May 4, 2015

Washington Healthcare Update

This Week: House E&C Releases Discussion Draft of 21st Century Cures Legislation Ahead of Legislative Hearing... FDA Finalizes Biosimilar Guidance Documents... CMS Updates Wage Index and Payment Rates for the Medicare Hospice Benefit

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


House E&C Releases Discussion Draft of 21st Century Cures Legislation Ahead of Legislative Hearing

On April 29, bipartisan House Energy and Commerce Committee leaders—Chairman Upton, Oversight and Investigations Subcommittee Ranking Member DeGette, full committee Ranking Member Frank Pallone, Jr. (D-NJ), Health Subcommittee Chairman Joe Pitts (R-PA) and Health Subcommittee Ranking Member Gene Green (D-TX)—jointly released a discussion draft marking continued progress in the 21st Century Cures initiative. The five bipartisan leaders said, “We’ve done things differently with 21st Century Cures, taking our time to listen and solicit feedback from every corner of the health care innovation infrastructure. It is because of this transparent, collaborative process that we are now ready and excited to take the next step in boosting research and delivering hope to patients and families all across the country. The ideas outlined in this draft represent a year of listening and working together to develop a product that we believe will truly help patients and bring our health care innovation infrastructure into the 21st century.”

  • The discussion draft of the 21st Century Cures legislation includes provisions to:
  • Incorporate the patient perspective in the discovery, development and delivery process.
  • Increase funding for the National Institutes of Health, through both reauthorization and $10 billion over five years in mandatory funding, starting in FY 2016.
  • Foster development of treatments for patients facing serious or life-threatening diseases.
  • Repurpose drugs for serious or life-threatening diseases and conditions.
  • Modernize clinical trials.
  • Break down barriers to increased collaboration and data sharing among patients, researchers, providers and innovators.
  • Help the development of personalized and precision medicines so the right patient can receive the right treatment at the right time.
  • Provide for continued work in the telehealth space.
  • Advance a truly interoperable health care system.
  • Provide clarity for developers of software products used in health management and medical care.

A complete section-by-section summary of the discussion draft is available online here .

A one-page summary is available online here .

Moreover, on April 30, the House Energy and Commerce Subcommittee on Health held a legislative hearing on the draft, which included testimony from Dr. Kathy Hudson, Deputy Director for Science, Outreach, and Policy at the National Institutes of Health; Dr. Janet Woodcock, Director of the Center for Drug Evaluation and Research at the Food and Drug Administration; and Dr. Jeff Shuren, Director of the Center for Devices and Radiological Health at the FDA.

Energy and Commerce Hearing Examines Federal Response to Opioid Abuse Epidemic

On May 1, the Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled “What is the Federal Government Doing to Combat the Opioid Abuse Epidemic?” The purpose of this hearing was to confer with the relevant Federal agencies regarding their ongoing efforts to combat the opioid abuse epidemic and explore how Federal policies can most effectively incentivize the development and broaden use of evidence-based practices and treatments. Subcommittee members heard testimony from senior officials representing the full range of multi-disciplinary activities composing the Federal response to this epidemic.


Michael Botticelli
Office of National Drug Control Policy

Richard Frank, Ph.D.
Assistant Secretary for Planning and Evaluation
Department of Health and Human Services

Nora Volkow, M.D.
National Institute of Drug Abuse
National Institute of Health

Douglas Throckmorton, M.D.
Deputy Director
Center for Drug Evaluation and Research
U.S. Food and Drug Administration

Debra Houry, M.D., M.P.H.
Director of the National Center for Injury Prevention and Control
Centers for Disease Control and Prevention

Pamela Hyde, J.D.
Substance Abuse and Mental Health Services Administration

Patrick Conway, M.D., M.Sc.
Deputy Administrator for Innovation and Quality & CMS Chief Medical Officer
Centers for Medicare and Medicaid Services

For more information, or to view the hearing, please visit

Legislation Introduced to Repeal “Cadillac” Health Insurance Tax

On April 28, Rep. Joe Courtney (D-CT) introduced legislation that would repeal the excise tax on high-cost health insurance plans scheduled to go into effect in 2018. Also known as the “Cadillac tax,” the policy would apply a 40 percent tax on health insurance expenditures over $10,200 per person and $27,500 per family. The excise tax was established in a later version of the Affordable Care Act, but its scheduled implementation was delayed five years by an effort led by Courtney with 191 House colleagues in 2010. Studies of the policy have indicated that it will have a disproportionate and rapidly increasing impact on older workers, women and workers in high-cost regions. “The excise tax is a poorly designed penalty that will put a dent in the pocketbooks of many families and businesses with health insurance plans that do not resemble the ‘Cadillac’ plans originally targeted when this policy was adopted—instead, the excise tax will punish people living in higher cost areas, with ‘Ford Focus’ level plans,” Courtney said.

House Passes FY 2016 Budget Plan

On May 1, the House adopted the final Republican budget plan for FY 2016 by a vote of 226-197, bringing Republicans one step closer to enacting a spending blueprint that sets the stage for this summer’s spending bills. The budget framework would balance the budget in 10 years without raising taxes, and pave the way for sending an Obamacare repeal to the president’s desk. The Senate will take up the measure next week. In a statement, House Budget Committee Chairman Tom Price (R-GA) said, “With today’s passage of a joint House and Senate balanced budget—the first of its kind in over a decade—we have provided a positive vision for how we can achieve those goals. The credible solutions we are championing will build a brighter future for all Americans.” Of note, the agreement would repeal the Affordable Care Act and replace the measure with “real, patient-centered health care reform.”


Senate HELP Committee Holds Hearing on Medical Innovation in Light of Upcoming Comprehensive Health Care Legislation

On April 28, the Senate Committee on Health, Education, Labor, and Pensions held a hearing to investigate medical advancements and federal research being undertaken to speed up innovation of medical products. “Our task is to help ensure that the exciting new technologies being developed and discoveries being made are reaching patients, and that the NIH is equipped to support the early-stage research required to make these advancements and that the FDA is equipped to handle them,” Chairman Lamar Alexander said in his opening statement. At the hearing, Director of the Center for Drug Evaluation and Research at the Food and Drug Administration Jane Woodcock suggested to members that developing new biomarkers and clinical trial networks, among other strategies, could help improve the drug development process; similarly, she also cautioned committee members that giving the agency a “large number of unfunded mandates” would cause review performance to suffer, echoing comments made by the former commissioner before she stepped down in March. The hearing, entitled “Continuing America’s Leadership: The Future of Medical Innovation for Patients,” was held at 10 a.m. in 430 Dirksen Senate Office Building.

Witness List

Roderic I. Pettigrew, Ph.D., M.D.
Director, National Institute of Biomedical Imaging and Bioengineering
National Institutes of Health

Christopher P. Austin, M.D.
Director, National Center for Advancing Translational Sciences
National Institutes of Health, Bethesda, MD

Janet Woodcock, M.D.
Center for Drug Evaluation and Research
Food and Drug Administration

Jeffrey E. Shuren, M.D., J.D.
Center for Devices and Radiological Health
Food and Drug Administration

For more information or to watch the hearing, please visit

Upcoming: Senate HELP Committee to Hold Hearing on President’s Precision Medicine Initiative

The Senate Committee on Health, Education, Labor, and Pensions will hold a hearing May 5 entitled “Continuing America’s Leadership: Realizing the Promise of Precision Medicine for Patients.” Members of the Committee will hear testimony from Administration witnesses on the progress made on the rollout of President Obama’s 2015 Precision Medicine initiative and possible intended patient outcomes expected from its advancement as the inter-agency collaboration in health care research and health IT moves forward. The hearing will be held at 2:30 p.m. EDT in 430 Dirksen Senate Office Building.

Witness List

Francis Collins, M.D., Ph.D.

National Institutes of Health

Karen DeSalvo, M.D., M.P.H., M.Sc.
National Coordinator for Health Information Technology

Jeff Shuren, M.D., J.D.
Center for Devices and Radiological Health
Food and Drug Administration

For more information or to view the hearing, please visit

Bipartisan Legislation Reintroduced in Senate to Exempt Low-risk Medical Software and Apps from FDA Regulation

On April 27, Senators Orrin Hatch (R-UT) and Michael Bennet (D-CO) reintroduced a bill, the Medical Electronic Data Technology Enhancement for Consumers’ Health (MEDTECH) Act, that would exempt low-risk medical software and mobile apps from FDA regulation and provide greater certainty regarding what software will be regulated by the agency to protect consumers. The bill aims to cut red tape at the Food and Drug Administration (FDA) and help boost innovation in health IT. “New and innovative technology is helping our health care providers better take care of their patients, and it’s putting tools into the hands of families that help them manage their own health,” Sen. Bennet said. “Some of these tools, whether a new app to track your calorie intake or an activity tracker to help you while you exercise, are low risk and don’t require in-depth oversight by the government. This bill provides certainty for innovators in the life sciences and the FDA as to which devices and software should be monitored to keep consumers safe.” The legislation was originally introduced in December 2014 and, according to lawmakers, it “limits and clarifies” FDA’s role in regulating administrative software, wellness and lifestyle products, certain aspects of electronic health records, and software that aids health care providers in developing treatment recommendations for their patients.

Bipartisan Senate Bill Introduced to Leave Small Group Expansion Decisions Up to States

On April 29, Senators Tim Scott (R-SC) and Jeanne Shaheen (D-NH), both members of the Senate Committee on Small Business and Entrepreneurship, introduced legislation intended to protect America’s small businesses from potential health care premium increases under the Affordable Care Act (ACA). The Protecting Affordable Coverage for Employees (PACE) Act, S.1099, would allow states to maintain the current small group market definition, which applies to businesses with up to 50 employees, in order to prevent premium increases and disruption for small and mid-sized businesses. “The PACE Act will ensure that small and mid-sized businesses in South Carolina and across America are not faced with drastic premium increases as a result of the Affordable Care Act,” said Sen. Scott in a press release. “Working together, we can find common sense solutions to stop this major disruption for many mid-sized businesses, their employees and their families.” Under the ACA, on Jan. 1, 2016, the definition of the state-based small group markets is scheduled to change from 50 to include employers with up to 100 employees. This change would require many small and mid-sized businesses to be subject to different rating rules and requirements, with the potential of increasing the health insurance premiums for small businesses, their employees and their families. Worth noting, last month Congressmen Brett Guthrie (R-KY) and Tony Cárdenas (D-CA) led a bipartisan group of lawmakers in introducing the PACE Act, H.R. 1624, in the House of Representatives.

2. Administration

Changes to the Requirements for Part D Prescribers — Interim Final Rule

On May 1, CMS issued an interim final rule with comment period that would revise requirements related to beneficiary access to covered Part D drugs. Under these revised requirements, pharmacy claims and beneficiary requests for reimbursement for Medicare Part D prescriptions, written by prescribers other than physicians and eligible professionals who are permitted by state or other applicable law to prescribe medications, will not be rejected at the point of sale or denied by the plan if all other requirements are met. In addition, a plan sponsor will not reject a claim or deny a beneficiary request for reimbursement for a drug when prescribed by a prescriber who does not meet the applicable enrollment or opt-out requirement without first providing provisional coverage of the drug and individualized written notice to the beneficiary. This interim final rule with comment period also revises certain terminology to be consistent with existing policy and to improve clarity. The regulations are effective on June 1, 2015.

Medicaid & CHIP: February 2015 Monthly Applications, Eligibility Determinations and Enrollment Report

According to a report issued May 1, over 70.5 million individuals were enrolled in Medicaid and CHIP in February 2015. This enrollment count is point-in-time (on the last day of the month) and includes all enrollees in the Medicaid and CHIP programs who are receiving a comprehensive benefit package. Of that total, 561,609 additional people were enrolled in February 2015 as compared to January 2015 in the states that reported comparable February and January 2015 data. Looking at the additional enrollment since October 2013 when the initial Marketplace open enrollment period began, among the 49 states reporting both February 2015 enrollment data and data from July-September of 2013, over 11.7 million additional individuals are enrolled in Medicaid and CHIP as of February 2015, an approximately 20.3 percent increase over the average monthly enrollment for July through September of 2013. (Connecticut and Maine are not included in this count.)

FDA Finalizes Biosimilar Guidance Documents

On April 28, FDA finalized three guidance documents, which are intended to assist drugmakers who are developing follow-on versions of branded biological drugs under an abbreviated pathway established by the Biologics Price Competition and Innovation Act of 2009 (BPCI Act), following public comments on the February 2012 drafts. The first two guidances lay out the scientific and quality considerations for demonstrating biosimilarity to a reference product, and the third contains questions and answers on the biosimilar pathway. The BPCI Act amends the PHS Act and other statutes to create an abbreviated licensure pathway in Section 351(k) of the Public Health Services Act for biological products shown to be biosimilar to or interchangeable with an FDA-licensed biological reference product (see Sections 7001 through 7003 of the Patient Protection and Affordable Care Act (Affordable Care Act) (Public Law 111-148)).

Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

This guidance provides answers to common questions from sponsors interested in developing proposed biosimilar products, biologics license application (BLA) holders and other interested parties regarding FDA’s interpretation of the BPCI Act. Specifically, the Q&A addresses four main topics: Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product, Scientific Considerations in Demonstrating Biosimilarity to a Reference Product, Biosimilars: Questions and Answers Regarding Implementation of the BCPI Act, and Formal Meetings Between the FDA and Biosimilar Biological Product Sponsors or Applicants.

Scientific Considerations in Demonstrating Biosimilarity to a Reference Product

This guidance is intended to assist sponsors in demonstrating that a proposed therapeutic protein product is biosimilar to a reference product for purposes of the submission of a marketing application under Section 351(k) of the Public Health Service Act (PHS Act). Although the 351(k) pathway applies generally to biological products, this guidance focuses on therapeutic protein products and gives an overview of important scientific considerations for demonstrating biosimilarity. The scientific principles described in this guidance may also apply to other types of proposed biosimilar biological products. View the guidance: 

Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product

This guidance describes the Agency’s current thinking on factors to consider when demonstrating that a proposed therapeutic protein product (hereinafter proposed product or proposed biosimilar product) is highly similar to a reference product licensed under Section 351(a) of the Public Health Service Act (PHS Act) for the purpose of submitting a marketing application under Section 351(k) of the PHS Act. Specifically, this guidance is intended to provide recommendations to sponsors on the scientific and technical information for the chemistry, manufacturing and controls (CMC) section of a marketing application for a proposed product submitted under Section 351(k) of the PHS Act. View the guidance:

CMS Releases Figures on Medicare Part D Spending and Prescribing Trends

The Centers for Medicare & Medicaid Services (CMS) released a new dataset and corresponding fact sheet April 30 that details information on the prescription drugs that individual physicians and other health care providers, including dentists and nurse practitioners, prescribed in 2013 under the Medicare Part D Prescription Drug Program. The dataset describes the specific medications prescribed and statistics on their utilization and costs and is intended to provide key information to consumers, providers, researchers and other stakeholders to help drive transformation of the health care delivery system. It provides data on more than one million distinct health care providers who collectively prescribed $103 billion in prescription drugs under the Part D program. CMS created the new dataset using information from the Prescription Drug Event Standard Analytic File (SAF), which has final-action claims submitted by Medicare Advantage Prescription Drug (MA-PD) plans and by stand-alone Prescription Drug Plans (PDPs). CMS officials cautioned that “the new drug data reflected raw prescription claim numbers and shouldn’t be used to draw conclusions about the quality of care delivered by individual providers. Worth noting, according to the CMS analysis, the top-spending drug in 2013 was for Nexium®, used to treat heartburn, at $2.53 billion, and the most prescribed drug in the program was Lisinopril, a hypertension treatment, with 36.9 million claims. As it stands, approximately 68 percent of all Medicare beneficiaries are enrolled in the Part D program, or about 36 million people.

HHS OIG to CMS: Issue Guidance to Clarify Definition of “Operating Expenses” to Avoid Misuse of ACA Funding for State Exchanges

In warning memorandum dated April 27 from the Department of Health and Human Services, Inspector General Daniel Levinson to Acting Centers for Medicare and Medicaid Services (CMS) Administrator Andy Slavitt, the oversight body relayed concerns that without more detailed guidance from CMS, state-based marketplaces might have used and might continue to use, establishment grant funds for operating expenses after Jan. 1, 2015, contrary to existing funding provisions with the Affordable Care Act (ACA). CMS plans to issue formal guidance on what qualifies as a health insurance exchange’s “operating expenses”—and therefore not allowed to be funded by federal establishment grants—following a warning from the HHS Inspector General about potentially illegal exchange spending. “We have observed that some state based marketplaces (SBMs) face uncertain operating revenues in 2015 and future years,” Inspector Levinson wrote. Whether the agency intends to fast-track those details by putting out a frequently asked question response or a bulletin prior to the existing short window for states to pass their FY 2016 budgets is still to be determined. As it stands, more than $5.5 billion was allocated to 37 states and D.C. to establish and build their own exchanges since 2011. The Obama administration also listed $380 million in leftover health insurance exchange grants in its fiscal 2016 budget released in early February, and suggested that states may put some of that money toward a move from one type of marketplace to another while being vague about how exactly those funds may be used.

CMS Releases 2013 Physician Quality Reporting and Electronic Prescribing Incentive Program Experience Report

The Centers for Medicare & Medicaid Services (CMS) on April 23 released the 2013 Physician Quality Reporting System (PQRS) and Electronic Prescribing (e-prescribing) Incentive Program Experience Report , which provides data and trends on participation, incentive eligibility, incentive payments and payment adjustments since the beginning of each of the programs. The Physician Quality Reporting System (PQRS) is a quality reporting program that encourages individual eligible professionals and group practices to report information on the quality of care given to Medicare beneficiaries. In the data, the agency found that there was an increase in participation among eligible professionals and in reporting clinical quality information for both PQRS (increased by 47 percent from 2012 to 2013) and the e-prescribing Incentive Program (up 9 percent from 2012 to 2013), reflecting increased use of electronic prescribing as well as increased tracking and reporting of important quality information. Beginning in 2015, the program will apply a negative payment adjustment to individual EPs and PQRS group practices who did not satisfactorily report data on quality measures for Medicare Part B Physician Fee Schedule (MPFS) covered professional services in 2013. As such, those who report satisfactorily for the 2015 program year will avoid the 2017 PQRS negative payment adjustment. According to the released data, 469,755 eligible professionals were subject to a 2015 PQRS negative payment adjustment stemming from 2013 data. A factsheet released in October 2014 provides information about the 2015 PQRS negative payment adjustment as well as step-by-step guidance for requesting an informal review during the official time period of Jan. 1, 2015, through Feb. 28, 2015, for the 2013 PQRS program year. Like the PQRS program, the e-prescribing Incentive Program used a combination of incentive payments and payment adjustments to encourage electronic prescribing by eligible professionals; 2013 was the last year of the program as electronic prescribing continues with Meaningful Use.

3. State Activities

Wisconsin Issues Guidance on Transitional Policy for Large Employers

On April 24, the Wisconsin Commissioner of Insurance issued, to all insurers authorized to write health insurance in the state, guidance regarding the U.S. Department of Health and Human Services Extended Transitional Policy for large employers with 51-100 employees. The guidance allows insurers the option to offer to renew their customers’ non-grandfathered, non-ACA-compliant plans purchased on or before Dec. 31, 2013, at least until Oct. 1, 2016. The guidance further clarifies that consumers may switch from one non-ACA-compliant plan to another provided both the new plan and the old plan are part of the same product group. Under federal law, the definition of “small employer” will change from the state definition of 2-50 total employees to the federal definition of 1-100 total employees, effective Jan. 1, 2016. This bulletin specifically clarifies the transitional relief offered to employers impacted by the small group definition change effective Jan. 1, 2016. It is the intent of OCI to ensure employers impacted by the definition change and their insurance carriers are able to maintain continued access to coverage eligible for transitional relief.

New York Becomes Second State to Create a Basic Health Program

On April 17, the New York Department of Health announced its intention to create a Basic Health Program under the Affordable Care Act (ACA), becoming one of only two states to do so under federal law, after Minnesota. The Basic Health program model covers low-income residents by allowing states to contract plans outside the health insurance marketplace, rather than qualified health plans (QHPs). Beginning November 1 of the open enrollment period, individuals with incomes between 133 percent and 200 percent of the federal poverty level will not obtain coverage through the state exchange but instead through the separate state-sponsored program. Specifically the state said individuals with incomes at or below 150 percent of the federal poverty level will not have a monthly premium, and those between 151 percent and 200 percent will have a $20 monthly charge. “We are excited to be among the first states in the nation to implement this option and we extend our thanks to the federal Centers for Medicare and Medicaid Services for their partnership,” said NYSOH Executive Director Donna Frescatore. “Adding the Basic Health Program to the suite of health insurance options already available through New York State of Health will make coverage even more affordable for hundreds of thousands of New Yorkers.” The Basic Health Plan will offer qualified individuals and families a choice of plans from high-quality, private health insurers through NY State of Health (NYSOH), the state’s official health plan Marketplace. New York State health insurers were invited to offer plans through the BHP when the NYSOH plan invitation was issued to New York State licensed health insurance companies. The invitation includes requirements for insurer certification and recertification for Qualified Health Plans and Stand-Alone Dental Plans, and for the new Basic Health Program, which will start on Jan. 1, 2016. In March 2014, the Centers for Medicare & Medicaid Services (CMS) issued final regulations on the requirements for a BHP and the methodology for calculating federal payments to states. States could choose to implement BHP beginning in 2015.

4. Regulations Open for Comment

CMS Updates Wage Index and Payment Rates for the Medicare Hospice Benefit

On April 30, 2015, CMS issued a proposed rule (CMS-1629-P) that would update fiscal year (FY) 2016 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. The proposed hospice payment rule reflects the ongoing efforts of CMS to support beneficiary access to hospice care. As proposed, hospices would see an estimated 1.3 percent ($200 million) increase in their payments for FY 2016. The $200 million increase in estimated payments for FY 2016 reflects the distributional effects of the 1.8 percent proposed FY 2016 hospice payment update percentage ($290 million increase); the use of updated wage index data and the phaseout of the wage index budget neutrality adjustment factor (-0.7 percent/$120 million decrease); and the proposed implementation of the new Office of Management and Budget (OMB) Core Based Statistical Areas (CBSA) delineations for the FY 2016 hospice wage index with a one-year transition (0.2 percent/$30 million increase). The elimination of the wage index budget neutrality adjustment factor (BNAF) was part of a seven-year phaseout that was finalized in the “Medicare Program; Hospice Wage Index for Fiscal Year 2010” final rule (74 FR 39384, Aug. 6, 2009) and is not a policy change.

Proposed FY 2016 Medicare Payment and Policy Changes for Inpatient Psychiatric Facilities

On April 24, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed fiscal year (FY) 2016 Medicare payment policies and rates for the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS). The proposed rule also updates the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program, which requires participating facilities to report on quality measures or incur a reduction in their annual payment update. This proposed rule would expand the measure sets in future fiscal years and change certain data reporting requirements for these measures. CMS is proposing to update the estimated payments to IPFs in FY 2016 relative to estimated payments in FY 2015 by 1.6 percent (or $80 million). This amount reflects 2.7 percent IPF-specific market basket estimate less the productivity adjustment of 0.6 percentage point and less the 0.2 percentage point reduction required by law, for a net update of 1.9 percent. Estimated payments to IPFs are reduced by 0.3 percent due to updating the outlier fixed-dollar loss threshold amount. CMS will accept comments on the proposed rule until June 23, 2015.

CMS Releases Proposed Rule on FY 2016 Medicare Payments for Inpatient Rehab Facilities

On April 23, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed FY 2016 Medicare payment policies and rates for the Inpatient Rehabilitation Facility (IRF) Prospective Payment System and the IRF Quality Reporting Program. Specifically, CMS is proposing to increase payments to inpatient rehabilitation hospitals in 2016 by approximately $130 million, or 1.7 percent when compared to 2015. This agency also proposes new quality reporting requirements to adopt measures that satisfy three of the quality domains required by the IMPACT Act in FY 2016: skin integrity and changes in skin integrity; functional status, cognitive function and changes in function and cognitive function; and incidence of major falls; IRFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to their applicable FY annual increase factor, and the expected cost of the implementation of these new quality reporting requirements is approximately $24 million to hospitals. Worth noting, the payment increase is significantly smaller than the 2.4 percent raise they received in fiscal 2015. The agency proposes to begin collecting IRF quality reporting data by fall 2016. The proposed rule will be published in the Federal Register on April 27, and the agency will accept comments from stakeholders until June 22, 2015.

USPSTF Upholds Recommendations on Mammography for Women Under 50

In a draft recommendation released April 20, the U.S. Preventive Services Task Force (USPSTF) upheld its 2009 recommendation that women under 50 wait to start getting mammograms. Specifically, the task force downgraded mammography coverage for women ages 40-49 from “B” to “C” status, meaning insurers would no longer have to cover screenings without a co-pay. The decision comes after more evidence has shown the negative effects associated with mammograms, including false positives and overdiagnosis. In a letter to the Department of Health and Human Services opposed to the decision, Sen. Barbara Mikulski said, “Should the draft recommendation be finalized, I will actively and aggressively pursue all legislative options available to ensure that women aged 40 and older are able to continue receiving free annual mammogram.” The task force reports that women aged 60-69 are most likely to avoid a breast cancer death due to a mammography. “Screening mammography in women ages 40 to 49 years may reduce the risk of dying of breast cancer, but the number of deaths averted is much smaller than in older women and the number of false-positive tests and unnecessary biopsies are larger. All women undergoing regular screening mammography are at risk for the diagnosis and treatment of noninvasive and invasive breast cancer that would otherwise not have become a threat to her health, or even apparent, during her lifetime. Public comment on the draft recommendations must be submitted by May 18, 2015, at 8:00 PM EST.

Fiscal Year 2016 Proposed Inpatient and Long-term Care Hospital Policy and Payment Changes

On April 17, 2015, CMS issued a proposed rule to update fiscal year (FY) 2016 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The proposed rule, which would apply to approximately 3,400 acute care hospitals and approximately 435 LTCHs, would affect discharges occurring on or after Oct. 1, 2015. The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and market conditions in the hospital’s geographic area.

The rule proposes policies that continue a commitment to increasingly shift Medicare payments from volume to value. CMS pays acute care hospitals (with a few exceptions specified in the law) for inpatient stays under the IPPS and long-term care hospitals under the LTCH PPS. Under these two payment systems, CMS generally sets payment rates prospectively for inpatient stays based on the patient’s diagnosis and severity of illness. A hospital receives a single payment for the case based on the payment classification — MS-DRGs under the IPPS and MS-LTC-DRGs under the LTCH PPS — assigned at discharge.

By law, CMS is required to update payment rates for IPPS hospitals annually, and to account for changes in the costs of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. This is known as the hospital “market basket.” LTCHs are paid according to a separate market basket based on LTCH-specific goods and services. CMS will accept comments on the proposed rule until June 16, 2015.

Proposed FY 2016 Payment and Policy Changes for Medicare Skilled Nursing Facilities (SNF)

On April 15, 2015, CMS issued a proposed rule [CMS-1622-P] outlining proposed Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs). This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2016. In addition, it includes a proposal to specify a SNF all-cause all-condition hospital readmission measure, as well as a proposal to adopt that measure for a new SNF Value-Based Purchasing (VBP) Program and a discussion of SNF VBP Program policies being considered for future rulemaking to promote higher quality and more efficient health care for Medicare beneficiaries. Additionally, this proposed rule would implement a new quality reporting program for SNFs as specified in the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). It also would amend the requirements that a long-term care (LTC) facility must meet to qualify to participate as a skilled nursing facility (SNF) in the Medicare program, or a nursing facility (NF) in the Medicaid program. These requirements implement the provision in the Affordable Care Act regarding the submission of staffing information based on payroll data. To be assured consideration, comments must be received no later than 5 p.m. on June 19, 2015.

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.

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 at, 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.

5. Reports

Advance Directives: Information on Federal Oversight, Provider Implementation and Prevalence

According to a report issued April 29 by GAO, many adults have advance directives, but estimated prevalence varies, depending on certain factors. Specifically, in 2013, 47 percent of adults over the age of 40 had an advance directive, according to the Institute of Medicine (IOM) report Dying in America. However, the prevalence of individuals with advance directives varies by type of provider and demographic characteristic. For example, a National Center for Health Statistics report found that 88 percent of discharged hospice patients had advance directives in 2007 compared to 65 percent of nursing home patients in 2004. Studies GAO reviewed found that individuals who were older, white or women or who had higher education or incomes were more likely to have advance directives than others. Advance directives, such as living wills or health care powers of attorney, specify—consistent with applicable state law—how individuals want medical decisions to be made for them should they become unable to communicate their wishes. Many individuals receive medical care from Medicare- and Medicaid-funded providers during the last six months of life, and may benefit from having advance directives that specify treatment preferences. According to IOM, advance directives are most effective when part of a comprehensive approach to end-of-life care called advanced care planning. View the report:

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