A&B Healthcare Week in Review, January 20, 2017

I. Regulations, Notices, & Guidance

• On January 17, 2017, the Government Accountability Office (GAO) issued a notice entitled, Request for Medicare Payment Advisory Commission Nominations. The notice is a request for letters of nomination and resumes for commissioners of the Medicare Payment Advisory Commission. Letters of nomination are due by March 10, 2017.
• On January 17, 2017, the Centers for Disease Control and Prevention (CDC) issued a notice entitled, Notice of Availability of the Draft Programmatic Environmental Assessment (Draft PEA) for Mosquito Control Activities Funded by HHS/CDC to Combat Zika Virus Transmission in the United States. The notice requests public comment on a draft Programmatic Environmental Assessment (Draft PEA) for mosquito control activities funded by the Department of Health and Human Services (HHS)/CDC to Combat Zika Virus transmission in the United States. Comments are due by March 20, 2017.
• On January 17, 2017, the Center for Medicare & Medicaid Services (CMS) issued a final rule entitled, Medicaid Program; The Use of New or Increased Pass-Through Payments in Medicaid Managed Care Delivery Systems. The rule finalizes changes to the pass-through payment transition periods and the maximum amount of pass-through payments permitted annually during the transition periods under Medicaid managed care contract(s) and rate certification(s). The final rule prevents increases in pass-through payments and the addition of new pass-through payments beyond those in place when the pass-through payment transition periods were established, in the final Medicaid managed care regulations effective July 5, 2016.
• On January 17, 2017, the Food and Drug Administration (FDA) issued a guidance entitled, Assessment of Abuse Potential of Drugs. The guidance is intended to assist sponsors of investigational new drugs and applicants for approval of a new drug in evaluating whether their new drug product has abuse potential. Specifically, the guidance provides recommendations for assessing the abuse potential of central nervous system (CNS)-active new drugs. Drug products with abuse potential generally contain drug substances that are active within the CNS and produce psychoactive effects such as euphoria and hallucinations. Thus, if a drug substance is CNS-active, the new drug product containing that drug substance will likely need to undergo a thorough assessment of its abuse potential and may be subject to control under the Controlled Substances Act (CSA). The guidance finalizes the draft guidance of the same name issued on January 27, 2010. Comments may be submitted at any time.
• On January 17, 2017, the FDA issued a guidance entitled, Considerations in Demonstrating Interchangeability With a Reference Product. The guidance is intended to assist sponsors in demonstrating that a proposed therapeutic protein product (proposed interchangeable product or proposed product) is interchangeable with a reference product for the purposes of submitting a marketing application or supplement under the Public Health Service Act (PHS Act). The guidance is one in a series of guidance that the FDA has developed to implement the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). Comments are due by March 20, 2017.
• On January 18, 2017, HHS issued a notice entitled, Annual Update of the HHS Poverty Guidelines. The notice provides an update of HHS’ poverty guidelines to account for last calendar year’s increase in prices as measured by the Consumer Price Index.
• On January 18, 2017, the FDA issued a draft guidance entitled, Drug and Device Manufacturer Communications With Payors, Formulary Committees, and Similar Entities-- Questions and Answers. The draft guidance provides answers to common questions regarding the communication of health care economic information (HCEI) about approved prescription drugs by medical product manufacturers, packers, distributers, and their representatives (firms) to payors, formulary committees, or other similar entities with knowledge and expertise in the area of health care economic analysis (collectively referred to as payors). The draft guidance also provides answers to common questions about firms' communications regarding investigational drugs and devices (investigational products) to payors before FDA approval or clearance of such products. Comments are due by April 19, 2017.
• On January 18, 2017, the Department of Homeland Security; Department of Agriculture; Department of Energy; National Aeronautics and Space Administration; Department of Commerce; Social Security Administration; Agency for International Development; Department of Housing and Urban Development; Department of Labor; Department of Defense; Department of Education; Department of Veterans Affairs; Environmental Protection Agency; HHS; National Science Foundation; and Department of Transportation issued a final rule entitled, Federal Policy for the Protection of Human Subjects. According to the departments and agencies listed in the final rule, they are making revisions to modernize, strengthen, and make more effective the Federal Policy for the Protection of Human Subjects that was originally promulgated as a Common Rule in 1991. The final rule is intended to better protect human subjects involved in research, while facilitating valuable research and reducing burden, delay, and ambiguity for investigators.
• On January 18, 2017, the FDA issued a draft guidance entitled, Medical Product Communications That Are Consistent With the Food and Drug Administration Required Labeling--Questions and Answers. The draft guidance provides information for manufacturers, packers, and distributors and their representatives (collectively “firms”) of drugs and medical devices for humans, including those that are licensed as biological products, and animal drugs (collectively “medical products”), about how the FDA evaluates their medical product communications, including their promotional materials, that present information that is not contained in the FDA-required labeling for the product but that may be consistent with the FDA-required labeling for the product. Comments are due by April 19, 2017.
• On January 18, 2017, HHS issued a final rule entitled, National Vaccine Injury Compensation Program: Revisions to the Vaccine Injury Table. The final rule amends the regulations governing the National Vaccine Injury Compensation Program (VICP or program) by proposing revisions to the Vaccine Injury Table (Table). HHS based the Table revisions primarily on the 2012 Institute of Medicine (IOM) report, “Adverse Effects of Vaccines: Evidence and Causality,” the work of nine HHS workgroups who reviewed the IOM findings, and consideration of the Advisory Commission on Childhood Vaccines’ (ACCV) recommendations. HHS amends the Table through the changes in this final rule. These changes will apply only to petitions for compensation under the VICP filed after this final rule becomes effective.
• On January 18, 2017, the CDC issued a final rule entitled, Possession, Use, and Transfer of Select Agents and Toxins; Biennial Review of the List of Select Agents and Toxins and Enhanced Biosafety Requirements. The CDC has reviewed the list of biological agents and toxins that have the potential to pose a severe threat to public health and safety. Following the review, HHS has decided: not to finalize the proposed changes to the list of select agents and toxins at this time; to finalize 2 provisions to address toxin permissible limits and the inactivation of select agents; to finalize specific provisions to the section of the regulations addressing biosafety; and to clarify regulatory language concerning security, training, incident response, and records.
• On January 18, 2017, HHS issued a notice entitled, Medicare Program; Administrative Law Judge Hearing Program for Medicare Claim and Entitlement Appeals; Quarterly Listing of Program Issuances—October Through December 2016. The notice lists the Office of Medicare Hearings and Appeals (OMHA) Case Processing Manual (OCPM) manual instructions that were published from October through December, 2016. The manual standardizes the day-to-day procedures for carrying out adjudicative functions, in accordance with applicable statutes, regulations and OMHA directives, and gives OMHA staff direction for processing appeals at the OMHA level of adjudication.
• On January 18, 2017, HHS issued a notice entitled, Denial of petition of rulemaking. The notice provides the reasons for not conducting a rulemaking proceeding to add neurological disorders or conditions as injuries associated with seasonal influenza vaccines to the Vaccine Injury Table.
• On January 19, 2017, HHS issued a notice entitled, Mandatory Guidelines for Federal Workplace Drug Testing Programs. The notice revises the Mandatory Guidelines for Federal Workplace Drug Testing Programs.
• On January 19, 2017, the CDC issued a notice entitled, Board of Scientific Counselors, National Center for Health Statistics: Notice of Charter Renewal. The notice gives notice that the National Center for Health Statistics has been renewed for a 2-year period through January 19, 2019.
• On January 19, 2017, the FDA issued a draft guidance entitled, Compliance with and Recommendations for Implementation of the Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption for Sprout Operations. The draft guidance, when finalized, will help sprout operations subject to the FDA’s final rule entitled "Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption" (the Produce Safety Rule), and primarily focuses on assisting such operations in complying with the sprout-specific requirements in Subpart M (Sprouts) of the Produce Safety Rule. The draft guidance also includes limited discussion on certain other applicable requirements of the Produce Safety Rule. Comments are due by July 24, 2017.
• On January 19, 2017, the FDA issued a notice entitled, Determination that ACTHAR GEL SYNTHETIC (Seractide Acetate) Injection, 80 Units/Milliliter and 40 Units/Milliliter, was Withdrawn from Sale for Reasons of Safety or Effectiveness. The purpose of the notice is that the FDA has determined that ACTHAR GEL SYNTHETIC (seractide acetate) injection, 80 units/milliliter (mL) and 40 units/mL, was withdrawn from sale for reasons of safety or effectiveness. The FDA will not accept or approve abbreviated new drug applications (ANDAs) for seractide acetate injection, 80 units/mL and 40 units/mL.
• On January 20, 2017, the Internal Revenue Service (IRS) issued a notice entitled, Extension of the Due Date for a Section 35 Health Coverage Tax Credit Election. The notice provides guidance regarding the health coverage tax credit (HCTC) under § 35 of the Internal Revenue Code. Specifically, the notice extends the due date for the election to claim the HCTC for eligible coverage months in taxable years beginning on or after June 29, 2015, and before January 1, 2017.

• March 22, 2017: CMS announced a public meeting of the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC). According to CMS, they are encouraging the participation of organizations with expertise in what health outcomes in studies for heart failure treatment technologies should be of interest to CMS. The Committee will hear oral presentations from the public for approximately 45 minutes.

II.Congressional Legislation & Committee Action

• On January 18, 2017, Senate Health, Education, Labor and Pensions (HELP) Committee held a confirmation hearing for Representative Tom Price (R-GA), President-Elect Donald Trump’s nominee to be Secretary of the U.S. Department of Health and Human Services (HHS).

• The House has adjourned until January 23, 2017.

III. Reports, Studies, & Analyses  

• On January 17, 2017, the Congressional Budget Office (CBO) released a report entitled, How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums. The report found that the number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the H.R. 3762. Later, after the elimination of the Affordable Care Act’s (ACA’s) expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026. Additionally, premiums in the non-group market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new pfafflan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.
• On January 17, 2017, the GAO released a report entitled, Drug Safety: FDA Has Improved Its Foreign Drug Inspection Program, but Needs to Assess the Effectiveness and Staffing of Its Foreign Offices. The report found that the FDA has increased its foreign drug inspections and enhanced its ability to prioritize drug establishments for inspection. The number of foreign inspections has consistently increased each year since fiscal year 2009. Beginning in fiscal year 2015, the FDA conducted more foreign than domestic inspections. The FDA has also improved the accuracy and completeness of information on its catalog of drug establishments subject to inspection. It has also reduced its catalog of drug establishments with no inspection history to 33 percent of foreign establishments, compared to 64 percent in 2010. However, the number of such establishments remains large, at almost 1,000 of the approximately 3,000 foreign establishments. The FDA plans to inspect all of these establishments over the next 3 years. Though the FDA uses two performance measures to assess the foreign offices—number of medical product inspections and number of collaborative actions—the collaborative action measure does not capture the offices’ unique contributions to drug safety. Moreover, the foreign offices face persistently high vacancy rates. As of July 2016, 46 percent of the foreign offices’ authorized positions were vacant. Although the FDA recently finalized a workforce plan, the GAO identified several weaknesses with it. For example, the plan sets a workforce target that applies to both foreign and domestic international program offices, making it difficult to ascertain whether its goal of reducing foreign office staff vacancies is being met.
• On January 17, 2017, the GAO released a report entitled, The Nation’s Fiscal Health: Action is Needed to Address the Federal Government’s Fiscal Future. The report found that in addition to near term financing decisions, a broader plan is needed to put the government on a more sustainable long-term path. The report illuminates this need by outlining the fiscal condition of the U.S. government and its future path based on current fiscal policies. It draws on the recently issued Fiscal Year (FY) 2016 Financial Report of the United States Government (2016 Financial Report) and the GAO’s audit of the government’s consolidated financial statements.
• On January 18, 2017, the GAO released a report entitled, National Institutes of Health: Kidney Disease Research Funding and Priority Setting. The report found that the National Institutes of Health (NIH) funding for biomedical research on kidney disease in fiscal year 2015 was approximately $564 million—an increase of 2.7 percent from fiscal year 2014. The National Institutes of diabetes and Digestive and Kidney Diseases (NIDDK) provided the majority (60 percent) of this funding, supporting a broad range of projects, such as chronic kidney disease, end-stage renal disease (ESRD) treatment, and kidney donation. The GAO also reviewed NIH research funding levels for other diseases and conditions in the United States—those that are associated with high mortality or are among the most prevalent chronic conditions. The GAO found that funding for fiscal year 2015 varied widely among these diseases and conditions—for example, from $28 million for emphysema to nearly $5.4 billion for cancer. This variation in funding reflects a range of factors, including each IC’s mission, budget, and research priorities.
• On January 18, 2017, the Office of Inspector General (OIG) released a report entitled, Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2016. The report found that during FY 2016, the Federal Government won or negotiated over $2.5 billion in health care fraud judgments and settlements, and it attained additional administrative impositions in health care fraud cases and proceedings. As a result of these efforts, as well as those of preceding years, in FY 2016 over $3.3 billion was returned to the Federal Government or paid to private persons. Of the approximately $31.0 billion returned by the Health Care Fraud and Abuse Control Program (HCFAC) account to the Medicare Trust Funds since the inception of the Program in 1997, over $17.9 billion has been returned from 2009 through 2016. The report also found that in FY 2016, the Department of Justice (DOJ) opened 975 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 480 cases involving 802 defendants. A total of 658 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2016, DOJ opened 930 new civil health care fraud investigations and had 1,422 civil health care fraud matters pending at the end of the fiscal year. In FY 2016, the FBI investigative efforts resulted in over 555 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 128 health care fraud criminal enterprises.
• On January 18, 2017, the OIG released a report entitled, California Improperly Claimed Federal Medicaid Reimbursement for Certain Nonemergency Services. The report found that qualified aliens are generally not permitted to receive Federal Medicaid benefits for 5 years from the date they enter the United States with qualified alien status. States are required to have a verification system to meet requirements for receiving Federal reimbursement for services provided to qualified aliens. To comply with those requirements, the California Department of Health Care Services (State agency) created the quarterly alien claiming adjustment report (adjustment report) in its Medicaid Management Information System (MMIS) to identify claims for services provided to qualified aliens who had not met, and were not otherwise excepted from, the 5-year waiting period. The State agency is not permitted to claim Federal reimbursement for these services. The State agency did not correctly identify all non-reimbursable claims for nonemergency services provided to qualified aliens for select quarters in State fiscal years 2010 through 2014. Specifically, the State agency's MMIS did not identify all claims for its adjustment reports for the audit period, for which Federal reimbursement was unallowable. The MMIS error occurred when claims were approved for payment in one quarter and paid in a subsequent quarter. As a result, the State agency claimed $9.9 million in unallowable Federal Medicaid reimbursement.
• On January 19, 2017, the OIG released a report entitled, Independent Attestation Review: Indian Health Service Fiscal Year 2016 Detailed Accounting Submission and Performance Summary Report for National Drug Control Activities and Accompanying Required Assertions. The report provides the results of our review of the Indian Health Service (IHS) detailed accounting submission, which includes the Table of Drug Control Obligations, related disclosures, and management's assertions for the fiscal year ended September 30, 2016. We also reviewed the Performance Summary Report, which includes management's assertions and related performance information for the fiscal year ended September 30, 2016.
• On January 20, 2017, the GAO released a report entitled, Medicare Advantage: Limited Progress Made to Validate Encounter Data Used to Ensure Proper Payments. The report found that without complete and accurate encounter data, CMS cannot appropriately risk adjust Medicare Advantage Organizations (MAO) payments. According to the GAO, CMS has begun compiling basic statistics on the volume and consistency of data submissions and preparing automated summary reports for MAOs indicating diagnosis information used for risk adjustment. However, CMS has yet to undertake activities that fully address encounter data accuracy, such as reviewing medical records. Furthermore, some health insurance and provider trade associations GAO interviewed voiced concerns about CMS’s ability to properly identify diagnoses used for risk adjustment. CMS officials noted that they are working with MAOs to refine how the methodology used to obtain diagnoses data is applied. To the extent that CMS is making payments based on data that have not been fully validated for completeness and accuracy, the soundness of billions of dollars in Medicare expenditures remains unsubstantiated. Given the agency’s limited progress, the GAO continues to believe that CMS should implement the GAO’s July 2014 recommendation that CMS fully assess data quality before use.

IV. Other Health Policy News

• On January 17, 2017, CMS issued an informational bulletin entitled, State Flexibility to Facilitate Timely Access to Drug Therapy by Expanding the Scope of Pharmacy Practice using Collaborative Practice Agreements, Standing Orders or Other Predetermined Protocols. The informational bulletin addresses flexibilities that states may have to facilitate timely access to specific drugs by expanding the scope of practice and services that can be provided by pharmacists, including dispensing drugs based on their own independently initiated prescriptions, collaborative practice agreements (CPA) with other licensed prescribing healthcare providers like physicians, “standing orders” issued by the state, or other predetermined protocols. These practices can facilitate easier access to medically necessary and time-sensitive drugs for Medicaid beneficiaries.
• On January 17, 2017, CMS updated the Open Payments dataset to reflect changes to the data that took place since the last publication on June 30, 2016. The updated dataset is now available for viewing here.
• On January 17, 2017, CMS released the second annual Medicare Part D Opioid Prescribing Mapping Tool. The opioid prescribing mapping tool shows geographic comparisons at the state, county, and ZIP code levels of de-identified Medicare Part D opioid prescription claims – prescriptions written and then submitted to be filled – within the United States. This mapping tool allows the user to see both the number and percentage of opioid claims at the local level and better understand how this critical issue impacts communities nationwide.
• On January 17, 2017, announced an extension of 2016 reporting deadline and intends to modify 2017 requirements for reporting of electronic Clinical Quality Measure eCQM data under the Inpatient Quality Reporting and EHR Incentive Programs for Hospitals.
• On January 18, 2017, CMS posted the second annual release of the Skilled Nursing Facility Public Use File (Skilled Nursing Facility PUF) with data for 2014. The Skilled Nursing Facility PUF presents summarized information on services provided to Medicare beneficiaries by skilled nursing facilities. It contains information on utilization, payment (Medicare payment and Medicare standardized payment), submitted charges, and beneficiary demographic and chronic condition indicators.
• On January 18, 2017, CMS announced over 359,000 clinicians are confirmed to participate in four of CMS’s Alternative Payment Models (APMs) in 2017. Clinicians who participate in APMs are paid for the quality of care they give to their patients. APMs are an important part of the Administration’s effort to build a system that delivers better care and one in which clinicians work together to have a full understanding of patients’ needs. APMs also strive to ensure that patients are in the center of their care, and that Medicare pays for what works and spends taxpayer money more wisely resulting in a healthier country.
• On January 18, 2017, CMS released a Biweekly Enrollment Snapshot for weeks 10 and 11, January 1 – January 14, 2017. According to CMS, more than 8.8 million Americans were signed up for 2017 coverage through HealthCare.gov as of January 14, 2017. This compares to about 8.7 million sign-ups as of January 14 last year, as Americans continue to demonstrate strong demand for 2017 Marketplace coverage.
• On January 18, 2017, CMS announced $66.1 million in funding to health departments in American Samoa, Puerto Rico, the U.S. Virgin Islands, and Florida to help combat the Zika virus. Congress authorized this funding in the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act (P.L. 114-223).
• On January 19, 2017, CMS released a fact sheet entitled, Independence at Home Demonstration Corrected Performance Year 2 Results. According to the fact sheet, in the second performance year of the demonstration, 10,484 beneficiaries were enrolled in the 15 participating practices. For the second performance year, all 15 of the Independence at Home practices improved performance from the first performance year in at least two of the six quality measures for the demonstration. Four practices met the performance thresholds for all six quality measures.
• On January 20, 2017, CMS issued FAQ entitled, Machine Readable Data FAQs. The FAQs provide answers to questions related to machine readable data.

V. ACA Repeal News

• On January 13, 2017, the House of Representatives passed Con. Res. 3 – a concurrent resolution setting forth the congressional budget for the United States Government for fiscal year 2017 and setting forth the appropriate budgetary levels for fiscal years 2018 through 2026. The resolution establishes: (1) a deficit-neutral reserve fund for health care legislation, and (2) a reserve fund for health care legislation. (The reserve funds provide the chairmen of the congressional budget committees with flexibility in applying budget enforcement rules to health care legislation that meets specified criteria. Under the reserve funds, the chairmen may revise committee allocations, aggregates and other appropriate levels in this resolution, and the pay-as-you-go [PAYGO] ledger in the Senate.)