On November 22, 2013, CMS is hosting a Special Open Door Forum to discuss the design and implementation of the Medicare Intravenous Immune Globulin (IVIG) Demonstration. The purpose of the demonstration is to evaluate the impact of providing payment for items and services needed for the in-home administration of IVIG for the treatment of primary immune deficiency disease.
CMS is hosting a call on November 25, 2013 to discuss progress to date in implementing the National Partnership to Improve Dementia Care in Nursing Homes. The partnership is focused on delivering person-centered, comprehensive, and interdisciplinary care and reducing the use of unnecessary antipsychotic medications in nursing homes. The target audience for the call is consumer and advocacy groups, nursing home providers, surveyor community, prescribers, professional associations, and other interested stakeholders.
As reported on our sister blog, http://www.lifescienceslegalupdate.com/, the HHS Office for Civil Rights (OCR) has made a number of recent announcements regarding HIPAA Privacy Rule implementation. First, OCR has issued guidance on how the changes to the HIPAA Privacy Rule’s marketing provisions under the Health Information Technology for Economic and Clinical Health (HITECH) Act and the January 25, 2013 “Omnibus Rule” apply to refill reminders and other communications about current prescriptions for drugs or biologics. Second, OCR has delayed until further notice enforcement of the requirement that certain HIPAA-covered laboratories revise their notices of privacy practices to comply with the Omnibus Rule. Third, OCR has released resources to assist law enforcement and emergency planners when addressing information-sharing that may be subject to the HIPAA Privacy Rule. Finally, OCR has released model Notices of Privacy Practices that health care providers and health plans may use to communicate with their patients and plan members about their privacy practices and their patients’ privacy rights with respect to their personal health information.
The HHS Office of Disease Prevention and Health Promotion is soliciting public comment on the draft National Action Plan for Adverse Drug Event Prevention. The document focuses on the use of surveillance, prevention, incentives and oversight, and research to reduce adverse drug events. It identifies current federal activity across inpatient and outpatient settings, as well as transitions of care, with a focus on the three drug classes associated with high levels of harm. It also highlights opportunities to advance these efforts through cross-federal partnerships and coordinated resources. Comments will be accepted until October 4, 2013.
This post was written by Jennifer Pike.
On July 15, 2013, the Food and Drug Administration (FDA) published in the Federal Register a proposed rule that would amend 21 CFR Part 1 to implement FDA’s detention authority with respect to drugs intended for human or animal use. FDA’s detention authority is authorized by amendments made to the Food, Drug, and Cosmetic Act by the Food and Drug Administration Safety and Innovation Act. Once finalized, FDA would be able to detain drugs encountered during an inspection that are reasonably believed to be adulterated or misbranded. According to FDA, the authority is intended to protect the public by preventing distribution or subsequent use of drugs encountered during inspections that are believed to be adulterated or misbranded, until FDA has had time to consider what action it should take concerning the drugs, and to initiate legal action, if appropriate. Comments on the proposed rule should be submitted in writing, or electronically at www.regulations.gov, on or before September 13, 2013.
This post was written by Jennifer Pike.
The FDA has recently issued a number of new draft guidance documents that provide insight on a range of issues, including expedited drug review programs, medical device reporting, importation of unapproved drugs for market launch, and safety labeling changes. A brief summary and link to each draft guidance document is provided below:
- Expedited Programs for Serious Conditions: Drugs and Biologics – This draft guidance provides a single resource for information on policies and procedures related to FDA’s expedited drug development and review programs: fast track designation, breakthrough therapy designation, accelerated approval, and priority review. The draft guidance is intended to help industry better understand each program, including when the programs can be used and the features of each.
- Medical Device Reporting for Manufacturers – This draft guidance describes and explains the current FDA regulation that addresses reporting and recordkeeping requirements applicable to manufacturers of medical devices for certain device-related adverse events. The document provides answers to frequently asked questions and includes a section on common reporting errors.
- Pre-launch Activities Importation Request – This draft guidance describes FDA’s policy regarding requests for the importation of unapproved finished dosage form drug products by an applicant preparing the product for market launch, based on anticipated approval of a pending application (e.g., NDA, ANDA, BLA). It also describes the procedures for making such requests and the factors that FDA will consider in granting such requests.
- Safety Labeling Changes: Implementation of Section 505(o)(4) of the FD&C Act– Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act, which was added by section 901 of the Food and Drug Administration Amendments Act of 2007, authorizes FDA to require certain drug and biological product application holders to make safety-related labeling changes based on new safety information that becomes available after approval of the drug or biological product. This draft guidance explains how FDA intends to implement section 505(o)(4), including a description of the types of safety labeling changes that ordinarily might be required under this section, how FDA plans to determine what constitutes new safety information, the procedures involved in requiring safety labeling changes, and enforcement of the requirements for safety labeling changes.
On July 19, 2013, CMS published a proposed rule that would update Medicare outpatient prospective payment system (OPPS) and ambulatory surgical centers (ASCs) policies and rates for CY 2014. Key provisions of the proposed rule include the following:
- CMS proposes to update the OPPS market basket by 1.8% for 2014, which reflects a 2.5% hospital market basket increase, minus a 0.4% multifactor productivity (MFP) adjustment and an additional 0.3% reduction (both mandated by the ACA). The OPPS update is subject to other adjustments, including a 2% reduction for hospitals that do not meet quality reporting requirements.
- CMS proposes larger payment bundles to maximize hospitals’ incentives to provide care in an efficient manner, including by encouraging hospitals “to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements.” Specifically, CMS proposes to package the following seven new categories of supporting items and services into the procedural ambulatory payment classification (APC) payment: (1) Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; (2) drugs and biologicals that function as supplies or devices when used in a surgical procedure; (3) certain clinical diagnostic laboratory tests; (4) procedures described by add-on codes; (5) ancillary services assigned status indicator “X”; (6) diagnostic tests on the bypass list; and (7) device removal procedures. Note that in some cases separate payment is permitted if these services are reported alone on a claim.
- In a separate provision, CMS proposes to create 29 all-inclusive, “comprehensive APCs” to replace 29 existing device-dependent APCs and prospectively pay for device-dependent services associated with 136 HCPCS codes. CMS is proposing to package into the comprehensive APCs all “adjunctive services” provided during the delivery of the comprehensive service, including: diagnostic procedures, laboratory tests and other diagnostic tests, and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; outpatient department services delivered by therapists as part of the comprehensive service; durable medical equipment, prosthetic and orthotic items, and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that are provided during the comprehensive service (except charges that cannot be covered by Medicare Part B or that are not payable under the OPPS).
- CMS proposes to collapse the current five levels of outpatient visit codes into a single code for each unique type of outpatient hospital visit.
- CMS proposes to continue a policy adopted last year setting OPPS payment for separately payable drugs and biologicals without pass-through status at average sales price (ASP) plus 6% (which it refers to as the "statutory default" rate), without an adjustment for pharmacy overhead costs. The proposed 2014 threshold for separate payment for outpatient drugs would be a cost per day that exceeds $90, compared to $80 in 2013.
- With regard to ASC policy, CMS is proposing to increase ASC payment rates by 0.9%, which is derived from a 1.4% inflation update reduced by a 0.5% MFP adjustment. ASCs that do not meet quality reporting requirements would be subject to a 2% payment reduction. CMS also proposes that ancillary or adjunctive services that would be packaged under the OPPS also would be packaged under the ASC payment system for CY 2014.
- In addition, the proposed rule addresses, among many other things: refinements to the Hospital Outpatient Quality Reporting Program, the ASC Quality Reporting Program, and the Hospital Value-Based Purchasing Program; payment for partial hospitalization services; a requirement that individuals furnish “incident to” hospital or critical access hospital outpatient services in compliance with state law; and changes to Quality Improvement Organization eligibility and contracting rules
CMS will accept comments on the proposed rule until September 6, 2013.
On July 8, 2013, CMS published a proposed rule to update Medicare end-stage renal disease (ESRD) prospective payment system (PPS) rates and policies for 2014. While CMS proposes a 2.5% base rate update (a 2.9% market basket update reduced by an estimated 0.4% ACA multi-factor productivity (MFP) adjustment), this amount would be more than offset by a -12% drug utilization offset. Specifically, under the American Taxpayer Relief Act of 2012, CMS must reduce the ESRD PPS base rate to reflect estimated change in the utilization of ESRD-related drugs and biologicals since 2007. CMS invites comments on whether this change should be phased in over more than one year (which CMS often does in the face of steep payment swings). In total, CMS estimates that CY 2014 ESRD PPS rates will decrease by 9.4% -- or $780 million -- compared to 2013 after application of all rate adjustments in the proposed rule. CMS also proposes to update ESRD Quality Incentive Program (QIP) measures and scoring methodologies for payment year 2016. In addition to ESRD policy changes, the proposed rule addresses Medicare coverage of and payment for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), including the definition of routinely purchased DME; the three-year Minimum Lifetime Requirement; and fee schedules for splints, casts, and intraocular lens (IOLs) inserted in a physician’s office. The DMEPOS provisions are discussed in a separate post. CMS will accept comments on the proposed rule until August 30, 2013.
Recent Congressional hearings have addressed the following health policy issues:
- The House Energy and Commerce Committee has held hearings on Medicaid reform, implementation of the ACA, and reform of drug compounding regulations. An August 1 hearing entitled “PPACA Pulse Check” will feature testimony by CMS Administrator Marilyn Tavenner.
- The Senate Finance Committee held two hearings on health information technology, along with a hearing on repealing the SGR.
- The Senate Judiciary Committee examined “pay for delay” settlements between generic and brand-name drug companies.
- The House Ways and Means Committee held two hearings on the Administration’s delay of the ACA employer insurance mandate, and an August 1 hearing will focus on the status of ACA implementation. The House Education and the Workforce Committee also held a hearing on the ACA employer mandate delay.
- The House Oversight and Government Reform Committee and House Homeland Security Committee are holding a joint hearing on July 30 entitled on “Evaluating Privacy, Security, and Fraud Concerns with ObamaCare's Information Sharing Apparatus.”
- The Senate Budget Committee is holding a July 30, 2013 hearing on containing health care costs.
Data collection under the ACA Physician Payment Sunshine Act begins on August 1, 2013. To assist covered manufacturers of pharmaceuticals or medical devices with reporting obligations, CMS has announced new “OPEN PAYMENTS” mobile applications that could be used to track payments and other financial transfers. While physicians are not required to report any information, CMS notes that they could use this technology to help validate reports submitted by manufacturers about payments the physicians have received. In addition, CMS is compiling answers to frequently-asked-questions on the Sunshine Act. On June 22, 2013, CME released a notice in the Federal Register concerning the collection of information under the Sunshine Act, specifically related to the following subjects: registration; attestation; dispute resolution and corrections; record retention; and submitting an assumptions document. Comments are due to CMS by September 20, 2013. Finally, CMS is hosting an educational call on August 8, 2013 for physicians and teaching hospitals on the Sunshine Act policy, with a focus on third party payments, indirect payments, and the Physician Resource Toolkit.
A number of recent Congressional hearings have focused on health policy issues, including the following:
- The House Energy and Commerce Committee held hearings on bipartisan proposals to redesign the Medicare benefit structure and challenges facing businesses under the ACA. A June 28 hearing will focus on Medicare Part B drug program reforms.
- House Ways and Means Health Subcommittee hearings addressed Medicare post-acute care and the 2013 Medicare Trustees Report.
- The Senate Finance Committee held a hearing entitled “High Prices, Low Transparency: The Bitter Pill of Health Care Costs,” along with hearings on oversight of Medicare Recovery Audit Contractors and a review of health care quality efforts.
- The Senate Committee on Homeland Security and Governmental Affairs held a hearing on curbing prescription drug abuse in Medicare.
- The Senate Special Committee on Aging held a hearing entitled “Renewing the Conversation: Respecting Patients' Wishes and Advance Care Planning."
- A House Small Business Committee hearing on "Mobile Medical App Entrepreneurs: Changing the Face of Health Care."
On July 10, 2013, CMS is hosting a provider call on its National Partnership to Improve Dementia Care in Nursing Homes. This initiative focuses on delivering person-centered, comprehensive, and interdisciplinary dementia care, while reducing the use of unnecessary antipsychotic medications in nursing homes (and eventually other care settings).
This post was written by Jennifer Pike.
On June 12, 2103 the Food and Drug Administration (FDA) published a final rule amending the orphan drug regulations (21 CFR Part 316). The amendments are intended to clarify regulatory provisions and make minor improvements to address issues regarding orphan drug designation and orphan drug exclusivity.
The final rule largely finalizes the amendments as proposed in October 2011. Reed Smith previously prepared a client alert summarizing the proposed rule and discussing the potential impact of the proposal on the drug, biological product, and biotechnology industries. In the final rule, the FDA has revised the proposed rule by, among other things:
- Adding a definition of "orphan subset" that is consistent with the explanation of orphan subset in the proposed rule;
- Clarifying the existing regulation in accordance with FDA’s long-standing practice that a designated drug is eligible for orphan exclusive approval only if the same drug has not already been approved for the same use or indication;
- Removing language stating that to demonstrate clinical superiority in terms of "major contribution to patient care," the drug must provide safety and effectiveness "comparable to the approved drug," because the language incorrectly implied that FDA would require direct proof of comparability (e.g., through non-inferiority trials);
- Updating the contact information required in requests for designation and for permanent-resident agents;
- Clarifying that a designation request need only include "relevant" in vitro laboratory data and data from "clinical experience" with the drug;
- Clarifying that FDA will notify the sponsor in writing whenever FDA considers a designation request voluntarily withdrawn;
- Codifying FDA’s longstanding interpretation that FDA can refuse to grant a designation request if the request is otherwise ineligible for designation under Part 316;
- Stating that that FDA’s publicly-available posting of designated drugs will include whether a drug is no longer designated if the drug loses designation after the effective date of the final rule;
- Making explicit an option that has always existed for sponsors – that sponsors may voluntarily withdraw a designation request, or an actual designation, at any time by submitting a written request to FDA;
- Clarifying that the scope of orphan drug exclusivity is limited to the indications or uses for which the designated drug is approved;
- Clarifying that that a designated drug that is otherwise the same as a previously approved drug receives 7-years market exclusivity ("orphan drug exclusivity") upon approval only if the sponsor of the second-in-time drug demonstrates upon approval that its drug is clinically superior to the previously approved drug; and
- Updating the FDA address listed in the regulations and adding an online address for the Orange Book.
The final rule is effective on August 12, 2013.
The OIG has issued a report entitled “Medicare and Beneficiaries Could Save Millions If Dialysis Payments Were Adjusted for Anemia Management Drug Utilization.” The OIG estimates that if CMS had adjusted the payments for dialysis services to incorporate anemia management drug utilization in 2011 -- rather than use 2007 data reflecting higher utilization -- the Medicare program could have saved $510 million for erythropoiesis-stimulating agents (ESAs) and $19 million for iron supplements. The OIG also identified limitations in the use of ESRD claims data for program oversight, including inaccuracies in the quantities of drugs claimed and the inability to determine the extent of drug waste or overfill usage. The OIG recommends that CMS: (1) adjust the bundled dialysis base rate to capture savings from decreased utilization of ESAs and iron supplements, (2) remind dialysis facilities of the importance of claims accuracy, and (3) develop guidance for recording drug waste and overfill on ESRD claims. CMS concurred with the recommendations.
This post was written by Jennifer Pike.
On May 9, 2013, the Food and Drug Administration (“FDA”) announced the availability of two new draft guidance documents answering common questions on FDA’s implementation of regulations related to access to investigational drugs. The first draft guidance, entitled “Charging for Investigational Drugs Under an IND – Qs & As,” addresses FDA’s implementation of 21 C.F.R. § 312.8 and answers the most frequently-asked questions about charging for investigational new drugs under an investigational new drug (IND) Application (IND). The regulation, which went into effect in October 2009, clarifies the circumstances under which charging for an investigational new drug in a clinical trial is appropriate. It also sets forth criteria for charging for an investigations drug and clarifies what costs can be recovered for an investigational drug.
The second draft guidance, entitled “Expanded Access to Investigational Drugs for Treatment Use – Qs & As,” answers the most frequently-asked questions related to FDA’s implementation of its expanded access regulations (21 CFR Part 312, Subpart I). The regulations, which went into effect on October 2009, contain the requirements for the use of investigational new drugs or approved drugs where availability is limited by a risk evaluation and mitigation strategy, when the primary purpose is to diagnose, monitor, or treat a patient’s disease or condition.
Comments on the draft guidance documents should be submitted in writing, or electronically at www.regulations.gov, on or before July 8, 2013.
This post was written by Nancy Sheliga.
The OIG has released a study entitled “High-Risk Compounded Sterile Preparations and Outsourcing by Hospitals That Use Them,” triggered by concerns caused by the recent outbreak of meningitis among patients receiving contaminated injections from a compounding center. The report found that 92% of hospitals used compounded sterile preparations (CSPs) in 2012, prepared either onsite at the hospitals themselves or outsourced to compounding pharmacies. Among these, higher-risk nonsterile-to-sterile compounding composed less than 1% of CSPs used in hospitals, but 85% of hospitals outsourced at least some nonsterile-to-sterile compounding. Among the reasons hospitals cited for outsourcing CSPs were the need to ensure an adequate supply of CSPs in the event of shortages, the need to obtain more stable CSPs and products with extended shelf lives, the ability to have products on hand when needed with less waste, and insufficient resources to prepare all CSPs on site at some hospitals.
Overall, hospitals reported few problems with the quality of CSPs obtained from outside pharmacies and they took few steps to ensure the quality of outsourced CSPs. However, over half of hospitals indicated that they have made changes or plan to make changes to CSP sourcing practices due to the recent meningitis outbreak, including decreasing CSP outsourcing, requesting more information on product quality from outside pharmacies, contracting with different outside pharmacies, changing the way CSPs are prepared in hospital facilities, increasing quality controls in hospital pharmacies, and expanding the capacity to prepare CSPs in-house.
The OIG notes that hospitals largely remain confident about the quality of outsourced CSPs, but “the meningitis outbreak raises questions about whether this confidence is well placed.” The OIG observes that vigilance is needed in this area and indicates that it plans to pursue additional work relating to the safety and quality of pharmaceutical compounding in hospitals, including work examining federal oversight mechanisms.
On May 8, 2013, the House Energy and Commerce Subcommittee on Health approved by voice vote H.R. 1407, legislation to reauthorize and combine the Animal Drug User Fee Act and the Animal Generic Drug User Fee Act. TheEnergy and Commerce Committee also recently held hearings on: the Administration’s HHS budget proposal; the Center for Consumer Information and Insurance Oversight and implementation of the ACA; the lack of transparency and consumer driven market forces in U.S. health care system; and the impact of HIPAA on patient care and public safety. The House Ways and Means Health Subcommittee held a hearing on Medicare physician payment reform, and the Senate Finance Committee has scheduled a May 14 hearing on this topic. Other Senate panels also recently held hearings on health policy issues, including: a HELP Committee hearing on "Successful Primary Care Programs: Creating the Workforce We Need"’ a Homeland Security Committee hearing on “Oversight and Business Practices of Durable Medical Equipment Companies”; and a Special Committee on Aging hearing on "The National Plan to Address Alzheimer's Disease: Are We On Track to 2025?"
CMS has posted the draft February 2013 FULs and Draft February 2013 Three-Month Rolling Average FULs. CMS will continue to accept comments on the draft average manufacturer price-based FULs and the draft three-month rolling average FULs, along with the methodologies used to calculate them.
Key members of the Senate Health, Education, Labor, and Pensions Committee have released a bipartisan draft legislative proposal intended to improve drug distribution security. The legislation addresses, among other things: lot-level product tracing requirements for “downstream” pharmaceutical supply chain members (drug manufacturers, repackagers, wholesale distributors, and dispensers); a requirement that manufacturers serialize prescription drugs at the unit level; national licensure standards for wholesale distributors and third-party logistics providers; a requirement that members of the supply chain only transact with registered or licensed entities; and preemption of state product tracing requirements, including paper or electronic pedigree systems. The lawmakers will accept comments on the draft legislation until April 26, 2013. In a related development, the House Energy and Commerce Subcommittee on Health has scheduled an April 25 hearing on "Securing Our Nation's Prescription Drug Supply Chain,” which will focus on a House companion version of the draft “track and trace” legislation intended to secure pharmaceutical distribution.
Update: On May 8, 2013, the House Energy and Commerce Health Subcommittee approved by voice vote an amended version of its “track and trace” legislation intended to secure pharmaceutical distribution.
CMS has released a letter providing operational and technical guidance for issuers seeking to offer Qualified Health Plans (QHPs) on Federally-facilitated and State Partnership Exchanges. The letter addresses, among other things, the QHP certification process; QHP performance and oversight; enrollment and premium payment; and consumer support. There is also an appendix with additional guidance on Essential Health Benefit Prescription Drug Coverage, Actuarial Value, and Cost Sharing.