A&B Healthcare Week in Review, March 20, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On March 20, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule entitled “Medicare and Medicaid Programs: Electronic Health Record Incentive Program Stage 3”. This Stage 3 proposed rule would specify the meaningful use criteria that eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) must meet in order to qualify for Medicare and Medicaid electronic health record (EHR) incentive payments and avoid downward payment adjustments under Medicare for Stage 3 of the EHR Incentive Programs. It would continue to encourage electronic submission of clinical quality measure (CQM) data for all providers where feasible in 2017, propose to require the electronic submission of CQMs where feasible in 2018, and establish requirements to transition the program to a single stage for meaningful use. Finally, this Stage 3 proposed rule would also change the EHR reporting period so that all providers would report under a full calendar year timeline with a limited exception under the Medicaid EHR Incentive Program for providers demonstrating meaningful use for the first time. The proposed rule will be published in the Federal Register March 30, and the comment period ends on May 29. A press release on the rule may be found here.
• On March 20, 2015, the Department of Health and Human Services (HHS) released a notice of proposed rulemaking entitled “2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications.” This notice of proposed rulemaking introduces a new edition of certification criteria (the 2015 Edition health IT certification criteria or “2015 Edition”), proposes a new 2015 Edition Base EHR definition, and proposes to modify the Office of the National Coordinator for Health Information Technology (ONC) Health IT Certification Program to make it open and accessible to more types of health IT and health IT that supports various care and practice settings. The 2015 Edition would also establish the capabilities and specify the related standards and implementation specifications that Certified Electronic Health Record (EHR) Technology (CEHRT) would need to include to, at a minimum, support the achievement of meaningful use by eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) under the Medicare and Medicaid EHR Incentive Programs when such edition is required for use under these programs. The proposed rule will be published in the Federal Register March 30, and the comment period ends on May 29. A press release on the rule may be found here. 
• On March 19, 2015, the Office of Management and Budget (OMB) began regulatory review on a proposed rule entitled “Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions related to Third Party Liability” (CMS-2390-P). In its fall 2014 regulatory agenda, the HHS described the proposal as aligning Medicaid managed care regulations “with existing commercial, Marketplace, and Medicare Advantage regulations.” 
• On March 16, 2015, HHS, along with the Departments of Treasury and Labor, released a final rule entitled “Amendments to Excepted Benefits”. 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, and the Public Health Service Act to specify requirements for limited wraparound coverage to qualify as an excepted benefit. Excepted benefits are generally exempt from the requirements that were added to those laws by the Health Insurance Portability and Accountability Act (HIPPA) and the Affordable Care Act (ACA). These regulations are effective on May 18, 2015. 
• On March 16, 2015, the Food and Drug Administration (FDA) announced an opportunity for the public to comment on an information collection request entitled “Medical Device Recall Authority”. This collection of information implements section 518(e) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360h(e)) and part 810 (21 CFR part 810), medical device recall authority provisions. Section 518(e) of the FD&C Act provides FDA with the authority to issue an order requiring an appropriate person, including manufacturers, importers, distributors, and retailers of a device, if FDA finds that there is reasonable probability that the device intended for human use would cause serious adverse health consequences or death, to: (1) Immediately cease distribution of such device; (2) immediately notify health professionals and device-user facilities of the order; and (3) instruct such professionals and facilities to cease use of such device. Comments should be submitted by May 15, 2015. 
• On March 17, 2015, FDA announced the availability of a guidance document entitled ‘‘Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling.’’ This guidance provides recommendations for the formulation and scientific validation of reprocessing instructions for reusable medical devices. This guidance document also provides recommendations for the content and review procedures for premarket notification (510(k)) submissions, premarket approval (PMA) applications, humanitarian device exemption (HDE) applications, de novo requests, and investigational device exemption (IDE) applications, concerning the labeling instructions for reprocessing reusable medical devices. This guidance reflects the scientific advances in knowledge and technology involved in reprocessing reusable medical devices, especially more complex, reusable medical device designs that are more difficult to reprocess. More information may be found here. 
• On March 17, 2015, the Health Resources and Services Administration (HRSA) published a notice entitled “Low-Income Levels’’ Used for Various Health Professions and Nursing Programs Authorized in Titles III, VII, and VIII of the Public Health Service Act”. HRSA has announced that it is updating income levels used to identify a ‘‘low-income family’’ for the purpose of determining eligibility for programs that provide health professions and nursing training to individuals from disadvantaged backgrounds. These various programs are authorized in Titles III, VII, and VIII of the Public Health Service Act. Comments will be accepted until May 18, 2015. 
• On March 20, 2015, CMS announced that it is seeking public comment on proposed information collection requests. They are entitled “Hospital National Provider Survey”; and “Nursing Home National Provider Survey”. Comments are due May 19, 2015. More information may be found here. 
• On March 20, 2015, CMS released a number of corrections to the final rule entitled “Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models & Other Revisions to Part B for CY 2015”. The correcting amendments may be found here.

Event Notices 

• April 21, 2015: FDA is announcing a public workshop entitled ‘‘Clinical Considerations of Risk in the Post-market Environment.’’ The purpose of this workshop is to provide a forum for an interactive discussion on assessing changes in medical device risk as quality and safety situations arise in the post-market setting when a patient, operator, or member of the public uses the device. FDA is interested in obtaining input from stakeholders about assessing risk post-market when new hazards develop in the post-market setting that were not present or not known at the time of clearance or approval or hazards were anticipated, but harm occurs at an unexpected rate or in unexpected populations or use environments. Comments and suggestions generated through this workshop will facilitate the assessment of risk in post-market quality and safety situations. The workshop will be held on April 21st from 8:30 AM to 5:00 PM at FDA’s White Oak Campus. 
• April 30, 2015: CMS has announced an administrative hearing to reconsider CMS’ decision to disapprove Louisiana’s Medicaid SPA 12–66B which was submitted CMS on December 20, 2012 and disapproved on December 11, 2014. In part, this SPA requested CMS approval to revise the current pharmacy reimbursement methodology for estimated acquisition cost (EAC) which is currently calculated as average acquisition cost (AAC) of the drug dispensed to a new calculation of AAC adjusted by a multiplier of 1.1 for multiple source drugs and 1.01 for single source drugs. The hearing will take place at the CMS Dallas Regional Office. Requests to participate in the hearing must be submitted by April 2, 2015. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On March 19, 2015, leaders in the Senate and House introduced bipartisan, bicameral legislation, entitled the SGR Repeal and Medicare Provider Payment Modernization Act, to replace the flawed Medicare Sustainable Growth Rate (SGR) formula. The SGR formula—the mechanism that ties physician payment updates to the relationship between overall fee schedule spending and growth in gross domestic product (GDP)—has led to 17 short-term patches enacted by Congress to prevent significant Medicare reimbursement rate cuts over the past decade. The legislation introduced this week is nearly identical to bills introduced in the House and Senate last year. The proposal will repeal the SGR while instituting a 0.5% payment update each year for five years. Click here to see a working summary of the SGR package, including proposed offsets. Find a one-page summary of H.R. 1470 here and a section-by-section here. Also on March 19th, Senate Finance Committee Ranking Member Ron Wyden (D-OR) released a press release explaining why he did not sign on to the legislation: “…introduction of this policy appears to be more about pushing an overall package I haven’t seen, rather than about the physician payment reforms my colleagues and I worked so hard to develop. The inclusive and effective process that brought six committee chairs and ranking members to agreement on a difficult topic has unfortunately not been used to finish the deal. A bill of this magnitude, on such a tight deadline, requires significant give and take to reach a balanced agreement that can pass both chambers.” 
• On March 17, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee convened a hearing entitled “America’s Health IT Transformation: Translating the Promise of Electronic Health Records Into Better Care”. Witnesses for the hearing included Julia Adler-Milstein, Ph.D., Assistant Professor of Information, School of Information, Assistant Professor of Health Management and Policy, School of Public Health, University of Michigan; Robert L. Wergin, MD , President, American Academy of Family Physicians (AAFP); Peter DeVault , Director of Interoperability, Epic Systems Corporation; and Angela Kennedy, Ed.D. M.B.A., R.H.I.A , Head of Department/Professor, Department of Health Informatics and Information Management, College of Applied and Natural Sciences, Louisiana Tech University. More information on the hearing may be found here. 
• On March 19, 2015, the Senate Finance Committee convened a hearing entitled “The Affordable Care Act at Five Years”. Witnesses for the hearing included Dr. Douglas Holtz-Eakin, President, American Action Forum; Ms. Holly Wade, Director of Research and Policy Analysis, National Federation of Independent Business; and Dr. David Blumenthal, President, The Commonwealth Fund. More information on the hearing may be found here.
• On March 18, 2015, Senate Republicans released their Fiscal Year 2016 Budget proposal, available here. The document states, “The Senate budget resolution balances the budget in 10 years by limiting spending growth, reaches a $3 billion surplus in the 10th year, and achieves $4.4 trillion more in deficit reduction than President Obama’s budget request.” The budget includes reconciliation instructions for health care, but says “the actual contours of that legislation are unknowable at this time. By adopting this new budget, Republicans can repeal the President’s health law and the committees of jurisdiction can continue to work on plans to replace it.”

House of Representatives 

• On March 16, 2015, the House passed H.R. 876, the Notice of Observation Treatment and Implication for Care Eligibility Act, and H.R. 284, Medicare DMEPOS Competitive Bidding Improvement Act of 2015. H.R. 876 amends title XVIII of the Social Security Act to require hospitals to provide written and oral notification to patients who are in the hospital under observation for more than 24 hours. Within 36 hours, the hospital is required to provide notification which: 1) explains the individual’s status as an outpatient under observation and not as an inpatient; 2) explains the reason for that classification; 3) explains the implications of that outpatient status on eligibility for Medicare coverage of items and services as well as cost-sharing requirements; 4) includes the name and title of the hospital staff who gave an oral notification and its date and time; and 5) is signed by the individual to acknowledge its receipt. CBO estimates that the bill would not have significant budgetary impacts over the 2015-2025 period. H.R.284 would require State licensure and bid surety bonds for entities submitting bids under the Medicare durable equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program. 
• On March 18, 2015, House Energy and Commerce Committee Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA) and Ranking Member Diana DeGette (D-CO) sent a letter to the Substance Abuse and Mental Health Services Administration (SAMHSA) as part of ongoing bipartisan oversight of the federal mental health system. Murphy and DeGette explain that the committee’s continued oversight seeks to ensure “that federal dollars devoted to mental health are reaching the millions of Americans with serious mental illness (SMI) and helping them to obtain the most effective care.” The subcommittee held a hearing in February to review concerns about the federal mental health system as outlined in a report from the Government Accountability Office. Murphy and DeGette write, “Since 1997, SAMHSA has sponsored a National Registry of Evidence-based Programs and Practices (NREPP), which is a searchable online registry of programs and services that are considered by SAMHSA to be evidence-based. According to SAMHSA, the purpose of NREPP is to help the public learn more about available evidence-based programs and practices and determine which of these may best meet their needs. The committee would like to better understand how SAMHSA manages NREPP.” 
• This week House Republicans released their Fiscal 2016 Budget, entitled “A Balanced Budget for a Stronger America” (see previous section for the Republican Senate Budget proposal). This proposal includes a policy statement on repealing the President’s health care law and promoting health care reform that encourages: increased competition and transparency, improved affordability (e.g., voluntary pooling mechanisms); greater accessibility (e.g., portability and sale of insurance across state line); improved quality; increased choices; and support for innovation. The policy statement says reform “should return authority to States wherever possible to make the system more responsive to patients and their needs,” and supports states’ offering of private Medicaid and CHIP products. (Sec. 807) The proposal also calls for reforms to prevent lawsuit abuse and curb the practice of defensive medicine. An op-ed on the proposal by House Budget Chairman Tom Price (R-GA) may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On March 16, 2015, HHS released a report entitled “Health Insurance Coverage and the Affordable Care Act”. The report finds that since the ACA’s coverage provisions took effect, approximately 16.4 million uninsured people have gained health coverage. HHS reports that 14.1 million adults who gained health insurance coverage since the beginning of open enrollment in October, 2013 (including 3.4 million young adults aged 19-25) through March 4, 2015. Over that period, the uninsured rate dropped from 20.3 percent to 13.2 percent – a 35 percent (or 7.1 percentage point) reduction in the uninsured rate. In addition, 2.3 million young adults (aged 19-25) who gained health insurance coverage between 2010 and the start of open enrollment in October, 2013 due to the ACA provision allowing young adults to remain on a parent’s plan until age 26. Health insurance coverage gains were especially strong in Medicaid expansion states and were concentrated among low and middle income population groups in all states. 
• On March 19, 2015, the Office of Inspector General (OIG) released a report entitled “The Department of Health and Human Services and The Department of Justice Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2014”. During Fiscal Year (FY) 2014, OIG found, the Federal government won or negotiated over $2.3 billion in health care fraud judgments and settlements, and it attained additional administrative impositions in health care fraud cases and proceedings. As a result of these efforts, as well as those of preceding years, in FY 2014, approximately $3.3 billion returned to the Federal government or paid to private persons. Of this $3.3 billion, the Medicare Trust Funds received transfers of approximately $1.9 billion during this period, and over $523 million in Federal Medicaid money was similarly transferred separately to the Treasury as a result of these efforts. The Health Care Fraud and Abuse Control Program (HCFAC) account has returned over $27.8 billion to the Medicare Trust Funds since the inception of the Program in 1997.

IV. OTHER HEALTH POLICY NEWS 

• On March 16, 2015, OIG announced that Sandoz Inc. will pay $12.64 million to settle allegations it misrepresented drug pricing data to the Medicare program. The Sandoz settlement is the largest ever entered into under OIG's drug price reporting civil monetary penalty (CMP) authority. "The Medicare program relies on drug manufacturers to accurately report pricing information," said OIG Chief Counsel, Gregory E. Demske. "We hope today's settlement reinforces for these companies the importance of taking their drug price reporting responsibilities seriously." Federal law requires drug makers to report both accurate and timely "Average Sales Price" information to CMS. CMS uses this information to set payment amounts for most drugs covered under Medicare Part B. Inaccurate pricing information can cause Medicare to overpay for these drugs. OIG can seek CMPs against manufacturers that misrepresent, or fail to timely report, drug pricing information. OIG alleged that, between January 2010 and March 2012, Sandoz misrepresented Average Sales Price data to CMS. The settlement includes a certification by the company that it has established a government pricing compliance program. Sandoz has denied liability and no judgment or finding of liability has been made against Sandoz.