This Week: Congress tries to put together a tax extender package, which may provide an opportunity for some Affordable Care Act changes... HHS releases final rule on bundled payment for Joint Replacement Comprehensive Care Program and releases proposed rule for benefits and marketplace standards.... Congress and the Administration continue focus on drug pricing.

1. Congress

House

Rep. Cummings Writes Letter to Valeant Pharmaceuticals Regarding Drug Pricing

House Oversight Committee ranking member Elijah Cummings (D-MD) wrote a letter to Valeant Pharmaceuticals requesting interviews with employees regarding Valeant’s relationship with Philidor Rx Services – a specialty pharmacy. Valeant allegedly used this pharmacy “to mask its price increases and circumvent the traditional insurance reimbursement process.” Valeant bought an option to purchase Philidor for $100 million last year, but recently announced that it ended its relationship with the pharmacy – apparently due to recent press reports that Valeant employees were telling the pharmacy to alter prescriptions for generic drugs to more expensive Valeant alternatives.

Bipartisan Letter Asks Appropriations Committee for Increased NIH Funding

A bipartisan group of over 100 House Representatives led by Rep. Suzan DelBene (D-WA) wrote a letter to House Appropriations Committee leaders asking them to provide $32 billion to the National Institutes of Health (NIH) in any new funding legislation. This request is almost $2 billion more than 2015 levels. The letter stressed that increased funding is essential for increasing the speed with which new cures, treatments and vaccines are developed.

House Energy and Commerce Committee Reports Health-Related Bills Out of Committee

On Nov. 18, the House Energy and Commerce Committee reported two bills concerning Medicaid. Both bills passed by a voice vote and with bipartisan support.

H.R. 3716, the Ensuring Terminated Providers are Removed from Medicaid and CHIP Act, would increase the oversight of and state reporting requirements for termination of Medicaid providers. The bill is intended to ensure that if a provider is terminated from one state’s Medicaid program, that the provider is terminated from all other states as well. The US Health and Human Services (HHS) Office of Inspector General (OIG) had identified the lack of information about provider terminations as a problem.

H.R. 3821, the Medicaid Directory of Caregivers Act, would require the publication of a provider director in states that provide medical assistance through a fee-for-service basis or a primary care case management system.

Other bills considered and reported out of the committee on Nov. 18 included:

• HR 2017, the Common Sense Nutrition Disclosure Act of 2015, which would amend disclosure requirements for restaurants and retail food establishments.
• H.R. 3014, The Medical Controlled Substances Transportation Act. This legislation amends the Controlled Substances Act to allow a physician to transport controlled substances to another practice setting or disaster area if the physician is registered to dispense or conduct research with controlled substances.

Senate

Senator Hatch Tells CMS His Concerns About New RAC Limitations

On Nov. 12, Senate Finance Committee Chairman Orrin Hatch (R-UT) wrote a letter to the Centers for Medicare and Medicaid Services (CMS) expressing concern about its new rule that would limit the power of the Recovery Audit Contractors (RACs) to monitor Medicare claims. The 0.5 limit on record requests is significantly lower than in the past and curbs the ability of the RACs to operate as Congress intended them to, Hatch said. He is especially concerned about the increased rates of fraud in the program, and is asking for a review of the new changes to the RAC program as well as CMS’s target for how much money it should recover in the future.

Bipartisan, Bicameral Letter Asks to Meet with POTUS Regarding Cadillac Tax

A bipartisan, bicameral group of lawmakers – Sens. Dean Heller (R-NV), Sherrod Brown (D-OH), Martin Heinrich (D-NM) and Reps. Joe Courtney (D-CT) and Frank Guinta (R-NH) – sent a letter to President Obama requesting a meeting to discuss their plan to repeal the Cadillac tax, a tax on insurers that has not yet gone into effect. These lawmakers have all sponsored legislation to repeal the tax.

Senator Wyden Asks HHS to Implement “1332 Waivers”

The ranking Democrat of the Senate Finance Committee, Senator Ron Wyden (D-OR), wrote to US Secretary of Health and Human Services Sylvia Burwell to stress his interest in the department’s implementing the Affordable Care Act’s (ACA) State Innovation Waivers, also known as a 1332 waiver. The lack of regulations concerns ACA supporters because the lack of guidance could be a backdoor method to undermine the ACA should a Republican win the presidency in 2016. The program, which is to start in 2017, permits states to opt out of major ACA provisions with some safeguards. The waivers are not designed to change Medicaid or the Children’s Health Insurance Program, but would work with those programs.

As the author of the provision, Wyden stressed the need to allow pioneering states to be able to decide how to tailor health coverage to their residents, and the waiver should be viewed as a tool to assist states. In his letter, Wyden asks four questions, including what precautions the department envisions putting in place to ensure consumers are protected in states that want to use a waiver.

2. Administration

FDA Recalls Custom Ultrasonics’ Automated Endoscope Reprocessors (AERs)

On Nov. 13, the US Food and Drug Administration (FDA) ordered Custom Ultrasonics to recall all of its scope cleaning devices, otherwise known as automated endoscope reprocessors (AERs). FDA indicated that the identified violations resulted in some deadly infections that might have been prevented if the company had complied with a 2012 recall. AERs have been used at health care facilities to reprocess scopes linked to the spread of antibiotic-resistant infections. The agency cited continual violations of federal law and a consent decree entered into with the company in 2007. The safety communication issued by FDA recommends that health care facilities using these AERs transition away from their use.

To read FDA’s safety communication, click here.

FDA Approves Narcan Nasal Spray for Opioid Overdoses

On Nov. 18, the US Food and Drug Administration (FDA) approved the naloxone nasal spray Narcan, a lifesaving medication that can stop or reverse the effects of an opioid overdose. The medication was previously approved only in injectable forms; the nasal spray should be an easy-to-use solution for nonmedical professionals in an emergency. The spray also eliminates the risk of a contaminated needle stick. The National Institute on Drug Abuse conducted clinical trials on the spray in a public-private partnership with FDA. Narcan will be distributed by Adapt Pharma, Inc.

FDA, CMS Appear in Energy and Commerce Hearings on Lab-Developed Tests (LDTs)

On Nov. 17, FDA’s device center chief, Jeffrey Shuren, told the House Energy and Commerce Committee that FDA guidance on lab-developed tests (LDTs) will likely come by early next year. At the hearing, Republican members of the committee expressed concern about potential agency overreach in the sector. Some members questioned whether LDTs posed enough concern to require more regulation. In response to these concerns, Shuren pointed to a report issued by FDA on Nov. 16 that showed 20 case studies of faulty LDTs that posed a risk to patients.

In a hearing on Nov. 18, deputy administrator Patrick Conway at the Centers for Medicare and Medicaid Services (CMS) told the House Energy and Commerce Committee that the agency doesn’t have the skill to conduct premarket reviews of LDTs and that FDA is better suited to do so. These remarks, combined with comments from FDA, make it more difficult for stakeholders that are attempting to limit FDA oversight and have CMS take it over. Conway stressed that CMS is more focused on postmarket review. Also, Jeff Shuren warned that a combined FDA-CMS oversight structure would cause gaps, duplication and lead to higher costs.

Food and Drug Administration (FDA) Holds More Device User Fee Discussions

On Nov. 18, a closed-door meeting was held to jump-start preliminary discussions on reauthorization of the user fee agreement set to expire in 2017. It is expected that negotiations will focus on US Food and Drug Administration (FDA) processes, including ways to improve consistency in the premarket review phase and create a more streamlined approach for those types of reviews that take the longest. FDA is pushing for additional funding for postmarket review and updates to the Device Center’s IT system. So far FDA has held two other meetings with the medical device industry concerning reauthorization of the Medical Device User Fee amendments.

CMS Announces Delayed Start Date for Bundled Payment Program

On Nov. 16, the Centers for Medicare and Medicaid Services (CMS) announced it will delay the start of the Comprehensive Care for Joint Replacement (CJF) model – a mandatory program to bundle Medicare payments for hip and knee surgeries – until April 1. Hospital groups, insurers and beneficiary groups asked for the delay, which CMS published in a final rule that is over 1,000 pages. The program was originally scheduled to begin Jan. 1. The final rule decreased the number of regions that will participate in the model from the proposed 75 to 67 geographic areas (with 800 hospitals total). CMS also is allowing a more gradual transition to downside risk and a lower stop-loss limit to give hospitals more time to gain experience under the model, as well as putting limits on how much hospitals can gain from the program.

CMS Changing Duals’ Risk Adjustment for 2016, Proposes Changes for 2017

In a Nov. 12 memo, the Centers for Medicare and Medicaid Services (CMS) recently informed plans participating in the duals demo under a capitated alignment model that “for CY 2016, payments to MMPs (Medicare-Medicaid Plans) will continue to be based on the same CMS-HCC risk adjustment model as used in Medicare Advantage. However, Medicare A/B payment rates will be adjusted to better align with FFS costs for full benefit dual eligible beneficiaries.”

On Oct. 28, CMS asked for feedback on a new risk adjustment model in the works for 2017 – the agency said this model would improve on accounting for the cost of different types of beneficiaries. CMS said the current risk adjustment model it uses to adjust capitated payment rates paid plans too much for partial-benefit duals and not enough for full-benefit duals.

CMS is accepting comments on its revised risk adjustment model through Nov. 25.

Insurer Rebates Will Total $470 Million

Approximately 5.5 million individuals will receive refunds totaling $470 million because insurers failed to spend enough of their premiums payments on medical costs in 2014, the Obama administration announced Nov. 19.

Under the Affordable Care Act (ACA), insurers in the individual and small group markets are required to spend at least 80 percent of premiums on medical claims. In the large group market that threshold is 85 percent. When insurers fail to meet the medical loss ratio requirement, they need to refund the funds or reduce future premiums. Since the ACA has been implemented, the number of insurers required to refund payments has decreased. Last year, fewer than 15 percent of individuals were in plans that failed to hit the 80 percent threshold.

Providers Outline Desired Principles for MACRA

In a letter led by the American Medical Association (AMA) to the Centers for Medicare and Medicaid Services (CMS), providers outlined principles they want the agency to follow as it implements the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The providers told CMS to get rid of restraints on physicians attempting to provide care under alternative payment models (APMs) and to make sure that providers are able to choose from a range of APMs. They also asked that quality-reporting requirements be streamlined and that administrative burdens be reduced on a broader level.

Goodrich Becomes Director of CMS’s CCSQ

Kate Goodrich, the head of the Centers for Medicare and Medicaid Services’ (CMS) quality measurement and value-based incentives group, has been promoted to director of the Center for Clinical Standards and Quality (CCSQ). CCSQ handles quality, clinical, certification and medical science issues for CMS.

Public Health Groups Ask Obama Administration to Publish Dietary Guidelines

Public health groups are asking the Obama administration to publish new dietary recommendations before the passage of new spending legislation that could possibly get rid of advice opposed by the food industry. The American Heart Association in particular has asked the administration to require the US Department of Agriculture and the US Department of Health and Human Services (HHS) to release updated Dietary Guidelines before Dec. 11, which is when Congress will need to pass the new spending legislation.

These groups want to avoid riders in appropriation bills that would limit dietary guidelines. The recommendations are under attack by the meat industry in particular because a 15-person advisory panel recently recommended that consumers scale back the amount of red and processed meats they eat. Opposing lawmakers put a rider into an agriculture appropriations bill that would remove a great deal of nutrition science from consideration.

Fifty public health, medical and nutrition groups are preparing their own letter to lawmakers asking them to get rid of the rider.

Justice Department Announces Charges Against Dietary Supplement Makers

The Department of Justice (DoJ) is filing criminal charges against USPlabs LLC as part of a sweep against dietary supplement makers. On Nov. 17, DoJ announced the indictment of USPlabs and four of its corporate officers for selling products including Jack3d and OxyElite Pro. Principal Deputy Assistant Attorney General Benjamin Mizer said many of the allegations against the company come from its claims that it used natural plant extracts in products – called Jack3d and OxyElite Pro – when in fact it was using synthetic chemicals manufactured in China, including those that are toxic to the liver. Some people experienced jaundice from taking these products, several of whom need transplants to survive.

ONDCP Publishes Updated Drug Control Strategy

On Nov. 17, the White House Office of National Drug Control Policy (ONDCP) released the 2015 National Drug Control Strategy , and is asking Congress to give Medicare the authority to restrict at-risk patients to one primary care doctor and pharmacy to prescribe their medications. Medicare has what is called an Opioid Overutilizer program, which permits Part D plans to reach out to doctors if they think a patient is at risk of getting drugs from too many providers. However, Part D currently can’t restrict patients to one provider or pharmacy – Congress needs to give that authority.

Enrollment 2016 Snapshot: Second Week of Enrollment and Over 1 Million Have Enrolled

In the second week of Obamacare’s open enrollment, 534,777 people signed up for health care plans through Healthcare.gov. Of those, 187,172 people selected plans for the first time in the marketplace, and another 347,605 existing customers selected 2016 plans through re-enrollment. This increases the number of 2016 signups to over 1 million thus far, according to the US Department of Health and Human Services (HHS). HHS predicts that this open enrollment season will create an increase of 1 million people, putting the total number of people insured through the health exchanges to 10 million by the end of 2016.

Model Law on Network Adequacy Expected to be Approved

On Nov. 19, the National Association of Insurance Commissioners opened its national meeting to discuss approval of the model state law on network adequacy, among other things. Most parties involved are happy with the end product of the proposal. Consumer advocates didn’t manage to get quantitative measures put in for assessing the adequacy of provider networks, and the American Medical Association (AMA) failed to eliminate language that curbs surprise medical bills. However, the model law is expected to sail through a vote on Sunday (Nov. 22).

The National PACE Association Asks CMS to Update Regulations

The National PACE Association wrote a letter asking the US Department of Health and Human Services (HHS) to provide a regulatory update to the PACE program – a program that provides preventive, primary, acute and long-term care services to Medicare and Medicaid populations. The letter indicates that the regulations haven’t been updated in nine years, even though in 2012 HHS signaled that something was in the works. Advocates argue that Medicaid Managed Long-Term Services and Supports (LTSS) programs and Medicare Advantage programs have fewer regulatory burdens, which diminishes PACE’s competitiveness. In the letter, advocates say that the Centers for Medicare and Medicaid Services (CMS) has left outdated regulations in place that are limiting PACE’s ability to grow and that they need to be updated.

Medicaid Best-Price Policy Makes Outcomes-Based Contracts Difficult

According to Medicaid Health Plans of America President and CEO Jeff Myers, Medicaid’s best-price policy makes it difficult for health plans and drug manufacturers to use outcomes-based contracts. In an effort to give state Medicaid agencies access to the lowest prices in the market, the Centers for Medicare and Medicaid Services (CMS) asked hepatitis C drug manufacturers about the challenges they face when offering value-based arrangements to state Medicaid agencies.

The letters ask the hepatitis C drug manufacturers a series of questions, including the following: What challenges they face in offering discounted price arrangements to Medicaid beneficiaries, what arrangements they offer commercial or government-sponsored health insurance plans, and if these arrangements are offered to state Medicaid programs. CMS also asked how the arrangements are structured, what challenges drug manufacturers face when offering the programs to states, any ideas manufacturers have to help states in the affordability of new drugs, and the monetary value of the arrangements to Medicaid.

AHA Lobbying for Exemption of Off-Campus Outpatient Facilities from Budget Cuts

On Nov. 16, the American Hospital Association (AHA) asked its members to lobby Congress to exempt outpatient facilities under development from the Medicare pay cuts in the budget deal passed last month. Hospitals oppose the measure in the budget deal, but primary physicians and independent cancer centers support it. AHA is lobbying for a policy that exempts all off-campus outpatient facilities under development – including physician practices and ambulatory surgical centers that hospitals are currently buying – from any pay cuts. AHA created a proposal that defines the projects that would be exempt from cuts and is asking legislators to include it as an amendment to any upcoming legislation.

3. State Activities

Alabama: Governor Bentley Moves Toward Expansion

Alabama Gov. Robert Bentley’s task force recently approved a recommendation for the state to expand health insurance to uninsured residents. The recommendation doesn’t actually tell the state to expand Medicaid under the Affordable Care Act (ACA). However, it details some similar benefits that the expansion would provide.

4. Regulations Open for Comment

Centers for Medicare and Medicaid Services (CMS) Issues Proposed Rule to Begin Data Collection for New Fee Schedule for Medicare Clinical Diagnostic Laboratory Tests

CMS released a proposed rule Sept. 25 that initiates the agency’s next step in implementing the Protecting Access to Medicare Act of 2014 (PAMA), a bill that requires clinical laboratories to report on private insurance payment amounts and volumes for lab tests. Under the proposed rule, certain laboratories would be required to report private payor rate and volume data if they receive at least $50,000 in Medicare revenues from laboratory services and more than 50 percent of their Medicare revenues from laboratory and physician services. Laboratories would collect private payor data from July 1, 2015, through Dec. 31, 2015, and report it to CMS by March 31, 2016. CMS will post the new Medicare rates by Nov. 1, 2016; these rates will be effective on Jan. 1, 2017. Tests that meet the criteria for being considered new advanced diagnostic laboratory tests (ADLTs) will be paid at actual list charge for a minimum of three quarters. ADLTs are tests offered under Medicare Part B and are furnished by only one laboratory and that either include a unique algorithm and are at a minimum an analysis of RNA or DNA, or are cleared or approved by the U.S. Food and Drug Administration (FDA). Under PAMA, the Medicare payment amount for any test cannot be reduced by more than 10 percent compared to the prior year’s amount during the first three years of implementation (2017-2019) and cannot be reduced by more than 15 percent in the following three years (2020-2022).

Medicare’s current fee schedule for lab tests was first adopted in 1984 and has remained relatively unchanged except to establish payments for new tests or implement across-the-board statutory payment updates. Medicare pays approximately $8 billion a year for clinical diagnostic laboratory tests. The new system will be updated every three years for clinical diagnostic laboratory tests (CDLTs) and every year for ADLTs to reflect market rates paid by private payors. One hot-button issue in the proposed rule is the definition of “applicable laboratory.” PAMA defined an applicable laboratory as one that receives a majority of its Medicare revenues under the MCLFS or the Medicare Physician Fee Schedule (MPFS). In a fact sheet summarizing the proposed rule, CMS said it does not expect any hospital laboratory to meet the definition of “applicable laboratory” and that more than 50 percent of independent laboratories and more than 90 percent of physician offices would likely be excluded based on the $50,000 threshold. The proposed rule was published in the Federal Register on Oct. 2. CMS will solicit comments until Nov. 24, 2015.

Department of Health and Human Services (HHS) Proposes Updates to “the Common Rule”

HHS and 15 other agencies released a notice of proposed rulemaking Sept. 2 for the Common Rule, the existing regulatory framework to transparency and oversight for scientific research involving human subjects. The proposed changes are to address the substantial changes that have occurred within scientific research. Current regulations have been in place since 1991 and are followed by 18 federal agencies. Proposed updates to the rule include:

• Strengthened informed consent provisions
• Requirements for administrative or IRB review that would align better with the risks of the proposed research
• New data security and information protection standards
• Requirements for written consent for use of an individual’s biological samples, for example, blood or urine, for research with the option to consent to their future use for unspecified studies
• Requirement, in most cases, to use a single institutional review board for multisite research studies
• Application of rule to clinical trials, regardless of funding source, if they are conducted in a U.S. institution that receives funding from a Common Rule agency for research involving human participants.

In July 2011, HHS issued an Advance Notice of Proposed Rulemaking to seek the public’s input on updating the Common Rule. The proposed rule issued reflects input and requests comments for HHS to consider as it drafts the final rule. HHS will take public comment on the proposed rule until Dec. 7.

For a press release detailing changes to the rule visit hhs.gov.

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA’s decision can be found in the agency’s press release.

CMS Releases Proposed Rule on Basic Health Program; Federal Funding Methodology for Program Years 2017 and 2018

On Oct. 22, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule related to federal funding methodology for the Basic Health Plan. The document provides the methodology and data sources necessary to determine federal payment amounts made in program years 2017 and 2018 to states that elect to establish a Basic Health Program under the Affordable Care Act to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Marketplaces. The Affordable Care Act provides states with an option to establish a Basic Health Program (BHP). Federal funding will be available for BHP based on the amount of PTC and cost-sharing reductions that BHP enrollees would have received had they been enrolled in qualified health plans (QHPs) through Marketplaces. These funds are paid to the states through trust funds dedicated to BHP, and the states then administer the payments to standard health plans within BHP. The proposed rule is open for comment. Comments must be received by 5 p.m. on Nov. 23, 2015.

CMS Releases a Request for Comment (RFC) on Proposed Medicaid Services “Received Through” Indian Health Service/Tribal Facility

On Oct. 27, the Centers for Medicare and Medicaid Services (CMS) released a Request for Comment (RFC) on a proposed change being considered regarding the circumstances in which 100 percent federal funding would be available for services given to Medicaid-eligible American Indian and Alaska Native (AI/AN) individuals through facilities of the Indian Health Service (IHS) or Tribes. This policy change would apply to all states and is intended to improve access to care for AI/AN Medicaid beneficiaries. The RFC describes the policy options under consideration and asks for feedback from states, Tribes, and various stakeholders. The comment period will be open until Nov. 17, 2015.

Additional information on Indian Health and Medicaid can be found here.

CMS Releases Proposed Rule with New Discharge Planning Requirements

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would require all hospitals develop a written discharge plan for all inpatient and many outpatients in an attempt to reduce readmissions. The proposed rule, “Medicare and Medicaid Programs; Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies,” would require hospitals to develop a discharge plan based on the needs of each applicable patient within 24 hours of admission. The plan would include a medication reconciliation process. Hospitals would be required to establish a process for patients who are transferred to a different facility or who went home.

CMS noted that the requirements could help reduce readmissions by a third. Until now, hospitals have had the ability to decide which patients need a written discharge plan, and have increasingly used the plans to reduce readmission and avoid the Affordable Care Act’s (ACA) financial penalties. Comments will be accepted until no later than 5 p.m. on Jan. 4, 2016.

A press release can be found here.

CMS Issues Final Rule to Ensure Medicaid Services for Beneficiaries and Issues Request for Information on the Rule

On Oct. 29, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that ensures Medicaid beneficiaries have sufficient access to covered Medicaid services. CMS said that the rule, entitled “Methods for Assuring Access to Covered Medicaid Services,” will allow states and CMS to make more informed decisions when considering whether proposed changes to Medicaid fee-for-service payment rates are sufficient to ensure the beneficiaries’ access to those services. States will have to create access review plans that outline how states will ensure access to health care services and to examine how cuts to provider payments will affect the care received.

The rule strengthens CMS’s oversight of Medicaid reimbursement and beneficiary access to providers. It will go into effect in January and CMS issued a Request for Information (RFI) to get feedback on how to make sure access requirements are being met. Comments will be accepted until no later than 5 p.m. on Jan. 4, 2016.

EEOC Issues Proposed Rule Amending the Genetic Information Nondiscrimination Act (GINA)

On Oct. 30, the U.S. Equal Employment Opportunity Commission (EEOC) issued a proposed rule clarifying when, under the Genetic Information Nondiscrimination Act (GINA), employers who offer wellness programs as part of group health plans can provide incentives to an employee’s spouse to provide information about his or her current or past health status. (This is different from the April EEOC proposed rule related to the Americans with Disabilities Act.) The proposed rule clarifies that an employer can offer limited incentives in exchange for the employee’s spouse providing information about his or her current or past health status. EEOC will accept comments on the new proposed rule through Dec. 29, 2015.

A press release on the proposed rule can be found here.

CMS Soliciting Comments on Episode Groups as Required by MACRA

The Centers for Medicare and Medicaid Services (CMS) is soliciting comments on episode groups and on specific clinical criteria and patient characteristics to classify patients into care episode and patient condition groups as required by Section 101(f) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), enacted April 16, 2015. The purpose of this commentary is to provide background and context to solicit stakeholder input on the episode groups that CMS has developed pursuant to Section 3003 of the Affordable Care Act (ACA). CMS is also seeking stakeholder input on the future role of episode groups in resource use measurement.

Comments should be sent to episodegroups@cms.hhs.gov by 11:59 p.m. EST on Feb. 15, 2016.

FDA Seeks Comments on Whether It Should Define “Natural” and If So, How?

Because of a series of competing citizen petitions, GMO labeling issues and congressional concern, the U.S. Food and Drug Administration (FDA) is seeking public input on whether it should define the term “natural” for use on food product labels, and, if so, how to do so.

On Nov. 12, FDA published a request for feedback. FDA policy to date has not restricted the use of the word “natural” on food labeling unless the product has added color, synthetic substances or flavoring.

FDA has received four citizen petitions over the past two years asking the agency to issue regulations on the use of the term, and in July the House of Representatives passed a proposal on GMOs that would require FDA to define the term “natural” for product labeling.

FDA seeks feedback on the following questions:

• What types of foods should be able to use the term?
• Should only raw agriculture products be able to use the term?
• Should only single-ingredient foods, such as bottled water or bagged spinach, be able to use the term?
• If multi-ingredient foods can use the term, what types of ingredients would disqualify a product from using it?
• What data or other information shows how consumers associate, confuse or compare the terms “natural” with “organic”?
• What data or other information shows how consumers associate, confuse or compare the term “natural” with the term “healthy”?

The comment period is open until Feb. 10, 2016.

HHS Releases Notice of Benefit and Payment Parameters proposed Rule for Health Insurance Marketplaces for 2017

On Nov. 20, the U.S. Department of Health and Human Services (HHS) released the proposed rule that providing the payment parameters that would apply to the 2017 benefit year and new standards relating to consumers’ experience in the Marketplaces.

The policies included in the proposed rule include payment parameters, Market rules, eligibility, enrollment and benefits.

Highlights of the proposed rule are:

• Another recalibration of risk adjustment factors for the 2017 year - the department is proposing to incorporate preventive services into their simulation of plan liability as part of the recalibration. They are seeking comments on other improvements that could be made to the risk adjustment methodology;
• A separate, lower default risk adjustment charge for smaller issuers, defined as issuers with 500 or fewer billable member months in a state’s individual and small group markets combined in a benefit year. HHS believes this proposal would have a minimal impact on risk transfers;
• Raising the default risk adjustment charge from the 75^th percentile to the 90^th percentile of absolute transfers nationwide as a percent of state average premium. This adjustment would be designed to prevent the charge from being a low-cost option for issuers;
• A federally-facilitated Marketplace (FFM) user fee rate of 3.5 percent for 2017 and a fee of 3 percent for those state-based Marketplaces using the federal platform;
• A maximum annual limitation on cost sharing for 2017 of $7,150 for individual coverage and $14,300 cumulatively for family coverage;
• Allowing issuers of student health insurance plans to establish one or more separate risk pools for each college or university, provided the risk pools are based on a bonafide school-related classification and based on a health status related factor;
• Requiring all issuers to submit the unified rate review template for all single risk pool products regardless of whether they propose rate increases, decreases or no change in rates for these products;
• An enrollment period for the individual market to be Nov. 1, 2016 through Jan. 31, 2017;
• Including third employer choice models for the federally facilitated SHOP plans and seeking comments about a fourth option for the 2017 plan year. The third option would give employers the choice to offer all plans on all actuarial levels from one issuer, called a “vertical choice.” The fourth option would allow employers to select a metal level and employees could choose from plans at that level and one level higher. CMS also seeks comments on whether FFM states should be able to add additional models to their SHOP programs; and
• Expand the role of navigators to include more post-enrollment activities, such as filing appeals, applying for exemptions and assisting in the transition from coverage to care.

Comments are due at the close of business on Dec. 21, 2015.

For a related press release, click here.

5. Reports

GAO Reports Many FDA-Ordered Device Postmarket Studies are Still Ongoing

On Oct. 29, the US Government Accountability Office (GAO) released a report on the characteristics and status of postmarket studies that are ordered after a medical device is put on the market. According to the report, 72 percent of device postapproval and surveillance studies mandated by the US Food and Drug Administration (FDA) between 2008 and 2015 are still ongoing. FDA cited low patient enrollment as a reason for delay in postmarket device studies, which officials said could be solved through more widespread use of registries.

Stakeholders have questioned whether FDA has the resources to monitor the shift to postmarket requirements and expect the agency to request additional funds to accommodate the shift. On average, manufacturers completed postapproval studies in roughly three years, with the longest taking seven, the GAO found. The report also found that 56 percent (175 studies) of postapproval studies ordered by FDA between 2008 and 2015 were for cardiovascular devices – orthopedic and plastic surgery devices accounted for the second and third spots.

According to GAO, the rise in postapproval study requirements for cardiovascular devices is due to FDA’s 2008 requirement that each new cardioverter defibrillator lead undergo a postapproval study. Of the studies examined, 20 percent were listed as complete, 72 percent as ongoing and 8 percent as inactive. In the ongoing studies, 81 percent were listed as “progressing adequately” and 19 percent were listed as delayed.

In terms of postmarket surveillance studies, FDA ordered the majority for orthopedic medical devices. Of postmarket studies examined by GAO, 88 percent were listed as inactive, 10 percent as ongoing and 2 percent as complete.

Two JAMA Studies Look at PrEP’s Effectiveness and Usage

Two studies in the Journal of the American Medical Association (JAMA) published on Nov. 16 show that the regimen for Pre-Exposure Prophylaxis (PrEP) to protect against HIV infections is 100 percent effective if patients take four or more doses of the pills every week. However, whether those at risk actually take the drugs appropriately is an open discussion. One study used data from clinics in San Francisco, Washington, DC, and Miami and found that 80 to 86 percent of gay men monitored over 48 weeks had drug levels consistent with the recommended dosage and none were infected with HIV.

A second study looked at awareness and use in a population-based sample of young black men who have sex with men – the most at-risk population. The study found that only 40 percent of men in the south side of Chicago were aware of PrEP. Of the men studied, 72 percent weren’t infected, but only 4 percent of them used PrEP.

Avalere Finds That Insurance Premium Increases Mirror Spending

A new analysis by Avalere finds that premium increases in 2016 generally reflect the distribution of healthcare spending in the individual and small group market, with hospital services accounting for the largest share – 53 percent. This compares with 48 percent of spending in 2014. Prescription drugs were the cause of 17 percent of premium increases and accounted for 17.5 percent of spending in 2014. According to Avalere, premiums for 2016 will rise an average of $25.26 per month, with $5.44 of the increase caused by outpatient hospital services. The analysis wasn’t weighted by health plan enrollment, and the drug category includes prescriptions filled by a pharmacy – not physician-administered medicines.

Kaiser Report Shows Potential Savings for Coverage in 2016

A recent Kaiser Family Foundation report reveals the potential savings from being an active shopper on Healthcare.gov in 2016. According to the report, the least expensive silver plan will change next year in three-fourths of the counties that use Healthcare.gov. If consumers remain in their current plans, premiums will go up on average by 15 percent. However, if they switch plans, the average premium increases go down to 7 percent.

Avalere Report Finds Limited Access to HIV Drugs in Exchange Plans

A new report from Avalere Health finds that about half of the plans in health insurance exchanges in 2015 include all 10 of the most commonly used HIV regimens in their formularies, but only 16 percent of silver exchange plans cover all top regimens with cost sharing at less than $100 per month per regimen. Patient advocates and patient groups, including the AIDS Institute, argue that these results show discrimination by exchange plans on AIDs patients, and that the Centers for Medicare and Medicaid Services (CMS) must start enforcing the ACA’s non-discrimination provision.

ACS CAN Argues Obamacare Plans Don’t Meet the Needs of Cancer Patients

On Nov. 18, the American Cancer Society Cancer Action Network (ACS CAN) published a report arguing that Obamacare plans aren’t transparent enough on their drug coverage and cost-sharing requirements to meet the needs of cancer patients. The report found the following:

• Plans continue to place most oral chemotherapy medications on the highest cost-sharing tier;
• Almost half of plans continue to place most generic oral chemotherapy medications on the highest cost-sharing tier;
• Cost-sharing structures in plan formularies didn’t match those on the marketplace websites almost half of the time;
• Coverage of newer oral chemotherapies was limited in some states in 2015; and
• Coverage for intravenous medications was noted more than in 2014, but was still unclear in most plans.

The report looked at plans in six states and includes nine recommendations to ensure better care for cancer patients.

Hepatitis C Relapse Rates Suggest Maintaining Prescribing Limits

According to a doctor familiar with treating hepatitis C since the late 1980s, data of patients treated with new hepatitis C drugs suggest that delaying medication treatment until patients get through addiction can keep the virus from becoming drug-resistant. Primrose Healthcare Vice Chair and Chief Medical Officer Tarek Hassanein said that without strict regimens and management programs many patients relapse, which causes the virus to mutate and become resistant to drugs.

Despite this data, the Centers for Medicare and Medicaid Services (CMS) has instructed states to stop preventing access to new hepatitis C drugs because the policies are “contrary to the statutory requirements.” Some patient advocates argue that there isn’t sufficient evidence that alcohol use inhibits the effectiveness of the drugs, and that there is strong evidence that people with addiction still adhere to treatment and have a low rate of reinfection Hassanein argues that in reality there are high rates of relapse and reinfection. He said he can lower the rates of reinfection by putting patients in a program where hepatitis C treatment is a stage of liver treatment. This approach, he says, lowers the rate of drug-resistant infection by treating liver-damaged patients in stages.

Because of Thanksgiving, the newsletter will not be published on Monday, Nov. 30. The next issue will be Dec. 7.