A&B Healthcare Week in Review, June, 5, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On June 4, 2015, the Centers for Medicare and Medicaid Services (CMS) released a final rule entitled “Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations”. This final rule addresses changes to the Medicare Shared Savings Program including provisions relating to the payment of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program. Under the Medicare Shared Savings Program, providers of services and suppliers that participate in an Accountable Care Organizations continue to receive traditional Medicare fee-for-service payments under Parts A and B, but the Accountable Care Organizations may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. According to a CMS press release on the regulation, the final rule:
  • Creates a new Track 3, based on some of the successful features of the Pioneer ACO Model, which includes higher rates of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
  • Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries’ care;
  • Establishes a waiver of the 3-day stay Skilled Nursing Facility (SNF) rule for beneficiaries that are prospectively assigned to ACOs under Track 3; and
  • Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings, and announces CMS’ intent to propose further improvements to the benchmarking methodology later this year.
• On June 1, 2015, the Food and Drug Administration (FDA) announced the availability of a draft guidance for industry entitled ‘‘Established Conditions: Reportable CMC Changes for Approved Drug and Biologic Products.’’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. 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 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 31, 2015.
• On June 3, 2015, FDA issued a notice to request that public stakeholders, including patient and consumer advocacy groups, health care professionals, and scientific and academic experts, notify FDA of their intent to participate in periodic consultation meetings on the reauthorization of the Generic Drug User Fee Amendments of 2012 (GDUFA). The statutory authority for GDUFA expires at the end of September 2017. At that time, new legislation will be required for FDA to continue collecting user fees for the generic drug program. The Federal Food, Drug, and Cosmetic Act requires that FDA consult with a range of stakeholders in developing recommendations for the next GDUFA program. The FD&C Act also requires that FDA hold continued discussions with patient and consumer advocacy groups at least monthly during FDA’s negotiations with the regulated industry. The purpose of this request for notification is to ensure continuity and progress in these monthly discussions by establishing consistent stakeholder representation. Submit notification of intention to participate by August 14, 2015. More information may be found here.
• On June 3, 2015, FDA announced that it is extending the comment period in the notice of availability that appeared in the Federal Register of February 19, 2015. In that notice of availability, FDA requested comments on a draft standard memorandum of understanding (MOU) entitled ‘‘Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products Between the State of [insert State] and the U.S. Food and Drug Administration.’’ The draft standard MOU describes the responsibilities of any State that chooses to sign the MOU in investigating and responding to complaints related to compounded human drug products distributed outside the State and in addressing the interstate distribution of inordinate amounts of compounded human drug products. Comments are now due July 20, 2015. More information may be found here.
• On June 2, 2015, FDA announced an opportunity for public comment on an information collection activity entitled “Guidance for Industry on Formal Dispute Resolution; Appeals Above the Division Level (OMB Control Number 0910–0430)—Extension”. This information collection approval request is for FDA guidance on the process for formally resolving scientific and procedural disputes in the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER) that cannot be resolved at the division level. CDER and CBER have determined and the guidance recommends that the following information should be submitted to the appropriate center with each request for dispute resolution so that the Center may quickly and efficiently respond to the request: (1) A brief but comprehensive statement of each issue to be resolved, including a description of the issue, the nature of the issue (i.e., scientific, procedural, or both), possible solutions based on information in the administrative file, whether informal dispute resolution was sought prior to the formal appeal, whether advisory committee review is sought, and the expected outcome; (2) a statement identifying the review division/office that issued the original decision on the matter and, if applicable, the last Agency official that attempted to formally resolve the matter; (3) a list of documents in the administrative file, or additional copies of such documents, that are deemed necessary for resolution of the issue(s); and (4) a statement that the previous supervisory level has already had the opportunity to review all of the material relied on for dispute resolution. Comments are due August 3, 2015.
• On June 2, 2015, FDA issued a notice entitled “Guidance for Industry on Generic Drug User Fee Cover Sheet; Form FDA 3794”. The purpose of this notice is to solicit feedback on the collection of information in an electronic form used to calculate and pay generic drug user fees. Proposed Form FDA 3794, the Generic Drug User Fee Cover Sheet, requests the minimum necessary information to determine if a person has satisfied all relevant user fee obligations. The proposed form is modeled on other FDA user fee cover sheets, including Form FDA 3397, the Prescription Drug User Fee Act Cover Sheet. The information collected would be used by FDA to initiate the administrative screening of generic drug submissions and DMFs, support the inspection of generic drug facilities, and otherwise support the generic drug program.
• On June 3, 2015, FDA announced that an information collection request entitled “Biosimilars User Fee Cover Sheet; Form FDA 3792” had been submitted to OMB for review. Comments are due July 6, 2015.
• On June 4, 2015, the Office of Inspector General (OIG) published OIG Advisory Opinion No. 15-06 regarding a nonprofit, tax-exempt, charitable organization’s proposal to provide financial assistance to individuals with chronic diseases, including cancer, to assist with the costs of health insurance and drug and device therapies. OIG reports that, based on the facts certified in the request for an advisory opinion, the proposed arrangement would not constitute grounds for the imposition of civil monetary penalties under section 1128A(a)(5) of the Act; and although the proposed arrangement could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of Federal health care program business were present, OIG would not impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Act.
• On June 4, 2015, CMS released a proposed information collection activity (extension) for public comment, entitled “Medicare Fee-for-Service Prepayment Medical Review”. The information required under this collection is requested by Medicare contractors to determine proper payment or if there is a suspicion of fraud. Medicare contractors request the information from providers or suppliers submitting claims for payment from the Medicare program when data analysis indicates aberrant billing patterns or other information which may present a vulnerability to the Medicare program. In this notice, CMS also requests a new OMB control number for a survey entitled “Hospital National Provider Survey”. Section 3104 of the Patient and Protection and Affordable Care Act (ACA) requires that the Secretary of the Department of Health and Human Services (HHS) conduct an assessment of the quality and efficiency impact of the use of endorsed measures in specific Medicare quality reporting and incentive programs. The ACA further specifies that the initial assessment must occur no later than March 1, 2012, and once every 3 years thereafter. This planned data collection activity was developed and tested as part of the 2015 Impact Report and data collection will be conducted for reporting in the 2018 Impact Report. Lastly, the notice announces CMS’ intention to conduct the “Nursing Home National Provider Survey”. Comments must be submitted within 30 days.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On June 3, 2015, the Senate Finance Committee convened an open executive session to consider an original bill entitled “Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015”. According to a Committee summary of the bill, the AFIRM Act seeks to: 1) Improve oversight capabilities for HHS and CMS that increase the integrity of the Medicare auditors and claims appeals process; 2) Coordinate efforts between auditors and CMS to ensure that all parties receive transparent data regarding audit practices, improved methodologies over time, and new incentives/disincentives to improve auditor accuracy; 3) Establish a voluntary alternate dispute resolution process to allow for multiple pending claims with similar issues of law or fact to be settled as a unit, rather than as individual appeals; 4) the amount in controversy for review by an Administrative Law Judge (ALJ) to match the amount for review by District Court; and 5) Allow for the use of sampling and extrapolation, with the appellant’s consent, to expedite the appeals process. The measure was reported out of Committee by voice vote. More information may be found here.
• On June 4, 2015, the Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts convened a hearing entitled "Rewriting the Law: Examining the Process that Led to the ObamaCare Subsidy Rule." More information on the hearing may be found here.

House of Representatives

• On June 2, 2015, the House Ways and Means Committee convened a markup of a series of healthcare bills. All ten bills (listed below) were favorably reported out of Committee. More information may be found here.
  • H.R. 160, “Protect Medical Innovation Act of 2015.”
  • H.R. 1190, “Protecting Seniors’ Access to Medicare Act of 2015.”
  • S. 984, “Steve Gleason Act of 2015.”
  • S. 971, “Medicare Independence at Home Medical Practice Demonstration Improvement Act of 2015.”
  • H.R. 2580, “LTCH Technical Correction Act of 2015.”
  • H.R. 2505, “Medicare Advantage Coverage Transparency Act of 2015.”
  • H.R. 2506, “Seniors’ Health Care Plan Protection Act of 2015.”
  • H.R. 2507, “Increasing Regulatory Fairness Act of 2015.”
  • H.R. 2579, “Securing Care for Seniors Act of 2015.”
  • H.R. 2581, “Preservation of Access for Seniors in Medicare Advantage Act of 2015.”
• On June 2, 2015, the House Energy and Commerce Subcommittee on Oversight and Investigations convened a hearing entitled “Medicaid Program Integrity: Screening Out Errors, Fraud, and Abuse”. Witnesses for the hearing included Seto J. Bagdoyan Director, Audit Services Forensic Audits and Investigative Service, U.S. Government Accountability Office (GAO); and Shantanu Agrawal, M.D., Deputy Administrator and Director Center for Program Integrity, CMS. During the hearing Members and witnesses discussed a recently-released (June 2nd) GAO report entitled “Medicaid: CMS Could Take Additional Actions to Help Improve Provider and Beneficiary Fraud Controls”. In the report, GAO recommended that CMS issue guidance to states to better identify beneficiaries who are deceased and provide states with additional information from the Provider Enrollment, Chain and Ownership System (PECOS). More information on the hearing may be found here.
• On June 3, 2015, the House Veterans Affairs Committee convened a hearing entitled “Assessing VA’s Ability to Promptly Pay Non-VA Providers”. Witnesses for the hearing included Asbel Montes, vice President, Government Relations and Reimbursement, Acadian Companies; Vincent Leist, President and CEO, North Arkansas Regional Medical Center; Sam Cook, president, National Mobility Equipment Dealers Association; Gene Migliaccio, Deputy Chief Business Officer for Purchased Care, Veterans Health Administration, Department of Veterans Affairs; and Joseph Enderle director, Purchased Care Operations, Veterans Health Administration, Department of Veterans Affairs. More information on the hearing may be found here.
• On June 4, 2015 the Republican Study Committee (RSC) released “The American Health Care Reform Act (AHCRA),” to “…repeal Obamacare, establish patient-centered reforms and develop free-market solutions for America’s health care sector”. The plan was drafted by the RSC’s Health Care Task Force, co-chaired by Rep. Phil Roe, M.D. (R-TN), who introduced the bill, and Rep. Austin Scott (R-GA). Click here to read a two page summary of the AHCRA. Click here to read the section-by-section summary of the AHCRA.

III. REPORTS, STUDIES, & ANALYSES

• On June 4, 2015, the Congressional Budget Office (GAO) released a cost estimate for the “Protect Medical Innovation Act of 2015” (HR 160). H.R. 160 would amend the Internal Revenue Code to repeal the medical device excise tax. Under current law, a tax of 2.3 percent is imposed on the sale of medical devices by the manufacturer or importer. The tax went into effect on January 1, 2013, and its repeal by H.R. 160 would be effective starting in the first calendar quarter after the date of enactment. The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 160 would reduce revenues, thus increasing federal deficits, by about $24.4 billion over the 2015-2025 period. The estimate assumes enactment in the last quarter of fiscal year 2015.
• On June 4, 2015, CMS updated its Eligibility Determinations and Enrollment Report for Medicaid and CHIP, now current through March 2015. According to the report, there were over 71 million individuals enrolled in Medicaid and CHIP as of April 1st. Among states that had implemented the Medicaid expansion and were covering newly eligible adults in March 2015, Medicaid and CHIP enrollment rose by approximately 28.1 percent compared to the July-September 2013 baseline period, while states that have not, to date, expanded Medicaid reported an increase of nearly 8.6 percent over the same period.
• This week the Kaiser Family Foundation released a report entitled “State-by-State Effects of a Ruling for the Challengers in King v. Burwell”. The Supreme Court is expected to issue a ruling by the end of June in King v. Burwell, a case challenging the legality of health insurance subsidies provided to low- and middle-income people in the 34 states where the federal government is operating the insurance Marketplace under the ACA. The document released this week shows for each state: The number of people receiving premium subsidies as of March 31, 2015, who would lose them if the Court finds for the challengers; the total amount of federal subsidy dollars; the average subsidy (or average premium tax credit) that subsidized enrollees have qualified for; and the average increase in premiums that subsidized enrollees would face if the subsidies are disallowed.

IV. OTHER HEALTH POLICY NEWS

• On Monday June 1st, CMS released the third annual update to Medicare hospital inpatient and outpatient charge data; and the first annual update on physician medical services and payments under Medicare part B.
  • Hospital Utilization: The public data now includes inpatient and outpatient hospital charge data for 2013, as well as data released for years 2011 and 2012, and shows what different hospitals in all 50 states and Washington, D.C. charge for similar services. The data include information comparing the average hospital charges for services that may be provided in connection with the 100 most common Medicare inpatient stays, such as services provided in connection with certain joint replacements or services provided to treat chest pain. The data also provide average Medicare payment information for the top 100 inpatient discharges to provide a point of comparison against hospital charges for the services. Information on the number of discharges for each service at each hospital is also provided to describe the volume of service utilization.
  • Physician Payment: The Physician and Other Supplier Public Use File (PUF), now available for 2012 and 2013, has information on the number and type of health care services that individual physicians and certain other health care providers furnished under the Medicare Part B fee-for-service (FFS) program, as well as information on the amount that Medicare paid them for those services. The new 2013 data set has information for over 950,000 distinct health care providers in all 50 states, DC and Puerto Rico who collectively received $90 billion in Medicare payments.
• On June 1st, CMS publicly posted health insurance companies’ proposed rate increases of 10 percent or more for the 2016 coverage year. The proposed rate increases were submitted by health insurance companies for health insurance plans inside and outside the Health Insurance Marketplaces in all states using the HealthCare.gov Marketplace enrollment platform and some State-based Marketplaces. CMS has posted these proposed increases to the rate review site at RateReview.HealthCare.gov. Rate review allows for officials, experts, and the public to examine and question why a particular health insurance plan’s yearly increase in its premium is “high” (10 percent or greater) before it is finalized. The rates posted this week will be finalized by October. “The rate review process kicks off an important set of steps designed to provide consumers and others the opportunity to weigh in on proposed rate increases of 10 percent or more," said Acting Administrator Andy Slavitt. "These specific rates will be subject to vigorous rate review and revision and the final rates consumers will see this Fall will reflect the breadth of choice and competition in the Marketplace.” Final rates for all states will be published no later than November 1, 2015.