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

I. Regulations, Notices, & Guidance

• On August 12, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled Medicaid Disproportionate Share Hospital (DSH) Payments: Treatment of Third Party Payers in Calculating Uncompensated Costs.  According to CMS, this proposed rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments and the application of such limitation in the annual DSH audits, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule would make clearer in the text of the regulation an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments received by hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation would reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source (other than state or local governmental payments for indigent patients). Comments are due September 14, 2016. 
• On August 11, 2016, the Health Resources and Services Administration (HRSA) issued a proposed rule entitled Administrative Dispute Resolutions: 340B Drug Pricing Program. The proposed rule would set forth new definitions, establish a 340B ADR Panel process for all incoming claims, and establish requirements around claim submission procedures, response timeframes, and information sharing.  Comments are due by October 11, 2016.
• On August 11, 2016, CMS issued a proposed rule entitled Medicare and Medicaid Programs; Programs of All-Inclusive Care for the Elderly (PACE). The proposed rule would revise and update the requirements for PACE under the Medicare and Medicaid programs. The proposed rule addresses application and waiver procedures, sanctions, enforcement actions and termination, administrative requirements, PACE services, participant rights, quality assessment and performance improvement, participant enrollment and disenrollment, payment, federal and state monitoring, data collection, record maintenance, and reporting. The proposed changes would provide greater operational flexibility, remove redundancies and outdated information, and codify existing practice. Comments are due September 15, 2016. 
• On August 8, 2016, CMS issued an HPMS memorandum entitled Guidance regarding implementation of the procedural requirements under the regulation implementing Section 1557 of the Affordable Care Act of 2010—Nondiscrimination Communication Requirements and Grievance Procedures. This memorandum provides guidance regarding implementation of the procedural requirements in the regulation implementing Section 1557 of the Affordable Care Act of 2010 (Section 1557) for Medicare Advantage organizations, Prescription Drug Plans, Medicare Medicaid Plans (MMPs), Program of All-inclusive Care for the Elderly (PACE) Plans, and Section 1876 Cost Plans ("Plans/Part D Sponsors").
• On August 11, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a request for comment on report entitled: Advancing the Care of Pregnant and Parenting Women with Opioid Use Disorder and their Infants: A Foundation for Clinical Guidance. This report describes the formal process agreed on and followed under the guidance of the federal steering committee (FSC). It explains the RAND Corporation (RAND)/University of California Los Angeles (UCLA) Appropriateness Method (RAM), justifies its adoption, and reports the outcomes of its application that will form the basis for the development of clinical guidance. This report will serve as the foundation for the development of clinical guidance to be used by providers caring for women with opioid use disorder and their infants. Comments are due September 12, 2016. 
• On August 5, 2016, the Center for Consumer Information and Insurance Oversight (CCIIO) released a notice entitled Reporting Cost-sharing Reduction Amounts for 2015 MLR and Risk Corridors.  The notice states that CCIIO is no longer requiring an issuer that reported a certified estimate of cost-sharing reductions (CSRs) for the 2014 benefit year that was lower than the actual amount of CSRs provided in the 2014 benefit year (as calculated under CSR reconciliation), and that is subject to the adjustment to 2015 risk corridors payments and charges, to adjust the 2015 CSR amount reported in its 2015 MLR and risk corridors forms to account for the adjustment amount. Instead, issuers that are subject to the direct adjustment to 2015 benefit year risk corridors payments and charges are permitted to report the reconciled amount of CSRs provided for the 2015 benefit year (as determined through CSR reconciliation), without any adjustments to account for 2014 CSR amounts previously reported.
• On August 12, 2016, CCIIO issued a guidance on Health Coverage Tax Credit Hardship Exemption. This guidance provides that the Secretary is exercising her statutory authority to provide that all individuals who are eligible individuals or qualifying family members (under 26 USC 35) who are not enrolled in health coverage tax credit (HCTC)-qualifying health insurance coverage for one or more months between July and December 2016 are entitled to a hardship exemption for the months during that period they were HCTC-eligible. 
• On August 8, 2016, CCIIO released a Notice to States Regarding Marketplace Auto Re-Enrollment. The notice provides that, beginning with the 2017 plan year, Marketplaces may determine the auto re-enrollment of enrollees in qualified health plans (QHPs) where the issuer will have no Marketplace enrollment option for the upcoming plan year, unless otherwise directed by the State regulatory authority. This notice outlines the steps CMS expects State Regulatory Authorities in all States with an FFM (including State Partnership Marketplaces) or State-based Marketplaces on the Federal Platform (SBM-FPs) to take if they wish to direct this auto re-enrollment activity for PY 2017, to ensure that the Marketplace will automatically re-enroll enrollees according to State direction.
  • On August 8, 2016, CCIIO released corresponding FAQs on Auto Re-enrollment for QHPs no longer available in the Marketplace that address how states intend to approach re-enrollment and clarifies certain requirements. 
• On August 10, 2016, CCIIO released an FAQ on Language Access Tagline Frequently Asked Questions.  Among other things, CCIIO notes that they intend to propose amendments to existing regulations in order to provide more specificity about when applicable entities would be permitted to aggregate limited English proficient populations across states to determine the languages in which taglines must be provided, in light of questions that have arisen about this issue.
• On August 12, 2016, the Food and Drug Administration (FDA) released a final rule entitled Substances Generally Recognized as Safe.  The final rule amends and clarifies the criteria in FDA regulations for when the use of a substance in food for humans or animals is not subject to the premarket approval requirements of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) because the substance is generally recognized as safe (GRAS) under the conditions of its intended use.  FDA also is amending regulations to replace the voluntary GRAS affirmation petition process with a voluntary notification procedure under which any person may notify FDA of a conclusion that a substance is GRAS under the conditions of its intended use. 
• On August 10, the FDA released a notice extending the comment period on the document entitled “Infectious Disease Next Generation Sequencing Based Diagnostic Devices: Microbial Identification and Detection of Antimicrobial Resistance and Virulence Markers; Draft Guidance for Industry and Food and Drug Administration Staff,” that appeared in the Federal Register of May 13, 2016. In the document, FDA requested comments on FDA’s recommendations to assist industry in designing studies to establish the analytical and clinical performance characteristics of infectious disease next generation sequencing-based diagnostic devices for microbial identification and detection of antimicrobial resistance and virulence markers. The Agency is taking this action in response to a request for an extension to allow interested persons additional time to submit comments. The comment period is extended through September 12, 2016.
• On August 9, 2016, the FDA issued an updated Guidance Agenda: New & Revised Draft Guidances CDER is Planning to Publish During Calendar Year 2016.  The list includes, among others, a new guidance entitled Submission of Quality Metrics Data; Revised Draft. 
• On August 12, 2016, the Department of Health and Human Services (HHS) issued a notice of proposed rulemaking (NPRM) entitled Control of Communicable Diseases.  According to HHS, through this NPRM, the Centers for Disease Control and Prevention (CDC) is amending its domestic (interstate) and foreign quarantine regulations. These amendments are being proposed to aid public health responses to outbreaks of communicable diseases such as the largest recorded outbreak of Ebola virus disease (Ebola) in history, the recent outbreak of Middle East Respiratory Syndrome (MERS) in South Korea, and repeated outbreaks and responses to measles in the United States, as well as the ongoing threat of other new or re-emerging communicable diseases. The NPRM is intended to provide additional clarity to various safeguards to prevent the importation and spread of communicable diseases affecting human health into the United States and interstate. Comments are due October 14, 2016.
• On August 1, 2016, the Office of Management and Budget (OMB) received for review two regulations regarding Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid, and Other Provisions Related to Eligibility and Enrollment for Medicaid and CHIP.  According to OMB, these regulations will implement provisions of the Affordable Care Act that expand access to health coverage through improvements in Medicaid and coordination between Medicaid, Children's Health Insurance Program (CHIP), and Exchanges. OMB received a final rule that will implement the remaining provisions from the proposed rule that was published in the January 22, 2013, Federal Register. Additionally, OMB received for review a proposed rule that proposes to implement provisions of the Medicaid statute pertaining to Medicaid eligibility and appeals.  These regulations continue CMS’ efforts to provide guidance to assist States in implementing Medicaid and CHIP eligibility, appeals, and enrollment changes required by the Affordable Care Act. 

Event Notices

• September 16, 2016: The Physician-Focused Payment Model Technical Advisory Committee (PTAC) will hold its next meeting on September 16, 2016. The PTAC was established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to review proposals for physician-focused payment models (PFPMs) and to make comments and recommendations to the Secretary of HHS. The PTAC welcomes comments and suggestions at any time; comments may be submitted by email to PTAC@hhs.gov.  The PTAC will also accept oral comments at its upcoming meeting.

II. Congressional Legislation & Committee Action

U.S. Senate

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

House of Representatives

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

III. Reports, Studies, & Analyses  

• On August 12, 2016, the Congressional Budget Office (CBO) released its Sequestration Update Report: August 2016. In the report, which is required by law, CBO provides estimates of the caps on discretionary funding for each fiscal year through 2021. CBO concludes that the discretionary appropriations provided to date for 2016 do not exceed the caps for this year.
• On August 10, 2016, the HHS Office of Inspector General (OIG) issued a report entitled MACs Continue to Use Different Methods to Determine Drug Coverage. The OIG recommended that CMS (1) assign a single entity to assist MACs with making coverage determinations, and (2) evaluate the cost-effectiveness of edits and medical reviews that are designed to ensure appropriate payments for covered uses on Part B drug claims. CMS concurred with the second recommendation but did not concur with the first recommendation. 
• On August 10, 2016, the OIG issued a report entitled Virginia State Medicaid Fraud Control Unit: 2015 Onsite Review. The OIG recommended that the Virginia Unit revise its policy to define what constitutes a monitored case and indicate the appropriate level and frequency of supervisory review for such cases. Further, the Unit should formalize its processes to ensure that convictions and adverse actions are consistently reported to Federal partners within required timeframes. The Unit concurred with both recommendations.
• On August 9, 2016, the OIG issued a report entitled Conversions of Startup Loans Into Surplus Notes by Consumer Operated and Oriented Plans Were Allowable but Not Always Effective. The OIG recommended that CMS perform the following steps prior to approving additional conversions of startup loans to surplus notes: (1) document any potential negative impact from changes in distribution priority and (2) quantify the likely impact on the Federal Government's ability to recover loan payments. CMS concurred with these recommendations. 
• On August 8, the CBO issued a Cost Estimate of S. 2503, Preventing Superbugs and Protecting Patients Act (as reported by the Senate Committee on Health, Education, Labor, and Pensions on April 5, 2016).  S. 2503 would require the Secretary of HHS to publish a list of reusable medical devices for which manufacturers would be required to submit additional data in a premarket notification regarding cleaning, disinfecting, and sterilizing the device. The bill also would require the Commissioner of the FDA to issue final guidance addressing when manufacturers are required to submit a notification to FDA to market a modified version of a legally marketed device. CMS says FDA is already working on the guidance required by S. 2503 and CBO expects that other aspects of the bill would make only small changes in FDA’s current activities. Based on that assessment, CBO estimates that implementing S. 2503 would cost less than $500,000 over the 2017-2021 period; that spending would be subject to the availability of appropriated funds. Enacting S. 2503 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply to the bill. CBO estimates that enacting S. 2503 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.
• On August 8, the CBO issued a Cost Estimate of S. 2055, Medical Counter-measure Innovation Act of 2016 (as reported by the Senate Committee on Health, Education, Labor, and Pensions on March 14, 2016). S. 2055 would authorize two programs to invest in research and to provide incentives for developing medical countermeasures. One program would authorize the Secretary of HHS to enter into an agreement with an independent entity that fosters the development of medical countermeasures. The bill also would create an incentive program that awards vouchers for priority review to companies that obtain FDA approval of certain drugs that can be used to counter the effects of biological, chemical, radiological, or nuclear agents. The bill also would require HHS to prepare a five-year budget plan for medical countermeasures. CBO estimates that implementing S. 2055 would cost $94 million over the 2017-2021 period, assuming appropriation of the necessary amounts. Pay-as-you-go procedures do not apply to this legislation because it would not affect direct spending or revenues. CBO estimates that enacting S. 2055 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027. 
• On August 8, the CBO issued a Cost Estimate of S. 2014, Next Generation Re-searchers Act (as reported by the Senate Committee on Health, Education, Labor, and Pensions on April 4, 2016). S. 2014 would make several changes to the programs for repaying loans for biomedical or behavioral research at the National Institutes of Health (NIH). The bill also would establish an initiative in the NIH Office of the Director to coordinate programs that are focused on promoting opportunities for new researchers at NIH. CBO estimates that implementing S. 2014 would cost $477 million over the 2017-2021 period, assuming appropriation of the necessary amounts. Enacting S. 2014 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply to the bill.  CBO estimates that enacting S. 2014 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.
• On August 8, the CBO issued a Cost Estimate of S. 185, Promise for Antibiotics and Therapeutics for Health Act (as reported by the Senate Committee on Health, Education, Labor, and Pensions on April 18, 2016).  S. 185 would require the FDA to establish a program to approve certain antibacterial drugs for a limited population of patients with unmet needs. The bill also would require FDA to study the effectiveness of the new program. CBO estimates that implementing S. 185 would cost $27 million over the 2017-2021 period, assuming appropriation of the necessary amounts. Pay-as-you-go procedures do not apply because enacting S. 185 would not affect direct spending or revenues. CBO estimates that enacting S. 185 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.   

IV. Other Health Policy News

• On August 11, 2016, CMS announced new data on per-enrollee costs and risk profiles in the Marketplaces. According to CMS, the data show that per-enrollee costs in the ACA individual market were essentially unchanged from 2014 to 2015, falling by 0.1 percent, even as per-enrollee costs in the broader health insurance market grew by at least 3 percent.  CMS says this finding suggests a year-over-year improvement in the ACA individual risk pool, with the Marketplaces gaining healthier, lower-cost consumers as it expanded.  CMS also says it is exploring options to modify the ACA’s permanent risk adjustment program to better adjust for the highest-cost enrollees and their actuarial risk.  In future rulemaking, CMS also plans to propose modifying the risk adjustment program to absorb some of the cost for claims above a certain threshold (e.g. $2 million), funded by a small payment from all issuers.
• A study published in the August edition of Health Affairs found that Medicaid expansion didn't significantly alter the overall use of hospital emergency departments (EDs), and suggests newly insured individuals don't visit ERs more frequently.  The study found that from 2012 through 2014, overall ED use differed by less than 1 percent between states that expanded their Medicaid programs and those that opted out. The authors conclude that "the expansion of Medicaid coverage strongly affected payer mix but did not significantly affect overall ED use, even though more people gained insurance coverage in expansion states than in nonexpansion states. This suggests that expanding Medicaid did not significantly increase or decrease overall ED visit volume." 
• On August 9, 2016, CMS released results from Performance Year 2 of The Independence at Home Demonstration. The CMS analysis found that, for the second performance year, Independence at Home participants saved Medicare more than $10 million – an average of $1,010 per beneficiary – while delivering higher quality patient care in the home. CMS will award incentive payments of $5.7 million to seven participating practices that succeeded in reducing spending while improving quality. “The Independence at Home Demonstration is a patient-centered model that supports providers in caring for chronically ill patients in their own homes,” said Dr. Patrick Conway, CMS acting deputy administrator and chief medical officer. “These results continue to support what most patients already want – the ability to have high quality care in the home setting.”
• On August 9, 2016, CMS announced that the Agency is currently soliciting nominations for technical expert panel members for quality measures developed under the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) to meet the domain of the transfer of health information and care preferences. The quality measures, Transfer of Information at Post-Acute Care Admission, Start, or Resumption of Care from Other Providers/Settings, and the Transfer of Information at Post-Acute Care Discharge or End of Care to Other Providers/Settings were developed for the Long-Term Care Hospital, the In-patient Rehabilitation Facility, the Skilled Nursing Facility, and the Home Health Agency settings. CMS is seeking technical experts with expertise in care transitions and information transfer during transitions, quality improvement, and performance measurement, among other areas of knowledge. The call for technical expert panel members is open from August 8th through August 21st, 2016. 
• On August 10, 2016, the Center for Medicare and Medicaid Innovation (CMMI) announced refinements to the design of the second year of the Medicare Advantage Value-Based Insurance Design (MA-VBID) model.  The MA-VBID model is an opportunity for Medicare Advantage plans (MA plans), including Medicare Advantage plans offering Part D benefits (MA-PD plans), to offer clinically nuanced benefit packages aimed at improving quality of care while also reducing costs. In the second year of the model, beginning January 1, 2018, CMS will: open the model test to new applicants; conduct the model test in three new states - Alabama, Michigan, and Texas; add rheumatoid arthritis and dementia to the clinical categories for which participants may offer benefits; make adjustments to existing clinical categories; and change the minimum enrollment size for some MA and MA-PD plan participants.
• On August 10, 2016, CMS announced updates to the Nursing Home Compare Five-Star Quality Ratings to incorporate new measures, giving families more information at their fingertips to help them make important decisions about care. These new measures look at successful discharges, emergency visits, and re-hospitalizations, and complement other nursing home measures previously announced in April. “When residents and their families are faced with important decisions about care, they need an easy, transparent way to figure out which facility is the best fit for them or their loved ones,” said CMS Deputy Administrator and Chief Medical Officer Patrick Conway, M.D., MSc. “With this update, star ratings will provide an even more accurate reflection of the services that nursing homes provide.”