A&B Healthcare Week in Review, October 23, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On October 22, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule entitled “Basic Health Program; Federal Funding Methodology for Program Years 2017 and 2018”. This document provides the methodology and data sources necessary to determine federal payment amounts made in program years 2017 and 2018 to states that elect to establish a Basic Health Program under the Affordable Care Act (ACA) to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Marketplaces. Comments on the proposed rule are due November 23, 2015.
• On October 16, 2015, CMS, the National Institute of Mental Health and the Substance Abuse and Mental Health Services Administration released an informational bulletin entitled “Coverage of Early Intervention Services for First Episode Psychosis”. This Informational Bulletin is intended to assist states in designing a benefit package to guide early treatment intervention options that will meet the needs of youth and young adults experiencing first episode psychosis.
• On October 20, 201, the Health Resources and Services Administration (HRSA) released a notice entitled “Enrollment and Re-Certification of Entities in the 340B Drug Pricing Program and Collection of Manufacturer Data to Verify 340B Drug Pricing Program Ceiling Price Calculations”. Section 602 of Public Law 102-585 provides that a manufacturer who sells covered outpatient drugs to eligible entities must sign a Pharmaceutical Pricing Agreement (PPA) with the Secretary of Health and Human Services (HHS) in which the manufacturer agrees to charge a price for covered outpatient drugs that will not exceed an amount determined under a statutory formula (“ceiling price”). A manufacturer subject to a PPA must offer all covered outpatient drugs at no more than the ceiling price to a covered entity listed in the 340B Program database. The purpose of this revision is to include an addendum to the PPA to incorporate the administrative requirement for manufacturer integrity provisions directly addressed in the Affordable Care Act. Comments on this proposed revision are due December 21, 2015.
• On October 20, 2015, CMS released a notice entitled “HHS-Developed Risk Adjustment Model Algorithm “Do It Yourself (DIY)” Software Instructions”. This document provides instructions for the HHS risk adjustment models for the 2015 benefit year, with revisions from the software instructions posted on the Center for Consumer Information and Insurance Oversight (CCIIO) website on June 2, 2014.
• On October 19, 2015, CCIIO released an FAQ document entitled “Frequently Asked Questions on the Impact of PACE Act on State Small Group Expansion”. On October 7, 2015, the Protecting Affordable Coverage for Employees Act was enacted as Public Law 114-60 (PACE Act). The PACE Act amends section 1304(b) of the Affordable Care Act and section 2791(e) of the Public Health Service Act to revise the definition of small employer for purposes of the market reforms under title I of the Affordable Care Act and title XXVII of the Public Health Service Act. The PACE Act generally defines a small employer as an employer who employed an average of 1-50 employees on business days during the preceding calendar year, but provides States the option of extending the definition of small employer to include employers with up to 100 employees. The law became effective upon enactment. This document provides a review of frequently asked questions related to the Act and its impact on state small group expansion under the health law.
• On October 22, 2015, the Food and Drug Administration (FDA) announced the availability of a draft guidance for industry entitled “Selection of the Appropriate Package Type Terms and Recommendations for Labeling Injectable Medical Products Packaged in Multiple-Dose, Single-Dose, and Single-Patient-Use Containers for Human Use.” This guidance has been developed to provide industry with FDA's recommendations on the selection of appropriate package type terms and selection of appropriate discard statements for injectable medical products for human use, packaged in multiple-dose, single-dose, and single-patient-use containers. This guidance provides FDA's revised definitions for single-dose and multiple-dose containers, and introduces the definition of a new package type term, “single-patient-use” container. Marketing applications for such products include: New Drug Applications (NDAs), Abbreviated New Drug Applications (ANDAs), Biologics License Applications (BLAs), Premarket Approval Applications (PMAs), and Premarket Notifications under section 510(k) of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Comments are due December 21, 2015.

Event Notices

• November 18-19, 2015: The Clinical Laboratory Improvement Advisory Committee will convene a meeting November 18th and 19th. The agenda will include agency updates from CDC, CMS, and FDA. Presentations and discussions will include laboratory information exchange (interoperability); noninvasive prenatal testing; CLIA waiver guidance; the Institute of Medicine (IOM) report “Improving Diagnosis in Health Care;” and FDA guidance for laboratory developed tests. The meeting will take place in Atlanta, but will be available by webcast. More information may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

• On Tuesday October 20th, the House Energy & Commerce Health Subcommittee convened a hearing entitled "Examining Legislative Proposals to Combat our Nation's Drug Abuse Crisis." Witnesses for the hearing included Paul Halverson, dean, Dean Richard M. Fairbanks School of Public Health, Indiana University; Chapman Sledge, chief medical officer, Cumberland Heights; Robert Corey Waller, chairman, Legislative Advocacy Committee, American Society of Addiction Medicine; Allen Anderson, president, American Orthopedic Society for Sports Medicine; and Kenneth Katz, doctor, Department of Emergency Medicine, Section of Medical Toxicology, Lehigh Valley Health Network. During the hearing the panel will review the following bills:
  • HR 2536 — A bill to provide access to medication-assisted therapy, and for other purposes.
  • HR 2805 — Heroin and Prescription Opioid Abuse Prevention, Education, and Enforcement Act
  • HR 2872 — Opioid Addiction Treatment Modernization Act
  • HR 3014 — Medical Controlled Substances Transportation Act
  • HR 3537 — A bill to amend the Controlled Substances Act to clarify how controlled substance analogues are to be regulated, and for other purposes.
  • Draft Bill — Improving Treatment for Pregnant and Postpartum Women Act
  • Draft Bill — Co-Prescribing to Reduce Overdoses Act

More information on the hearing may be found here.

• On October 21st, the House Energy & Commerce Health Subcommittee convened a hearing entitled "Examining the Medicare Part D Medication Therapy Management Program." The sole witness for Panel I of the hearing was Tim Gronniger, Director of Delivery System Reform, Centers for Medicare and Medicaid Services. Witnesses for Panel II included Lawrence Kocot, Principal and National Leader, Center for Healthcare Regulatory Insight, KPMG LLP; Mark Merritt, President and CEO, Pharmaceutical Care Management Association; Jesse McCullough, Director, Field Clinical Services, Rite Aid Corporation; Richard Thomas Benson, Associate Director of Stroke, MedStar Washington Hospital Center. More information on the hearing may be found here.
• On October 23rd, the House Energy & Commerce Health Subcommittee convened a hearing entitled "Reviewing the Accuracy of Medicaid and Exchange Eligibility Determinations." More information on the hearing may be found here.
• On October 22nd, the House voted to approve the Restoring Americans’ Healthcare Freedom Reconciliation Act, which would repeal a number of elements of the ACA, including the medial device tax and the individual and employer mandates. The measure passed the House by a vote of 240-189, and heads to the Senate.

III. REPORTS, STUDIES, & ANALYSES

• On October 19, 2015, CMS released the “Evaluation and Monitoring of the Bundled Payments for Care Improvement Model 1 Initiative”. This Executive Summary first identifies BPCI Model 1 roles, provides a high-level model description, and details model Awardee characteristics. It then presents an overview of evaluation and monitoring activities under this contract, a synthesis and discussion of interim findings, and future activities under this contract.
• On October 19, 2015, the Congressional Budget Office (CBO) released “Overview of the Debt Limit and Extraordinary Measures”. The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. In March 2015, the debt ceiling was reached, and since then, the Secretary of the Treasury has taken a number of “extraordinary measures,” as authorized by law, to borrow additional funds without breaching the debt ceiling. CBO projects that if the debt limit remains unchanged, the Treasury will begin running a very low cash balance in early November, and the extraordinary measures will be exhausted and the cash balance entirely depleted sometime during the first half of November. At such time, the government would be unable to fully pay its obligations, a development that would lead to delays of payments for government activities, a default on the government’s debt obligations, or both.
• On October 20, 2015, CBO released a cost estimate for H.R. 3762, “Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015”. CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 3762 would decrease deficits by about $130 billion over the 2016-2025 period. The largest budgetary effects of enacting the legislation would stem from: 1) Repealing provisions of the Affordable Care Act that require most people to obtain health insurance coverage and large employers to offer their employees health insurance coverage that meets specified standards or pay penalties; and 2) Repealing the federal excise taxes imposed on the sale of medical devices and on certain employer-provided health coverage with premiums above specified amounts.
• On October 23, 2015, the Government Accountability Office (GAO) released a report entitled “Additional Federal Controls Needed to Improve Accuracy of Eligibility Determinations and for Coordination with Exchanges”. GAO found that CMS has excluded from review federal Medicaid eligibility determinations in the states that have delegated authority to the federal government to make Medicaid eligibility determinations through the federal exchange. GAO also found that CMS reviews of states’ expenditures do not use information obtained from the reviews of state eligibility determination errors to better target its review of Medicaid expenditures for the different eligibility groups. GAO concluded that CMS cannot identify erroneous expenditures due to incorrect eligibility determinations, which also limits its ability to ensure that state expenditures are appropriately matched with federal funds. GAO found that CMS’s policies and procedures do not sufficiently minimize the potential for coverage gaps and duplicate coverage in states with a federal exchange. GAO found that individuals transitioning from Medicaid to exchange coverage may experience coverage gaps, for example, if they lose Medicaid eligibility toward the end of a month. In addition, GAO found that some individuals had duplicate coverage.
• On October 23, 2015, GAO released a report entitled “Preliminary Results of Undercover Testing of the Federal Marketplace and Selected State Marketplaces for Coverage Year 2015”. For 10 fictitious applicants, GAO tested application and enrollment controls for obtaining subsidized health plans available through the federal Health Insurance Marketplace (Marketplace) (for New Jersey and North Dakota) and two selected state marketplaces (California and Kentucky). Although 8 of these 10 fictitious applications failed the initial identity-checking process, all 10 were subsequently approved by the federal Marketplace or the selected state marketplaces. For 8 additional fictitious applicants, GAO tested enrollment into Medicaid through the same federal Marketplace and the two selected state marketplaces, and was able to obtain either Medicaid or alternative subsidized coverage for 7 of the 8 applicants.

IV. OTHER HEALTH POLICY NEWS

• On October 16th, Health Republic of Oregon and Colorado HealthOp announced that they will be shutting down operations in 2016. Of note, Colorado’s Consumer Operated and Oriented Plan (CO-OP) insists that this is the latest in, “…a series of CO-OP shut downs across the country, spurred by the federal government’s failure to pay billions of dollars in promised funding,” and suggests that the insurer will fight back against state regulators’ decision to shut them down. “Despite Colorado HealthOP’s projected strong financial performance, the DOI’s decision to shutter Colorado HealthOP will cause significant ramifications for Colorado taxpayers and consumers,” they write in a press release released last week. Also of note, junior Nebraska Senator Ben Sasse (R) last week indicated that he will block consideration and confirmation of every HHS nominee until the Obama Administration gives him an accounting of, “…the systematic failures of the Affordable Care Act’s CO-OP program”. “Republicans and Democrats from these nine states [with failed CO-OPs] have an opportunity to stand together and demand answers for our constituents so that this kind of failure never happens again,” he said.
• On October 23, 2015, CMS announced that the agency has added new features to improve the customer experience at HealthCare.gov. More details on some of the improvements for 2016 Open Enrollment may be found in a CMS fact sheet, available here.