Life Science Compliance Update

March 13, 2015

OIG Issues 2015 Health Reform Oversight Plan


HHS-OIG recently released their 2015 Health Reform Oversight Plan. The agency plans to hone in on the Affordable Care Act during 2015, with “primary focus” on the health insurance marketplaces. 

Health Insurance Marketplaces

OIG’s Oversight Plan states that their marketplace work will aim to answer questions in four key areas:

Payments: Are taxpayer funds being expended correctly for their intended purposes?

OIG plans on continuing their oversight into the accuracy and appropriateness of Federal expenditures with reviews of Financial Assistance Payments; Consumer Operated and Oriented Plan (CO-OP) Loan Program; Establishment grants; Navigator grants, and payments to Federal contractors.

Eligibility: Are the right people getting the right benefits?

To ensure accuracy in eligibility determinations, OIG is conducting reviews of marketplace enrollment safeguards, eligibility verifications for premium tax credits, and resolution of inconsistencies in federally facilitated Marketplace (FFM) applicant data. Further, OIG states that they are considering new work on emerging issues, such as Marketplaces’ verification of employer information. “We may also review eligibility for hardship waivers if that emerges as a significant issue as this year’s tax season progresses,” they state. Additional areas for oversight might include reviews of the second open enrollment period.

Management and Administration: Is HHS managing and administering Marketplace programs effectively and efficiently?

To assess the management and administration of Marketplace programs, OIG is currently reviewing HHS’s management and implementation of the FFM from enactment of the ACA through the second open enrollment period and continued oversight of Federal contractors.

Security: Is consumers’ personal information safe?

OIG’s security focused reviews include assessing FFM security controls over consumer information, including personally identifiable information. OIG will also review information security controls at selected State-based Marketplaces. OIG states they are working closely with HHS and law enforcement partners in other agencies to monitor for reports of cybersecurity threats and consumer fraud incidents and take appropriate investigative actions

Health Reform in Other HHS Programs

“Although we are devoting substantial attention to the Marketplaces…OIG is also conducting and developing oversight work addressing reforms in other programs,” their report states. These include Medicaid expansion and services, Medicare payment and delivery reform, Medicare and Medicaid program integrity, and public health programs.

Under the Medicare and Medicaid Program Integrity work, OIG states that they “are examining the implementation and effectiveness of provisions of Title VI of the ACA designed to strengthen transparency and program integrity in Medicare and Medicaid,” including reviews of enhanced provider screening systems, provider payment suspensions, provider terminations, and managed care encounter data.

OIG also states: “We will consider oversight of CMS’ new Open Payments Database and other Title VI transparency initiatives.”


Target Timeframes for Issuing Reports on Ongoing Marketplace Work

Winter 2015: OIG looks to be focused on payments in the early part of 2015:

  • Accuracy of Aggregate Payments to Qualified Health Plan Issuers for Advanced Premium Tax Credits and Cost Sharing Reductions, and Effectiveness of Related Internal Controls (Payments)
  • Payments to Federally Facilitated Marketplace Contractors (Payments)
  • Information System Security Controls at State-Based Marketplaces – CA (Security)
  • Review of Affordable Care Act Establishment Grants for State Marketplace – MD (Payments)
  • Programmatic Justification for CMS’ Involvement in Premium Tax Credit Obligations Under the ACA (Payments)

Spring 2015:

  • CMS’ Internal Controls Over Advance Premium Tax Credit Obligations and Payments Under the ACA (Payments)
  • Oversight of Federally Facilitated Marketplace Contractors (Management and Administration)
  • Review of Affordable Care Act Establishment Grants for State Marketplaces (Payments)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 6-month period (Payments)
  • Enrollment Safeguards at Additional State Marketplaces (Eligibility)
  • Information System Security Controls at State-Based Marketplaces – CO (Security)
  • CMS Implementation of Security Controls Over Consumer Information Obtained in the Federally Facilitated Marketplace (Security)
  • Review of the Federally Facilitated Marketplace’s Eligibility Verifications for Premium Tax Credits (Eligibility)

Summer 2015:

  • Implementation of the Federally Facilitated Marketplace (Case Study) (Management and Administration)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 12-month period (Payments)

Fall 2015:

  • Review of Grant Awards to Navigators in Federally Facilitated or State Partnership Marketplaces (Payments)
  • Information System Security Controls at State-Based Marketplaces – NY (Security)

 View the entire report here


March 10, 2015

NLARx Dissolves--The National Legislative Association on Prescription Drug Prices Formed in 2000 Called It Quits Last Month


The Board of Directors of the National Legislative Association on Prescription Drug Prices (NLARx) has voted to dissolve. The NLARx was formed in 2000 as a coalition of state legislators that set their sights on the pharmaceutical industry’s pricing of medicine and fought for reforms in marketing, clinical trials, and a host of other issues they believed were responsible for increasing drug prices.

“In large part, the very success of the Association has led to the Board's decision that this is an appropriate time to wind down the organization,“ states NLARx. “While prescription drug costs remain a significant portion of medical costs, and there are still patients who cannot afford their medications, much of what the founders of NLARx set out to do has been accomplished.”

They note that "the issues of prescription drug access and pricing have been subsumed into the overall health care debate, and are being addressed within that context."

"Many of the state legislators who have been active participants in the NLARx network over the past 15 years have also been also deeply involved in seeking to provide universal access to health care in their respective states," the Association states, and “[o]ver the past few years, more and more of their attention has been focused on how to address health care access and cost issues systemically.”

NLARx's press release lists some of the issues that the association advocated for, including Medicare Part D, in order to expand access of reasonable drugs to seniors. Furthermore, "[s]tate legislation in the late 1990's and early 2000's focused on alternative strategies to limit excessive prices through supplemental state Medicaid rebates, Medicaid waivers, group purchasing and negotiation, 340B program expansions and reference pricing."

NLARx also looked back on the past 15 years, during which transparency has spread into all facets of medicine:

Outside of the pharmacists and insurers who had to deal with them, and a few state Attorneys General investigating Medicaid kickbacks, no one in the year 2000 knew what a PBM was; now states around the country have PBM transparency laws. There were no laws at either the state or federal level requiring that spending on pharmaceutical marketing and gifts to prescribers be disclosed or regulated -- policies now incorporated into the Physician Sunshine Payments Act included in the ACA and based on state laws enacted across the nation. Information about most clinical trials was not available unless a pharmaceutical company wanted to share it, and public clinical trial registries didn't exist; after state litigation exposed significant issues, state and federal databases, including, were created.

One of the stated reasons for dissolving has been a lack of financial resources. NLARx has been in the forefront of publicly denouncing pharmaceutical companies, and to their credit were successful in passing many state laws and many of their principles were then adopted in the Affordable Care Act. This may signal that the public war against life industry may be winding down.


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