A&B Healthcare Week in Review, June 19, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On June 17, 2015, the Health Resources and Services Administration (HRSA) released a proposed rule entitled “340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation”. This proposed rule will apply to all drug manufacturers that are required to make their drugs available to covered entities under the 340B Program. The proposed rule sets forth the calculation of the ceiling price and application of civil monetary penalties. Comments are due August 17, 2015.
• On June 19, 2015, the Food and Drug Administration (FDA) announced the availability of a guidance for industry entitled ‘‘Size, Shape, and Other Physical Attributes of Generic Tablets and Capsules.’’ This guidance discusses FDA recommendations for the size, shape, and other physical attributes of generic tablets and capsules intended to be swallowed intact. FDA is concerned that differences in these physical characteristics between generic drugs and the originator drug could affect patient outcomes.
• On June 19, 2015, the Centers for Medicare and Medicaid Services (CMS) announced that it is extending the application submission deadline for organizations to participate in the Oncology Care Model (OCM) beginning in 2016. The deadline is now June 30, 2015, at 5:00 PM ET. Letters of Intent (LOIs) are eligible to apply to participate in OCM, and only the submission of web-based applications will be accepted. The OCM aims to improve health outcomes for people with cancer, improve the quality of cancer care, and reduce spending for cancer treatment. More information on the Model may be found here.
• On June 17, 2015, CMS released an information collection request for public comment, entitled “Off-Cycle Submission of Summaries of Model of Care Changes”. All Medicare Advantage (MA) Special Needs Plans (SNPs) must be approved by the National Committee for Quality Assurance (NCQA). The SNPs must submit Models of Care (MOC) as a component of the Medicare Advantage application process. Approval is based on NCQA’s evaluation of SNPs using MOC scoring guidelines. Based on their scores, SNPs receive an approval for a period of 1-, 2-, or 3-years. CMS is developing an MOC off-cycle revision process so that SNPs can revise the MOC to modify its processes and strategies for providing care during their MOC approval period. CMS will require that SNPs submit summaries of their MOC revisions to CMS for NCQA evaluation when a SNP makes significant changes to its MOC as described in the annual Announcement of Medicare Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call letter for CY 2015 and CY2016. The NCQA will review the summary of changes to verify that the revisions are consistent with the acceptable, high quality standards as included in the original approved MOC. Comments are due August 17, 2015.
• On June 19, 2015, CMS released a proposed notice entitled “Request for an Exception to the Prohibition on Expansion of Facility Capacity Under the Hospital Ownership and Rural Provider Exceptions to the Physician Self-Referral Prohibition”. The Social Security Act prohibits a physician-owned hospital from expanding its facility capacity, unless the Secretary of the Department of Health and Human Services (HHS) grants the hospital’s request for an exception to that prohibition after considering input on the hospital’s request from individuals and entities in the community in which the hospital is located. The Centers for Medicare & Medicaid Services (CMS) has received a request from a physician-owned hospital for an exception to the prohibition against expansion of facility capacity. This notice solicits comments on the request from individuals and entities in the community in which the physician-owned hospital is located. Community input may inform our determination regarding whether the requesting hospital qualifies for an exception to the prohibition against expansion of facility capacity. To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on July 20, 2015.
• On June 18, 2015, the Department of Health and Human Services (HHS) released its Semiannual Regulatory Agenda. This Agenda presents the rulemaking activities that the Department expects to undertake this year to advance its mission. The Agenda furthers several Departmental goals, including strengthening health care; advancing scientific knowledge and innovation; advancing the health, safety, and wellbeing of the American people; increasing efficiency, transparency, and accountability of HHS programs; and strengthening the nation’s health and human services infrastructure and workforce.
• On June 17, 2015, FDA announced that an information collection activity entitled “Impact of Ad Exposure Frequency on Perception and Mental Processing of Risk and Benefit Information in Direct-to-Consumer Prescription Drug Ads” had been submitted to the Office of Management and Budget (OMB) for review. The Office of Prescription Drug Promotion (OPDP) plans to examine the effects of variation in ad exposure frequency on perception and mental processing of risk and benefit information in DTC prescription drug ads through empirical research. Comments are due July 17, 2015.
• On June 17, 201, FDA announced the availability of a guidance for industry entitled ‘‘Naming of Drug Products Containing Salt Drug Substances’’ which replaces the draft guidance of the same title that published on December 26, 2013. This guidance describes the United States Pharmacopeia’s (USP’s) ‘‘Monograph Naming Policy for Salt Drug Substances in Drug Products and Compounded Preparations,’’ which became official on May 1, 2013, and how the Center for Drug Evaluation and Research (CDER) is implementing it. More information may be found here.
• On June 18, 2015, FDA announced the availability of the draft guidance entitled ‘‘Factors to Consider When Making Benefit-Risk Determinations for Medical Device Investigational Device Exemptions (IDEs).’’ The purpose of this draft guidance is to provide greater clarity for FDA staff and IDE sponsors and sponsor-investigators regarding the principal factors that FDA considers when assessing the benefits and risks of IDE applications for human clinical study. The draft guidance also characterizes benefits in the context of investigational research, which includes direct benefits to the subjects and benefits to others (to the extent they are indirect benefits to subjects or reflect the importance of knowledge to be gained). This draft guidance is not final nor is it in effect at this time. Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment of 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 September 16, 2015. More information may be found here.
• On June 12, 2015, the CMS Center for Consumer Information & Insurance Oversight (CCIIO) released a notice entitled “Distribution of Information Regarding Advance Payments of the Premium Tax Credit (APTC) and Cost-Sharing Reductions (CSR) in Federal Standard Notices for Coverage Offered through the Federally-facilitated Marketplaces”.
• On June 15, 2015, CCIIO released technical guidance entitled “Instructions for Self-Insured Non-Federal Governmental Health Plans and Health Insurance Issuers Offering Group & Individual Health Coverage on How to Elect a Federal External Review Process”. This technical guidance sets forth instructions regarding the election of a Federally-administered external review process using the Health Insurance Oversight System (HIOS). This technical guidance applies to health insurance issuers offering group and individual health coverage that are using a Federally-administered external review process in accordance with Technical Release 2011-02 (TR 2011-02), available on the CCIIO website. This technical guidance also applies to self-insured, non-federal governmental health plans and amends prior technical guidance pertaining to such plans that was released on June 22, 2011. These provisions do not apply to plans and issuers in connection with grandfathered health plans.
• On June 15, 2015, CCIIO released an FAQ document entitled “Uniform Modification and Plan/Product Withdrawal FAQ”. Questions addressed in the document include 1) “An issuer stops offering Product X at the end of 2015, and in 2016 begins offering Product Y. Is Product Y a new product?”; and 2) “An issuer makes changes within a product but submits it as a new product. The state determines that the product changes are within the standards for uniform modification of coverage. Is the issuer required to revert to the product’s former Health Insurance Oversight System (HIOS) product identifier (ID)?”
• On June 17, 2015, CCIIO released a memo entitled “Transitional Reinsurance Program: Pro Rata Adjustment to the National Coinsurance Rate for the 2014 Benefit Year”. In the notice, HHS announced that the national coinsurance rate for the 2014 benefit year for the transitional reinsurance program will be increased from 80% to 100% for non-grandfathered, reinsurance eligible individual market plans’ covered claims costs between the attachment point of $45,000 and the reinsurance cap of $250,000. HHS will remit payments to issuers starting in August 2015.
• On June 19, 2015, CMS released two information collection requests for public review and comment. The first is entitled “Medicare Prescription Drug Benefit Program”. Part D plans and, to the extent applicable, MA organizations use the information to comply with the eligibility and associated Part D participating requirements. CMS uses this information to approve contract applications, monitor compliance with contract requirements, make proper payment to plans, and to ensure that correct information is disclosed to potential and current enrollees. The second is entitled “Quality Improvement Strategy Implementation Plan and Progress Report”. The Quality Improvement Strategy Plan and Reporting Template will allow (1) HHS to evaluate the compliance and adequacy of QHP issuers’ quality improvement efforts, as required by Section 1311(c) of the Affordable Care Act (ACA), and (2) HHS will use the issuers’ validated information to evaluate the issuers’ quality improvement strategies for compliance with the requirements of Section 1311(g) of the Affordable Care Act. Comments are due July 20, 2015. More information may be found here.
• On June 19, 2015, CMS released an information collection activity entitled “CMS–643 Hospice Survey and Deficiencies Report Form and Supporting Regulations”. CMS uses the information collected as the basis for certification decisions for hospices that wish to obtain or retain participation in the Medicare or Medicaid programs. Comments on the survey/ report form are due August 18, 2015.

Event Notices

• July 13, 2015: FDA is announcing a public meeting on the reauthorization of the Medical Device User Fee Amendments (MDUFA) for fiscal years 2018 through 2022. The current legislative authority for the medical device user fee program expires on October 1, 2017, and new legislation will be required for FDA to continue collecting user fees for the medical device program in future fiscal years. The meeting will take place July 13th from 9:00 AM to 5:00 PM. More information may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On Tuesday June 16th, the Senate Health, Education, Labor and Pensions (HELP) committee convened a hearing entitled "Achieving the Promise of Health Information Technology: What Can Providers and the U.S. Department of Health and Human Services do to Improve the Electronic Health Record User Experience?" Witnesses for the hearing included Boyd Vindell Washington, MD, MHCM, President, Franciscan Medical Group, Chief Medical Information Officer, Franciscan Missionaries of Our Lady Health System; Timothy A. Pletcher, DHA, Executive Director, Michigan Health Information Network Shared Services; and Meryl Moss, MPA, EMHL, Chief Operating Officer, Coastal Medical. More information on the hearing may be found here.

House of Representatives

• On June 17, 2015, the House passed a series of bipartisan bills related to the Medicare Advantage (MA) program: H.R. 2505, the Medicare Advantage Coverage Transparency Act; H.R. 2507, the Increasing Regulatory Fairness Act; H.R. 2582, the Seniors’ Health Care Plan Protection Act; and H.R. 2570, the Strengthening Medicare Advantage through Innovation and Transparency for Seniors Act. More information, including bill text and amendment language, may be found here.
• On June 18, 2015, the House voted to advance H.R. 1190, the Protecting Seniors’ Access to Medicare Act. However, lawmakers postponed final passage of the Act until a time to be announced. The measure would repeal the sections of the ACA related to establishment of the Independent Payment Advisory Board (IPAB) to develop proposals to reduce the per capita rate of growth in Medicare spending. President Obama has said he would likely veto the measure if it reached his desk.
• On June 18, 2015, the House voted in favor of H.R. 160, the Protect Medical Innovation Act. The measure would repeal the 2.3% excise tax on medical device manufacturers and importers imposed under the ACA. Although the bill has fairly broad bipartisan support, President Obama has said he would likely veto the measure if it reached his desk.
• On Wednesday, June 17th, the House Appropriations Subcommittee on Labor, Health and Human Services (HHS), Education, and Related Agencies of House Appropriations Committee held a markup of draft fiscal 2016 appropriations for programs under its jurisdiction. More information on the markup may be found here. A summary of the bill may be found here.
• On June 16, 2015, the House Energy & Commerce Health Subcommittee convened a hearing entitled “Examining H.R. 2646, the Helping Families in Mental Health Crisis Act”. Witnesses for the hearing included: Creigh Deeds, Senator, Senate of Virginia; Patrick J. Kennedy, Former U.S. Representative (RI), and Founder, Kennedy Forum; Jeffrey A. Lieberman, M.D., Chairman, Department of Psychiatry, Columbia University College of Physicians and Surgeons; Paul Gionfriddo, President and CEO; Mental Health America; Steve Coe, Chief Executive Officer, Community Access; Mary Jean Billingsley, Parent, National Disability Rights Network; and Harvey Rosenthal, Executive Director, New York Association of Psychiatric Rehabilitation Services. According to a Committee summary, H.R. 2646, the Helping Families in Mental Health Crisis Act of 2015 (introduced by Representative Murphy) would “remove Federal barriers to care, clarify privacy standards for families and caregivers, reform outdated Federal programs, expand parity accountability, invest in services for individuals with serious mental illness, and promote evidence-based care.” The Committee also discussed H.R. 2690, the Including Families in Mental Health Recovery Act of 2015, introduced by Representative Doris Matsui (D-HI), as well as a discussion draft sponsored by Representative Paul Tonko (D-NY). More information on the hearing can be found here.

III. REPORTS, STUDIES, & ANALYSES

• On June 16, 2015, the HHS Office of Inspector General (OIG) released a report entitled “CMS's Internal Controls Did Not Effectively Ensure the Accuracy of Aggregate Financial Assistance Payments Made to Qualified Health Plan Issuers Under the Affordable Care Act”. OIG determined that CMS's internal controls did not effectively ensure the accuracy of nearly $2.8 billion in aggregate financial assistance payments made to insurance companies under the Affordable Care Act during the first 4 months that these payments were made. Specifically, OIG found that CMS's reliance on issuer attestations did not ensure that advance cost-sharing reduction (CSR) payment rates identified as outliers were appropriate, CMS did not have systems in place to ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts, CMS did not have systems in place for State marketplaces to submit enrollee eligibility data for financial assistance payments, and CMS did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments. In the report, OIG recommended that CMS correct these internal control deficiencies by requiring its Office of the Actuary to review and validate QHP issuers' actuarial support for index rates that CMS identifies as outliers, implementing computerized systems to maintain confirmed enrollee and payment information so that CMS does not have to rely on QHP issuers' attestations in calculating payments, implementing a computerized system so State marketplaces can submit enrollee eligibility data, following its guidance for calculating estimated advance CSR payments, and developing interim reconciliation procedures to address potentially inappropriate CSR payments.
• On June 16, 2015, CBO published “The 2015 Long-Term Budget Outlook”. According to CBO’s projection, if current law remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits—caused mainly by the aging of the population and rising health care costs—would push debt back to, and then above, its current high level. The deficit would grow from less than 3 percent of GDP this year to more than 6 percent in 2040. At that point, 25 years from now, federal debt held by the public would exceed 100 percent of GDP.
• On June 15, 2015, both the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC), federal advisory Committees with jurisdiction over Medicare and Medicaid payment policy issues, respectively, released their June 2015 Reports to Congress. In the MACPAC report, Chapter 1 examines a new approach to supplemental payments embodied in Delivery System Reform Incentive Payment (DSRIP) programs, Chapter 2 discusses coverage of adult dental benefits, Chapters 3 and 4 describe Medicaid’s role in providing health services to beneficiaries with behavioral health diagnoses and youth who receive child welfare assistance, and Chapter 5 concludes the report with a discussion of the use of psychotropic medications under Medicaid. MACPAC’s report may be found here. The MedPAC Report to Congress covers hospital short-stay policy issues, Medicare payment for drugs under Parts B and D, synchronizing policy across Medicare payment models, and the next generation of Medicare beneficiaries. The report may be accessed here; a fact sheet from the Commission highlighting major components of the document may be found here.
• On June 19, 2015, CBO released a report entitled “Budgetary and Economic Effects of Repealing the Affordable Care Act”. CBO and the Joint Committee on Taxation (JCT) estimate that repealing the ACA would have several major effects, relative to the projections under current law: 1) Including the budgetary effects of macroeconomic feedback, repealing the ACA would increase federal budget deficits by $137 billion over the 2016–2025 period; and 2) For many reasons, the budgetary and economic effects of repealing the ACA could differ substantially in either direction from the central estimates presented in this report. The uncertainty is sufficiently great that repealing the ACA could reduce deficits over the 2016–2025 period—or could increase deficits by a substantially larger margin than the agencies have estimated. However, CBO and JCT’s best estimate is that repealing the ACA would increase federal budget deficits by $137 billion over that 10-year period.

IV. OTHER HEALTH POLICY NEWS

• On June 15, 2015, CMS announced that three states—Pennsylvania, Delaware, and Arkansas—were conditionally approved as state-based marketplaces. “The Centers for Medicare & Medicaid Services (CMS) has reached this decision based on … attestations, progress to date, and expected progress across the entire spectrum of Marketplace requirements,” HHS Secretary Sylvia Burwell wrote in the letters.
• On June 18, 2015, HHS Secretary Burwell announced and Attorney General Loretta E. Lynch announced a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. In addition, CMS also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud.