A&B Healthcare Week in Review, December 31, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On December 30, 2015, the Centers for Medicare and Medicaid Services (CMS) released a final rule entitled, “Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies”. This final rule establishes a prior authorization program for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items that are frequently subject to unnecessary utilization. This rule defines unnecessary utilization and creates a new requirement that claims for certain DMEPOS items must have an associated provisional affirmed prior authorization decision as a condition of payment. This rule also adds the review contractor's decision regarding prior authorization of coverage of DMEPOS items to the list of actions that are not initial determinations and therefore not appealable.
• On December 23, 2015, the CMS Center for Consumer Information & Insurance Oversight (CCIIO) released a notice entitled, “Draft 2017 Letter to Issuers in the Federally-facilitated Marketplaces”. This Letter provides issuers seeking to offer qualified health plans (QHPs), including stand-alone dental plans (SADPs), in the Federally-facilitated Marketplaces (FFMs) or the Federally-facilitated Small Business Health Options Programs (FF-SHOPs) with operational and technical guidance to help them successfully participate in those Marketplaces in 2017. Throughout this Letter, CMS identifies the areas in which States performing plan management functions in the FFMs have flexibility to follow an approach different from that articulated in this guidance. CMS also describes how parts of this Letter apply to issuers in State-based Marketplaces on the Federal Platform (SBM-FPs). CMS notes that the policies articulated in this Letter apply to the certification process for plan years beginning in 2017. Comments on the letter should be submitted to FFEcomments@cms.hhs.gov by January 17, 2016.
• On December 23, 2015, CCIIO released a draft bulletin entitled, “Timing of Submission and Posting of Rate Filing Justifications for the 2016 Filing Year for Single Risk Pool Coverage Effective on or after January 1, 2017”. CMS is releasing this draft bulletin for comment on the proposed uniform timeline for submission and posting of information about rates for single risk pool coverage, consistent with the proposed amendments to the rate review regulations at 45 CFR Part 154 in the 2017 Payment Notice Proposed Rule. Specifically, this bulletin proposes guidance for purposes of establishing the uniform deadline under 45 CFR 154.220(b) for health insurance issuers to submit the Unified Rate Review Template for proposed rates in the individual and small group markets. It also proposes guidance for purposes of establishing the uniform posting deadline under 45 CFR 154.301(b)(1)(i) for a state with an effective rate review program to provide public access to information regarding proposed rate increases that are subject to review. The bulletin also identifies the deadline for posting of final rate increases (including those not subject to review) and the CMS web address to be used by states with an effective rate review program that elect to provide public access from their website through a link to the rate information made available on the CMS website. Comments should be submitted to RateReview@cms.hhs.gov no later than January 22, 2016.
• On December 31, 2015, the Food and Drug Administration (FDA) announced the availability of the draft guidance entitled "Public Notification of Emerging Postmarket Medical Device Signals ('Emerging Signals')." This guidance describes the Agency's policy for notifying the public about medical device "emerging signals." Historically, FDA has communicated important medical device postmarket information after having completed an analysis of available data and, in most cases, after having reached a decision about relevant recommendations for the device user community and about whether further regulatory action is warranted. However, in addition to these types of public communications, FDA believes there also is a need to notify the public about emerging signals that the Agency is monitoring or analyzing, even when the information has not been fully analyzed, validated, or confirmed, and for which the Agency does not yet have specific recommendations.
• On December 22, 2015, CMS released a request for information (RFI) entitled, “The Medicare Advantage (MA) Risk Adjustment Data Validation (RADV) Recovery Audit Contractor (RAC)”. The purpose of this RFI is to solicit feedback from industry related to expanding the RAC program to Medicare Part C. Send responses by email to Alice.McGruder@cms.hhs.gov and Craig.Dash@cms.hhs.gov NLT February 1st at 10:00 am EST.
• On December 23, 2015, CCIIO released a document entitled, “Proposed Key Dates for Calendar Year 2016: QHP Certification in the Federally-facilitated Marketplaces; Rate Review; Risk Adjustment and Reinsurance”.
• On December 23, 2015, the FDA released a proposed rule entitled, “Fixed-Combination and Co-Packaged Drugs: Applications for Approval and Combinations of Active Ingredients Under Consideration for Inclusion in an Over-the-Counter Monograph”. The FDA is proposing to revise its regulations on prescription fixed-combination drugs to apply the regulations to both prescription and nonprescription fixed-combination and co-packaged drugs and combinations of active ingredients under consideration for inclusion in an over-the-counter (OTC) monograph. These products must meet specific evidentiary requirements for approval. The proposed revisions would harmonize the requirements for prescription and nonprescription products and make them consistent with long-standing Agency policy. Comments on the proposed rule are due March 22, 2016.
• On December 23, 2015, the FDA announced the availability of a draft guidance for industry entitled “Advancement of Emerging Technology Applications to Modernize the Pharmaceutical Manufacturing Base.” This guidance provides recommendations to pharmaceutical companies interested in participating in a program involving the submission of chemistry, manufacturing, and controls (CMC) information containing emerging manufacturing technology. The program is open to companies that intend the technology to be submitted as part of an investigational new drug application (IND), or an original or supplemental new drug application (NDA), abbreviated new drug application (ANDA), or biologics license application (BLA) reviewed by the Center for Drug Evaluation and Research (CDER), where that technology meets certain criteria described in the guidance. Comments on the draft guidance are due January 22, 2016.
• On December 23, 2015, the FDA announced the availability of a guidance document entitled “Revised Recommendations for Reducing the Risk of Human Immunodeficiency Virus Transmission by Blood and Blood Products; Guidance for Industry.” The guidance document provides blood establishments that collect blood or blood components, including Source Plasma, with revised donor deferral recommendations for individuals at increased risk for transmitting human immunodeficiency virus (HIV) infection. The guidance document recommends corresponding revisions to donor educational materials, donor history questionnaires and accompanying materials, along with revisions to donor requalification, product management, and testing procedures. The guidance announced in this notice finalizes the draft guidance of the same title dated May 2015 and supersedes the memorandum to blood establishments entitled “Revised Recommendations for the Prevention of Human Immunodeficiency Virus (HIV) Transmission by Blood and Blood Products” dated April 23, 1992 (1992 blood memo).
• On December 24, 2015, the FDA announced the availability of a draft document entitled “Deviation Reporting for Human Cells, Tissues, and Cellular and Tissue-Based Products Regulated Solely Under Section 361 of the Public Health Service Act and 21 CFR part 1271; Draft Guidance for Industry.” The draft guidance document provides certain establishments that manufacture non-reproductive human cells, tissues, and cellular and tissue-based products (HCT/Ps), regulated solely under the Public Health Service Act (PHS Act) and under FDA regulations, with recommendations and relevant examples for complying with the requirements to report HCT/P deviations.
• On December 28, 2015, the Internal Revenue Service (IRS) released Notice 2016-4, “Extension of the Due Dates for 2015 Information Reporting Under I.R.C. §§ 6055 and 6056”. This notice extends the due dates for the 2015 information reporting requirements (both furnishing to individuals and filing with the Internal Revenue Service (Service)) for insurers, self-insuring employers, and certain other providers of minimum essential coverage under section 6055 of the Internal Revenue Code (Code), and the information reporting requirements for applicable large employers under section 6056 of the Code. Specifically, this notice extends the due date (1) for furnishing to individuals the 2015 Form 1095-B, Health Coverage, and the 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from February 1, 2016, to March 31, 2016, and (2) for filing with the Service the 2015 Form 1094-B, Transmittal of Health Coverage Information Returns, the 2015 Form 1095-B, Health Coverage, the 2015 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from February 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically. This notice also provides guidance to individuals who might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns.
• On December 28, 2015, the FDA’s Center for Devices and Radiological Health (CDRH) released “CDRH Fiscal Year 2016 (FY 2016) Proposed Guidance Development and Focused Retrospective Review of Final Guidance”. The list includes guidance documents that CDRH intends to publish this fiscal year (FY2016), as well as previously-issued final guidances for which CDRH is interested in receiving external feedback regarding whether these final guidances should be revised or withdrawn.
• On December 29, 2015, the FDA announced the establishment of a public docket entitled, “Clinical Trial Designs in Emerging Infectious Diseases”. The FDA is establishing a public docket to receive input on clinical trial designs in emerging infectious diseases. Interested parties are invited to submit comments, supported by research and data, regarding clinical trial designs. Public input is due by January 28, 2016.
• On December 29, 2015, the FDA announced the availability of a revised draft guidance for industry entitled “Draft Guidance on Paliperidone Palmitate.” The recommendations provide specific guidance on the design of bioequivalence (BE) studies to support abbreviated new drug applications (ANDAs) for paliperidone palmitate extended-release injectable suspension. Comments on the guidance are due February 29, 2016.
• On December 29, 2015, the National Institutes of Health (NIH) released a notice entitled, “Proposed Action Under the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules”. The NIH is considering a proposal to conduct research involving the deliberate transfer of a chloramphenicol resistance trait to Rickettsia typhi, conorii, rickettsii, and felis. The acquisition of this antibiotic resistance trait could possibly compromise the use of a class of antibiotics for the treatment of Rickettsia infections in humans. Under the NIH Guidelines (http://www.osp.od.nih.gov/sites/default/files/NIH_Guidelines.html), these experiments can proceed only after they are reviewed by the NIH Recombinant DNA Advisory Committee (RAC) and specifically approved by the NIH Director as Major Actions. This proposal will be discussed at the March 8-10, 2016 RAC meeting. The public is encouraged to provide comments on this proposed action.
• On December 29, 2015, the Office of Inspector General (OIG) issued the following modifications:
  • Modification of Advisory Opinion 07-06: Modifies Advisory Opinion 07-06 which concerned the management by a health care industry consultancy of a charitable organization's arrangements to assist patients with specified chronic diseases with cost-sharing and premium obligations, and its first modification at Modification of Advisory Opinion 07-06, to reflect guidance issued on May 21 in the Supplemental Special Advisory Bulletin regarding Independent Charity Patient Assistance Programs.
  • Modification of Advisory Opinion 11-05: Modifies Advisory Opinion 11-05 which concerns a nonprofit, tax-exempt, charitable organization's practices of providing vouchers for genetic tests and assistance with cost-sharing obligations for certain genetic tests and prescription drugs for cancer treatment and its first modification at Modification of Advisory Opinion 11-05, to permit earmarking of donations to specific disease states and to reflect guidance issued on May 21 in the Supplemental Special Advisory Bulletin regarding Independent Charity Patient Assistance Programs.
• On December 31, 2015, the Substance Abuse and Mental Health Services Administration released a notice entitled, “Commission of a Surgeon General’s Report on Substance Use, Addiction, and Health”. On behalf of the United States Department of Health and Human Services, the Substance Abuse and Mental Health Services Administration and the Office of the Surgeon General announce the commission of the first-ever Surgeon General’s Report presenting the state of the science on substance use, addiction, and health. The report will examine the health effects of drug and alcohol misuse from the perspectives of prevention, treatment, recovery, neurobiology, and delivery of care. More information may be found here.
• On December 31, 2015, the FDA announced the availability of the draft guidance entitled "Unique Device Identification: Convenience Kits; Draft Guidance for Industry and Food and Drug Administration Staff." This proposed guidance document is intended to outline the Agency's current thinking that for purposes of Unique Device Identification (UDI) labeling and data submission requirements, the term "convenience kit" applies solely to two or more different medical devices packaged together for the convenience of the user, where they are intended to remain packaged together and not replaced, substituted, repackaged, sterilized, or otherwise processed or modified before the devices are used by an end user. This draft guidance is not final nor is it in effect at this time. When finalized, this guidance document will constitute a change in policy. This item is expected to be published in the Federal Register on January 4, 2016; comments will be due 90 days thereafter.
• On December 31, 2015, CMS released a request for information entitled, “Certification Frequency and Requirements for the Reporting of Quality Measures Under CMS Programs”. This request for information seeks public comment regarding several items related to the certification of health information technology (IT), including electronic health records (EHR) products used for reporting to certain CMS quality reporting programs such as, but not limited to, the Hospital Inpatient Quality Reporting (IQR) Program and the Physician Quality Reporting System (PQRS). In addition, we are requesting feedback on how often to require recertification, the number of clinical quality measures (CQMs) a certified Health IT Module should be required to certify to, and testing of certified Health IT Module(s). Comments are due February 1, 2016.

Event Notices

• January 25, 2016: The Department of Health and Human Services (HHS) Assistant Secretary for Planning and Evaluation (ASPE) has announced a public meeting of the Advisory Council on Alzheimer’s Research, Care, and Services. The Advisory Council on Alzheimer’s Research, Care, and Services provides advice on how to prevent or reduce the burden of Alzheimer’s disease and related dementias on people with the disease and their caregivers. During the January meeting, the Advisory Council will review the process for developing recommendations and developing the National Plan to Address Alzheimer’s Disease, discuss updates to work on Goals 2 and 3 of the National Plan, and hear updates on a future summit on care. More information on the announcement may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

• Congress is in recess this week. Both chambers will resume regular legislative business the week of January 4th. The House calendar for 2016 may be accessed here; the Senate 2016 calendar may be accessed here.
• On December 28, 2015, President Barack Obama signed into law the Patient Access and Medicare Protection Act, introduced on introduced December 18th 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

III. REPORTS, STUDIES, & ANALYSES

• On December 18, 2015, the Government Accountability Office (GAO) released a report entitled, “Increasing Hospital-Physician Consolidation Highlights Need for Payment Reform”. Medicare expenditures for hospital outpatient (HOPD) services have grown rapidly in recent years. Some policymakers have raised questions about whether this growth may be attributed to services that were typically performed in physician offices shifting to HOPDs. GAO was asked to examine trends in vertical consolidation and its effects on Medicare. This report examines, for years 2007 through 2013, (1) trends in vertical consolidation between hospitals and physicians and (2) the extent to which higher levels of vertical consolidation were associated with more E/M office visits being performed in HOPDs. GAO analyzed, using various methods including regression analyses, the most recent available claims data from CMS and survey data from the American Hospital Association, in which hospitals report the types of financial arrangements they have with physicians. According to the report’s conclusion, GAO recommends the following: “In order to prevent the shift of services from lower paid settings to the higher paid HOPD setting from increasing costs for the Medicare program and beneficiaries, Congress should consider directing the Secretary of the Department of Health and Human Services (HHS) to equalize payment rates between settings for E/M office visits—and other services that the Secretary deems appropriate—and to return the associated savings to the Medicare program.”.
• In a new report for the Kansas Grantmakers in Health, Manatt Health reviews the implications of Medicaid expansion on the Kansas state budget. Drawing on the state's fiscal impact analysis, publicly available data on Kansas Medicaid costs and the experiences of states that expanded in 2014, the report concludes that Kansas should be able to generate sufficient savings and revenue gains to cover the costs of expansion between 2016 and 2020. In the report, Manatt Health identifies areas where early expansion states saw savings or revenue and suggests where Kansas might also see savings and new revenue sufficient to cover its costs of expansion. The full paper may be accessed here.
• Recently Aon Global Risk Consulting and the American Health Care Association (AHCA) released the “2015 Long Term Care General Liability and Professional Liability Actuarial Analysis”. The 13th published edition of the Aon/AHCA 2015 Long Term Care General Liability and Professional Liability Actuarial Analysis provides estimates of loss rates, or the cost of liability to skilled nursing care centers on a per-bed basis. According to the report, the projected national 2016 loss rate, which is a combination of claim severity and frequency, is expected to increase from $2,030 to $2,150 per occupied bed. This means that a nursing center with 100 occupied beds can expect approximately $215,000 in liability expenses in 2016. In addition to the national projection, 18 states are profiled individually in this annual report.

IV. OTHER HEALTH POLICY NEWS

• On December 18, 2015, CMS released a public data set that provides information on services provided to Medicare beneficiaries by home health agencies. The Home Health Agency Utilization and Payment Public Use File (Home Health Agency PUF) contains information on utilization, payments, and submitted charges organized by provider, state and home health resource group. “The Home Health Agency data made available today focuses on our initiative of achieving better care, smarter spending, and healthier people throughout our health care system, “said CMS Administrator Andrew Slavitt. “CMS has been a pioneer in greater data transparency and views it as key to a more effectively functioning health care system where information flows more freely.” The Home Health Agency PUF was created from CMS administrative claims data for Medicare beneficiaries enrolled in the fee-for-service program available from the CMS Chronic Condition Data Warehouse (www.ccwdata.org). The data covers calendar year 2013 and is based on home health agency Part A institutional claims. These new data include information on 11,062 home health agencies, over 6 million claims, and over $18 billion in Medicare payments for 2013. More information may be found here.
• On December 21, 2015, CMS released a new online dashboard to look at Medicare prescription drugs for both Medicare Part B and Part D. These categories include drugs with high spending on a per user basis, high spending for the program overall, and those with high unit cost increases in recent years. CMS intends to update this list on a regular basis and release a similar list for Medicaid next year. To create this list, CMS identified 80 drugs using 2014 data that met certain criteria: 40 drugs provided through the Medicare Prescription Drug Program under Part D and 40 drugs administered by physicians and other professionals in the Medicare fee-for-service program under Part B. For all drugs included on the list, CMS displays relevant spending, utilization, and trend data and also includes consumer-friendly information on the drug product descriptions, manufacturer(s), and clinical indications. CMS is prohibited from publicly disclosing information on manufacturer rebates, thus the data used to select Part D drugs do not reflect any manufacturers’ rebates or other price concessions. According to CMS, one use of this list is to make the trends related to drug spending for beneficiaries and for the programs administered by CMS transparent to providers, consumers and the public. The relatively small set of medications presented as part of this dashboard represents a very large proportion of program spending, including 33 percent of all Part D spending and 71 percent of Part B drug spending in 2014.
• On December 30, 2015, CMS released an updated Open Enrollment Snapshot for the Affordable Care Act Health Insurance Marketplace. According to the announcement, since Open Enrollment began on November 1, more than 8.5 million consumers signed-up for health coverage through the HealthCare.gov platform or had their coverage automatically renewed. Of the about 6 million Marketplace consumers whose coverage was renewed, about 3.6 million actively renewed and 2.4 million consumers were automatically renewed.