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

The GAO has issued a report, “New Drug Approval: FDA's Consideration of Evidence from Certain Clinical Trials,” examining FDA’s use of non-inferiority trial evidence as part of the drug approval process. According to the report, evidence from non-inferiority trials was included in 43 of the 175 new drug applications (NDAs) for new molecular entities submitted between FY 2002 and 2009, many of which were for antimicrobial drugs. As of December 31, 2009, FDA approved 18 of the 43 NDAs on the basis of evidence from non-inferiority trials (certain additional NDAs were approved based on other evidence). The GAO also examined the characteristics of these trials, and describes FDA’s guidance on these trials. According to GAO, “the agency has become more conservative in allowing evidence from non-inferiority trials to demonstrate a drug’s effectiveness,” both by limiting the indications for which these trials may be used and by becoming more rigorous in its review of evidence from non-inferiority trials. 

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The GAO has issued a report entitled “Medicaid Managed Care: CMS's Oversight of States' Rate Setting Needs Improvement,” which concludes that CMS has been inconsistent in reviewing states’ rate setting for compliance with the Medicaid managed care actuarial soundness requirements. Based in its review, the GAO recommends that CMS track state compliance with actuarial soundness requirements, clarify guidance on rate-setting reviews, and make use of information on data quality in overseeing states’ rate setting.

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The Government Accountability Office (GAO) is seeking nominations for the ACA’s Patient Centered Outcomes Research Institute Governing Board, which is charged with identifying national priorities for comparative effectiveness research.  Likewise, the GAO is seeking nominations for the National Health Care Workforce Commission, also established by the ACA.  Nominations for both panels are due June 30, 2010.

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The Government Accountability Office (GAO) has issued a report entitled "Medicare Advantage: Relationship between Benefit Package Designs and Plans' Average Beneficiary Health Status." GAO examined (1) MA plan benefit packages by average health status of plans’ enrolled beneficiaries, (2) distribution and characteristics of MA plans by average beneficiary health status, and (3) CMS’s process for ensuring that benefit packages do not discriminate with respect to health status. Among other things, the GAO found that plans in the good health group generally had lower premiums, higher cost sharing for certain services, and fewer additional benefits than plans in the poor health group in 2008. CMS has revised its process for reviewing MA plans for the likelihood of discrimination, and it developed a new methodology for setting cost-sharing thresholds. For contract year 2010, CMS contacted all MA plans with benefit packages likely to discriminate, and all plans subsequently met cost-sharing thresholds.

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The GAO has released correspondence to Sen. Charles Grassley on its analysis of whether nursing home surveys accurately identify serious deficiencies. The GAO reviewed fiscal year (FY) 2008 federal comparative survey data, in which federal surveyors independently resurvey a home recently inspected by state surveyors and compare deficiencies identified during the two survey). The GAO found that 12.3% of FY 2008 comparative surveys identified at least one missed serious deficiency, compared to 14.7% in FY 2007. The number of states that missed serious deficiencies on 25% or more of their comparative surveys declined from nine to six states, with eight of those states improving their overall performance. In addition, 74.8% of comparative surveys had at least one lower-level missed deficiency in FY 2008.

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The Government Accountability Office (GAO) has issued a report entitled "End-Stage Renal Disease: CMS Should Monitor Access to and Quality of Dialysis Care Promptly after Implementation of New Bundled Payment System." The report focuses on the new ESRD payment system that begins January 2011, under which CMS will make a single payment to pay for dialysis and related services. To help ensure that changes in Medicare payment methods for dialysis care do not adversely affect beneficiaries, the GAO recommends that CMS monitor access to and quality of dialysis care for groups of beneficiaries, particularly those with above-average costs of dialysis care, under the new payment system. Such monitoring should begin as soon as possible once the new bundled payment system is implemented and be used to inform potential refinements to the system. CMS agreed and noted that it is planning to actively monitor the effects of the new payment system on all ESRD beneficiaries, including those with above-average costs. CMS noted that it plans to have a comprehensive monitoring strategy in place when the system is implemented.

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The Government Accountability Office (GAO) has issued a report entitled "Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS's Program Could Be Strengthened." In this report, the GAO reviewed the factors states consider in selecting facilities for the Special Focus Facility (SFF) program, which targets nursing homes with severe and persistent quality of care problems, along with how CMS and states adhere to related program guidance and the program’s impact on homes’ performance. The GAO found that when selecting SFFs from CMS’s list of candidate facilities, state officials considered factors other than rank on that list, such as their own knowledge of each candidate’s circumstances. In addition, the GAO reports that some states did not consistently follow CMS’s basic SFF program requirements, such as the required number of surveys. Moreover, the GAO described CMS’s enforcement guidance as vague, which results in inconsistent interpretations. Most SFFs that “graduated” from the program showed significant improvement while in the program, although there were some facilities that did not sustain that improved performance after graduation. The GAO discussed a number of strategies CMS and states have used to improve nursing home quality of care. The GAO recommends that CMS take several steps to strengthen the SFF program, including (1) notifying homes that are on the SFF candidate list and seeking legislative authority to charge SFFs for the costs of conducting additional surveys.

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The GAO has issued a report entitled “Medicare Contracting Reform: Agency Has Made Progress with Implementation, but Contractors Have Not Met All Performance Standards.” The report discusses CMS’s transition of claims administration from carriers and fiscal intermediaries to 19 new Medicare Administrative Contractors (MAC), 15 of which will process both Part A and B Medicare claims (A/B MACs) and four that process durable medical equipment (DME) claims. CMS expects to complete the transition process ahead of the October 1, 2011 Medicare Modernization Act (MMA) deadline. The GAO found that contractor transitions to date have lead to a variety of challenges for providers, including payment delays, in part because CMS’s accelerated implementation schedule overlapped with other Medicare claims processing initiatives, including a requirement that providers re-enroll. The GAO also reports that some MACs did not meet all provider service metrics, including superior performance related to accuracy of responses to providers, claims processing timeliness, and appeals.

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The Government Accountability Office (GAO) has issued a report entitled "Electronic Personal Health Information Exchange: Health Care Entities' Reported Disclosure Practices and Effects on Quality of Care." The report, which was required by the HITECH Act, reviews practices implemented by health information exchange organizations, providers, and other health care entities that disclose electronic personal health information, based on case studies of operational health information exchanges and a selection of each of the exchanges’ participating providers. The health care entities reported that they implement widely-accepted practices for safeguarding personal information to help ensure the appropriate use and disclosure of electronic personal health information for treatment purposes. In addition, both the exchanges and providers reported examples of ways that sharing electronic personal health information has had a positive effect on the quality of care that providers deliver to patients.

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The Government Accountability Office (GAO) has issued a report entitled, “Patient Safety Act: HHS Is in the Process of Implementing the Act, So Its Effectiveness Cannot Yet Be Evaluated.” The report seeks to assess the early implementation of the Patient Safety and Quality Improvement Act of 2005, which included provisions to encourage health care providers to voluntarily report information on medical errors and other events to patient safety organizations (PSOs). The GAO notes that at the time of its review in July 2009, few of the 17 PSOs it interviewed had entered into contracts to work with providers or had begun to receive patient safety data. Some PSOs are waiting for the Agency for Healthcare Research and Quality (AHRQ) to finalize the common formats for PSOs and providers to use in submitting patient safety data to the network of patient safety databases (NPSD). According to AHRQ, if development of the patient safety system remains on schedule, the NPSD could begin receiving patient safety data from hospitals by February 2011. 

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This post was written by Paul Sheives.

A recent GAO report points to improvement in FDA’s postmarket drug safety oversight, but the agency expresses concern over continued gaps in particular areas. The GAO recommended that FDA develop a plan and timeline for transferring additional regulatory authorities from the Office of New Drugs to the Office of Surveillance and Epidemiology. FDA comments regarding the report were generally supportive, but the agency is hesitant to commit to any timelines.

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This post was written by Paul Sheives.

The GAO issued a report entitled "Oversight of Clinical Investigators: Action Needed to Improve Timeliness and Enhance Scope of FDA's Debarment and Disqualification Processes for Medical Product Investigators."   Among other things, the report raises concerns about the length of time associated with FDA disqualification proceedings. The GAO also found that FDA rules allow an investigator who is disqualified for conduct related to drugs or biologics to serve as an investigator for medical devices; likewise, an individual disqualified for conduct related to medical devices still may serve as a clinical investigator for drugs and biologics. In the report, the GAO recommends that the FDA Commissioner: pursue extending FDA’s debarment authority; extend disqualification to include drugs, biologics, and medical devices; and ensure the timely completion of debarment and disqualification proceedings.   FDA agreed with GAO’s recommendations.

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The GAO has announced the appointment of 13 members to the Health Information Technology Policy Committee, a new advisory body established by the ARRA. The panel is charged with making recommendations on creating a policy framework for the development and adoption of a nationwide health information technology infrastructure, including standards for the exchange of patient medical information. Note that additional members will be appointed by HHS, Congress, and the President. 

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The Government Accountability Office (GAO) has released a report entitled “Medicare: Improvements Needed to Address Improper Payments in Home Health.” The report examines the growth in Medicare home health spending and utilization linked to upcoding and other fraudulent practices, concentrating on a review of home health agencies (HHAs) in California, Florida, Louisiana, Nevada, Oklahoma, Texas, and Utah. The GAO recommends that CMS: consider verifying the criminal history of key officials named on an HHA enrollment application; provide additional information to physicians who's identification number was used to certify HHA plans of care; direct CMS contractors to conduct postpayment medical reviews on claims submitted by HHAs with high rates of improper billing identified through prepayment review; and issue rules to expand the types of improper billing practices that are grounds for revocation of billing privileges.

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The OIG has issued a report entitled “Comparing Special Needs Plan Beneficiaries to Other Medicare Advantage Prescription Drug Plan Beneficiaries.” The OIG found that Special Needs Plan (SNP) beneficiaries filled an average of 11% more prescriptions than other Medicare Advantage Prescription Drug Plan (MA-PD) beneficiaries, and the average annual prescription cost per SNP beneficiary was 49% higher compared to that of other MA-PD beneficiaries. On the other hand, SNP and other MA-PD beneficiaries were similarly exposed to potentially inappropriate drug pairs that could lead to adverse drug events. The OIG recommends that CMS take steps to help physicians and pharmacists prevent inappropriate drug pairs. Separately, the Government Accountability Office (GAO) has issued a report entitled "Medicare Part D: Opportunities Exist for Improving Information Sent to Enrollees and Scheduling the Annual Election Period" Sponsors, pharmacists, beneficiary advocates, and counselors GAO interviewed expressed concern that CMS’s model Annual Notice of Change (ANOC) for the 2008 annual election period (AEP) did not effectively communicate drug plan changes to enrollees. In addition, although CMS and plan sponsors made improvements to the enrollment process, CMS data showed that about 15% of beneficiaries who chose to switch plans in the 2008 AEP were not fully enrolled in their new plan by January 1. To improve the AEP, the GAO recommends that CMS review alternative formats to communicate plan changes. Additionally, Congress should consider authorizing the HHS Secretary to amend the AEP schedule to include a processing interval between the end of the AEP and the effective date of new coverage. CMS concurred with the GAO recommendations.

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The OIG and the Government Accountability Office (GAO) have issued several reports regarding the Medicare Part D drug program. In a report entitled “Medicare Drug Plan Sponsors' Identification of Potential Fraud and Abuse,” the OIG recommends a number of steps to address fraud and abuse. For instance, the OIG calls on CMS to: review variances in potential fraud and abuse among plans; determine if Part D prescription drug plan (PDP) sponsors investigated and corrected potential abuses; and require PDP sponsors to report on their fraud and abuse programs. In a separate report, “Oversight of Prescription Drug Plan Sponsors' Compliance Plans,” the OIG found that CMS conducted only one focused audit and no routine audits of PDP sponsors’ compliance plans in 2007. Further, CMS did not verify sponsor’s responses to a compliance plan self-assessment. CMS agreed with an OIG recommendation that CMS conduct audits to verify that PDP sponsors' compliance plans meet regulatory and manual requirements. Additionally, an OIG report on "Centers for Medicare & Medicaid Services Audits of Medicare Part D Bids" found that one-quarter of all bid audits completed for plan years 2006 and 2007 identified at least one material finding, but CMS has not adjusted PDP sponsors’ bid amounts based on such findings. The OIG recommends that CMS hold plan sponsors more accountable for material findings identified in bid audits, and conduct the required number of financial audits in a timely manner. Finally, the GAO has reported on "Medicare Part D Prescription Drug Coverage: Federal Oversight of Reported Price Concessions Data." The GAO found that CMS has initiated about half of its planned detailed financial audits to examine Part D price concessions data for 2006, with the rest delayed due to financial constraints. The audits are expected to be completed by October 2009. CMS also pointed to variation in defining and reporting price concessions data, such as differences in how sponsors allocate manufacturer rebates between their Part D plans and other business, as likely creating oversight challenges.

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The GAO has issued a report entitled “Biosafety Laboratories: Perimeter Security Assessment of the Nation's Five BSL-4 Laboratories.”. For this report, the GAO conducted a physical security assessment of the nation’s five biosafety level (BSL) 4 labs, which handle the world’s most dangerous agents and diseases. Based on findings of inconsistent levels of protection against unauthorized intrusions, the GAO recommends that the Director of the Centers for Disease Control and Prevention (CDC) adopt specific perimeter control requirements for all BSL-4 labs. HHS indicated that further study is required prior to additional regulation. 

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On October 27, 2008, the GAO published a notice soliciting nominations for Medicare Payment Advisory Commission (MedPAC) members for appointments effective May 1, 2009. Letters of nomination should be submitted between January 1 and March 31, 2009. 

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On October 22, 2008, the Government Accountability Office (GAO) issued a report entitled "Drug Safety: Better Data Management and More Inspections Are Needed to Strengthen FDA's Foreign Drug Inspection Program." Among other things, the GAO found that: FDA databases contain inaccurate information on foreign establishments subject to inspection; FDA inspects relatively few foreign establishments each year to assess the manufacturing of drugs currently marketed in the United States; and FDA’s identification of serious deficiencies has led foreign establishments to take corrective actions, but inspections to determine continued compliance are not always timely. The GAO recommends that FDA improve the data that it uses to manage its foreign inspection program, conduct more inspections of foreign establishments, and ensure more timely inspection of foreign establishments where FDA has identified serious deficiencies. HHS agreed that FDA should conduct more foreign inspections, and discussed other FDA oversight initiatives, such as database improvements.

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The Government Accountability Office (GAO) has issued a report examining the FDA’s advisory committee processes. Specifically, the GAO examined: (1) how FDA recruited individuals for membership and evaluated candidates for potential conflicts of interest, (2) barriers that were reported to recruiting qualified individuals to serve on committees, and (3) the proportion of standing and temporary members, and the frequency with which members with conflict of interest determinations participated in meetings. 

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The GAO has issued a report entitled “Nonprofit Hospitals: Variation in Standards and Guidance Limits Comparison of How Hospitals Meet Community Benefit Requirements.” The GAO found that Internal Revenue Service (IRS) standards allow nonprofit hospitals broad latitude to determine the activities that constitute community benefit, and state tax-exempt/nonprofit status rules also vary substantially.   While consensus generally exists regarding how charity care, unreimbursed costs of means-tested government health care programs, and certain other activities qualify as community benefit, there is no consensus defining bad debt and unreimbursed Medicare costs as community benefit. This lack of consensus and differences in measuring charity care and unreimbursed government health care program costs lead to substantial differences in the amount of community benefits hospitals report. The GAO recommends that federal and state policymakers and industry groups continue to address the variability in defining and measuring community benefit activities.

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The Government Accountability Office (GAO) has issued a report examining (1) the extent to which certain Medicare Part D drug plan sponsors have implemented programs to control fraud, waste, and abuse, and (2) the extent of CMS’s oversight of Part D plan sponsors’ programs to control fraud, waste, and abuse. The GAO concluded that five of the largest Part D plan sponsors’ had not completely implemented all of CMS’s required compliance plan elements and selected recommended measures for Part D fraud and abuse programs. Moreover, CMS oversight of Part D sponsors’ fraud and abuse programs has been limited. The GAO recommends that CMS conduct timely audits of Part D sponsors’ fraud and abuse programs, and CMS concurred.

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The GAO has released two reports involving prescription drugs. The first report, "Prescription Drugs: FDA's Oversight of the Promotion of Drugs for Off-Label Uses," found a number of shortcomings in the FDA's review process, including FDA's failure to prioritize its reviews in a systematic manner or consistently track the receipt and review of submitted materials. The second report, "Medicare Part D: Complaint Rates Are Declining, but Operational and Oversight Challenges Remain,” includes a number of recommendations to improve oversight of the Medicare Part D grievances process and provide added assurance that beneficiaries’ grievances are being resolved.

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The Government Accountability Office (GAO) has issued a report entitled "Medicare Part B Imaging Services: Rapid Spending Growth and Shift to Physician Offices Indicate Need for CMS to Consider Additional Management Practices." The GAO found that from 2000 through 2006, Medicare spending for imaging services paid for under the physician fee schedule more than doubled, with spending rising particularly fast for advanced imaging services. The GAO recommends that CMS consider adding prior authorization requirements and other payment safeguards for imaging services.

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