Alston & Bird Health Care Week in Review, July 31, 2020

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in healthcare regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

On Monday, Senate Republicans introduced their $1 trillion proposal for the next round of COVID-19 stimulus legislation. Read more about the proposed legislation and other news below.

I. Regulations, Notices, & Guidance

• On July 28, 2020, the Drug Enforcement Administration (DEA) issued a proposed rule entitled, Reporting of Theft or Significant Loss of Controlled Substances. This proposed rule would amend DEA regulations regarding DEA Form 106, used by DEA registrants to report thefts or significant losses of controlled substances, to clarify that all such forms must be submitted electronically. In addition, the proposed rule would add new requirements for the form to be submitted accurately and within a 15-day time period. This proposed rule will not change the requirement that registrants notify the DEA Field Division Office in their area, in writing, of the theft or significant loss of any controlled substances within one business day of discovery of such loss or theft.
• On July 28, 2020, the Food and Drug Administration (FDA) issued guidance entitled, Multiple Function Device Products: Policy and Considerations. This final guidance provides FDA's regulatory approach for device products with multiple functions including at least one device function and includes such device products that are part of combination products, in accordance with the 21st Century Cures Act (Cures Act).
• On July 28, 2020, FDA issued guidance entitled, Setting Endotoxin Limits during Development of Investigational Oncology Drugs and Biological Product. This guidance describes FDA’s current recommendations about endotoxin limits in certain investigational oncology drugs and biological products. This guidance looks at a risk-based approach of weighing the potential risks of not evaluating endotoxin levels in all components of a multidrug regimen against the potential benefits to patients with serious and life-threatening diseases.
• On July 29, 2020, FDA issued guidance entitled, Expiration Dating of Unit-Dose Repackaged Solid Oral Dosage Form Drug Products. This guidance describes the circumstances under which FDA generally does not intend to take action regarding required stability studies for unit-dose repackaged solid oral dosage form drug products and appropriate expiration dates under those circumstances.
• On July 29, 2020, FDA issued guidance entitled, Pregnancy, Lactation, and Reproductive Potential: Labeling for Human Prescription Drug and Biological Products—Content and Format. This draft guidance is intended to assist applicants in complying with the content and format requirements of the Pregnancy, Lactation, and Females and Males of Reproductive Potential subsections of labeling for human prescription drug and biological products. This draft guidance revises the draft guidance issued in December 2014. This revision provides clarification and additional information on recommendations to applicants submitting new drug applications (NDAs), biologics license applications (BLAs) (for biological products that are regulated as drugs), and efficacy supplements to approved NDAs or BLAs.
• On July 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a request for information entitled, Medicare Program: Electronic Prescribing of Controlled Substances. Section 2003 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) requires generally that prescriptions for controlled substances covered under a Medicare Part D prescription drug plan or Medicare Advantage Prescription Drug Plan (MA/PD) be transmitted by a health care practitioner electronically in accordance with an electronic prescription drug program, beginning January 1, 2021. Further, section 2003 of the SUPPORT Act provides CMS with the authority to, through rulemaking, enforce and specify appropriate penalties for noncompliance with the requirement for electronic prescribing of controlled substances (EPCS). The SUPPORT Act requires CMS to specify, through rulemaking, circumstances and processes by which it may waive the EPCS requirement. This Request for Information (RFI) seeks input from stakeholders about whether CMS should include exceptions to the EPCS and under what circumstances, and whether CMS should impose penalties for noncompliance with this mandate in its rulemaking, and what those penalties should be.
• On July 31, 2020, FDA issued guidance entitled, Pediatric Study Plans: Content of and Process for Submitting Initial Pediatric Study Plans and Amended Initial Pediatric Study Plans. The purpose of this guidance is to provide information to sponsors regarding the submission of an initial pediatric study plan (iPSP) and any amendments to the iPSP. Specifically, this guidance addresses the FDA’s current thinking regarding implementation of the requirement for sponsors to submit an iPSP as described in the Federal Food, Drug, and Cosmetic Act (FD&C Act).
• On July 31, 2020, CMS issued a final rule entitled, Fiscal Year 2021 Hospice Wage Index and Payment Rate Update. This final rule updates the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2021. This rule also revises the hospice wage index to reflect the current Office of Management and Budget (OMB) area delineations, with a 5 percent cap on wage index decreases. In addition, this rule responds to comments on the modified election statement and the addendum examples that were posted on the Hospice Center webpage to assist hospices in understanding the content requirements finalized in the FY 2020 Hospice Wage Index and Payment Rate Update final rule, effective for hospice elections beginning on and after October 1, 2020
• On July 31, 2020, CMS issued a final rule entitled, Fiscal Year 2021 Inpatient Psychiatric Facilities Prospective Payment System and Special Requirements for Psychiatric Hospitals for Fiscal Year Beginning October 1, 2020. This final rule updates the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPF), which include psychiatric hospitals and excluded psychiatric units of an Inpatient Prospective Payment System hospital or critical access hospital. In addition, CMS is adopting more recent OMB statistical area delineations, and applying a 2-year transition for all providers negatively impacted by wage index changes. CMS is also removing the term licensed independent practitioner(s) from the regulations for psychiatric hospitals. On April 6, 2020, CMS published an interim final rule with comment period to implement this statutorily mandated change. This final rule responds to comments on the interim final rule regarding changes to the term licensed independent practitioner, finalizes the implementing regulation, and explains how the new procedure will be put into practice. These changes will be effective for IPF discharges beginning with the 2021 Fiscal Year (FY), which runs from October 1, 2020 through September 30, 2021 (FY 2021).
• On July 31, 2020, CMS issued a final rule entitled, Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Value-Based Purchasing Program for Federal Fiscal Year 2021. This final rule updates the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2021. CMS is also making changes to the case-mix classification code mappings used under the SNF PPS and making two minor revisions in the regulation text. Additionally, CMS is adopting the recent revisions in OMB statistical area delineations. This rule also updates the Skilled Nursing Facility Value-Based Purchasing (VBP) Program that affects Medicare payment to SNFs.

Event Notices

• August 6, 2020: The Department of Health and Human Services (HHS) announced a public meeting entitled, Meeting of the Presidential Advisory Council on HIV/AIDS. The purpose of the meeting is to discuss COVID-19 and HIV, and Ready, Set, PrEP enrollment.
• August 11, 2020: FDA announced a public meeting entitled, Independent Third-Party Assessment of IND FDA-Sponsor Communication Practices in PDUFA VI. The meeting will include a presentation from an independent third-party contractor about its assessment of FDA-sponsor communications during the investigational new drug (IND) stage of drug/biologic development in the Prescription Drug User Fee Act (PDUFA) VI; a series of presentations by and a panel discussion with invited regulatory and industry representatives, and an open public comment period.
• August 13, 2020: FDA announced a public meeting entitled, Meeting of the Oncologic Drugs Advisory Committee. The committee will discuss biologics license application 125706, for remestemcel-L (ex-vivo culture-expanded adult human mesenchymal stromal cells suspension for intravenous infusion), submitted by Mesoblast, Inc. The proposed indication for this product is for the treatment of steroid-refractory acute graft-versus-host disease in pediatric patients.
• August 19, 2020: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting entitled, Meeting of the Advisory Committee for Women’s Services. The meeting will include discussions on assessing SAMHSA’s current strategies, including the mental health and substance use needs of the women and girls’ population. Additionally, the ACWS will be addressing priorities regarding the impact of COVID-19 on the behavioral health needs of women and children, and the current ethnic/racial climate and related economic and health disparities on women, and directions around behavioral health services and access for women and children.
• August 26, 2020: The Centers for Disease Control and Prevention (CDC) announced a public meeting entitled, Meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions on COVID-19 vaccines.
• September 8-9, 2020: FDA announced a public meeting entitled, Meeting of the Orthopaedic and Rehabilitation Devices Panel of the Medical Devices Advisory Committee. During the meeting, the committee will discuss the classification of several medical devices.
• September 15, 2020: FDA announced a public meeting entitled, Meeting of the Pediatric Advisory Committee. The committee will discuss pediatric-focused safety reviews, as mandated by the Best Pharmaceuticals for Children Act (Pub. L. 107-109) and the Pediatric Research Equity Act of 2003 (Pub. L. 108-155).

II. Congressional Hearings

U.S. House of Representatives

• On July 29, 2020, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Improving Access to Care: Legislation to Reauthorize Key Public Health Programs. Witnesses present included: Robert Boyd, M.C.R.P., M.Div., President, School-Based Health Alliance; Linda Goler Blount, M.P.H., President and CEO, BlackWomen’s Health Imperative; Nancy Goodman, M.P.P., J.D., Founder and Executive Director, Kids v. Cancer; Aaron Seth Kesselheim, M.D., J.D., M.P.H., Professor of Medicine, Harvard Medical School; Brian Lindberg, Chief Legal Officer and General Counsel, National Bone Marrow Donor Program; and Travis T. Tygart, CEO, U.S. Anti-Doping Agency.
• On July 31, 2020, the House Select Subcommittee on the Coronavirus Crisis held a hearing entitled, The Urgent Need for a National Plan to Contain the Coronavirus. Witnesses present included: Anthony Fauci, Director, National Institute of Allergy and Infectious Diseases, National Institutes of Health (NIH); Admiral (ADM) Brett Giroir, M.D., Assistant Secretary for Health, HHS; and Dr. Robert Redfield, Director, CDC.

U.S. Senate

• On July 28, 2020, the Senate Finance Committee hearing held a entitled, Part 1: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic. Witnesses present included: Soraya Correa, Chief Procurement Officer, United States Department of Homeland Security (DHS); Thomas F. Overacker, Cargo and Conveyance Security, Office of Field Operations, United States Customs and Border Protection (CBP); and Steve K. Francis, Assistant Director, Homeland Security Investigations Global Trade Investigations Division, Director, National Intellectual Property Rights Coordination Center, United States Immigration, Customs, and Enforcement (ICE).
• On July 30, 2020, the Senate Finance Committee held a hearing entitled, Part 2: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic. Witnesses present included: Cathy Denning, RN, MSN, Group Senior Vice President, Sourcing Operations, Analytics and Center of Excellence, Vizient; Mr. Rob Wiehe, Senior Vice President, Chief Supply Chain and Logistics Officer, UC Health; Mr. Charles D. Johnson, President, International Safety Equipment Association; and Dr. Earnest Grant, RN, FAAN, President, American Nurses Association.

III. Reports, Studies, & Analyses

• On July 27, 2020, the Bipartisan Policy Center (BPC) published a report entitled, A Pathway to Full Integration of Care for Medicare-Medicaid Beneficiaries. BPC has worked for a number of years to improve integration of services for those who are eligible for Medicare and Medicaid. In continuing that work over the past year, BPC conducted research, hosted roundtable discussions, and interviewed key stakeholders to better understand the barriers to integration of these programs and the challenges faced by those who must navigate them. BPC also commissioned a study to better understand the challenges and successes of federal and state demonstrations to align these programs. The primary goals in recommending alignment are to improve beneficiary experience, outcomes, and well-being. Given the lack of coordination in the current system, BPC believes there is also potential for savings over the long term, primarily in the form of reduced hospitalizations, hospital readmissions, emergency department visits, and post-acute care. However, before those savings can be achieved, there will need to be up-front investments to provide resources to states and to the office within CMS that administers the program, to develop infrastructure where it is currently lacking. This report describes BPC’s recommendations to create strong incentives for states to integrate care. The report identifies three care models from which states can choose to achieve full integration.
• On July 30, 2020, RAND Corporation published a report entitled, Advancing the Development of a Framework to Capture Non–Fee-for-Service Health Care Spending for Primary Care. This report describes work conducted to understand what non-fee-for-service (FFS) payment data are being collected by states and other stakeholders to support more complete measurement of primary care spending as a proportion of total health care spending. The authors interviewed states and other multistakeholder entities, as well as payers, about their current capture of non-FFS payment data as an initial effort to inform a clearer discussion of how to develop standardized methods to collect and report these data. Based on the interviews and discussion of findings with a technical expert panel, the researchers summarize current practice and offer preliminary recommendations about considerations to inform future efforts to develop a standardized methodology for collecting non-FFS payment data. The goal is to support more-complete measurement of primary care spending and total health care spending.

IV. Other Health Policy News

• On July 27, 2020, Senate Republicans presented their $1 trillion plan to bolster the U.S. economy in the face of the COVID-19 pandemic. Emergency appropriations for health care would give HHS $118.4 billion in overall appropriations, including the following:
  • $29 billion for the development of necessary countermeasures and vaccines.
  • $25 billion for the Provider Relief Fund.
  • $16.7 billion for the Administration for Children and Families, including $10 billion for “Back to Work” Child Care Grants, $5 billion for existing child care block grants, and $1.5 billion for the Low Income Home Energy Assistance Program.
  • $16 billion for testing, contact tracing, surveillance, containment, among other uses.
  • $15.5 billion for the National Institutes of Health.
  • $4.5 billion for the Substance Abuse and Mental Health Services Administration.
  • $3.4 billion for the Centers for Disease Control and Prevention.

Additional health-related provisions include a proposal to keep Medicare Part B premiums for 2021 at the same level as 2020, and add a $3 surcharge for most beneficiaries until the Supplemental Medical Insurance Trust Fund balance is restored; extending telehealth expansions provided during the pandemic through next year or until the end of the public health emergency, whichever is later, and extending telehealth flexibilities provided to federally qualified health centers and rural health clinics under the CARES Act for five years; allowing unused flexible spending account funds to be carried over to the 2021 plan year, up to the maximum $2,750 allowed for 2020; authorizing HHS to establish “strike teams” to respond to coronavirus-related crises in nursing homes, including through medical exams, testing, and implementing infection control practices; and authorizing $1 billion annually from FY 2021 through 2030 to support state stockpiles of medical products and supplies for public health emergencies.

• On July 29, 2020, HHS released a report calling for Congressional action to combat surprise billing and promote price transparency. Although the report does not specifically endorse any of the legislative proposals on surprise billing that have been offered by lawmakers over the past year, HHS notes that “surprise billing legislation will not only protect patients but will encourage a fairer, more transparent, patient-centered healthcare system that benefits all Americans.” More information about the report can be found here.
• On July 29, 2020, CMS announced the average basic premium for Medicare Part D prescription drug plans, which cover prescription drugs that beneficiaries pick up at a pharmacy. The average basic Part D premium will be approximately $30.50 in 2021. The 2021 and 2020 average basic premiums are the second lowest and lowest, respectively, average basic premiums in Part D since 2013. This trend of lower Part D premiums, which have decreased by 12 percent since 2017, means that beneficiaries have saved nearly $1.9 billion in premium costs over that time. Further, Part D continues to be an extremely popular program, with enrollment increasing by 16.7 percent since 2017. More information Medicare Part D premiums in 2021 can be found here.
• On July 30, 2020, CMS announced new procedure codes to allow Medicare and other insurers to identify the use of the therapeutics remdesivir and convalescent plasma for treating hospital in-patients with COVID-19. These new codes, which go into effect August 1, will enable CMS to conduct real-time surveillance and obtain real-world evidence in how these drugs are working and provide critical information on their effectiveness and how they can protect patients. These codes can be reported to Medicare and other insurers may also use the codes to identify the use of COVID-19 therapies and help facilitate monitoring and data collection on their use. More information about the new codes can be found here.
• On July 30, 2020, CMS announced that payment is available to physicians and health care providers to counsel patients, at the time of COVID-19 testing, about the importance of self-isolation after they are tested and prior to the onset of symptoms. More information about this decision can be found here.
• On July 31, 2020, the U.S. Court of Appeals for the D.C. Circuit ruled that the Trump Administration and HHS had the legal authority to reduce payments by 28.5 percent for drugs purchased under the 340B discount program by hospital outpatient departments, reversing a decision by the lower court on HHS’s 2017 action on this issue. More information about this decision can be found here.

Click here to view the members of our Health Care Legislative & Public Policy team.