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

I. Regulations, Notices, & Guidance

• On December 19, 2016, the Food and Drug Administration (FDA) issued a notice entitled, Authorization of Emergency Use of an In Vitro Diagnostic Device for Detection of Zika Virus. The notice announces the issuance of an Emergency Use Authorization (EUA) (the Authorization) for an in vitro diagnostic device for detection of the Zika virus in response to the Zika virus outbreak in the Americas. The FDA issued this Authorization under the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as requested by Abbott Molecular, Inc. The Authorization contains, among other things, conditions on the emergency use of the authorized in vitro diagnostic device. The Authorization follows the February 26, 2016, determination by HHS that there is a significant potential for a public health emergency that has a significant potential to affect national security or the health and security of U.S. citizens living abroad and that involves Zika virus. On the basis of such determination, the Secretary of HHS declared on February 26, 2016, that circumstances exist justifying the authorization of emergency use of in vitro diagnostic tests for detection of Zika virus and/or diagnosis of Zika virus infection, subject to the terms of any authorization issued under the FD&C Act.
• On December 19, 2016, the Center for Medicare & Medicaid Services (CMS) issued a final rule entitled, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program. The final rule sets forth payment parameters and provisions related to the risk adjustment program; cost-sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges and State-based Exchanges on the Federal platform. The final rule also provides additional guidance relating to standardized options; qualified health plans; consumer assistance tools; network adequacy; the Small Business Health Options Programs; stand-alone dental plans; fair health insurance premiums; guaranteed availability and guaranteed renewability; the medical loss ratio program; eligibility and enrollment; appeals; consumer operated and oriented plans; special enrollment periods; and other related topics. The final rule is effective on January 17, 2017.
• On December 19, 2016, the FDA issued a final rule entitled, Postmarketing Safety Reporting for Combination Products. The final rule describes the postmarketing safety reporting requirements that apply when two or more different types of regulated medical products (drugs, devices, and/or biological products, which are referred to as “constituent parts” of a combination product) comprise a combination product and the combination product or its constituent parts have received the FDA marketing authorization. The rule is intended to promote and protect the public health by setting forth the requirements for postmarketing safety reporting for these combination products, and is part of the FDA’s ongoing effort to ensure the consistency and appropriateness of the regulatory requirements for combination products.
• On December 19, 2016, CMS issued a notice entitled, Medicare Program; Implementation of Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items and Publication of the Initial Required Prior Authorization List of DMEPOS Items that Require Prior Authorization as a Condition of Payment. The notice announces the implementation of the prior authorization program for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items in two phases and the issuance of the initial Required Prior Authorization List of DMEPOS items that require prior authorization as a condition of payment. Phase one of implementation is effective on March 20, 2017. Phase two of implementation is effective on July 17, 2017.
• On December 20, 2016, CMS issued a final 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 (CJR). The final rule implements three new Medicare Parts A and B episode payment models, a Cardiac Rehabilitation (CR) Incentive Payment model and modifications to the existing Comprehensive Care for Joint Replacement model under section 1115A of the Social Security Act. According to CMS, Acute care hospitals in certain selected geographic areas will participate in retrospective episode payment models targeting care for Medicare fee-for-service beneficiaries receiving services during acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment episodes. All related care within 90 days of hospital discharge will be included in the episode of care. The final rule is effective February 18, 2017, except for the following amendatory instructions: number 3 amending 42 CFR 510.2; number 4 adding 42 CFR 510.110; number 6 amending 42 CFR 510.120; number 14 amending 42 CFR 510.405; number 15 42 CMS-5519-F 2 CFR 510.410; number 16 revising 42 CFR 510.500; number 17 revising 42 CFR 510.505; number 18 adding 42 CFR 510.506; and number 19 amending 42 CFR 510.515, which are effective July 1, 2017.
• On December 22, 2016, CMS issued a notice entitled, Medicare Program; Renewal of the Advisory Panel on Hospital Outpatient Payment And Solicitation of Nominations to the Advisory Panel on Hospital Outpatient Payment. The notice announces the renewal of the Advisory Panel (the Panel) on Hospital Outpatient Payment (HOP) panel charter. The charter was approved on November 21, 2016 for a 2-year period effective through November 21, 2018. This notice also solicits nominations for up to two new members to the HOP Panel. There will be two vacancies on the Panel for 4-year terms that begin during Calendar Year (CY) 2017. Nominations appear to be due by February 21, 2017.
• On December 22, 2016, the FDA issued a final order entitled, Medical Devices; Neurological Devices; Classification of the Neurovascular Mechanical Thrombectomy Device for Acute Ischemic Stroke Treatment. The final order classifies the neurovascular mechanical thrombectomy device for acute ischemic stroke treatment into class II (special controls). The special controls that will apply to the device are identified in this final order and will be part of the codified language for the neurovascular mechanical thrombectomy device for acute ischemic stroke treatment’s classification.
• On December 22, 2016, the FDA issued a notice entitled, Food and Drug Administration Modernization Act of 1997: Modifications to the List of Recognized Standards, Recognition List Number: 046. The notice announces a publication containing modifications the Agency is making to the list of standards FDA recognizes for use in premarket reviews (FDA Recognized Consensus Standards). The publication, entitled “Modifications to the List of Recognized Standards, Recognition List Number: 046” (Recognition List Number: 046), will assist manufacturers who elect to declare conformity with consensus standards to meet certain requirements for medical devices. Comments may be submitted at any time.
• On December 22, 2016, the FDA issued draft and revised draft product-specific bioequivalence (BE) recommendations entitled, Product-Specific Bioequivalence Recommendations. The recommendations provide product-specific guidance on the design of BE studies to support abbreviated new drug applications (ANDAs). Comments appear to be due by February 21, 2017.
• On December 22, 2016, the FDA issued a notice entitled, Medical Device User Fee and Modernization Act; Notice to Public of Web Site Location of Fiscal Year 2017 Proposed Guidance Development. The notice announces the Web site location where the FDA will post two lists of guidance documents that the Center for Devices and Radiological Health (CDRH or the Center) intends to publish in fiscal year (FY) 2017. In addition, the FDA has established a docket where interested persons may comment on the priority of topics for guidance, provide comments and/or propose draft language for those topics, suggest topics for new or different guidance documents, comment on the applicability of guidance documents that have issued previously, and provide any other comments that could benefit the CDRH guidance program and its engagement with stakeholders. Comments appear to be due by February 21, 2017.
• On December 22, 2016, CMS issued its 2017 Durable Medical Equipment Prosthetics, Orthotics, and Supplies Healthcare Common Procedure Coding System (HCPCS) Code Jurisdiction List. This is an annual, recurring update of the HCPCS codes for DME MAC and Part B MAC jurisdictions to reflect codes that have been added or discontinued each year. This update is effective January 1, 2017 and will be implemented January 24, 2016.
• On December 22, 2016, CMS issued its January 2017 Update of the Ambulatory Surgical Center (ASC) Payment System. This is a recurring update of changes to billing instructions for payment policies implemented in in the January 2017 ASC payment system update. Included are CY 2017 payment rates for separately payable drugs and biologicals and the CY 2017 ASC payment rates for covered surgical and ancillary services. The payment files reflect the most recent changes to the CY 2017 Medicare Physician Fee Schedule payment. This update is effective January 1, 2017 and will be implemented January 3, 2017.
• On December 22, 2016, CMS issued its Calendar Year (CY) 2017 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment. This recurring update provides instructions for the CY 2017 clinical laboratory fee schedule, mapping for new codes for clinical laboratory tests, and updates for laboratory costs subject to the reasonable charge payment. This update is effective January 1, 2017 and will be implemented January 3, 2017.
• On December 22, 2016, CMS issued its January 2017 Update of the Hospital Outpatient Prospective Payment System (OPPS). This is a recurring update of changes to billing instructions for payment policies implemented in in the January 2017 OPPS update. This change request includes information on: (1) new device pass-through policies; (2) device intensive procedures; (3) Argus retinal prosthesis add-on code (C1842); (4) services eligible for new technology APC assignment and payments; (5) expiration of modifier “L1” for unrelated lab tests in the OPPS; (6) conditional packaging change to apply at claim level; (7) exception for laboratory packaging in the OPPS for Advanced Diagnostic Laboratory Tests; (8) FX modifier (x-ray taken using film); (9) CT modifier; (10) billing for items and services furnished at off-campus hospital outpatient departments; (11) partial hospitalization program changes; (12) changes to policies related to allogeneic hematopoietic stem cell transplantation; (13) drugs, biologicals, and radiopharmaceuticals; (14) changes to OPPS pricer logic; (15) update the outpatient provider specific file; and (16) coverage determinations. This update is effective January 1, 2017 and will be implemented January 3, 2017.
• On December 22, 2016, CMS issued its January 2017 Update of the Hospital Outpatient Prospective Payment System (OPPS). This change request implements manual changes and is a clarification for Chapter 1, section 10, Covered Inpatient Hospital Services Covered Under Part A of the Medicare Benefits Policy Manual. This update is effective January 1, 2017 and will be implemented January 3, 2017.
• On December 22, 2016, CMS released a final rule correction entitled, Medicare Program; End-Stage Renal Disease Quality Incentive Program; Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Bid Surety Bonds, State Licensure, and Appeals Process for Breach of Contract Actions; Correction. This document corrects technical and typographical errors that appeared in the final rule published in the Federal Register on November 4, 2016 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, Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program Bid Surety Bonds, State Licensure and Appeals Process for Breach of Contract Actions, Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program and Fee Schedule Adjustments, Access to Care Issues for Durable Medical Equipment; and the Comprehensive End-Stage Renal Disease Care Model. CMS does not believe a correcting document constitutes rulemaking subject to notice and a comment period and has therefore waived those and the effective date requirements.
• On December 23, 2016, the FDA issued guidance entitled, Factors to Consider Regarding Benefit-Risk in Medical Device Product Availability, Compliance, and Enforcement Decisions. This guidance is intended to provide clarity for FDA staff and industry regarding the benefit and risk factors FDA may consider in prioritizing resources for compliance and enforcement efforts to maximize medical device quality and patient safety. Comments may be submitted at any time.
• On December 23, 2016, the FDA issued a notice of a public workshop entitled, Coordinated Registry Network (CRN) for Devices Used for Acute Ischemic Stroke Intervention (DAISI).

Event Notices

• January 25, 2017: The Department of Health and Human Services (HHS) announced a public meeting of the Presidential Advisory Council on Combating Antibiotic-Resistant Bacteria. The January public meeting will be dedicated to presentations from federal and non-federal stakeholders surrounding the topic areas of infection prevention and control.
• February 2, 2017: The FDA announced a public workshop of the Coordinated Registry Network (CRN) for Devices Used for Acute Ischemic Stroke Intervention (DAISI). The purpose of the public workshop is to obtain stakeholders’ input on the coordination of registries for DAISI.
• February 16, 2017: The FDA announced a public advisory committee meeting of the Psychopharmacologic Drugs Advisory Committee. The general function of the committee is to provide advice and recommendations to the Agency on FDA’s regulatory issues. This meeting will be open to the public.

II. Congressional Legislation & Committee Action

U.S. Senate

• The Senate has adjourned until January 3, 2017.

House of Representatives

• The House has adjourned until January 3, 2017.

III. Reports, Studies, & Analyses 

• On December 19, 2016, the Office of Inspector General (OIG) released a report entitled, Vulnerabilities Remain Under Medicare’s 2-Midnight Hospital Policy. The report found that the number of inpatient stays decreased and the number of outpatient stays increased since the implementation of the 2-midnight policy. Further, short inpatient stays decreased more than long outpatient stays. However, despite these changes, vulnerabilities still exist.
• On December 20, 2016, the OIG released a report entitled, Early Implementation Review: CMS’s Management of the Quality Payment Program. From the OIG’s analysis, the OIG identified CMS's five key management priorities regarding the agency's planning and early implementation of the QPP. Early on, CMS staff decided that clinicians' acceptance of the QPP, and readiness to participate in it, would be the most critical factor to ensuring the program's success. This focus on clinicians informed CMS's decision making regarding its other management priorities, including: (1) adopting integrated internal business practices to accommodate a flexible, user-centric approach; (2) developing information technology (IT) systems that support and streamline clinician participation; (3) developing flexible and transparent MIPS policies; and (4) facilitating participation in Advanced APMs.
• On December 20, 2016, the OIG issued Advisory Opinion No. 16-13. The advisory opinion is in response a proposal to waive cost-sharing obligations incurred by individuals for health care services required for participation in a government-funded clinical research study (Proposed Arrangement); and the payment of a stipend to study participants for the time and effort required to participate in study visits (Current Arrangement). The OIG concluded that, although both the Proposed Arrangement and the Current 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 will not impose administrative sanctions.
• On December 22, 2016, the Government Accountability Office (GAO) released a report entitled, Medicaid Personal Care Services: CMS Could Do More to Harmonize Requirements across Programs. For this study, GAO reviewed oversight of Medicaid personal care services, specifically examining: (1) how selected states ensure that beneficiaries receiving services are safe from harm and that billed services are provided; and (2) steps CMS has taken since 2010 to improve oversight and harmonize requirements across programs. GAO reviewed policies in four states with varied programs; reviewed laws, guidance and documents; and interviewed CMS officials. Based on the study, GAO recommended that CMS: (1) collect and analyze required state reports on personal care services and (2) take steps to further harmonize federal program requirements, as appropriate, across programs providing these services. HHS concurred with both recommendations.
• On December 23, 2016, the OIG released a report entitled, Case Review of Inpatient Rehabilitation hospital Patients Not Suited for Intensive Therapy. Based on the study, OIG found that most patients (32 of 39) who physician reviewers determined were not suited for intensive rehab therapy remained in inpatient rehab hospitals for extended periods of time, including some who were in very poor condition. OIG encouraged CMS to consider providing additional technical assistance to ensure that Medicare patients are placed in the most appropriate setting for post-acute care, and that inpatient rehab hospitals do not admit patients who are unable to participate in and benefit from intensive therapy. An OIG audit that is currently in progress will provide a national assessment of the proportion of inpatient rehab stays that do not comply with all Medicare coverage and documentation criteria.

IV. Other Health Policy News

• On December 19, 2016, CMS announced an expansion of the Pre-Claim Review Demonstration for Home Health Services to Florida. According to CMS, they will expand the Pre-Claim Review Demonstration for Home Health Services to Florida for services that begin on or after April 1, 2017.
• On December 19, 2016, CMS released a fact sheet entitled, Pre-Claim Review Demonstration of Home Health Services Expands to Florida. The fact sheet describes the pre-claim review demonstration and CMS’ thought process behind the demonstration.
• On December 20, 2016, CMS issued FAQS about Affordable Care Act Implementation Part 35. The FAQs are in regards to the implementation of the Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the 21st Century Cures Act.
• On December 20, 2016, CMS issued a fact sheet entitled, Advancing Care Coordination through Episode Payment Models (Cardiac and Orthopedic Bundled Payment Models) Final Rule (CMS-5519-F) and Medicare ACO Track 1+ Model. The fact sheet discusses the December 20, 2016 newly released Innovation Center models that continue the Administration’s progress to shift Medicare payments from rewarding quantity to rewarding quality by creating strong incentives for hospitals to deliver better care to patients at a lower cost.
• On December 20, 2016, the Congressional Budget Office (CBO) released a blog post entitled, Challenges in Estimating the Number of People With Nongroup Health Insurance Coverage Under Proposals for Refundable Tax Credits. The blog post discusses proposals to replace the current tax-based subsidies for the purchase of private health insurance in the nongroup (or individual) market under the ACA with refundable tax credits that would be structured differently from those under current law.
• On December 20, 2016, the CBO released a blog post entitled, How Does CBO Define and Estimate Health Insurance Coverage for People Under Age 65. The blog post discusses how the CBO defines health insurance coverage (private and public) for people under 65 who are not institutionalized and who are not members of the active-duty military. The blog post also explains how the CBO estimates the number of insured and uninsured people in that population for the most recent year for which data on actual coverage exist. Lastly, the blog post describes where the CBO obtains the data to estimate coverage, the limitations of those sources, and how the CBO adjusts its estimates because of those limitations.
• On December 21, 2016, CMS issued Manufacturers Release No. 103. In this release, CMS clarifies that a biosimilar biological product would not qualify as an authorized generic drug as it is defined by our regulation at 42 CFR 447.502.
• On December 21, 2016, CMS issued a fact sheet entitled, Special Edition Open Enrollment Snapshot: November 1 through December Deadline for January 1 Coverage. According to CMS, through the extended deadline for January 1, 2017 coverage, 6.4 million consumers have signed up for Health Insurance Marketplace plans through HealthCare.gov, an increase of 400,000 plan selections compared to last year at this time. Total plan selections from November 1 through the extended deadline of December 19 include 2.05 million new consumers and 4.31 million returning consumers actively renewing their coverage. Consumers whose coverage will be automatically renewed for January 1 are not yet included in these totals.
• On December 22, 2016, CMS issued a change request entitled, SSNRI: MAC-Only Analysis and Planning for the Social Security Number Removal Initiative (SSNRI) Project. This change request allows Medicare Administrative Contractors to participate in a series of conference calls and develop implementation plans and project timelines to assist CMS in the development of business requirements for the MAC implementation change request for the SSNRI Project.
• On December 23, 2016, CMS released a Request for Information (RFI) seeking public input on potential adaptations of the model of care employed by the Programs of All-Inclusive Care for the Elderly (PACE) for new populations, including individuals with physical disabilities, under the authority provided by the PACE Innovation Act. The RFI includes two parts: (1) CMS seeks comment on potential elements of a five-year PACE-like model test for individuals dually eligible for Medicare and Medicaid, age 21 and older, with disabilities that impair their mobility and who are assessed as requiring a nursing home level of care, among other eligibility criteria (provisionally named “Person Centered Community Care” or “P3C”) and (2) CMS seeks information on additional specific populations whose health outcomes could benefit from enrollment in PACE-like models, and how the PACE model of care could be adapted to better serve the needs of these populations and the currently eligible population. Comments are due by February 10, 2017.