A&B Healthcare Week in Review, May 29, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On May 26, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule entitled “Medicaid and Children’s Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, Medicaid and CHIP Comprehensive Quality Strategies, and Revisions Related to Third Party Liability”. According to CMS, the proposed rule would modernize Medicaid managed care regulations “to reflect changes in the usage of managed care delivery systems.” The proposed rule would align Medicaid managed care rules with some of those applicable to other major sources of coverage, including Qualified Health Plans (QHPs) and Medicare Advantage (MA) plans. The proposed rule would also “implement statutory provisions; strengthen actuarial soundness payment provisions to promote the accountability of Medicaid managed care program rates; and promote the quality of care and strengthen efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries.” It would establish additional beneficiary protections and program integrity requirements, require states to establish comprehensive quality strategies for all Medicaid and CHIP programs regardless of how services are provided, implement provisions of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), and addresses third party liability for trauma codes. The proposed rule is primarily divided across three program areas: Medicaid Managed Care; CHIP; and Third Party Liability. Comments are due July 27, 2015. A CMS Fact Sheet on the proposed rule is available here.
• On May 29, 2015, the Department of Health and Human Services (HHS) released a request for information (RFI) entitled “Requirements for the Health Plan Identifier”. This request for information seeks public comment regarding the health plan identifier (HPID) including the requirements regarding health plan enumeration and the requirement, to use the HPID in electronic health care transactions. Public comments are due July 28, 2015.
• On May 26, 2015, the Office of Management and Budget (OMB) received a final rule for review entitled “Summary of Benefits and Coverage and Uniform Glossary” from the Department of Labor. The abstract reads, “The Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act, or “ACA”) amended title I of ERISA, by adding a new section 715 which encompasses various health reform provisions of the Public Health Service (PHS) Act. Section 2715 of the PHS Act directs the Departments of Labor, Treasury, and Health and Human Services to develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage in compiling and providing a summary of benefits and coverage (SBC) that accurately describes the benefits and coverage under the applicable plan or coverage. PHS Act section 2715 also calls for the development of standards for the definitions of terms used in health insurance coverage.”
• On May 27, 2015, the CMS Center for Consumer Information & Insurance Oversight (CCIIO) released technical guidance entitled “Questions and Answers Regarding the Medical Loss Ratio (MLR) Reporting and Rebate Requirements”. The purpose of this bulletin is to provide guidance regarding: the limited circumstances in which a health insurance issuer may, for MLR reporting purposes, exclude agent and broker fees or commissions from earned premium under 45 CFR §158.130; and, to whom a health insurance issuer must provide MLR rebates when a portion or all of the premium is paid with advance payments of the premium tax credit.
• On May 26, 2015, the Departments of Labor, HHS, and Treasury released an FAQ regarding Affordable Care Act implementation. The FAQ deals with limitations on cost sharing under the ACA, and provider non-discrimination.
• On May 27, 2015, FDA announced the availability of a draft guidance for industry entitled ‘‘Draft Guidance on Risperidone.’’ The recommendations provide specific guidance on the design of studies to support abbreviated new drug applications (ANDAs) for risperidone injection. This draft guidance is the second revision of a previously issued draft guidance on the same subject. Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comments on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by July 27, 2015.
• On May 28, 2015, FDA announced the availability of a guidance entitled ‘‘M7 Assessment and Control of DNA Reactive (Mutagenic) Impurities in Pharmaceuticals to Limit Potential Carcinogenic Risk.’’ The guidance was prepared under the auspices of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH). The guidance emphasizes considerations of both safety and quality risk management in establishing levels of mutagenic impurities that are expected to pose negligible carcinogenic risk. It outlines recommendations for assessment and control of mutagenic impurities that reside or are reasonably expected to reside in a final drug substance or product, taking into consideration the intended conditions of human use. The guidance is intended to provide guidance for new drug substances and new drug products during their clinical development and subsequent applications for marketing.
• On May 27, 2015, FDA announced a delay of compliance date for the final rule entitled, “Postmarketing Safety Reports for Human Drug and Biological Products; Electronic Submission Requirements; Delay of Compliance Date; Safety Reporting Portal of Electronic Submission of Postmarketing Safety Reports for Human Drugs and Nonvaccine Biological Products”. FDA is delaying the compliance date for the final rule for the electronic submission of postmarketing safety reports for human drugs and biological products that published in the Federal Register of June 10, 2014. The rule amended FDA’s postmarketing safety reporting regulations for human drugs and biological products to require that persons subject to mandatory reporting requirements submit safety reports in an electronic format that FDA can process, review, and archive. FDA is also announcing the availability of the Safety Reporting Portal (SRP), a Web-based electronic submission system, for the electronic submission of postmarketing individual case safety reports (ICSRs) of adverse events for human drug and non-vaccine biological products. The SRP is intended to facilitate the secure electronic submission of postmarketing ICSRs and ICSR attachments to the FDA Adverse Event Reporting System (FAERS) database. FDA is delaying the compliance date for the final rule because FDA understands that not all persons subject to mandatory postmarketing reporting requirements who wish to use the newly available Safety Reporting Portal (SRP) will have the opportunity to register for an account and test the submission process prior to June 10, 2015, the effective date of the final rule. The compliance date for the final rule published at 79 FR 33072 on June 10, 2014, is delayed until September 8, 2015.
• On May 29, 2015, CMS announced an opportunity for the public to comment on the proposed extension of an information collection activity entitled “National Implementation of the Hospital CAHPS Survey.” The HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) Survey, also known as the CAHPS® Hospital Survey or Hospital CAHPS®, is a standardized survey instrument and data collection methodology that has been in use since 2006 to measure patients’ perspectives of hospital care. While many hospitals collect information on patient satisfaction, HCAHPS created a national standard for collecting and public reporting information that enables valid comparisons to be made across all hospitals to support consumer choice. Comments are due June 29, 2015.
• On May 29, 2015, FDA announced an opportunity for public comment on an information collection activity entitled “Prescription Drug Product Labeling; Medication Guide Requirements”. FDA regulations require the distribution of patient labeling, called Medication Guides, for certain prescription human drug and biological products used primarily on an outpatient basis that pose a serious and significant public health concern requiring distribution of FDA-approved patient medication information. These Medication Guides inform patients about the most important information they should know about these products in order to use them safely and effectively. Included is information such as the drug’s approved uses, contraindications, adverse drug reactions, and cautions for specific populations, with a focus on why the particular product requires a Medication Guide. These regulations are intended to improve the public health by providing information necessary for patients to use certain medication safely and effectively. Comments are due July 28, 2015.
• On May 26, 2015, FDA released an information collection activity entitled “Spousal Influence on Consumer Understanding of and Response to Direct-to-Consumer Prescription Drug Advertisements” for public comment. The Office of Prescription Drug Promotion plans to examine differences between consumers viewing prescription drug ads with a spouse versus alone through empirical research. The main study will be preceded by pretesting designed to delineate the procedures and measures used in the main study. Pretest and main study participants will be couples who are married or in a marital-like living arrangement in which one member (consumer) has asthma and the other does not (spouse). All participants will be 18 years of age or older and married or cohabiting for 6 months or longer. Comments on the proposed study are due June 25, 2015.
• On May 29, 2015, CMS released a notice entitled “Medicaid Program; State Allotments for Payment of Medicare Part B Premiums for Qualifying Individuals (QIs): Federal Fiscal Years 2013 and 2014”. This notice sets forth the states’ final allotments available to pay the Medicare Part B premiums for Qualifying Individuals (QIs) for the federal fiscal year (FY) 2013 and the preliminary QI allotments for FY 2014. The amounts of these QI allotments were determined in accordance with the methodology set forth in regulations and reflect funding for the QI program made available under recent legislation. The final QI allotments for payment of Medicare Part B premiums for FY 2013 are effective October 1, 2012. The preliminary QI allotments for FY 2014 are effective October 1, 2013.
• On May 29, 2015, FDA announced the availability of a guidance for industry entitled "Established Conditions: Reportable CMC Changes for Approved Drug and Biologic Products." The purpose of this guidance is to provide applicants of new drug applications, abbreviated new drug applications, and biologic license applications with FDA's current thinking on established conditions (i.e., the chemistry, manufacturing, and controls (CMC) information in a submission that would require reporting to FDA if changed for approved drug and biologic products, per the current regulations). This guidance also describes those sections of a common technical document formatted application that typically contain information that meets the definition of established conditions, and provides considerations for managing changes to established conditions over the life cycle of an approved product.

Event Notices

• June 25, 2015: CMS has announced a meeting of the Advisory Panel on Outreach and Education (APOE) (the Panel) in accordance with the Federal Advisory Committee Act. The Panel advises and makes recommendations to the Secretary of the U.S. Department of Health and Human Services (HHS) and the Administrator of the Centers for Medicare & Medicaid Services (CMS) on opportunities to enhance the effectiveness of consumer education strategies concerning the Health Insurance Marketplace, Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). This meeting is open to the public. The meeting will take place at the HHS Hubert Humphrey Building in SW Washington DC between 8:30 AM and 4:00 PM. More information may be found here.
• July 7-8, 2015: FDA has announced a joint meeting of the Drug Safety and Risk Management Advisory Committee and the Anesthetic and Analgesic Drug Products Advisory Committee. The committees will discuss the results of post-marketing studies evaluating the misuse and/or abuse of reformulated OXYCONTIN (oxycodone hydrochloride) extended-release tablets, supplemental new drug application (sNDA) 022272, manufactured by Purdue Pharma L.P. The committees will discuss whether these studies have demonstrated that the reformulated OXYCONTIN product has had a meaningful impact on abuse of OXYCONTIN. The meeting will take place at FDA’s White Oak Campus in Silver Spring, Maryland. More information may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• The House and Senate were not in session this week. Both chambers will reconvene on Monday June 1st.
• On May 28, 2015, Senator Claire McCaskill (D-MO) sent a letter to CMS Acting Administrator Andy Slavitt requesting that the agency provide information on its efforts to combat fraud and abuse in the Medicare Advantage program. In the letter, McCaskill specifically requested to be briefed on efforts to combat fraud and abuse as it relates to risk scores given to patients with Medicare Advantage plans. “Gaming the Medicare Advantage system is a threat to taxpayers, but also to Medicare beneficiaries—and we should be doing everything possible to aggressively pursue anyone engaged in wrongdoing,” said McCaskill, the top-ranking Democrat on the Senate Special Committee on Aging. “Time and again we’ve seen whistleblowers allege outright fraud when it comes to risk scores, and to me that’s a sign there’s simply not enough oversight taking place.”

House of Representatives

• The House and Senate were not in session this week. Both chambers will reconvene on Monday June 1st.
• On May 29, 2015, Ways and Means members Reps. Diane Black (R-TN) and Earl Blumenauer (D-OR) and Energy and Commerce members Rep. Brett Guthrie (R-KY) and Rep. Dave Loebsack (D-IA), introduced H.R. 2579, the Securing Care for Seniors Act of 2015. The bill would require CMS to reevaluate and consider changes to Medicare Advantage's risk adjustment model. This bill requires CMS to evaluate and, if appropriate, incorporate minor changes to risk-adjustment model, such as using multiple years of data and adjusting for multiple chronic conditions. The legislation also includes a Sense of Congress regarding the Medicare Advantage STARS ratings system, citing work that the Congress plans to reform the system in conjunction with CMS and stakeholders.

III. REPORTS, STUDIES, & ANALYSES

• On May 22, 2015, the Government Accountability Office (GAO) released a report entitled “Results from the First Two Years of the Pioneer Accountable Care Organization Model”. The CMS Center for Medicare & Medicaid Innovation (CMMI) began testing the Pioneer Accountable Care Organization (ACO) Model in 2012. Under this model, ACOs can earn additional Medicare payments if they generate savings, which are shared with CMS, but must pay CMS a penalty if their spending is higher than expected. ACOs must report quality data to CMS annually and meet quality performance standards. In conducting its review, GAO analyzed ACOs' expenditures, spending benchmarks, the amount of shared savings and losses, and payment amounts for shared savings or losses. GAO found that fewer than half of the ACOs earned shared savings in 2012 and in 2013, although overall the Pioneer ACO Model produced net shared savings in each year. Specifically: 1) Forty-one percent of the ACOs produced $139 million in total shared savings in 2012, and 48 percent produced $121 million in total shared savings in 2013; 2) In 2012 and 2013 CMS paid ACOs $77 million and $68 million, respectively, for their shared savings; and 3) The Pioneer ACO Model produced net shared savings of $134 million in 2012 and $99 million in 2013. GAO also found that ACOs that participated in both years had significantly higher quality scores in 2013 than in 2012 for 67 percent of the quality measures.
• Recent data from the National Health Interview Survey (NHIS) at the Centers for Disease Control and Prevention (CDC) found there was an overall 3.7 percentage point decrease in the number of uninsured adults in Medicaid expansion states in the second and third quarters (April-September) of 2014, compared with 2013. In non-expansion states, the number of uninsured adults dropped 2.5 percentage points over the same time, the report said. The greatest absolute decrease in the percentage uninsured from 2013 to April–September 2014 (12.1 percentage points) was among adults aged 45–64 with incomes less than or equal to 138% FPL in Medicaid expansion states.
• This week the American Academy of Actuaries released an issue brief entitled “Implications of Proposed Changes to the ACA in Response to King v. Burwell”. Policymakers are considering changes to the ACA in case the Supreme Court rules in King v. Burwell that federal premium subsidies are not available for individual market plans in states participating in the federally-facilitated marketplace (FFM). Various proposals would provide transitional coverage to those losing subsidies as well as make other changes to the ACA. Many of these changes also are being included in proposals to replace the ACA more broadly. The issue brief examines the general approaches that are included in one or more of the proposals. Key findings from the Academy suggest that: 1) a temporary extension of premium subsidies would only delay the market disruption; 2) eliminating the individual mandate could threaten the viability of the health insurance market; 3) depending on the extent of other ACA changes, allowing for insurance to be sold across state lines could result in adverse selection, but also could increase competition; and 4) allowing for association health plans could also raise adverse selection concerns.
• The Urban Institute published a review entitled “Medicaid Expansion, the Private Option, and Personal Responsibility Requirements: The Use of Section 1115 Waivers to Implement Medicaid Expansion Under the ACA”. As of April 1, 2015, CMS had approved Section 1115 waivers in all six states that had applied for such approval as an alternative to a standard Medicaid expansion under the ACA: Arkansas, New Hampshire, Indiana, Iowa, Michigan, and Pennsylvania. This paper describes and analyzes key components of the Medicaid expansion programs in these six states based on analysis of the Section 1115 waiver applications, proposed amendments, CMS’ approval documents, summaries and press reports, and interviews with national experts and state officials, providers, insurance company representatives, and consumer advocates in the study states. The report finds that these waivers have enabled states that were not prepared to implement a standard expansion to extend Medicaid coverage to hundreds of thousands of people who otherwise would have likely remained uninsured. Respondents from all six states reported that a standard expansion would not have been approved in their states. Second, the use of premium assistance and payment of cost-sharing reductions to place Medicaid enrollees into qualified health plans (QHPs) in the ACA marketplace could have several advantages, including 1) providing access to a broader mix of providers, 2) promoting continuity of care when people move between eligibility for Medicaid and marketplace subsidies, 3) contributing to expanded competition in the marketplace, which in turn would lower premiums, and 4) lowering federal government subsidy costs in the marketplace and the costs of QHPs for individuals not eligible for subsidies as a result of lower premiums.
• The HHS Office of Inspector General (OIG) recently released a Mid-Year Update to its FY 2015 Work Plan. The OIG notes that, in FY 2015 and beyond, it will “continue to focus on emerging payment, eligibility, management, and information technology systems security vulnerabilities in health care reform programs, such as the health insurance marketplaces. OIG plans to add to its portfolio of work on care quality and access in Medicare and Medicaid, as well as on public health and human services programs. OIG’s examination of the appropriateness of Medicare and Medicaid payments will continue, with possible additional work on the efficiency and effectiveness of payment policies and practices in inpatient and outpatient settings, for prescription drugs, and in managed care. Other areas under consideration for new work include, for example, the integrity of the food, drug, and medical device supply chains; the security of electronic data; the use and exchange of health information technology; and emergency preparedness and response efforts.”

IV. OTHER HEALTH POLICY NEWS

• The American Hospital Association (AHA) and a collection of 8 hospitals and healthcare systems filed a lawsuit challenging the 0.2% Medicare payment rate cut for fiscal year 2015 (American Hospital Association v. Burwell, No. 15-cv-747). The payment cut is the result of the CMS “two-midnight” policy, which plaintiffs say have cost hospitals more than $200 million in 2014 alone. The suit challenges that, “The Medicare payment rates CMS has adopted for FFY 2015 to reimburse our nation’s hospitals for inpatient care incorporate the invalid reduction that CMS applied in FFY 2014. Given the numerous violations of the Administrative Procedure Act (APA) and the Medicare Act from the prior year, it is equally arbitrary and capricious for CMS to base FFY 2015 payment rates on the unlawful FFY 2014 rates.” AHA filed a similar suit against the rate cut in 2014.
• On May 28, 2015, HHS Secretary Sylvia Burwell announced that CMS is accepting applications for the Million Hearts® CVD Risk Reduction model. Health care providers who participate in the model will work with Medicare beneficiaries to determine their individual risk for a heart attack or stroke in the next ten years (for example, 25 percent). Then, providers will work with patients to identify the best approach to reduce their individual risk —for example, stopping smoking, reducing blood pressure, or taking cholesterol-lowering drugs or aspirin—and show them the benefits of each approach. Each patient will get a personalized risk modification plan that will target their specific risk factors. Providers will be paid for reducing the absolute risk for heart disease or stroke among their high-risk patients. The Million Hearts® CVD Risk Reduction model will operate for five years and aims to enroll over 300,000 Medicare beneficiaries and 720 practices, varying in size and patient case mix; and including providers in general/family practice, general internal medicine, geriatric medicine, multi-specialty care, or cardiovascular care. A request for applications for the Initiative may be found here.
• This week HHS awarded $112 million to regional cooperatives to work with about 5,000 primary care professionals in 12 states to improve the heart health of their nearly 8 million patients. The “EvidenceNOW” initiative establishes seven regional cooperatives composed of multidisciplinary teams of experts that will each provide quality improvement services to up to 300 small primary care practices. These services include onsite coaching, consultation from experts in health care delivery improvement, sharing best practices, and electronic health record support. More information may be found here.