This Week: Montana Legislature Reverses Course, Endorses Medicaid Expansion... Final 2016 Medicare Advantage and Part D Rate Announcement and Call Letter... Upcoming: Energy and Commerce Subcommittee Hearing on Post-Acute Bundling

1. Congress

House of Representatives

Senate

2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress

House

Upcoming: House W&M Committee to Hold Hearing on Individual Mandate

On April 14, the House Ways and Means Subcommittee on Health will hold a hearing on the individual and employer mandates and associated penalties in the President’s health care law. The hearing will take place immediately following a brief Subcommittee organizational meeting in Room B-318 of the Rayburn House Office Building, beginning at 10:00 a.m. A witness list was not available at time of print. For more information or to watch the hearing, please visitwaysandmeans.house.gov.

Upcoming: Energy and Commerce Subcommittee Hearing on Post-Acute Bundling

The Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), has scheduled a hearing for Thursday, April 16, 2015, at 10:15 a.m. in Room 2322 of the Rayburn House Office Building. The hearing is entitled “Medicare Post Acute Care Delivery and Options to Improve It.” Subcommittee members will discuss the current state of post-acute care for Medicare beneficiaries and ways to improve it, including H.R. 1458, the Bundling and Coordinating Post-Acute Care (BACPAC) Act, authored by Rep. David McKinley (R-WV), Rep. Jerry McNerney (D-CA) and House Budget Committee Chairman Tom Price (R-GA). The BACPAC Act would reform the delivery of Post-Acute Care Services under the Medicare program by providing for a system of bundled payments that seek to improve both quality in the program and efficiencies in the delivery of services to seniors in need. The subcommittee will review recent improvements made in H.R. 2, the Medicare Access and CHIP Reauthorization Act, and discuss further opportunities to strengthen this important component of the Medicare program. For more information, or to view the hearing, please visit energycommerce.house.gov.

Lawmakers Reintroduce Bill Closing Observation Status Loophole in House and Senate

Rep. Joe Courtney (D-CT) and a bipartisan group of senators, Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL) and Shelley Moore-Capito (R-WV), reintroduced respective bills, H.R. 1571 and S.843, to count all time spent in a hospital toward Medicare’s required three-day nursing home eligibility requirement. “For seniors on Medicare, coverage of rehabilitative care after a stay in the hospital can be a financial lifesaver,” Rep. Courtney said in a press release . The Improving Access to Medicare Coverage Act of 2015 would count all time beneficiaries spend in the hospital toward the three-day inpatient requirement necessary to receive Medicare coverage for post-hospital care. Currently, Medicare pays for post-hospital skilled nursing facility care only when patients are formally classified as inpatients for three days. Medicare will not pay for such care when the increasingly common outpatient “observation status” classification is used, even when a patient remains under observation for three or more days. First introduced in 2010, the Improving Access to Medicare Coverage Act received broad bipartisan support in the 113th Congress.

Senate

Upcoming: Finance Committee Hearing Examines Medicare Claim Appeal System

On April 14, the Senate Finance Committee will hold a hearing entitled “Creating a More Efficient and Level Playing Field: Audit and Appeals Issues in Medicare,” in which members of the Committee will explore issues related to the process by which Medicare providers and beneficiaries contest reimbursement decisions by Medicare contractors. Last year, Chief Administrative Law Judge Nancy Griswold announced that her agency, the Office of Medicare Hearings and Appeals, would be prioritizing beneficiary-generated appeals in an attempt to deal with a large and growing backlog of claims. Providers have criticized Medicare contractors for their aggressive pursuit of improper payments, while Medicare officials have noted that some providers have abused the system by appealing virtually every denied claim.

Witnesses:

The Honorable Nancy Griswold 
Chief Administrative Law Judge, Office of Medicare Hearings and Appeals 
United States Department of Health and Human Services

Ms. Sandy Coston 
CEO and President 
Diversified Service Options, Inc.

Mr. Thomas Naughton 
Senior Vice President 
MAXIMUS Federal Services, Inc.

For more information, or to view the hearing, please visit www.finance.senate.gov.

Bipartisan Letter Seeks HHS Response on Use of Antipsychotic Drugs by Seniors

On April 3, Senators Tom Carper (D-DE), Ranking Member of the Homeland Security and Governmental Affairs Committee, and Susan Collins (R-ME), Chairman of the Special Committee on Aging, sent a letter seeking more information from HHS on its efforts to address the potentially improper prescribing of antipsychotic medications to seniors with dementia, and the cost to taxpayers of paying for these prescriptions through Medicare Part D. The bipartisan letter to Secretary Sylvia Mathews Burwell follows up on a recent Government Accountability Office (GAO) report that found among elderly adults with dementia in 2012, nearly 30 percent living in nursing homes and nearly 14 percent living outside of nursing home care received potentially improper anti-psychotic medications to treat their symptoms. Most of the medications prescribed have specific warnings that they not be given to patients with dementia due to an increased risk of falls or death, and their use in treating symptoms of dementia has not been approved by the Federal Drug Administration (FDA). According to GAO, Medicare Part D spent $363 million on these antipsychotic prescriptions for elderly adults with dementia in 2012. 

2. Administration

Final 2016 Medicare Advantage and Part D Rate Announcement and Call Letter

On April 6, CMS released its final Medicare Advantage (MA) and Part D Prescription Drugprogram changes for 2016 that provide fair and accurate payments to plans, and encourage the delivery of high-quality care for all populations. The Rate Announcement finalizes changes in payments that will affect plans differently depending on the characteristics of those plans. On average, the expected revenue change is 1.25 percent without accounting for the expected growth in coding acuity that has typically added another 2 percent. The final revenue increase is larger than the February advance notice largely because the Medicare actuaries recently updated Medicare per capita spending estimates for 2014 and 2015. Medicare per capita spending in 2014, 2015 and 2016 is still expected to be below historical standards. In the 2016 Call Letter, CMS finalized a number of proposed improvements to the Medicare Advantage and Part D programs. CMS continues to signal an intention to begin working with plans participating in Medicare Advantage to better understand value-based payment models to compensate providers offering services to their enrollees. Based on stakeholder concerns, CMS decided not to finalize the proposed policy and will make no changes to the 2016 Star Ratings for dual-eligible or LIS effects.

Risk Evaluation and Mitigation Strategies: Modifications and Revisions Guidance for Industry

FDA has released guidance on how the agency will define and process submissions from application holders for modifications and revisions to approved risk evaluation and mitigation strategies (REMS). Specifically, this guidance provides information on what types of changes to REMS will be considered modifications of the REMS, as described in Section 505-1(h) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), and what types of changes will be considered revisions of the REMS. There are different procedures for submission of REMS modifications and revisions to the FDA, as well as different time frames for FDA review and action on such changes. This guidance provides information on how REMS modifications and revisions should be submitted to the FDA, and the FDA’s process for reviewing and acting on these submissions. The definitions of REMS modifications and revisions set forth in this guidance apply to all types of REMS. This guidance is issued pursuant to Sections 505 1(h)(2)(A)(ii), (iii) and (iv) of the FD&C Act. This guidance does not address additional procedures that may apply to application holders proposing changes to REMS that are part of a single shared system. The FDA intends to address these procedures in future guidance.

CMS Expands Duration of Navigator Grant Awards to Three Years

On March 30, the Centers for Medicare & Medicaid Services (CMS) posted cooperative agreements for the next round of navigator grants, announcing that the agency will expand the duration of its navigator grant awards into three 12-month budgets, rather than funding grants for only one year at a time. “As the Navigator program enters its third year, the project period under the 2015 funding opportunity will change from 12 months to 36 months, funded in 12-month increments known as budget periods,” CMS writes. The agency expects to award funding to 102 applicants in 2015. The official funding opportunity announcement is expected in late spring or early summer. As it stands, Section 1311(i) of the Affordable Care Act requires the exchanges to establish a navigator grant program under which it awards grants to eligible individuals and entities applying to assist consumers in States with an FFM or State Partnership Marketplace; navigators aid consumers by providing education about and facilitating selection of qualified health plans (QHPs) within the exchange, among other required duties. CMS previously provided $67 million in grants to 105 navigators in FFM and partnership states in 2013, and another $60 million to 92 applicants in 2014.

CMS Call Letter Dictates 2016 Program Changes to Part D and Medicare Advantage

On April 6, the Centers for Medicare & Medicaid Services (CMS) announced final updates to the Medicare Advantage and Part D programs through the 2016 Rate Announcement and Call Letter. The Rate Announcement finalizes changes in provider payments that will affect plans differently, depending on the characteristics of those plans. On average, the expected revenue change is 1.25 percent without accounting for the expected growth in coding acuity that has typically added another 2 percent. Moreover, the final revenue increase is larger than the Feb. 20 advance notice largely because the CMS Office of the Actuary recently updated Medicare per-capita spending estimates for 2014 and 2015 to 1.9 percentage points of additional FFS spending for 2014 and 2015, 0.6 percent for 2016 and 0.1 percent for the assumption that Congress will enact the pending legislation to permanently fix the SGR. The announcement includes important improvements to the star rating system, adds additional accuracy and transparency of provider networks and aims to promote improvements in quality of care for beneficiaries. Updates to the Part D program include requirements that some insurance plans disclose in their marketing materials, including websites, that their networks offer limited access to preferred pharmacies with lower cost sharing.

CMS Announces Modifications to Meaningful Use for 2015 Through 2017

On April 10, 2015, CMS issued a new proposed rule for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs to align Stage 1 and Stage 2 objectives and measures with the long-term proposals for Stage 3, to build progress toward program milestones, to reduce complexity and to simplify providers’ reporting. These modifications would allow providers to focus more closely on the advanced use of certified EHR technology to support health information exchange and quality improvement. The proposed rule would streamline reporting requirements. To accomplish these goals, the NPRM proposes:

  • Reducing the overall number of objectives to focus on advanced use of EHRs;
  • Removing measures that have become redundant, duplicative or have reached wide-spread adoption;
  • Realigning the reporting period beginning in 2015, so hospitals would participate on the calendar year instead of the fiscal year; and
  • Allowing a 90-day reporting period in 2015 to accommodate the implementation of these proposed changes in 2015.

As of March 1, 2015, more than 525,000 providers had registered to participate in the Medicare and Medicaid EHR Incentive Programs. In addition, more than 438,000 eligible professionals, eligible hospitals and CAHs have received an EHR incentive payment. As of the end of 2014, 95 percent of eligible hospitals and CAHs, and more than 62 percent of eligible professionals have successfully demonstrated meaningful use of certified EHR technology.

Griffis Named HHS Assistant Secretary for Public Affairs

On April 7, the White House announced that Kevin Griffis would be named Assistant Secretary for Public Affairs within the Department of Health and Human Services (HHS). Griffis currently serves as a Senior Advisor in the Office of the Assistant Secretary for Public Affairs at HHS, a position he has held since May 2014. Since December 2014, he has also served as the Acting Assistant Secretary for Public Affairs at HHS. Prior to this, Mr. Griffis served as Communications Director for Senator Cory Booker from 2013 to 2014 and as Senior Advisor and Communications Director for Cory Booker’s Senate campaign in 2013.

3. State Activities

Colorado Names New Exchange CEO

In an April 1 press release, the board for Colorado’s state health insurance exchange, the Connect for Health Colorado, named Robert C. Malone, a veteran health care executive, as its final candidate for Chief Executive Officer. Under state law, the board posts the name of the finalist, takes public comment on the selection for 14 days and then seeks approval from the Legislative Health Benefit Exchange Implementation Review Committee before formally offering the job. “This is a great opportunity and challenge,” Mr. Malone said in a statement. “Colorado’s Marketplace has been a leader in the country among state-based exchanges, and it’s at a critical point in its growth. I’d be honored to work with all the stakeholders across the state who are so committed to its success. My job and our mission will be that everyone in Colorado who wants health insurance has it.” Mr. Malone has 30 years of experience in insurance, brokerage, claims and cost-containment industries, and previously served as chief executive of the Assist Group. People who wish to submit comments on Malone’s candidacy can email Connect for Health at:board@connectforhealthco.com.

Coverage for Low-Income Floridians in Limbo over Renewal of LIP Funding; Gov. Rejects Medicaid Expansion

Continuing funding for health care for Florida’s working poor who are underinsured and uninsured is in complicated limbo as negotiations with the Centers for Medicare & Medicaid Services (CMS) over the Low Income Pool (LIP) funding have been delayed. LIP provides supplemental Medicaid dollars to the state, which directs them to fund hospitals, federally qualified health centers, graduate medical education and health maintenance organizations (HMOs). Counties contribute the majority of dollars Florida uses to draw down federal funds, but there also is a bit of state money targeted to LIP. House Speaker Steve Crisafulli (R) said in a statement that the federal government was using LIP funding to “bully” the state into expanding Medicaid to low-income, uninsured residents. Worth noting, the state’s Republican Senate insists that LIP funding must be connected to Medicaid expansion out of fear that CMS will be unwilling to renew any LIP funding if the state doesn’t embrace expansion. To complicate things further, on April 6, GOP Gov. Rick Scott, in a reversal of his opinion two years ago, publicly opposed Medicaid expansion in the state. CMS told Florida last April that it would not extend the Low Income Pool program beyond June 2015; however, Gov. Rick Scott included the $2 billion of LIP funding in his proposed budget for 2015. As for the state Republican-controlled House, its budget proposal includes neither expansion nor funding under the low-income pool; the result is a $5 billion budget gap that legislators must resolve before the state’s legislative session ends May 1. Nearly 800,000 low-income Floridians would be eligible for Medicaid coverage if the state opts for expansion under provisions within the ACA.

Montana Legislature Reverses Course, Endorses Medicaid Expansion

On April 9, the Montana House of Representatives voted 54-46 in favor of a Medicaid expansion plan developed by a Republican senator after the defeat of Democratic Gov. Steve Bullock’s proposal. Under the plan — which still needs to be reconciled with a similar version considered by the state’s Senate before it can be sent to the desk of Democratic Gov. Steve Bullock, after which it must be approved by HHS — would involve Medicaid enrollees’ paying monthly premiums and copays. Many believed the bill was dead after being defeated in committee, but now Montana stands to be the 29th state to enact Medicaid expansion programs, as provided for under the ACA.

4. Regulations Open for Comment

CMS Proposes Mental Health Parity for Medicaid and CHIP in New Rule

The Centers for Medicare & Medicaid Services (CMS) announced April 6 a new proposed rule to align mental health and substance use disorder benefits for low-income Americans with benefits required of private health plans and insurance. Specifically, the proposal applies certain provisions of the Mental Health Parity and Addiction Equity Act of 2008 to Medicaid and the Children’s Health Insurance Program (CHIP) by mandating that mental health and substance use disorder benefits are no more restrictive than medical and surgical services. As it is currently written, the proposed rule ensures that all beneficiaries who receive services through managed care organizations or under alternative benefit plans have access to mental health and substance use disorder benefits regardless of whether services are provided through the managed care organization or another service delivery system, and the full scope of the proposed rule applies to CHIP, regardless of whether care is provided through fee-for-service or managed care. Currently, states have flexibility to provide services through a managed care delivery mechanism using entities other than Medicaid managed care organizations, such as prepaid inpatient health plans or prepaid ambulatory health plans; in the new rule, states will be required to include contract provisions requiring compliance with parity requirements in all applicable contracts for these Medicaid managed care arrangements. The proposed rule was published in the Federal Register on April 10 with comments due to the agency by June 9, 2015.

FDA Assessing the Center of Drug Evaluation and Research’s Safety-Related Regulatory Science Needs and Identifying Priorities

On March 19, the Food and Drug Administration (FDA) announced the availability of a report entitled "Assessing CDER’s Drug Safety-Related Regulatory Science Needs and Identifying Priorities." This report identifies drug safety-related regulatory science needs and priorities related to the mission of FDA’s Center for Drug Evaluation and Research (CDER) that would benefit from external collaborations and resources. FDA hopes to foster collaborations with external partners and stakeholders to help address these needs and priorities. This notice asks stakeholders conducting research related to these needs to describe that research and indicate their interest in collaborating with FDA to address safety-related research priorities. Since publication of the 2011 "Identifying CDER’s Science and Research Needs" report, FDA has been engaged in efforts to further assess and prioritize the needs articulated therein. As part of these efforts, CDER’s Safety Research Interest Group (SRIG), a subcommittee of the Science Prioritization and Review Committee, assessed CDER’s overall drug safety-related regulatory science needs in view of FDA’s ongoing research efforts and highlighted areas that would benefit from additional resources and collaboration. Public comments will be accepted at any time. However, the public is encouraged to submit comments by May 18, 2015, to ensure FDA consideration.

National Coverage Determinations Proposed for Removal

On Aug. 7, 2013, the Centers for Medicare & Medicaid Services (CMS) published a Federal Register notice (78 FR 48164-69), updating the process used for opening, deciding or reconsidering national coverage determinations (NCDs) under the Social Security Act (the Act). The notice replaced the Sept. 26, 2003, Federal Register notice (68 FR 55634) and further outlined an expedited administrative process, using specific criteria, to remove certain NCDs older than 10 years since their most recent review. On March 18, CMS announced its list of NCDs proposed for removal, along with the relevant portion of the Federal Register notice containing the CMS criteria. CMS is soliciting public comment through April 17 on whether any or all of these NCDs should be removed or retained. CMS expects to publish a finalized list by fall 2015. Local Medicare Administrative Contractors (MACs) will be able to determine coverage for items and services that were previously determined by removed NCDs. View the proposed rule:www.cms.gov.

HHS Releases Proposed Rules on EHR Incentive Programs and Health IT Certification Criteria

The U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC)announced March 20 the release of the Stage 3 notice of proposed rulemaking for the Medicare and Medicaid Electronic Health Records (EHRs) Incentive Programs and 2015 Edition Health IT Certification Criteria to improve the way electronic health information is shared and ultimately improve the way care is delivered and experienced. The proposed rules aim to give providers additional flexibility, make the program simpler, drive interoperability among electronic health records and increase the focus on patient outcomes to improve care.

Specifically, the Meaningful Use Stage 3 proposed rule issued by CMS specifies new criteria that eligible professionals, eligible hospitals and critical access hospitals must meet to qualify for Medicaid EHR incentive payments; the rule also proposes criteria that providers must meet to avoid Medicare payment adjustments (Medicaid has no payment adjustments) based on program performance beginning in payment year 2018. Moreover, the 2015 Edition Health IT Certification Criteria proposed rule aligns with the path toward interoperability — the secure, efficient and effective sharing and use of health information — identified in ONC’s draft shared Nationwide Interoperability Roadmap. The proposed rule also builds on past editions of adopted health IT certification criteria, and includes new and updated IT functionality and provisions that support the EHR Incentive Programs’ care improvement, cost reduction and patient safety across the health system.

Under the Health Information Technology for Economic and Clinical Health Act, doctors, health care professionals and hospitals, including critical access hospitals, can qualify for Medicare and Medicaid incentive payments when they adopt and meaningfully use health IT technology certified by ONC. The Stage 3 proposed rule may be viewed here, and the comment period ends on May 29, 2015. The 2015 Edition proposed rule may be viewed here and the comment period ends on May 29, 2015. The Draft 2015 Edition Certification Test Procedures may be viewed atHealthIT.gov, and the comment period ends on June 30, 2015.

Use of an Electronic Informed Consent in Clinical Investigations: Questions and Answers; Draft Guidance for Industry, Clinical Investigators and Institutional Review Boards

The Food and Drug Administration (FDA or the Agency) is announcing the availability of draft guidance for industry, clinical investigators and institutional review boards, entitled “Use of Electronic Informed Consent in Clinical Investigations: Questions and Answers.” The guidance provides recommendations for clinical investigators, sponsors and institutional review boards (IRBs) on the use of electronic media and processes to obtain informed consent for FDA-regulated clinical investigations of medical products, including human drug and biological products, medical devices and combinations thereof. Although public comments will be accepted any time, to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by May 8, 2015.

FDA: Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling

On March 12, FDA announced new actions to enhance the safety of reusable medical devices and address the possible spread of infectious agents between uses. The new recommendations are outlined in a final industry guidance aimed at helping device manufacturers develop safer reusable devices, especially those devices that pose a greater risk of infection. Medical devices intended for repeated use are commonplace in health care settings. They are typically made of durable substances that can withstand reprocessing, a multi-step process designed to remove soil and contaminants by cleaning and to inactivate microorganisms by disinfection or sterilization. While the majority of reusable devices are successfully reprocessed in health care settings, the complex design of some devices makes it harder to remove contaminants. FDA’s guidance document, titled “Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling ,” includes recommendations medical device manufacturers should follow pre-market and post-market for the safe and effective use of reprocessed devices. A device manufacturer’s reprocessing instructions are critical to protect patients against the spread of infections. As part of its regulatory review for reusable medical devices, the FDA reviews the manufacturer’s reprocessing instructions to determine whether they are appropriate and able to be understood and followed by end users. The guidance lists six criteria that should be addressed in the instructions for use with every reusable device to ensure users understand and correctly follow the reprocessing instructions.

Compounding of Human Drug Products Under the Federal Food, Drug, and Cosmetic Act; Establishment of a Public Docket

On March 9, FDA announced it is establishing a public docket to receive information, recommendations and comments on matters related to the Agency’s regulation of compounding of human drug products under sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Section 503A of the FD&C Act describes the conditions that must be satisfied for human drug products compounded by a licensed pharmacist or licensed physician to be exempt from certain sections of the FD&C Act. Previously, the conditions of section 503A of the FD&C Act also included restrictions on the advertising or promotion of the compounding of any particular drug, class of drug or type of drug and the solicitation of prescriptions for compounded drugs. These provisions were challenged in court and held unconstitutional by the U.S. Supreme Court in 2002.

On Nov. 27, 2013, President Obama signed the Drug Quality and Security Act (DQSA), which contains important provisions relating to the oversight of human drug compounding. This new law removes from section 503A of the FD&C Act the provisions that had been held unconstitutional by the U.S. Supreme Court in 2002. By removing these provisions, the new law clarifies that section 503A of the FD&C Act applies nationwide. In addition, the DQSA adds a new section, 503B, to the FD&C Act that creates a new category of “outsourcing facilities.” Outsourcing facilities, as defined in section 503B of the FD&C Act, are facilities that meet certain conditions described in section 503B, including registration with FDA as an outsourcing facility. This docket is intended for general comments related to human drug compounding that are not specific to documents or issues that are the subject of other dockets. Comments may be submitted to this docket at any time.

FDA Solicits Comments on New Methodologies for Generic Drug Clinical Studies

In a notice released March 5 by the Federal Register, the Food and Drug Administration (FDA) is seeking feedback from stakeholders on possible new methodologies for generic drug clinical studies and ways to demonstrate bioequivalence as part of its regulatory science priorities for 2016 under Generic Drug User Fee Amendments (GDUFA). FDA noted it will take feedback from stakeholders into account when creating next year’s regulatory science plan for generic drugs. A public hearing has been scheduled for June 5, where FDA plans to hear from stakeholders on six specific areas including scientific or technical advancements that would help that currently limit generics’ availability, innovative approaches to preapproval development of generic drugs, advancements in scientific approaches to evaluate therapeutic equivalence of generic drugs through later stages of their lifecycle. The agency’s efforts come as House and Senate lawmakers are also looking at ways to revamp clinical trial design, though up to now they haven’t focused on generic drug-specific issues, and identification of high-impact public health issues involving generic drugs, among others. The notice comes as the House of Representatives 21st Century Cures discussion legislative draft also seeks to revamp clinical trials by allowing trial sponsors to propose incorporating adaptive trial designs for alternative statistical methods into proposed clinical trials and streamlining the institutional review board.

FDA Reopens Comment Period for Generic Drug Labeling Rule

In an announcement Feb. 17, the Food and Drug Administration (FDA) revealed that it has formally re-opened the comment period for a controversial generic drug labeling proposed rule and will hold a public meeting next month to address concerns with the rule and possible alternatives. The rule, which FDA proposed in 2013, would allow generic drugmakers to unilaterally update safety information and would require generic drugmakers to modify their labels independently of their brand-name counterparts, something that only brand-name drugmakers can currently do before receiving agency permission. The FDA proposed the rule in response to a 2011 U.S. Supreme Court decision that federal law does not permit generic drugmakers to make such changes independently and, therefore, they should not be held accountable for a failure to warn against a risk. Stakeholders will have until April 27 to comment on the proposed rule; the agency’s public hearing to receive more input from stakeholders will be held on March 27 from 8 a.m. to 5 p.m. at FDA’s White Oak campus.

FDA Releases Five Draft Guidance Documents on Drug Compounding

On Feb. 13, U.S. Food and Drug Administration (FDA) issued five draft guidance documentsrelated to drug compounding and repackaging that will help entities comply with important public health provisions; guidance will be applicable to pharmacies, federal facilities, outsourcing facilities and physicians and comes as an outcrop of the Drug Quality and Security Act (DQSA), enacted by Congress in November 2013, in response to a deadly fungal meningitis outbreak that was linked to contaminated sterile compounded drug products. Specifically, the documents include potential direction on outsourcing facility registration, outsourcing facility adverse event reporting, drug repackaging, mixing, diluting and repackaging biological products, and a draft Memorandum of Understanding (MOU) with the states. The draft guidance documents are available for public comment until May 14, while draft comment for the draft MOU is open until June 13.

FDA Releases Draft to Streamline Experimental Drug Applications

On Feb. 4, the Food and Drug Administration (FDA) released draft guidance, entitled Individual Patient Expanded Access Applications: Form 3926, for a new, shorter application for patient access to experimental drugs. The draft comes in response to concerns that the existing process for “compassionate use” for experimental drug applications was too arduous. In the guidance, FDA says the newly proposed form would take doctors 45 minutes to complete whereas the existing form is estimated to take 100 minutes. Under the old system, FDA required that a “cover sheet” be included with any IND submission, known as Form 1571. However, that form was originally intended to be used by companies involved in drug development, not physicians, who submit the vast majority of expanded access requests. FDA said it was “concerned” that some physicians might not understand how to complete that cover sheet “and associated documents because it is not tailored to requests for individual patient expanded access.” Peter Laurie, FDA’s associate commissioner for public health strategy and analysis, said the changes would greatly simplify the compassionate use process. The old form “called for 26 separate types of information and seven attachments,” he noted. “The new form calls for a small fraction of that. The new draft form, when finalized, will require only eight elements of information and a single attachment.” The changes announced by the agency are expected to affect a significant number of patients each year; in 2014, FDA processed 1,758 single patient investigational new drug applications and emergency investigational new drug applications—97 percent of all expanded access requests. Comments and suggestions for the draft document should be submitted by April 13, 2015.

5. Reports

CMS Office of the Actuary: Estimated Financial Effects of the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2)

On April 9, the CMS Office of the Actuary released a report summarizing its estimates of the short-range and long-range financial effects of H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, which has passed the House and is awaiting consideration in the Senate. From fiscal year 2015 through 2025, the CMS Actuary estimates that H.R. 2 would increase combined Federal spending for Medicare, Medicaid and the health insurance marketplace by $102.8 billion. According to the report, while H.R. 2 avoids the significant short-range physician payment issues resulting from the current SGR system approach, it nevertheless raises important long-range concerns that would almost certainly need to be addressed by future legislation. In particular, additional updates totaling $500 million per year and a 5 percent annual bonus are scheduled to expire in 2025, resulting in a payment reduction for most physicians. In addition, this bill specifies the physician payment update amounts for all years in the future, and these amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases. The report states that, absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2

.OIG: Iowa Did Not Always Make Correct Medicaid Claim Adjustments

According a recent report, OIG reviewed 1,055,484 claim adjustments, totaling $673 million ($418 million Federal share), that were originally paid from October 2009 through September 2013. During this period, the State agency’s FMAP ranged from 72.55 percent to 59.59 percent. The State agency subsequently adjusted these claims from October 2011 through September 2013, resulting in a payment difference. The State agency did not always use the correct FMAPs when processing claim adjustments reported on the CMS-64 report. Of the 1,055,484 claims reviewed, the State agency processed 798,227 claims using the correct FMAPs. However, a portion of the Federal share for the remaining 257,257 claims was paid using the incorrect FMAPs. As a result, the State agency received $713,955 (Federal share) more than it was entitled to. These errors occurred because the State agency did not have adequate internal controls to process claim adjustments in accordance with Federal requirements.