A&B Healthcare Week in Review, September 23, 2016

I. Regulations, Notices, & Guidance

• On September 23, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a notice entitled, Agency Information Collection Activities: Submission for OMB Review; Comment Request. The notice relates to Expanded Coverage for Diabetes Outpatient Self-Management Training Services and Supporting Regulations; Collection of Diagnostic Data from Medicare Advantage Organizations for Risk Adjusted Payments; Consolidated Renal Operations in a Web Enabled Network (CROWNWeb) Third-party Submission Authorization Form; Healthy Indiana Program (HIP) 2.0 Beneficiaries Survey, Focus Groups, and Informational Interviews. The Comment period is open until October 23, 2016.
• On September 22, 2016, CMS issued a notice entitled, Clarification on the New Additional Inflation – Adjusted Rebate Requirement for Non-Innovator Multiple Source Drugs. CMS clarifies in this release that, for non-innovator multiple source drugs with market dates after April 1, 2013, for which the baseline AMP is established in second quarter 2017 or later, the additional rebate portion of the URA calculation would only apply prospectively from the quarter in which the drug’s baseline AMP is established.
• On September 22, 2016, CMS announced an Agency Information Collection Activities: Submission for OMB Review; Comment Request. CMS is announcing an opportunity for the public to comment on CMS’ intention to collect information from the public. Comments are due by October 23, 2016.
• On September 22, 2016, the Food and Drug Administration (FDA) announced the availability of a guidance for industry entitled, Self-Identification of Generic Drug Facilities, Sites, and Organizations. The guidance is intended to assist industry with meeting the self-identification requirement. It explains which entities are required to self-identify, what information must be requested, how the information should be submitted to FDA, and what the penalty is for failure to self-identify.
• On September 22, 2016, the FDA issued a guidance entitled, Procedures for Evaluating Appearance Issues and Granting Authorizations for Participation in Food and Drug Administration Advisory Committees; Draft Guidance for the Public, Food and Drug Administration Advisory Committee Members, and Food and Drug Administration Staff; Availability. The FDA is extending the comment period for the notice that appeared in the Federal Register of June 29, 2016. In the notice, the FDA requested comments on “Procedures for Evaluating Appearance Issues and Granting Authorizations for Participation in FDA Advisory Committees and on whether the FDA should request that each advisory committee member, who receives an authorization from the FDA on an appearance issue so that they may participate in an advisory committee meeting, voluntarily publicly disclose the authorization. The comment period is extended until June 29, 2016.
• On September 22, 2016, CMS issued a notice entitled, Medicare Program; Medicare Appeals; Adjustment to the Amount in Controversy Threshold Amounts for Calendar Year 2017. The notice announces the annual adjustment in the amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process. The adjustment to the AIC threshold amounts will be effective for requests for ALJ hearings and judicial review filed on or after January 1, 2017. The calendar year 2017 AIC threshold amounts are $160 for ALJ hearings and $1,560 for judicial review.
• On September 19, 2016, CMS released a proposed rule entitled, Medicaid; Revisions to State Medicaid Fraud Control Unit Rules. The proposed rule would amend the regulation governing State Medicaid Fraud Control Units (MFCUs or Units). The proposed rule would incorporate statutory changes affecting the MFCUs as well as policy and practice changes that have occurred since the regulation was initially issued in 1978. These changes include a codification of OIG’s delegated authority, MFCU authority, functions, and responsibilities; disallowances; and issues related to organization, prosecutorial authority, staffing, recertification, and the MFCUs’ relationship with Medicaid agencies.

Event Notices

• September 28, 2016: CMS announced the next CMS Physicians, Nurses & Allied Health Professionals Open Door Forum. The agenda for the meeting can be found here.
• September 30, 2016: the Technical Advisory Panel on Medicare Trustee Reports will hold its next meeting on September 30, 2016.
• October 21, 2016: the FDA announced a public meeting to discuss proposed recommendations for the reauthorization of the Generic Drug User Fee Amendments of 2012 (GDUFA).
• October 25, 2016: the FDA announced a public advisory committee meeting of the Technical Electronic Product Radiation Safety Standards Committee. The committee will discuss and make recommendation regarding possible FDA performance standards for the following topics: radiofrequency (RF) radiation products, such as microwave ovens and wireless power transfer; laser products, including an update to amendments to the laser rule, light detection and ranging (LIDAR), laser data (Light Fidelity-Lifi)/energy transfer, illumination applications and infrared applications; sunlamp products including an update on the performance standards amendments; and non-coherent light sources (e.g., LEDs and UVC lamps) including initiatives.
• December 6, 2016: the FDA announced a forthcoming public advisory committee meeting of the Bone, Reproductive and Urologic Drugs Advisory Committee. The committee will discuss appropriate clinical trial design features, including acceptable endpoints for demonstrating clinical benefit, for drugs intended to treat secondary hypogonadism while preserving or improving testicular function, including spermatogenesis.

II. Congressional Legislation & Committee Action

U.S. Senate

• On September 20, 2016, the Senate Health, Education, Labor and Pensions Committee held a hearing entitled, Laboratory Testing in the Era of Precision Medicine. The witnesses included Mr. David S. Klimstra, Attending Pathologist And Chairman, Department Of Pathology, James Ewing Alumni Chair In Pathology, Memorial Sloan Kettering Cancer Center Professor of Pathology and Laboratory Medicine, Weill Medical College of Cornell University; Mr. Brad Spring, Vice President Regulatory Affairs and Compliance, BD Life Sciences; Mr. Jeff Allen, PhD, President and CEO, Friends of Cancer Research; and Ms. Karen L. Kaul, MD, PhD, Chair, Department Of Pathology And Laboratory Medicine, Duckworth Family Chair, NorthShore University HealthSystem Clinical Professor of Pathology, University of Chicago Pritzker School of Medicine.
• On September 21, 2016, the Senate Appropriations, Agriculture, Rural Development, FDA, and Related Agencies Subcommittee hearing entitled, Prioritizing Public Health: The FDA”s Role in the Generic Drug Marketplace. The witness included Ms. Janet Woodcock, Director of the FDA’s Center for Drug Evaluation and Research.”
• On September 22, 2016 the Senate Homeland Security & Governmental Affairs Committee held a hearing entitled, Exploring a Right to Try for Terminally Ill Patients. The witnesses included Lieutenant Commander Matthew Ballina, U.S. Navy (Retired); The Honorable Ian Calderon, Majority Leader State Assembly, State of California; The Honorable Jim Nelly, D.O., Member, House of Representatives State of Missouri; Mr. Richard Garr, Former President and Chief Executive Officer, Neuralstem, Inc.; Mr. Andrew McFadyen, Executive Director, The Isaac Foundation; and Mr. Peter Lurie, M.D., M.P.H., Associate Commissioner for Public Health Strategy and Analysis, Food and Drug Administration U.S. Department of Health and Human Services.

House of Representatives

• On September 21, 2016, the House Oversight and Government Reform Committee held a hearing entitled, Reviewing the Rising Price of EpiPens. The witnesses included Ms. Heather Bresch, CEO, Mylan Inc. and Mr. Doug Throckmorton, Deputy Director of the Food and Drug Administration’s Center for Drug Evaluation and Research.
• On September 22, 2016, the House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee held a hearing entitled, Treating the Opioid Epidemic: The State of Competition in the Markets for Addiction Medicine. The witnesses included Ms. Anne McDonald Pritchett, Vice President of policy and research at the Pharmaceutical Research and Manufacturers of America; David Gaugh, Senior Vice President for sciences and regulatory affairs at the Generic Pharmaceutical Association; Mr. Mark Merritt, President and CEO of the Pharmaceutical Care Management Association; Mr. Eric Ketcham of the American College of Emergency Physicians, Medical Director of the Emergency Department and Urgent Care and co-medical director of the EMS San Juan Regional Medical Center; and Ms. Robin Feldman, Professor of Law and Director of the UC Hastings College of the Law's Institute for Innovation Law.
• On September 22, 2016, the House Oversight and Government Reform, Government Operations Subcommittee held a hearing entitled, Examining Billion Dollar Waste Through Improper Payments. The witnesses included The Honorable David Mader, Controller, Office of Federal Financial Management, the Office of Management and Budget; Ms. Sheila Conley, Deputy Chief Financial Officer, U.S. Department of Health and Human Services; Ms. Lauri Park, Deputy Assistant Secretary of Finance, U.S. Department of Health and Human Services; Ms. Marianna LaConfora, Assistant Deputy Commissioner for Policy and Chair of the Improper Payments Board, U.S. Social Security Administration; and Mr. Jeff Schramek, Assistant Commissioner, Bureau of Debt Management Services, U.S. Department of Treasury.

III. Reports, Studies, & Analyses 

• On September 19, 2016, the U.S. Government Accountability Office (GAO) released a report entitled, Veterans’ Health Care: Improved Oversight of Community Care Physicians’ Credentials Needed. The GAO found that the Department of Veterans Affairs' (VA) contractors—Health Net Federal Services (Health Net) and TriWest Healthcare Alliance (TriWest)—complied with contractual requirements to verify the credentials of physicians under one community care program, but were deficient in doing so under another program. Based on GAO's review of selected physicians, GAO found that the contractors almost always verified and documented the credentials of physicians in the Veterans Health Administration's (VHA) Patient-Centered Community Care (PC3) program consistent with the requirements of the contract.
• On September 21, 2016, the GAO released a report entitled, High-Containment Laboratories: Improved Oversight of Dangerous Pathogens Needed to Mitigate Risk. The report found that the total number of incidents involving incomplete inactivation—a process to destroy the hazardous effects of pathogens while retaining characteristics for future use—that occurred from 2003 through 2015 is unknown for several reasons. One key reason is that the Select Agent Program—operated by the Departments of Health and Human Services (HHS) and Agriculture (USDA) to oversee certain dangerous pathogens, known as select agents—does not require laboratories to identify such incidents on reporting forms.
• On September 21, 2016, the GAO released a report entitled, Defense Health Care Reform: DOD Needs Further Analysis of the Size, Readiness, and Efficiency of the Medical Force. The report found The Department of Defense’s (DOD’s) approach in its Report on Military Health System Modernization (the Study) did not consistently follow relevant generally accepted research standards for research design and execution. While the Study’s recommendations position DOD, over time, to take actions to improve the effectiveness and efficiency of the Military Health System, GAO found a number of shortcomings.
• On September 21, 2016, the Congressional Budget Office (CBO) released a presentation entitled, CBO’s Analysis of Health Care Spending and Policy Proposals. The presentation describes CBO’s general approach to policy analysis and its role in supporting the Congress; summarizes several elements of the agency’s projection of health care spending; and reviews examples of policy proposals and approaches affecting health care that CBO has analyzed recently.
• On September 21, 2016, the Office of Inspector General (OIG) released a report entitled, Ohio Did Not Always Make Correct Medicaid Claim Adjustments. The report found that the Ohio Department of Medicaid did not always use the correct Federal medical assistance percentages (FMAP) when processing Medicaid claim adjustments reported on the CMS-64. OIG found that of the 1,585,792 claim adjustments we reviewed, it was determined that 1,204,718 adjustments (composed of 900,413 private and 304,305 public provider claims) used the correct FMAP or did not result in a payment difference. However, the remaining 381,074 claim adjustments were paid using incorrect FMAPs resulting in an overpayment to the State agency of $151,000 (Federal share).
• On September 22, 2016, the OIG released a report entitled, Idaho Claimed Federal Medicaid Reimbursement for Inpatient Hospital Services Related to Treating Provider-Preventable Conditions. The report found that from July 1, 2012, through June 30, 2014, the Idaho Department of Health and Welfare claimed $4.3 million in Federal Medicaid reimbursement for inpatient hospital services related to certain provider-preventable conditions, some portion of which was unallowable.
• On September 22, 2016, the OIG released a report entitled, Washington State Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals. The report found that Although the Washington State Health Care Authority (State agency) made Medicaid electronic health record (EHR) incentive program payments to eligible hospitals, it did not always make these payments in accordance with Federal requirements. Specifically, from October 1, 2011, through December 31, 2015, the State agency made incorrect Medicaid EHR incentive payments to 19 of the 20 hospitals reviewed, totaling $11.3 million. These incorrect payments included both overpayments and underpayments, resulting in a net overpayment of $9.2 million. Because the incentive payment is calculated once and then paid out over 4 years, payments made after December 31, 2015, will also be incorrect. The adjustments to these payments total $2.5 million.

IV. Other Health Policy News

• On September 22, 2016, CMS announced that Medicare Advantage premiums will remain stable in 2017 and that beneficiaries have saved over $23.5 billion on prescription drugs. CMS estimates that the average Medicare Advantage monthly premium will decrease by $1.19 (about 4 percent) in 2017, from $32.59 on average in 2016 to $31.40. This would be 13 percent lower than the average Medicare Advantage premium prior to passage of the Affordable Care Act. The majority of Medicare Advantage enrollees (67 percent) will experience no premium increase.
• On September 21, 2016, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA) sent a letter to the FDA requesting an update regarding their Office of Criminal Investigations (OCI) after independent watchdogs identified weaknesses.
• On September 21, 2016, CMS issued a document updating the ICD-10 Flexibility FAQs and 2017 Codes. The document answers questions related to the July 6, 2016, CMS/AMA joint announcement and guidance regarding ICD-10 flexibilities.
• On September 20, 2016, the Kaiser Family Foundation released a study entitled, How Much Has Medicare Spent on the EpiPen Since 2007? The study found that Medicare’s prescription drug program increased spending on EpiPens from $7 million in 2007 to $87.9 million in 2014, an increase of 1,151 percent. Specifically, average spending per EpiPen prescription increased from $71 in 2007 to $344 in 2014. Additionally, while the number of Medicare Part D enrollees using EpiPens also increased during the seven-year period that Kaiser examined, that increase (164 percent) was significantly lower than the increase in total spending on EpiPens.
• On September 20, 2016, Senate Finance Committee Republicans sent a letter to HHS’ Inspector General, Daniel R. Levinson requesting a review of CMS’ administration and oversight of the Medicaid Drug Rebate Program (MDRP) regarding Mylan’s EpiPen.
• On September 19, 2016, CMS released a blog post by Principal Deputy Administrator and Chief Medical Officer, Patrick Conway, M.D. The blog post discusses the release of the second annual evaluation report for Models 2-4 of the Bundled Payments for Care Improvement initiative, which include both retrospective and prospective bundled payments that may or may not include the acute inpatient hospital stay for a given episode of care. The blog post also provides key highlights of the evaluation report.