FDA & CMS Extend Medical Device Parallel Review Program

The Food and Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS) have announced that they are making permanent their “Program for Parallel Review of Medical Devices,” which is now operating as a pilot program.  The parallel review initiative allows concurrent FDA and CMS review of a medical device with the goal of reducing the time between FDA marketing approval or granting of a de novo request and Medicare coverage decisions, thereby “facilitating earlier access to innovative medical technologies for Medicare beneficiaries.”  Acceptance of a device into the parallel review program does not modify FDA’s premarket review criteria (thus leaving preemption unaffected) or CMS’s coverage criteria.

In the notice announcing the extension of the parallel review program, the agencies observe that the pilot program benefitted manufacturers by providing feedback to help design pivotal trials that can answer both agencies’ evidentiary questions.  The notice also cites the program’s success in facilitating issuance of a Medicare national coverage determination less than two months after a medical technology (the CologuardTM colorectal cancer screening test) received FDA premarket approval.

The agencies are soliciting nominations from manufacturers of additional innovative medical devices to participate in the parallel review program.  However, due to FDA and CMS resource issues, the permanent program, like the pilot program, will still only accept five candidates per year.   More information is available on the FDA website.

Upcoming FDA Public Meeting on Speech and Medical Products

As a reminder, the Food and Drug Administration (FDA) is holding a two-day public meeting on November 9 and 10, 2016 regarding “Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products.”  The meeting comes at a time where recent litigation has raised hot-button issues regarding the relationship between FDA, off-label use of drugs and medical devices, manufacturer statements about off-label use, and the First Amendment.

According to FDA, the agency is engaged in a comprehensive review of its regulations and policies governing firms’ communications about unapproved uses of approved/cleared medical products, and the input from this meeting will inform FDA’s policy development in this area.

While registration for the meeting is closed at this time, FDA will post a link to the archived webcast here approximately one week after the public meeting.  Regardless of attendance at the public meeting, electronic comments to the public docket may be submitted here by January 9, 2017.

New OIG Studies Reveal Clinical Lab Test Payment Trends and CMS’ Progress in Implementing PAMA

Last week, the OIG released two new studies analyzing what and how Medicare pays for clinical laboratory tests (“lab tests”).

The first study, Medicare Payments for Clinical Diagnostic Laboratory Tests in 2015: Year 2 of Baseline Data, analyzed Medicare Part B claims data for lab tests performed in 2015 and reimbursed under the Clinical Laboratory Fee Schedule.  OIG compared this data with the same claims data for 2014, and found that, among other things:

  • Total Medicare spending for lab tests performed in 2015 was $7 billion, the same amount as in 2014.
  • Total Medicare spending for the top 25 lab tests performed in 2015 was $4.1 billion, slightly less than the $4.2 billion spent in 2014.
  • Payments for drug tests (which test for the presence or level of drugs in a person’s body) – increased significantly from $910 million in 2014 to $1.1 billion in 2015 (a 19 percent increase). Similarly, drug tests comprised a larger share of the top 25 lab tests performed in 2015 (six tests) as compared with 2014 (four tests). OIG believes the increase in payment for and prevalence of drug tests may reflect efforts to monitor the growing prescription drug abuse epidemic. It notes that while the increase in drug testing may be legitimate, it may also signal medically unnecessary drug testing.
  • Payments for molecular pathology tests (which analyze genetic material) – decreased significantly from $466 million in 2014 to $259 million in 2015 (a 44 percent decrease). OIG concludes that this decrease is the result of efforts by CMS, among others, to prevent medically unnecessary testing.
  • Only an estimated 5 percent of labs will be required to report private payor data to CMS. As we have reported previously, that data will be used by CMS to set new payment rates for lab tests, as required by the Protecting Access to Medicare Act of 2014 (PAMA). OIG reports that this group received 69 percent of Medicare payments in 2015.
  • While Medicare payment rates under the new payment system required by PAMA will decrease overall, rates for some tests will increase in certain locations.

The second study, Changing How Medicare Pays for Clinical Diagnostic Laboratory Tests: An Update on CMS’s Progress, assessed CMS’ progress implementing the new payment system required under PAMA.  Through documentation review and interviews with CMS staff and contractors, the OIG identified six key implementation tasks:

  • Issuance of the Final Rule and Related Guidance Documents: OIG found this task “largely completed.” The final rule was issued in June 2016, and guidance from CMS is forthcoming.
  • Establishment and Consultation with the Advisory Panel: OIG found this task to be “completed.” The Advisory Panel was established in 2015, and it continues to meet and provide recommendations to CMS.
  • Collection of Private Payer Data Reported by Applicable Labs: OIG found that CMS has made “significant progress” toward this task, noting that CMS has built the system that labs will use to report data beginning in early 2017.
  • Ensuring the Completeness and Accuracy of Data Reports: OIG found this task to be “in progress,” noting that CMS has developed preliminary plans to conduct checks for data completeness and accuracy. However, OIG emphasizes that while CMS has some safeguards in place to mitigate incomplete or inaccurate reporting, it does not plan to independently verify labs’ data, which may result in inaccurate Medicare payment rates for lab tests.
  • Determining and Publishing New Medicare Payment Rates: OIG found this task to be “in progress,” noting that CMS has begun to plan how it will determine and publish new payment rates once labs start submitting data in early 2017.
  • Identifying Advanced Diagnostic Laboratory Tests (ADLTs): OIG found this task to be “in progress,” noting that while PAMA created this new category of tests, CMS plans to release supplementary guidance in late 2016.OIG will continue to monitor CMS’ implementation of the new payment system required by PAMA, as well as its effects on Medicare payments. 

OIG will continue to monitor CMS’ implementation of the new payment system required by PAMA, as well as its effects on Medicare payments.

October 16 Deadlines Quickly Approaching for the ACA’s Nondiscrimination Requirements: Are You Ready?

By October 16, 2016, all health programs and activities receiving federal financial assistance from the Department of Health and Human Services (HHS), those administered by HHS, and Health Insurance Marketplaces (Covered Entities), must be in compliance with the final pieces of the final rule issued by the Office for Civil Rights (OCR) issued May 18, 2016, implementing section 1557 of the Affordable Care Act.  Although most of the requirements of the final rule went into effect July 18, 2016, OCR extended the deadline for the following:

  • Posting a Notice of Nondiscrimination (1) in conspicuous physical locations where the Covered Entity interacts with the public; (2) on the Covered Entity’s website; and (3) in significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public. OCR has provided a sample Notice of Nondiscrimination on its website.
  • Posting taglines (short statements in non-English languages) on the availability of free language assistance services for patients with limited English proficiency (LEP) in the top 15 languages spoken in the Covered Entity’s state. The taglines must be posted (1) in conspicuous physical locations where the Covered Entity interacts with the public; (2) on the Covered Entity’s website; and (3) in significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public. OCR has provided sample taglines on its website. OCR has also posted a table of the top 15 languages in each state.
  • Posting (1) a Nondiscrimination Statement; and (2) taglines indicating the availability of free language assistance services in the top two languages spoken in the Covered Entity’s state in significant publications and significant communications that are small-sized, such as postcards and tri-fold brochures. OCR has provided a sample Nondiscrimination Statement on its website.

Additional resources on the final rule are available from OCR, including FAQs on section 1557, FAQs on how OCR determined the top 15 languages in each state, and other summary information.

GAO Assesses Availability of Data on Long-Term Care Workforce

In response to concerns about potential future shortages of direct-care workers to provide hands-on long-term services and supports (LTSS), the Government Accountability Office (GAO) has issued a report examining federal and state data available on the paid direct-care workforce (e.g., home health aides, psychiatric aides, nursing assistants, and personal care aides).  While a variety of data exist on workforce population and wages, the GAO identified significant gaps in available information.  In particular, GAO reports that the Health Resources and Services Administration (HRSA), which is responsible for monitoring the supply of and demand for health professionals, has not produced projections of this workforce or developed methods to address data limitations.  Without improvements in HRSA data, including information on independent providers (who are employed directly by the individuals for whom they provide care) and attrition rates, the GAO believes that “the ability of policymakers and other stakeholders to develop appropriate workforce strategies to ensure a sufficient number of qualified direct care workers will continue to be hampered.” 

 The GAO therefore recommends that HRSA (1) take steps to produce projections of direct-care workforce supply and demand, and (2) develop methods to address data limitations.  The Department of Health and Human Services concurred with the GAO recommendations, noting that HRSA is developing demand projections for certain direct-care workforce occupations and will explore development of additional information to provide comprehensive workforce trends.  

OIG Examines Compliance with Hospice Election Statement, Terminal Illness Certification Requirements

A recent OIG report examined whether hospices are meeting all requirements associated with the election statement that Medicare beneficiaries sign when they choose hospice care, and whether physicians are meeting all requirements for certifying Medicare beneficiaries for hospice care.  According to the OIG, more than one third of hospice general inpatient (GIP) stays in 2012 lacked required information or had “other vulnerabilities” (e.g., the patient’s revocation or discharge information was inaccurate or unclear).  Moreover, in 14 percent of GIP stays, the physician not only failed to meet all associated requirements, such as composing a narrative when certifying the patient’s terminal illness, but also “appeared to have limited involvement in determining that the beneficiary was appropriate for hospice care.”

To strengthen safeguards for Medicare beneficiaries, the OIG recommends that CMS:  (1) develop and disseminate model text for hospice election statements; (2) instruct surveyors to strengthen their review of election statements and certifications of terminal illness; (3) educate hospices about these topics; and (4) provide guidance to hospices clarifying the effects of revocation and discharge on the beneficiary.  CMS generally concurred with these recommendations.

GAO Calls on HHS to Strengthen Electronic Health Info Security, Privacy Guidance and Oversight

In light of recent health information data breaches, the Government Accountability Office has issued a report examining whether HHS security and privacy guidance for electronic health records (EHRs) are consistent with federal cybersecurity guidance, and the extent to which HHS oversees compliance with HHS information security and privacy requirements. The GAO identified shortcomings in HHS guidance on the privacy and security of protected health information, such as a failure to address how covered entities should tailor their implementation of key security controls (e.g., penetration testing and developing risk responses) identified by the National Institute of Standards and Technology (NIST) to their specific needs. The GAO also found that the HHS Office of Civil Rights (OCR) did not always follow up with an entity under its jurisdiction with which OCR had entered into a settlement agreement to ensure that corrective actions were implemented, nor has it established benchmarks to assess the effectiveness of its audit program.

GAO made several recommendations to strengthen controls in this area, including: updating security guidance for covered entities and business associates to address  controls described in the NIST Cybersecurity Framework; updating technical assistance for covered entities and business associates; revising enforcement protocols to include following up on the implementation of corrective actions; establishing performance measures for the OCR audit program; and implementing procedures to share results of investigations and audits between OCR and CMS to help ensure that covered entities and business associates are in compliance with health security standards.  HHS generally concurred with these recommendations.

CMS Issues Preliminary 2017 Medicare Clinical Lab Payment Determinations, Final 2016 Gap Fill Amounts

CMS has released the preliminary 2017 Medicare clinical laboratory fee schedule (CLFS) payment determinations for new and reconsidered test codes, including determinations regarding whether CMS will use crosswalking or gapfilling to establish payment rates for specific tests.  CMS will accept public comments on these preliminary determinations through October 2016.  Also, CMS has released the 2016 CLFS Gapfill Final Determinations; reconsideration requests will be accepted until October 31, 2016.

CMS Corrects FY 2017 Medicare IPPS/LTCH Final Rule

CMS has corrected a series of technical and typographical errors in its final rule updating the Medicare acute hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) payments and policies for fiscal year (FY) 2017. Among other things, CMS is making changes to the budget neutrality factors, uncompensated care payments, outlier adjustment factors, standardized amounts, capital federal rate, new technology add-on payment thresholds, and various MS-DRG assignments.  The changes are effective October 1, 2016.

PTAC Announces Timeline for Submission of Physician-Focused Alternative Payment Model Proposals

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to provide recommendations on arrangements that meet the criteria for a physician-focused payment model (PFPM) under the reformed system for updating the Medicare physician fee schedule. The PTAC has announced that it will begin accepting letters of intent (LOI) for the submission of PFPM proposals starting on October 1, 2016, and full proposals will be accepted beginning December 1, 2016 (after the final MACRA payment reform rule is published).  Additional details are available here.

Public Health Bills Advance

On September 30, 2016, President Obama signed into law S 1878, the Advancing Hope Act, which modifies the FDA’s priority review voucher program for rare pediatric diseases and extends the program through December 31, 2016. In addition, the House has approved a number of health policy bills, including the following:

  • HR 954, the “CO-OP Consumer Protection Act of 2016,” which would provide an exemption from the requirement to maintain minimum essential coverage if an individual’s Consumer Operated and Oriented Plan (CO-OP) coverage is terminated. The bill was approved on a 258 to 165 vote. The Obama Administration opposes this bill and has announced that the President would veto it if it reaches his desk.
  • HR 3537, the Synthetic Drug Control Act, which would add synthetic drug compounds to Schedule I of the Controlled Substances Act (CSA). The vote was 258 to 101.
  • HR 1877, Mental Health First Aid Act, which would require the Substance Abuse and Mental Health Services Administration to award grants to support mental health awareness training programs (approved by voice vote).

Any bills that are not approved by both chambers of Congress during the lame duck session need to start the legislative process over next year.

SAMHSA Final Rule on Medication Assisted Treatment for Opioid Use Disorders Reporting Requirements

On September 27, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA) published a final rule establishing annual reporting requirements for certain practitioners who prescribe buprenorphine-based medication-assisted treatment for opioid disorders under the Controlled Substances Act. As previously reported, SAMHSA published a rule on July 8, 2016 that expanded from 100 to 275 the number of patients that qualified practitioners may treat with buprenorphine. The September 27 rule requires practitioners approved to treat additional patients to submit annually to SAMHSA information about their practice, such as caseload and diversion control plan information, for purposes of monitoring regulatory compliance with the July 8 rule. The rule is effective on October 27, 2016.

NIH Finalizes New Drug and Device Clinical Trial Reporting Requirements

The National Institutes of Health (NIH) has finalized the requirements for submitting clinical trial information for applicable clinical trials of drug products (including biological products) and device products on ClinicalTrials.gov. The rule is intended to clarify as well as establish additional procedures and requirements for submitting: (i) registration, (ii) summary results, and (iii) adverse event information for such applicable clinical trials.

According to NIH, the expanded registry and results data bank will “help patients find trials for which they might be eligible, enhance the design of clinical trials and prevent duplication of unsuccessful or unsafe trials, improve the evidence base that informs clinical care, increase the efficiency of drug and device development processes, improve clinical research practice, and build public trust in clinical research.”  Among other things, the final rule: Continue Reading

CMS Call: How to Report Across 2016 Medicare Quality Programs (November 1)

CMS is hosting a call on November 1, 2016 to discuss how physicians and other providers can report quality measures during 2016 to maximize participation in Medicare quality programs, including the Physician Quality Reporting System (PQRS), Medicare Electronic Health Record (EHR) Incentive Program, Value-Based Payment Modifier (Value Modifier), and the Medicare Shared Savings Program.

With Short-Term Government Funding Bill in Place, Congress Adjourns until after Elections

On September 29, 2016, President Obama signed into law HR 5325, which averts a government shutdown by continuing funding for the federal government through December 9, 2016.  The legislation also includes $1.1 billion in supplemental funding to combat the Zika virus (including vaccine and diagnostic test development, public health, and other functions), along with $37 million to help address the opioid epidemic. 

With the short-term funding in place, Congress has adjourned until a lame duck session scheduled to begin on November 14, 2016.  In addition to addressing fiscal year 2017 spending, Congressional leaders have expressed their intention to finish work on biomedical innovation (CURES Act) and mental health system reform legislation, among other legislative business.

CMS Finalizes Major Changes to Medicare/Medicaid Requirements for Long-Term Care Facilities

On September 28, 2016, the Centers for Medicare & Medicaid Services (CMS) released a highly-anticipated final rule to strengthen requirements that long-term care (LTC) facilities must meet to participate in the Medicare and Medicaid programs.  The sweeping rule – more than 700 pages – is intended to improve the safety, quality, and effectiveness of care delivered to facility residents.  According to CMS, the final rule reflects nearly 10,000 public comments on the July 16, 2015 proposed rule.  CMS adopted numerous changes from the proposed rule, including various revisions to staffing and training requirements, care planning rules, infection prevention, and control program provisions. Continue Reading

CMS Call on New Medicare/Medicaid Emergency Preparedness Requirements (Oct. 5)

On October 5, 2016, CMS is hosting a call to discuss its September 16, 2016 final rule establishing emergency preparedness requirements for Medicare- and Medicaid-participating providers and suppliers to ensure that they can meet the needs of patients and residents during natural and man-made emergency situations. The call will discuss provisions of the final rule, the enforcement process, and available technical assistance. The call is intended for the 17 provider and supplier types impacted by the rule: hospitals; critical access hospitals; long-term care facilities; psychiatric residential treatment facilities; intermediate care facilities for individuals with intellectual disabilities; religious nonmedical health care institutions; transplant centers; hospices; ambulatory surgical centers; Program for the All-inclusive Care for the Elderly (PACE) organizations; home health agencies; comprehensive outpatient rehabilitation facilities; community mental health centers; organ procurement organizations; clinics, rehabilitation, and therapy providers; rural health clinics/federally qualified health clinics; and end-stage renal disease providers.

House of Representatives Approves Bill to Delay LTCH 25% Rule Implementation, Make Other LTCH Reforms, and Tighten Medicare Enrollment Moratorium Authority

On September 21, 2016, the House Ways and Means Committee approved H.R. 5713, the “Sustaining Healthcare Integrity and Fair Treatment Act of 2016” or “SHIFT Act.”  The primary focus of the SHIFT Act is to provide an additional delay in full implementation of the “25 Percent Rule” for long-term acute care hospitals (LTCHs).  The legislation also would tighten CMS’s authority to impose Medicare enrollment moratoria to prevent providers and suppliers from evading the moratoria by locating outside of moratoria areas.  Continue Reading

OIG Report Highlights MFCU Achievements

The OIG has released its Medicaid Fraud Control Units Fiscal Year 2015 Annual Report, which compiles data on investigations and prosecutions by the 50 MFCUs. According to the OIG, MFCUs attained 1,553 convictions in FY 2015, the highest in the last five years. Almost one-third of these convictions involved personal care services attendants, and 71% represented fraud cases. There were also 731 civil settlements and judgments in FY 2015, including 279 involving pharmaceutical manufacturers (typically related to the marketing of drugs) and 54 involving pharmacies. MFCUs were responsible for a total of $744 million in criminal and civil recoveries in FY 2015, down significantly from the $1.5 billion to $2.6 billion range over the previous four years. The OIG attributes this decrease to “a national trend of declining civil health care fraud complaint settlements, especially those involving large pharmaceutical companies.” Combined federal and state expenditures for MFCUs totaled approximately $251 million in FY 2015, $188 million of which represented federal funds.

House Approves Medicare ESRD Coverage, Rural Hospital Supervision Bills

On September 21, 2016, the House of Representatives approved HR 5659, the Expanding Seniors Receiving Dialysis Choice Act of 2016, which would allow Medicare beneficiaries with end stage renal disease (ESRD) to enroll in Medicare Advantage plans beginning in 2020. The House also approved HR 5613, to prevent CMS from enforcing a Medicare requirement for direct physician supervision of certain outpatient therapeutic services furnished in critical access hospitals and small rural hospitals through 2016. The bills have not yet been considered by the Senate.