A&B Healthcare Week in Review, October 14, 2016

I. Regulations, Notices, & Guidance

• On October 14, 2016, the Centers for Medicare & Medicaid Services (CMS) released a final rule with comment period entitled, Medicare Program; Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models. The final rule with comment period establishes incentives for participation in certain APMs and includes the criteria for use by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in making comments and recommendations on physician-focused payment models (PFPMs). The final rule also establishes the MIPS, a new program for certain Medicare-enrolled practitioners. MIPS will consolidate components of three existing programs, the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (EPs), and will continue the focus on quality, cost, and use of certified EHR technology (CEHRT) in a cohesive program that avoids redundancies. Comments are due 60 days after filing for public inspection.
• Additional resources on the final rule, including an executive summary, fact sheets, list of APMs, and educational materials and opportunities can be found at: https://qpp.cms.gov/education.
• On October 14, 2016, the Office of the National Coordinator for Health Information Technology (ONC) issued a final rule entitled, ONC Health IT Certification Program: Enhanced Oversight and Accountability. The rule finalizes modifications and new requirements under the ONC Health IT Certification Program (Program), including provisions related to the Office of the National Coordinator for Health Information Technology (ONC)’s role in the Program. The final rule creates a regulatory framework for ONC’s direct review of health information technology (health IT) certified under the Program, including, when necessary, requiring the correction of non-conformities found in health IT certified under the Program and suspending and terminating certifications issued to Complete EHRs and Health IT Modules. The final rule also sets forth processes for ONC to authorize and oversee accredited testing laboratories under the Program. In addition, it includes provisions for expanded public availability of certified health IT surveillance results.
• On October 11, 2016, the Food and Drug Administration (FDA) issued a final rule entitled, Medical Devices; Technical Amendment. The FDA is amending its regulations on the definition of a custom device so as to include new enumerated statutory requirements for custom devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act) as amended by the Food and Drug Administration Safety and Innovation Act (FDASIA). The new provision, under FDASIA, amends the existing custom device exemption and introduces new concepts and procedures applicable to custom devices.
• On October 12, 2016, CMS issued a notice entitled, New Interest Rate for Medicare Overpayments and Underpayments – 1^st Qtr Notification for FY 2017. The notice states that the Treasury Department has notified the Department of Health and Human Services (HHS) that the private consumer rate has been changed to 9.625 percent.
• On October 13, 2016, the FDA issued a draft guidance entitled, Software as a Medical Device: Clinical Evaluation; International Medical Device Regulators Forum. The draft guidance was prepared under the auspices of the International Medical Device Regulators Forum (IMDRF), formerly the Global Harmonization Task Force. The draft guidance pertains to the conduct of clinical evaluation of Software as a Medical Device (SaMD) and focuses on the general principles of clinical evaluation, which includes establishing the scientific validity, clinical performance, and analytical validity for a SaMD. Comments are due by December 13, 2016.
• On October 13, 2016, the Federal Trade Commission (FTC) released a proposed consent agreement entitled, CentraCare Health System; Analysis to Aid Public Comment. The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders – embodied in the consent agreement – that would settle these allegations. Comments are due by November 7, 2016.
• On October 14, 2016, the FDA issued a notice entitled, Issuance of Priority Review Voucher; Rare Pediatric Disease Product. The notice announced the issuance of a priority review voucher to the sponsor of a rare pediatric disease product application. FDA has determined that EXONDYS 51 (eteplirsen), manufactured by Sarepta Therapeutics, meets the criteria for a priority review voucher. EXONDYS 51 (eteplirsen) is indicated for the treatment of Duchenne muscular dystrophy (DMD) in patients who have a confirmed mutation of the DMD gene that is amenable to exon 51 skipping.
• On October 14, 2016, the FDA issued a final guidance entitled, Abbreviated New Drug Application Submission – Prior Approval Supplements Under Generic Drug User Fee Amendments (GDUFA). This guidance is intended to assist applicants preparing to submit to FDA prior approval supplements (PASs) and amendments to PASs for abbreviated new drug applications (ANDAs). It describes FDA's performance metric goals for PASs and clarifies how FDA will handle a PAS and amendments to a PAS for an ANDA subject to GDUFA performance metric goals.
• On October 14, 2016, the FDA issued a proposed rule entitled, Electronic Submission of Labeling for Certain Home-Use Medical Devices.  The proposed rule would implement provisions of the FD&C Act to require electronic submission of the device label and package insert of certain home-use devices when these devices are listed with the FDA. The FDA plans to make this device labeling available to the public through the Internet and would also provide search tools to facilitate locating information concerning a particular home-use device or a particular type of home-use device. Comments are due by January 16, 2017.
• On October 14, 2016, the FDA issued a final order entitled, Medical Devices; Cardiovascular Devices; Classification of the Apical Closure Device. The final order classifies the apical closure device into class II (special controls). The special controls that will apply to the device are identified in the order and will be part of the codified language for the apical closure device’s classification. The FDA is classifying the device into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.
• On October 11, 2016, the Office of Management and Budget (OMB) received a proposed rule from the Office of Personnel Management (OPM) entitled, Federal Employees Health Benefits Program: Family Member Disenrollments and Process for Removal. The proposed rule was issued to clarify the process for removing ineligible individuals from Federal Employees Health Benefits (FEHB) Program Self and Family enrollments.
• On October 11, 2016, OMB received an interim final rule from OPM entitled, Federal Employees Health Benefits and Federal Employees Dental and Vision Programs: Coverage Exceptions for Dependents of Domestic Partners. The interim final rule creates a coverage exception for the children of enrollees living overseas through September 2018.

Event Notices

• October 19, 2016: CMS announced a Rural Health Solutions Summit. The CMS Rural health Council will discuss ways to improve access to care in rural America and to support local solutions and innovation in care delivery.
• October 31, 2016: HHS announced a meeting of the Advisory Council on Alzheimer’s Research, Care, and Services. The theme of the October meeting will be on racial and ethnic disparities in research and care for dementia. Presentations will focus on general demographics, gaps and barriers that various groups face in obtaining services, and successful interventions to reduce these gaps. Additional presentations in the afternoon will include further discussion of the 2016 Update to the National Plan, updates on progress towards a Care and Services Summit, and federal workgroup updates.
• November 2-3, 2016: the Centers for Disease Control and Prevention (CDC) announced a meeting of the Clinical Laboratory Improvement Advisory Committee (CLIAC). The agenda will include agency updates from CDC, CMS, and the FDA. Presentations and discussions will include a report on the cytology workload assessment and time measure study; an update on CLIAC recommendations for laboratory biosafety; laboratory preparedness and response: the case of Zika; a report from the Institute of Medicine (IOM) CLIAC workgroup; and future CLIAC topics.
• November 18, 2016: The FDA announced a public workshop entitled, Substitutability of Generic Drugs: Perceptions and Reality. The objective of this workshop is to discuss FDA and industry practices related to postmarket surveillance of generic drugs, postmarket generic drug research activities, public perceptions of generic drug quality and effectiveness, and verification of therapeutic equivalence of generic drugs. This workshop will also give stakeholders, including scientists from government, academia, and industry, patient advocacy groups, clinicians, pharmacists, and the general public an opportunity to provide their insights on future research needs in postmarket surveillance of generic drugs.

II. Congressional Legislation & Committee Action

U.S. Senate

• The Senate has adjourned and will reconvene on Monday, November 14, 2016.

House of Representatives

• The House has adjourned and will reconvene on Monday, November 14, 2016.

III. Reports, Studies, & Analyses  

• On October 11, 2016, the HHS Office of Inspector General (OIG) released a report entitled, Pubic Summary Report: Information Technology Control Weaknesses Found at the Minnesota Health Insurance Exchange. The report found that the Minnesota's Health Insurance Marketplace (MNsure) had implemented security controls, policies, and procedures intended to prevent vulnerabilities in its Web applications (Web site), database, and other supporting information systems. However, it did not always comply with Federal and State information technology requirements when it implemented those security controls, policies, and procedures, which increased MNsure's risk that personally identifiable information (PII) could have been exposed.
• On October 12, 2016, the OIG released a report entitled, Public Summary Report: The State of Colorado Did Not Meet Federal Information System Security Requirements for Safeguarding Its Medicaid Systems Data. The report found that the Colorado Department of Health Care Policy and Financing (HCPF) had not implemented adequate information system general controls over the Colorado Medicaid eligibility determination and claims processing systems to fully comply with Federal requirements. The vulnerabilities that the OIG identified increased the risk to the confidentiality, integrity, and availability of Colorado's Medicaid data. 
• On October 13, 2016, the OIG released a report entitled, North Carolina Claimed Millions in Unallowable School-Based Medicaid Administrative Costs. The report found that the North Carolina Division of Medical Assistance (State agency) claimed school-based Medicaid administrative costs that were not in accordance with Federal requirements. The State agency used statistically invalid random moment sampling (RMS) in allocating costs to Medicaid, and it did not maintain adequate support to validate its sample results and related extrapolations. In addition, it claimed these costs without promptly submitting to the U.S. Department of Health and Human Services, Division of Cost Allocation (DCA), for review its cost allocation plan (CAP) amendment describing its new random moment time study (RMTS) methodology. Instead, the State agency claimed costs based on an implementation plan describing the new RMTS methodology, which was conditionally approved by CMS. As a result, the almost $107.5 million (almost $53.8 million Federal financial participation) the State agency claimed in school-based Medicaid administrative costs for Federal fiscal years 2010 through 2012 was unallowable.
• On October 13, 2016, the Government Accountability Office released a report entitled, Health Care Quality: HHS Should Set Priorities and Comprehensively Plan Its Efforts to Better Align Health Quality measures. The report found that while the full extent of misalignment among health care quality measures is unknown, it can have adverse effects on providers and efforts to improve quality of care. Misalignment occurs when health care payers require providers to report on measures that focus on different quality issues or define the measures using different specifications. 
• On October 11, 2016, the OIG issued Advisory Opinion 16-10. The Advisory Opinion is in response to a local health care district’s proposal to cooperate with another district to jointly fund the cost of a transportation coordinator to educate patients about local transportation options and subsidize certain forms of transportation for patients with financial need. Specifically, the OIG concluded that, although the proposed 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 would not impose administrative sanctions in connection with the proposed arrangement.

IV. Other Health Policy News

• On October 12, 2016, CMS issued a fact sheet entitled, 2017 Star Ratings. The fact sheet shows that the percentage of beneficiaries in four- and five-star Medicare Advantage plans with drug coverage fell slightly for the first time in recent years.
• On October 13, 2016, CMS announced a new initiative to improve the clinician experience with the Medicare program. Specifically, CMS is launching an 18-month pilot program to reduce medical record review for certain physicians while continuing to protect program integrity. Under the program, providers practicing within certain Advanced Alternative Payment Models (Advanced APMs) will be relieved of additional scrutiny under certain Medicare medical review programs.
• On October 13, 2016, CMS detailed the agency’s outreach campaign strategy for Open Enrollment 2017.  The strategy includes reaching people who need coverage through mail and email, improving messaging, using effective media like targeted platforms and optimized search functions, and reaching out at deadlines through smarter TV advertising and by getting people the information they need when they need it.
• On October 14, 2016, CMS released Frequently Asked Questions on Health Insurance Marketplace Standards. The FAQ’s address the question of whether Exchange-certified Stand-alone Dental Plans offered Off-Exchange are permitted to accept enrollments outside the Exchange enrollment periods.