A&B Healthcare Week in Review, July 1, 2016

I. REGULATIONS, NOTICES, & GUIDANCE

• On June 27, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, “Medicare and Medicaid Programs; CY 2017 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements.” CMS projects that Medicare payments to home health agencies (HHAs) in Calendar Year (CY) 2017 would be reduced by 1.0 percent, or $180 million based on the proposed policies. The proposed decrease reflects the effects of the 2.3 percent home health payment update percentage ($420 million increase); the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the NRS conversion factor ($420 million decrease); the effects of the -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($160 million decrease); and the effects of the proposed increase to the fixed-dollar loss (FDL) ratio used in determining outlier payments from 0.45 to 0.56 for an estimate impact of -0.1 percent ($20 million decrease). Public comments are due by August 26, 2016.
• On June 28, 2016, CMS issued a proposed rule entitled, “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures.” This proposed rule would revise the procedures that the Department of Health and Human Services (HHS) would follow at the Administrative Law Judge level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage (MA) and other Medicare competitive health plans, and enrollees in Medicare prescription drug plans, as well as appeals of Medicare beneficiary enrollment and entitlement determinations, and certain Medicare premium appeals. In addition, this proposed rule would revise procedures that HHS would follow at CMS and the Medicare Appeals Council levels of appeal for certain matters affecting the Administrative Law Judge level. Public comments are due by August 29, 2016.
• On July 1, 2016, CMS issued a final rule entitled, “Medicare Program: Expanding Uses of Medicare Data by Qualified Entities.” This final rule implements requirements under Section 105 of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 that expand how qualified entities may use and disclose data under the qualified entity program to the extent consistent with applicable program requirements and other applicable laws, including information, privacy, security and disclosure laws. This rule also explains how qualified entities may create non-public analyses and provide or sell such analyses to authorized users, as well as how qualified entities may provide or sell combined data, or provide Medicare claims data alone at no cost, to certain authorized users. In addition, this rule implements certain privacy and security requirements, and imposes assessments on qualified entities if the qualified entity or the authorized user violates the terms of a data use agreement required by the qualified entity program.
• On June 30, 2016, CMS issued a notice entitled, “Summary Report on Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2015 Benefit Year.” According to the notice, the transitional reinsurance and permanent risk adjustment programs continued to function smoothly for the 2015 benefit year, as the Affordable Care Act (ACA)-compliant market grew substantially. For the 2015 benefit year, as of the date of this report, an estimated $7.8 billion in reinsurance payments will be made to 497 issuers nationwide.
• On June 29, 2016, CMS issued a notice entitled, “Implementation of the Medicare Prescription Drug Plan and Medicare Advantage Plan Disenrollment Reasons Survey; Outcome and Assessment Information Set (OASIS).” This data collection complements the satisfaction data collected through the Medicare Consumer Assessment of Healthcare Providers and Systems survey by providing dissatisfaction data in the form of reasons for disenrollment from a Prescription Drug Plan (PDP). The data collected in this survey can be used to improve the operation of MA contracts and standalone PDPs through the identification of beneficiary disenrollment reasons. Plans can use the information to guide quality improvement efforts. Public comments are due July 30, 2016.
• On June 29, 2016, CMS issued a notice entitled, “Medicare Advantage and Prescription Drug Program: Final Marketing Provisions; Medicare Part C and Part D Data Validation; Evaluation of the CMS Quality Improvement Organizations: Reducing Healthcare-Acquired Conditions in Nursing Homes.” The regulatory provisions require that MA organizations and Part D sponsors disclose plan information, including: service area, benefits, access, grievance and appeals procedures, and quality improvement and quality assurance requirements by September 30th of each year. The MA organizations and Part D sponsors use the information to comply with the disclosure requirements. CMS will use the approved standardized documents to ensure that correct information is disclosed to current and potential enrollees. Public comments are due by August 30, 2016.
• On June 24, 2016, CMS issued an operational guide and updated FAQs entitled, “Pre-Claim Review Demonstration for Home Health Services.” The purpose of the operational guide is to interpret and clarify the pre-claim review process for Medicare participating HHAs when rendering home health services for Medicare beneficiaries. This guide will advise providers on the process for submitting documents in support of the final claim.
• On July 1, 2016, HHS issued a final rule entitled, “World Trade Center (WTC) Health Program: Addition of New-Onset Chronic Obstructive Pulmonary Disease and WTC-Related Acute Traumatic Injury to the List of WTC-Related Health Conditions.” The final rule will add both new onset chronic obstructive pulmonary disease (COPD) and WTC-related acute traumatic injury to the List of WTC-Related Health Conditions eligible for treatment coverage in the WTC Health Program.
• On June 29, 2016, CMS issued a correction to a final rule entitled, “Medicare and Medicaid Programs; Fire Safety Requirements for Certain Health Care Facilities; Correction.” This document corrects technical errors that appeared in the final rule published in the Federal Register on May 4, 2016, entitled “Medicare and Medicaid Programs; Fire Safety Requirements for Certain Health Care Facilities.”
• On June 27, 2016, CMS issued an MLN Matters® Article entitled, “Medicare Coverage of Diagnostic Testing for Zika Virus.” This article informs the public that Medicare covers Zika virus testing under Medicare Part B as long as the clinical diagnostic laboratory test is reasonable and necessary for the diagnosis or treatment of a person’s illness or injury. This article reminds laboratories furnishing Zika virus tests to contact their Medicare Administrative Contractors (MACs) for guidance on the appropriate billing codes to use on claims for Zika virus testing. Furthermore, laboratories should provide resources and cost information as may be requested by the MACs in order for the MACs to establish appropriate payment amounts for the tests.
• On June 27, 2016, CCIIO issued a notice entitled, “Alternative Schedule for Payment of Charges for Reconciliation of the Cost-sharing Reduction Portion of Advance Payments for the 2014 and 2015 Benefit Years.” According to CCIIO, to request flexibility on the payment schedule for reconciliation of the cost-sharing reduction component of advance payments, an issuer must demonstrate that full payment will present a liquidity hardship, that the company expects to remain solvent through the end of 2016, and that the company does not have reasonable access to another source of funding. It must also provide the following financial data and attestation to CMS no later than 11:59 p.m. ET on Tuesday, July 5, 2016. The financial data and attestation should be submitted to CSRrepayment@cms.hhs.gov. The company must also inform the State Department of Insurance in the state in which it is domiciled that it is requesting this flexibility.
• On June 28, 2016, the United States Patent and Trademark Office (USPTO) issued a notice entitled, “Cancer Immunotherapy Pilot Program.” USPTO is implementing a pilot program to provide for earlier review of patent applications pertaining to cancer immunotherapy in support of the White House national $1 billion initiative to achieve ten years’ worth of cancer research in the next five years (“National Cancer Moonshot”). The USPTO will advance applications containing a claim(s) to a method of treating a cancer using immunotherapy out of turn for examination if the applicant files a grantable petition to make special under the pilot program. The objective of the pilot program is to complete the examination of the application within twelve months of special status being granted.
• On June 28, 2016, FDA issued a final order entitled, “Medical Devices; General and Plastic Surgery Devices; Classification of the Electrosurgical Device for Over-the-Counter Aesthetic Use.” FDA is classifying the electrosurgical device for over-the-counter (OTC) aesthetic use into class II (special controls). The special controls that will apply to the device are identified in this order and will be part of the codified language for the electrosurgical device for over-the-counter aesthetic use’s classification.
• On June 28, 2016, FDA issued a draft guidance entitled, “Gifts to FDA: Evaluation and Acceptance.” The Secretary of HHS has the authority to accept conditional or unconditional gifts on behalf of the United States. The Secretary has delegated this gift authority to the Commissioner of FDA. This guidance provides the process and principles the Agency will use in implementing this authority. Public comments are due by September 9, 2016.
• On June 28, 2016, FDA issued draft guidance entitled, “Procedures for Evaluating Appearance Issues and Granting Authorizations for Participation in Food and Drug Administration Advisory Committees.” This draft guidance addresses FDA's process, under government-wide federal regulations, for evaluating whether an advisory committee member has an appearance issue that raises concerns about the member's participation in an advisory committee meeting and describes FDA's process for determining whether to authorize a member with an appearance issue to participate in the advisory committee meeting. Public comments are due by September 28, 2016.
• On June 29, 2016. CCIIO issued a guidance entitled, “Guidance for State-based Marketplaces No Cost Extensions in 2017.” The guidance provides information for current grantees under section 1311 of the ACA on the requirements for requesting a No Cost Extension (NCE). This information supplements the prior CMS guidance entitled, “FAQs on the Clarification of the Use of 1311 Funds for Establishment Activities,” published in March 2014.
• On June 29, 2016, CMS issued a transmittal entitled, “July 2016 Update of the Hospital Outpatient Prospective Payment System (OPPS).” This recurring update notification describes changes to and billing instructions for various payment policies implemented in the July 2016 OPPS update. The July 2016 Integrated Outpatient Code Editor (I/OCE) and OPPS Pricer will reflect the Healthcare Common Procedure Coding System (HCPCS), Ambulatory Payment Classification (APC), HCPCS Modifier, and Revenue Code additions, changes, and deletions identified in this notice.
• On June 29, 2016, CMS issued a transmittal entitled, “New Condition Code for Reporting Home Health Episodes With No Skilled Visits.” The transmittal revises Medicare billing instructions for home health claims to allow the use of a new condition code. The code indicates the HHA provided no skilled services during the billing period, but the HHA has documentation on file of an allowable circumstance.
• On June 29, 2016, FDA issued a proposed rule entitled, “Submission of Food and Drug Administration Import Data in the Automated Commercial Environment.” FDA is proposing to establish requirements for the electronic filing of entries of FDA-regulated products in the Automated Commercial Environment (ACE) or any other electronic data interchange (EDI) system authorized by the U.S. Customs and Border Protection Agency (CBP), in order for the filing to be processed by CBP and to help FDA in determining admissibility of that product. Public comments are due by September 1, 2016.
• On July 1, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a notice entitled, “Center for Substance Abuse Prevention.” SAMHSA announced the renewal of the Center for Substance Abuse Prevention (CSAP) Drug Testing Advisory Board (DTAB). The CSAP DTAB provides advice based on an ongoing review of the direction, scope, balance, and emphasis of the Agency's drug testing activities and the drug testing laboratory certification program.
• On June 30, 2016, FDA issued a draft guidance entitled, “Elemental Impurities in Drug Products.” This draft guidance provides recommendations regarding the control of elemental impurities of human drug products marketed in the United States consistent with implementation of International Council for Harmonisation (ICH) guidance for industry “Q3D Elemental Impurities.” This draft guidance will also assist manufacturers of compendial drug products in responding to the issuance of the United States Pharmacopeia (USP) requirement for the control of elemental impurities. Public comments are due September 1, 2016.

Event Notices

• July 22, 2016, the Agency for Healthcare Research and Quality (AHRQ) announced a public meeting of the National Advisory Council for Healthcare Research and Quality.
• August 4, 2016, FDA announced a public advisory committee meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee. The general function of the committees is to provide advice and recommendations to the Agency on FDA’s regulatory issues.
• August 16, 2016, FDA announced a public advisory committee meeting of the Microbiology Devices Panel of the Medical Devices Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA's regulatory issues. The meeting will be open to the public.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On June 28, 2016, the Senate Finance Committee convened a hearing entitled, “Examining the Proposed Medicare Part B Drug Demonstration.” The sole witnesses included Dr. Patrick Conway, Acting Principal Deputy Administrator, Deputy Administrator for Innovation and Quality, and Chief Medical Officer, CMS.
• On June 28, 2016, the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Aging convened a hearing entitled, “Small Business Health Care: Costs and Options.” The witnesses included Mr. Tom Glause, Commissioner, Wyoming Department of Insurance; Mr. Warren Hudak, President, Hudak and Company; Mr. Tom Harte, President, Landmark Benefits, Inc.; and Ms. Sarah Lueck, Senior Policy Analyst, Center on Budget Policy and Priorities.
• On June 29, 2016, the Senate Homeland Security and Governmental Affairs Committee convened a hearing entitled, “Roundtable - Preparing for and Protecting the Nation from Zika.” The witnesses included Rear Admiral Anne Schuchat, M.D., USPHS, Principal Deputy Director, Centers for Disease Control and Prevention (CDC); H. Fisk Johnson, Chairman and CEO. S.C. Johnson & Son; Colonel Christopher Zahn, M.D., USAF (Ret.), Vice President, Practice Activities, American College of Obstetricians and Gynecologists; Joseph M. Conlon, Technical Advisor, American Mosquito Control Association; and David O'Connor, Ph.D., Professor of Pathology and Laboratory Medicine, University of Wisconsin-Madison.

House of Representatives

• The House has adjourned and will reconvene on Tuesday, July 5, 2016.

III. REPORTS, STUDIES, & ANALYSES

• On June 27, 2016, the HHS Office of Inspector General (OIG) released “OIG Advisory Opinion No. 16-07.” OIG responded to a request for an advisory opinion regarding a savings card program under which individuals who have prescription drug coverage under Medicare Part D receive discounts on a drug that is statutorily excluded from coverage (the “Arrangement”). OIG concluded that, although the Arrangement could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of Federal health care program business were present, the OIG will not impose administrative sanctions on [name redacted].
• On June 29, 2016, the Congressional Budget Office (CBO) issued a revised cost estimate for H.R. 4981, the Opioid Use Disorder Treatment Expansion and Modernization Act. This estimate supersedes the cost estimate that CBO transmitted for H.R. 4981 on May 31, 2016. That earlier estimate did not account for the reduction in health care spending, the additional costs from reduced mortality rates for those people who comply with buprenorphine MAT, or for the effects of the bill on the costs of private health insurance coverage.
• On June 29, 2016, CBO released a report entitled, “Cost Estimate of S. 1455, Recovery Enhancement for Addiction Treatment (TREAT) Act.” CBO estimates that enacting S. 1455 would increase net direct spending by $2.3 billion and reduce revenues by $0.7 billion, resulting in a $3.1 billion increase in federal deficits. CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2027.
• On June 30, 2016, OIG released a report entitled, “Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2016.” For this report, OIG determined whether the 347 unique formularies used by the 3,116 Part D plans operating in 2016 cover the 200 drugs most commonly used by dual eligibles. Overall, OIG found that the rate of Part D plan formularies' inclusion of the 198 drugs commonly used by dual eligibles is high, with some variation. On average, Part D plan formularies include 96 percent of the 198 commonly used drugs. This report does not contain recommendations.

IV. OTHER HEALTH POLICY NEWS

• On June 30, 2016, CMS published 2015 Open Payments data, along with newly submitted and updated payment records for the 2013 and 2014 reporting periods. The Open Payments program (sometimes called the “Sunshine Act”) requires that transfers of value by manufacturers of drugs, devices, biologicals, and medical supplies that are paid to physicians and teaching hospitals to be published on a public website. For Open Payments program year 2015, health care industry manufacturers reported $7.52 billion in payments and ownership and investment interests to physicians and teaching hospitals. This amount is comprised of 11.90 million total records attributable to 618,931 physicians and 1,116 teaching hospitals.
• On June 30, 2016, CMS published the March 31, 2016 Effectuated Enrollment Snapshot. According to CMS, an estimated 11.1 million consumers had effectuated Health Insurance Marketplace coverage – which means those individuals, paid their premiums and had an active policy as of that date. HHS continues to project effectuated enrollment of about 10 million people for the end of 2016. Moving forward, CMS will be reporting effectuated enrollment data semiannually, once for the first six months of the year and once for the full twelve months of the year, based on the average number of effectuated enrollments over the relevant time period.
• On June 30, 2016, CMS published two reports with Medicaid long-term services and support (LTSS) expenditures data. The first report focuses on the most recent data available, for Fiscal Year 2014, and recent trends such as 1) an increase in LTSS provided in managed care programs and 2) increased used of newer Medicaid LTSS options authorized in the Deficit Reduction Act and the Affordable Care Act. The second report, called Improving the Balance, provides a historical perspective, with data from FY 1981 through FY 2014. This report documents the impressive transformation of Medicaid LTSS from primarily institutional services to the present home and community-based services (HCBS) that represent 53 percent of LTSS spending. A webinar to present and discuss data from both reports will be held July 14 at 2:00 p.m. Eastern.
• On June 29, 2016, HHS announced that it has selected nearly 200 physician group practices and 17 health insurance companies to participate in a care delivery model that supports and encourages higher quality and more coordinated cancer care. The Medicare arm of the Oncology Care Model includes more than 3,200 oncologists and will cover approximately 155,000 Medicare beneficiaries nationwide. The Oncology Care Model begins on July 1, 2016 and runs through June 30, 2021.
• On June 27, 2016, HHS Office of the Assistant Secretary for Preparedness and Response (ASPR) announced that it will begin developing a Zika vaccine using its Center for Innovation in Advanced Development and Manufacturing (CIADM) in Baltimore, Maryland. With funding and direction from ASPR’s Biomedical Advanced Research and Development Authority (BARDA), the CIADM led by Emergent BioSolutions, Inc., will conduct a variety of studies to move quickly through early stages of vaccine development and submit an investigational new drug request to FDA to begin clinical studies.
• On June 29, 2016, Vice President Joe Biden hosted the first Cancer Moonshot Summit, where numerous initiatives were rolled out in an effort to drive progress toward ending cancer. As part of the summit, FDA Commissioner Robert Califf named Dr. Richard Pazdur as the acting director of the newly created FDA Oncology Center of Excellence (OCE). Dr. Pazdur will coordinate the review of all the agency's cancer therapeutics. “The acting director of the OCE will also play a critical role serving as the central point of engagement for oncology stakeholders, including patient-focused advocacy groups, professional associations, industry, academia and sister agencies such as the National Institutes of Health (NIH),” said Califf.