Alston & Bird Healthcare Week in Review, March 24, 2017

I. Regulations, Notices, & Guidance

• On March 20, 2017, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule with comment period entitled, Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model. The interim final rule with comment period (IFC) further delays the effective date of the final rule entitled, "Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model" published in the January 3, 2017 Federal Register (82 FR 180) from March 21, 2017 until May 20, 2017. This IFC also delays the applicability date of the regulations at 42 CFR part 512 from July 1, 2017 to October 1, 2017 and effective date of the specific CJR regulations itemized in the DATES section from July 1, 2017 to October 1, 2017. Comments are due by April 19, 2017.
• On March 20, 2017, the National Institutes of Health (NIH) issued a notice entitled, Eunice Kennedy Shrive National Institute of Child Health and Human Development Notice of Committee Establishment. The notice announces that the NIH is establishing the Task Force on Research Specific to Pregnant Women and Lactating Women (Task Force). The Task Force will provide guidance regarding Federal activities related to identifying and addressing gaps in knowledge and research regarding safe and effective therapies and the collaboration on and coordination of such activities.
• On March 22, 2017, the FDA issued a notice entitled, Center for Devices and Radiological Health: Experiential Learning Program. The notice announces the 2017 Experiential Learning Program (ELP). The training component is intended to provide the FDA’s Center for Devices and Radiological Health (CDRH) staff with an opportunity to understand the policies, laboratory practices, patient perspective/input, quality system management, and other challenges that impact the device development life cycle. The purpose of the notice is to invite medical device industry, academia, and health care facilities, and others to participate in this formal training program for CDRH's employees, or to contact CDRH for more information regarding the ELP.
• On March 22, 2017, the FDA issued a draft guidance entitled, Delayed Graft Function in Kidney Transplantation: Developing Drugs for Prevention. The purpose of the draft guidance is to assist sponsors in the clinical development of drugs for the prevention of delayed graft function (DGF) in kidney transplantation. Comments are due by June 21, 2017.
• On March 23, 2017, the Centers for Disease Control and Prevention (CDC) issued a request for information entitled, Effect of stockpiling conditions on the performance of medical N95 respirators and high-level protective surgical gowns. The National Institute for Occupational Safety and Health (NIOSH) of the Centers for Disease Control and Prevention announces the request for information about facilities that stockpile N95 respirators and high-level protective surgical gowns. Comments are due by April 24, 2017.
• On March 23, 2017, the Office of Management and Budget (OMB) received a proposed rule from CMS entitled, FY 2018 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements. The proposed rule proposes updates to the hospice payment rates for fiscal year 2018 as required under section 1814(i) of the Social Security Act (the Act). The proposed rule also proposes new quality measures and provides an update on the hospice quality reporting program (HQRP).

• April 4 – 5, 2017: The FDA announced a 2-day public conference entitled, FDA CDER Small Business and Industry Assistance (SBIA) Regulatory Education for Industry (REdI) Generic Drugs Forum. The goal of the public conference is to provide direct, relevant, and helpful information on the key aspects of the generic drug development process.
• April 12 – 13, 2017: The CDC announced the cancellation of the Clinical Laboratory Improvement Advisory Committee (CLIAC) meeting scheduled for April 12 – 13, 2017.

II. Congressional Legislation & Committee Action

• On March 21, 2017, the Senate Health, Education, Labor and Pensions Committee held a hearing entitled, FDA Use Fee Agreements: Improving Medical Product Regulation and Innovation for Patients Part 1. The witnesses included Dr. Janet Woodcock, Director of the FDA’s Center for Drug Evaluation and Research; Peter Marks, Director of the FDA’s Center for Biologics Evaluation and Research; and Jeffrey Shuren, Director of the FDA’s Center for Devices and Radiological Health.
• On March 21, 2017, the Senate Special Aging Committee held a hearing on raising grandchildren in the opioid crisis and beyond. The witnesses included Jaia Peterson Lent, Deputy Executive Director of Generations United; Megan Dolbin-MacNab, Associate Professor of the Department of Human Development and Director of the Marriage and Family Therapy Doctoral Program at Virginia Tech University; and Sharon McDaniel, Founder, President and CEO of A Second Chance Inc.

• On March 21, 2017, the House Energy and Commerce Oversight and Investigations Subcommittee held a hearing entitled, Fentanyl: The Next Wave of the Opioid Crisis. The witnesses included Mathew Allen, Assistant Director of homeland security investigative programs and homeland security investigations for Immigration and Customs Enforcement; Kemp Chester, Acting Deputy Director of the Office of National Drug Control Policy; Wilson Compton, Deputy Director of the NIH’s National Institute on Drug Abuse; Debra Houry, Director of the Centers for Disease Control and Prevention's National Center for Injury Prevention and Control; and Louis Milione, Assistant Administrator in the Drug Enforcement Administration’s Diversion Control Division.
• On March 22, 2017, the House Energy and Commerce Health Subcommittee held a hearing on examining the FDA’s Prescription Drug User Fee Program. The witnesses included Dr. Janet Woodcock, Director, FDA, Center for Drug Evaluation and Research; Mr. Jeff Allen, President and CEO, Friends of Cancer Research (FOCR); Ms. Kay Holcombe, Senior Vice President of Science Policy, Biotechnology Industry Organization (BIO); and Dr. Anne Pritchett, Vice President of Policy and Research, Pharmaceutical Research and Manufacturers of America (PhRMA).
• On March 22, 2017, the House Oversight and Government Reform Health Care, Benefits and Administrative Rules Subcommittee held a hearing on examining the impact of Voluntary Restricted Distribution Systems in the pharmaceutical supply chain. The witnesses included Dr. Janet Woodcock, Director, Food and Drug Administration (FDA), Center for Drug Evaluation and Research; Mr. Bruce Leicher, Senior Vice President and General Counsel, Momenta Pharmaceuticals (Testifying on behalf of the Association for Accessible Medicines (AAM)); Dr. Gerard Anderson, Director, Center for Hospital Finance and Management, Johns Hopkins University (JHU); and Mr. David Mitchell, President and Founder Patients for Affordable Drugs (PAD).
• On March 22, 2017, the House Veterans’ Affairs Health Subcommittee held a hearing entitled, Healthy Hiring: Enabling VA to Recruit and Retain Quality Providers. The witnesses included Louis Celli, Director, The American Legion, National Veterans Affairs and Rehabilitation Division; Debra Draper, Director, Health Care, on behalf of U.S. Government Accountability Office (GAO); Paula Malloy, Assistant Deputy Under Secretary for Health for Workforce Services, Veterans Health Administration, on behalf of U.S. Department of Veterans Affairs; Max Stier, President and Chief Executive Office, Partnership for Public Service; and Steve Young, Deputy Under Secretary for Health for Operations and Management, Veterans Health Administration, on behalf of U.S. Department of Veterans Affairs.

• On March 29, 2017, the Senate Special Aging Committee will hold a hearing entitled, The Arch of Alzheimer's: From Preventing Cognitive Decline in Americans to Assuring Quality Care for those Living with the Disease. The hearing will take place at 2:30 p.m. in 106 Dirksen.

• On March 28, 2017, the House Energy and Commerce Health Subcommittee will hold a hearing entitled, Examining FDA’s Medical Device User Fee Program. The hearing will take place at 10:15 a.m. in 2123 Rayburn.
• On March 29, 2017, the House Appropriations Labor, Health and Human Services, Education, and Related Agencies Subcommittee will hold a budget hearing on the Department of Health and Human Services. The hearing will take place at 10:00 a.m. in 2358-C Rayburn.

• On March 22, 2017, the Office of Inspector General (OIG) released a report entitled, Mississippi Claimed Millions in Unallowable School-Based Medicaid Administrative Costs. The report found that the Mississippi Division of Medicaid (State agency) claimed school-based Medicaid administrative costs that were not in accordance with Federal requirements. The State agency used statistically invalid random moment sampling (RMS) in allocating costs to Medicaid, and it did not maintain adequate support to validate its sample results and related extrapolations. In addition, it claimed these costs without promptly submitting to the. Department of Health and Human Services, Division of Cost Allocation (DCA), for review its cost allocation plan (CAP) amendments describing its random moment time study (RMTS) methodologies. Instead, the State agency claimed costs based on either of two implementation plans describing different RMTS methodologies. As a result, the almost $42.4 million (more than $21.1 million Federal financial participation) that the State agency claimed in school-based Medicaid administrative costs for Federal fiscal years 2010 through 2012 was unallowable.
• On March 22, 2017, the Congressional Budget Office (CBO) released a report on R. 1215, Protection Access to Care Act of 2017. The report found that H.R. 1215 would impose limits on medical malpractice litigation in state and federal courts by capping awards and attorney fees, modifying the statute of limitations, and eliminating joint and several liability. The CBO expects that enacting H.R. 1215 would, on balance, lower costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of health care services prescribed by providers when faced with less pressure from potential malpractice suits. Those reductions in costs would, in turn, lead to lower spending in federal health programs and to lower premiums for private health insurance.
• On March 22, 2017, the CBO released a report on R. 1628, the American Health Care Act, incorporating manager’s amendments 4, 5, 24, and 25. The CBO estimates a net reduction in federal deficits of $337 billion over the 2017 – 2026 period; the updated estimated shows a net reduction of $150 billion (approximately $186 billion less over the period). According to the CBO, there are minimal differences on the number of individuals insured and the impact on premiums would be approximately the same.
• On March 24, 2017, the OIG released a report entitled, Missouri Properly Verified Correction of Deficiencies Identified During Surveys of Nursing Homes. The report found that on the basis of the OIG’s review of 100 sampled deficiencies, it is determined that the Missouri Department of Health and Senior Services verified nursing homes' correction of deficiencies identified during surveys in calendar year 2014 in accordance with Federal requirements.

IV. Other Health Policy News

• On March 22, 2017, CMS issued a Medicaid drug rebate program notice. The notice provides guidance to states to remind them of certain limitations on Medicaid Federal Financial Participation (FFP) and manufacturer rebates under the Medicaid Drug Rebate Program (MDRP) for drugs used for cosmetic purposes or hair growth as well as those used to treat sexual dysfunction or erectile dysfunction.

V. ACA Repeal News

• On March 20, 2017, the Republican chairs of the key House committees overseeing the American Health Care Act (AHCA) released the manager’s amendment containing technical changes to the AHCA bill, which can be found here and the manager’s amendment containing policy changes, which can be found here. The policy changes in the manager’s amendment include: (1) letting states choose between Medicaid per-capital caps or block grants; (2) allowing state work requirements for Medicaid enrolls; (3) keeping new states from expanding Medicaid to coverage adults above 133 percent of the federal poverty, but grandfather expansion enrollees who were enrolled as of Dec. 31, 2019 and who do not have a break in eligibility for more than one month – at the enhanced FMAP; (4) offering more generous reimbursement for elder and disabled Medicaid enrollees; (5) repealing the Affordable Care Act’s industry taxes a year earlier, in 2017; (6) delaying the Cadillac tax for an additional year; (6) allowing the Senate to enhance the tax credit for those ages 50 to 64; and (7) ensuring federally funded tax credits can only be used to purchase insurance plans that do not cover abortion or abortion services.
• On March 21, 2017, House Freedom Caucus Chair Mark Meadows (R-NC) said the GOP leadership changes to the AHCA still do not satisfy the conservative group’s issues with the AHCA. He said there are more than 21 members of the roughly 40-member group that will likely vote against the AHCA. Additionally, the Chair of the moderate Tuesday Group, Charlie Dent (R-PA) said the changes floated to accommodate his concerns about the tax credits do not go far enough.
• On March 22, 2017, the House Rules Committee held a meeting on H.R. 1628, the AHCA. The Committee heard extensive testimony from several panels of witnesses – including the Chairmen and Ranking Members of the House Ways and Means, Energy and Commerce, and Budget Committees, Democratic Leadership, and proponents and opponents of various amendments.  The Committee did not proceed with votes on any amendments (note, however, that all amendments submitted to the Committee are available here.
• On March 24, 2017, the House Rules Committee reconvened a meeting regarding legislation to repeal and replace the Affordable Care Act, H.R. 1628, the AHCA. The Rules Committee adopted a Closed Rule (by a vote of 9-3 in support), providing for four hours of debate on the bill, equally divided between the Chair and Ranking Member of the House Budget Committee.  The Rule self-executes the Manager’s Amendments as amended.  No additional amendments were made in order.  The Committee voted down a motion to allow for an open rule (by a vote of 9-3 in opposition).
• On March 24, 2017, House Speaker Paul Ryan (R-WI) removed the AHCA from consideration.