Alston & Bird Health Care Week in Review, August 7, 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:

On Tuesday, CMS issued its annual proposed updates to the Medicare Outpatient Prospective Payment System and Physician Fee Schedule. Read more about the proposed rules and other news below.

I. Regulations, Notices, & Guidance

• On August 4, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; New Categories for Hospital Outpatient Department Prior Authorization Process; Clinical Laboratory Fee Schedule: Laboratory Date of Service Policy; Overall Hospital Quality Star Rating Methodology; and Physician-owned Hospitals. This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2021 based on CMS’s continuing experience with these systems. In this proposed rule, CMS describes the proposed changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In addition, this proposed rule would establish and update the Overall Hospital Quality Star Rating beginning with the CY 2021; remove certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities,” and clarify that certain beds are counted toward a hospital’s baseline number of operating rooms, procedure rooms, and beds; and add two new service categories to the OPD Prior Authorization Process.
• On August 4, 2020, CMS issued a proposed rule entitled, CY 2021 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicaid Promoting Interoperability Program Requirements for Eligible Professionals; Quality Payment Program; Coverage of Opioid Use Disorder Services Furnished by Opioid Treatment Programs; Medicare Enrollment of Opioid Treatment Programs; Electronic Prescribing for Controlled Substances for a Covered Part D Drug under a Prescription Drug Plan or an MA-PD plan; Payment for Office/Outpatient Evaluation and Management Services; Hospital IQR Program; Establish New Code Categories; and Medicare Diabetes Prevention Program (MDPP) Expanded Model Emergency Policy. This major proposed rule addresses changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; Medicare Shared Savings Program requirements; Medicaid Promoting Interoperability Program requirements for Eligible Professionals; updates to the Quality Payment Program; Medicare coverage of opioid use disorder services furnished by opioid treatment programs; Medicare enrollment of Opioid Treatment Programs; payment for office/outpatient evaluation and management services; Requirement for Electronic Prescribing for Controlled Substances for a Covered Part D drug under a prescription drug plan or an MA-PD plan and Medicare Diabetes Prevention Program (MDPP) expanded model Emergency Policy.
• On August 4, 2020, CMS issued a final rule entitled, Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2021. This final rule updates the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY) 2021. As required by statute, this final rule includes the classification and weighting factors for the IRF prospective payment system’s case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2021. This final rule adopts more recent Office of Management and Budget (OMB) statistical area delineations and applies a 5 percent cap on any wage index decreases compared to FY 2020 in a budget neutral manner. This final rule also amends the IRF coverage requirements to remove the post-admission physician evaluation requirement and codifies existing documentation instructions and guidance. In addition, this final rule amends the IRF coverage requirements to allow, beginning with the second week of admission to the IRF, a nonphysician practitioner who is determined by the IRF to have specialized training and experience in inpatient rehabilitation to conduct 1 of the 3 required face-to-face visits with the patient per week, provided that such duties are within the non-physician practitioner’s scope of practice under applicable state law.
• On August 4, 2020, CMS issued a proposed rule entitled, Treatment of Medicare Part C Days in the Calculation of a Hospital’s Medicare Disproportionate Patient Percentage. This proposed rule would establish a policy concerning the treatment of patient days associated with persons enrolled in a Medicare Part C (also known as “Medicare Advantage”) plan for purposes of calculating a hospital’s disproportionate patient percentage for cost reporting periods starting before FY 2014 in response to the ruling in Azar v. Allina Health Services, 139 S. Ct. 1804 (June 3, 2019).
• On August 5, 2020, the Food and Drug Administration (FDA) issued guidance entitled, Limited Population Pathway for Antibacterial and Antifungal Drugs. This guidance provides information on the implementation of the limited population pathway provision of the 21st Century Cures Act (Cures Act), which established the limited population pathway for antibacterial and antifungal drugs (LPAD pathway). This guidance finalizes the draft guidance of the same name issued on June 13, 2018.
• On August 5, 2020, FDA issued guidance entitled, Biosearch Monitoring Technical Conformance Guide. This guidance provides current FDA specifications, recommendations, and general considerations for preparing and submitting Clinical Study-Level Information, Subject-Level Data Line Listings by Clinical Site, and a Summary-Level Clinical Site Dataset that are used by the Center for Drug Evaluation and Research (CDER) for planning of Bioresearch Monitoring (BIMO) inspections in electronic format for new drug applications (NDAs), biologics license applications (BLAs), and NDA or BLA supplemental applications containing clinical data that are regulated by CDER. It also applies when these data and information are submitted under certain investigational new drug applications (INDs) in advance of a planned NDA, BLA, or supplemental submission.
• On August 7, 2020, FDA issued guidance entitled, Drug-Drug Interaction Assessment for Therapeutic Proteins. The purpose of this guidance is to provide a systematic, risk-based approach to help sponsors of INDs and applicants of BLAs determine the need for drug-drug interaction (DDI) studies for a therapeutic protein (TP).

Event Notices

• August 11, 2020: FDA announced a public meeting entitled, Independent Third-Party Assessment of IND FDA-Sponsor Communication Practices in PDUFA VI. The meeting will include a presentation from an independent third-party contractor about its assessment of FDA-sponsor communications during the investigational new drug (IND) stage of drug/biologic development in the Prescription Drug User Fee Act (PDUFA) VI; a series of presentations by and a panel discussion with invited regulatory and industry representatives, and an open public comment period.
• August 13, 2020: FDA announced a public meeting entitled, Meeting of the Oncologic Drugs Advisory Committee. The committee will discuss biologics license application 125706, for remestemcel-L (ex-vivo culture-expanded adult human mesenchymal stromal cells suspension for intravenous infusion), submitted by Mesoblast, Inc. The proposed indication for this product is for the treatment of steroid-refractory acute graft-versus-host disease in pediatric patients.
• August 19, 2020: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting entitled, Meeting of the Advisory Committee for Women’s Services. The meeting will include discussions on assessing SAMHSA’s current strategies, including the mental health and substance use needs of the women and girls’ population. Additionally, the ACWS will be addressing priorities regarding the impact of COVID-19 on the behavioral health needs of women and children, and the current ethnic/racial climate and related economic and health disparities on women, and directions around behavioral health services and access for women and children.
• August 26, 2020: The Centers for Disease Control and Prevention (CDC) announced a public meeting entitled, Meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions on COVID-19 vaccines.
• August 31, 2020: CMS announced a public meeting entitled, Meeting of the Advisory Panel on Hospital Outpatient Payment. The purpose of the Panel is to advise the Secretary of the Department of Health and Human Services (HHS) and the CMS Administrator concerning the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, and supervision of hospital outpatient therapeutic services. The advice provided by the Panel will be considered as CMS prepares the annual updates for the hospital outpatient prospective payment system.
• September 8-9, 2020: FDA announced a public meeting entitled, Meeting of the Orthopaedic and Rehabilitation Devices Panel of the Medical Devices Advisory Committee. During the meeting, the committee will discuss the classification of several medical devices.
• September 15, 2020: FDA announced a public meeting entitled, Meeting of the Pediatric Advisory Committee. The committee will discuss pediatric-focused safety reviews, as mandated by the Best Pharmaceuticals for Children Act (Pub. L. 107-109) and the Pediatric Research Equity Act of 2003 (Pub. L. 108-155).
• September 23-24, 2020: HHS announced a public meeting entitled, Meeting of the National Vaccine Advisory Committee (NVAC). During the September 2020 NVAC meeting, sessions will focus on future coronavirus vaccines, the upcoming flu season, immunization equity, and routine vaccination.

II. Congressional Hearings

U.S. House of Representatives

• On August 6, 2020, the House Committee on Oversight and Reform Subcommittee on the Coronavirus Crisis held a hearing entitled, Challenges to Safely Reopening K-12 Schools. Witnesses present included: The Honorable Arne Duncan, Managing Partner, Emerson Collective, Former Secretary of Education; Dr. Caitlin Rivers, Senior Scholar, Johns Hopkins Center for Health Security, Assistant Professor, Department of Environmental Health and Engineering, Johns Hopkins Bloomberg School of Public Health; Robert W. Runcie, Superintendent, Broward County Public Schools; and Angela Skillings, Teacher, Hayden Winkelman Unified School District.
• On August 6, 2020, the House Committee on Ways and Means Rural and Underserved Communities Health Task Force held a roundtable entitled, Examining the Role of Telehealth During COVID-19 and Beyond. Panelists included: Tearsanee Carlisle Davis, DNP, FNP-BC, FAANP, Director of Clinical and Advanced Practice Operations at the University of Mississippi Medical Center’s Center (UMMC) for Telehealth, Assistant Professor at UMMC School of Nursing; Dr. Ateev Mehrotra, MD, MPH, Associate Professor of Health Care Policy, Department of Health Care Policy, Harvard Medical School, Associate Professor of Medicine and Hospitalist, Beth Israel Deaconess Medical Center; Keris Myrick, MBA, Chief of Peer and Allied Health Professions for the Los Angeles County Department of Mental Health; and Dr. Jason Tibbels, MD, Chief Quality Officer for Teladoc and Founder and Vice President of the Institute of Patient Safety and Quality of Virtual Care.

III. Reports, Studies, & Analyses

• On August 3, 2020, Kaiser Family Foundation (KFF) published an issue brief entitled, Key Questions About Nursing Home Regulation and Oversight in the Wake of COVID-19. The COVID-19 pandemic has led to renewed interest in nursing home regulation and oversight, as residents and staff are at increased risk of infection due to the highly transmissible nature of the coronavirus, the congregate nature of facility settings, and the close contact that many workers have with patients. Certification of nursing home compliance with federal Medicare and/or Medicaid requirements generally is performed by states through regular inspections known as surveys. Federal regulations issued in 2016 require facilities to have an infection control and prevention program and a written emergency preparedness plan. This issue brief answers key questions about nursing home oversight and explains how federal policy has changed in light of COVID-19.
• On August 3, 2020, KFF published an issue brief entitled, What We Know About Provider Consolidation. This brief provides an overview of existing research that examines the impact of provider consolidation on health care costs and quality. There are two major types of consolidation among health care providers, both of which are discussed in this brief. The first is horizontal consolidation, which occurs when two providers performing similar functions join, such as when two hospitals merge or groups of physician practices merge to form larger group practices. The second type is vertical integration, which refers to one type of entity purchasing another in the supply chain such as hospitals acquiring physician practices.
• On August 4, 2020, RAND Corporation published a report entitled, Practice Expense Methodology and Data Collection Research and Analysis. In this report, the authors address how CMS can improve the methodology or update data used for setting practice expense (PE) rates for payments made under the Medicare PFS. The current system for setting PE payment rates relies, in part, on data collected in the Physician Practice Information (PPI) Survey, which generally reflects information from 2006. Because of changes in the U.S. economy and health care system since that time, there are concerns that continued reliance on measures that use PPI Survey data might result in misvalued PE rates. To the extent that future payment systems use PFS rates as a starting point, misvalued PE rates might be problematic if they are not updated. The research in this report, which is part of the second phase of a study, can be divided into three broad topics. First, the authors consider how updated PE data could be collected through a new large-scale national survey effort to replace the PPI Survey. Second, the authors consider a new framework for allocating PE, which they developed to better capture variation in PE resources that are required to provide services covered in the Medicare PFS. Finally, the authors continue work begun in Phase I of the project and documented in a previous report, Practice Expense Methodology and Data Collection Research and Analysis, investigating the potential to make use of data collected to set rates in the OPPS.

IV. Other Health Policy News

• On August 3, 2020, President Trump signed an executive order calling on CMS to make permanent some telehealth provisions allowed during the COVID-19 pandemic as well as authorize the Center for Medicare and Medicaid Innovation (CMMI) to create a rural health payment model. The executive order also calls on HHS to submit a report to the White House on existing and upcoming policy initiatives related to increasing access to health care for rural patients by eliminating regulation on the availability of providers; reducing maternal mortality and morbidity; and improving mental health care in rural communities. Finally, it calls on HHS and the Federal Communications Commission to develop and implement a strategy to improve rural communications health care infrastructure. More information on this executive action can be found here.
• On August 6, 2020, President Trump signed an executive order to encourage the production of certain drugs and medical supplies in the U.S. following shortages during the COVID-19 pandemic. The order calls on purchasers to buy American-made products and loosens federal drug-safety and environmental regulations that the administration says disadvantage domestic producers, among other measures. More information on the order can be found here.
• On August 6, 2020, HHS, through the Health and Resources and Services Administration (HRSA), awarded over $101 million to combat substance use disorders (SUD) and opioid use disorders (OUD). The awards support 116 organizations in 42 states and the District of Columbia, with many targeting high-risk rural communities. More information about this funding can be found here.

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