHB plans. 
• On January 7, 2015, OPM released a proposed rule entitled “Enrollment Options Following the Termination of a Plan or Plan Option”. OPM is issuing a proposed rule to amend the FEHB Program regulations regarding enrollment options following the termination of a plan or plan option. Comments are due March 9, 2015. 
• On December 31, 2014, OMB received a proposed Centers for Medicare and Medicaid Services (CMS) rule entitled “Electronic Health Record (EHR) Incentive Programs--Stage 3” (CMS-3310-P) (RIN: 0938-AS26). This proposed rule would establish policies related to Stage 3 of meaningful use for the Medicare and Medicaid EHR Incentive Programs. This rule is necessary to implement the provisions of the American Recovery and Reinvestment Act (ARRA) that provide incentive payments to eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) participating in Medicare and Medicaid programs that adopt and meaningfully use certified EHR technology. The rule specifies applicable criteria for demonstrating Stage 3 of meaningful use. 
• On January 5, 2015, the Centers for Medicare and Medicaid Services (CMS) announced that an information collection request entitled “Risk Corridors Transitional Policy” had been submitted to OMB for review. Section 1342 of the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act, or ACA) provides for the establishment of a temporary risk corridors program that will apply to qualified health plans (QHPs) in the individual and small group markets for the first three years of Exchange operation. Under 45 CFR 153.530(e), each issuer conducting business in the individual and small group markets in states that adopted the transitional policy is required to submit enrollment data, including enrollment in transitional policies (i.e. individual or small group health insurance coverage in states that adopted the transitional policy announced in the CMS letter dated November 14, 2013), on the ‘‘Transitional Adjustment Reporting Form’’ prescribed by CMS, for each state in which the issuer conducts business. The data collection will be used to amend the risk corridors program provisions in 45 CFR part 153 to mitigate any unexpected losses for issuers of plans subject to risk corridors that are attributable to the effects of this transitional policy. Specifically, CMS will use the data to calculate the risk corridors adjustment percentage, if any, in transitional states. Comments are due February 4, 2015. 
• On January 9, 2015, CMS released a notice entitled “Agency Information Collection Activities: Proposed Collection; Comment Request”. CMS is request to extend a currently approved collection of information entitled “6071 of the Deficit Reduction Act”. The second request in this notice is for a new information collection (request for a new OMB control number) entitled “Outcome and Assessment Information Set (OASIS) OASIS–C1/ICD–10”. Comments on the proposal are due March 10, 2015. Home health agencies (HHAs) are required to collect the outcome and assessment information data set (OASIS) to participate in the Medicare program. CMS is requesting a new OMB control number for the proposed revised OASIS item set (OASIS–C1/ICD–10).

II. LEGISLATION & COMMITTEE ACTION 

• The House and Senate convened on Tuesday January 6, 2015 to begin the 114th Congressional session. 
• On January 8, 2015, the House passed the Save American Workers Act of 2015 (H.R. 30). H.R. 30 would change how penalties are imposed under the ACA on employers that do not offer insurance (or offer insurance that does not meet certain criteria) and that have at least one full-time employee receiving a subsidy through a Health Insurance Exchange. The legislation would raise the threshold that defines full-time employment from 30 hours per week under current law to 40 hours per week, and it would apply that higher threshold in two ways in the calculation of penalties. The Congressional Budget Office (CBO) cost estimate for the bill may be found here. CBO and the Joint Committee on Taxation (JCT) estimate that enacting H.R. 30 would increase budget deficits by $18.1 billion over the 2015-2020 period, and by $53.2 billion over the 2015-2025 period. Of note, the White House issued a Statement of Administration Policy which indicates that the Administration strongly opposes the measure, and that President Obama would veto the bill should it reach his desk. 
• On January 6, 2015, the House passed the Hire More Heroes Act of 2015 (H.R. 22). The Act would amend section 4980H(c)(2) of the Internal Revenue Code to provide that employees who have medical coverage under TRICARE or certain programs administered by the Veterans Administration (VA) would not be taken into account for purposes of determining whether the employer is large enough to be subject to employer responsibility payments under the ACA.

III. REPORTS, STUDIES, & ANALYSES 

• A study published in the January issue of Health Affairs examines whether the growth in Medicare Advantage enrollment between 2006 and 2011 was mainly due to new beneficiaries choosing Medicare Advantage when they first became eligible. The study also examined the extent to which beneficiaries in traditional Medicare switched to Medicare Advantage, and vice versa. The authors found that 22 percent of new Medicare beneficiaries elected Medicare Advantage over traditional Medicare in 2011; they accounted for 48 percent of new Medicare Advantage enrollees that year. People ages 65–69 switched from traditional Medicare to Medicare Advantage at higher-than-average rates. Dual eligibles (people eligible for both Medicare and Medicaid) and beneficiaries younger than age sixty-five with disabilities dis-enrolled from Medicare Advantage at higher-than-average rates. On average, in each year of the study period authors found that fewer than 5 percent of traditional Medicare beneficiaries switched to Medicare Advantage, and a similar percentage of Medicare Advantage enrollees switched to traditional Medicare. These results suggest that initial coverage decisions have long-lasting effects. 
• On January 8, 2015, the Commonwealth Fund released a report entitled “State Trends in the Cost of Employer Health Insurance Coverage, 2003-2013”. The report finds that from 2010 to 2013—the years following ACA implementation—there has been a marked slowdown in premium growth in 31 states and the District of Columbia. Yet, the authors write, the costs employees and their families pay out-of-pocket for deductibles and their share of premiums continued to rise, consuming a greater share of incomes across the country. In all but a handful of states, average deductibles more than doubled over the past decade for employees working in large and small firms. The report indicates that, “Workers are paying more but getting less protective benefits. Costs are particularly high, compared with median income, in Southern and South Central states, where incomes are below the national average. Based on recent forecasts that predict an uptick in private insurance growth rates starting in 2015, securing slow cost growth for workers, families, and employers will likely require action to address rising costs of medical care services.” 
• On January 5, 2015, the Office of Inspector General (OIG) released Advisory Opinion No. 14-11, indicating that OIG would not impose sanctions in the case of a proposed copayment assistance program. The case in question pertains to a nonprofit, tax-exempt, charitable organization’s proposal to provide assistance with copayment obligations to financially needy patients, including Medicare and Medicaid beneficiaries, diagnosed with Crohn’s disease or ulcerative colitis. OIG concludes that the proposed arrangement would not constitute a violation of federal anti-kickback statute. 
• On January 5, 2015, a study was published in Health Affairs entitled “Medicare’s Hospital Compare Quality Reports Appear To Have Slowed Price Increases For Two Major Procedures”. Researchers estimated difference-in-differences models of the effects of Hospital Compare (Medicare’s public reporting initiative) quality reporting on transaction prices for two major cardiac procedures, coronary artery bypass graft (CABG) and percutaneous coronary intervention (PCI). States that had mandated their own public reporting systems before the implementation of Hospital Compare formed the control group. The authors found that prices for these procedures continued to increase overall after the initiation of Hospital Compare quality scores, but the rate of increase was significantly lower in states with no quality reporting metrics of their own before Hospital Compare, when compared to the control states (annual rates of increase of 4.4 percent versus 8.7 percent for PCI, and 3.9 percent versus 10.6 percent for CABG, adjusted for overall inflation). This finding implies that Hospital Compare provided leverage to purchasers in moderating price increases, while adding competitive pressures on hospitals.

IV. OTHER HEALTH POLICY NEWS 

• On January 7, 2015, the FDA Oncologic Drugs Advisory Committee (ODAC) convened a meeting to discuss the biologics license application (BLA) submitted by Sandoz, Inc. for EP2006 (brand name “Zarxio”), a proposed biosimilar to Neupogen (filgrastim). (The Biologics Price Competition and Innovation Act of 2009 (BPCI Act) created an abbreviated licensure pathway for biological products shown to be “biosimilar” to or “interchangeable” with an FDA-licensed biological product, or “reference” product.) Sandoz is seeking licensure of EP2006 for the same five indications as US-licensed Neupogen. Following presentations by representatives from FDA, Sandoz, and the public, ODAC voted unanimously (14-0) that EP2006 should receive licensure as a biosimilar product for each of the five indications for which US-licensed Neupogen is currently licensed. EP2006 is the first biosimilar drug to receive a supportive vote from the panel. More information on the meeting, including briefing materials, may be found here. 
• On January 8, 2015, Tennessee Governor Bill Haslam issued a proclamation convening an “extraordinary session” of the 109th General Assembly to consider “Insure Tennessee,” a two year pilot program to provide health care coverage to Tennesseans who do not currently have access to health insurance or have limited options. Under the program, Tennesseans 21 to 64 years old will be offered a choice of the Healthy Incentives Plan or the Volunteer Plan. The Volunteer Plan would provide a health insurance voucher to participants that would be used to participate in their employer’s health insurance plan. The voucher, valued at slightly less than the average TennCare per-enrollee cost, could be used to pay for premiums and other out-of-pocket expenses associated with participation in an individual’s employer sponsored private market plan. Participants in the Healthy Incentives Plan may choose to receive coverage through a redesigned component of the TennCare program, which would introduce Healthy Incentives for Tennesseans (HIT) accounts, modeled after Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of required member cost-sharing. More information on the pilot program may be found here. The proclamation calls for the special session to begin Monday, Feb. 2 at 4 p.m. CST for the legislature to consider a joint resolution authorizing the governor to implement Insure Tennessee. More information on the Governor’s proclamation may be found here.