A&B Healthcare Week in Review, April 3, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On March 30th, the U.S. Department of Health and Human Services (HHS) announced the establishment of the Advisory Council on Combating Antibiotic-Resistant Bacteria. The Advisory Council will provide advice, information, and recommendations to the Secretary regarding programs and policies intended to support and evaluate the implementation of Executive Order 13676, including the National Strategy for Combating Antibiotic-Resistant Bacteria and the National Action Plan for Combating Antibiotic Resistant Bacteria . HHS is seeking nominations of individuals who are interested in being considered for appointment to the Advisory Council. Resumes or curricula vitae from qualified individuals who wish to be considered for appointment as a member of the Advisory Council are currently being accepted. Nominations must be received no later than close business April 29, 2015. More information may be found here. 
• On April 3, 2015, the Food and Drug Administration (FDA) announced that it is extending the comment period for the notice entitled ‘‘Identifying Potential Biomarkers for Qualification and Describing Contexts of Use to Address Areas Important to Drug Development; Request for Comments’’ that appeared in the Federal Register of February 13, 2015 (80 FR 8089). In the notice, FDA requested comments on identifying potential biomarkers for qualification and describing contexts of use to address areas important to drug development. The Agency is taking this action for an extension to allow interested persons additional time to submit comments. Comments may now be submitted until May 15, 2015. 
• On April 2, 2015, FDA announced the availability of a guidance for industry entitled ‘‘Abuse-Deterrent Opioids— Evaluation and Labeling’’. This guidance explains FDA’s current thinking about the studies that should be conducted to demonstrate that a given formulation has abuse-deterrent properties. This guidance also makes recommendations about how those studies should be performed and evaluated, and discusses how to describe those studies and their implications in product labeling. It is intended to assist sponsors who wish to develop opioid drug products with potentially abuse-deterrent properties and is not intended to apply to products that are not opioids or opioid products that do not have the potential for abuse. More information may be found here. 
• On March 31, 2015, FDA announced the availability of a guidance for industry entitled ‘‘Critical Path Innovation Meetings.’’ This guidance describes a Critical Path Innovation Meeting (CPIM), a means by which FDA’s Center for Drug Evaluation and Research (CDER) and investigators from industry, academia, government, and patient advocacy groups can communicate to improve efficiency and success in drug development. The goals of the CPIM are to discuss a methodology or technology proposed by the meeting requester and for CDER to provide general advice on how this methodology or technology might enhance drug development. The discussions and background information submitted through the CPIM are nonbinding on both FDA and CPIM requests. More information may be found here. 
• On March 31, 2015, FDA announced a request for additional comments on the chemistry, manufacturing, and control (CMC) information that a sponsor of an investigational new drug application (IND) should provide in its IND in order to meet regulatory requirements when commercially available foods or dietary supplements containing live biotherapeutic products (LBPs) are used as investigational new drugs in early phase clinical trials. The request for additional comments on the CMC information is related to the guidance entitled, ‘‘Early Clinical Trials with Live Biotherapeutic Products: Chemistry, Manufacturing, and Control Information; Guidance for Industry,’’ dated February 2012. Comments are requested by May 29, 2015. More information may be found here. 
• On March 31, 2015, FDA announced the availability of a draft guidance for industry entitled ‘‘Development and Submission of Near Infrared Analytical Procedures.’’ This draft guidance provides recommendations to applicants of new drug applications (NDAs) and abbreviated new drug applications (ANDAs) regarding the development and submission of near infrared (NIR) analytical procedures used during the manufacture and analysis of pharmaceuticals. This draft guidance only pertains to the development and validation of NIR analytical procedures and does not provide recommendations concerning the set up and qualification of NIR instruments or their maintenance and calibration. Comments are requested by June 1, 2015. More information may be found here.
• On March 30, 2015, the Centers for Medicare and Medicaid Services (CMS) announced that it is seeking public comment on several information collection requests. These are entitled: 1) Information Collection for Machine Readable Data for Provider Network and Prescription Formulary Content for FFM QHPs; and 2) Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Exchanges. Comments are due May 29, 2015. More information may be found here. 
• On March 30, 2015, CMS announced an opportunity for the public to comment on CMS’ intention to collect information from the public. CMS has submitted the following information collection requests to the Office of Management and Budget (OMB) for review: 1) Verification of Clinic Data—Rural Health Clinic Form and Supporting Regulations; 2) Site Investigation for Independent Diagnostic Testing Facilities (IDTFs); and 3) Site Investigation for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS). More information may be found here. Comments are due April 29, 2015. 
• On March 30, 2015, HHS, the Department of Labor, and the Treasury released a Frequently Asked Questions document regarding Affordable Care Act (ACA) implementation, which delays implementation of revised summary of benefits and coverage (SBC) templates and now says the updated forms must be used for all coverage as of Jan. 1, 2017, rather than Sept. 15, 2015. The Departments anticipate the new template and associated documents will be finalized by January 2016 and will apply to coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2017 (including open season periods that occur in the Fall of 2016 for coverage beginning on or after January 1, 2017). The document states that the Departments, “…are fully committed to updating the template and associated documents (including the uniform glossary) to better meet consumers’ needs as quickly as possible.” 
• On April 1, 2015, FDA released a draft guidance document for industry entitled “Procedures for Meetings of the Medical Devices Advisory Committee”. The Center for Devices and Radiological Health (CDRH) is issuing this guidance to provide additional information regarding the processes for meetings of the Medical Devices Advisory Committee panels other than the Dispute Resolution Panel (DRP). This guidance describes the general circumstances in which CDRH consults with a panel, the process for exchange of information between CDRH, the members of the panel, industry, and the public, and the conduct of panel meetings. This guidance supplements existing FDA Agency-wide guidance on the conduct of Advisory Committee meetings. Comments should be submitted by June 1, 2015. More information may be found here. 
• On April 2, 2015, the HHS Office of the National Coordinator for Health Information Technology (ONC) announced the availability of test tools and test procedures approved by the National Coordinator for the testing of Electronic Health Record (HER) technology to two 2014 Edition Release 2 EHR certification criteria under the ONC HIT Certification Program. The approved test tools and test procedures for the ‘‘optional— transitions of care’’ certification criterion (§ 170.314(b)(8)) and the revised ‘‘view, download, and transmit to 3rd party’’ certification criterion (§ 170.314(e)(1)) are identified on the ONC Web site here. The test tools and test procedures for all the other 2014 Edition Release 2 EHR certification criteria were previously approved by the National Coordinator.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• The Senate was not in session this week. Congress will return from a two-week recess on April 13th. The Senate calendar for 2015 may be found here. 
• On April 1, 2015, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Judiciary Chairman Chuck Grassley (R-IA) sent a letter to HHS Secretary Sylvia Mathews Burwell questioning an alleged lack of transparency over how CMS managed “potential conflicts of interest” regarding Acting Administrator Andy Slavitt and his former employer, Optum. Specifically, the letter notes that Slavitt, then an employee of Optum (a UnitedHealth Group subsidiary), was one of the primary executives brought in to repair the HealthCare.gov platform following its botched launch in late 2013. “The Chairmen’s request for information on the potential conflict of interest management comes as Slavitt has taken on a higher role at CMS than before – a role that most likely will impact relationships with his previous employer – and reports detailing the Administration’s lack of transparency surrounding payouts received by Slavitt before joining CMS,” states a Senate Finance Committee press release. “The Chairmen are asking for all documents, recusals, exemptions, and/or waivers regarding any evaluation of potential, apparent and/or actual conflicts of interest concerning Slavitt.”

House of Representatives 

• The House was not in session this week. Congress will return from a two-week recess on April 13th. The House of Representatives calendar for 2015 may be found here.

III. REPORTS, STUDIES, & ANALYSES 

• On April 1, 2015, the HHS Office of Inspector General (OIG) and the Treasury Inspector General for Tax Administration (TIGTA) released a report entitled “Review of the Accounting Structure Used for the Administration of Premium Tax Credits”. The general purpose of the analysis was to identify the Internal Revenue Service (IRS) and CMS justification for determining how to establish programmatic control over the premium tax credit created by the ACA to assist individuals with the cost of their health insurance premiums. The report found that IRS and CMS, in coordination with the Department of the Treasury and HHS, took significant steps in planning the shared roles and responsibilities for advanced premium tax credit (APTC) payments. Of note, the report states that total APTC disbursements for Fiscal Year 2014 were nearly $11 billion ($15.5 billion in Calendar Year 2014), and that they went to 291 health insurance issuers. In addition, in Fiscal Year 2015, the IRS allocated $18.9 billion of the $31.5 billion in annual funding to the CMS. The IRS indicated that it allocated this amount in order to ensure that the CMS had sufficient readily available funds with which to administer APTC disbursements. OIG and TIGTA made no recommendations in this report. 
• On March 31, 2015, technology firm Inovalon—in association with the Special Needs Plan Alliance—released a report entitled “An Investigation of Medicare Advantage Dual Eligible Member-Level Performance on CMS Five-Star Quality Measures”. The objective of the analysis was to identify factors associated with lower Star Ratings among dual eligible individuals in the Medicare Advantage (MA) program. Key findings included: 1) dual eligible beneficiaries have significantly worse outcomes than non-dual eligible members who are enrolled in the same plan benefit package for five of the eight current Star Measures analyzed; 2) worse outcomes of dual eligible members are not statistically related to the proportion of dual eligible members enrolled in the plan; 3) differences in socio-demographic characteristics were consistently a main contributor to the differences in outcomes between dual eligible and non-dual eligible members; and 4) if MA Star Measures were adjusted to control for characteristics statistically associated with higher risk for the outcomes evaluated, the observed performance gaps between dual eligible and non-dual eligible members would be reduced by at least 70%. 
• On March 27, 2015, the Government Accountability Office (GAO) released a report entitled “Coverage of Services and Costs to Consumers in Selected CHIP and Private Health Plans in Five States”. In five selected states, GAO determined that coverage of services in the selected State Children’s Health Insurance Program (CHIP) plans was generally comparable to that of the selected private qualified health plans (QHP), with some differences. In particular, the plans were generally comparable in that most covered the services GAO reviewed with the notable exceptions of pediatric dental and certain enabling services such as translation and transportation services, which were covered more frequently by the CHIP plans. Selected CHIP plans and QHPs were also similar in terms of the services on which they imposed day, visit, or dollar limits, although the five selected CHIP plans generally imposed fewer limits than the selected QHPs. For services where coverage limits were sometimes imposed on QHPs and CHIP plans, GAO’s review found that the limits on CHIP plans were at times less restrictive. Consumers’ costs for these services—defined as deductibles, copayments, coinsurance, and premiums—were almost always less in the five states’ selected CHIP plans when compared to their respective QHPs, despite the application of subsidies authorized under the Affordable Care Act (ACA) that reduce these costs in the QHPs. 
• On March 31, 2015, CMS released a Medicare Learning Network (MLN) Matters article entitled “Food and Drug Administration Approval of First Biosimilar Product”. The article discusses implications for CMS policies of FDA’s approval of the first biosimilar product. Of note, the document indicates that CMS anticipates including the approved biosimilar in the next quarterly Healthcare Common Procedure Coding System (HCPCS) tape release in the coming weeks, appearing in the claims processing system on July 1, 2015, effective retroactively to the FDA approval date. Also, CMS says it will create a separate code to distinguish the biosimilar from the reference biological. CMS is considering policy options for coding of additional biosimilars, and will release further guidance “in the future”.

IV. OTHER HEALTH POLICY NEWS 

• On March 30th, the Supreme Court declined to take up a challenge to the Independent Payment Advisory Board (IPAB), established under the ACA to oversee future Medicare spending (Coons v. Lew). The high court instead left intact a ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals that threw out the lawsuit. 
• The Medicare Payment Advisory Commission (MedPAC) convened a series of meetings April 2nd and 3rd in Washington, DC to discuss Medicare issues and policy questions and to develop and approve reports and recommendations to the Congress. The agenda included sessions on: hospital short stay issues; polypharmacy and Medicare beneficiaries with a focus on opioid use in Part D; sharing risk in Medicare Part D; measuring low-value care; using episode bundles to improve the efficiency of care; bundling oncology services; and synchronizing Medicare policy across payment models. Of note, during the session on hospital short stay policy issues, MedPAC called on CMS to withdraw the agency’s “Two Midnight Rule.” The Two Midnight Rule instructs Recovery Audit Contractors (RACs) to presume that all inpatient stays that cross two or more midnights signify appropriate inpatient admissions, while also presuming that inpatient stays that do not cross two midnights are presumptively inappropriate inpatient admissions, where outpatient observation services should be considered more appropriate. Congress and CMS have repeatedly delayed the implementation of the Two Midnight Rule, which was originally established for Fiscal Year (FY) 2014. MedPAC also voted unanimously to approve other recommendations for Congress related to RACs; to evaluate establishing a penalty for hospitals with excess short stay rates; to revise the skilled nursing facility (SNF) three day inpatient hospital eligibility requirement; to require beneficiary notification for outpatient observation status; and to package payment for self-administered drugs provided during outpatient observation within the outpatient prospective payment system. The full agenda may be found here. 
• On March 31st, the Supreme Court ruled 5-4 that providers cannot sue states over Medicaid rates (Armstrong v. Exceptional Child Center, INC). The case deals with a service provider for Medicaid beneficiaries with developmental disabilities which sued Idaho officials in 2011 after the state failed to increase Medicaid payments past 2006 rates, despite studies showing that the cost of providing care had risen. When a lower court ordered that payments to these providers increase because the rates were stagnant “for purely budgetary reasons”, Idaho appealed to the high court, and was supported by 27 states, the National Governors Association, and the Obama Administration. “It is difficult to imagine a requirement broader and less specific than §30(A)'s mandate that state plans provide for payments that are 'consistent with efficiency, economy, and quality of care,' all the while 'safeguard[ing] against unnecessary utilization of...care and services,” Justice Antonin Scalia said in the majority opinion. In a response, the National Association of Medicaid Directors stated that the decision “…allays potential fears that individuals or providers would bring litigation on a host of different matters involving state policies. Such a tsunami of litigation could have had the effect of grinding the gears of the effective and efficient administration of the Medicaid program to a halt. The Court’s decision reinforces Medicaid’s role as a federal-state partnership and wisely moves payment away from the control of the courts.” 
• On April 1st, CMS published an e-news release regarding scheduled Medicare provider cuts of 21% under the current Sustainable Growth Rate (SGR), which went into effect that day. The document states: “CMS is taking steps to limit the impact on Medicare providers and beneficiaries by holding claims for a short period of time beginning on April 1st. Holding claims for a short period of time allows CMS to implement any subsequent Congressional action while minimizing claims reprocessing and disruption of physician cash flow in the event of legislation addressing the 21% payment reduction. Under current law, electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. As we stated in our recent email to physicians, CMS will provide more information about next steps by April 11, 2015.” The “subsequent Congressional action” to which CMS refers is an expected Senate vote on the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2)—which permanently repeals and replaces the SGR, and which was passed by the House last week—upon return from April recess.