Alston & Bird Health Care Week in Review, May 15, 2020

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in healthcare regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

This week, CMS issued its FY 2021 Hospital Inpatient Prospective Payment Systems (IPPS) proposed rule and House Democrats released their draft proposal for the next COVID-19 relief bill. Read more about these events and other news below.

I. Regulations, Notices, & Guidance

• On May 11, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicare Programs: Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2021 Rates; etc. CMS is proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from CMS’s continuing experience with these systems for FY 2021 and to implement certain recent legislation. CMS is also are proposing to make changes relating to Medicare graduate medical education (GME) for teaching hospitals. In addition, CMS is providing the market basket update that will apply to the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis, subject to these limits for FY 2021. CMS is proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2021. In this FY 2021 IPPS/LTCH PPS proposed rule, CMS is proposing changes to the new technology add-on payment pathway for certain antimicrobial products and other changes to new technology add-on payment policies, and to collect market-based rate information on the Medicare cost report for cost reporting periods ending on or after January 1, 2021, and requesting comment on a potential market based MS-DRG relative weight methodology beginning in FY 2024 that CMS may adopt in this rulemaking. CMS is proposing to establish new requirements or revise existing requirements for quality reporting by acute care hospitals and PPS-exempt cancer hospitals. CMS is also are proposing to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare and Medicaid Promoting Interoperability Programs. CMS is providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program and the Hospital-Acquired Condition (HAC) Reduction Program.
• On May 11, 2020, the Food and Drug Administration (FDA) issued guidance entitled, Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency (Revised). FDA is issuing this guidance to provide a policy to help accelerate the availability of novel coronavirus (COVID-19) tests developed by laboratories and commercial manufacturers for the duration of the public health emergency. Rapid detection of COVID-19 cases in the United States requires wide availability of testing to control the emergence of this rapidly spreading, severe illness. This guidance describes a policy for laboratories and commercial manufacturers to help accelerate the use of tests they develop in order to achieve more rapid and widespread testing capacity in the United States. This policy is intended to remain in effect only for the duration of the public health emergency related to COVID-19 declared by the Secretary of Health and Human Services (HHS) on January 31, 2020, effective January 27, 2020, including any renewals made by the HHS Secretary in accordance with section 319(a)(2) of the Public Health Service Act (PHS Act).
• On May 11, 2020, FDA issued guidance entitled, COVID-19 Public Health Emergency: General Considerations for Pre-IND Meeting Requests for COVID-19 Related Drugs and Biological Products. FDA is issuing this guidance to provide general considerations to assist sponsors in preparing pre-investigational new drug application (pre- IND) meeting requests for COVID-19 related drugs for the duration of the COVID-19 public health emergency. As described in further detail in this guidance, FDA recommends that sponsors initiate all drug development interactions for COVID-19 related drugs through IND meeting requests. This policy is intended to remain in effect only for the duration of the public health emergency related to COVID-19 declared by the Secretary of HHS on January 31, 2020, effective January 27, 2020, including any renewals made by the HHS Secretary in accordance with section 319(a)(2) of the PHS Act.
• On May 11, 2020, FDA issued guidance entitled, COVID-19: Developing Drugs and Biological Products for Treatment or Prevention. FDA is issuing this guidance to assist sponsors in the clinical development of drugs for the treatment or prevention of COVID-19. Preventative vaccines and convalescent plasma are not within the scope of this guidance. This guidance is intended to remain in effect for the duration of the public health emergency related to COVID-19 declared by the HHS, including any renewals made by the HHS Secretary in accordance with section 319(a)(2) of the PHS Act. However, the recommendations described in the guidance are expected to assist the FDA more broadly in its continued efforts to assist sponsors in the clinical development of drugs for the treatment of COVID-19 beyond the termination of the COVID-19 public health emergency and reflect the FDA’s current thinking on this issue.
• On May 11, 2020, FDA issued guidance entitled, Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic. This guidance provides recommendations to industry regarding postmarketing adverse event reporting for drugs, biologics, medical devices, combination products, and dietary supplements during a pandemic. FDA anticipates that during a pandemic, industry and FDA workforces may be reduced because of high employee absenteeism while reporting of adverse events related to widespread use of medical products indicated for the treatment or prevention of the pathogen causing the pandemic may increase. The extent of these possible changes is unknown. This guidance discusses FDA’s intended approach to enforcement of adverse event reporting requirements for medical products and dietary supplements during a pandemic.
• On May 14, 2020, the Drug Enforcement Administration (DEA) issued a proposed rule entitled, Schedules of Controlled Substances: Placement of para-Methoxymethamphetamine (PMMA) in Schedule I. The DEA proposes placing 1-(4- methoxyphenyl)-N-methylpropan-2-amine (para-methoxymethamphetamine, PMMA), including its salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible, in schedule I of the Controlled Substances Act. This action is being taken to enable the United States to meet its obligations under the 1971 Convention on Psychotropic Substances. If finalized, this action would impose the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule I controlled substances on persons who handle (manufacture, distribute, import, export, engage in research, conduct instructional activities or chemical analysis, or possess), or propose to handle PMMA.
• On May 15, 2020, HHS issued a rule entitled, Enforcement Discretion Regarding COVID-19 Community-Based Testing Sites During the COVID-19 Nationwide Public Health Emergency. This notification is to inform the public that the HHS is exercising its discretion in how it applies the Privacy, Security, and Breach Notification Rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As a matter of enforcement discretion, the HHS Office for Civil Rights (OCR) will not impose penalties for noncompliance with the regulatory requirements under the HIPAA Rules against covered health care providers or their business associates in connection with the good faith participation in the operation of a COVID-19 Community-Based Testing Site (CBTS) during the COVID-19 nationwide public health emergency.

• May 18, 2020: The Health Resources and Services Administration (HRSA) announced a public meeting entitled, Meeting of the Advisory Commission on Childhood Vaccines. During this meeting, the ACCV will discuss a draft National Vaccine Injury Compensation Program Notice of Proposed Rulemaking.
• May 20, 2020: The National Institutes of Health (NIH) announced a public meeting entitled, Meeting of the National Institute of Biomedical Imaging and Bioengineering. The purpose of the meeting is to go over the Report from the Institute Director and other Institute Staff.
• June 1-2, 2020: CMS announced a public meeting entitled, New Public Requests for Revisions to the Healthcare Common Procedure Coding System (HCPCS) Coding for Durable Medical Equipment and Accessories, Orthotics and Prosthetics, Supplies and Other Non-Drug and Non-Biological Items. The purpose of this meeting is to discuss CMS’s preliminary coding recommendations for new public requests for revisions to the HCPCS Level II code set for Durable Medical Equipment (DME) and Accessories, Orthotics and Prosthetics (O&P), Supplies, and other non-drug and non-biological items.
• June 8, 2020: NIH announced a public meeting entitled, Meeting of the Muscular Dystrophy Coordinating Committee. The purpose of this meeting is to bring together committee members, representing government agencies, patient advocacy groups, other voluntary health organizations, and patients and their families to update one another on progress relevant to the Action Plan for the Muscular Dystrophies and to coordinate activities and discuss gaps and opportunities leading to better understanding of the muscular dystrophies, advances in treatments, and improvements in patients' and their families' lives.
• June 22, 2020: CMS announced a public meeting entitled, Public Meeting Regarding New and Reconsidered Clinical Diagnostic Laboratory Test Codes for the Clinical Laboratory Fee Schedule for Calendar Year 2021. The purpose of this meeting is to receive comments and recommendations (including data on which recommendations are based) on the appropriate basis for establishing payment amounts for new or substantially revised Healthcare Common Procedure Coding System codes being considered for Medicare payment under the Clinical Laboratory Fee Schedule (CLFS) for calendar year 2021.
• June 24, 2020: The Centers for Disease Control and Prevention (CDC) announced a public meeting entitled, Meeting of the Advisory Committee on Immunization Practices. The meeting agenda will include discussions on SARS-CoV-2(COVID-19) Vaccines, influenza vaccines, and meningococcal vaccines. A recommendation vote is scheduled for influenza vaccines and a VFC vote is schedule for meningococcal vaccines.
• June 29-30, 2020: CMS announced a public meeting entitled, Meeting Announcement for the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests. The Panel will provide input and recommendations on the establishment of payment rates under section 1834A of the Act for new clinical diagnostic laboratory tests, including whether to use “crosswalking” or “gapfilling” processes to determine payment for a specific new test; the factors used in determining coverage and payment processes for new clinical diagnostic laboratory tests; and other aspects of the new payment system under section 1834A of the Act.
• June 30, 2020: FDA announced a public meeting entitled, Modernizing the Food and Drug Administration's Data Strategy. The purpose of the meeting is to provide an opportunity to hear from FDA staff and outside experts on topics directly related to modernizing FDA's data strategy, including data quality, data stewardship, data exchange, and data analytics.

II. Congressional Hearings

U.S. House of Representatives

• On May 13, 2020, the House Select Subcommittee on the Coronavirus Crisis held a briefing entitled, Requirements to Safely Reopen the Economy. Panelists present included: Ashish Jha, Director, Harvard Global Health Institute, Harvard University; Dr. Scott Gottlieb, Former Commissioner, FDA, Resident Fellow, American Enterprise Institute (AEI); Dr. Georges Benjamin, Executive Director, American Public Health Association (APHA); Dr. Mark McClellan, Former Commissioner, FDA, Former Administrator, CMS, Founding Director, Duke-Margolis Center for Health Policy, Duke University; and Dr. Tom Inglesby, Director, Center for Health Security, Johns Hopkins Bloomberg School of Public Health.
• On May 14, 2020, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Protecting Scientific Integrity in the COVID-19 Response. Witnesses present included: Dr. Richard Bright, Senior Advisor, NIH; and Mike Bowen, Executive Vice President, Prestige Ameritech.

U.S. Senate

• On May 12, 2020, the Senate Committee on Health, Education, Labor, & Pensions (HELP) held a hearing entitled, COVID-19: Safely Getting Back to Work and Back to School. Witnesses present included: Dr. Anthony Fauci, Director, National Institute of Allergy and Infectious Diseases (NIAID), NIH; Dr. Robert Redfield, Director, CDC; ADM Brett Giroir, MD, Assistant Secretary for Health, HHS; and Dr. Stephen Hahn, Commissioner of FDA.
• On May 12, 2020, the Senate Committee on the Judiciary held a hearing entitled, Examining Liability During the COVID-19 Pandemic. Witnesses present included: Mr. Kevin Smartt, Chief Executive Officer, Kwik Chek Convenience Stores; Mr. Anthony “Marc” Perrone, International President, United Food and Commercial Workers International Union; Ms. Rebecca Dixon, Executive Director, National Employment Law Project; Mr. Leroy Tyner, Jr., General Counsel, Texas Christian University; Professor David Vladeck, A.B. Chettle Chair in Civil Procedure, Georgetown University Law Center; and Ms. Helen Hill, Chief Executive Officer, Explore Charleston.

III. Reports, Studies, & Analyses

• On May 11, 2020, the Kaiser Family Foundation (KFF) published an issue brief entitled, Opportunities and Barriers for Telemedicine in the U.S. During the COVID-19 Emergency and Beyond. This brief presents some of the many policy changes that have taken place in the field of telehealth by the federal government, state governments, commercial insurers, and health systems in just the few short weeks since the COVID-19 outbreak hit the U.S. the brief highlights key considerations in achieving widespread implementation of telemedicine services during this pandemic and beyond, including easing of telemedicine regulations, broadening insurance coverage, strengthening telecommunications infrastructure, and patient facing issues like connectivity and quality of care.
• On May 13, 2020, KFF published an issue brief entitled, Individual Insurance Market Performance in 2019. This brief analyzes data from 2011 through 2019 to examine how the individual insurance market performed under the ACA and, most recently, without the individual mandate in place. The authors used financial data reported by insurance companies to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates to look at the average premiums, claims, medical loss ratios, gross margins, and enrollee utilization in the individual insurance market, as well as the amount of medical loss ratio rebates insurers expect to issue to 2019 enrollees. The authors found that, on average, individual market insurers remained profitable through 2019. Further, despite the absence of the mandate penalty, data indicate that the individual market has not become significantly less healthy.
• On May 14, 2020, KFF published an issue brief entitled, Distribution of CARES Act Funding Among Hospitals. This brief examines the implications of the decision to allocate funding based on total net patient revenue, which is total patient revenue minus contractual allowances and discounts. The brief focuses specifically on hospitals using data that hospitals report to the CMS as part of the Healthcare Cost Report Information System (HCRIS). Hospital revenue is mainly a factor of volume and payment rates per service or patient diagnosis. Reimbursement rates vary widely by payer. Hospitals typically command rates from private insurers that average twice Medicare rates per patient, and some are paid substantially higher rates from private insurers in highly concentrated markets. The authors focused their analysis on hospitals with the highest and lowest shares of revenue from private payers to inform policy decisions regarding how to allocate any remaining grants to providers as well as any potential new funding from Congress.

IV. Other Health Policy News

• On May 12, 2020, House Democrats unveiled the text of their proposal for the next COVID-19 relief package. The bill, entitled the Health and Economic Recovery Omnibus Emergency Solutions Act (or “HEROES Act”), offers a total of $3 trillion in aid. Among its key health care provisions, the bill would create a contact tracing and disease surveillance workforce and bump billions more dollars into states’ Medicaid programs. It would give $75 billion to public health departments and workforce agencies to support expanding COVID-19 testing and create a contact tracing and surveillance system across the country. It would also increase Federal Medical Assistance Percentage payments to state Medicaid programs by 14% starting July 1 through June 30, 2021. Other highlights include: $100 billion to the federal fund for health-care providers; slashing interest rates to 1% for providers who took Medicare advance payments; eliminating cost sharing for COVID-19 treatments for people in Medicare, Medicaid and private insurance, TRICARE and at Veterans Affairs facilities; full subsidies for COBRA premiums for furloughed workers; special enrollment periods for Obamacare and Medicare; a temporarily increase by 2.5% of Medicaid disproportionate share hospital allotments; regular reporting to Congress on requests by states to the Strategic National Stockpile; and a requirement for drug manufacturers to report foreign drug manufacturing sites. The bill also provides $200 billion to fund what it describes as “hazard pay” for essential workers. The package serves as a starting point for negotiations with Congressional Republicans, who, along with President Donald Trump, have largely rejected the Democrats’ bill. For more information, a summary of the bill can be found here.
• On May 13, 2020, CMS released a new toolkit developed to aid nursing homes, governors, states, departments of health, and other agencies who provide oversight and assistance to these facilities, with additional resources to aid in the fight against the COVID-19 pandemic within nursing homes. The toolkit builds upon previous actions taken by CMS, which provide a wide range of tools and guidance to states, healthcare providers and others during the public health emergency. The toolkit is comprised of best practices from a variety of front line health care providers, governors’ COVID-19 task forces, associations and other organizations, and experts, and is intended to serve as a catalogue of resources dedicated to addressing the specific challenges facing nursing homes as they combat COVID-19. The toolkit is available here.
• On May 14, 2020, the CDC released previously withheld guidance documents on reopening schools, restaurants, and other institutions locked down during the pandemic. The new CDC guidelines provide brief checklists meant to help key businesses and others operating in public reopen safely. In separate one-page documents, the CDC offers decision-making tools for schools, workplaces, camps, child-care programs, mass transit systems, and bars and restaurants. The guidance documents can be accessed here.
• On May 15, 2020, the Trump Administration announced the appointment of Moncef Slaoui as chief advisor and General Gustave F. Perna as chief operating officer of Operation Warp Speed (OWS), the administration's national program to accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics (medical countermeasures). More information about this announcement can be found here.

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