General Publications October 26, 2018

Alston & Bird Healthcare Week in Review, October 26, 2018

Alston & Bird’s Week in Review provides a synopsis of the latest news in health care regulations, notices, and guidance; federal legislation and Congressional committee action; reports, studies, and analyses; and other health policy news.

I. Regulations, Notices, & Guidance

  • On October 23, 2018, the Department of Health and Human Services (HHS), Internal Revenue Service (IRS), and the Department of Labor (DOL) issued a joint proposed rule entitled, Health Reimbursement Arrangements and Other Account-Based Group Health Plans. The document sets forth proposed rules intended to expand opportunities for working men and women and their families to access affordable, quality healthcare through proposed changes to regulations under various provisions of the Public Health Service Act (PHS Act), the Employee Retirement Income Security Act (ERISA), and the Internal Revenue Code (Code) regarding health reimbursement arrangements (HRAs) and other account-based group health plans. Specifically, these proposed rules allow integrating HRAs with individual health insurance coverage, if certain conditions are met. The proposed rules also set forth conditions under which certain HRAs would be recognized as limited excepted benefits. Also, the Department of the Treasury (Treasury Department) and the IRS propose rules regarding premium tax credit (PTC) eligibility for individuals offered coverage under an HRA integrated with individual health insurance coverage. In addition, the DOL proposes a clarification to provide plan sponsors with assurance that the individual health insurance coverage the premiums of which are reimbursed by an HRA or a qualified small employer health reimbursement arrangement (QSEHRA) does not become part of an ERISA plan, provided certain conditions are met. Finally, HHS proposes rules that would provide a special enrollment period in the individual market for individuals who gain access to an HRA integrated with individual health insurance coverage or who are provided a QSEHRA. The goal of these proposed rules is to expand the flexibility and use of HRAs to provide more Americans with additional options to obtain quality, affordable healthcare. The proposed rules would affect employees and their family members; employers, employee organizations, and other plan sponsors; group health plans; health insurance issuers; and purchasers of individual health insurance coverage.
  • On October 24, 2018, the Food and Drug Administration (FDA) issued guidance entitled, Verification Systems Under the Drug Supply Chain Security Act for Certain Prescription Drugs; Draft Guidance for Industry; Availability. The draft guidance addresses the verification systems that manufacturers, re-packagers, wholesale distributors, and dispensers must have in place to comply with the Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by the Drug Supply Chain Security Act (DSCSA). Specifically, this draft guidance covers the statutory verification system requirements that include quarantine and investigation of a product determined to be suspect and quarantine and disposition of a product determined to be illegitimate. The draft guidance also addresses the statutory requirement for notification to the FDA of a product that has been cleared by a manufacturer, re-packager, wholesale distributor, or dispenser after a suspect product investigation because it is determined that the product is not an illegitimate product.
  • On October 24, 2018 the Centers for Medicare & Medicaid Services (CMS) and the Department of the Treasury issued guidance entitled, State Relief and Empowerment Waivers. This guidance relates to section 1332 of the Patient Protection and Affordable Care Act (PPACA) and its implementing regulations. Section 1332 provides the Secretary of Health and Human Services and the Secretary of the Treasury (collectively, the Secretaries) with the discretion to approve a state’s proposal to waive specific provisions of the PPACA (a State Innovation Waiver, now also referred to as a State Relief and Empowerment Waiver), provided the section 1332 state plan meets certain requirements. HHS and the Department of the Treasury (collectively, the Departments) finalized implementing regulations on February 27, 2012. This updated guidance provides supplementary information about the requirements that must be met for the approval of a State Innovation Waiver, the Secretaries’ application review procedures, the calculation of pass-through funding, certain analytical requirements, and operational considerations. This guidance supersedes the guidance related to section 1332 of the PPACA that was previously published on December 16, 2015. Changes include increasing flexibility with respect to the manner in which a section 1332 state plan may meet section 1332 standards in order to be eligible to be approved by the Secretaries, clarifying the adjustments the Secretaries may make to maintain federal deficit neutrality, and allowing for states to use existing legislative authority to authorize section 1332 waivers in certain scenarios. The Departments are committed to empowering states to innovate in ways that will strengthen their health insurance markets, expand choices of coverage, target public resources to those most in need, and meet the unique circumstances of each state. This guidance aims to lower barriers to innovation for states seeking to reform their health insurance markets. The guidance is applicable beginning October 22, 2018. Comments on the guidance must be received by December 24, 2018.
  • On October 25, 2018, the CMS issued a proposed rule entitled, Medicare Program; International Pricing Index Model for Medicare Part B Drugs. CMS is issuing this advance notice of proposed rulemaking to solicit public comments on potential options CMS may consider for testing changes to payment for certain separately payable Part B drugs and biologicals (hereafter called “drugs”). Specifically, CMS intends to test whether phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and changing the 4.3 percent (post-sequester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program.
  • On October 26, 2018, CMS issued a proposed rule entitled, Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021. This proposed rule would revise the Medicare Advantage (MA) program (Part C) regulations and Prescription Drug Benefit program (Part D) regulations to implement certain provisions of the Bipartisan Budget Act of 2018; improve quality and accessibility; clarify certain program integrity policies; reduce burden on providers, MA plans, and Part D sponsors through providing additional policy clarification; and implement other technical changes regarding quality improvement. This proposed rule would also revise the appeals and grievances requirements for Medicaid managed care and MA special needs plans for dually eligible individuals to implement certain provisions of the Bipartisan Budget Act of 2018.

Event Notices   

  • November 5, 2018: The FDA announced a public hearing and an opportunity for public comment on the future format of the National Drug Code (NDC). FDA is seeking input from a variety of stakeholders through comments and responses to FDA questions included in the above notice and associated web content that will be published before the hearing.
  • November 7, 2018: The Centers for Disease Control and Prevention (CDC) announced a meeting of the Clinical Laboratory Improvement Advisory Committee (CLIAC). The CLIAC will hear updates from other agencies on a range of laboratory-related issues, including laboratory interoperability.
  • November 8, 2018: The FDA announced a meeting of the Vaccines and Related Biological Products Advisory Committee. The Committee will hear an overview of the research program in the Laboratory of DNA Viruses, Division of Viral Products, Office of Vaccines Research and Review.
  • November 27, 2018: The FDA announced a public meeting entitled, Identifying the Root Causes of Drug Shortages and Finding Enduring Solutions. The purpose of the hearing is to give stakeholders the opportunity to provide input on the underlying systemic causes of drug shortages and make recommendations for actions to prevent or mitigate drug shortages.

II. Congressional Legislation & Committee Action

U.S. Senate

  • There were no health-related hearings this week.

House of Representatives

  • There were no health-related hearings this week.

III. Reports, Studies, & Analyses

  • On October 25, 2018, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) issued a report entitled, Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures. The report found the prices charged by drug manufacturers to wholesalers and distributors in the United States are 1.8 times higher than other countries for the top drugs by total expenditures separately pain under Medicare Part B. the report also claimed the United Sates prices were higher for most of the drugs included in the study compared to other countries.

IV. Other Health Policy News

  • On October 25-26, 2018, the Medicaid and CHIP Payment and Access Commission (MACPAC) held their October meeting. MACPAC’s agenda is available here.
Media Contact
Nicholas Clarke
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Phone: 212.210.1222

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