Alston & Bird Healthcare Week in Review, February 17, 2017

I. Regulations, Notices, & Guidance

• On February 13, 2017, the Department of Health and Human Services (HHS) issued a notice entitled, Interest Rate on Overdue Debts. The notice announces that the current rate of 9.5%, as fixed by the Secretary of the Treasury, is the interest rate that will be applied to overdue debt until HHS publishes a revision.
• On February 14, 2017, the Food and Drug Administration (FDA) issued a revised draft guidance entitled, Bioequivalence Recommendations for Difluprednate. The draft guidance provides specific guidance on the design of bioequivalence (BE) studies to support abbreviated new drug applications (ANDAs) for difluprednate emulsion. Comments are due by April 17, 2017.
• On February 14, 2017, HHS issued a notice entitled, National Institute of Neurological Disorders and Stroke, Muscular Dystrophy Coordinating Committee Call for Committee Membership Nominations. The notice announces that HHS is seeking nominations for an individual to serve as a nonfederal public member on the Muscular Dystrophy Coordinating Committee. Nominations are due by March 17, 2017.
• On February 14, 2017, the Centers for Disease Control and Prevention (CDC) issued a final rule entitled, Control of Communicable Diseases; Delay of Effective Date. The final rule announces a change in the effective date of the final rule entitled, Control of Communicable Diseases that was published on January 19, 2017. This action is undertaken in accordance with the memorandum of January 20, 2017 from the Assistant to the President and Chief of Staff entitled, Regulatory Freeze Pending Review. The effective date of the final rule amending 42 CFR parts 70 and 71 published January 19, 2017 (82 FR 6890) is delayed to March 21, 2017.
• On February 15, 2017, the Center for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Patient Protection and Affordable Care Act; Market Stabilization. According to CMS, the proposed rule would make changes that would help stabilize the individual and small group markets. The proposed rule would amend standards relating to special enrollment periods, guaranteed availability, and the timing of the annual open enrollment period in the individual market for the 2018 plan year; standards related to network adequacy and essential community providers for qualified health plans; and the rules around actuarial value requirements. Comments are due by March 7, 2017.
• On February 15, 2017, HHS issued a final rule entitled, Confidentiality of Substance Use Disorder Patient Records; Delay of Effective Date. In accordance with the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled, Regulatory Freeze Pending Review, published in the Federal Register on January 24, 2017 (82 FR 8346), this action delays for 60 days from the date of the memorandum the effective date of the rule entitled, Confidentiality of Substance Use Disorder Patient Records published in the Federal Register on January 18, 2017 (82 FR 6052). The effective date of the Confidentiality of Substance Use Disorder Patient Records final rule, published in the Federal Register on January 18, 2017 (82 FR 6052) is delayed from February 17, 2017, to a new effective date of March 21, 2017.
• On February 15, 2017, the CDC issued a final rule entitled, Possession, Use, and Transfer of Select Agents and Toxins; Biennial Review and Enhanced Biosafety Requirements; Delay of Effective Date. The CDC announces a delay in the effective date of the final rule entitled, Possession, Use, and Transfer of Select Agents and Toxins, Biennial Review and Enhanced Biosafety Requirements that was published on January 19, 2017. This action is undertaken in accordance with the memorandum of January 20, 2017 from the Assistant to the President and Chief of Staff entitled, Regulatory Freeze Pending Review.  The effective date for the final rule published January 19, 2017, at 82 FR 6278, is delayed until March 21, 2017.
• On February 15, 2017, 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; Delay of Effective Date. In accordance with the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled "Regulatory Freeze Pending Review", this action delays for 60 days from the date of the memorandum the effective date of the rule entitled "Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model" published in the January 3, 2017 Federal Register (82 FR 180).  The effective date of the final rule published in the January 3, 2017 Federal Register (82 FR 180) for provisions that were to become effective on February 18, 2017, is delayed to a new effective date of March 21, 2017.
• On February 16, 2017, CMS issued a notice entitled, Opportunities for Hearings: Compliance of Alabama State Plan Provisions Concerning Provision of Terminating Coverage and Denying Reenrollment to Otherwise Eligible Individuals Based on a Determination of Fraud or Abuse with Titles XI and XIX (Medicaid) of the Social Security Act. The notice announces the opportunity for a hearing; Compliance of Alabama Medicaid State Plan – provision of providing Medicaid to all individuals who meet eligibility criteria, and requirements for handling of suspected fraud and abuse by providers, applicants, and beneficiaries. Requests to participate in the hearing as a party must be received by March 20, 2017.
• On February 16, 2017, the FDA issued a guidance entitled, Requirements for Transactions with First Responders under Section 582 of the Federal Food, Drug, and Cosmetic Act. The guidance addresses the compliance of dispensers that engage in transactions with first responders and the compliance of first responders with the provisions in section 582 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360eee-1) related to the exchange of product tracing information (i.e., transaction information, transaction history, and transaction statements) and verification. The guidance also addresses the compliance of trading partners that engage in transactions with first responders with the requirement for conducting business only with authorized trading partners. The requirements related to the exchange of product tracing information took effect on July 1, 2015 for dispensers. Requirements for verification and conducting business only with authorized trading partners went into effect for all trading partners on January 1, 2015. Comments may be submitted at any time.
• On February 16, 2017, the FDA issued a notice entitled, Guidance Agenda. The notice announces the new and revised draft guidance the Center for Drug Evaluation and Research (CDER) is planning to publish during Calendar Year 2017.
• On February 17, 2017, the FDA issued a draft guidance entitled, Q11 Development and Manufacture of Drug Substances--Questions and Answers (Regarding the Selection and Justification of Starting Materials); International Council for Harmonisation. The draft guidance was prepared under the auspices of the International Council for Harmonisation (ICH), formerly the International Conference on Harmonisation. The draft guidance consists of questions and answers that were developed to clarify the principles for selecting starting materials described in the ICH guidance entitled, Q11 Development and Manufacture of Drug Substances. The draft guidance is intended to provide additional clarification and to promote convergence on the considerations for the selection and justification of starting materials. Comments are due by March 23, 2017.
• On February 17, 2017, the World Trade Center Health Program issued a notice entitled, Petition 014--Autoimmune Diseases; Finding of Insufficient Evidence. The notice announces that on September 29, 2016, the Administrator of the World Trade Center (WTC) Health Program received a petition to add autoimmune diseases, including rheumatoid arthritis, to the List of WTC-Related Health Conditions (List). Upon reviewing the information provided by the petitioner, the Administrator has determined that Petition 014 is not substantially different from Petitions 007, 008, 009, 011, and 013, which also requested the addition of autoimmune diseases, including various subtypes. The Administrator has published responses to the five previous petitions in the Federal Register and has determined that Petition 014 does not provide additional evidence of a causal relationship between 9/11 exposures and autoimmune diseases, including This document is scheduled to be published in the Federal Register on 02/21/2017 and available online at https://federalregister.gov/d/2017-03336, and on FDsys.gov 2 rheumatoid arthritis. Accordingly, the Administrator finds that insufficient evidence exists to request a recommendation of the WTC Health Program Scientific/Technical Advisory Committee (STAC), to publish a proposed rule, or to publish a determination not to publish a proposed rule.

• March 9, 2017: The FDA announced a public meeting entitled, Use of the Term ‘Healthy’ in the Labeling of Human Food Products. The purpose of the public meeting is to give interested persons an opportunity to discuss the use of the term “healthy” in the labeling of human food.
• March 13 – 14, 2017: The Physician-Focused Payment Model Technical Advisory Committee (PTAC) announced their next public meeting. PTAC will hear presentations from Preliminary Review Teams (PRTs) on proposals submitted to PTAC. PTAC will hear public comments on the proposals and deliberate. If the Committee completes its deliberation, the Committee will vote on whether the proposal meets the criteria established by the Secretary of HHS. Prior to the meeting, an agenda including information on the proposals under consideration will be posted on the PTAC website and be distributed via PTAC’s Listserv.
• March 15 – 17, 2017: The FDA, Cincinnati District, announced a public conference entitled, FDA/Xavier University PharmaLink Conference: Leadership in a Global Supply Chain. The PharmaLink conference seeks solutions to important and complicated issues by aligning with the strategic priorities of the FDA, and includes presentations from key FDA officials and industry experts.
• April 10 – 11, 2016: PTAC announced a public meeting. PTAC will hear presentations from Preliminary Review Teams (PRTs) on proposals submitted to PTAC. PTAC will hear public comments on the proposals and deliberate. If the Committee completes its deliberation, the Committee will vote on whether the proposal meets the criteria established by the Secretary of HHS. Prior to the meeting, an agenda including information on the proposals under consideration will be posted on the PTAC website and be distributed via PTAC’s Listserv.

II. Congressional Legislation & Committee Action

• On February 15, 2017, the Senate Appropriations Labor, Health and Human Services, Education and Related Agencies Subcommittee held a hearing entitled, Mental Health Care: Examining Treatments and Services. The witnesses include Joseph Parks, Medical Director of the National Council for Behavioral Health; David Johnson, CEO of Navos Mental Health Solutions; Dennis Freeman, CEO of Cherokee Health Systems; and Donald De Lucca, President of the International Association of Chiefs of Police.
• On February 16, 2017 the Senate Finance Committee held a hearing on the nomination of Seema Verma to be the CMS administrator.

• On February 16, 2017, the House Judiciary, Regulatory Reform and Commercial and Antitrust Law Subcommittee held a hearing on R. 372, The Competitive Health Insurance Reform Act of 2017. The witnesses included Representative Paul Gosar (R-AZ), Representative Austin Scott (R-GA), Mr. Thomas Miller, Resident Fellow, American Enterprise Institute (AEI), Mr. David Balto, Principal, David A. Balto Law Offices, Mr. Robert Woody, Vice President, Policy, Property Casualty Insurers Association of America (PCI) and Mr. George Slover, Senior Policy Counsel, Consumer Union.

• The Senate has adjourned until February 27, 2017.

• The House has adjourned until February 27, 2017.

• On February 13, 2017, the Government Accountability Office (GAO) released a report entitled, Medicaid: CMS Needs Better Data to Monitor the Provision of and Spending on Personal Care Services. The report found that two data systems managed by CMS collect information from states on the provision of and spending on personal care services: (1) the Medicaid Statistical Information System (MSIS) collects detailed information from provider claims on services rendered to individual Medicaid beneficiaries and state payments for these services; and (2) the Medicaid Budget and Expenditure System (MBES) collects states’ total aggregate Medicaid expenditures across 80 broad service categories. Information from these two CMS data systems can be used in the aggregate to describe broadly the provision of and spending on Medicaid personal care services. For example, MBES data show that total fee-for-service spending on these services was at least $15 billion in 2015—up $2.3 billion from 2012. However, the usefulness of the data collected from these two systems for CMS oversight is limited because of data gaps and errors. To provide effective oversight, including decision making, external reporting, and monitoring program operations, CMS needs timely, relevant and reliable data on personal care services rendered and the amount paid. The GAO found that the data collected did not always meet these standards.
• On February 15, 2017, the Congressional Budget Office (CBO) released a report entitled, Federal Spending for Means-Tested Programs, 2007 to 2027. The CBO projects that if current laws generally remained unchanged, federal outlays for mandatory means-tested programs (programs and tax credits that provide cash payments or other assistance to people with relatively low income or few assets) would grow over the next decade at an average annual rate of 4.3 percent, whereas spending for mandatory non–means-tested programs would grow at an average annual rate of 6.0 percent. Among the mandatory programs, the largest means-tested ones are Medicaid, the earned income and child tax credits (which are refundable), the Supplemental Nutrition Assistance Program, and Supplemental Security Income. The largest non–means-tested ones are Social Security, most of Medicare, and civilian and military retirement programs.
• On February 15, 2017, the GAO released a report entitled, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others. The report found that since the GAO’s last high-risk update, many of the 32 high-risk areas on the 2015 list have shown solid progress. Twenty-three high-risk areas, or two-thirds of all the areas, have met or partially met all five criteria for removal from the High-Risk List; 15 of these areas fully met at least one criterion. Progress has been possible through the concerted efforts of Congress and leadership and staff in agencies.
• On February 15, 2017, the GAO released a report entitled, Private Health Insurance: In Most States and New Exchanges, Enrollees Continued to be Concentrated among Few Issuers in 2014. The report found that enrollment in private health insurance plans remained concentrated among a small number of issuers in most states in 2014, including in the newly established exchanges. On average in each state and the District of Columbia, 11 or more issuers participated in each of three types of markets— individual, small group, and large group—from 2011 through 2014. However, in most states, the 3 largest issuers in each market had at least an 80 percent share of the market during the period. Beginning in 2014, issuers in the individual and small group markets could sell coverage through exchanges established by the Patient Protection and Affordable Care Act (PPACA). Not all issuers in these overall markets participated in the exchanges, and several had fewer than 3 issuers participating. Enrollment through these exchanges was generally more concentrated among a few issuers than was true for the overall markets. The GAO did not assess the effect of the law on concentration and participation as 2014 was the first year of implementation for certain PPACA insurance reforms.
• On February 15, 2017, the GAO released a report entitled, VA Health Care: Action Needed to Ensure medical Facility Controlled Substance Inspection Programs Meet Agency Requirements. The report found weaknesses in the way four selected Department of Veterans Affairs (VA) medical facilities were implementing their controlled substance inspection programs. Two of the four did not conduct monthly inspections of controlled substances as required by the Veterans Health Administration (VHA). For example, one facility missed 43 percent of monthly inspections in critical patient care areas and the pharmacy for the period the GAO reviewed—January 2015 to February 2016. Further, inspections that three of the four facilities performed did not include or follow three or more of the nine VHA requirements the GAO reviewed. At two of the three facilities, for example, inspectors did not properly verify that controlled substances had been transferred from VA pharmacies to patient care areas; nor did inspectors ensure that all controlled substances on hold for destruction were properly documented. The VA Office of the Inspector General identified similar inspection program weaknesses at other VA facilities in 2009 and again in 2014.

IV. Other Health Policy News

• On February 15, 2017, CMS released the 2016-2025 projections of national health expenditures data. According to CMS, national health expenditure growth is expected to average 5.6 percent annually over 2016-2025. National health spending growth is projected to outpace projected growth in Gross Domestic Product (GDP) by 1.2 percentage points. As a result, CMS projects the health share of GDP to rise from 17.8 percent in 2015 to 19.9 percent by 2025. Growth in national health expenditures over this period is largely influenced by projected faster growth in medical prices compared to recent historically low growth. This faster expected growth in prices is projected to be partially offset by slowing growth in the use and intensity of medical goods and services.

• On February 15, 2017, CMS issued a fact sheet entitled, CMS Issues Proposed Rule to Increase Patients’ Health Insurance Choices for 2018. The fact sheet discusses CMS’ proposed rule entitled, Patient Protection and Affordable Care Act; Market Stabilization and outlines the variety of policy and operational changes to the Marketplace.

• On February 17, 2017, CMS announced it awarded approximately $20 million to 11 organizations for the first year of a five-year program to provide on-the-ground training and education about the Quality Payment Program for clinicians in individual or small group practices of 15 clinicians or fewer. CMS intends to invest up to an additional $80 million over the remaining four years.

• On February 13, 2017, House Ways & Means Committee Chairman Kevin Brady (R-TX) said the Republican alternative to the Affordable Care Act (ACA) will not provide the same level of funding for beneficiary subsidies as in the current law, but will provide tax credits that are universal and increase by age as in Speaker Paul Ryan’s (R-WI) Better Way proposal.

• On February 14, 2017, the Freedom Caucus expressed their impatience with Republican leaders for failing to schedule a vote to repeal the ACA.

• On February 16, 2017, Representative Sam Johnson (R-TX) and Representative Tim Walberg (R-MI) introduced R. 1101, the Small Business Health Fairness Act. According to Rep. Johnson, the legislation would empower small businesses to join together through association health plans (AHPs) to provide their employees greater access to affordable health care.

• On February 16, 2017, Republicans released outlines of their plan to replace the ACA, leaning heavily on tax credits to finance individual insurance purchases and reducing federal payments to the 31 states that have expended Medicaid eligibility.