United States: Weekly Washington Healthcare Update: September 8, 2014

This Week: CMS issues final roll on ACA re-enrollment process... SHOP small business exchange early access will launch in five states... Pennsylvania "private option" Medicaid expansion waiver granted.

1. CONGRESS

House

Upcoming Ways and Means Hearing on ACA Implementation

On Sept. 3, 2014, Subcommittee Chairman Kevin Brady announced that the House Committee on Ways and Means Subcommittee on Health will hold a hearing on the status of the Obama Administration's implementation and oversight of the Affordable Care Act (ACA); the hearing will be held on Sept. 10, 2014, in 1100 Longworth House Office Building, at 10:00 a.m. CMS is the federal agency that oversees the operation of the Exchanges through the Center for Consumer Information and Insurance Oversight (CCIIO), and the IRS oversees the distribution and verification of the subsidies in the ACA.

More information on the hearing can be found here.

Upcoming Energy and Commerce Hearing on FDA Regulation of Laboratory Developed Tests

On Sept. 2, Chairman Joe Pitts (R-PA) announced that the House Energy and Commerce Committee Subcommittee on Health will hold a hearing on Tuesday, Sept. 9, 2014, at 9:30 a.m. in room 2322 Rayburn House Office Building to examine recent Food and Drug Administration (FDA) regulation on laboratory developed tests. The hearing is part of the Committee's ongoing 21st Century Cures series and will allow subcommittee members to gain a better understanding of how laboratory developed tests (LDTs) are performed in clinical practice, what their impact has been on personalized medicine and how we can continue to foster innovation in this space; in addition, it will provide an opportunity to hear from FDA and a variety of stakeholders about the agency's recently proposed regulatory framework for the review and oversight of such tests. The hearing will be the first to discuss LDT regulation since FDA sent a controversial notice to Congress last month detailing a preliminary, risk-based plan for regulating LDTs that would treat high-risk LDTs as Class III medical devices.

More information on the hearing can be found here.

Senate

State Work Period -- No Legislative Activity

2. ADMINISTRATION

CMS: Report Finds Uninsured Population Projected to Decrease Due to Coverage Expansions with ACA

The Centers for Medicare and Medicaid Services (CMS) Office of the Actuary released a report Sept. 4 in Health Affairs that found that the number of uninsured is expected to decline by nearly half from 45 million in 2012 to 23 million by 2023 as a result of the coverage expansions associated with the Affordable Care Act. "Health care costs are increasing at a slower rate thanks to the Affordable Care Act," said Marilyn Tavenner, CMS Administrator. "The dramatic decrease in the number of uninsured Americans is a win for our country and its economy in the future." The report also found that health spending growth for 2013 is projected to remain slow at 3.6 percent, which would mark the fifth consecutive year of spending growth under 4.0 percent; moreover, CMS says that national health expenditures (NHE) are projected to grow at an average rate of 5.7 percent for 2013 through 2023, about 1.1 percentage points faster than the expected average annual growth rate for the gross domestic product (GDP). Worth noting, with regard to government health spending, CMS estimates that by 2023, health expenditures financed by federal, state and local governments are projected to account for 48 percent of national health spending. In comparison, in 2012, such expenditures constituted only 44 percent of national health spending. The National Health Expenditure projections report, issued annually, contains estimates of spending for health care in the U.S. over the next decade by type of service and source of funding.

Healthcare.gov Hacked; HHS Says Won't Affect Upcoming Open Enrollment

On Sept. 4, the Department of Health and Human Services (HHS) confirmed a report from the Wall Street Journal of a July 8, 2014, cyber-attack on the Administration's Federal Exchange website, Healthcare.gov. The White House and congressional staff were briefed on the matter after the Centers for Medicare and Medicaid Services (CMS) discovered the incident on Aug. 25, and the Department of Homeland Security, Federal Bureau of Investigation and National Security Agency have assisted in the investigation, which is currently ongoing. While HHS says that no personal, health or financial information was compromised, the hacker(s) seems to have accessed a server and uploaded harmful software, which can be used to launch other attacks. A CMS spokesperson confirmed that none of these attacks were in fact carried out. It's not surprising that Congressional Republicans took the opportunity to criticize and reaffirm their previous concerns of the website's security and agency's transparency, and the Administration will likely be in the hot seat over the issue at the upcoming House Committee on Ways and Means Subcommittee on Health hearing on Sept. 10. CMS has urged GOP lawmakers and the public that the attacks should be viewed within the context of the several other relentless attacks on U.S. websites, which have included several large retailers. CMS said the data breach should not have any impact on the enrollment process, which is set to begin Nov. 15.

CMS Final Rule on ACA Re-Enrollment Procedures

CMS in final regulations on the federal exchange plan renewal process that will begin later this year largely maintains policy first proposed in June that aims to make it easy for consumers to retain existing plans and subsidies if they take no action. HHS has released a final rule on eligibility and re-enrollment for the second open enrollment season of the Affordable Care Act. This final rule specifies additional options for annual eligibility redeterminations and renewal and re-enrollment notice requirements for qualified health plans offered through the Exchange, beginning with annual redeterminations for coverage for benefit year 2015. This final rule provides additional flexibility for Exchanges, including the ability to propose unique approaches that meet the specific needs of their state, while streamlining the consumer experience. 

CMS Issues Final Rule on Electronic Health Record Technology

The Department of Health and Human Services (HHS) published a final rule today that allows health care providers more flexibility in how they use certified electronic health record (EHR) technology (CEHRT) to meet meaningful use for an EHR Incentive Program reporting period for 2014. By providing this flexibility, more providers will be able to participate and meet important meaningful use objectives like drug interaction and drug allergy checks, providing clinical summaries to patients, electronic prescribing, reporting on key public health data and reporting on quality measures. Based on public comments and feedback from stakeholders, the Centers for Medicare & Medicaid Services (CMS) identified ways to help eligible professionals, hospitals and critical access hospitals (CAHs) implement and meaningfully use Certified EHR Technology. Specifically, eligible providers can use the 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT for an EHR reporting period in 2014 for the Medicare and Medicaid EHR Incentive Programs. All eligible professionals, hospitals and CAHs are required to use the 2014 Edition CEHRT in 2015.

CMS: SHOP Early Access in Five States Benefits Small Employers Nationwide

On Sept. 5, CMS announced that, starting in late October, small employers, agents and brokers in Delaware, Illinois, New Jersey, Ohio and Missouri will be able to experience some of the key new online functions of the Federally facilitated Small Business Health Options Program (SHOP), on HealthCare.gov. This early access initiative of the Centers for Medicare & Medicaid Services (CMS) will precede the full launch of the SHOP Marketplace nationwide on Nov. 15, 2014, when small employers and their employees will begin to be able to find and enroll in coverage that starts as early as Jan. 1, 2015. SHOP offers small employers a choice of plans and the information and tools to help them make informed choices. Eligible small employers who purchase coverage through SHOP can also qualify for a Small Business Health Care tax credit worth up to 50 percent of their contribution to employee premiums.

3. STATE ACTIVITIES

CMS Approves Pennsylvania Medicaid Expansion Proposal

CMS has approved a "private option" Medicaid expansion proposal submitted by Pennsylvania, which would allow roughly 500,000 of the state's low-income residents to access the program under a hybrid model that would use Medicaid funds to purchase private health insurance. In a statement, CMS Administrator Marilyn Tavenner said that "Pennsylvania will become the 28th state, including the District of Columbia, to adopt the Affordable Care Act's Medicaid expansion. ...  Like we are doing in Pennsylvania, HHS and CMS are committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals."

Citizenship Verification Data Deadline Could Impact Almost 94,000 Florida ACA Enrollees

More than 300,000 immigrants who bought insurance through the Affordable Health Care Act were alerted Aug. 12 that they may lose health insurance coverage on Sept. 30 if they don't submit documentation they legally reside in the country. According to an Aug. 10 Department of Health and Human Services (HHS) fact sheet, Florida has the largest population of the country's 300,000 unverified policies obtained on the federal health exchange -- 93,800 cases, about a third of the nationwide total and about 12 percent of the state's total ACA enrollee population. Other states with sizeable unverified immigrant enrollee populations include Texas (52,700 cases) and Georgia (20,900 cases). More information can be found in the CMS announcement here.

Arizona State Supreme Court to Review Decision on Challenge to Governor's Medicaid Expansion

The Arizona Supreme Court agreed to hear a challenge from Republican Governor Jan Brewer, who hopes to defend the state's use of federal dollars to expand the state's Medicaid program last year. The Medicaid expansion, which was expected to provide coverage to about 300,000 Arizona residents, has been the center of a drawn-out courtroom battle between Gov. Brewer and the leaders of the Republican-controlled House and Senate. As it stands, the expanded Medicaid program took effect this year based on a bipartisan measure passed by the state legislature in 2013. The high court's decision allows counsel for the governor to argue that the state Court of Appeals incorrectly concluded that GOP lawmakers on the losing end of last year's bipartisan expansion vote have the grounds to challenge the law's legality. Lawmakers argue that the hospital assessment, which would start funding the expansion in its second year, requires a two-thirds vote from the state legislature rather than a simple majority. The state, under the Arizona Health Care Cost Containment System, is supposed to provide free care for everyone below the federal poverty level. A court date has yet to be set.

WA Insurance Commissioner Extends Special Enrollment to Open Enrollment

On Aug. 27, Washington Insurance Commissioner Mike Kreidler announced that anyone who has had difficulties enrolling through the state's Healthplanfinder exchange would be eligible for special enrollment until the next open enrollment period begins on Nov. 15. As such, any Washingtonian who verifies having enrollment, billing or payment issues can select a different plan during this time period. Also of note, Commissioner Kreidler disclosed that insurance premiums on average would increase by about 1.9 percent, considerably lower than the 8.6 percent hike that insurers had requested.

Special Enrollment Period Granted for Wisconsin's BadgerCare

On Sept. 4, CMS announced that thousands of former BadgerCare beneficiaries have the opportunity to enroll in private health insurance through the Marketplace after Wisconsin changed its Medicaid eligibility earlier this year. Outside of major life changes, people generally enroll in Marketplace coverage during the annual open enrollment period. However, because of unique circumstances, CMS is clarifying that a special enrollment period applies to those individuals in Wisconsin who lost coverage because of the state's decision to change eligibility for its Medicaid program, BadgerCare, on April 1, 2014. Individuals eligible for this special enrollment period will be able to apply for Marketplace coverage immediately and will have 60 days to do so. Eligible individuals should contact the federal call center at 1-800-318-2596 to apply. Individuals wishing to apply for coverage need to act by Nov. 2, 2014.

4. REGULATIONS OPEN FOR COMMENT

Guidance for Industry on Registration of Human Drug Compounding Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act

The Food and Drug Administration (FDA) has announced that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995 (the PRA). FDA is working to implement provisions added to the Federal Food, Drug, and Cosmetic Act (the FD Act) by the Drug Quality and Security Act (DQSA), which created a statutory category of "outsourcing facilities" that compound human drugs. Section 503B of the FD Act allows compounders to register with FDA as outsourcing facilities. Drug products compounded in an outsourcing facility can qualify for exemptions from the FDA approval requirements in Section 505 of the FD Act and the requirement to label products with adequate directions for use under Section 502(f)(1) of the FD Act if the requirements in Section 503B are met. The guidance discusses the process for registration of outsourcing facilities.

Under the guidance, facilities that elect to register must submit the following registration information to FDA for each facility:

• name of the facility;
• place of business;
• unique facility identifier;
• point of contact email address and phone number;
• whether the facility intends to compound drugs that appear on FDA's drug shortage list in effect under Section 506E of the FD Act; and
• an indication of whether the facility compounds from bulk drug substances, and if so, whether it compounds sterile or nonsterile drugs from bulk drug substances.

After initial registration, outsourcing facilities that wish to remain an outsourcing facility must re-register annually between Oct. 1 and Dec. 31 of each year. Registration information should be submitted to FDA electronically using the Structured Product Labeling (SPL) format and in accordance with Section IV of the FDA guidance entitled "Providing Regulatory Submissions in Electronic Format--Drug Establishment Registration and Drug Listing." In the draft guidance issued on Dec. 4, 2013, FDA described an alternative interim registration mechanism for use after initial passage of the DQSA and until Sept. 30, 2014. The final guidance specifies the use of the SPL format for all registrations. Under the final guidance, outsourcing facilities may request a waiver from the SPL electronic submission process by submitting a written request to FDA explaining why the use of electronic means is not reasonable for the person requesting the waiver.

Comments are due Sept. 26, 2014.

5. REPORTS

Medicare Advantage: CMS Should Fully Develop Plans for Encounter Data and Assess Data Quality before Use

According to a recent GAO report, CMS has not fully developed plans for using MA encounter data. The agency announced that it will begin using diagnoses from both encounter data and the data it currently collects for risk adjustment to determine payments to MAOs in 2015. However, CMS has not established time frames or specific plans to use encounter data for other potential purposes.

CMS has taken some, but not yet all, appropriate actions to ensure that MA encounter data are complete and accurate. The agency has established timeliness and frequency requirements for data submission, but has not yet developed requirements for completeness and accuracy. Also, the agency has certified nearly all MAOs to transmit encounter data. Although CMS performs automated checks to determine whether key data elements are completed and values are reasonable, it has not yet performed statistical analyses that could detect more complex data validity issues.

VA Dialysis Pilot: Documentation of Plans for Concluding the Pilot Needed to Improve Transparency and Accountability

According to GAO report issued Sept. 2, five years into the Dialysis Pilot, the Department of Veterans Affairs (VA) Central Office still has not set a timetable for completing the pilot or documented how it will determine the success of the pilot locations. GAO previously identified best practices that state that a project timeline is critical for managing and measuring an entity's performance on projects and that choosing and documenting well-regarded criteria that are used to make comparisons can lead to strong, defensible conclusions. Initially, VA planned to conclude the Dialysis Pilot after the pilot locations were all open for five years. However, in March 2014, VA officials told GAO they are no longer operating under this timeline but instead plan to conclude the pilot once the pilot locations achieve (1) the creation of a model for a VA-operated, free-standing dialysis clinic that can be replicated by other VA medical centers (VAMC) and (2) the confirmation of the time necessary for a pilot location to reach a "breakeven point." VA considers that a pilot location has achieved a breakeven point when it repays its start-up funding and the VAMC realizes a cost savings because its treatment cost for dialysis at the pilot location is lower than purchasing care from non-VA dialysis providers. However, VA has not formally documented these pilot location achievements as criteria for concluding the Dialysis Pilot. By not doing so, the transparency of VA's management decisions on pilot location outcomes is compromised and the Department lacks accountability for ensuring the success of the Dialysis Pilot.

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