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

I. Regulations, Notices, & Guidance

• On October 28, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a final rule entitled, Medicare Program; End-Stage Renal Disease Prospective Payment System, Coverage and Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, etcl. The final rule updates and makes revisions to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year 2017. The final rule also finalizes policies for coverage and payment for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. The final rule sets forth requirements for the ESRD Quality Incentive Program, including the inclusion of new quality measures beginning with payment year (PY) 2020 and provides updates to programmatic policies for the PY 2018 and PY 2019 ESRD QIP. The final rule is effective on January 1, 2017. 
• On October 24, 2016, the Drug Enforcement Agency (DEA) issued a final order entitled, Final Adjusted Aggregate Production Quotas for Schedule I and II Controlled Substances and Assessment of Annual Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2016. The final order establishes the final adjusted 2016 aggregate production quotas for controlled substances in schedules I and II of the Controlled Substances Act (CSA) and the assessment of annual needs for the list I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine.
• On October 25, 2016, the Food and Drug Administration (FDA) issued a draft guidance entitled, Low Sexual Interest, Desire, and/or Arousal in Women: Developing Drug for Treatment. The purpose of the draft guidance is to assist sponsors in developing drugs for the treatment of low sexual interest, desire, and/or arousal in women. Specifically, the draft guidance addresses the FDA’s current thinking regarding the overall clinical development program, with a focus on phase 3 trial designs, to support an indication for the treatment of these conditions. Comments are due by December 27, 2016.
• On October 25, 2016, CMS issued a notice entitled, Medicaid Program; Final FY 2014 and Preliminary FY 2016 Disproportionate Share Hospital Allotments, and Final FY 2014 and Preliminary FY 2016 Institutions for Mental Diseases Disproportionate Share Hospital Limits. The notice announces the final federal share disproportionate share hospital (DSH) allotments for federal fiscal year (FY) 2014 and the preliminary federal share DSH allotments for FY 2016, and corresponding limitations on aggregate state DSH payments to institutions for mental disease and other mental health facilities. In addition, this notice includes background information describing the methodology for determining the amounts of states' FY DSH allotments.
• On October 26, 2016, the Administration for Community Living issued a final rule entitled, Independent Living Services and Centers for Independent Living. The final rule implements the Rehabilitation Act as amended by the Workforce Innovation and Opportunity Act. The final rule helps implement changes to the administration of Independent Living Services and the Centers for Independent Living made under the current law in alignment with Administration for Community Living and Department of Health and Human Service (HHS) policies and practices. The final rule is effective November 28, 2016.
• On October 27, 2016, the FDA issued a draft guidance entitled, Listing of Ingredients in Tobacco Products. The revised draft guidance is intended to assist persons making tobacco product ingredient submissions to FDA, as required by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act). Comments are due by November 28, 2016.
• On October 27, 2016, the FDA issued a notice entitled, Authorizations of Emergency Use of In Vitro Diagnostic Devices for Detection and/or Diagnosis of Zika Virus. The notice announces the issuance of four Emergency Use Authorizations (EUAs) for four in vitro diagnostic devices for detection and/or diagnosis of Zika virus in response to the Zika virus outbreak in the Americas.
• On October 27, 2016, the FDA issued a final guidance entitled, Collection of Race and Ethnicity Data in Clinical Trials. The final guidance provides FDA expectations for and recommendations on use of a standardized approach for collecting and reporting race and ethnicity data in submissions for clinical trials for FDA regulated medical products conducted in the United States and abroad.
• On October 27, 2016, HHS issued a final rule entitled, Freedom of Information. The final rule amends HHS’s Freedom of Information Act (FOIA) regulations. The regulations have been revised in order to incorporate changes made to the FOIA by the Electronic FOIA Act of 1996 (E-FOIA Act), the Openness Promotes Effectiveness in our National Government Act of 2007 (OPEN Government Act), and the FOIA Improvement Act of 2016 (FOIA Improvement Act). Additionally, the regulations have been updated to reflect changes to the organization, to make the FOIA process easier for the public to navigate, to update HHS’s fee schedule, and to make provisions clearer.
• On October 28, 2016, the FDA issued a guidance entitled, Labeling for Permanent Hysteroscopically Placed Tubal Implants Intended for Sterilization. The guidance addresses the inclusion of a boxed warning and patient decision checklist in the product labeling for permanent hysteroscopically placed tubal implants intended for female sterilization, and the content and format of those materials. Comments may be submitted at any time.
• On October 28, 2016, the FDA issued a draft guidance entitled, Describing a Hazard That Needs Control in Documents Accompanying the Food, as Required by Four Rules Implementing the FDA Food Safety Modernization Act. The draft guidance explains the FDA’s current thinking on disclosure statements made by an entity, in documents accompanying food, that certain hazards have not been controlled by that entity as required by certain provisions in four final rules. The draft guidance also describes the FDA’s current thinking on how to describe the hazard under each of the four rules and which documents the FDA will consider to be “documents of the trade” for the purpose of disclosure statements. Comments are due by April 29, 2017.
• On October 28, 2016, the National Institutes of Health (NIH), issued a notice entitled, Government-Owned Inventions; Availability for Licensing. The notice states that the Small Molecule Inhibitors of Drug Resistant Forms of HIV-1 Integrase, which is owned by an agency of the U.S. Government, is now available for licensing and/or co-development in the United States.
• On October 28, 2016, the Internal Revenue Service (IRS), Employee Benefits Security Administration, Department of Labor, and CMS issued final rules entitled, Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration. The final rules provide the definition of short-term, limited-duration insurance for purposes of the exclusion from the definition of individual health insurance coverage, as well as standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits.

Event Notices

• November 14, 2016: CMS announced a listening session regarding the implementation of certain Medicare Part D provisions in the Comprehensive Addiction and Recovery Act of 2016 (CARA). Section 704 of CARA is the basis for the listening session and provides the information for which CMS is soliciting stakeholder input.
• December 5, 2016: the FDA announced a public workshop entitled, The Role of Hospitals in Modernizing Evidence Generation for Device Evaluation: Harnessing the Digital Revolution for Surveillance. The workshop is intended to foster a dialogue about the value of, costs of, and challenges with current hospital-based reporting and surveillance, what the role of hospitals should be and reasonably could be in the evolution of device surveillance and in creating more robust surveillance capabilities in the developing national evaluation system, and how that should impact current hospital reporting requirements and future voluntary opportunities to best meet the needs of patients in receiving and hospitals in providing quality care. 

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 24, 2016, the Office of Inspector General (OIG) released a report entitled, Arizona Did Not Always Verify Correction of Deficiencies Identified During Surveys of Nursing Homes Participating in Medicare and Medicaid. The report found that the Arizona Department of Health Services, Division of Licensing Services, Bureau of Long-Term Care Licensing (State agency), did not always verify nursing homes' correction of deficiencies identified during surveys in calendar year 2014 in accordance with Federal requirements. For the 100 sampled deficiencies, the State agency verified the nursing homes' correction of 58 deficiencies but did not obtain the nursing homes' evidence of correction for the remaining 42 deficiencies, which were all less serious deficiencies. On the basis of OIG’s sample results, the OIG estimated that the State agency did not verify nursing homes' correction of deficiencies in accordance with Federal requirements for 361 (56 percent) of the 650 deficiencies identified during surveys in CY 2014. The State agency's practice for less serious deficiencies was to accept the nursing homes' correction plans as confirmation of substantial compliance without obtaining the required evidence of correction.
• On October 24, 2016, the OIG released a report entitled, State Agencies Claimed Unallowable and Unsupported Medicaid reimbursements for Services Under the home and Community-Based Services Waiver Program. The report found that State agencies did not always exclude unallowable room-and-board costs when determining payment rates under the Home and Community-Based Services (HBCS) waiver program, resulting in unallowable Medicaid reimbursement. The OIG’s previous audits also conveyed certain other findings that resulted in unallowable and unsupported Medicaid reimbursement. The State agencies did not have adequate controls to ensure that their HCBS waiver programs complied with applicable Federal requirements regarding the need to exclude unallowable room-and-board costs when determining payment rates and to ensure that certain other costs complied with the requirements associated with their HCBS waiver programs. As a result of the inadequate controls regarding unallowable room-and-board costs and certain other unallowable and unsupported costs, the State agencies claimed at least $176.5 million (Federal share) in unallowable and unsupported Federal Medicaid reimbursement for services under their HCBS waiver programs. 
• On October 24, 2016, the OIG released a report entitled, New York made Some Incorrect Medicaid Electronic Health record Incentive Payments. The report found that the New York State Department of Health did not always pay electronic health record (EHR) incentive payments in accordance with Federal and State requirements. The New York Department of Health made incorrect EHR incentive payments to two hospitals totaling $175,000. Because the incentive payment is calculated once and then paid out over 3 years, payments after June 30, 2014, will also be incorrect. The adjustments to these payments total $19,000. The State agency correctly paid the five professionals we reviewed.
• On October 27, 2016, the Government Accountability Office (GAO) released a report entitled, VA Health Care: Processes to Evaluate, Implement, and Monitor Organizational Structure Changes Needed. The report found that recent internal and external reviews of Veterans Health Administration (VHA) operations have identified deficiencies in its organizational structure and recommended changes that would require significant restructuring to address, including eliminating and consolidating program offices and reducing VHA central office staff. However, VHA does not have a process that ensures recommended organizational structure changes are evaluated to determine appropriate actions and implemented. This is inconsistent with federal standards for internal control for monitoring, which state that management should remediate identified internal control deficiencies on a timely basis. The GAO found instances where VHA actions in response to recent recommendations for organizational structure changes were incomplete, not documented, or not timely. 
• On October 27, 2016, the GAO released a report entitled, Opioid Addiction: Laws, Regulations, and Other Factors Can Affect Medication-Assisted Treatment Access. The report found that when used for pain management, methadone and buprenorphine are regulated under federal laws and regulations that apply to controlled substances generally and do not impose requirements unique to methadone or buprenorphine. However, additional Requirements apply to Methadone and Buprenorphine when used for opioid addiction treatment. Additionally, the report found that practitioner capacity, perceived value, and insurance coverage can affect patients’ access to medication-assisted treatment (MAT) for opioid addiction.
• On October 27, 2016, CMS released President Obama’s Mental Health and Substance Use Disorder Parity Task Force final report. The report highlighted the progress to date on parity implementation, summarized comments from stakeholders and actions taken during the Task Force’s tenure and offered recommendations on how to: 1) support consumers; 2) improve parity implementation; and 3) enhance parity compliance and enforcement. 
• On October 28, 2016, the Congressional Budget Office (CBO) released a document entitled, Answers to Questions for the Record Following a Hearing by the House Committee on the Budget on CBO’s Estimates of the Budgetary Effects of the Center for Medicare & Medicaid Innovation (CMMI). The CBO provided answers to questions for the record following the September 7, 2016 House Budget Committee hearing on CMMI’s activities.

IV. Other Health Policy News 

• On October 24, 2016, CMS released FAQs about Affordable Care Act Implementation Part 33. The FAQs are in regards to the implementation of the market reform provisions of the Affordable Care Act (ACA).
• On October 26, 2016, CMS announced the Vermont All-Payer Accountable Care Organization (ACO) Model. The new initiative is aimed at accelerating delivery system reform for Vermont residents. The Vermont All-Payer ACO Model aims to transform health care for the entire state and its population.
• On October 27, 2016, CMS released FAQs about Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation. The FAQs are in regards to the implementation of the market reform provisions of the ACA and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
• On October 27, 2016, CMS released Pre-Claim Review Demonstration for Home Health Services Frequently Asked Questions. The updated FAQ’s address questions related to the pre-claim review demonstration that was announced on June 8, 2016
• On October 27, 2016, the White House released a fact sheet entitled, Federal Parity Task Force Takes Steps to Strengthen Insurance Coverage for Mental Health and Substance Use Disorders. The factsheet details the Mental Health and Substance Use Disorder Parity Task Forces’ new actions and recommendations.
• On October 27, 2016, Senate Finance Committee Chairman Orrin Hatch (R-UT), and Ranking Member Ron Wyden (D-OR), along with Senators Johnny Isakson (R-GA), and Mark Warner (D-VA), co-chairs of the Finance Committee Chronic Care Working Group released a discussion draft of a bill aimed at improving health outcomes for Medicare beneficiaries living with chronic conditions. Specifically, the discussion draft would extend the Independence at Home demonstration by two years, let kidney-failure patients enroll in Medicare Advantage, ease telehealth restrictions, and change how beneficiaries could be assigned to ACOs.
• On October 27, 2016, Senate Finance Committee Chairman Orrin Hatch (R-UT), and Ranking Member Ron Wyden (D-OR), along with Senators Johnny Isakson (R-GA), and Mark Warner (D-VA), co-chairs of the Finance Committee Chronic Care Working Group sent a letter to HHS Secretary, Sylvia M. Burwell and CMS Acting Administrator, Andy M. Slavitt highlighting a number of chronic care provisions the working group identified that were later adopted through regulatory action.