Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

The Reed Smith Health Industry Washington Watch blog has been updated to discuss a variety of health policy developments, including the following: 

• Regulatory Developments. HHS has posted its latest regulatory agenda, and rule standards for health care electronic funds transfers, and FDA has announced an opportunity for public comment on its Healthcare Professional Survey of Prescription Drug Promotion. CMS has published rules on payments to retiree prescription drug plan sponsors and changes to Medicaid disproportionate share hospital payments.
   
• Other HHS Developments. HHS has revised contraception coverage rules for certain religious groups offering insurance. CMS has established procedures for claims against DMEPOS surety bonds, and has released information on Medicaid drug pricing, Medicare Part D drug plan reporting, and national health care spending. FDA has released information on drug user fees and advertising and promotional labeling.
   
• Legislative Developments. The House is considering legislation to repeal the ACA CLASS program, and a House panel is planning hearings on FDA user fees.
   
• OIG & GAO Developments. Recent OIG reports have addressed hospital incident reporting systems and Medicare Part B drug pricing. The OIG also has released new compliance training video and audio presentations. A GAO report examines prescription pain reliever abuse.
   
• Odds & Ends. The Patient-Centered Outcomes Research Institute (PCORI) has released its draft National Priorities for Research and Research Agenda, and the CBO has examined options for raising the Medicare eligibility age.
   
• Health Industry Events. CMS is hosting a Medicare Shared Savings/ACO Program Webinar and a meeting of the Advisory Panel on Hospital Outpatient Policy.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 20, 2012, the Obama Administration posted its Fall 2011 Regulatory Agenda, outlining its planned regulatory initiatives in a number of policy areas. Priorities for the Department of Health and Human Services (HHS) include, among many others:

• Implementing Affordable Care Act (ACA) insurance reforms, including establishing Affordable Insurance Exchanges, establishing risk adjustment criteria for health plans, and expanding Medicaid coverage;
• Improving health care quality and patient safety, including implementing value-based purchasing programs for hospitals and other health care providers and promoting health information technology adoption and electronic health records;
• Improving response to adverse events, including establish a unique identification system to track medical devices
• Advancing scientific research by revising ethical rules governing research on human subjects; and
• Streamlining regulations to reduce regulatory burdens, including Food and Drug Administration (FDA) rules designed to reduce reporting and data submission requirements for drug and medical device manufacturers, and streamlined Medicare conditions of participation for hospitals and other providers.

A listing of specific HHS rules under consideration (including a variety of Medicare payment update rules) also is available.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Centers for Medicare & Medicaid Services (CMS) has published a final rule that implements provisions regarding the reporting of gross covered retiree plan-related prescription drug costs and retained rebates by Retiree Drug Subsidy (RDS) sponsors. The rule, which was published January 12, 2012, also addresses the scope of CMS's authority to waive requirements that hinder the design of, the offering of, or enrollment in RDS plans. The rule is effective March 12, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 18, 2012, CMS published a proposed rule that would define “uninsured” for purposes of calculating the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments. The proposed rule would not modify state DSH allotment amounts. CMS will accept comments on the proposal until February 17, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 10, 2012, HHS published an interim final rule with comment period that implements an ACA provision requiring the adoption of a standard for electronic funds transfers (EFTs). By streamlining standards for the format and data content of EFT transmissions, HHS estimates that health system administrative costs will be reduced by up to $4.5 billion over the next 10 years. For instance, by requiring trace numbers to automatically match EFTs with remittance advice, the rule would eliminate costly manual reconciliation of the records. The regulations are effective January 10, 2012, with a compliance date of January 1, 2014. Comments will be accepted until March 12, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In August 2011, HHS published an interim final rule that requires most health plans to furnish certain preventive health services, including contraceptive services, for women without cost sharing under the ACA, effective for plan years beginning on or after August 1, 2012. The rule provided an exemption with regard to contraceptive services for certain religious employers (defined as one that has the inculcation of religious values as its purpose; primarily employs persons who share its religious tenets; primarily serves persons who share its religious tenets; and is a non-profit organization). On January 20, 2012, HHS Secretary Kathleen Sebelius announced that religious employers who currently do not provide contraceptive coverage in their insurance plan will have until August 1, 2013 to comply with the new law if they certify their eligibility and provide notices to their employees of the availability of contraceptive services at clinics and other sites.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Under a January 2009 CMS rule, DMEPOS suppliers must obtain and maintain a surety bond in an amount of at least $50,000 in order to enroll in and to remain enrolled in the Medicare program. The Office of Inspector General (OIG) issued a report in September 2011 observing that CMS had not recovered any overpayments through surety bonds to date nor finalized procedures for recovering overpayments to DMEPOS suppliers through surety bonds. On January 20, 2012, CMS updated the Program Integrity Manual to establish detailed procedures for making a claim against a DMEPOS surety bond in the event of an unpaid claim, civil monetary penalty, or assessment imposed by CMS or the OIG. The effective date of the policy is February 21, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As previously reported, the ACA modified the statutory federal upper limit (FUL) provisions for Medicaid reimbursement for multiple source drugs. While CMS has not yet promulgated regulations to implement this policy, the agency has issued several sets of draft FUL reimbursement files, including the draft methodology used to calculate the FULs in accordance with the ACA and the weighted average of monthly average manufacturer prices (AMP) in a FUL group. The most recent draft FUL prices – which are for review and comment only -- are based on the manufacturer reported and certified October 2011 monthly AMP and AMP unit data. CMS also has posted a modified FUL methodology and data guide. Following a period of releasing the FULs in draft format, CMS plans to publish the final ACA FULs. No timeline has been announced for the final FULs, although CMS sent the proposed rule to the Office of Management and Budget for regulatory clearance in June 2011.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 17, 2012 the FDA announced an opportunity for public comment on its Healthcare Professional Survey of Prescription Drug Promotion. This survey is designed to explore the opinions and perceptions of physicians, nurse practitioners, and physician assistants with regard to the promotion of prescription drugs to consumers and healthcare providers. FDA is inviting comments on, among other things, the necessity of the information collection, ways to enhance the utility of the information to be collected, and ways to minimize the burden of the collection of information on respondents. Comments will be accepted until March 19, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 13, 2012, the FDA announced that it has completed its recommendations for three user fee programs designed to help speed safe and effective drugs and lower-cost generic drug and biosimilar biological products to patients. The recommendations regarding the user fee programs were transmitted to Congress that same day by HHS Secretary Sebelius. The programs include the fifth authorization of the Prescription Drug User Fee Act (PDUFA), and new user fee programs for human generic drugs and biosimilar biological products.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The FDA released a guidance document entitled ‘‘Product Name Placement, Size, and Prominence in Advertising and Promotional Labeling’’ on January 25, 2012. The guidance is intended to clarify for applicants the requirements for product name placement, size, prominence, and frequency in promotional labeling and advertising for prescription human and animal drugs and biological products. The guidance finalizes the draft guidance published in January 1999. Comments on FDA guidance documents may be submitted at any time.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

CMS is soliciting comments on proposed changes to the 2013 Part D drug plan reporting requirements in the areas of (1) unused drugs in long-term care, and (2) medication therapy management programs. Comments will be accepted until January 31, 2011. CMS also has issued a memo to Part D sponsors regarding the processes that must be followed to update 2012 Part D plan formularies. Another recent memo announces that the collection of the Pharmaceutical Manufacturer Rebates, Discounts, and Other Price Concessions report is suspended for contract year 2011 because it duplicates data in the Part D sponsors’ Summary and Detailed DIR (direct and indirect remuneration) Report.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

According to new CMS national health spending statistics, U.S. health care spending grew 3.9% in 2010 -- the lowest rate of increase in 51 years. The relatively low rate of growth is attributed to lower utilization of health care services. Notably, retail prescription drug spending grew only 1.2%, the slowest rate of growth for prescription drug spending recorded in the national health expenditure survey. Medicare spending grew 5.0% in 2010, while Medicaid spending increased 7.2%.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 18, 2012, the House Ways and Means Committee approved H.R. 1173, the “Fiscal Responsibility and Retirement Security Act of 2011,” which would repeal the ACA’s Community Living Assistance Services and Supports (CLASS) program. While the CLASS program was included in the ACA as a national voluntary, self-financed program to provide insurance for long-term care services and supports, the Obama Administration announced in October 2011 that it was suspending implementation of the program because it could not identify a benefit plan that was both actuarially sound and consistent with the statutory requirements. The bill previously was approved by the Energy and Commerce Committee, and it is expected to be considered by the full House in the near future.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The House Energy and Commerce Health Subcommittee has announced a series of hearings on FDA user fees for prescription drugs, generic drugs, biosimilar drugs, and medical devices. The hearing schedule is as follows: a February 1, 2012 hearing will address reauthorization of the Prescription Drug User Fee Act; on February 7, a Subcommittee hearing will focus on the new Generic Drug User Fee proposal and Biosimilar User Fee proposal; and on February 15, the Subcommittee will hold a hearing on reauthorization of the Medical Device User Fee Act.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A recent OIG report, "Hospital Incident Reporting Systems Do Not Capture Most Patient Harm,” estimates that hospital incident reporting systems captured only about 14% of the “patient harm events” experienced by Medicare beneficiaries. Because of what the OIG characterizes as an “absence of clear event reporting requirements,” administrators classified the remainder of unreported events as either events that staff did not perceive as reportable (62% of events) or that staff commonly reported but did not report in this case (25%). The OIG also reports that few policy or practice changes were made as a result of reported events. The OIG recommended that: (1) the Agency for Healthcare Research and Quality (AHRQ) and CMS collaborate to create and promote a list of potentially reportable events for hospitals to use; (2) CMS provide guidance to accreditors regarding their assessments of hospital efforts to track and analyze events; (3) surveyors evaluate the information collected by hospitals using AHRQ's Common Formats; and (4) CMS review survey standards related to incident reporting systems. The agencies generally concurred.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Social Security Act requires the OIG to notify the HHS Secretary if the average sales price (ASP) for a particular drug exceeds the drug's AMP or widely available market price (WAMP) by a threshold, currently set at 5%. If that threshold is met, the Secretary is authorized to disregard the drug’s ASP and substitute the lesser of the WAMP or 103% of AMP. The OIG has released a series of reports comparing Medicare Part B drug ASPs with AMPs. While CMS has made no price adjustments in response to these reports to date, CMS’s 2012 Medicare physician fee schedule rule specifies the circumstances under which AMP-based price substitutions will occur beginning January 2012 (CMS is not implementing a price substitution policy based on the comparison of WAMP to ASP for 2012 in light of complicated operational issues). According to a recent OIG report comparing second quarter 2011 ASPs and AMPs, under CMS’s price substitution policy, reimbursement for 7 drugs would have been reduced in the fourth quarter of 2011, saving an estimated $696,000 (the savings would have been higher if additional drugs with partial AMP data were included). Separately, the OIG has issued a report comparing ASPs to WAMPs for 14 drugs that have been identified in previous OIG reports as repeatedly exceeding the 5% ASP-AMP threshold. According to the OIG, “limitations and irregularities in the sales data provided by the distributors and manufacturers of the 14 drugs called into question the data's accuracy and reliability, and prevented us from measuring AMPs against the threshold.” For instance, some sales data did not reflect discounts and rebates passed on to providers, and the reported total number of units sold differed substantially from the number reported through quarterly ASP submissions. To fulfill its statutory mandate, the OIG will consider alternative methodologies to conduct pricing comparisons, including directly surveying providers.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As discussed in a previous report, the OIG is producing a series of compliance training video and audio presentations to familiarize the provider community with major health care fraud and abuse laws and help providers respond to compliance issues. Recent presentations have addressed the False Claims Act, the physician self-referral law, compliance program basics, and tips for implementing an effective compliance program.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Government Accountability Office (GAO) has issued a report entitled “Prescription Pain Reliever Abuse: Agencies Have Begun Coordinating Education Efforts, but Need to Assess Effectiveness.” The report: (1) describes national trends in prescription pain reliever abuse and misuse, (2) describes how federal agencies are educating prescribers, (3) assesses the extent to which federal agencies follow key practices for developing public education efforts, and (4) identifies and assesses related educational efforts. Among other things, the report notes that the Office of National Drug Control Policy (ONDCP) is developing a legislative proposal to require education for prescribers registering with the Drug Enforcement Administration to prescribe controlled substances. The GAO recommends that the ONDCP Director establish outcome metrics and implement a plan to evaluate proposed educational efforts, and ensure that agencies share lessons learned among similar efforts.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 23, 2011, the ACA's Patient-Centered Outcomes Research Institute (PCORI) released its first draft National Priorities for Research and Research Agenda, which will be used to guide funding announcements for comparative clinical effectiveness research. The proposed national priorities for research are as follows:

Comparative Assessments of Prevention, Diagnosis, and Treatment Options -- determining which options work best for distinct populations with specific health problems.

• Improving Healthcare Systems – focusing on ways to improve healthcare services, such as the coordination of care for patients with multiple chronic conditions.
• Communication and Dissemination – examining ways to provide information to patients so that they can make informed healthcare decisions with clinicians.
• Addressing Disparities – assuring that research addresses the healthcare needs of all patient populations since treatments may not work equally well for everyone.
• Accelerating Patient-Centered and Methodological Research – including patients and caregivers in the design of research that is quick, safe, and efficient.

Note that PCORI is not specifying or prioritizing any particular condition or disease for research, although it may do so in the future. Public comments on the priorities and agenda will be accepted until March 15, 2012, or at various public forums planned during the comment period, including a "National Patient and Stakeholder Dialogue" in Washington D.C. scheduled on February 27. After the comment period closes, PCORI will report on the public feedback and the PCORI Board of Governors will vote on the priorities and agenda. PCORI expects to issue its first funding announcements in May.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Congressional Budget Office (CBO) has issued a report on options for raising the Medicare and Social Security eligibility ages. CBO estimates that gradually raising the Medicare eligibility age to 67 would reduce federal Medicare outlays, net of premiums and other offsetting receipts, by $148 billion from 2012 through 2021, although Medicaid and health insurance subsidy spending could rise somewhat.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The House Energy and Commerce Health Subcommittee has announced a series of hearings on FDA user fees for prescription drugs, generic drugs, biosimilar drugs, and medical devices. The hearing schedule is as follows:

• A February 1, 2012 hearing will address reauthorization of the Prescription Drug User Fee Act;
• A February 7 hearing will focus on the new Generic Drug User Fee proposal and Biosimilar User Fee proposal; and
• A February 15 hearing will examine reauthorization of the Medical Device User Fee Act.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On January 25, 2012, CMS will host a National Provider Call regarding Medicare fee-for-service (FFS) implementation of HIPAA Version 5010 and D.0 transaction standards. The target audience for this call includes vendors, clearinghouses, and providers who need to make Medicare FFS-specific changes in compliance with HIPAA Version 5010 requirements. Registration is required. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The CMS Chicago Regional Office is hosting a webinar on the Medicare Shared Savings Program (MSSP) on January 31, 2012 to provide an overview of the MSSP and explain the application process.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Reed Smith Health Industry Washington Watch blog has been updated to discuss a variety of health policy developments, including the following:

• Legislative Developments. President Obama has signed into law H.R. 3765, which temporarily averts a 27.4% cut in Medicare physician fee schedule rates and extends for two months certain expiring Medicare policies. 
   
• Regulatory Developments. CMS has established the ACA Independence at Home Demonstration and corrected its 2012 Medicare physician fee schedule and hospital outpatient prospective payment system/ambulatory surgical center final rules. HHS has announced the initial core set of ACA Medicaid health care quality measures, the OIG has published its annual solicitation of new safe harbors and special fraud alerts, and an FDA rule expands drug manufacturer notification requirements for potential drug shortages.
   
• Other HHS Developments. CMS has made policy announcements regarding: ACA Essential Health Benefits, ACA provider screening and enrollment provisions, the application of the imaging multiple procedure payment reduction policy to physicians in same group practice, new Recovery Audit Prepayment Review and Power Mobility Device Prepayment Review and Prior Authorization Demonstrations, Medicare clinical lab updates, overutilization of Medicare Part D drugs, Medicare Part B drug average sales price reporting, ACA physician-owned hospital provisions, Pioneer Accountable Care Organizations, and the ACA Innovation Advisors Program. The FDA has issued guidance on responding to unsolicited requests for off-label information, evaluation of sex differences in medical device clinical studies, evaluating substantial equivalence in premarket notifications, and the Center for Devices and Radiological Health appeals processes.
   
• OIG, GAO, & DOJ Developments. Recent OIG reports have addressed portable x-ray supplier billing patterns, program integrity issues with new DMEPOS suppliers, Part D oversight gaps, and Medicaid managed care. A GAO report examines pediatric medical devices. The Department of Justice has announced False Claims Act recoveries for FY 2011.
   
• Health Industry Events. CMS is hosting a call on the Advance Payment ACO model, an inpatient hospital New Technology Payment Town Hall Meeting, and a meeting of the Advisory Panel on Hospital Outpatient Policy.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On December 23, 2011, President Obama signed into law H.R. 3765, the Temporary Payroll Tax Cut Continuation Act of 2011.  Among other things, the law freezes Medicare physician fee schedule (MPFS) rates at 2011 levels through February 2012, temporarily averting a scheduled 27.4% cut under the statutory Sustainable Growth Rate (SGR) formula. The measure also extends for two months certain Medicare policies set to expire December 31, 2011, including: the floor used in the physician work geographic adjustment; the Medicare outpatient therapy cap exceptions process; payment for the technical component of certain physician pathology services; certain ambulance add-on payments; physician fee schedule mental health add-on payment; the outpatient hold harmless provision; minimum payment for bone mass measurement; the Qualified Individual program that reimburses states for certain Part B premiums; and the Transitional Medical Assistance program. The bill also extends for two months the authority for Medicare Modernization Act section 508 hospital reclassifications, with special rules for October and November 2011.  A CMS summary of the law is available here.   Note that the final version of the legislation does not include provisions adopted earlier by the House of Representatives to pay for a 2-year SGR fix through a variety of Medicare, Medicaid, and Affordable Care Act (ACA) cuts.  When Congress reconvenes, Congressional leaders are expected to tackle legislation to address these Medicare policies at least through 2012, although the outcome of such efforts is speculative at this point. Note that given the uncertainties associated with MPFS rates for 2012, the Centers for Medicare & Medicaid Services (CMS) is extending the 2012 Annual Participation Enrollment Period for health professionals through February 14, 2012 (although the effective date for any participation status change remains January 1, 2012 and will be in force for the entire year). 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A January 4, 2012 Department of Health and Human Services (HHS) notice announces the initial core set of health care quality measures for Medicaid-eligible adults under section 2701 of the ACA. The quality measures are available for voluntary use by state Medicaid programs, health insurance issuers and managed care entities that enter into contracts with Medicaid, and Medicaid providers. The core set includes 26 quality measures addressing: prevention and health promotion, management of acute and chronic conditions, family experiences of care, care coordination, and availability of services.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Government Accountability Office (GAO) has issued a report entitled “Pediatric Medical Devices: Provisions Support Development, but Better Data Needed for Required Reporting.” This report: (1) describes barriers to developing pediatric devices, (2) describes how pediatric device consortia have contributed to the development of pediatric devices, and (3) examines FDA data on the number of pediatric devices approved since FDAAA was enacted. The GAO found that while FDA created an electronic flag in its internal tracking system to identify devices labeled for use in pediatric patients, FDA has not consistently used this flag and therefore lacks reliable and timely information needed for reporting. The GAO recommends that FDA collect reliable information to report data on pediatric medical devices by consistently using its existing pediatric electronic flag in its tracking system or otherwise developing internal controls. HHS concurred with GAO’s recommendations.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On December 21, 2011, CMS published a notice establishing the Independence at Home (IAH) Demonstration, as authorized by the ACA. The IAH Demonstration will test a service delivery model that uses primary care teams to provide services to high-cost, chronically ill Medicare beneficiaries in their homes. CMS will select up to 50 multi-disciplinary practices, which will be accountable for providing comprehensive care to high-need populations at home and coordinating health care across all treatment settings. Participating practices may share in demonstration savings if specified quality measures and savings targets are achieved. Each participating practice must provide services to at least 200 applicable beneficiaries during each year of the demonstration. Applicable beneficiaries are defined as Medicare fee-for-service patients who have at least 2 chronic illnesses, need assistance with 2 or more functional dependencies requiring the assistance of another person, have had a nonelective hospital admission within the last 12 months, and have received acute or subacute rehabilitation services within the last 12 months. Participating practices will make in-home visits tailored to an individual patient’s needs. Each practice must be available 24 hours per day, 7 days a week to carry out plans of care, and practices must use electronic health information systems, remote monitoring, and mobile diagnostic technology. Applications will be accepted until February 6, 2012.

• Email This
• Print
• Comments
• Trackbacks
• Share Link