Alston & Bird Healthcare Week in Review, July 21, 2017

I. Regulations, Notices, & Guidance

• On July 19, 2017, the Food and Drug Administration (FDA) issued a notice entitled, Pilot Project Program Under the Drug Supply Chain Security Act. The notice announces the FDA’s intent to establish a pilot project program under the Drug Supply Chain Security Act (the DSCSA Pilot Project Program) to assist in development of the electronic, interoperable system that will identify and trace certain prescription drugs as these are distributed within the United States. Under this program, the FDA will work with stakeholders to establish one or more pilot projects to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain. According to the FDA, participation in the DSCSA Pilot Project Program will be voluntary and will be open to pharmaceutical distribution supply chain members. The FDA will be particularly interested in participation reflecting the diversity of the supply chain, including large and small entities from all industry sectors. Comments are due by September 18, 2017.
• On July 20, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a notice entitled, Medicaid Program; State Allotments for Payment of Medicare Part B Premiums for Qualifying Individuals (QIs): Federal Fiscal Year 2014 and Federal Fiscal Year 2015 through Calendar Year 2015. The notice sets forth the states’ final allotments available to pay the Medicare Part B premiums for Qualifying Individuals (QIs) for the federal fiscal year (FY) 2014 and the preliminary QI allotments for federal FY 2015 which is extended through calendar year (CY) 2015 (December 2015) by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). According to CMS, the amounts of these QI allotments were determined in accordance with the methodology set forth in regulations and reflect funding for the QI program made available under recent legislation.
• On July 20, 2017, the Health Resources and Services Administration (HRSA) issued a notice entitled, Ryan White HIV/AIDS Program, Part C Early Intervention Services Grant. The notice announces that HRSA will provide a one-time non-competitive, HRSA-initiated supplemental award to Cape Cod Hospital. The purpose of the Fiscal Year 2017 RWHAP Part C Early Intervention Services Program Existing Geographic Service Area (EISEGA) is to provide HIV primary care in the outpatient setting to targeted low income, underinsured, and uninsured people living with HIV.
• On July 20, 2017, the Department of Veterans Affairs (VA) issued a notice entitled, Solicitation of Nominations for Appointment to the VA Prevention of Fraud, Waste, and Abuse Advisory Committee. The notice announces that the VA is seeking nominations of qualified candidates to be considered for appointment to the VA Prevention of Fraud, Waste, and Abuse Advisor Committee. Nominations are due by July 24, 2017.

• August 3 – 4, 2017: HRSA announced a meeting of the Advisory Committee on Heritable Disorders in Newborns and Children. The meeting agenda will include: (1) presentations and discussion on the processes states use to identify and follow up on out of range newborn screening results; (2) a presentation on phase one of the spinal muscular atrophy evidence review; (3) presentations on newborn screening topics such as the clinical and public health impact of Critical Congenital Heart Defects, quality measures in newborn screening, and a review of newborn screening technology; and (4) updates from the Laboratory Standards and Procedures workgroup, Follow-up and Treatment workgroup, and Education and Training workgroup.
• August 23, 2017: The FDA announced a public meeting entitled, Enhanced Drug Distribution Security Under the Drug Supply Chain Security Act. The public meeting is intended to provide members of the pharmaceutical distribution supply chain and other interested stakeholders an opportunity to discuss with the FDA, and provide input on, strategies and issues related to the enhanced drug distribution security provisions of the Drug Supply Chain Security Act.
• September 8, 2017: CMS announced a meeting on behavioral health payment and care delivery. The meeting will include four panel sessions of behavioral health experts of varied backgrounds who will discuss substance use disorders, mental health in the presence of concurring conditions, Alzheimer’s disease and related dementias, and behavioral health workforce development.
• September 25, 2017: The FDA announced a public meeting on Patient-Focused Drug Development for Hereditary Angioedema. The Patient-Focused Drug Development is part of the FDA’s performance commitment under the fifth authorization of the Prescription Drug User Fee Act (PDUFA V). The public meeting is intended to allow the FDA to obtain patients' perspectives on the impact of hereditary angioedema (HAE) on daily life. The FDA also is seeking patients' views on treatment approaches for HAE. Registration to attend must be received by August 10, 2017.
• December 5 – 6, 2017: The FDA announced a public meeting entitled, Enhanced Drug Distribution Security Under the Drug Supply Chain Security Act. The public meeting is intended to provide members of the pharmaceutical distribution supply chain and other interested stakeholders an opportunity to discuss with the FDA, and provide input on, strategies and issues related to the enhanced drug distribution security provisions of the Drug Supply Chain Security Act.
• February 28, 2018: The FDA announced a public meeting entitled, Enhanced Drug Distribution Security Under the Drug Supply Chain Security Act. The public meeting is intended to provide members of the pharmaceutical distribution supply chain and other interested stakeholders an opportunity to discuss with the FDA, and provide input on, strategies and issues related to the enhanced drug distribution security provisions of the Drug Supply Chain Security Act.

II. Congressional Legislation & Committee Action

• On July 18, 2017, the Senate Appropriations Agriculture, Rural Development, FDA, and Related Agencies Subcommittee held a markup of the Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act, 2018. The bill was reported favorably by a roll call vote of 31-0.

• On July 18, 2017, the House Energy & Commerce Oversight and Investigations Subcommittee held a hearing entitled, Examining HRSA's Oversight of the 340B Drug Pricing Program. The witnesses present at the hearing included, Erin Bliss, Assistant Inspector General in the Office of Inspector General’s (OIG) Office of Evaluation and Inspections; Dr. Debbie Draper, Director of Health Care, the Government Accountability Office (GAO); and Captain Krista Pedley, Director of the Health Resources and Service Administration’s (HRSA) Office of Pharmacy Affairs.
• On July 19, 2017, the House Ways & Means Oversight Subcommittee held a hearing entitled, Efforts to Combat Waste, Fraud, and Abuse in the Medicare Program. The witnesses present at the hearing included, James Cosgrove, Director, Health Care, Government Accountability Office (GAO); and Jonathan Morse, Acting Director, Center for Program Integrity, Centers for Medicare & Medicaid Services (CMS). The hearing focused on how CMS identifies and combats waste, fraud, and abuse in both traditional Medicare and the Medicare Advantage (MA) program.
• On July 20, 2017, the House Small Business Agriculture, Energy and Trade Subcommittee held a hearing entitled, 21st Century Medicine: How Telehealth Can Help Rural Communities. The witnesses present at the hearing included, Nicole Clowers, Managing Director, Health Care Team, GAO; Barb Johnston, CEO and Co-Founder, HealthLinkNow; and Dr. David Schmitz, President, National Rural Health Association.
• On July 20, 2017, the House Energy & Commerce Health Subcommittee held a hearing entitled, Examining Bipartisan Legislation to Improve the Medicare Program. The hearing covered several pieces of legislation that focused on improving Medicare program integrity, while also increasing patient access to health care. Specifically, legislation was discussed that would: (1) repeal the Independent Payment Advisory Board; (2) increase access to stroke telemedicine; (3) permanently eliminate the specified payment cap under the Medicare program for speech generating devices; (4) provide coverage for DNA Specimen Provenance Assay testing; (5) reduce the volume of future electronic health record-related significant hardship requests by removing the requirement that meaningful use standards be more stringent over time; (6) provide a temporary transitional payment under Medicare Part B for home infusion therapy services; (7) update the civil and criminal monetary penalties in the Medicare program; (8) extend the Independence at Home Medical Practice Demonstration Program; (9) expand access to diabetes supplies; (10) extend therapy cap exceptions; and (11) create a bundled payment model under Medicare for clinical laboratory services provided to Medicare nursing facility and homebound patients.

• On July 18, 2017, the GAO released a report entitled, Drug Discount Program: Update on Agency Efforts to Improve 340B Program Oversight. The report found that since the GAO provided HRSA with recommendations in 2011, HRSA now audits entities to ensure they comply with program rules, and has clarified its guidance on equitable distribution of drugs to 340B entities. However, the report found that two other recommendations on clarifying eligibility guidance have not been addressed by HRSA.
• On July 19, 2017, the OIG released a report entitled, Review of Pennsylvania Medicaid Managed Care Program Potential Savings With Minimum Medical Loss Ratio. The report found that Pennsylvania's Medicaid managed care program, known as HealthChoices, could have saved between $8 million ($4.3 million Federal share) on a contract and grant basis and $81.4 million ($42.3 million Federal share) on a rating category basis in 2014 if Pennsylvania: (1) required its managed care organizations (MCOs) to meet a minimum medical loss ratio (MLR) standard similar to the Federal standards for certain private insurers and Medicare Advantage plans; and (2) required remittances when MCOs did not meet the MLR standard. Because States have the flexibility to choose to calculate MLRs and remittances either on contract basis or a rating category basis, we calculated MLRs and remittances using both methods.
• On July 19, 2017, the Congressional Budget Office (CBO) issued a cost estimate of H.R. 1628, the Obamacare Repeal Reconciliation Act of 2017. The CBO and the Joint Committee on Taxation (JCT) estimate that enacting H.R. 1628 would reduce federal deficits by $473 billion over the coming decade and increase the number of people who are uninsured by 32 million in 2026 relative to current law.
• On July 19, 2017, the GAO released a report entitled, Medicare Advantage Program Integrity: CMS' Efforts to Ensure Proper Payments and Identify and Recover Improper Payments. The report found that CMS’ audits do not target Medicare Advantage contracts at highest risk for improper payments—payments made in error or due to potential fraud. CMS has also not fully validated the data—known as "encounter data"— it uses to ensure proper Medicare Advantage payments.
• On July 20, 2017, the GAO released a report entitled, Telehealth: Use in Medicare and Medicaid. The report found that Under Medicaid, states may cover different types of telehealth services from different types of care providers. In the 6 states the GAO reviewed, officials from states that were generally more rural said they used telehealth more frequently than officials from more urban states. The report also found that Medicare pays for some two-way video visits—referred to as "telehealth"—if the patients connect from rural health facilities. Medicare is testing new ways to provide health care that allow telehealth coverage regardless of location.
• On July 20, 2017, the CBO released a cost estimate of H.R. 1628, the Better Care Reconciliation Act of 2017: An Amendment in the Nature of a Substitute. The CBO and JCT estimate that enacting this legislation would reduce federal deficits by $420 billion over the coming decade and increase the number of people who are uninsured by 22 million in 2026 relative to the number under current law.

IV. Other Health Policy News

• On July 18, 2017, the CBO released a presentation by Jessica Banthin, Deputy Assistant Director in CBO’s Health, Retirement, and Long-Term Analysis Division entitled, Health Care Spending Today and in the Future: Impacts on Federal Deficits and Debt. The presentation notes that if current laws governing taxes and spending were to remain unchanged, the condition of the federal budget would worsen considerably over the next three decades. Growth in federal spending would continue to outpace growth in federal revenues, leading to ever-larger budget deficits.
• On July 19, 2017, CMS issued a frequently asked questions document entitled, Third-party Auditor Operational Readiness Reviews (ORRs) for the Proxy Direct Enrollment Pathway. The document provides additional detail and clarification about the third-party auditor ORRs for the Proxy Direct Enrollment (DE) Pathway.
• On July 19, 2017, CMS posted an update to the Health Insurance Exchanges Issuer County Map. The map is of projected issuer participation on the Health Insurance Exchanges in 2018 based on the known issuer public announcements through July 19, 2017. According to CMS, participation is expected to fluctuate and does not represent actual Exchange application submissions.
• On July 19, 2017, CMS issued an informational bulletin entitled, Extended Use of the Targeted Enrollment “SNAP Strategy” under Section 1902(e)(14)(A) of the Social Security Act. The bulletin discusses the conditions under which CMS may approve waivers under section 1902(e)(14)(A) of the Social Security Act to authorize states to rely on findings from the Supplemental Nutrition Assistance Program (SNAP) to support Medicaid eligibility determinations at application and renewal for certain populations.

V. ACA Repeal News

• On July 20, 2017, the Senate Budget Committee released an updated draft of the Better Care Reconciliation Act. The updated text can be accessed here.