A&B Healthcare Week in Review, July 29, 2016

I. REGULATIONS, NOTICES, & GUIDANCE

• On July 25, 2016, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule entitled Medicare Program: Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model. The proposal would implement three new bundled payment demonstrations, as well as a new model to increase cardiac rehabilitation utilization, and would establish a pathway for physicians with significant participation in bundled payment models to qualify for payment incentives under MACRA. Under the proposed bundled payment models, the hospital in which a patient is admitted for care for a heart attack, bypass surgery, or surgical hip/femur fracture treatment would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge.
• On July 29, CMS issued a final rule entitled Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017, in which CMS has finalized an overall estimated update of approximately 1.9 percent (or $145 million), relative to payments in FY 2016.
• On July 29, CMS issued a final rule entitled Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2017, Skilled Nursing Facilities Value-Based Purchasing Program, etc. CMS projects that aggregate payments to SNFs will increase in FY 2017 by $920 million, or 2.4 percent, from payments in FY 2016. This estimated increase is attributable to a 2.7 percent market basket increase reduced by 0.3 percentage points, in accordance with the multifactor productivity adjustment required by law.
• On July 29, CMS issued a notice entitled Medicare, Medicaid, and Children's Health Insurance Programs: Implementation and Extension of Temporary Moratoria on Enrollment of Part B Non-Emergency Ground Ambulance Suppliers, etc., in which CMS announced that it is extending for six months and expanding statewide the temporary provider enrollment moratoria on new Medicare Part B non emergency ground ambulance suppliers in New Jersey, Pennsylvania, and Texas and home health agencies (HHAs) in Florida, Texas, Illinois, and Michigan. Additionally, the statewide expansion also applies to Medicaid and CHIP.
  • At the same time, CMS issued a separate notice entitled Provider Enrollment Moratoria Access Waiver Demonstration of Part B Non-Emergency Ground Ambulance Suppliers and Home Health Agencies in Moratoria-Designated Geographic Locations, in which CMS announced the Provider Enrollment Moratoria Access Waiver Demonstration (PEWD), which gives CMS the ability to allow for provider and supplier enrollment exceptions in the moratoria areas if access to care issues are identified and for the development and improvement of methods of investigating and prosecuting fraud in Medicare, Medicaid, and CHIP.
• On July 29, CMS announced that the average basic premium for a Medicare Part D prescription drug plan in 2017 is projected to remain relatively stable at an estimated $34 per month. This represents an increase of approximately $1.50 over the actual average premium of $32.56 in 2016. CMS also rolled out the Part D National Average Monthly Bid Amount, the Part D Regional Low-Income Premium Subsidy Amounts, the De Minimis Amount, the Part D Income-Related Monthly Adjustment Amounts, the 2017 Medicare Advantage Employer Group Waiver Plan Regional Payment Rates, and the Medicare Advantage Regional Benchmarks.
• On July 29, CMS issued a final rule entitled Medicare Program: FY 2017 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements. As finalized, hospices would see a 2.1 percent ($350 million) increase in their payments for FY 2017 (reflecting an estimated 2.7 percent inpatient hospital market basket update, reduced by a 0.3 percentage point productivity adjustment and a 0.3 percentage point adjustment required by law).
• On July 28, 2016, CMS issued a final rule entitled Medicare Program: FY 2017 Inpatient Psychiatric Facilities (IPF) Prospective Payment System: Rate Update. The final rule estimates that IPF payments will increase by 2.2 percent – or $100 million – in FY 2017.
• On July 26, 2016, CMS updated three documents related to the Pre-Claim Review Demonstration for Home Health Services: Frequently Asked Questions; Operational Guide; and Program Overview. Additionally, one of CMS’ Medicare Administrative Contractors – CGS – released three educational letters on the demonstration, available here. The demonstration is slated to go into effect in Illinois on August 1, 2016.
• On July 25, 2016, CMS released a CMCS Informational Bulletin on Coordination of Eligibility and Enrollment between Medicaid, CHIP and the Federally Facilitated Marketplace (FFM or “Marketplace”), to remind states about federal requirements related to coordination of eligibility and enrollment among insurance affordability programs. The Bulletin also provides an overview of current regulations to ensure timely determination of eligibility and coordination across insurance affordability programs, and highlights a simplified approach to assessing potential eligibility for enrollment in coverage through the Marketplace.
• On July 26, 2016, the Center for Consumer Information and Insurance Oversight (CCIIO) clarified the Deadline for Submission of MLR and Risk Corridors Data for the 2015 Benefit Year. According to the notice, the MLR report for each reporting year must be submitted by July 31 of the year following the end of an MLR reporting year. Qualified Health Plan (QHP) issuers must also submit risk corridors data by July 31 of the year following the benefit year. However, July 31, 2016 falls on a Sunday. Therefore, for the 2015 Reporting and Benefit Year, an issuer may submit its MLR and risk corridors data for the 2015 Benefit Year by 11:59 p.m. ET on Monday, August 1, 2016, which is the first business day following the July 31, 2016 regulatory deadline(s). CMS intends to propose this clarification in future rulemaking, such that the data submission deadline would be July 31 of the year following the end of the applicable reporting and benefit year, or, if such date is not a business day, the next business day. CMS encourages issuers to submit MLR and risk corridors data as early as possible to avoid technical difficulties.
• On July 26, 2016, the Food and Drug Administration (FDA) issued a notice entitled Blood Donor Deferral Policy for Reducing the Risk of Human Immunodeficiency Virus Transmission by Blood and Blood Products. The notice seeks comment on the Agency's blood donor deferral recommendations for reducing the risk of human immunodeficiency virus (HIV) transmission as described in the document entitled "Revised Recommendations for Reducing the Risk of Human Immunodeficiency Virus Transmission by Blood and Blood Products; Guidance for Industry" dated December 2015. Comments must be received by November 25, 2016.
• On July 28, 2016, the FDA announced Guidance for Industry on General Wellness: Policy for Low Risk Devices. The guidance indicates that FDA does not intend to examine low risk general wellness products to determine whether they are devices within the meaning of the FD&C Act or, if they are devices, whether they comply with the premarket review and post-market regulatory requirements for devices under the FD&C Act and implementing regulations.
• On July 29, 2016, the Health Resources and Services Administration (HRSA) updated audit results for fiscal years 2014, 2013, and 2012.
• On July 29, 2016, the Department of Health and Human Services (HHS) announced a Sponsorship Opportunity: Office on Women's Health Awards Ceremony and Event for its 25th Anniversary. Specifically, the Office on Women’s Health (OWH) is soliciting proposals from non-federal public and private sector entities to cosponsor the OWH Anniversary Celebration event in the Washington, D.C. area in late September, 2016. Organizations should submit expressions of interest no later than 6:00pm on August 16, 2016.
• On July 27, 2016, the FDA issued the Prescription Drug User Fee Rates for Fiscal Year 2017. This document provides fee rates for FY 2017 for an application requiring clinical data ($2,038,100), for an application not requiring clinical data or a supplement requiring clinical data ($1,019,050), for an establishment ($512,200), and for a product ($97,750). These fees are effective on October 1, 2016, and will remain in effect through September 30, 2017. For applications and supplements that are submitted on or after October 1, 2016, the new fee schedule must be used. Invoices for establishment and product fees for FY 2017 will be issued in August 2016 using the new fee schedule.
• On July 27, 2016, the FDA issued the Biosimilar User Fee Rates for Fiscal Year 2017. The FY 2017 fee for a biosimilar biological product application requiring clinical data equals the PDUFA fee for an application requiring clinical data, $2,038,100. The FY 2017 fee for a biosimilar biological product application not requiring clinical data equals half this amount, $1,019,050. If a sponsor submitting a biosimilar biological product application has previously paid an initial BPD fee, annual BPD fee(s), and/or reactivation fee(s) for the product that is the subject of the application, the fee for the application is reduced by the cumulative amount of these previously paid fees. The FY 2017 biosimilar biological product establishment fee for establishments where approved biosimilar biological products are made is equal to the FY 2017 PDUFA establishment fee of $512,200. The FY 2017 biosimilar biological product fee for each biosimilar biological product approved in a biosimilar biological product application is equal to the FY 2017 PDUFA product fee of $97,750.
• On July 29, 2016, the FDA announced the Medical Device User Fee Rates for Fiscal Year 2017. The standard fee (adjusted base amount) for a premarket application, including a BLA, and for a premarket report and a BLA efficacy supplement, is $234,495 for FY 2017. The annual fee for establishment registration, after adjustment, is set at $3,382 for FY 2017. There is no small business rate for the annual establishment registration fee; all establishments pay the same fee.
• On July 29, 2016, the FDA announced the Outsourcing Facility Fee Rates for Fiscal Year 2017. This document establishes the FY 2017 rates for the small business establishment fee ($5,279), the non-small business establishment fee ($16,852), and the reinspection fee ($15,837) for outsourcing facilities; provides information on how the fees for FY 2017 were determined; and describes the payment procedures outsourcing facilities should follow. These fee rates are effective October 1, 2016, and will remain in effect through September 30, 2017.
• On July 26, 2016, the FDA issued a notice regarding Generic Drug User Fee: Abbreviated New Drug Application, Prior Approval Supplement, Drug Master File, Final Dosage Form Facility, and Active Pharmaceutical Ingredient Facility Fee Rates for Fiscal Year 2017. For FY 2017, the generic drug fee rates are: ANDA ($70,480), PAS ($35,240), DMF ($51,140), domestic API facility ($44,234), foreign API facility ($59,234), domestic FDF facility ($258,646), and foreign FDF facility ($273,646). These fees are effective on October 1, 2016, and will remain in effect through September 30, 2017.
• On July 26, 2016, the FDA issued guidance entitled Adaptive Designs for Medical Device Clinical Studies, which addresses adaptive designs for medical device clinical studies and is applicable to premarket medical device submissions including Premarket Approval Applications (PMA), premarket notification (510(k)) submissions, de novo submissions (Evaluation of Automatic Class III Designation), Humanitarian Device Exemption (HDE) applications and Investigational Device Exemption (IDE) submissions.
• On July 27, 2016, the FDA issued a daft guidance entitled Use of Real-World Evidence to Support Regulatory Decisionmaking for Medical Devices, to clarify how FDA evaluates real-world data to determine whether it may be sufficiently relevant and reliable to generate the types of real-world evidence that can be used in FDA regulatory decision-making for medical devices. Comments are requested by October 25, 2016.
• On July 26, 2016, the FDA issued draft guidance entitled Unique Device Identification System: Form and Content of the Unique Device Identifier. The draft guidance defines the expected content and forms of the Unique Device Identifier (UDI). Comments are requested by September 26, 2016.
• On July 25, 2016, the FDA issued a notice entitled Food and Drug Administration Modernization Act: Modifications to the List of Recognized Standards, which sets the forth modifications that the Agency is making to the list of standards FDA recognizes for use in premarket reviews (FDA Recognized Consensus Standards). The modifications are effective as of July 26, 2016.

Event Notices

• August 2, 2016: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public listening session to solicit comments regarding the supplemental notice of proposed rulemaking, “Medication Assisted Treatment for Opioid Use Disorders Reporting Requirements.”
• August 2, 2016: CMS will host a Special Open Door Forum (ODF) on Open Payments Notice to Inform Future Rulemaking. CMS is seeking input from Open Payments stakeholders to inform future rulemaking and other enhancements to the program by hosting a Special Open Door Forum. This effort is separate from the third reporting cycle, which published data on June 30, 2016. This solicitation will not impact any future reporting requirements without additional rulemaking or public notice. Additional information is available here.
• August 3, 2016: CMS announced the next Low Income Health Access ODF. Agenda items include: Medicare Managed Care Regulations Announcement; Proposed Changes to Chronic Care Management CCM) and Transitional Care Management (TCM) Requirements; Billing for Nursing Visits in Home Health Shortage Areas by an RHC or FQHC; and the Proposed 2017 FQHC Market Basket. Additional information is available here.
• August 31, 2016: HHS announced a public meeting of the Presidential Commission for the Study of Bioethical Issues. At this meeting, the Commission will reflect on the past, present, and future impact of national bioethics advisory bodies. Topics will include the history of national bioethics advisory bodies and their contributions to health policy, perspectives about similar bodies elsewhere, and discussion about what the future holds for groups like the Commission.
• September 14, 2016: The FDA announced a meeting of the Oncologic Drugs Advisory Committee, to discuss new drug application 208714, apaziquone for intravesical instillation, application submitted by Spectrum Pharmaceuticals, Inc. The proposed indication (use) for this product is for immediate intravesical instillation post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer. FDA intends to make background material available to the public no later than 2 business days before the meeting.
• September 14, 2016: The FDA announced a meeting of the Psychopharmacologic Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee, to discuss a completed postmarketing-requirement randomized, placebo controlled trial of the neuropsychiatric effects of CHANTIX (varenicline), ZYBAN (bupropion), and nicotine replacement therapy, along with relevant published observational studies to determine whether the findings support changes to product labeling. FDA intends to make background material available to the public no later than 2 business days before the meeting.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• The Senate has adjourned and will reconvene on Tuesday, September 6, 2016.
• • On July 28, 2016, Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, and Sen. Ben Sasse (R-Neb.), who serves on the committee, demanded answers from HHS Secretary Sylvia Mathews Burwell about the Department's failure to return a total of $5 billion to the U.S. Treasury and redistribute $20 billion to insurance providers of individual health plans. The Senators state that when HHS collected less in contributions than required by law in 2014, it fully reimbursed insurers but failed to deposit any funds into the U.S. Treasury. Overall, they say HHS has promised taxpayers only $500 million in payments under the reinsurance program in 2014 and 2015.

House of Representatives

• The House has adjourned and will reconvene on Tuesday, September 6, 2016.

III. REPORTS, STUDIES, & ANALYSES

• On July 27, 2016, the HHS Office of the Inspector General (OIG) released Advisory Opinion 16-08, approving an arrangement in which a hospice would make a supplemental payment to the nursing facilities in which the hospice's dually eligible patients reside when the nursing facilities-instead of the hospice-receive payment for their patients' room and board expenses.
• On July 25, 2016, the Congressional Budget Office (CBO) released a Cost Estimate of H.R. 5713, Sustaining Healthcare Integrity and Fair Treatment Act of 2016 (as ordered reported by the House Committee on Ways and Means on July 13, 2016). The bill would modify Medicare’s payments to Long-Term Care Hospitals (LTCHs) and prohibit Medicare from paying for items or services furnished by certain newly enrolled providers in select areas of the country subject to provider moratoria. CBO estimates that the changes in payment rules for LTCHs would increase spending by $45 million over the 2017-2026 period, while expanding the moratorium would reduce spending by the same amount over that time period.
• On July 25, 2016, the OIG released a report entitled Hospitals Largely Reported Addressing Requirements for EHR Contingency Plans (OEI-01-14-00570). The OIG concluded that persistent and evolving threats to electronic health information reinforce the need for EHR contingency plans. This review and cyberattacks that have occurred since 2014 underscore OIG’s previous recommendation that OCR fully implement a permanent audit program for compliance with HIPAA.

IV. OTHER HEALTH POLICY NEWS

• On July 21, 2016, Democrats released their final 2016 Democratic Party Platform before convening in Philadelphia, PA, for the Democratic National Convention. The final platform includes a few modifications from the draft platform, including a new section supporting programs that “emphasize independence rather than institutionalization must be better structured to support them.” The final platform also includes a new reference to pharmaceutical companies “stash[ing] their profits in offshore tax havens.” However, the platform continues to support universal health care, community health centers, reducing prescription drug costs, enabling cutting edge medical research, combatting drug and alcohol addiction, securing reproductive rights, promoting public health, and preventing gun violence, among other things.
• On July 27, 2016, CMS announced the first release of overall hospital quality star ratings on the Hospital Compare website to “help millions of patients and their families learn about the quality of hospitals, compare facilities in their area side-by-side, and ask important questions about care quality when visiting a hospital or other health care provider.”
• On July 27, 2016, the Federal Trade Commission (FTC) announced that Teva Pharmaceutical Industries Ltd. has agreed to sell the rights and assets related to 79 pharmaceutical products to settle FTC charges that its proposed $40.5 billion acquisition of Allergan plc’s generic pharmaceutical business would be anticompetitive. The remedy requires Teva to divest the drug portfolio to eleven rival firms, and marks the largest drug divestiture order in an FTC pharmaceutical merger case. On the same day, the FTC also announced that Mylan Inc. has agreed to divest the rights and assets related to two generic pharmaceutical products in order to settle FTC charges that its proposed $7.2 billion acquisition of Swedish drug maker Meda would be anticompetitive.
• On July 29, 2016, the Center for Disease Control and Prevention (CDC) said Zika virus infections in four people in Florida were likely caused by bites of local mosquitoes. The cases are likely the first known occurrence of local mosquito-borne Zika virus transmission in the continental United States.
• On July 25, 2016, CMS announced that it has approved Arizona’s plan to allow new enrollment in the Children’s Health Insurance Program (CHIP) after enrollment was frozen for several years. Now all states provide CHIP coverage to eligible children.
• On July 27, 2016, the Center for a Responsible Federal Budget released estimates of Hillary Clinton’s healthcare and education proposals, saying Clinton's previously-released health care proposals (increasing the insurance subsidies, fixing the so-called "family glitch," encouraging more states to expand Medicaid, promoting enrollment in health exchanges and Medicaid, and repealing the Cadillac tax) would cost about $400 billion, $250 billion of which would be offset by policies to reduce prescription drug costs, reform Medicare payment models, and encourage states to adopt a "public option" for health care exchanges. On net, Clinton's new proposals (increasing funding for FQHCs, allowing adults over the age of 55 to buy into Medicare, giving the Secretary of HHS the ability to block large health insurance premium increases, and triple funding for the National Health Service Corps) would cost an estimated additional $50 billion over ten years.