Health Industry Washington Watch

Daschle Nomination Hearing

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Tue, 06 Jan 2009 09:23:12 -0500

On January 8, 2009, the Senate Health, Education, Labor and Pensions Committee is holding a hearing on the nomination of former Senate Majority Leader Tom Daschle to be Secretary of Health and Human Services in the Obama administration.

Corrections to Final 2009 Medicare Physician Fee Schedule, Inpatient Hospital Rules

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Wed, 31 Dec 2008 09:38:48 -0500

On December 31, 2008, CMS published a notice correcting a number of technical and typographical errors in the November 19, 2008 final Medicare physician fee schedule rule for calendar year 2009. In addition, on December 30, 2008, CMS published a notice correcting certain wage data included in the October 3, 2008 final FY 2009 Medicare hospital inpatient prospective payment system rule.

New Postings on the Reed Smith Health Industry Washington Watch Blog

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:38:58 -0500

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

Regulatory Developments -- CMS has published regulations regarding Medicaid disproportionate share hospital payments, Medicaid non-emergency medical transportation services, and Medicare home health agency rates. HHS has published a final rule designed to protect the conscience rights of health care providers. The OIG has published its annual solicitation of ideas for new anti-kickback safe harbor provisions. The FDA is seeking comments on a planned study regarding coupons used in direct-to-consumer prescription drug print advertisements, and it has announced grants to support the clinical development of “orphan products.” Finally, and IRS proposed rule would require government entities to withhold income tax when making certain payments, including certain Medicare payments.
Other CMS Developments -- CMS has posted first quarter 2009 Medicare Part B drug and biological average sales price amounts; released details on the 2009 Physician Quality Reporting Initiative; posted nursing home quality ratings; and announced medical necessity reviews of long term care hospital stays. CMS also has provided guidance on accreditation of durable medical equipment suppliers, requirements for entities providing mobile diagnostic testing services; and how the HIPAA Privacy Rule can facilitate electronic health information exchange in a networked environment.
FDA Guidance Documents -- The FDA has issued a number of guidance documents dealing with such issues as labeling of nonprescription human drug products and dietary supplements, genotoxic and carcinogenic impurities in drugs, modification of devices subject to premarket approval, and orally disintegrating tablets.
Obama Transition -- President-elect Barack Obama has nominated former Senator Tom Daschle as HHS Secretary and Director of a new White House Office on Health Care Reform. Obama’s transition team also is calling on individuals to hold “Health Care Community Discussions” this month to make recommendations on health care policy. In addition, President-elect Obama has named Eric Holder as his Attorney General.
OIG & GAO Reports -- The HHS OIG has issued reports on adverse events in hospitals, Medicare drug prices, and special needs plans. The GAO has reported on Medicare Part D enrollment issues, Medicare Advantage plan profits and expenses, and characteristics of private fee-for-service plans.
Odds & Ends -- The Congressional Budget Office hasreleased major reports on health care system reform and insurance reform. Congress has approved technical corrections to the new mental health parity law. The Agency for Healthcare Research and Quality (AHRQ) is seeking participation in a symposium on clinical and comparative effectiveness research methods.
Looking Ahead -- CMS is hosting meetings in February on applications for Medicare inpatient prospective payment system new technology add-on payments, hospital outpatient ambulatory payment classification groups, and genomic testing.

Medicaid Disproportionate Share Hospital Payments

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:36:06 -0500

On December 19, 2008, the Centers for Medicare & Medicaid Services (CMS) published a final rule implementing provisions of the Medicare Modernization Act of 2003 related to state auditing and reporting of Medicaid disproportionate share hospital (DSH) payments, effective January 19, 2009. CMS also published a separate notice announcing the final federal share DSH allotments for federal fiscal year (FY) 2007 and the preliminary federal share DSH allotments for FY 2009. The notice also announces the final FY 2007 and the preliminary FY 2009 limitations on aggregate DSH payments that states may make to institutions for mental disease and other mental health facilities.

Medicaid Non-Emergency Medical Transportation Program

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:35:10 -0500

CMS published a final rule on December 19, 2008 that implements a provision of the Deficit Reduction Act of 2005 that provides states with additional flexibility to establish a non-emergency medical transportation brokerage program, and to receive the federal medical assistance percentage matching rate. The rule is effective January 20, 2009.

HHA PPS Correction Notice

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:34:05 -0500

CMS published a document on December 22, 2008 correcting technical errors that appeared in the November 3, 2008 notice updating Medicare home health agency (HHA) prospective payment system (PPS) rates for 2009.

Provider Conscience Rights

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:32:27 -0500

On December 19, 2008, the Department of Health and Human Services (HHS) published a controversial final rule to implement and enforce certain federal nondiscrimination statutes protecting the conscience rights of health care providers and other entities. Among other things, the rule clarifies that non-discrimination protections allowing a provider to refuse to perform health care services to which they may object for religious, moral, ethical, or other reasons apply to institutional health care providers as well as to individual employees working for recipients of certain HHS funds; requires recipients of certain HHS funds to certify their compliance with laws protecting provider conscience rights; designates the HHS Office for Civil Rights as the entity to receive related discrimination complaints; and establishes compliance provisions, including termination and recoupment of funding paid in violation of the nondiscrimination provisions if voluntary compliance is not achieved. The rule is effective January 20, 2009, although HHS components have been given discretion to phase in the written certification requirement by October 1, 2009 (the beginning of FY 2010).

FDA Study on DTC Ad Coupons

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:31:23 -0500

The Food and Drug Administration (FDA) is seeking comments on a planned "Experimental Study of the Impact of Coupons Embedded in Direct-to-Consumer Prescription Drug Print Advertisements." According to the FDA notice, the study will examine the impact of the presence of coupons offering price incentives or rebates on consumers' perceptions of product risks and benefits in direct-to-consumer (DTC) print ads. The FDA acknowledges, however, that "it does not actually regulate the dollar or other incentive amount of coupons, price incentives, or rebate offers with respect to how they affect the price of prescription drugs or biological products." Comments will be accepted until February 13, 2009.

FDA Grants for Orphan Product Studies

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:30:19 -0500

The FDA Office of Orphan Product Development has announced grants to support the clinical development of products for use in rare diseases or conditions where no current therapy exists or where the proposed product will be superior to the existing therapy. Grants are available for clinical studies on safety and/or effectiveness that will either result in, or substantially contribute to, market approval of these products. Of the estimated FY 2010 funding ($14.1 million) for this program, approximately $10 million will fund noncompeting continuation awards, and approximately $4.1 million will fund 10 to 12 new awards, subject to availability of funds.

IRS Rule on Withholding of Taxes from Medicare & Other Government Payments

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:29:01 -0500

On December 5, 2008, the Internal Revenue Service (IRS) issued a proposed rule to implement a tax withholding requirement of the Tax Increase Prevention and Reconciliation Act of 2005 that requires federal, state, and local government entities to withhold income tax when making payments to persons providing property or services. The tax withheld will equal 3% of payments made after December 31, 2001. The statute provides an exception for payments made in connection with a public assistance/welfare programs for which eligibility is determined based on needs or income, but not based on age. Therefore, while Medicaid payments are exempt, Medicare payments would be subject to the withholding requirements. The withholding requirement also would not apply to payment amounts below a $10,000 threshold. Multiple payments made to a person generally would not be aggregated for determining if the threshold has been met, but an anti-abuse rule would be established to prevent payment manipulation to avoid required withholding. The IRS will accept comments on the proposed rule until March 5, 2009.

Medicare Part B ASP Amounts

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:27:25 -0500

CMS has posted the Medicare Part B drug and biological average sales price (ASP) amounts for January 1 to March 31, 2009. According to CMS, average payment amounts for all drugs increased 1% compared to the last quarter of 2008.

DMEPOS Accreditation Update

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:24:01 -0500

On December 10, 2008, CMS provided further guidance on accreditation requirements for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) under the Medicare for Patients and Providers Act of 2008 (MIPPA). MIPPA exempts certain eligible professionals from the general September 30, 2009 accreditation deadline if unless CMS determines that the quality standards are specifically designed to apply to such professionals and persons. The eligible professionals to whom this exemption applies include physicians, physical therapists, occupational therapists, qualified speech-language pathologists, physician assistants, and nurse practitioners. Also as authorized by MIPPA, CMS has specified that certain “other persons” – specifically orthotists, prosthetists, opticians, and audiologists – are exempt from the general accreditation requirements. CMS will issue rules in 2009 on how the quality standards apply to these eligible professionals and other persons. CMS also has clarified that individuals not included in this exemption list, such as pedorthotists, mastectomy fitters, orthopaedic fitters/ technicians or athletic trainers applying for Medicare enrollment in order to bill for Medicare Part B services are not exempt from meeting the September 30, 2009 deadline for DMEPOS accreditation.

FAQ on Mobile Testing Provider Requirements

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:22:30 -0500

CMS has provided additional guidance on a provision of the November 19, 2008 final Medicare physician fee schedule rule for calendar year 2009. In the final rule, CMS adopted a requirement that an entity providing mobile diagnostic testing services enroll with Medicare as an Independent Diagnostic Testing Facility (IDTF), comply with the IDTF performance standards, and bill Medicare directly for its services (although CMS did not require a mobile testing entity to bill directly for its services they are furnished “under arrangement” to hospitals). In a frequently-asked question dated December 15, 2008, CMS clarifies that if the mobile provider of testing services provides only the equipment and the non-physician technicians, they are not required to enroll and bill as an IDTF. Note, however, that if the mobile provider also provides the physician supervision of the test as well as the equipment and the technician, the mobile entity would be required to enroll and bill as an IDTF effective January 1, 2009.

2009 Physician Quality Reporting Initiative

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:16:12 -0500

CMS has released the detailed specifications for the 2009 Physician Quality Reporting Initiative (PQRI) measures and the 2009 PQRI measures groups. In addition, a new 2009 PQRI Implementation Guide instructs physicians on how to implement 2009 PQRI claims-based reporting of measures to facilitate satisfactory reporting of quality data codes.

Nursing Home Rating System

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:14:20 -0500

On December 18, 2008, CMS posted quality ratings for the nation’s Medicare- and Medicaid-participating nursing homes on the CMS Nursing Home Compare Web site. Each facility has been assigned a “star rating” based on health inspection results, quality measures, and staffing levels. CMS acknowledges certain limits to its rating system, including, among other things, state variations in inspection and licensing requirements, the fact that the staffing levels represent just a “snap-shot in time,” and lack of adjustments in quality measures for differences in nursing home patient populations. CMS recommends that the nursing home quality rating system be used with other sources of information.

Long Term Care Hospital Medical Necessity Review

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:03:01 -0500

CMS has awarded contracts to review the medical necessity of long term care hospital (LTCHs) stays, as authorized by the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). Specifically, CMS has awarded contracts to AdvanceMed to perform LTCH sampling and validation, and to Wisconsin Physician Services (WPS) to perform medical review of LTCH claims to determine a national error rate for LTCHs. WPS will use existing inpatient hospital review criteria in order to determine the medical necessity of admission. CMS expects the medical reviews, which are scheduled to begin in January 2009, to help contractors to recover overpayments and determine if additional review is necessary.

HIPAA Privacy Rule and the Electronic Exchange of Health Information

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 14:01:13 -0500

On December 15, 2008, the HHS Office for Civil Rights announced new guidance on how the HIPAA Privacy Rule can facilitate electronic health information exchange in a networked environment. In addition, the guidance addresses electronic access by an individual to his or her protected health information and how the Privacy Rule may apply to the use of personal health records.

Labeling of Nonprescription Human Drug Products and Dietary Supplements; Enforcement Date Extended to January 1, 2010

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 13:54:49 -0500

The FDA has released revised draft guidance entitled “Questions and Answers Regarding the Labeling of Nonprescription Human Drug Products Marketed Without an Approved Application as Required by the Dietary Supplement and Nonprescription Drug Consumer Protection Act: Revision 1.” This guidance is intended to assist industry in complying with the labeling requirements for nonprescription (over-the-counter (OTC)) human drugs marketed without an approved application established by the Dietary Supplement and Nonprescription Drug Consumer Protection Act. In an earlier version of the guidance issued January 2, 2008, the FDA stated that it intended to begin enforcing the labeling requirements for OTC drug products marketed without an approved application that are labeled on or after January 1, 2009; because the agency is still finalizing the guidance, the revised draft extends the enforcement date until January 1, 2010. Separate guidance regarding compliance with the labeling requirements for dietary supplements also has been released.

Genotoxic and Carcinogenic Impurities in Drugs

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 13:53:47 -0500

The FDA has released draft guidance on “Genotoxic and Carcinogenic Impurities in Drug Substances and Products: Recommended Approaches.” The document reflects the agency's views on genotoxic and carcinogenic impurities in drug substances and drug products, including biologic products regulated by the Center for Drug Evaluation and Research. It also provides recommendations on how to evaluate the safety of these impurities during clinical development and for marketing applications, including additional testing and exposure threshold recommendations when genotoxic or carcinogenic impurities are present. The draft guidance addresses synthetic impurities and degradants in drug substances, but not the genotoxicity or carcinogenicity of actual drug substances or intended drug product ingredients. This draft guidance also applies to known starting materials or anticipated reaction products. The FDA will accept comments on the guidance through February 17, 2009.

Modification of Devices Subject to PMA

DMcCurdy@ReedSmith.com (Debra A. McCurdy) — Mon, 22 Dec 2008 13:52:45 -0500

The FDA has issued guidance on “Modifications to Devices Subject to Premarket Approval (PMA)--the PMA Supplement Decision-Making Process,” which is designed to help industry determine the type of regulatory submission that may be required when a device subject to PMA is modified.