A&B Healthcare Week in Review, June 10, 2016

I. REGULATIONS, NOTICES, & GUIDANCE

• On June 6, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a final rule entitled, “Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations--Revised Benchmark Rebasing Methodology, Facilitating Transition to Performance-Based Risk, and Administrative Finality of Financial Calculations.” Under the Medicare Shared Savings Program (Shared Savings Program), providers of services and suppliers that participate in an Accountable Care Organization (ACO) continue to receive traditional Medicare fee-for-service (FFS) payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. This final rule addresses changes to the Shared Savings Program, including: modifications to the program’s benchmarking methodology, when resetting the ACO’s benchmark for a second or subsequent agreement period, to encourage ACOs’ continued investment in care coordination and quality improvement; an alternative participation option to encourage ACOs to enter performance-based risk arrangements earlier in their participation under the program; and policies for reopening of payment determinations to make corrections after financial calculations have been performed and ACO shared savings and shared losses for a performance year have been determined.
• On June 8, 2016, the Internal Revenue Service (IRS), the Department of Labor (DOL), and CMS issued a proposed rule entitled, “Expatriate Health Plans, Expatriate Health Plan Issuers, and Qualified Expatriates; Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance.” The document contains proposed regulations on the rules for expatriate health plans, expatriate health plan issuers, and qualified expatriates under the Expatriate Health Coverage Clarification Act of 2014 (EHCCA). This document also includes proposed conforming amendments to certain regulations to implement the provisions of the EHCCA. Further, the document proposes standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits and revisions to the definition of short-term, limited-duration insurance for purposes of the exclusion from the definition of individual health insurance coverage. The proposed regulations affect expatriates with health coverage under expatriate health plans and sponsors, issuers and administrators of expatriate health plans, individuals with and plan sponsors of travel insurance and supplemental health insurance coverage, and individuals with short-term, limited-duration insurance. In addition, this document proposes to amend a reference in the final regulations relating to prohibitions on lifetime and annual dollar limits and proposes to require that a notice be provided in connection with hospital indemnity and other fixed indemnity insurance in the group health insurance market for it to be considered excepted benefits. Public comments are due by August 10, 2016.
• On June 8, 2016, CMS issued a notice entitled, “Medicare Program; Pre-Claim Review Demonstration for Home Health Services.” This notice announces a 3-year Medicare pre-claim review demonstration for home health services in the states of Illinois, Florida, Texas, Michigan, and Massachusetts, where there have been high incidences of fraud and improper payments for these services. This demonstration will begin in Illinois no earlier than August 1, 2016, in Florida no earlier than October 1, 2016, and in Texas no earlier than December 1, 2016. The demonstration will begin in Michigan and Massachusetts no earlier than January 1, 2017.
• On June 6, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a notice entitled, “Protection and Advocacy for Individuals with Mental Illness (PAIMI) Final Rule.” The Act authorizes funds to support activities on behalf of individuals with significant (severe) mental illness (adults) or significant (severe) emotional impairment (children/youth). Public comments are due by July 6, 2016.
• On June 6, 2016, the CDC issued a notice entitled, “Request for Nominations of Candidates to Serve on the Clinical Laboratory Improvement Advisory Committee (CLIAC) and Request for Suggested Meeting Topics for CLIAC.” CLIAC consists of 20 members including the Chair, and represents a diverse membership across laboratory specialties, professional roles (laboratory management, technical specialists, physicians, nurses) and practice settings (academic, clinical, public health), and includes a consumer representative. In addition, the Committee includes three ex officio members (or designees), including the Director of the CDC; the Administrator of the CMS; and the Commissioner of the FDA. Nominations are due by August 1, 2016.
• On June 7, 2016, CMS issued a notice entitled, “Medicare Program: Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals, etc.; Correction.” This document corrects technical and typographical errors in the proposed rule that appeared in the Federal Register on April 27, 2016 titled “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2017 Rates; Quality Reporting Requirements for Specific Providers; Graduate Medical Education; Hospital Notification Procedures Applicable to Beneficiaries Receiving Observation Services; and Technical Changes Relating to Costs to Organizations and Medicare Cost Reports.”
• On June 7, 2016, the Food and Drug Administration (FDA) issued a notice entitled, “Mammography Quality Standards Act Requirements.” The Mammography Quality Standards Act requires the establishment of a Federal certification and inspection program for mammography facilities; regulations and standards for accreditation and certification bodies for mammography facilities; and standards for mammography equipment, personnel, and practices, including quality assurance. The intent of these regulations is to assure safe, reliable, and accurate mammography on a national level. Public comments are due by August 7, 2016.
• On June 8, 2016, the Department of Health and Human Services (HHS) issued its Semiannual Regulatory Agenda. This agenda presents the rulemaking activities that HHS expects to undertake in the foreseeable future to advance this mission.
• On June 8, 2016, FDA issued a final rule entitled, “Advisory Committee; Transmissible Spongiform Encephalopathies Advisory Committee; Termination.” FDA announced the termination of the Transmissible Spongiform Encephalopathies Advisory Committee. This document removes the Committee from the Agency’s list of standing advisory committees.
• On June 7, 2016, the Office of Management and Budget (OMB) received a final rule for review entitled, “Topical Antimicrobial Drug Products for Over-the-Counter Human Use: Final Monograph for Consumer Antiseptic Wash Products.” OMB has not published an agenda for this final rule.
• On June 8, 2016, the Consumer Information and Insurance Oversight (CCIIO) issued an FAQ entitled, “March 31, 2016, HHS-Operated Risk Adjustment Methodology Meeting; Questions & Answers.” The purpose of the document is to set forth the major questions asked and answered during the March 31, 2016, HHS-Operated Risk Adjustment Methodology Public Meeting.
• On June 9, 2016, FDA issued a guidance entitled, “Guidance for Industry: Interim Policy on Compounding Using Bulk Drug Substances under Section 503B the Federal Food, Drug, and Cosmetic Act.” The guidance describes FDA’s interim regulatory policy regarding outsourcing facilities that compound human drug products using bulk drug substances while FDA develops the list of bulk drug substances that can be used in compounding under the Federal Food, Drug, and Cosmetic Act (the FD&C Act). Public comments may be submitted at any time.
• On June 9, 2016, FDA issued a guidance entitled, “Guidance for Industry: Interim Policy on Compounding Using Bulk Drug Substances under Section 503A the Federal Food, Drug, and Cosmetic Act.” The guidance describes FDA's interim regulatory policy regarding the use of bulk drug substances by licensed pharmacists in State-licensed pharmacies or Federal facilities and by licensed physicians to compound human drug products while FDA develops the list of bulk drug substances that can be used in compounding under section 503A of the FD&C Act.
• On June 9, 2016, FDA issued a guidance entitled, “Pharmacy Compounding of Human Drug Products Under Section 503A of the Federal Food, Drug, and Cosmetic Act.” This guidance announces FDA’s intention with regard to enforcement of section 503A of the FD&C Act to regulate entities that compound drugs, now that section 503A has been amended by Congress to remove the advertising and solicitation provisions that were held unconstitutional by the U.S. Supreme Court in 2002. Several parts of section 503A require rulemaking and consultation with a Pharmacy Compounding Advisory Committee to implement. This guidance explains how the provisions will be applied pending those consultations and rulemaking. This guidance also describes some of the possible enforcement actions FDA can bring against individuals or firms that compound drugs in violation of the FD&C Act.
• On June 9, 2016, FDA issued a final order entitled, “Medical Devices: Ophthalmic Devices; Classification of Nasolacrimal Compression Device.” The FDA is classifying the nasolacrimal compression device into class I (general controls). The Agency is classifying the device into class I (general controls) in order to provide a reasonable assurance of safety and effectiveness of the device.
• On June 9, 2016, FDA issued a draft guidance entitled, “Dissemination of Patient-Specific Information from Devices by Device Manufacturers.” The FDA developed this draft guidance to facilitate the appropriate and responsible dissemination of patient-specific information recorded, stored, processed, retrieved, and derived from medical devices from manufacturers to patients. This draft guidance provides recommendations to industry, healthcare providers, and FDA staff about the mechanisms and considerations for device manufacturers sharing such information with patients. This draft guidance is not final nor is it in effect at this time. Public comments are due by August 9, 2016.
• On June 9, 2016, the Agency for Healthcare Research and Quality (AHRQ) issued a notice entitled, “Survey of Hospital Quality Leaders.” This proposed information collection was previously published in the Federal Register on February 10, 2016 and allowed 60 days for public comment. AHRQ received no substantive comments. The purpose of this notice is to allow an additional 30 days for public comment. Public comments are due by July 9, 2016.
• On June 9, 2016, CMS issued a transmittal entitled, “Drug Amount Discarded/Not Administered to Any Patient.” Transmittal 3530, dated May 24, 2016, is being rescinded and replaced by Transmittal 3538 to update the Effective and Implementation dates. All other information remains the same. Effective January 1, 2017, claims for discarded drug or biological amount not administered to any patient, shall be submitted using the JW modifier. Also, effective January 1, 2017, providers must document the discarded drugs or biologicals in patient's medical record. This CR updates the Section 40 - Discarded Drugs and Biologicals of Chapter 17 of the Claims Processing Manual 100-04.
• On June 9, 2016, CMS issued a transmittal entitled, “Corrections to Chapter 1 of the Medicare Claims Processing Manual.” The transmittal makes various corrections to Chapter 1 of the Medicare Claims Processing Manual.
• On June 10, 2016, CDC issued a notice entitled, “Healthcare Associated Venous Thromboembolism Prevention Challenge; Requirements and Registration.” The notice is being made to reflect an increase in the number of Champions and change the maximum total prize disbursement. There are no other changes to the September 22, 2015 notice.
• On June 10, 2016, CMS issued a notice entitled, “Detailed Notice of Discharge (DND) and Supporting Regulations.” A beneficiary or enrollee who wishes to appeal a determination by a Medicare health plan (for a managed care enrollee) or hospital (for an original Medicare beneficiary) that inpatient care is no longer necessary may request Quality Improvement Organization (QIO) review of the determination. Public comments are due by July 10, 2016.
• On June 10, 2016, CMS issued a notice entitled, “National Implementation of In-Center Hemodialysis CAHPS Survey; Medicare Parts C and D Program Audit Protocols and Data Requests; Program of all-Inclusive Care for the Elderly (PACE) Quality Data Entry in CMS Health Plan Monitoring System; Testing Experience and Functional Tools Demonstration: Personal Health Record (PHR) User Survey; Medicare Advantage, Medicare Part D, and Medicare Fee-For-Service Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey.” Public comments are due on August 10, 2016.
• On June 10, 2016, NIH issued a notice entitled, “Charter Renewals: National Cancer Institute.” NIH announced that the Charter for the National Cancer Institute Clinical Trials and Translational Research Advisory Committee was renewed for an additional two-year period through April 14, 2018.
• On June 8, 2016, OMB received a proposed rule for review entitled, “TRICARE; Reimbursement of Long Term Care Hospitals.” According to OMB, the rule would implement the statutory requirement that TRICARE payment methods for institutional care be determined to the extent practicable in accordance with the same reimbursement rules as those that apply to payments to providers of services of the same type under Medicare. This rule would implement a reimbursement methodology similar to that furnished to Medicare beneficiaries for services provided by long-term care hospitals.

Event Notices

• June 13, 2016, SAMHSA’s Center for Substance Abuse Prevention (CSAP) National Advisory Council will meet via teleconference. The meeting will include the review, discussion, and evaluation of grant applications reviewed by the Initial Review Group, and involve an examination of confidential financial and business information as well as personal information concerning the applicants.
• June 22, 2016, HHS announced a public meeting of the President's Advisory Council on Faith-based and Neighborhood Partnerships Council Meetings.
• June 28 &29, 2016, CDC announced a public meeting of the Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry.
• June 28-29, 2016, CDC announced a closed meeting of the Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP).
• June 28-29, 2016, HHS announced a public meeting of the Advisory Committee on Training in Primary Care Medicine and Dentistry (ACTPCMD).
• July 11, 2016, HHS announced a public meeting of the Advisory Group on Prevention, Health Promotion, and Integrative and Public Health.
• July 13, 2016, FDA announced a public meeting of the Arthritis Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA’s regulatory issues.
• July 19, 2016, FDA announced a public meeting of the Dermatologic and Ophthalmic Drugs Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA's regulatory issues.
• July 26, 2016, FDA announced a public advisory committee meeting of the Cellular, Tissue and Gene Therapies Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA’s regulatory issues.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On June 7, 2016, the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies convened a markup of the “Labor, Health and Human Services, Education, and Related Agencies Appropriations Act for FY2017.” The FY 2017 Labor, Health and Human Services, and Education and Related Agencies (Labor-HHS) Appropriations Bill provides $161.9 billion in base discretionary spending, which is $270 million below the FY 2016 level and $2 billion below the President’s budget request. The bill also contains $1.96 billion in cap adjustment funding for preventing waste, fraud, abuse, and improper payments in the Social Security, Medicare, and Medicaid programs.
• On June 9, 2016, the Senate Appropriations Committee convened a markup of the “Labor, Health and Human Services, Education, and Related Agencies Appropriations Act for FY2017.” The bill was reported favorably to the Senate floor.

House of Representatives

• On June 8, 2016, the House Ways and Means on Subcommittee on Health convened a Member’s Day hearing entitled, “Legislation to Improve and Sustain the Medicare Program.” Members presented a variety proposed legislation to improve and sustain the Medicare program.
• On June 8, 2016, the House Energy and Commerce on Subcommittee on Health convened a markup of H.R.3299, the “Strengthening Public Health Emergency Response Act of 2015.” The bill, authored by Reps. Brooks (R-IN) and Eshoo (D-CA) would increase American emergency preparedness by increasing administrative efficiency within the Office of Assistant Secretary for Preparedness and Response (ASPR) in HHS and provide incentives for companies to spur development of medical countermeasures for public health emergencies and biochemical attacks.
• On June 10, 2016, the House Energy and Commerce Subcommittee on Health held a hearing on “Advancing Patient Solutions for Lower Costs and Better Care,” to review several pieces of legislation that would: change the permissible age variation in health insurance premium rates; amend the Affordable Care Act (ACA) to better align the grace period required for non-payment of premiums before discontinuing coverage under qualified health plans with such grace periods provided for under State law; require verification for eligibility for enrollment during special enrollment periods in ACA insurance plans; as well as H.R.3463, the “Aligning Children's Dental Coverage Act”; and “H.R.4262, the “Transparency and Accountability of Failed Exchanges Act.” The witnesses included Ms. Sara Collins, Vice President of Health Coverage and Access, Commonwealth Fund; Mr. Doug Holtz-Eakin, President, American Action Forum; and Ms. Grace-Marie Turner, Founder, President, and Trustee, Galen Institute.
• On June 10, 2016, Members of the House Ways and Means and Energy and Commerce Committees issued a statement upon receiving a letter from CMS Acting Administrator Andy Slavitt in response to concerns raised about CMS’s proposed Medicare Part B Drug Payment Model. Among other things, Members said: “The lack of a substantive response from CMS to the detailed concerns raised by a bipartisan majority of the House of Representatives is not just disappointing, it’s disrespectful to the millions of individual patients and families we collectively represent… What CMS is proposing under the guise of an ‘experiment’ is, in fact, a major policy change that threatens access to care for some of the most seriously ill Americans. Before this new payment model moves forward, the vulnerable seniors and elderly cancer patients whose health care options will be impacted by this change deserve a thoughtful response from CMS.”
• On June 8, 2016, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Ranking Member Frank Pallone, Jr. (D-NJ) introduced the FDA Cross-Center Collaboration Act of 2016, legislation to encourage collaboration at the FDA. The bipartisan bill would modernize the agency to help streamline the review of drugs and devices for major disease areas across product centers.

III. REPORTS, STUDIES, & ANALYSES

• On June 3, 2016, GAO released a study entitled, “VA’s Health Care Budget: In Response to a Projected Funding Gap in Fiscal Year 2015, VA Has Made Efforts to Better Manage Future Budgets.” GAO found that two areas accounted for the Department of Veterans Affairs' (VA) fiscal year 2015 projected funding gap of $2.75 billion: (1) higher-than-expected obligations for VA's longstanding care in the community (CIC) programs; and (2) unanticipated obligations for hepatitis C drugs. GAO is not making any recommendations. After reviewing a draft of this report, VA agreed with what GAO found.
• On June 6, 2016, GAO released a study entitled, “VA Health Care: Improvements Needed for Management and Oversight of Sole- Source Affiliate Contract Development.” GAO found it took nearly three years on average to develop and award 11 selected high-value, long-term sole-source affiliate contracts (SSAC) from three of the five Department of Veterans Affairs (VA) medical centers (VAMC) GAO visited. GAO is making eight recommendations, including that the VA develop performance standards for the timely development of high-value, long- term SSACs, develop standards for the minimum amount of time necessary to develop and award short-term SSACs, and take steps to increase the retention and competence of the contracting workforce. VA concurred with GAO's recommendations and provided an action plan to address them.
• On June 7, 2016, OIG released an updated work plan entitled, “Fiscal Year 2016 HHS OIG Mid-Year Work Plan.” Areas under consideration for new work include a holistic examination of HHS' efforts to reduce opioid abuse, adherence to safety standards in Administration for Children and Families' Unaccompanied Children Program, and evaluation of CMS's Fraud Prevention System.
• On June 7, 2016, OIG released a study entitled, “Observations From Our Review of CMS's Administration of the First Performance Year of the Pioneer Accountable Care Organization Payment Model.” OIG reviewed CMS’ administration of the Pioneer ACO Payment Model (Pioneer Model). OIG’s observations on CMS' administration of Pioneer Model PY1 include that CMS (1) although not required to do so, did not publicly disclose certain retroactive payment arrangement selections for PY1; (2) did not have access to data needed to verify shared savings and loss calculations; (3) did not promptly process and collect the only shared loss; (4) performed two Pioneer ACO pilot audits and, although not required to do so, may not have communicated and resolved the results; and (5) did not always maintain complete Pioneer ACO agreements and other key documentation.
• On June 8, 2016, OIG released a report entitled, “State Efforts to Exclude 340B Drugs from Medicaid Managed Care Organization (MCO) Rebates.” OIG found that, in order to identify 340B drug claims and correctly collect rebates for MCO drugs, most States use methods that identify providers using 340B purchased drugs. OIG recommended that CMS require States to use claim level method to identify 340B claims. CMS did not concur with the recommendation, noting that while it agrees with the importance of claim level methods, the statute does not contemplate such a requirement for States.
• On June 9, 2016, GAO released a report entitled, “Medicare Fee-For-Service: Opportunities Remain to Improve Appeals Process.” GAO found that the number of appeal decisions issued after statutory time frames had increased, with the largest increase in and the largest proportion of late decisions occurring at appeal Levels 3 and 4. GAO recommends that HHS take four actions, including improving the completeness and consistency of the data used by HHS to monitor appeals and implementing a more efficient method of handling appeals associated with repetitious claims. HHS agreed with four of GAO's recommendations, and disagreed with a fifth recommendation, citing potential unintended consequences. GAO agreed and has dropped that recommendation.

IV. OTHER HEALTH POLICY NEWS

• On June 6, 2016, CMS launched the second round of the Support and Alignment Networks under the Transforming Clinical Practice Initiative (TCPI). This opportunity will provide up to $10 million over the next three years to leverage primary and specialist care transformation work and learning that will catalyze the adoption of Alternative Payment Models on a large scale. The Support and Alignment Networks 2.0 represents a significant enhancement to the TCPI network expertise and will help clinicians prepare for the proposed new Quality Payment Program, which CMS is implementing as part of bipartisan legislation Congress passed last year repealing the Sustainable Growth Rate.
• On June 8, 2016, HHS announced a series of actions to strengthen the Marketplace risk pool. These actions include curbing abuses of short-term plans, improving the risk adjustment program, helping consumers who turn 65 make the transition to Medicare, beginning the full implementation of the Special Enrollment Confirmation Process, and continuing efforts to reduce data-matching issues (DMIs.)
• On June 9, 2016, HHS hosted a webinar entitled, “Marketplace Year 3: Issuer Insights and Innovation.” The forum featured key leadership from the insurance industry exploring strategies around consumer engagement, provider contracting, and care coordination models tailored by population data to serve Marketplace consumers. The meeting brought together national leaders within the Marketplace industry to discuss strategies to fuel innovative and competitive private health insurance coverage.