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

I. REGULATIONS, NOTICES, & GUIDANCE

• On December 11, 2015, the Office of Management and Budget (OMB) completed review of a final rule entitled “Covered Outpatient Drugs (CMS-2345-F)”. According to OMB’s website, the final rule “...revises requirements pertaining to Medicaid reimbursement for covered outpatient drugs to implement provisions of the Affordable Care Act. This rule also revises other requirements related to covered outpatient drugs, including key aspects of Medicaid coverage, payment, and the drug rebate program.”. The rule has not yet been published in the Federal Register.
• On December 16, 2015, the Office for Human Research Protections (OHRP), Office of the Assistant Secretary for Health, and the Food and Drug Administration (FDA) announced that they are extending the comment period for the draft guidance entitled “Minutes of Institutional Review Board (IRB) Meetings: Guidance for Institutions and IRBs.” A notice of availability requesting comments on the draft guidance document appeared in the Federal Register of November 5, 2015. The Agencies are taking the initiative to extend the comment period for an additional 30 days because the timing of the due date for comments intersects with comment periods on other Federal Register documents requiring review by the same group of stakeholders. This extension will allow interested persons additional time to submit comments. Comments are now due February 3, 2016.
• On December 15, 2015, the Departments of Health and Human Services (HHS); Labor; and Treasury released their semiannual regulatory agendas. They may be accessed here, here, and here, respectively.
• On December 17, 2015, the Centers for Medicare and Medicaid Services (CMS) Center for Consumer Information & Insurance Oversight (CCIIO) released a notice 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 (ACA) 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 FAQ document discusses the impact of the PACE Act on state small group expansion.
• On December 18, 2015, the Internal Revenue Service (IRS) released final regulations entitled “Minimum Value of Eligible Employer-Sponsored Plans and Other Rules Regarding the Health Insurance Premium Tax Credit”. This document contains final regulations on the health insurance premium tax credit enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the Medicare and Medicaid Extenders Act of 2010, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, and the Department of Defense and Full-Year Continuing Appropriations Act, 2011. These final regulations affect individuals who enroll in qualified health plans through Affordable Insurance Exchanges (Exchanges, sometimes called Marketplaces) and claim the health insurance premium tax credit, and Exchanges that make qualified health plans available to individuals and employers. Regulations are effective immediately.
• On December 18, 2015, the IRS released a notice entitled “Further Guidance on the Application of the Group Health Plan Market Reform Provisions of the Affordable Care Act to Employer-Provided Health Coverage and on Certain Other Affordable Care Act Provisions”. This notice provides further guidance on the application of various provisions of the Affordable Care Act to employer-provided health coverage. Part II of this notice applies to provisions within the jurisdiction of the Treasury Department (Treasury) and the Internal Revenue Service (IRS), the Departments of Health and Human Services (HHS), and Labor (DOL) (collectively the Departments). Parts III through VI of this notice apply only to provisions of the Internal Revenue Code, and accordingly the guidance on these parts is provided solely by Treasury and IRS.
• On December 11, 2015, the IRS released a notice entitled “2015 Cumulative List of Changes in Plan Qualification Requirements”. This notice contains the 2015 Cumulative List of Changes in Plan Qualification Requirements (2015 Cumulative List) described in section 4 of Rev. Proc. 2007- 44, 2007-2 C.B. 54. The 2015 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2016 and ending January 31, 2017.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

• On December 18, 2015, President Obama signed into law a combined spending and tax package (H.R. 2029) which funds the government through fiscal year 2016 and extends several expiring tax breaks. The FY2016 omnibus appropriations component of the bill is a $1.149 trillion package of all 12 annual appropriations bills that will fund government operations for fiscal year 2016 in accordance with the Bipartisan Budget Act of 2015. The FY2016 Labor-HHS Appropriations bill is $162.1 billion in base discretionary spending for the Departments of Labor, Health and Human Services, and Education and Related Agencies. The bill is $5.4 billion above the FY2015 level and $5.5 billion below the President’s budget request. In addition, the bill includes $1.5 billion in cap adjustment funding for preventing waste, fraud, abuse, and improper payments in the Social Security, Medicare, and Medicaid programs. The bill also includes a $32 billion appropriation for the National Institutes of Health (NIH), an increase of $2 billion above FY 2015. The bill continues to include a provision requiring the Administration to operate the Risk Corridor program in a budget neutral manner by prohibiting any funds from the Labor/HHS appropriations bill to be used as payments for the Risk Corridor program. The measure also eliminates funding for the Independent Payment Advisory Board (IPAB); provides $295 million for Children’s Hospitals Graduate Medical Education (CHGME); and includes $123 million (an increase of $91 million) for programs targeted to combat opioid abuse at the Centers for Disease Control and Prevention (CDC). The measure was combined with the House’s tax extenders bill, the “Protecting Americans from Tax Hikes Act of 2015”. This measure provides for the extension of several expiring tax breaks, including a 2-year moratorium on the 2.3-percent excise tax imposed on the sale of medical devices under the ACA. The tax will not apply to sales during calendar years 2016 and 2017.
• On December 18, 2015, Senate Finance Committee Chairman Orrin Hatch, R-Utah, Ranking Member Ron Wyden, D-Ore., along with Senators Johnny Isakson, R-Ga., and Mark Warner, D-Va., co-chairs of the Finance Committee Chronic Care Working Group, today released an options paper outlining policies being considered as a part of the committee’s effort to improve how Medicare treats beneficiaries with multiple, complex chronic illnesses. Policies in the options paper include allowing Medicare Advantage (MA) plans to tailor benefits specifically for chronically ill enrollees, adding additional tools for Accountable Care Organizations (ACO), making permanent the Independence at Home (IAH) demonstration program that helps primary care providers give high-quality care in the home, and giving greater flexibility to MA and ACOs to deliver non-health services that are pivotal for beneficiaries with multiple, complex chronic illnesses. The paper comes as a part of a 7-month long process to explore and develop legislation to address the challenges facing beneficiaries with chronic conditions enrolled in Medicare. The committee launched the Chronic Care Working Group in May 2015 following the committee’s second hearing on chronic care, and proceeded to solicit comments on potential policy changes. The working group received 530 comments and conducted 80 stakeholder meetings to discuss ideas that improve the way care is delivered to Medicare beneficiaries with chronic diseases. The senators are now requesting additional feedback on the proposals. Submissions can be sent to chronic_care@finance.senate.gov and will be accepted through January 26, 2016. The working group will then use congressional and stakeholder input to aid the committee in producing a bipartisan legislative product that can be introduced and advanced through the Committee.
• On December 18, 2015, the House and Senate passed a legislative package of Medicare reforms in the Patient Access and Medicare Protection Act (S. 2425). The measure was introduced by Senator Rob Portman (R-OH). As noted in Sen. Portman’s press release on the bill, the measure includes the following health-related provisions:
  • One-year delay of the application of the proposed Medicare fee schedule adjustment for wheelchair accessories and seat and back cushions when furnished in connection with complex rehab power wheelchairs.
  • Transitional payment rules for certain radiation therapy services under the Medicare physician fee schedule for two years
  • Meaningful use hardship exemption extension
  • Strengthening Medicaid program integrity
• On December 17, 2015, Senator Ben Sasse (R-NE) released his hold on HHS nominees including Robert Califf as leader of the Food and Drug Administration and Andy Slavitt as administrator of the Centers for Medicare & Medicaid Services.

III. REPORTS, STUDIES, & ANALYSES

• On December 16, 2015, the Office of the Inspector General (OIG) released a report entitled “Average Manufacturer Prices Increased Faster Than Inflation for Many Generic Drugs”. Generic drug price increases exceeded the specified statutory inflation factor applicable to brand-name drugs for 22 percent of the quarterly average manufacturer prices OIG reviewed. If the provision for brand-name drugs were extended to generic drugs, the Medicaid program would receive additional rebates. OIG calculated that Medicaid would have received a total of $1.4 billion in additional rebates for the top 200 generic drugs, ranked by Medicaid reimbursement, from 2005 through 2014. The additional rebates for the top 200 generic drugs increased most years, from more than $39 million in 2005 to more than $464 million in 2014. OIG’s findings are consistent with our previous work and support our prior recommendation that CMS consider seeking legislative authority to extend the additional rebate provisions to generic drugs. On November 2, 2015, the Bipartisan Budget Act of 2015 (P.L. No. 114-74) was enacted and included provisions extending the additional rebate to generic drugs. The additional rebate for generic drugs will apply to rebate periods beginning with the first quarter of 2017. Therefore, OIG is not making any additional recommendations.

IV. OTHER HEALTH POLICY NEWS

• Although the Open Enrollment period for coverage starting January 1st on the ACA Federal Marketplace was supposed to close on Tuesday, the Obama Administration extended the deadline until Thursday (December 17th) after HealthCare.gov experienced an unprecedented surge in customers. In a press release published today, HHS Secretary Sylvia M. Burwell said that, “Through December 17, about 6 million people signed up for Marketplace coverage in states that use HealthCare.gov. Of these, 2.4 million were new Marketplace customers, more than a third more than we signed up ahead of the first deadline last year.”
• On December 18, 2015, CMS announced that it is seeking comments on the draft “CMS Quality Measure Development Plan: Supporting the Transition to the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs)”. According to a CMS blog post, “The Measure Development Plan outlines how we’ll draw from our quality measure development experience to build a measure portfolio for MIPS and APMs. Existing measurement strategies, policies, and principles will guide our efforts.” CMS encourages stakeholders to review the document and provide comment by March 1, 2016.