A&B Healthcare Week in Review, February 12, 2016

I. REGULATIONS, NOTICES, & GUIDANCE

• On February 9, 2016, the President released his Fiscal Year (FY) 2017 Budget Proposal and the Department of Health and Human Services (HHS) released its Budget in Brief. The President’s FY 2017 Budget for HHS includes legislative proposals that would save on net an estimated $242 billion over 10 years. The Budget proposes $82.8 billion in discretionary budget authority and additional mandatory funding to further support specific initiatives in the discretionary budget. One billion dollars would be spent on Vice President Joe Biden’s “Cancer Moonshot”, an effort to understand the causes of cancer and reward innovative research, and on the Precision Medicines Initiative. The Budget also includes $200 million worth of program integrity initiatives, which the Administration estimates would result in more than $25 billion in savings over 10 years. The Budget includes net projected Medicare savings of $419.4 billion over 10 years, including $77.2 billion in estimated savings derived from reforming Medicare Advantage payments to “improve efficiency and achieve sustainability of the program.” Other proposals include reforming Medicare payments to providers and address the rising costs of pharmaceuticals.
• On February 11, 2016, CMS issued a final rule entitled Reporting and Returning of Overpayments, which will require providers and suppliers receiving funders under the Medicare program to report and return overpayments by the later of the date that is 60 days after the date which overpayment is identified. The new rule is meant to ensure compliance with applicable statutes, promote high quality care, and protect the Medicare Trust Funds against fraud and improper payments.
• On February 11, 2016, CMS issued a State Medicaid Directors Letter to provide guidance to states concerning Implementation of the Covered Outpatient Drug Final Regulations Provisions with comment (CMS-2345-FC) (81 FR 5170) published on February 1, 2016, concerning final regulations pertaining to reimbursement for covered outpatient drugs in the Medicaid program. The SMDL outlines the key changes that states need to address when determining their reimbursement methodologies, including the revised requirement in 42 CFR §447.512(b) for states to reimburse at an aggregate upper limit based on actual acquisition cost (AAC) plus a professional dispensing fee established by the agency; the implementation of the Affordable Care Act federal upper limit (FUL); and requirements for the 340B entities, 340B contract pharmacies, Indian Health Service (IHS), Tribal, and Urban Indian Organization (I/T/U) pharmacies.
• On February 8, 2016, the Agency for Healthcare Research and Quality (AHRQ) issued a Notice of request for Measures Assessing Health Care Organization Quality Improvement Activities Improve Patient Understanding, Navigation, Engagement, and Self-Management. The notice requests information from the public (including health care delivery organizations, health information developers, payers, quality measure developers, clinicians, and health care consumers) about quality improvement measures designed to help health care organizations monitor initiatives aimed at, improving patient understanding of health information, simplifying navigation of health care systems and facilities, and enhancing patients’ ability to manage their health.
• On February 9, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a Comment Request on the Home Health Agency Cost Report. The cost report is needed to determine a provider’s reasonable cost incurred in furnishing medical services to Medicare beneficiaries and reimbursement due to or from a provider. The Notice provides an opportunity for the public to comment on CMS’ information collection request. Comments must be received by March 11, 2016.
• On February 9, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a Comment Request on four items: Prepaid Health Plan Cost Report; Social Security Office (SSO) Report of State Buy-in Problem; Medicare Prior Authorization of Home Health Services Demonstration; and Evaluation of the Medicare Patient Intravenous Immunoglobulin Demonstration. The Notice provides an opportunity for the public to comment on CMS’ intention to collect information from the public. Comments must be received by April 11, 2016.
• On February 9, 2016, the Center for Medicaid and CHIP Services (CMCS) issued an informational bulletin updating the 2016 Federal Poverty Level Standards. The 2016 guidelines reflect a 0.1 percent price increase between calendar years 2014 and 2015.
• On February 9, 2016, the Office of the Inspector General (OIG) released a Notice entitled Updated Provider Self-Disclosure Settlements. The OIG notes that self-disclosure gives providers the opportunity to avoid the costs and disruptions associated with a Government-directed investigation and civil or administrative litigation.
• On February 9, 2016, OIG published its FY 2017 Congressional Budget Justification, which presents the OIG’s budgetary requirements for meeting its responsibility to protect the integrity of over a hundred HHS programs, as well as the health and welfare of the beneficiaries whom they serve. The FY 2017 Budget requests a total of $419 million to oversee the administration of HHS, including $85 million to support oversight of HHS’s Public Health and Human Services (PHHS) programs and Health Insurance Marketplaces, and $334 million to support oversight of the Medicare and Medicaid programs while continuing the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.
• On February 10, 2016, CMS issued the April 2016 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files. The summary of changes provide that CMS will supply contractors with the ASP and not otherwise classified (NOC) drug pricing files for Medicare Part B drugs on a quarterly basis. This Medicare claims change request will become effective April 1, 2016 and implemented on April 4, 2016.
• On February 11, 2016, the Food and Drug Administration (FDA) issued a final order to on the Reclassification of Membrane Lung for Long-Term Pulmonary to redesignate membrane lung devices for long-term pulmonary support, a preamendments class III device, as extracorporeal circuit and accessories for long-term respiratory/cardiopulmonary failure, and to reclassify the device to class II (special controls) in patients with acute respiratory failure or acute cardiopulmonary failure where other available treatment options have failed, and continued clinical deterioration is expected or the risk of death is imminent.
• On February 11, 2016, the FDA issued a Notice announcing that a collection of information entitled Registration of Producers of Drugs and Listing of Drugs in Commercial Distribution has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
• On February 12, 2016, the National Institutes of Health (NIH) issued a Notice that the AAV-based Vectors for the Therapeutic Management of Menkes Disease and Related Copper Transport Disorders are available for licensing and/or co-development in the U.S. in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve expeditious commercialization of results of federally-funded research and development. Requests for copies of the patent application or inquiries about licensing, research collaborations, and co-development opportunities should be sent to John D. Hewes, Ph.D., email: john.hewes@nih.gov.
• On February 12, 2016, the FDA issued a final rule entitled Removal of Review and Reclassification Procedures for Biological Products Licensed Prior to July 1, 1972, to remove two regulations that prescribe procedures for FDA's review and classification of biological products licensed before July 1, 1972. FDA is taking this action because the two regulations are obsolete and no longer necessary in light of other statutory and regulatory authorities established since 1972, which allow FDA to evaluate and monitor the safety and effectiveness of all biological products. In addition, other statutory and regulatory authorities authorize FDA to revoke a license for biological products because they are not safe and effective, or are misbranded. FDA is taking this action as part of its retrospective review of its regulations to promote improvement and innovation.

Event Notices

• February 24, 2016: The Substance Abuse and Mental Health Services Administration’s (SAMHSA) Advisory Committee will hold a meeting for the Advisory Committee for Women’s Services (ACWS). The meeting will include discussions on The U.S. Preventive Services Task Force (USPSTF) Fifth Annual Report to Congress on High-Priority Evidence Gaps for Clinical Preventive Services for Women. The meeting is open to the public and will be held at 9:00 a.m. at SAMHSA, 5600 Fishers Lane, Rockville, MD 20857, in Conference Room 5E49.
• February 24, 2016: The Substance Abuse and Mental Health Services Administration’s (SAMHSA) Advisory Committee will hold a meeting that will include consideration of minutes from the SAMHSA CSAT NAC meeting of August 26, 2015, the CSAT Director’s report, budget update, a presentation related to the opiate use disorders among Native Americans, a presentation related to the effects of the opioid epidemic on youth and young people, a presentation related to substance use disorders and criminal justice reform, a presentation related to peer recovery support services in diverse settings, an overview of Recovery Month.
• February 24, 2016: The Centers for Disease Control and Prevention (CDC) will hold the next meeting of the Community Preventive Services Task Force (Task Force). During the February 2016 meeting, the Community Preventive Services Task Force (Task Force) will discuss proposed methods for increasing throughput of Task Force findings (i.e., how to increase the number of Task Force findings that are produced in a given time period), while maintaining adequate quality of the underlying reviews; adequate usefulness for decision makers; and sufficient attention to priority topics.
• March 8, 2016: FDA will hold a meeting with the Pharmacy Compounding Advisory Committee (PCAC) to provide advice on scientific, technical, and medical issues concerning drug compounding.
• March 13, 2016: The FDA, in cosponsorship with the Pharmaceutical Users Software Exchange (PhUSE), announced a public conference entitled “The FDA/PhUSE Annual Computational Science Symposium.” The purpose of the conference is to help the broader community align and share experiences to advance computational science.
• June 16, 2016: CMS will hold the 2016 Medicare Advantage and Prescription Drug Plan Audit & Enforcement Conference. CMS is currently in the process of creating an agenda based on feedback from last year’s program, and the agenda should be released within the next month. Registration will open in March.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On February 9, 2016, Senate Health, Education, Labor, and Pensions (HELP) Committee held the first markup in a series focused on Biomedical Innovation bills. The Committee considered the following bills during the markup: S. 2030, The Advancing Targeted Therapies for Rare Diseases Act of 2015, S. 1622, The FDA Device Accountability Act of 2015, S. 2014, Next Generation Researchers Act, S. 800, The Enhancing the Stature and Visibility of Medical Rehabilitation Research at NIH Act, S. 849, Advancing Research for Neurological Diseases Act of 2015, S. 2503, Preventing Superbugs and Protecting Patients Act, and S. 2511, Improving Health Information Technology. All seven bills were passed out of Committee. On March 9th, the Committee will markup legislation aimed at “modernizing” the FDA and National Institutes of Health (NIH). More information is available here.
• On February 11, 2016, Majority Leader Mitch McConnell (R-KY) filed cloture for a vote on the nomination of Robert Califf as FDA commissioner. The vote is expected to take place on February 22nd.
• On February 11, 2016, the Senate Finance Committee held a hearing on The President’s Fiscal Year 2017 Budget. The sole witness was Department of Health and Human Services’ (HHS) Secretary Sylvia Mathews Burwell.
• On February 12, 2016, Senators Patty Murray (D-WA), Richard Blumenthal (D-CT), Jeanne Shaheen (D-NH), and Mazie Hirono (D-HI) led 27 of their Democratic colleagues in sending a letter to Republican leaders emphasizing the importance of prioritizing women’s access to reproductive health care in light of the spreading Zika virus.
• Congress is in recess next week for the President’s Day holiday.

House of Representatives

• On February 8, 2016, House Energy and Commerce Committee issued a letter to CMS on Medicaid coverage of housing-related activities and services, saying “Medicaid coverage of housing-related services may be cost-effective if it avoids or reduces the need for costly institutional care, such as nursing home care by allowing an individual to remain in, or return to, the community… At the same time, coverage of housing-related services could be especially vulnerable to fraud, waste, and abuse and could result in duplication with other federal programs that provide housing assistance.” The complete letter is available here.
• On February 9, 2016, Ways and Means Chairman Kevin Brady (R-TX) released the following statement in reaction to President Obama’s FY 2017 Budget: “The President’s final budget is clearly about promoting his liberal legacy instead of securing America’s financial future. Why is he wasting his last opportunity in office to tackle the real challenges facing our country? While a $3.4 trillion tax increase and $2.5 trillion in new spending over the next decade might please very liberal voters, they will only make life more expensive for the vast majority of Americans. This document will not prevent American jobs from moving overseas, Medicare from going bankrupt, and healthcare spending from continuing to rise.”
• On February 10, 2016, the House Ways and Means Committee held a hearing entitled The Department of Health and Human Services’ Fiscal Year 2017 Budget Request. The sole witness was HHS Secretary Sylvia Mathews Burwell.
• On February 10, 2016, the House Energy & Commerce Committee held hearing entitled Examining Medicaid and CHIP’s Federal Medical Assistance Percentage with a panel of witnesses including Ms. Carolyn Yocom, Director, Health Care, Government Accountability Office; Ms. Anne Schwartz PhD, Executive Director, Medicaid and CHIP Payment and Access Commission; Ms. Alison Mitchell, Health Care Financing Analyst, Congressional Research Service; and Mr. John Hagg, Director of Medicaid Audits, Office of Inspector General, Department of Health and Human Services.
• On February 12, 2016, the House Energy & Commerce Committee held hearing entitled Outbreaks, Attacks, and Accidents: Combatting Biological Threats with a panel of witnesses including The Honorable Donna Shalala, Panel Member, Blue Ribbon Study Panel on Biodefense; Dr. Gerald Parker, Associate Vice President for Public Health Preparedness and Response, Texas A&M University, Center for Innovation in Advanced Development and Manufacturing; The Honorable Tara O'Toole, Senior Advisor and Executive Vice President, In-Q-Tel; and The Honorable James Greenwood, Panel Member, Blue Ribbon Panel on Biodefense.
• On February 12, 2016, the House Energy & Commerce Committee issued a letter to HHS regarding the Operations of the Office of Refugee Resettlement. “Since 2011, over 129,000 children have been apprehended at the border and placed in temporary ORR custody. In fiscal year 2014, the number of unaccompanied children increased dramatically as over 57,000 children were placed in the care of ORR, and numbers soared once again this fall. In the last three months, 17,370 unaccompanied children were apprehended at the Southwest border and placed into the custody of ORR. In comparison, 7,989 children were apprehended and placed in custody during the same time period last year.”

III. REPORTS, STUDIES, & ANALYSES

• On February 8, 2016, HHS released a report that finds millions of seniors and people with disabilities with Medicare continue to save on prescription drugs and see improved benefits in 2015 as a result of the Affordable Care Act. According to HHS, nearly 10.7 million Medicare beneficiaries have received discounts over $20.8 billion on prescription drugs – an average of $1,945 per beneficiary – since the enactment of the Affordable Care Act. In 2015 alone, nearly 5.2 million seniors and people with disabilities received discounts of over $5.4 billion, for an average of $1,054 per beneficiary. This is an increase in savings compared to 2014, when 5.1 million Medicare beneficiaries received discounts of $4.8 billion, for an average of $941 per beneficiary.
• On February 9, 2016, the Office of the Inspector General (OIG) released a study entitled Delaware State Medicaid Fraud Control Unit: 2015 Onsite Review which provides the findings of an onsite review of the Delaware Unit in June 2015. For FYs 2012 through 2014, the Delaware Unit reported 28 convictions, 47 civil judgments and settlements, and combined criminal and civil recoveries of $5 million.
• On February 10, 2016, the Government Accountability Office (GAO) released a study entitled, Changes to Funding Formula Could Improve Allocation of Funds to States, in which alternative measures were identified that could be used to allocate Medicaid funding to states “more equitably” than the current Federal Medical Assistance Percentage (FMAP) formula.
• On February 10, 2016, the OIG released a report entitled, Medicare Did Not Pay Selected Inpatient Claims for Bone Marrow and Stem Cell Transplant Procedures in Accordance With Medicare Requirements. The OIG recommended that CMS direct the Medicare contractors to recover the $4.6 million in identified overpayments for incorrectly billed claims that are within the 3-year recovery period; (2) work with the Medicare contractors to notify providers of potential overpayments outside of the 3-year recovery period, which we estimate to be as much as $1.7 million for our audit period (January 2010 through September 2013); (3) review the 58 inpatient claims from October 2013 through April 2015 for stem cell transplants with lengths of stays of 1 to 2 days, which could save as much as $2 million; (4) strengthen controls related to MS-DRGs for stem cell transplants; and (5) educate hospitals on the appropriate billing of stem cell transplants.
• On February 10, 2016, GAO released an ongoing report entitled, Preliminary Observations on Efforts to Improve Tracking of Obligations and Projected Utilization which discusses the Veteran Affair’s projected funding gap and steps to better track obligations.
• On February 11, 2016, the Congressional Budget Office (CBO) issued a report on the cost of H.R. 3821, Medicaid Directory of Caregivers Act. CBO estimates that enacting H.R. 3821 would increase direct spending by $13 million over the 2016-2026 period. Because the legislation would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues. CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion in one or more of the four consecutive 10-year periods beginning in 2027.
• On February 11, 2016, CBO released a report on Private Health Insurance Premiums and Federal Policy, which notes that premiums for private health insurance are affected by various federal subsidies and regulations. CBO projects that in 2016, the federal government will subsidize most premiums, at a cost of roughly $300 billion. CBO and the staff of the Joint Committee on Taxation (JCT) project that in 2016, the average premium for an employment-based insurance plan will be about $6,400 for single coverage and about $15,500 for family coverage. Average premiums for coverage purchased individually (in what is called the nongroup market) are also high—but not quite as high as average employment-based premiums, mostly because nongroup coverage is less extensive and thus requires enrollees to make higher out-of-pocket payments when they receive care.
• On February 11, 2016, 340B Health released a study conducted by Dobson DaVanzo & Associates entitled, Analysis of Separately Billable Part B Drug Use Among 340 B DSH Hospitals and Non-340B Providers, which suggests that Medicare pays disproportionate share hospitals in the 340B drug discount program on average 13 percent less for separately payable drugs reimbursed through Medicare Part B. The release noted that 340B DSH hospitals are treating more vulnerable patients than other providers in terms of race, age, disability, and dual eligibility and emphasized the importance of 340B discounts to treat the most vulnerable patients.

IV. OTHER HEALTH POLICY NEWS

• On February 11, 2016, posted new data on preferred cost-sharing pharmacy access levels for each plan offering a preferred cost sharing benefit structure. CMS had analyzed the availability of preferred cost sharing pharmacies to Part D enrollees. CMS issued a memo on December 4, 2015 asking Part D sponsors to review the data from this analysis, prior to CMS publishing the results.
• On February 11, 2016, the Robert Wood Johnson Foundation (RWJF) released a report entitled, State Level Trends in Children's Health Insurance Coverage, which examines data from the American Community Survey (ACS) to compare health insurance coverage from 2013 to 2014 and to detail five-year coverage trends (2010 to 2014) for children nationwide and at the state level for all 50 states and the District of Columbia. Uninsurance among children (aged 0-18) was down nationwide from 7.5 percent in 2013 to 6.3 percent in 2014. This decrease was driven by a concurrent increase in public coverage. Twenty-three states experienced statistically significant declines in children’s uninsurance between 2013 and 2014, and no state saw a significant increase. Despite coverage gains, close to five million children remained uninsured in 2014, and almost half (2.4 million) reside in just six states: Texas (880,000), California (550,000), Florida (410,000), Georgia (210,000), Arizona (180,000), and New York (160,000).
• On February 9, 2016, Tom Frieden, Director of the Centers for Disease Control and Prevention (CDC), warned lawmakers that Puerto Rico will likely be hit hard by Zika virus, and requested additional funding for the agency to reduce the risks of the virus. The CDC also warned that it was be harmful to use the emergency funds allotted to prevent and fight the Ebola virus.
• On February 12, 2016, Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases said a vaccine for the Zika virus could be ready for tests on human subjects in as soon as a few months. Officials have accelerated the timeline so the country will be prepared for the summer season.
• On February 10, 2106, Blue Cross and Blue Shield of North Carolina president and CEO J. Brad Wilson hinted the company may exit North Carolina’s Affordable Care Act market. The company expects to report its second consecutive financial loss in the coming weeks. Currently, Blue Cross is the only insurer offering coverage under the ACA in all 110 counties of North Carolina.