Life Science Compliance Update

March 16, 2016

Office of the National Coordinator for Health Information Technology Proposes Rule on Information Blocking

The United States Department of Health and Human Services released a proposed rule last week that would permit the Office of the National Coordinator for Health Information Technology (ONC) to review certified health IT products for information blocking, in addition to potential risks to patient safety and public health. The proposed rule also gives ONC increased power to regulate authorized certification-testing bodies.


The ONC Health IT Certification Program was established as a Temporary Certification Program in June 2010, and was later transitioned into a Permanent Certification Program in January 2011. In September 2012, certification criteria were established to provide a clear implementation direction to ONC-Authorized Certification Bodies for certifying Health IT Modules.

In October 2015, HHS published a final rule that identified how health IT certification can support the establishment of an interoperable nationwide health information infrastructure through the certification and use of adopted new and updated vocabulary and content standards for structured recording and exchange of health information. This final rule also included provisions to increase the transparency of information related to health IT certified under the program.

The impetus behind this proposed rule is that as certified capabilities interact with other capabilities in certified health IT and with other products, it is important to ensure that concerns within the scope of the Program can be appropriately addressed.

The Health Information Technology for Economic and Clinical Health (HITECH) Act amended the Public Health Service Act (PHSA) in an attempt to improve the quality, safety, and efficiency of health care through the promotion of health IT and electronic health information exchange. The HITECH Act also required the National Coordinator for Health Information Technology perform specific statutory duties, including keeping or recognizing a program for the voluntary certification of health information technology.

This proposed rule proposes to expand the ONC's role in the Program to encompass the ability to directly review health IT certified under the Program and address non-conformities found in certified Health IT, as well as propose processes for ONC to timely and directly address testing issues. According to the drafters of the Rule, increased transparency and publication of identifiable surveillance results would support further accountability of health IT developers to their customers and users of certified health IT.

The Proposed Rule

The proposed rule asks to expand the ONC's role to encompass the ability to directly review health IT certified under the Program, independently of reviews conducted by ONC-ACBs. These reviews would extend beyond the continued conformance of the certified health IT's capabilities with specific certification criteria, test procedures, and certification requirements and would also extend to the interaction of certified and uncertified capabilities within the certified health IT.

ONC would also have broad discretion to review certified health, though the drafters of the rule anticipate that such a review would be relatively infrequent and would focus on situations that pose a risk to public health or safety.

The proposed rule also gives authority to ONC to initiate a direct review whenever it becomes aware of information, whether from the general public, interested stakeholders, ONC'ACBs, or by any other means, that certified health IT may not conform to the requirements of its certification.

The rule also proposes to require ONC-ACBs to make identifiable surveillance results publicly available on their websites on a quarterly basis. The rule drafters believe that by publishing "positive" surveillance results, as well as "negative" ones, will provide a more complete context of surveillance.

Analysis and Conclusion

According to Sherilyn Pruitt, director of ONC's Office of Programs and Engagement, "our goal is to work with developers. Our goal is not to get to decertification." Ms. Pruitt expects the office to work with noncompliant vendors to develop action plans to fix their products and practices.

The proposed rule follows announcements by dozens of health IT vendors, major health systems, and other industry organizations, that they will provide wider consumer access to health data, avoid information blocking, and adopt federally recognized interoperability standards. In announcing the interoperability pledge, HHS Secretary Sylvia Mathews Burwell stated, "we must demand interoperability. We have to work together to unblock data."

The proposed rule also comes after the Precision Medicine Initiative Summit at the White House, where data liquidity was in focus. According to national health IT coordinator Dr. Karen DeSalvo, "the president of the United States has a keen interest in seeing that data moves. We would like to see change [to interoperability] as rapidly as possible, but as safely and securely as possible."

Comments will be accepted on the proposed rule through May 2, 2016, and can be submitted via the Federal eRulemaking Portal or the mail.

February 22, 2016

White House Budget includes Prescription Drug Cost Provisions and Publish NPI Numbers on Open Payments

Recently, the White House released its 2017 Budget through the Office of Management and Budget (OMB). In the Budget, the Administration lays out some of its concerns about our current healthcare system, including drug costs as they relate to Medicare, Medicaid, and transparency.

Addressing the High Cost of Drugs

The cost of drugs continues to take center stage, with constant Congressional hearings and Congressional inquiries and probes. The saga now moves to the Executive Branch of the government, with this budget including a package of proposals that focus on Medicare, Medicaid, and drug price transparency.

Improving Quality and Lowering Drug Costs for the Medicare Program

The White House Budget includes proposals that are expected to lower drug costs, while at the same time increasing transparency and evidence development in the Medicare Part D program.

One such proposal is to increase data collection to demonstrate the effectiveness of medications in the Part D program in the Medicare population, and to inform real world clinical treatment. Additionally, the Budget allows the Secretary of Health and Human Services to continue to have the authority to negotiate drug prices for both biologics and more expensive drugs in Medicare Part D. The Budget also includes a new proposal to incentivize Part D plan sponsors to "better manage care provided to beneficiaries with high prescription drug costs."

The Budget also proposes to accelerate discounts for brand name drugs for senior citizens who fall into Medicare's coverage gap by increasing manufacturer rebates from 50% to 75% in 2028 and to require drug manufacturers to provide rebates that are generally consistent with Medicaid rebate levels for drugs provided to low-income Part D beneficiaries.

OMB estimates that making these changes will save $140 billion over the course of ten years.

Lowering Medicaid Drug Costs for States and the Federal Government

The Budget also includes several policies to lower drug costs for Medicaid, including providing the States with a new, voluntary tool to help negotiate lower drug prices through the creation of a Federal-State Medicaid negotiating pool for high cost drugs.

The Budget also proposes that work be done to continue supporting and building on previously-proposed reforms to the Medicaid drug rebate program, including reforms that enhance manufacturer compliance with rebate requirements, and improve patient access to certain medications.

The Budget also works to improve and correct the Affordable Care Act (ACA) Medicaid rebate formula for new drug formulations, such as by exempting abuse deterrent formulations.

These proposals are estimated to save the Federal Government $11.4 billion over the course of ten years.

Increasing Transparency of Prescription Drug Pricing and Ensuring Access to Generic Medications

The Budget gives the Secretary of Health and Human Services more latitude and responsibility by giving her the authority to require drug manufacturers to publicly disclose certain information, like their R&D costs, discounts, and other data as determined through regulation.

The Budget also includes three reforms that were previously proposed to increase access to generic drugs and biologics by preventing companies from entering into anti-competitive deals that are intended to block consumer access to safe and effective generics. One reform does this by offering brand biologic manufacturers seven years of exclusivity (instead of the twelve offered under current law), and by prohibiting additional periods of exclusivity for brand biologics who made minor changes in product formulations.

It is estimated that these proposals would save the Federal Government $21 billion over 10 years.

Other Transparency Proposals

Tucked away in the body of the text is a proposal to Allow CMS to publish the National Provider Identifier (NPI) of covered recipients on the Open Payments website to make it easier for data users to connect Open Payments records with covered recipient information.

Other Healthcare Related Topics Covered in the Budget

The Budget was not only about the cost of drugs, bust also covered topics such as: improving access to primary care providers (include

s expanding the National Health Service Corps clinicians and encourages provider participation in Medicaid); strengthening HIV and Hepatitis C services (through continued implementation of the National HIV/AIDS Strategy); expanding access to mental health care (including $500 million in new funding over two years to help engage individuals with serious mental illness in care and to expand the behavioral health system workforce); and combating prescription drug abuse and heroin use (through community-based efforts to prevent drug use, improve opioid prescribing practices, and increase access to opioid use disorder treatment services).

January 25, 2016

Office of Management and Budget To Revise Fraud Rules by Spring

The White House Office of Management and Budget released their 2016 rule agenda at the close of last year, laying out some of the goals they have for releasing final and proposed rules over the next year. In that agenda, revisions to three healthcare fraud and abuse rules are planned, including one that would increase the Office of Inspector General's ability to impose civil monetary penalties.

Three Rules for Office of Inspector General

Rule Number 0936-AA04, the rule affecting the OIG's Civil Monetary Penalty Rules, implements authority under the Affordable Care Act and authorizes Centers for Medicare and Medicaid Services to assess new penalties. CMS will be permitted to assess fines for failing to grant timely access to the OIG; for ordering and prescribing while excluded; for making false statements, omissions, or misrepresentations in an enrollment application; for failing to return an overpayment; or for making or using a false record or statement that is material to a false or fraudulent claim. The rule also aims to add clarity to the regulatory scheme and provide a blueprint for how to make regulations more accessible to the public. This rule is set to have final action taken by May 2016.

Rule Number 0936-AA05 focuses on Fraud and Abuse, and includes some revisions to the OIG's Exclusion Authorities. As you may recall, the Affordable Care Act expanded the OIG's authority to protect Federal health care programs from fraud and abuse. This Rule will update OIG regulations to codify the changes made by the Affordable Care Act, while also updating and clarifying the regulations pursuant to the Medicare Prescription Drug Improvement and Modernization Act of 2003. This rule will have final action taking place in May 2016.

The last of the three rules set to affect OIG this year by the Office of Management and Budget is Rule Number 0936-AA06. This Rule will amend the safe harbors to the anti-kickback statute and civil monetary penalty rules under the authority of the OIG. This final rule will ad some new safe harbors, some of which codify statutory changes set forth in the Medicare Prescription Drug Improvements and Modernization Act and the Affordable Care Act. The new safe harbors were created to protect certain payment practices and business arrangements from criminal prosecution and civil sanctions under the kickback provisions of the statute. This Rule will also codify the Affordable Care Act's revised definition of "remuneration" and add a gainsharing civil monetary penalty provision. This rule will have Final Action taken by June 2016.

Bonus Rule: Centers for Medicare and Medicaid Services

Another rule set to be released in 2016 is the final version of the sixty-day overpayments rule. The rule will require providers to return overpayments and to notify the agency that the payment was returned within sixty days of first identifying the overpayment. This rule will apply to Medicare Part A and B providers as well as suppliers.

The rule also provides for a ten-year "look back" period on claims that are not identified by a provider. The "look back" period has been harshly criticized from industry participants, arguing that the agency is "overstepping its statutory authority," in part because it conflicts with look back periods for Part C and D overpayments, which are significantly shorter.

This rule was originally slated to go into effect in February 2015, but was pushed back due to "exceptional circumstances" revolving around the rule's complexity and the volume of public comments received. While the rule being pushed back may seem like a positive move, providers and suppliers still must give back overpayments, whether the final rule is in effect or not. Penalties can now include potential False Claims Act liability carrying fines as high as $10,000 per unreturned overpayment and future exclusion from Medicare.

These agenda items and final rules are in addition to the HHS agenda items we have previously written about.


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