A&B Healthcare Week in Review, April 24, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On April 23, 2015, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule entitled “Medicare Program; Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) for Federal Fiscal Year 2016”. This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2016 as required by the statute. CMS is also proposing to adopt an IRF-specific market basket that reflects the cost structures of only IRF providers, phase in the revised wage index changes, and revise and update quality measures and reporting requirements under the IRF quality reporting program (QRP). CMS is proposing to update the IRF PPS payments for FY 2016 to reflect an estimated 1.9 percent increase factor (reflecting a new IRF-specific market basket estimate of 2.7 percent, reduced by a 0.6 percentage point multi-factor productivity adjustment and a 0.2 percentage point reduction required by law). An additional 0.2 percent decrease to aggregate payments due to updating the outlier threshold results in an overall update of 1.7 percent (or $130 million), relative to payments in FY 2015. For FY 2016, CMS is proposing an IRF-specific market basket to replace the Rehabilitation, Psychiatric and Long-Term Care (RPL) market basket. The proposed IRF market basket would be based on 2012 data (the RPL market basket is based on 2008 data). The proposed IRF market basket would also be derived using both freestanding and hospital-based IRFs’ FY 2012 Medicare cost report data. A CMS fact sheet on the proposed rule may be found here. The proposed rule will be published in the Federal Register on April 27th. Comments are due June 22nd.
• On April 24, 2015, CMS released a proposed rule entitled “Medicare Program; Inpatient Psychiatric Facilities Prospective Payment System – Update for Fiscal Year Beginning October 1, 2015 (FY 2016)”. This proposed rule would update the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs) (which are freestanding IPFs and psychiatric units of an acute care hospital or critical access hospital). These changes would be applicable to IPF discharges occurring during the fiscal year (FY) beginning October 1, 2015 through September 30, 2016 (FY 2016). This proposed rule also proposes: a new IPF-specific market basket; to update the IPF labor-related share; a transition to new Core Based Statistical Area (CBSA) designations in the FY 2016 IPF Prospective Payment System (PPS) wage index; to phase out the rural adjustment for IPF providers whose status changes from rural to urban as a result of the proposed wage index CBSA changes; and new quality measures and reporting requirements under the IPF quality reporting program. This proposed rule also reminds IPFs of the October 1, 2015 implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM), and updates providers on the status of IPF PPS refinements. A CMS fact sheet on the proposed rule may be found here. The proposed rule will be published in the Federal Register on May 1st. Comments are due June 23rd.
• On April 20, 2015, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a new compliance guidance for health-care governing boards, attorneys, compliance officers and internal auditors, giving examples of how they can foster a corporate culture of compliance to meet the ultimate goals of protecting the integrity and viability of the nation's health-care delivery system. The document addresses issues relating to a Board’s oversight and review of compliance program functions, including the: (1) roles of, and relationships between, the organization’s audit, compliance, and legal departments; (2) mechanism and process for issue-reporting within an organization; (3) approach to identifying regulatory risk; and (4) methods of encouraging enterprise-wide accountability for achievement of compliance goals and objectives. This publication represents the first collaboration of its kind between the Inspector General of the Department of Health and Human Services (HHS OIG), the American Health Lawyers Association (AHLA), the Association of Healthcare Internal Auditors (AHIA) and the Health Care Compliance Association (HCCA).
• On April 20, 2015, the Food and Drug Administration (FDA) released a notice entitled “Pilot Program for Center for Devices and Radiological Health Electronic Submission for Home Use Device Labeling”. The FDA Center for Devices and Radiological Health (CDRH) is announcing the availability of a CDRH electronic submissions Pilot Program database to house labeling for home use devices. Participation in the pilot is open to applicants who label their device(s) for home use. Participation in the pilot project is voluntary. Participants will be asked to navigate through the electronic submissions system and practice submitting labels and package inserts. The pilot project is intended to provide industry and CDRH staff the opportunity to evaluate the submissions process and system and to receive comments from industry participants. FDA will accept applications for participation in the voluntary electronic submissions CDRH Home Use Device Labeling Pilot Program from May 1, 2015, through May 31, 2015.
• On April 21, 2015, FDA announced the availability of draft guidance for industry entitle “Acceptance of Medical Device Clinical Data From Studies Conducted Outside the United States; Draft Guidance for Industry and Food and Drug Administration Staff”. This draft guidance articulates FDA’s current policy of accepting scientifically valid clinical data obtained from foreign clinical studies in support of premarket submissions for devices. The guidance describes special considerations that apply when using such data, including applicability to populations within the United States and study design issues and provides recommendations to assist sponsors in ensuring their data are adequate under applicable FDA standards to support approval or clearance of the device in the United States. Comments should be submitted by July 20, 2015.
• On April 22, 2015, FDA announced the availability of a guidance for industry entitled ‘‘Clinical Trial Endpoints for the Approval of Non-Small Cell Lung Cancer Drugs and Biologics.’’ This guidance provides recommendations to applicants on endpoints for cancer clinical trials submitted to FDA to support effectiveness claims in new drug applications, biologics license applications, or supplemental applications for the treatment of non-small cell lung cancer. This guidance focuses on endpoints specifically for lung cancer trials to support drug approval or labeling claims. This guidance should speed the development and improve the quality of protocols submitted to FDA to support anticancer effectiveness claims. This guidance finalizes the draft guidance issued on June 17, 2011.
• On April 22, 2015, FDA announced the availability of a draft guidance for industry entitled ‘‘Providing Regulatory Submissions in Electronic and NonElectronic Format—Promotional Labeling and Advertising Materials for Human Prescription Drugs.’’ This draft guidance explains how manufacturers, packers, and distributors (firms) that may either be the applicant or acting on behalf of the applicant, should make submissions pertaining to promotional materials for human prescription drugs and biologic products (‘‘drugs’’) to the Office of Prescription Drug Promotion (OPDP) in the Center for Drug Evaluation and Research (CDER) and the Advertising and Promotional Labeling Branch (APLB) in the Center for Biologics Evaluation and Research (CBER). This draft guidance describes the various types of submissions of promotional materials and general considerations for submissions. In addition, this draft guidance discusses the specific aspects of submission of promotional materials using module 1 of the electronic Common Technical Document (eCTD) using version 3.3 or higher of the us-regional-backbone file. This guidance does not address the more general requirements for a valid electronic submission using eCTD or the specifications for module 1 of the eCTD. This guidance contains both binding and nonbinding provisions. Comments should be submitted by June 22, 2015.
• On April 22, 2015, the CMS Center for Consumer Information and Insurance Oversight (CIIO) issued a guidance document entitled “Guidance on Annual Eligibility Redeterminations and Re-enrollments for Marketplace Coverage for 2016”. 45 CFR 155.335(a)(2) provides that a Health Insurance Marketplace has three options to re-determine eligibility for enrollment in a qualified health plan (QHP) through the Marketplace and insurance affordability programs on an annual basis. 45 CFR 155.335(a)(2)(ii) provides that one of these options is a set of alternative procedures specified by the Secretary annually for the applicable benefit year. Accordingly, this guidance describes these alternative procedures for benefit year 2016. These procedures incorporate some modifications from the alternative procedures specified by the Secretary for benefit year 2015, to accommodate the programmatic and operational experience gained during the process for 2015, and will be implemented by each Federally-facilitated Marketplace (FFM).

Event Notices

• June 15, 2015: FDA is announcing a public meeting on the Generic Drug User Fee Amendments of 2012 (GDUFA). The legislative authority for GDUFA expires at the end of September 2017. At that time, new legislation will be required for FDA to continue to collect generic drug user fees for future fiscal years. FDA invites public comment on the GDUFA program and suggestions regarding the features FDA should propose for the next GDUFA program. The public meeting will be held on June 15, 2015, from 9 a.m. to 5 p.m. at FDA’s White Oak Campus. More information may be found here.
• July 22, 2015: On April 24, 2015, CMS announced a meeting of the Medicare Evidence Development and Coverage Advisory Committee (MEDCAC). This meeting will specifically focus on lower extremity peripheral artery disease. This meeting is open to the public. More information on the meeting may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On Tuesday April 21st, the Senate Commerce, Science and Transportation Subcommittee on Communications, Technology, Innovation and the Internet convened a hearing entitled "Advancing Telehealth through Connectivity." Witnesses for the hearing included Kristi Henderson, chief telehealth and innovation officer, University of Mississippi Medical Center; Jonathan D. Linkous, CEO, American Telehealth Association; M. Chris Gibbons, distinguished scholar in residence, Connect2HealthFCC Task Force, FCC; and Todd Rytting, chief technology officer, Panasonic Corporation of North America. More information on the hearing may be found here.
• On Thursday April 23rd, the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies convened a hearing on proposed fiscal 2016 appropriations for programs under HHS jurisdiction. The sole witness for the hearing was Sylvia Mathews Burwell, Secretary of HHS. More information on the hearing may be found here.
• On April 20, 2015, Senator Ron Johnson (R-WI), along with 29 cosponsors, introduced the Preserving Freedom and Choice in Health Care Act (S. 1016), which would allow individuals to keep any healthcare plan and subsidy that they currently have until August 2017, and would allow them to purchase any new insurance plan from free market offers, if the Supreme Court rules against the Obama Administration in the pending King v. Burwell case. “This bill is a transitional response that rescues Americans from the coercive nature of Obamacare, which is an unnecessarily complicated scheme that should not be resuscitated,” said Senator Johnson in a press release. "This bill lives up to its name by restoring freedom. If you want to keep your health care plan, you can keep it. If you want to escape Obamacare, this sets you free.”
• On April 22, 2015, the Senate approved the Medicare Independence at Home Medical Practice Demonstration Improvement Act of 2015 (S. 971), which would extend for two years a Medicare test program that provides in-home primary care for chronically ill seniors. Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced the legislation.
• On April 22, 2015, the Senate approved the Trade Priorities and Accountability Act of 2015 (TPA-2015), legislation to renew Trade Promotion Authority (TPA). Included in the package is a measure renewing and adjusting health coverage assistance for trade-displaced workers. The cost of this assistance program is partially offset through an extension of the long-term sequestration cut to Medicare provider payments. On Thursday April 23rd, the House Ways and Means Committee advanced a similar trade bill package, with the same Medicare sequestration offset. The Medicare sequestration offset would modify the sequester on Medicare mandatory spending for the last six months of FY2024. The proposal would increase the Medicare sequester during the second half of 2024 from the current rate of 0% to 0.25%. The provision is estimated by CBO to save $700 million over ten years. Both packages also include a provision that would allow Medicare beneficiaries with acute kidney injury to receive short-term scheduled dialysis at a Medicare-certified End Stage Renal Disease facility. This policy reflects a proposal that was contained in the President’s FY2016 Budget. The provision is estimated by CBO to save $250 million over ten years.

House of Representatives

• On April 23, 2015, the House Energy & Commerce Committee convened a hearing entitled “Combatting the Opioid Abuse Epidemic: Professional and Academic Perspectives”. The purpose of this hearing was to solicit insights and findings, drawn from clinical practice and research—as well as constructive policy recommendations—from professional and academic experts on opioid abuse. Subcommittee members heard testimony on treatment options currently available as well as new and emerging evidence-based practices supporting individuals living with opioid abuse and addiction. Witnesses for the hearing included Robert L. DuPont, M.D., President, Institute For Behavior and Health; Marvin D. Seppala, M.D., Chief Medical Officer, Hazelden Betty Ford Foundation; Laurence M. Westreich, M.D., President American Academy of Addiction Psychiatry; Anna Lembke, M.D., Assistant Professor of Psychiatry and Behavioral Sciences, Stanford University Medical Center Psychiatry Department; Adam Bisaga, M.D., Columbia University Medical Center, NYS Psychiatric Institute; and Patrice Harris, M.D., American Medical Association (AMA). More information on the hearing may be found here.
• This week the House passed the Ensuring Patient Access and Effective Drug Enforcement Act of 2015 (HR 471). The bill would adjust controlled substance registration denial procedures, and includes a call for a report from federal health agencies detailing the obstacles to legitimate patient access to controlled substances and how drugs are being diverted to illicit use, along with suggestions on agency and drug industry cooperative efforts to prevent prescription drug diversion.

III. REPORTS, STUDIES, & ANALYSES

• The HHS Office of Inspector General (OIG) released this week a report entitled “Medicaid Rebates for Brand-Name Drugs Exceeded Part D Rebates by a Substantial Margin”. OIG determined total Part D and Medicaid drug expenditures and rebates in 2012, as well as total 2012 Part D and Medicaid expenditures and rebates for 200 selected brand-name drugs and compared the differences between the two programs. Further, OIG determined total Part D and Medicaid drug expenditures and rebates in 2012. OIG also determined total 2012 Part D and Medicaid expenditures and rebates for 200 selected brand-name drugs and compared the differences between the two programs. The report finds that total rebates under Medicaid were substantially higher than total rebates under Medicare Part D. Also, Medicaid's net unit costs (i.e., the pharmacy reimbursement amounts minus rebates) were much lower than net unit costs under Part D in 2012 for the 200 selected brand-name drugs, and the statutorily defined Medicaid rebates exceeded Part D rebates by a substantial margin. Further, more than half of Medicaid rebates owed by manufacturers for selected brand-name drugs were attributed to the inflation-based add-on rebates. OIG concludes that, “While we recognize the statutory limitations surrounding rebate collection under Part D, we encourage CMS and Congress to explore the costs and benefits of obtaining additional rebates under Part D. Some options include an examination of the impact of "dual-eligible" beneficiaries (i.e., beneficiaries eligible for both Medicare and Medicaid) on each program's rebate totals and an analysis of methods to protect Part D from significant increases in drug prices.”
• On April 22, 2015, Avalere released the results of a survey conducted by Avalere and the National Comprehensive Cancer Network® (NCCN®), which shows that exchange plan participation by the nation’s leading cancer centers is highly varied, but may be better than initial 2014 reports suggested. Initiated in February 2015, the intent of the survey was to analyze experiences with healthcare exchanges and understand the scope of reportedly narrow networks, as reported by National Cancer Institute (NCI)-designated cancer centers. Surveys were distributed to individuals with titles of VP/Director of Payer or Managed Care Contracting (or similar) at 61 NCI-designated centers that treat patients. In total, 20 centers completed the survey across 19 states. Specifically, 75 percent of cancer centers that responded indicate they are covered by at least some of the exchange plans offered by most of the carriers in their state. Among this group, 13 percent report they are covered by all the exchange plans in their state. Half of centers report that individual exchange plans in their state have tiered provider networks with differential enrollee cost-sharing at each tier and most of the responding centers report that they fall in the higher tiers only. Still, the majority of centers indicate they are included in more or the same number of plans as 2014, which is also largely in line with their expectations. These results suggest that the picture of cancer center inclusion in exchange plan networks may not be as grim as feared when the exchange markets launched in late 2013.

IV. OTHER HEALTH POLICY NEWS

• This week the United States Preventive Services Task Force (USPSTF) released a draft recommendation statement on breast cancer screening. The recommendation would downgrade screening for women under 50 years of age from a “B” to a “C” grading. If finalized, insures would no longer have to cover the screenings with no co-pay. The Task Force will accept comments on the draft recommendations until May 18th. Of note, Senator Barbara Mikulski, Vice Chairwoman of the Senate Appropriations Committee and a senior member of the Senate Health, Education, Labor and Pensions (HELP) Committee, issued a response letter calling on the Department to ensure the continued availability of free mammograms for women aged 40 and older, which are currently guaranteed through Senator Mikulski’s ‘Women’s Preventive Health Amendment’ to the Affordable Care Act. The letter may be found here.