Healthcare Week in Review November 21, 2015

A&B Healthcare Week in Review, November 21, 2015

Alston & Bird

I. REGULATIONS, NOTICES, & GUIDANCE

  • On November 21, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule entitled “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017”. This proposed rule sets forth payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges. It also provides additional standards for the annual open enrollment period for the individual market for the 2017 benefit year; essential health benefits; cost-sharing requirements; qualified health plans; updated standards for Exchange consumer assistance programs; network adequacy; patient safety standards; the Small Business Health Options Program; stand-alone dental plans; acceptance of third-party payments by qualified health plans; the definitions of large employer and small employer; fair health insurance premiums; guaranteed availability; student health insurance coverage; the rate review program; the medical loss ratio program; eligibility and enrollment; exemptions and appeals; and other related topics. Comments are due December 21, 2015.
  • On November 16, 2015, the CMS released a final rule entitled “Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services”. This final rule implements a new Medicare Part A and B payment model under section 1115A of the Social Security Act, called the Comprehensive Care for Joint Replacement (CJR) model, in which acute care hospitals in certain selected geographic areas will receive retrospective bundled payments for episodes of care for lower extremity joint replacement (LEJR) or reattachment of a lower extremity. All related care within 90 days of hospital discharge from the joint replacement procedure will be included in the episode of care. CMS writes, “We believe this model will further our goals in improving the efficiency and quality of care for Medicare beneficiaries with these common medical procedures.” These regulations are effective on January 15, 2016, and applicable on April 1, 2016 when the first model performance period begins. The rule is expected to be published in the Federal Register on November 24th. A CMS fact sheet on the rule may be found here.
  • On November 19, 2015, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) released guidance entitled “Risk Corridors Payments for the 2014 Benefit Year”. According to the announcement, “On October 1, 2015, the Centers for Medicare & Medicaid Services (CMS) announced that for the first year of the three year risk corridors program, qualified health plan (QHP) issuers will pay charges of approximately $362 million, and QHP issuers have requested $2.87 billion of 2014 payments, based on current data for the 2014 benefit year. Consistent with prior guidance, assuming full collections of risk corridors charges for the 2014 benefit year, insurers will be paid an amount that reflects a proration rate of 12.6% of their 2014 benefit year risk corridors payment requests. The remaining 2014 risk corridors payments will be made from 2015 risk corridors collections, and if necessary, 2016 collections. In the event of a shortfall for the 2016 program year, the Department of Health and Human Services (HHS) will explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”
  • On November 19, 2015, CCIIO released a notice entitled “Risk Corridors Payment and Charge Amounts for Benefit Year 2014”. HHS is releasing issuer-level risk corridors payments and charges based on the most current risk corridors data submitted by issuers and assuming full collection of charges from issuers, by market and state, for the 2014 benefit year. The tables in the document include the risk corridors payment or charge amounts for the individual and small group markets, respectively, and the prorated risk corridors payment, if applicable. Risk corridors charges payable to HHS are not prorated, and the full risk corridors charge amounts are noted in the chart below. Only risk corridors payment amounts are prorated. HHS will begin collection of risk corridors charges in November 2015 and will begin remitting risk corridors payments to issuers starting in December 2015.
  • On November 18, 2015, the Food and Drug Administration (FDA) announced the availability of a guidance for industry entitled “Formal Meetings Between the FDA and Biosimilar Biological Product Sponsors or Applicants.” This guidance provides recommendations to industry on formal meetings between FDA and sponsors or applicants relating to the development and review of biosimilar biological products regulated by the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER). The guidance assists sponsors and applicants in generating and submitting meeting requests and the associated meeting packages to FDA for biosimilar biological products. This guidance finalizes the draft guidance issued on April 1, 2013.
  • On November 16, 2015, the Office of Inspector General (OIG) and CMS jointly issued waivers for specified arrangements involving Comprehensive Care for Joint Replacement Model participants.
  • On November 18, 2015, FDA published a list of premarket approval applications (PMAs) that have been approved. This list is intended to inform the public of the availability of safety and effectiveness summaries of approved PMAs through the Internet and the Agency's Division of Dockets Management. More information may be found here.
  • On November 18, 2015, the Department of Health and Human Services (HHS) released a final rule entitled “Health and Human Services Acquisition Regulations”. HHS is issuing a final rule to amend its Federal Acquisition Regulation (FAR) Supplement, the HHS Acquisition Regulation (HHSAR), to update its regulation to current FAR requirements; to remove information from the HHSAR that consists of material that is internal, administrative, and procedural in nature; to add or revise definitions; to correct certain terminology; and to delete outdated material or material duplicative of the FAR. More information may be found here.
  • On November 19, 2015, the Health Resources and Services Administration (HRSA) announced that it is requesting nominations to fill vacancies on the Council on Graduate Medical Education (COGME). The COGME is authorized by 42 42 U.S.C. 294o, section 762 of the Public Health Service (PHS) Act, as amended. The Advisory Committee is governed by the Federal Advisory Act, Public Law (Pub. L.) 92-463, as amended (5 U.S.C. Appendix 2) which sets forth standards for the formation and use of advisory committees. The agency will receive nominations on a continuous basis.
  • On November 20, 2015, CMS released a Request for Information (RFI) entitled “Medicare Program; Request for Information to Aid in the Design and Development of a Survey Regarding Patient and Family Member Experiences with Care Received in Long-Term Care Hospitals”. This request for information will aid in the design and development of a survey regarding patient and family member experiences with the care received in long-term care hospitals (LTCHs). Comments are due within sixty days.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

  • On November 17, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee convened a confirmation hearing to consider the nomination of Dr. Robert Califf to be Commissioner of the Food and Drug Administration. During the hearing several Members asked Califf to defend his nomination in light of close ties to the pharmaceutical industry during his research career. Ranking Member Patty Murray (D-WA) asked how Califf will ensure that his prior professional experience in research would not impact his ability to lead the FDA without “undue influence”. Massachusetts Senator Elizabeth Warren said at one point that Califf’s financial relationship with the industry raises questions about “…what your priorities will be”. She said many industry stakeholders are pushing for efforts to lower standards for FDA approval, and asked Califf to comment. Califf insisted that, “if anything, I’ve argued for raising standards…but that doesn’t mean we couldn’t be quicker”. More information on the hearing may be found here.
  • On November 17, 2015, the Senate Finance Committee convened a hearing entitled “Physician Owned Distributors: Are They Harmful to Patients and Payers?”. Witnesses for the hearing included Scott Lederhaus, president, Association for Medical Ethics, Monarch Beach, Calif.; John Steinmann, board advisor, American Association of Surgical Distributors, Redlands, Calif.; Suzie Draper, vice president of business ethics and compliance, Intermountain Healthcare, Salt Lake City, Utah; and Kevin Reynolds, son of a patient of a surgeon affiliated with a physician owned distributor, Ventura, Calif. More information on the hearing may be found here.
  • On November 18, 2015, the Senate HELP Committee convened a committee markup of H.R.2820, the "Stem Cell Therapeutic and Research Reauthorization Act of 2015"; S.1719, the "Recognize, Assist, Include, Support, and Engage Family Caregivers Act of 2015"; and voted on the nominations of Victoria Lipnic to be a member of the Equal Employment Opportunity Commission; and Michael Michaud to be assistant Labor secretary for veterans' employment and training. More information on the event may be found here.

House of Representatives

  • On November 17, 2015, the House Energy & Commerce Health Subcommittee convened a hearing entitled "Examining the Regulation of Diagnostic Tests and Laboratory Operations." Witnesses for the hearing included Dr. Jeffrey Shuren, Director, Center for Devices and Radiological Health (CDRH), Food and Drug Administration (FDA) at the Department of Health and Human Services (HHS); and Dr. Patrick Conway, Deputy Administrator for Innovation and Quality & Chief Medical Officer, Office of the Administrator, Centers for Medicare and Medicaid Services (CMS). More information on the hearing may be found here.
  • On November 17, 2015, the House Veterans’ Affairs Health Subcommittee convened a hearing on veteran’s health legislation:

    HR 1319 — A bill to direct the Secretary of Veterans Affairs to conduct annual surveys of veterans on experiences obtaining hospital care and medical services from medical facilities of the Department of Veterans Affairs, and for other purposes.
    HR 1603 — A bill to amend the Veterans Access, Choice, and Accountability Act of 2014 to improve the private treatment of veterans who are victims of military sexual assault.
    HR 1904 — Wounded Warrior Workforce Enhancement Act
    HR 2639 — A bill to amend title 38, United States Code, to provide for additional qualification requirements for individuals appointed to marriage and family therapist positions in the Veterans Health Administration of the Department of Veterans Affairs.
    HR 3234 — A bill to amend title 38, United States Code, to establish within the Department of Veterans Affairs an Office of Failing Medical Center Recovery, and for other purposes.
    HR 3471 — Veterans Mobility Safety Act
    HR 3549 — VA Billing Accountability Act
    Draft Bill — Promoting Responsible Opioid Management and Incorporating Medical Expertise Act
    Draft Bill — VA Purchased Health Care Streamlining and Modernization Act

    More information on the hearing may be found here.
  • On November 18, 2015, the House Veterans Affairs Committee convened a hearing entitled “Choice Consolidation: Assessing VA’s Plan to Improve Care in the Community”. The primary witness for the hearing was Sloan Gibson, Deputy Secretary of the Department of Veterans Affairs (VA). He was accompanied by Undersecretary for Health David Shulkin; Assistant Deputy Undersecretary for Health for Community Care, Baligh Yehia, and Network Director of the Heart of Texas Health Care Network (VISN 17), Joe Dalpiaz. During the hearing members and witnesses discussed ongoing implementation of the Veterans Access, Choice, and Accountability Act of 2014 (the “Choice Act”), and the associated “Choice program”, which allows veterans to receive care at non-VA providers under certain conditions. More information on the hearing may be found here.
  • On November 17, 2015, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law convened a hearing entitled "The State of Competition in the Pharmacy Benefits Manager and Pharmacy Marketplaces." Witnesses for the hearing included Bradley J. Arthur, owner, Black Rock Pharmacy; David A. Balto, Law Offices of David A. Balto; Amy Bricker, vice-president of retail contracting and strategy, Express Scripts; and Natalie A. Pons, senior vice-president and assistant general counsel, CVS Health. More information on the hearing may be found here.
  • On November 18, 2015, Ways and Means Committee Chairman Kevin Brady (R-TX) discussed his vision for Committee priorities in the remainder of the 114th Congress. In his remarks, Brady outlined priorities for the Committee, including the following: “Many of us are convinced there is a better way to provide affordable, patient-centered health care than the Affordable Care Act, and we’ll continue to fight for patients, local businesses and health care professionals who have been harmed by this law. Lastly, the longer we put off saving Social Security and Medicare for the long term, the more difficult the task becomes. We have ideas, and so do our Democratic friends. It’s time to act now to take steps small and large to strengthen and save these important programs.”
  • On November 19, 2015, the House Energy & Commerce Subcommittee on Oversight and Investigations convened a hearing entitled "U.S. Public Health Preparedness for Seasonal Influenza: Has the Response Improved?’ More information on the hearing may be found here.

III. REPORTS, STUDIES & ANALYSES

  • On November 19, 2015, the Congressional Budget Office (CBO) released a document entitled “CBO’s Approach to Dynamic Analysis”. In May, the Congress adopted a concurrent resolution on the budget for fiscal year 2016. That resolution requires CBO, to the greatest extent practicable, to incorporate macroeconomic effects into its 10-year cost estimates for major legislation that Congressional committees approve. Such estimates must also include, when practicable, a qualitative assessment of the budgetary effects for the following 20 years. Incorporating such macroeconomic feedback into cost estimates is often called dynamic scoring. This presentation describes how CBO will prepare such estimates.
  • On November 13, 2015, CBO released a presentation entitled “Forecasting Enrollment and Subsidies in the ACA Exchanges”. This presentation reviews CBO’s original and more recent projections of enrollment in health insurance policies through the exchanges established under the Affordable Care Act and the subsidies (including both premium tax credits and cost-sharing subsidies) provided to those enrollees, illustrating how the estimates have changed over time. CBO’s projections of 2014 exchange enrollment and subsidies are also compared with the actual enrollment and subsidies paid in that year.
  • On November 16, 2015, the Government Accountability Office (GAO) released a report entitled “End-Stage Renal Disease: Medicare Payment Refinements Could Promote Increased Use of Home Dialysis”. The percentage of dialysis patients who received home dialysis generally declined between 1988 and 2008 and then slightly increased thereafter through 2012, and stakeholder estimates suggest that future increases in the use of home dialysis are possible. GAO was asked to study Medicare patients' use of home dialysis and key factors affecting its use. This report examines (1) trends in home dialysis use and estimates of the potential for wider use, (2) incentives for home dialysis associated with Medicare payments to dialysis facilities, and (3) incentives for home dialysis associated with Medicare payments to physicians. GAO reviewed CMS policies and relevant laws and regulations, and GAO analyzed data from CMS (2010-2015), the United States Renal Data System (1988-2012), and Medicare cost reports (2012), the most recent years with complete data available. GAO also interviewed CMS officials, selected dialysis facility chains, physician and patient associations, and experts on home dialysis. Given their findings, GAO recommends that CMS (1) take steps to improve the reliability of the cost report data, (2) examine and, if necessary, revise policies for paying physicians to manage the care of dialysis patients, and (3) examine and, if appropriate, seek legislation to revise the KDE benefit.

IV. OTHER HEALTH POLICY NEWS

  • On November 16, 2015, CMS announced $32 million in available funds to support efforts to reach out to families with children eligible for Medicaid and the Children’s Health Insurance Program (CHIP) and help get them covered. The funds will support activities aimed at alerting families to the availability of free or low-cost health coverage under Medicaid and CHIP, identifying children likely to be eligible, and assisting families with the application and renewal process. Medicaid and CHIP provide comprehensive coverage to the nation’s most vulnerable children. “Health coverage gives children access to the care they need to stay healthy and gives families the security of knowing their kids and household budgets are protected.” said Vikki Wachino, deputy administrator of CMS, and director, Center for Medicaid and CHIP Services. “By connecting eligible children to Medicaid and CHIP, these grants will help to ensure that children can more fully participate in childhood activities and are more prepared to succeed in school.” The Connecting Kids to Coverage Outreach and Enrollment Grant funds are provided under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, continuing the program first funded in 2009 under the Children’s Health Insurance Program Reauthorization Act (CHIPRA) and extended under the Affordable Care Act. This funding opportunity is the fourth cycle of this initiative and funding will be awarded as cooperative agreements to allow close collaboration between CMS and awardees.
  • On November 19, 2015, UnitedHealth Group released revised earnings expectations for 2015, reflecting what the company describes as a “continuing deterioration in individual exchange-compliant product performance”. The announcement reads in part: “In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group. “We continue to be pleased with the growth and overall performance of our Company outside of the individual exchange products and look forward to strong, positive and broad based earnings growth across our enterprise in 2016.”
  • On November 18, 2015, CMS released a “Snapshot” of Open Enrollment figures for the week of November 8th through November 14th. According to the data, over one million individuals have selected plans on HealthCare.gov since November 1st. More information may be found here.
  • On November 20, 2015, the Department of Health and Human Services (HHS) held an event entitled HHS Pharmaceutical Forum: Innovation, Access, Affordability and Better Health. During the forum, Secretary Sylvia M Burwell discussed the complex problem of rising drug costs; their impact on patients, businesses, taxpayers, and state and federal budgets; and the challenge of balancing innovation with affordability. More information on the forum, including a full agenda, may be found here.
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