United States: Weekly Washington Healthcare Update - December 07, 2015

Last Updated: December 10 2015
Article by Stephanie A. Kennan, Charlyn A. Iovino and Caroline Perrin

This Week: Obamacare repeal passes Senate and goes to the House... Tax extenders still under development... Focus on drug pricing continues... Congress looks to create an omnibus appropriations bill to fund the government by Dec. 11 and in doing so weighs potential riders.

1. CONGRESS

House

Subcommittee on Health to Hold Hearing on Improving Health Care and Treatment

The Energy and Commerce Subcommittee on Health, chaired by Rep. Joseph Pitts (R-PA), has scheduled a hearing for Dec. 9 entitled "Examining Legislation to Improve Health Care and Treatment." The subcommittee will continue efforts to reauthorize a nursing training program and to advance legislation that addresses shortcomings in current law.

The bills to be discussed are:

  • H.R. 921, the Sports Medicine Licensure Clarity Act of 2015 – Authored by subcommittee Vice Chairman Brett Guthrie (R-KY), this bipartisan legislation would address medical liability rules for athletic trainers and medical professionals to ensure they are properly covered by their malpractice insurance while traveling with athletic teams in another state.
  • H.R. 1209, the Improving Access to Maternity Care Act – Authored by Rep. Michael Burgess, M.D. (R-TX), this bipartisan legislation would require the Health Resources and Services Administration to designate maternity care health professional shortage areas and review these designations on an annual basis, at minimum. The Department of Health and Human Services would also be required to collect and publish data on these shortage areas.
  • H.R. 2713, the Title VIII Nursing Workforce Reauthorization Act – Authored by Rep. Lois Capps (D-CA), this bipartisan legislation would reauthorize the current Nursing Workforce Development programs to continue nursing education at all levels, and provide additional support for nurses practicing in medically underserved communities.
  • H.R. 3441, the Accurate Education for Prenatal Screenings Act – Authored by Rep. Jaime Herrera Beutler (R-WA), this bipartisan legislation would direct the Centers for Disease Control and Prevention to develop, implement and maintain programs to educate patients as well as health care providers on the purpose of cell-free DNA prenatal screenings, the reasons for such screenings and what conditions may be detected, as well as the risks, benefits and alternatives to such screenings.
  • H.R. 4152, the Cardiac Arrest Survival Act – Authored by Rep. Pete Olson (R-TX), this legislation would expand immunity from civil liability related to the use of automated external defibrillator devices (AEDs).
  • H.R. 4153, the Educating to Prevent Eating Disorders Act of 2015 – Authored by Rep. Renee Ellmers (R-NC), this bipartisan legislation would establish a pilot program to test the impact of early intervention on the prevention, management and course of eating disorders.

To see the press release, click here.

The Majority Memorandum, a witness list and witness testimony will be available here as they are posted.

Oversight Subcommittee to Hold Second Hearing Examining ACA's State Insurance Marketplaces

The Energy and Commerce Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), scheduled a hearing for Dec. 8 entitled "An Overdue Checkup Part II: Examining the ACA's State Insurance Marketplaces." The hearing is the second of a two-part series and will focus on the actions that the Centers for Medicare and Medicaid Services (CMS) is taking to oversee the implementation of state exchanges and the challenges they are facing. Obamacare's failing CO-OP program will also be addressed at the hearing. CMS Acting Administrator Andy Slavitt will testify before the subcommittee.

To see the press release, click here.

The Majority Memorandum, a witness list and witness testimony will be available here as they are posted.

Senate

Senate Passes Obamacare Repeal Bill as Part of Reconciliation

On Dec. 3, the Senate passed its "reconciliation" package, which repeals much of Obamacare. Fifty-two Republicans voted for passage after hours of debate over a variety of issues from guns to risk corridors and Planned Parenthood funding. The bill now goes to the House, which is expected to pass it. The Administration has vowed to veto the package, which includes repeal of the medical device tax and the tax on insurers known as the Cadillac tax.

Democrats offered a variety of amendments from extending the Medicaid expansion funding split of 90 percent Federal/10 percent state to providing additional funds for mental health services. Democrats were successful in blocking an amendment to repeal risk corridors because it violated the Senate's budget rules. Also defeated was an amendment offered by Sen. Johnson (R-WI) to allow previously grandfathered health plans to continue. That amendment was also found to violate the Senate budget rules. Other additions include language that would defund the Prevention and Public Health Fund, as well as provisions to repeal the law's reinsurance provisions, the tax on health insurance plans and many other taxes, such as the tanning salon tax and a fee on health savings accounts. Republicans came up with an additional $750 million to help states address mental health needs and substance abuse disorders. Democratic amendments to preserve tax credits for vets, individuals who lost their jobs, victims of domestic violence and Americans with diseases like hepatitis C and cancer failed to pass.

While the bill is likely to be vetoed, some view this action as part of a careful development of a legislative strategy to unwind the Affordable Care Act (ACA) in 2017 should a Republican be elected President. Under the rules of reconciliation, the Senate parliamentarian has to determine whether each provision complies with the Senate's rules. Those rulings are based in part on precedent. So once the parliamentarian has determined that the legislation complies in December 2015, it would be hard to argue in January 2017 that a similar repeal bid does not.

Senators Ask HHS to Permit Drug Importation from Canada

On Nov. 20, Sens. John McCain (R-AZ) and Chuck Grassley (R-IA) wrote a letter to HHS Secretary Burwell asking her to issue certification of certain drugs as safe for importation from Canada. The senators say Burwell should use the authority in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to permit importation if doing so would lower costs and pose no public health risk.

Sen. Murkowski Attempting to Block Califf Nomination Due to FDA Approval of GE Salmon

Sen. Lisa Murkowski (R-AK) is attempting to block the pending nomination of Robert Califf as commissioner of the U.S. Food and Drug Administration (FDA) due to FDA's recent approval of genetically engineered (GE) fish. According to Murkowski, the FDA failed to cooperate fully on its decision to approve GE salmon. She plans to introduce legislation to require mandatory labeling and additional research into the potential risks and impacts of GE salmon.

Murkowski previously introduced the Genetically Engineered Salmon Risk Reduction Act — legislation that would amend the Federal Food, Drug, and Cosmetic Act to require an environmental impact report and risk analysis before GE salmon is approved for human consumption. An amendment was added to the FY 2016 agriculture/FDA spending bill that provides funds for implementing a provision requiring the labeling of GE salmon — Murkowski is continuing to build on that language.

Sen. Ben Sasse (R-NE) has also said he would block the confirmation of every nominee to the U.S. Department of Health and Human Services (HHS), which includes Califf, until the Obama administration gives answers for the failure of the CO-OP program.

Wyden-Grassley Investigation Finds Revenue-Driven Pricing Strategy Behind Gilead Hepatitis Drug

On Dec. 1, Senate Finance Committee Ranking Member Ron Wyden (D-OR) and senior Republican committee member and Chairman of the Senate Judiciary Committee Chuck Grassley (R-IA) released the results of an 18-month investigation into the pricing and marketing of Gilead Sciences' hepatitis C drug Sovaldi and its successor, Harvoni. Their staffs reviewed 20,000 pages of company documents, conducted interviews with health care experts and collected data from Medicaid programs in 50 states and the District of Columbia. The investigation found that the company pursued a marketing strategy and final wholesale price of Sovaldi that would maximize revenue with little concern for access or affordability. The price came to $1,000 per pill, or $84,000 for one course of treatment. Harvoni was later introduced at $94,500 per treatment.

In the 18 months after Sovaldi's approval, Medicare spent $8.2 billion before rebates on Sovaldi and Harvoni. Medicare spent more on Gilead hepatitis C drugs in the initial half of 2015 than in all of 2014. Gilead's recent financial statements show U.S. sales of Sovaldi and Harvoni, including through public programs and private payers, totaled $20.6 billion after rebates in the 21 months following Sovaldi's introduction.

Additional major findings from the investigation include:

  • Gilead justified Sovaldi's high price point based on price-per-cure
  • Gilead set a high price for Sovaldi with an eye toward ensuring a future high price for Harvoni
  • Gilead underestimated the degree of access restrictions that it expected would result from its pricing decision
  • Despite significant access restrictions, Gilead refused to significantly lower the net price
  • The burdens on Medicare, Medicaid and the Bureau of Prisons were significant
  • Competition entered the market and prices responded, but there are still significant concerns

Click here for more information.

Click here for a relevant press release.

Possible Funding Increases for NIH, AHRQ and FDA in the Upcoming Omnibus Appropriations Act

Research advocates are hoping the National Institutes of Health (NIH) will receive at least a $2 billion increase this year due to bipartisan support. In a letter on Nov. 20, over 100 Republicans in the House asked for a $3 billion increase — a number that is close to what NIH would have gotten under the House-passed 21st Century Cures bill, and almost as much as what Research!America advocates.

Funding for the Agency for Healthcare Research and Quality (AHRQ) is subject to increases now that the budget deal has freed up $25 billion for domestic spending in 2016. Previous funding for AHRQ was eliminated or reduced in House and Senate appropriations subcommittee bills earlier this year. However, the budget deal passed earlier this year provides Labor-HHS appropriators $5 billion above current levels and $9 billion above what was proposed for 2016.

There is also strong bipartisan support for increasing the U.S. Food and Drug Administration (FDA) budget to deal with the agency's duties under the Food Safety and Modernization Act.

2. ADMINISTRATION

Duals Demonstrations Face Low Enrollment

Demonstration projects with states to better align financing for those individuals who are eligible for Medicare and Medicaid (duals) and to integrate primary, acute, behavioral health and long-term services and supports for their Medicare-Medicaid enrollees have run into lower-than-expected enrollment and provider resistance in multiple states. However, states are still considering extending the demonstrations and advocates argue it is too soon to judge the success of the demonstration projects. As of September 2015, the 13 states running duals demos had enrolled only 400,000 beneficiaries. New York's demo in particular suffers from low enrollment. As of Sept. 1 only 7,280 beneficiaries were enrolled and 57,375 had left the demo.

State officials are complaining that providers are telling beneficiaries to drop out of the demos. Medicaid Health Plans of America said that provider resistance is contributing to low enrollment as the providers have an incentive to keep low-cost duals in fee-for-service. States are having more difficulty demonstrating the benefits of the program when people are able to change plans more often; therefore, states would like to know whether the Centers for Medicare and Medicaid Services (CMS) plans to restrict the ability of plan switching. This idea has met resistance from the Medicare Rights Center, which argues that the demos are still experiments and that it is too early to lock beneficiaries in plans for longer periods of time.

California Gov. Jerry Brown said in his 2015 budget that he will not continue the program if it does not show savings. Massachusetts is also struggling to fund its demonstration. Washington is participating in a managed fee-for-service demo and has promising results, but is funded only through the end of the year. Despite the various concerns, all 13 states participating in the duals demos have sent letters of intent to extend their demos after CMS offered an extension of two years.

White House Releases Updated HIV Plan

On Dec. 1, the White House released the National HIV/AIDS Strategy Federal Action Plan (Federal Action Plan) designed to fight HIV in the United States. The plan targets ways to expand HIV testing and linkage to care, improve viral suppression and pre-exposure prophylaxis (PrEP) — a new HIV prevention method.

The Federal Action Plan, released on World AIDS Day, presents immediate actions to be taken by Federal agencies that will move toward improving HIV prevention and care outcomes. It highlights progress over the past five years — including increasing the number of people living with HIV from 81 percent to 87 percent and reducing wait lists for the AIDS Drug Assistance Program.

The plan asks the Centers for Medicare and Medicaid Services (CMS) to educate state Medicaid programs about the newest treatment guidelines and to increase access to testing and care coordination. It also says that the Centers for Disease Control and Prevention (CDC) will increase efforts to find people not receiving care and increase awareness of PrEP in at-risk populations.

Chamber of Commerce Tells HHS to Extend Comment Period on 2017 Notice of Benefit and Payment Parameters Proposed Rule

The Chamber of Commerce is demanding that the U.S. Department of Health and Human Services (HHS) extend the 30-day comment period for the 2017 Notice of Benefit and Payment Parameters proposed rule, arguing that the current Dec. 21 deadline is inadequate considering its expansive and complex policies. The Chamber says this is the third year the administration has prevented the opportunity for meaningful comment.

The Chamber is requesting that HHS extend the comment period to 60 days after the proposed rule was published in the Federal Register. The Centers for Medicare and Medicaid Services (CMS) released the rule Nov. 20, but it wasn't published in the register until Dec. 2, giving only 19 days for comment under the current deadline. The Chamber also noted that meaningful public comment is almost impossible on this proposed rule, as there are a slew of disparate policy actions contained within it.

CMS Outlines Basis for Cuts Associated With Two-Midnight Rule

On Nov. 30, the Centers for Medicare and Medicaid Services (CMS) outlined its reasoning behind a 0.2 percent cut associated with the two-midnight rule after a federal court ordered CMS to do so in response to a lawsuit by the American Hospital Association (AHA). The two-midnight rule says that doctors should expect a beneficiary to stay in the hospital for at least two midnights for them to be considered inpatient — shorter stays are considered outpatient and are paid at a lower rate. When CMS implemented this policy in 2014, it expected more claims to be classified as inpatient and implemented the 0.2 percent cut to keep the policy budget neutral. Hospitals argue that the cut wasn't justified and that there shouldn't have been a reduction in the 2014 rates.

In September, the federal D.C. District Court ruled that HHS didn't give hospitals a chance to meaningfully comment on the cut, but also concluded that requiring HHS to pay hospitals back would be extremely disruptive. CMS says it is not proposing to reconsider the 0.2 percent cut at this time, and that it will respond to comments in a final notice published by March 18, 2016.

HHS OIG Says Medicare Part B Could Have Saved Money by Sharing Savings with 340B Providers

The HHS Office of Inspector General (OIG) says Medicare Part B could have saved between $162 million to $1.1 billion by sharing savings with 340B providers. The OIG says shared savings options could help strike a balance between the needs of 340B providers and Medicare. The 340B hospitals, however, say now is not the time to consider reimbursement cuts to safety net providers.

The OIG has developed three different shared savings scenarios that the OIG believes could achieve Medicare savings while continuing to provide financial incentives to ensure that covered entities continue to purchase Part B drugs through the 340B program.

CMS Issues Final Rule on the Extension of 90/10 Federal Funding for Medicaid Eligibility Systems

On Dec. 3, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on the Extension of 90/10 Federal Funding for Medicaid Eligibility Systems. The final rule is a part of CMS's efforts to support states in modernizing state eligibility systems to make accurate eligibility determinations and promote enrollment of eligible low-income people in Medicaid and the Children's Health Insurance Program (CHIP). The changes aim to support states in developing more efficient Medicaid eligibility and enrollment systems and Medicaid Management Information System (MMIS) claims systems. To do this, CMS is implementing initiatives such as automating the application and renewal process, processing claims more efficiently, integrating with human services programs, retiring outdated legacy systems and enhancing program reporting and management tools.

This final rule revises a 2011 regulation that provided an enhanced federal matching rate for the design, development, installation or enhancement of Medicaid eligibility and enrollment (E&E) systems through Dec. 31, 2015. The final rule continues the increases in the level of federal support from 50 percent to 90 percent for new E&E systems.

For more information, click here.

3. STATE ACTIVITIES

Kansas: Wichita Chamber Board Supports Medicaid Expansion

On Nov. 19, the Wichita Metro Chamber of Commerce voted to add Medicaid expansion to its policy priorities for the upcoming legislative session — only if the plan is revenue neutral and includes work and job training requirements. Kansas Gov. Sam Brownback still opposes expansion in the state, but there is increasing support from health industry executives and lawmakers.

South Dakota: Gov. Daugaard Considering Medicaid Expansion

South Dakota Gov. Dennis Daugaard is planning to address Medicaid expansion in his Dec. 8 budget address. His office reported that expansion could increase eligibility to 55,000 additional residents and could cost the state $30 million to $33 million a year starting in 2020. The governor's main concerns are keeping costs low and ensuring that Native Americans receive sufficient care. According to Daugaard's chief of staff, expanding the program largely relies on efforts by the Centers for Medicare and Medicaid Services (CMS) to update the policy funding 100 percent of costs for Medicaid-eligible American Indians through the Indian Health Service or tribes in the state.

Florida: Bill Repealing "Certificate of Need" Process Clears House Panel

On Nov. 19, a House review panel in Florida, the Select Committee on Affordable Healthcare Access, cleared a bill that would end state oversight of hospital construction and expansion. Gov. Rick Scott supports this measure that would repeal the "certificate of need" process requiring hospitals to prove community need to state regulators before building a new facility or expanding an existing one. The current bill has no Senate companion for the 2016 legislative session.

New Jersey: 17 Hospitals Sue the State for Approving OMNIA Health Plans

On Nov. 19, seventeen hospitals filed an appeal challenging New Jersey Gov. Chris Christie's approval of Horizon Blue Cross Blue Shield's new line of discounted health plans. The lawsuit claims the state "abdicated its responsibility" to act in the public interest. The hospitals are asking the state Department of Banking and Insurance to take back its decision allowing the insurer — the largest in the state — to sell the OMNIA tiered network plans. If the department refuses, the hospitals will take the matter to a state appeals court.

New Hampshire: Lawmakers Approve Drug Abuse Task Force

On Nov. 18, both the House and Senate chambers approved the creation of a task force charged with reviewing legislation related to drug abuse and addiction. The 26-member task force will spend the next six weeks studying issues including insurance coverage for treatment, increasing law enforcement, strengthening drug monitoring programs, educating opioid prescribers and cracking down on fentanyl dealers. Nearly 300 people have died from drug overdoses in New Jersey this year.

Arkansas: Task Force Set to Recommend Tweaked Private Option

Arkansas' Health Reform Legislative Task Force seems to be progressing on its recommendations to the governor on the future of health care in the state. State law requires the group to submit recommendations on the matter by the end of the year. The task force is expected to recommend continuing the state's private option Medicaid expansion with a few Republican tweaks added. Then, Gov. Asa Hutchinson will start negotiations with the federal government to figure out what the private option will be in 2017 and in the years after.

Oregon and California: New Laws Allow Easier Access to Birth Control

Oregon and California will become the first two states to allow women to get birth control directly from a pharmacist instead of having to go through their doctor first. The new laws are intended to make it easier for women to get multiple forms of birth control including pills, patches and rings. Pharmacists will be able to give women the medication directly once they fill out a questionnaire about their medical history.

Illinois: SEIU Healthcare Illinois Files Restraining Order Against Governor Rauner

SEIU Healthcare Illinois filed for a temporary restraining order against Gov. Bruce Rauner and Comptroller Leslie Munger after the governor refused to pay Illinois' contribution to the workers' health fund. SEIU claims Rauner violated the contract with the home care workers in Illinois' Home Services Program that requires the state to contribute health insurance benefits. The state currently owes the fund $1.5 million from fiscal year 2015 and $11.8 million for July through October in fiscal year 2016.

4. REGULATIONS OPEN FOR COMMENT

Department of Health and Human Services (HHS) Proposes Updates to "the Common Rule"

HHS and 15 other agencies released a notice of proposed rulemaking Sept. 2 for the Common Rule, the existing regulatory framework to transparency and oversight for scientific research involving human subjects. The proposed changes are to address the substantial changes that have occurred within scientific research. Current regulations have been in place since 1991 and are followed by 18 federal agencies. Proposed updates to the rule include:

  • Strengthened informed consent provisions
  • Requirements for administrative or IRB review that would align better with the risks of the proposed research
  • New data security and information protection standards
  • Requirements for written consent for use of an individual's biological samples, for example, blood or urine, for research with the option to consent to their future use for unspecified studies
  • Requirement, in most cases, to use a single institutional review board for multisite research studies
  • Application of rule to clinical trials, regardless of funding source, if they are conducted in a US institution that receives funding from a Common Rule agency for research involving human participants.

In July 2011, HHS issued an Advance Notice of Proposed Rulemaking to seek the public's input on updating the Common Rule. The proposed rule issued reflects input and requests comments for HHS to consider as it drafts the final rule. HHS will take public comment on the proposed rule until Dec. 7.

For a press release detailing changes to the rule visit hhs.gov.

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not "generally recognized as safe" or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA's decision can be found in the agency's press release.

CMS Releases Proposed Rule with New Discharge Planning Requirements

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would require all hospitals develop a written discharge plan for all inpatient and many outpatients in an attempt to reduce readmissions. The proposed rule, "Medicare and Medicaid Programs; Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies," would require hospitals to develop a discharge plan based on the needs of each applicable patient within 24 hours of admission. The plan would include a medication reconciliation process. Hospitals would be required to establish a process for patients who are transferred to a different facility or who went home.

CMS noted that the requirements could help reduce readmissions by a third. Until now, hospitals have had the ability to decide which patients need a written discharge plan, and have increasingly used the plans to reduce readmission and avoid the Affordable Care Act's (ACA) financial penalties. Comments will be accepted until no later than 5 p.m. on Jan. 4, 2016.

A press release can be found here.

CMS Issues Final Rule to Ensure Medicaid Services for Beneficiaries and Issues Request for Information on the Rule

On Oct. 29, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that ensures Medicaid beneficiaries have sufficient access to covered Medicaid services. CMS said that the rule, entitled "Methods for Assuring Access to Covered Medicaid Services," will allow states and CMS to make more informed decisions when considering whether proposed changes to Medicaid fee-for-service payment rates are sufficient to ensure the beneficiaries' access to those services. States will have to create access review plans that outline how states will ensure access to health care services and to examine how cuts to provider payments will affect the care received.

The rule strengthens CMS's oversight of Medicaid reimbursement and beneficiary access to providers. It will go into effect in January and CMS issued a Request for Information (RFI) to get feedback on how to make sure access requirements are being met. Comments will be accepted until no later than 5 p.m. on Jan. 4, 2016.

EEOC Issues Proposed Rule Amending the Genetic Information Nondiscrimination Act (GINA)

On Oct. 30, the U.S. Equal Employment Opportunity Commission (EEOC) issued a proposed rule clarifying when, under the Genetic Information Nondiscrimination Act (GINA), employers who offer wellness programs as part of group health plans can provide incentives to an employee's spouse to provide information about his or her current or past health status. (This is different from the April EEOC proposed rule related to the Americans with Disabilities Act.) The proposed rule clarifies that an employer can offer limited incentives in exchange for the employee's spouse providing information about his or her current or past health status. EEOC will accept comments on the new proposed rule through Dec. 29, 2015.

A press release on the proposed rule can be found here.

CMS Soliciting Comments on Episode Groups as Required by MACRA

The Centers for Medicare and Medicaid Services (CMS) is soliciting comments on episode groups and on specific clinical criteria and patient characteristics to classify patients into care episode and patient condition groups as required by Section 101(f) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), enacted April 16, 2015. The purpose of this commentary is to provide background and context to solicit stakeholder input on the episode groups that CMS has developed pursuant to Section 3003 of the Affordable Care Act (ACA). CMS is also seeking stakeholder input on the future role of episode groups in resource use measurement.

Comments should be sent to episodegroups@cms.hhs.gov by 11:59 p.m. EST on Feb. 15, 2016.

FDA Seeks Comments on Whether It Should Define "Natural" and If So, How?

Because of a series of competing citizen petitions, GMO labeling issues and congressional concern, the US Food and Drug Administration (FDA) is seeking public input on whether it should define the term "natural" for use on food product labels, and, if so, how to do so.

On Nov. 12, FDA published a request for feedback. FDA policy to date has not restricted the use of the word "natural" on food labeling unless the product has added color, synthetic substances or flavoring.

FDA has received four citizen petitions over the past two years asking the agency to issue regulations on the use of the term, and in July the House of Representatives passed a proposal on GMOs that would require FDA to define the term "natural" for product labeling.

FDA seeks feedback on the following questions:

  • What types of foods should be able to use the term?
  • Should only raw agriculture products be able to use the term?
  • Should only single-ingredient foods, such as bottled water or bagged spinach, be able to use the term?
  • If multi-ingredient foods can use the term, what types of ingredients would disqualify a product from using it?
  • What data or other information shows how consumers associate, confuse or compare the terms "natural" with "organic"?
  • What data or other information shows how consumers associate, confuse or compare the term "natural" with the term "healthy"?

The comment period is open until Feb. 10, 2016.

HHS Releases Notice of Benefit and Payment Parameters Proposed Rule for Health Insurance Marketplaces for 2017

On Nov. 20, the U.S. Department of Health and Human Services (HHS) released the proposed rule providing the payment parameters that would apply to the 2017 benefit year and new standards relating to consumers' experience in the Marketplaces.

The policies included in the proposed rule include payment parameters, Market rules, eligibility, enrollment and benefits.

Highlights of the proposed rule are:

  • Another recalibration of risk adjustment factors for the 2017 year — the department is proposing to incorporate preventive services into their simulation of plan liability as part of the recalibration. They are seeking comments on other improvements that could be made to the risk adjustment methodology;
  • A separate, lower default risk adjustment charge for smaller issuers, defined as issuers with 500 or fewer billable member months in a state's individual and small group markets combined in a benefit year. HHS believes this proposal would have a minimal impact on risk transfers;
  • A raise in the default risk adjustment charge from the 75th percentile to the 90th percentile of absolute transfers nationwide as a percent of state average premium. This adjustment would be designed to prevent the charge from being a low-cost option for issuers;
  • A federally facilitated Marketplace (FFM) user fee rate of 3.5 percent for 2017 and a fee of 3 percent for those state-based Marketplaces using the federal platform;
  • A maximum annual limitation on cost sharing for 2017 of $7,150 for individual coverage and $14,300 cumulatively for family coverage;
  • Establishment of one or more separate risk pools for each college or university by issuers of student health insurance plans, provided the risk pools are based on a bonafide school-related classification and on a health status-related factor;
  • Requirement that all issuers submit the unified rate review template for all single risk pool products regardless of whether they propose rate increases, decreases or no change in rates for these products;
  • An enrollment period for the individual market to be Nov. 1, 2016, through Jan. 31, 2017;
  • Third employer choice models for the federally facilitated SHOP plans included and comments about a fourth option for the 2017 plan year sought. The third option would give employers the choice to offer all plans on all actuarial levels from one issuer, called a "vertical choice." The fourth option would allow employers to select a metal level and employees could choose from plans at that level and one level higher. CMS also seeks comments on whether FFM states should be able to add additional models to their SHOP programs; and
  • The role of navigators expanded to include more post-enrollment activities, such as filing appeals, applying for exemptions and assisting in the transition from coverage to care.

Comments are due at the close of business on Dec. 21, 2015.

For a related press release, click here.

Deadline for Feedback Extended on New Human Research Rule

The deadline for feedback on the new human research rule has been extended until Jan. 6, 2016. This rule contains the first major updates proposed in decades for protections for human research, including strengthening informed consent provisions and requiring new data security protections. It has been criticized by consumer advocates for trying to reduce the effort institutional review boards spend on low-risk research.

FDA Reopens Comment Period for Tobacco Clarification Rule

The U.S. Food and Drug Administration (FDA) reopened the comment period for the proposed rule entitled "Clarification of When Products Made or Derived from Tobacco Are Regulated as Drugs or Devices." The rule describes the circumstances in which a product made or derived from tobacco that is intended for human consumption will be subject to regulation as a drug, device or a combination product under the Federal Food, Drug, and Cosmetic Act (the FD&C Act). It is intended to provide direction to regulated industry following recent litigation.

FDA is taking this action in response to a request for an extension to allow interested parties additional time to submit comments. Comments must now be submitted by Dec. 30, 2015.

5. REPORTS

CBO Paper Shows Changes in Medicare Spending Per Beneficiary by Age

On Nov. 24, the Congressional Budget Office (CBO) published a paper providing estimates of how Medicare spending per beneficiary for people of different ages and for different types of services has changed in recent years. The paper estimated spending per beneficiary for the elderly population (ages 65 to 105) enrolled in the traditional fee-for-service (FFS) Medicare program between 1999 and 2012 with information from the Master Beneficiary Summary File. Read the summary here.

JAMA Study Shows Big Price Hikes for Dermatology Drugs

A recent study in the Journal of the American Medical Association (JAMA) entitled "Changes in Retail Prices of Prescription Dermatologic Drugs From 2009 to 2015" reviewed 19 brand-name dermatology drugs between 2009 and 2015 and found that prices increased by an average of 401 percent over those years. The drugs with the sharpest price increase — 1,240 percent — were drugs used to prevent the spread of cancer cells. The increases for frequently prescribed medications greatly outpaced inflation, national health expenditure growth and increases in reimbursement for physician services. The prices were ultimately determined based on surveys of national chain pharmacies.

The authors of the study, Miranda Rosenberg of the Perelman School of Medicine at the University of Pennsylvania and Steve Rosenberg of the Miller School of Medicine at the University of Miami, noted that some of the drug price increases were due to shortages and limited active ingredients. However, the prices didn't fall back down after these issues were resolved. Overall, the study found no specific trend explaining the price increases for different classes of drugs.

American Academy of Family Physicians Survey Says Only a Third of Docs are in Value-based Arrangements

A third of family physicians are actively pursuing value-based payment arrangements, according to a study conducted by the American Academy of Family Physicians (AAFP) and sponsored by Humana. Another 19 percent are developing value-based payment capabilities, but waiting until results are better known before fully pursuing these arrangements. The U.S. Department of Health and Human Services (HHS) has established a goal of tying 50 percent of traditional or fee-for-service Medicare payments to value-based payment models by 2018. The AAFP conducted their study to gauge family physicians' perceptions of and progress toward making the shift from fee-for-service care to value-based care.

Medicare Part D Enrollees Will Pay More Out of Pocket for Specialty Meds

A Kaiser Family Foundation analysis of 2016 Medicare drug plans concludes that Medicare Part D enrollees will have to pay thousands of dollars from their own pockets for specialty medicines treating cancer, rheumatoid arthritis, multiple sclerosis and hepatitis C.

Enrollees could expect to pay anywhere between $4,000 and $12,000 annually for just one of those drugs included in their plan formulary. The analysis looked at enrollee costs for 12 specialty drugs, which Medicare defines as treatments costing more than $600 per month. Cancer medicines had the highest out-of-pocket costs.

Enrollee spending on specialty meds varies little by plan because most of the consumers' costs are established by law. In comparison, the analysis found that out-of-pocket costs for a monthly supply of commonly used brand and generic medicines can vary by as much as $100 depending on the plans used.

Health Spending Starts to Rise

According to the Centers for Medicare and Medicaid Services (CMS), health care spending in 2014 increased 5.3 percent to $3 trillion, driven by Medicaid expansion. The faster spending growth in 2014 followed five straight years of historically low growth. The report also shows that growth in federal government health spending outpaced growth in spending for other health care sponsors in 2014 as the most significant provisions of the Affordable Care Act (ACA) took effect. Federal and state government spending for Medicaid in 2014 increased at a rate of 11 percent compared to 5.9 percent in 2013. This increase came as 26 states expanded their programs. Medicare spending was only 20 percent of health expenditures in 2014, as it was in 2013.

Medicare, Medicaid and private health plans' prescription drug spending growth rates increased in 2014 in part because of spending on new hepatitis C drugs.

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