A&B Healthcare Week In Review, September 25, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On September 25, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule entitled “Medicare Program: Medicare Clinical Diagnostic Laboratory Tests Payment System”. This proposed rule would significantly revise the Medicare payment system for clinical diagnostic laboratory tests and would implement other changes required by section 216 of the Protecting Access to Medicare Act of 2014. Section 216 of the Protecting Access to Medicare Act of 2014 (PAMA) added section 1834A to the Social Security Act, which requires revisions to the payment and coverage methodologies for clinical laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS). Under section 1834A, applicable laboratories will be required to report private payor payment rates and corresponding volumes of tests. The statutorily required collection of private payor rates for laboratory tests from applicable laboratories will be the basis for the revised payment rates for most laboratory tests on the CLFS beginning in January 2017. Comments on the proposed rule are due November 24, 2015. A CMS Fact Sheet on the proposed rule may be accessed here.
• On September 24, 2015, the Food and Drug Administration (FDA) announced an opportunity for public comment on the interim results of a study of the workload volume and full costs associated with the process for the review of biosimilar biological product applications. This study was conducted by an independent consulting firm, and it fulfills FDA’s statutory requirement under the first authorization of the Biosimilar User Fee Act of 2012 (BsUFA), which enables FDA to collect user fees for the review of biosimilar biological applications for fiscal years 2013 to 2017. This notice solicits comments on the interim report. The report is available here. Comments on the report must be submitted by October 26, 2015.
• On September 18, 2015, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) released a guidance document entitled “CCIIO Technical Guidance (CCIIO 2015—0002): Question and Answer Regarding the Medical Loss Ratio (MLR) Reporting and Rebate Requirements for the 2014 MLR Reporting Year”. The purpose of this bulletin is to provide guidance regarding limited circumstances under which a health insurance issuer will not be treated as out of compliance with the regulatory deadline for 2014 reporting year MLR rebate distribution to policyholders and enrollees under section 2718 of the Public Health Service Act (PHS Act) and 45 CFR §158.240. These limited circumstances are if the issuer (1) pays the rebates no later than October 30, 2015, and (2) timely submitted its 2014 MLR Reporting Form and Risk Corridors Plan-Level Data Form but was required to resubmit those forms in September 2015.
• On September 18, 2015, CCIIO released a Frequently Asked Questions (FAQ) document regarding agents and brokers operating in the Marketplace. Some questions covered in the guidance include: 1) What do agents and brokers need to do to assist clients in the SHOP Marketplace? 2) Where do agents and brokers registered with the SHOP Marketplace add their National Producer Number (NPN) on the SHOP Marketplace application? And 3) Can an employer change the agent or broker associated with their account in the SHOP Marketplace?
• On September 18, 2015, CCIIO released an FAQ document entitled “2016 Employer Notice Program”. The document provides information regarding the employer notice program. The Affordable Care Act and implementing regulations require each Health Insurance Marketplace to notify any employer whose employee was determined eligible for advance premium tax credits (APTC) and cost sharing reductions (CSRs) because the employee attested that he or she was neither enrolled in employer sponsored coverage nor eligible for employer coverage that is affordable and meets the minimum value standard. Starting in 2016, the FFM will notify certain employers whose employees enrolled in Marketplace coverage with APTC. The FFM will send notices to employers if the employee received APTC for at least one month in 2016 and if the FFM has an address for the employer.
• On September 21, 2015, FDA announced that a proposed information collection activity entitled “Request for Samples and Protocols” had been submitted to the Office of Management and Budget (OMB) for review and clearance. Comments on the document are due October 22, 2015.
• On September 22, 2015, CMS announced that a proposed information collection activity entitled had been submitted to OMB for review. The items under review are the following: 1) Solicitation for Applications for Medicare Prescription Drug Plan 2017 Contracts; and 2) Part C -Medicare Advantage and 1876 Cost Plan Expansion Application. Comments are due October 26, 2015. More information may be found here.
• On September 22, 2015, CMS issued a notice setting out a summary of the use and burden associated with the following information collections: CMS-R-262 Contract Year 2017 Plan Benefit Package (PBP) Software and Formulary Submission and CMS-10142 Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans and Prescription Drug Plans (PDP). Comments on these items are due November 23, 2015. More information may be found here.
• On September 23, 2015, CMS announced an opportunity for the public to comment on the following information collection activities: 1) Physician Quality Reporting System (PQRS) and the Electronic Prescribing Incentive (eRx) Program Data Assessment, Accuracy and Improper Payments Identification Support; 2) Data Collection for Medicare Beneficiaries Receiving Beta Amyloid Positron Emission Tomography (PET) for Dementia and Neurodegenerative Disease. Comments are due November 24, 2015. More information may be found here.
• On September 25, 2015, the Centers for Disease Control and Prevention (CDC) announced that it is seeking nominations of individuals qualified to serve as members of the Community Preventive Services Task Force (CPSTF). Nominations are due November 9, 2015. More information may be found here.
• On September 25, 2015, FDA announced the fee rate for using a rare pediatric disease priority review voucher for fiscal year (FY) 2016. The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Food and Drug Administration Safety and Innovation Act (FDASIA), authorizes FDA to determine and collect rare pediatric disease priority review user fees for certain applications for review of human drug or biological products when those applications use a rare pediatric disease priority review voucher. These vouchers are awarded to the sponsors of certain rare pediatric disease product applications, submitted 90 days or more after July 9, 2012, upon FDA approval of such applications. The amount of the fee for using a rare pediatric disease priority review voucher is determined each FY based on the difference between the average cost incurred by FDA in the review of a human drug application subject to priority review in the previous FY, and the average cost incurred in the review of an application that is not subject to priority review in the previous FY. This notice establishes the rare pediatric disease priority review fee rate for FY 2016 and outlines the payment procedures for such fees.

Event Notices

• October 7, 2015: CMS has announced a meeting of the Advisory Panel on Outreach and Education (APOE) 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 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. It will take place Wednesday, October 7, 2015, 8:30 a.m. to 4:00 p.m. eastern daylight time (e.d.t). in Washington, DC.
• December 18, 2105: The FDA is announcing a public meeting on the reauthorization of the Biosimilar User Fee Act (BsUFA) for fiscal years (FYs) 2018 through 2022. BsUFA authorizes FDA to collect user fees for the process for the review of biosimilar biological products. The current legislative authority for BsUFA expires in September 2017. At that time, new legislation will be required for FDA to continue collecting user fees in future fiscal years. The Federal Food, Drug, and Cosmetic Act (the FD&C Act) requires that FDA begin the BsUFA reauthorization process by publishing a notice in the Federal Register requesting public input and holding a public meeting where the public may present its views on the reauthorization. FDA invites public comment on the BsUFA performance goals as the Agency begins the process to reauthorize the program in FYs 2018- 2022. The meeting will take place on December 18, 2015, from 9:00 AM to 2:00 PM in Silver Spring, MD. More information may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On Tuesday September 22nd, the Senate Judiciary Committee convened a hearing entitled “Examining Consolidation in the Health Insurance Industry and its Impact on Consumers”. Witnesses for the hearing included: Mr. Mark T. Bertolini, Chairman And Chief Executive Officer, Aetna, Inc.; Mr. Joseph R. Swedish, President And Chief Executive Officer, Anthem, Inc.; Dr. Paul Ginsburg, Norman Topping Chair In Medicine And Public Policy, University of Southern California; Dr. Leemore S. Dafny, Herman Smith Research Professor In Hospital And Health Services, Kellogg School of Management, Northwestern University; Mr. Richard J. Pollack, President And Chief Executive Officer, American Hospitals Association; and Mr. George Slover, Senior Policy Counsel, Consumer Union. More information on the hearing may be found here.

House of Representatives

• On September 25, 2015, news broke that House Speaker John Boehner (R-OH) would resign from Congress at the end of October. “My first job as speaker is to protect the institution,” Mr. Boehner said at a news conference at the Capitol. “It had become clear to me that this prolonged leadership turmoil would do irreparable harm to the institution.” Boehner has been in Congress since 1990.

III. REPORTS, STUDIES, & ANALYSES

• On September 21, 2015, the Office of Inspector General (OIG) released a report entitled “CMS Did Not Identify All Federal Marketplace Contract Costs and Did Not Properly Validate the Amount to Withhold for Defect Resolution on the Principal Federal Marketplace Contract”. 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. However, consumers experienced significant problems accessing the Web site, including slow response times, errors that dropped the consumer out of the enrollment process, and unplanned outages that made enrollment either difficult or impossible. The problems that consumers experienced raised concerns about the Department’s oversight of the contractors involved in the development, implementation, and operation of the Federal marketplace. OIG received requests from the Department and Congress to review the work performed by contractors and CMS’s payment for, and management and oversight of, the Federal marketplace. According to the report findings, CMS did not accurately identify all obligations and expenditures related to the Federal marketplace. For 6 of the 62 contracts, CMS recorded $24,336,404 of obligations and $22,885,725 of expenditures in the Healthcare Integrated General Ledger Accounting System (HIGLAS) but did not identify them as being related to the Federal marketplace. OIG recommended that CMS include all relevant contract costs when it identifies total obligations and expenditures related to the design, development, and operation of the Federal marketplace and review all charges submitted by CGI Federal for the FFM contract and make a final determination on the appropriate amount to withhold for correcting defects by validating the $267,420 withheld for the fixed fee.
• On September 22, 2015, the Congressional Budget Office (CBO) released a report entitled “Budgetary Effects of Legislation That Would Permanently Prohibit the Availability of Federal Funds to Planned Parenthood”. CBO has estimated the effect on direct spending of legislation that would permanently prohibit Planned Parenthood from receiving federal funds. CBO estimates that implementing such a bill would increase direct spending by $130 million over the 2016-2025 period. The difference in the estimated costs reflects the different time periods over which use of federal funds would be prohibited.
• On September 22, 2015, the Institute of Medicine (IOM) released a report entitled “Improving Diagnosis in Health Care”. Improving Diagnosis in Health Care, a continuation of the landmark Institute of Medicine reports To Err is Human: Building a Safer Health System (2000) and Crossing the Quality Chasm: A New Health System for the 21st Century (2001) finds that diagnosis -- and, in particular, the occurrence of diagnostic errors -- has been largely unappreciated in efforts to improve the quality and safety of health care. The result of this inattention is significant: the committee concluded that most people will experience at least one diagnostic error in their lifetime, sometimes with devastating consequences. According to a report abstract, “Urgent change is warranted to address this challenge. Improving diagnosis will require collaboration and a widespread commitment to change among health care professionals, health care organizations, patients and their families, researchers, and policy makers. The recommendations from Improving Diagnosis in Health Care contribute to the growing momentum for change in this crucial area of health care quality and safety.”
• On September 22, 2015, the Kaiser Family Foundation released a report entitled “2015 Employer Health Benefits Survey”, which finds a modest rise in health premiums this year. According to the report, average annual premiums in 2015 are $6,251 for single coverage and $17,545 for family coverage. The average single and family premiums increased 4% in the last year. The average family premium has increased 61% since 2005 and 27% since 2010. The average family premium for workers in small firms (3-199 workers) ($16,625) is significantly lower than average family premiums for workers in larger firms (200 or more workers) ($17,938).

IV. OTHER HEALTH POLICY NEWS

• On September 22, 2015, Presidential candidate Hillary Clinton unveiled her plan for lowering prescription drug costs. Some of the proposals outlined in her plan include: 1) require drug companies that benefit from taxpayer support to “invest in research, not marketing or profits”; 2) increase competition for prescription drugs, including specialty drugs; 3) prohibit “pay for delay” arrangements; ad 4) allow Medicare to negotiate drug and biologic prices. More information on the plan may be found here.
• On September 22, the FDA announced it has awarded 18 new research grants totaling more than $19 million to boost the development of products for patients with rare diseases. These new grants were awarded to principal investigators in ten states, with research spanning clinical sites domestically and internationally. “The FDA is in a unique position to help those who suffer from rare diseases by offering important incentives to promote the development of products, one of which is our grants program,” said Gayatri R. Rao, M.D., J.D., director of the FDA’s Office of Orphan Product Development. “The grants awarded this year support much-needed research in 17 different rare diseases, many of which have little, or no, available treatment options.” The FDA awards the grants through the Orphan Products Grants Program to encourage clinical development of drugs, biologics, medical devices, or medical foods for use in rare diseases. The grants are intended for clinical studies evaluating the safety and effectiveness of products that could either result in, or substantially contribute to, the FDA approval of products.
• On September 25, 2015, the Board of Directors of the Pharmaceutical Research and Manufacturers of America (PhRMA) announced that Stephen J. Ubl will be the next president and chief executive officer (CEO) of the association. Ubl joins PhRMA after more than ten years as the president and CEO of the Advanced Medical Technology Association (AdvaMed), the world’s largest medical technology association. He succeeds John J. Castellani who announced earlier this year that he will be retiring at the end of the year.
• On September 25, 2015, CMS announced that it has awarded $110 million to 17 national, regional, or state hospital associations and health system organizations to serve as the second round of Hospital Engagement Networks. The period of performance for this second round of Hospital Engagement Networks is one year and begins in September 2015. The contracts are part of the Partnership for Patients, a nationwide public-private collaboration to keep patients from being harmed while in the hospital and heal without complication once they are discharged.