A&B Healthcare Week in Review, September 18, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On September 14, 2015, the Food and Drug Administration (FDA) released a final rule implementing the Agency’s authority to destroy a drug valued at $2,500 or less (or such higher amount as the Secretary of the Treasury may set by regulation) that has been refused admission into the United States under the Federal Food, Drug, and Cosmetic Act (the FD&C Act), by issuing a rule that provides to the owner or consignee notice and an opportunity to appear and introduce testimony to the Agency prior to destruction. This regulation is authorized by amendments made to the FD&C Act by the Food and Drug Administration Safety and Innovation Act (FDASIA). Implementation of this authority will allow FDA to better protect the public health by providing an administrative process for the destruction of certain refused drugs, thus increasing the integrity of the drug supply chain.
• On September 18, 2015, FDA announced the availability of additional draft and revised draft product-specific bioequivalence (BE) recommendations. The recommendations provide product-specific guidance on the design of BE studies to support abbreviated new drug applications (ANDAs). In the Federal Register of June 11, 2010, FDA announced the availability of a guidance for industry entitled “Bioequivalence Recommendations for Specific Products” that explained the process that would be used to make product-specific BE recommendations available to the public on FDA’s Web site. The BE recommendations identified in this notice were developed using the process described in that guidance. Comments should be submitted within 60 days of Federal Register publication, which is expected to be September 21st.
• On September 14, 2015, FDA announced that a proposed information collection activity entitled “Guidance for Industry on Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification” had been submitted to the Office of Management and Budget (OMB) for review and clearance. Beginning January 1, 2015, section 582 of the FD&C Act requires trading partners, upon determining that a product in their possession or control is illegitimate, to notify (1) FDA and (2) all immediate trading partners that they have reason to believe may have received the illegitimate product, not later than 24 hours after making the determination. Manufacturers are additionally required under section 582(b)(4)(B)(ii)(II) of the FD&C Act to notify FDA, and any immediate trading partners that the manufacturer has reason to believe may possess a product manufactured by or purported to be manufactured by the manufacturer, not later than 24 hours after the manufacturer determines or is notified by FDA or a trading partner that there is a high risk that a product is illegitimate. In addition, in accordance with section 582(h)(2) of the FD&C Act, the draft guidance sets forth the process by which trading partners must terminate the notifications using Form FDA 3911, in consultation with FDA, regarding illegitimate product and, for a manufacturer, a product with a high risk of illegitimacy, under section 582(b)(4)(B), (c)(4)(B), (d)(4)(B), and (e)(4)(B). Comments on this information collection are due October 15, 2015.
• On September 16, 2016, the Veterans Affairs Department (VA) released a final rule entitled “Copayments for Medications in 2015”. This document adopts as a final rule, with changes, an interim final rule amending the Department of Veterans Affairs (VA) medical regulations to freeze the copayments required for certain medications provided by VA until December 31, 2015. Under that interim final rule, copayment amounts were maintained at the same rates as they were in 2014 (which were $8 for veterans in priority groups 2-6 and $9 for veterans in priority groups 7 and 8), and would have increased based on the prescription drug component of the Medical Consumer Price Index (CPI-P) on January 1, 2016. This final rule extends the current freeze for copayments through December 31, 2016.
• On September 17, 2015, FDA published an information collection activity entitled “Medical Device User Fee Small Business Qualification and Certification”. Comments are due November 16, 2015.
• On September 17, 2015, the Office of Personnel Management (OMB) issued a final rule entitled “Federal Employees Health Benefits Program Self Plus One Enrollment Type”. OPM is issuing this final rule to amend the Federal Employees Health Benefits (FEHB) Program regulations to add an additional enrollment type called “self plus one” for premium rating and family member eligibility purposes. The rule is effective immediately.
• On September 18, 2015, the Centers for Medicare & Medicaid Services (CMS) solicited public comment on a revised information collection activity entitled “Hospital and Hospital Health Care Complex Cost Report”, which has just been submitted to OMB for review. The revisions made to the hospital cost report are in accordance with the statutory requirement for hospice payment reform in §3132 of the Patient Protection and Affordable Care Act (ACA) (March 23, 2010) and the statutory requirement establishing a prospective payment system for Federally Qualified Health Centers in §10501(i)(3)(A) of the ACA, codified in section 1834(o) of the Act. Comments are due October 19, 205.
• On September 18, 2015, CMS released a notice entitled “Part C Medicare Advantage Reporting Requirements and Supporting Regulations”. Based on internal review, this notice withdraws a portion of a prior notice (August 24, 2015) concerning the same subject matter and corrects that notice by adding a new requirement which was inadvertently omitted from that notice. Specifically, CMS proposes to add a new Payments to Providers reporting section to capture data related to MA organizations’ value-based payments. Upon OMB approval, the Payments to Providers section would add 10 data elements. Comments are due October 19, 2015.
• On September 18, 2015, the Internal Revenue Service (IRS) released Notice 2015-68, Information Reporting on Minimum Essential Coverage. This notice advises taxpayers that the Treasury Department and the Internal Revenue Service intend to propose regulations under § 6055 of the Internal Revenue Code (1) providing that health insurance issuers must report coverage in catastrophic health insurance plans described in § 1302(e) of the Affordable Care Act enrolled in through an Affordable Insurance Exchange (Exchange, also known as a Health Insurance Marketplace), (2) allowing electronic delivery of statements reporting coverage under expatriate health plans unless the recipient explicitly refuses consent or requests a paper statement, (3) allowing filers reporting on insured group health plans to use a truncated taxpayer identification number (TTIN) to identify the employer on the statement furnished to a taxpayer, and (4) specifying when a provider of minimum essential coverage is not required to report coverage of an individual who has other minimum essential coverage. This notice also invites comments on issues relating to solicitation of taxpayer identification numbers (TINs) of covered individuals; advises that the governments of United States possessions or territories, namely American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands, are not required to report coverage under Medicaid and the Children’s Health Insurance Program (CHIP); and provides that the state government agency sponsoring coverage under the Basic Health Program is required to report Basic Health Program coverage.
• On September 18, 2015, FDA announced that it is requesting that any consumer organizations interested in participating in the selection of a voting consumer representative to serve on the Patient Engagement Advisory Committee (the Committee) notify FDA in writing. FDA is also requesting nominations for a voting consumer representative to serve on the Committee. Nominees recommended to serve as a voting consumer representative may either be self-nominated or may be nominated by a consumer organization. Nominations will be accepted for the current vacancy effective with this notice. Nominations should be submitted within 30 days after the notice is published in the Federal Register, which is expected to be September 21st.
• On September 18, 2015, the Department of Veterans Affairs released a notice entitled “Reasonable Charges for Inpatient MS-DRGs and SNF Medical Services; V3.17, Fiscal Year 2016 Update”. This document updates the acute inpatient and the skilled nursing facility/sub-acute inpatient facility charges. The updated charges are based on the 2016 Medicare severity diagnosis related groups (MS-DRGs).

Event Notices

• November 19, 2015: FDA will convene a public meeting of the Pediatric Oncology Subcommittee of the Oncologic Drugs Advisory Committee on November 19th from 8:00 AM to 1:00 PM at the FDA’s White Oak Campus in Silver Spring Maryland. Information will be presented to gauge investigator interest in exploring potential pediatric development plans for two products in various stages of development for adult cancer indications. The subcommittee will consider and discuss issues concerning diseases to be studied, patient populations to be included, and possible study designs in the development of these products for pediatric use. The discussion will also provide information to the Agency pertinent to the formulation of written requests for pediatric studies, if appropriate. The products under consideration are: (1) ABT-414, application submitted by AbbVie, Inc., and (2) Lenvatinib, application submitted by Eisai, Inc.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On September 16, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee convened a hearing entitled “Achieving the Promise of Health Information Technology: Improving Care through Patient Access to their Records”. The hearing will take place on Wednesday September 16th at 10:00 AM in 430 Dirksen Senate Office Building. Witnesses for the hearing will include: Raj Ratwani, PhD, Scientific Director, National Center For Human Factors In Healthcare, MedStar Health, Assistant Professor of Emergency Medicine, Georgetown University School of Medicine; Kathy Giusti, MBA, Founder And Executive Chairman. Multiple Myeloma Research Foundation; and Eric Dishman, Intel Fellow, General Manager For Health And Life Sciences, Intel Corporation. During the hearing, Committee Chairman Lamar Alexander (R-TN) asserted that final rules for Stage 3 of Meaningful Use should be delayed until January 1, 2017, and Stage 3 requirements should be phased in at a rate which “reflects the success of the program”. He said that proposed modifications to Stage 2 requirements should be adopted immediately. More information on the hearing may be found here.
• On September 17, 2015, the Senate Health, Education, Labor and Pensions Subcommittee on Primary Health and Retirement Security convened a hearing entitled “Biosimilar Implementation: A Progress Report from FDA”. The sole witness was Dr. Janet Woodcock, M.D., Director of the Food and Drug Administration’s Center for Drug Evaluation and Research. More information on the hearing may be found here.

House of Representatives

• On September 17, 2015, the House Energy & Commerce Health Subcommittee convened a hearing on legislation to ban providers found to be violating the Born-Alive Infants Protection Act of 2002 and the Partial-Birth Abortion Ban of 2003 from participating in Medicare. More information on the hearing may be found here. Also of note, on September 18, 2015, the House passed the Defund Planned Parenthood Act (H.R. 3134) which would bar for one year, federal funding for Planned Parenthood and its affiliates unless they certify that, during that period, they will not perform abortions or provide funds to other entities that perform abortions. The measure passed by a vote of 241-187.
• On September 17, 2015, the House Ways and Means Committee convened a markup of the following bills:
  • H.R. 2061, “EACH Act.”
  • H.R. 1270, “Restoring Access to Medication Act of 2015.”
  • H.R. 2940, “Educator Tax Relief Act of 2015.”
  • H.R. 765, “Restaurant and Retail Jobs and Growth Act.”
  • H.R. 2510, “A bill to amend the Internal Revenue Code of 1986 to modify and make permanent bonus depreciation.”
  • H.R. 961, “A bill to amend the Internal Revenue Code of 1986 to permanently extend the subpart F exemption for active financing income.”
  • H.R. 1430, “Permanent CFC Look-Through Act of 2015.”

All seven bills were ordered favorably reported as amended to the House of Representatives. More information on the markup may be found here.

• On September 18, 2015, the House Energy & Commerce Subcommittee on Health convened a hearing entitled "Improving the Medicaid Program for Beneficiaries." The legislation under consideration at the hearing included:
  • H.R. 209, the Ensuring Access to Clinical Trials Act of 2015 
  • H.R. 670, the Special Needs Trust Fairness Act of 2015 
  • H.R. 3243, To amend title XI of the Social Security Act to clarify waiver authority regarding programs of all-inclusive care for the elderly (PACE programs) 
  • H.R. ___, the Medicaid DOC Act 
    
    More information on the hearing may be found here.

III. REPORTS, STUDIES, & ANALYSES

• On September 14, 2015, the Government Accountability Office (GAO) released a report entitled “Medicare Part D: Changes Needed to Improve CMS’s Recovery Audit Program Operations and Contractor Oversight”. CMS, within the Department of Health and Human Services (HHS), implemented the Part D recovery audit contractor (RAC) program in January 2011 by undertaking various activities, including establishing a statement of objectives and conducting a solicitation process to select a RAC to identify improper payments. In this report, GAO finds that CMS’s challenges in setting expectations about the work the Part D RAC would conduct and establishing the length of time required for CMS and the RAC to reach project milestones hampered Part D RAC program implementation. “As a result of CMS’s challenges in setting expectations and establishing realistic timelines as it implemented the RAC program,” GAO writes, “the RAC did not have a clear understanding about the work it should perform, and CMS recovered improper payments for Part D more than a year after it had projected.” According to the report, as of May 2015, CMS had collected less than $10 million in improper payments, and had not approved the RAC to perform new audit work since March 2014.
• On September 14, 2015, the HHS Office of Inspector General (OIG) released a report entitled “CMS Did Not Always Manage and Oversee Contractor Performance for the Federal Marketplace as Required by Federal Requirements and Contract Terms”. Beginning on October 1, 2013, the Federal marketplace offered private insurance plans, known as qualified health plans, and enrolled individuals in those plans through its HealthCare.gov Web site or through other means. OIG reviewed 20 of 62 contracts that CMS identified as awarded for the development, implementation, and operation of the Federal marketplace to determine the contract requirements for monitoring and overseeing contractor performance. According to the report, contracting officers and contracting officer's representatives did not always manage and oversee contractor performance as required by Federal requirements and contract terms. OIG says that CMS did not always comply with Federal regulations regarding designation and certification requirements for contracting officer's representatives. Also, contracting records did not always include all critical contract deliverables and other management and oversight documentation. Because CMS did not always provide adequate contract management and oversight for Federal marketplace contracts, OIG found, (1) contractor delays and performance issues were not always identified, (2) a contractor incurred unauthorized costs that increased the cost of the contract, (3) contracting officers in all Government agencies did not have access to contractor past-performance evaluations when making contract awards, and (4) critical deliverables and management decisions were not properly documented.
• On September 14, 2015, the Journal of the American Medical Association (JAMA) published online an article entitled “Patient Characteristics and Differences in Hospital Readmission Rates”. Under current law, Medicare penalizes hospitals with higher than expected readmission rates by up to 3% of annual inpatient payments. Expected rates are adjusted only for patients’ age, sex, discharge diagnosis, and recent diagnoses. The study sought to assess the extent to which a comprehensive set of patient characteristics accounts for differences in hospital readmission rates, using survey data from the Health and Retirement Study and linked Medicare claims. The data showed that patient characteristics not included in Medicare’s current risk-adjustment methods explained much of the difference in readmission risk between patients admitted to hospitals with higher vs lower readmission rates. Hospitals with high readmission rates may therefore be penalized to a large extent based on the patients they serve, the authors suggest.
• On September 15, 2015, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released a preliminary estimate of the net budgetary effect of eliminating the requirement that individuals purchase health insurance and associated penalties established by the Affordable Care Act. CBO and JCT estimate that eliminating that requirement and the associated penalties would reduce the deficit by about $305 billion over the 2015-2025 period. That total consists of a $311 billion decrease in direct spending partially offset by a $6 billion decrease in revenues.
• On September 16, 2015, the United States Census Bureau reported that the portion of the U.S. population without health insurance declined by 2.9 percentage points to 10.4 percent in 2014, a reduction of 8.8 million people from 2013. The full report, entitled “Income, Poverty and Health Insurance Coverage in the United States: 2014”, may be found here.
• On September 16, 2015, the Government Accountability Office (GAO) released a report entitled “State Health Insurance Marketplaces: CMS Should Improve Oversight of State Information Technology Projects”. The objectives of this study were to (1) determine how states have used federal funds for IT projects to support their marketplaces and the status of the marketplaces, (2) determine CMS's and states' roles in overseeing these projects, and (3) describe IT challenges states have encountered and lessons learned. To do this, GAO surveyed the 50 states and the District of Columbia, reviewed relevant documentation from the states and CMS, and interviewed CMS officials. GAO reports that the specific amount spent on marketplace-related projects was uncertain, as only a selected number of states reported to GAO that they tracked or estimated this information. Regarding the status of states' marketplace IT projects, 14 states with state-based marketplaces had developed and were operating IT systems to support their marketplaces, but, as of February 2015, not all system functions were complete. In addition, as of November 2014, 7 of 37 states using the federal marketplace system could not transfer health insurance applications between their state Medicaid systems and a key component of the federal marketplace or had not completed testing or certification of these functions. GAO is recommending that CMS define and communicate its oversight roles and responsibilities, ensure senior executives are involved in funding decisions for state IT projects, and ensure that states complete testing of their systems before they are put into operation. HHS concurred with GAO's recommendations.

IV. OTHER HEALTH POLICY NEWS

• On September 15, 2015, the President Barack Obama announced his intent to nominate a number of individuals to key administration posts, including Dr. Rob Cliff to be the FDA Commissioner. The position was vacated in March with the resignation of Dr. Margaret Hamburg, who served six years as Commissioner in the Obama Administration. Dr. Califf is currently Deputy Commissioner for Medical Products and Tobacco at the FDA, a position he has held since March 2015. Dr. Califf has also served in various capacities at Duke University School of Medicine and the Duke University Medical Center between 1982 and 2015.
• On September 15, 2015, HHS announced that it has awarded nearly $500 million in Affordable Care Act funding to health centers nationwide. The awards include approximately $350 million for 1,184 health centers to increase access to services such as medical, oral, behavioral, pharmacy, and vision care. Nearly $150 million will be awarded to 160 health centers for facility renovation, expansion, or construction to increase patient or service capacity. “These awards will give 1.4 million more Americans across every state access to comprehensive, quality health care,” said HHS Secretary Sylvia M. Burwell. “ With these awards, health centers will be able to do things like increase their hours of operation, hire more behavioral health providers, add dental facilities, better treat patients with opioid use disorders, and help people get coverage through the Health Insurance Marketplace and make the journey from coverage to primary care.” More information on the awards may be found here.
• On September 15, 2015, HHS, the U.S. Department of Agriculture (USDA), and the U.S. Department of Defense (DoD) announced the appointment of nationally recognized experts to the Presidential Advisory Council on Combating Antibiotic-Resistant Bacteria (the Advisory Council). Established by Executive Order 13676, signed by President Obama on Sept. 18, 2014, the Advisory Council, comprising fifteen experts and five organizations, will provide advice, information, and recommendations to the HHS Secretary on programs and policies related to combating antibiotic-resistant bacteria. The Advisory’s Council’s inaugural meeting, open to the public, will be held Tuesday, Sept. 29, 2015, in the Great Hall of the Hubert H. Humphrey Building, 200 Independence Ave S.W., Washington, D.C. 20201. More information may be found here.
• The Medicaid and CHIP Payment and Access Commission (MACPAC) convened a series of meetings in Washington, DC on September 17th. The agenda included sessions on the future of children’s coverage, Medicaid Disproportionate Share Hospital (DSH) payments, and Medicaid spending trends. The agenda, briefs, and presentations may be found here.