A&B Healthcare Week in Review, March 27, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On March 24, 2015, the Food and Drug Administration (FDA) announced the availability of a guidance document entitled ‘‘Determining the Need for and Content of Environmental Assessments for Gene Therapies, Vectored Vaccines, and Related Recombinant Viral or Microbial Products; Guidance for Industry’’ dated March 2015. The guidance document provides investigational new drug application (IND) sponsors and applicants for a biologics license application (BLA) or a supplement to a BLA (BLA supplement), with recommendations on considerations when assessing whether to submit an Environmental Assessment (EA) for gene therapies, vectored vaccines, and related recombinant viral or microbial products (GTVVs). The guidance also contains recommendations as to what information should be included in an EA and what can be expected once an EA is filed. The guidance announced in this notice finalizes the draft guidance of the same title dated June 2014. 
• On March 23, 2015, FDA announced the availability of a guidance for industry entitled “Electronic Submission of Lot Distribution Reports”. The guidance document provides information and recommendations pertaining to the electronic submission of lot distribution reports for applicants with approved biologics license applications (BLAs). FDA recently published in the Federal Register a final rule requiring that, among other things, lot distribution reports be submitted to FDA in an electronic format that the Agency can process, review, and archive. The guidance announced in this notice finalizes the draft guidance entitled ‘‘Guidance for Industry: Electronic Submission of Lot Distribution Reports’’ dated August 2014, and is intended to help licensed manufacturers of products distributed under an approved BLA comply with the final rule. 
• On March 23, 2015, FDA released a notice entitled “Registration of Producers of Drugs and Listing of Drugs in Commercial Distribution”. This notice solicits comments on the requirements for drug establishment registration and drug listing. Submit either electronic or written comments on the collection of information by May 22, 2015. 
• On March 25, 2015, the Centers for Medicare and Medicaid Services (CMS) announced an opportunity for the public to comment on the following information collection requests (ICRs): 1) Survey of Retail Prices: Payment and Utilization Rates, and Performance Rankings; 2) Administrative Requirements for Section 6071 of the Deficit Reduction Act; and 3) Outcome and Assessment Information Set (OASIS) OASIS–C1/ICD–10. Comments are due April 24, 2015. More information may be found here. 
• On March 27, 2015, CMS released the “Updates to the List of Durable Medical Equipment (DME) Specified Covered Items That Require a Face-to-Face Encounter and a Written Order Prior to Delivery”. This notice updates the Healthcare Common Procedure Coding System (HCPCS) codes on the Durable Medical Equipment (DME) List of Specified Covered Items that require a face-to-face encounter and a written order prior to delivery.

Meeting Notices 

April 20-22, 2015: The FDA, in co-sponsorship with the Drug Information Association (DIA), is announcing a public conference entitled ‘‘Ninth Annual DIA/ FDA Statistics Forum—2015’’. The purpose of the conference is to discuss relevant statistical issues associated with the development and review of therapeutic drugs and biologics. A primary focus for this meeting will be to establish an ongoing dialogue regarding FDA’s ‘‘Critical Path’’ initiative— emphasizing the regulatory and statistical challenges associated with innovative approaches to the design and analysis of clinical trial data and measuring the progress being made in designing and implementing innovative solutions. The conference will take place in Bethesda, Maryland, from 8:30 AM to 5:00 PM each day. More information may be found here. 

April 20-21, 2015: FDA is announcing a public hearing to obtain information and comments from stakeholders about the current use of human drug and biological products labeled as homeopathic, as well as the Agency’s regulatory framework for such products. These products include prescription drugs and biological products labeled as homeopathic and over-the-counter (OTC) drugs labeled as homeopathic. FDA is seeking participants for the public hearing and written comments from all interested parties, including, but not limited to, consumers, patients, caregivers, health care professionals, patient groups, and industry. FDA is seeking input on a number of specific questions, but is interested in any other pertinent information participants would like to share. The meeting will take place at FDA’s White Oak Campus in Silver Spring, Maryland. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• In the early hours of Friday March 27th, the Senate adopted a fiscal 2016 budget resolution (S Con Res 11) by a 52-46 vote. This followed the Senate’s lengthy “vote-a-rama” session Thursday evening, which saw nearly 800 amendments filed, 49 considered and 35 approved. 
• On March 24, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee convened a hearing entitled “Continuing America’s Leadership: Advancing Research and Development for Patients”. Witnesses for the hearing included Bruce Sullenger, PhD, Director of the Duke Translational Research Institute; Alexis Borisy, Partner at Third Rock Venturs; Michael Mussallem, Chairman and CEO of Edwards Lifesciences; and Alln Coukell, Senior Director of Health Programs at the Pew Charitable Trusts. More information may be found here. 

On March 3, 2015, the Senate Veterans Affairs Committee convened a hearing entitled “VA Opioid Prescription Policy, Practice and Procedures”. The hearing featured two witness panels:

Panel I:

Carolyn Clancy, MD, Interim Under Secretary for Health, Veterans Health Administration, Department of Veterans Affairs (VA)

Accompanied By:

Gavin West, MD, Special Assistant for Clinical Operations

Michael Valentino, Chief Consultant of Pharmacy Benefits Management Services

John D. Daigh, Jr., MD, CPA, Assistant Inspector General for Healthcare Inspections, Office of Inspector General (OIG), Department of Veterans Affairs

Panel II:

G. Caleb Alexander, MD, Co-Director, Center for Drug Safety and Effectiveness, Johns Hopkins Bloomberg School of Public Health

Carol Forster, MD, Physician Director, Pharmacy & Therapeutics/Medication Safety, Mid-Atlantic Permanente Medical Group, Kaiser Permanente

John Gadea, Director, Drug Control Division, Connecticut Department of Consumer Protection

During the hearing Committee Chairman Johnny Isakson (R-GA) and Ranking Member Richard Blumenthal (D-CT) both expressed great concern with the rate of opioid abuse in the VA system. Ranking Member Blumenthal said he is “astonished that VA isn’t better” at addressing this issue, which he characterized as the single most important problem facing the department. More information may be found here. 

• On March 25, 2015, the Senate Special Aging Committee convened a hearing entitled "The Fight Against Alzheimer's Disease: Are We on Track to a Treatment by 2025?". More information may be found here.

House of Representatives

• On March 26, 2015, the House passed the Medicare Access and CHIP Reauthorization Act of 2015(H.R. 2), by a vote of 392 to 37. The measure permanently repeals the flawed Sustainable Growth Rate (SGR) formula which sets Medicare physician reimbursement rates, while instituting a 0.5% payment update each year for five years. The bill streamlines Medicare’s existing quality programs into one value-based performance program; incentivizes the use of alternative payment models; preserves and extends the Children’s Health Insurance Program (CHIP) through September 30, 2017; extends all extenders included in the Protecting Access to Medicare Act of 2014 (PAMA, the most recent SGR patch); and includes additional funding for Community Health Centers through 2017. The measure also permanently extends the Qualifying Individual program and the Transitional Medical Assistance program. Offsets include income-related premium adjustments; Medigap reform; an increased levy authority on payments to Medicare providers with delinquent tax debt; additional Medicaid disproportionate share hospital (DSH) savings; and a 1% market basket update for post-acute care providers. On March 25th, the Congressional Budget Office (CBO) released a cost estimate for the bill, available here. Over the 2015–2025 period, CBO estimates, enacting H.R. 2 would increase both direct spending (by about $145 billion) and revenues (by about $4 billion), resulting in a $141 billion increase in federal budget deficits. Also on March 25th, the White House issued a Statement of Administration Policy on H.R. 2, affirming the Administration’s support for H.R. 2. The Senate adjourned for a two-week recess Friday without taking action on the measure. Physician payment cuts of 21% are scheduled to take place April 1st under the current SGR, but Senate Majority Leader Mitch McConnell (R-KY) has indicated that CMS will be able to “handle” a payment delay until the Senate takes up the bill after recess. Also of note, last weekend Senate Democrats released a unified statement on the measure, which expresses concern with proposed increased beneficiary cost sharing liability and other issues. “Though we have not been part of negotiations in the House on the total package,” the document reads, “we want to be clear that any legislation of this magnitude sent to the Senate must be balanced. Unfortunately, our current understanding of what the House is negotiating does not sufficiently pass that test… As the deadline for SGR looms and negotiations are finalized, a compromise that we believe can reach the President’s desk is evident: Permanent repeal of the SGR, a four-year, clean extension of CHIP (as demonstrated by S. 522), health extenders, and an appropriate balance of offsets. Without it, there is no guarantee.” 
• On March 25, 2015, the House passed H.Con.Res 27, the House Republican fiscal year 2016 budget resolution by a 228-199 vote, with 17 Republicans voting against, and no Democrats voting in favor. 
• On March 24, 2015, the House Energy and Commerce Subcommittee on Health convened a hearing entitled “Examining the 340B Drug Pricing Program” with Diana Espinosa, MPP, Deputy Administrator of the Health Resources and Services Administration (HRSA) (accompanied by Krista M. Pedley, PharmD, MS, CDR, USPHS, Director of the Office of Pharmacy Affairs at HRSA); Debbie Draper, Director, Health Care, Government Accountability Office (GAO); and Ann Maxwell, Assistant Inspector General for Evaluation and Inspections, Office of Inspector General (OIG), U.S. Department of Health and Human Services (HHS). During the hearing, members generally expressed support for the 340B program. Members largely focused on the need for improved program integrity and transparency, with a slight emphasis in the Members' questions on addressing certain covered entities’ reporting and expenditure requirements. HRSA reiterated previous statements around their intent to issue regulations (on calculation of 340B ceiling prices, imposition of manufacturer civil monetary penalties, and implementation of a dispute resolution process) and guidances (including on patient definition and hospital eligibility) this year. More information may be found here. 
• On March 24, 2015, the House Ways and Means Subcommittee on Oversight convened a hearing entitled “The Use of Data to Stop Medicare Fraud”. During the hearing lawmakers considered the federal government’s use of data analysis—particularly the Centers for Medicare and Medicaid Services’ (CMS) Fraud Prevention System (FPS)—to identify emerging trends, and stop Medicare fraud. Witnesses included Dr. Shantanu Agrawal, Deputy Administrator and Director, Center for Program Integrity, CMS; and Gary Cantrell, Deputy Inspector General for Investigations, Office of Inspector General (OIG), U.S. Department of Health and Human Services (HHS). More information may be found here. 
• On March 26, 2015, the House Energy and Commerce Subcommittee on Oversight and Investigations convened a hearing entitled “Examining the Growing Problems of Prescription Drug and Heroin Abuse: State and Local Perspectives”. The purpose of the hearing was to review the recent prescription drug and heroin epidemic in the United States, featuring witnesses at the state and local level. These witnesses offered a “boots on the ground” perspective to discuss trends they are observing and specific local impacts, why the problem is getting worse, how they are handling it at a state and local level, what works and what does not, and how the federal public health response can be improved. Witnesses for the hearing included Fred Wells Brason II, Executive Director, Project Lazarus; Dr. Sarah T. Melton, PharmD, BCPP, BCACP, CGP, FASCP, Associate Professor of Pharmacy Practice, Gatton College of Pharmacy at East Tennessee State University, Johnson City, Tennessee, and Chair of the Board of Directors of OneCare of Southwest Virginia; Dr. Stefan R Maxwell, MD, Associate Professor, Pediatrics, WVU School of Medicine, MEDNAX Medical Group, Medical Director, NICU, Women & Children's Hospital; Rachelle Gardner, Chief Operating Officer, Hope Academy, Indianapolis, Indiana; Corporal Michael Griffin, Narcotics Unit Supervisor - K9 Handler, Special Investigations Division, Tulsa Police Department; Dr. Caleb Banta-Green, Senior Research Scientist, Alcohol and Drug Abuse Institute, University of Washington; and Victor Fitz, Cass County, Michigan, Prosecutor, and President of the Prosecuting Attorneys Association of Michigan (PAAM). More information may be found here.

III. REPORTS, STUDIES, & ANALYSES 

• On March 23rd, HHS released a report entitled “Insurance Expansion, Hospital Uncompensated Care, and the Affordable Care Act”. Using hospital financial reporting and member surveys from hospital associations, HHS analysts found that through 2014, payer mix is shifting in ways that will likely reduce hospital uncompensated care costs, and the “large observed declines in the uninsured and increases in Medicaid coverage have led to substantial declines in hospital uncompensated care” already. They find that Medicaid expansion states account for approximately $5 billion of the estimated $7.4 billion reduction in uncompensated care costs attributed to ACA coverage expansions. 
• On March 23, 2015, the Government Accountability Office (GAO) released a report entitled “Medicare: Payment Methods for Certain Cancer Hospitals Should Be Revised to Promote Efficiency”. This report compares (1) the characteristics of prospective payment system (PPS)-except cancer hospitals (PCHs) with those of PPS teaching hospitals, (2) the inpatient and outpatient methodologies Medicare uses to pay PCHs and PPS teaching hospitals, and (3) Medicare payments to PCHs with payments to PPS teaching hospitals. GAO analyzed CMS claims and cost report data for 2012 to determine various characteristics, estimate inpatient payment differentials for comparable beneficiaries, and calculate the average payment differences for outpatient services. GAO reports that compared with how PPS teaching hospitals are paid, the methodologies for paying PCHs provide little incentive for efficiency. In 2012, Medicare payments—both inpatient and outpatient—were substantially higher at PCHs than at PPS teaching hospitals in the same geographic area for beneficiaries with the same diagnoses or services. GAO estimated that PCHs received, on average, about 42 percent more in Medicare inpatient payments per discharge than what Medicare would have paid a local PPS teaching hospital to treat cancer beneficiaries with the same level of complexity. Similarly, Medicare outpatient payment adjustments to PCHs resulted in overall payments that were about 37 percent higher, on average, than payments Medicare would have made to PPS teaching hospitals for the same set of services. The estimated differences in Medicare payments varied greatly across PCHs. Furthermore, GAO found no association between the proportion of Medicare payments for cancer patient care and Medicare profit margins at PPS teaching hospitals, indicating that the PPS or an alternative payment methodology may be reasonable for cancer care. GAO recommends that Congress should consider requiring Medicare to pay PCHs as it pays PPS teaching hospitals, or provide the Secretary of HHS with the authority to otherwise modify how Medicare pays PCHs. 
• On March 19, 2015, the RAND Corporation released a study—commissioned by the American Medical Association— entitled “Effects of Health Care Payment Models on Physician Practice in the United States”. The report aimed to describe the effects that alternative health care payment models (i.e., models other than fee-for-service payment) have on physicians and physician practices in the United States. The results show that alternative payment models have not substantially changed how physicians delivered face-to-face patient care, and additional nonclinical work has created significant discontent. Most physicians in practice leadership positions were optimistic and enthusiastic about alternative payment models, while most physicians not in leadership roles expressed at least some level of apprehension. The report offers a number of recommendations, including harmonizing key components of alternative payment models.

IV. OTHER HEALTH POLICY NEWS 

• On March 24th, the Medicaid and CHIP Payment and Access Commission (MACPAC) convened its March meeting Washington, DC. The March 2015 meeting opened with discussions of payment models that emphasize value rather than volume of services, presenting findings from MACPAC’s site visits and interviews with states implementing Delivery System Reform Incentive Payment (DSRIP) programs followed by an update on various state approaches to value-based purchasing. Later, the Commission considered the evidence on Medicaid beneficiaries’ access to specialty care, and reviewed proposed chapters for the June 2015 report to Congress, including the intersection of Medicaid and child welfare, coverage of adult dental benefits in Medicaid, need for and use of behavioral health services in Medicaid, and Medicaid beneficiaries’ use of psychotropic medications. In the final sessions of the March meeting, staff briefed the Commission on the U.S. Department of Health and Human Services’ recent report to Congress on Improving the Identification of Health Care Disparities in Medicaid and CHIP, and Commissioners discussed findings on the Medicaid expansion population drawn from the Health Reform Monitoring Survey. More information, including an agenda and presentations, may be found here. 
• On March 27th, the White House released its National Action Plan for Combating Antibiotic Resistant Bacteria (NAP), which outlines a whole-of-government approach over the next five years to address the threat of antibiotic resistance. Developed in response to Executive Order 13676: Combating Antibiotic-Resistant Bacteria—issued by President Barack Obama on September 18, 2014—the National Action Plan outlines steps for implementing the National Strategy for Combating Antibiotic-Resistant Bacteria and addressing the policy recommendations of the President’s Council of Advisors on Science and Technology (PCAST). The goals of the plan include: 1) Slow the Emergence of Resistant Bacteria and Prevent the Spread of Resistant Infections; 2) Strengthen National One-Health Surveillance Efforts to Combat Resistance; 3) Advance Development and Use of Rapid and Innovative Diagnostic Tests for Identification and Characterization of Resistant Bacteria; 4) Accelerate Basic and Applied Research and Development for New Antibiotics, Other Therapeutics, and Vaccines; and 5) Improve International Collaboration and Capacities for Antibiotic-resistance Prevention, Surveillance, Control, and Antibiotic Research and Development.