Life Science Compliance Update

October 31, 2017

United States Senate Focuses on Opioids

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Senate Finance Committee Chairman Orrin Hatch, along with 10 of his Republican Committee colleagues, recently called on the Department of Health and Human Services (HHS) to increase safeguards against opioid fraud. In the letter, the senators request information about HHS’ measures to prevent opioid abuse among Medicare Part D providers and beneficiaries.

The letter requests details regarding the HHS Office of Inspector General’s (OIG) report issued last July, which found that one in three Medicare Part D beneficiaries received a prescription opioid in 2016 – as many as 500,000 of those beneficiaries were receiving high amounts of opioids and nearly 90,000 beneficiaries were deemed to be at serious risk. The report also identified roughly 400 prescribers with questionable opioid prescription patterns for those beneficiaries at serious risk.

The senators requested additional information of HHS regarding the OIG’s findings, including information on the most prevalent opioid related fraud schemes identified in the report; prevention efforts HHS intends to undertake in the wake of these findings; along with a request for specific congressional recommendations as to additional authority that may be needed to protect beneficiaries and prevent fraud and abuse of opioids. The senators also request further detail regarding the 400 prescribers with questionable opioid prescription patterns and the subsequent actions HHS intends to take to follow-up with these prescribers.

Finally, the lawmakers request increased engagement of HHS with the Committee to address the epidemic, including a discussion of potential regulatory and/or legislative actions in this vein. Specifically, the letter request that “HHS officials engage with the Committee on policy options including, but not limited to, review of Medicare and Medicaid payment incentives related to treatment of pain and addiction.”

The Committee’s letter came in conjunction with the recent Senate Health, Education, Labor and Pensions (HELP) hearing on the opioid epidemic at which a number of HHS officials testified, including Scott Gottlieb, MD, Commissioner of the FDA.

During the hearing, the HHS members noted that five-point Opioid Strategy the Agency has implemented, which provides the overarching framework to leverage the expertise and resources of HHS agencies in a strategic and coordinated manner. The comprehensive Opioid Strategy aims to:

  • Improve access to prevention, treatment, and recovery support services to prevent the health, social, and economic consequences associated with opioid addiction and to enable individuals to achieve long-term recovery;
  • Target the availability and distribution of overdose-reversing drugs to ensure the broad provision of these drugs to people likely to experience or respond to an overdose, with a particular focus on targeting high-risk populations;
  • Strengthen public health data reporting and collection to improve the timeliness and specificity of data and to inform a real-time public health response as the epidemic evolves;
  • Support cutting-edge research that advances our understanding of pain and addiction, leads to the development of new treatments, and identifies effective public health interventions to reduce opioid-related health harms; and
  • Advance the practice of pain management to enable access to high-quality, evidence based pain care that reduces the burden of pain for individuals, families, and society while also reducing the inappropriate use of opioids and opioid-related harms.

July 12, 2017

Prices Testifies On Proposed Budget Cuts

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We continue to follow the President’s budgets with potential cuts to the NIH and possible legislation to address drug prices. With that in mind, HHS Secretary Tom Price’s testimony in front of a House appropriations subcommittee is particularly relevant. The head of HHS reiterated his support for the President’s cuts to NIH and noted that he is working on a plan to lower the cost of drugs in the United States. Chairman Tom Cole’s (R-Okla.) remarks before Price’s testimony can be found here.

Price’s testimony

The Secretary faced a number of questions regarding the promotion of Obamacare plans along with drug prices and NIH funding. On the funding of the NIH, Price argued the agency could be trimmed by cutting “inefficiencies,” such as overhead payments. As has been reported, “About 30% of the grant money that goes out is used for indirect expenses, which as you know means that money goes for something other than the research that's being done,” Price said. The Trump budget, he explained, is “trying to … be the first step in this process” of getting “a bigger bang for our buck.”

In 2016, NIH paid $6.4 billion in overhead costs on top of the $16.9 billion in extramural funds to support the direct costs of research projects and other awards. Price’s comments were echoed by Representative Andy Harris (R–MD), who noted that many private foundations limit overhead payments to grantees to 10%, whereas others, such as the American Lung Association, pay nothing. “It’s very interesting that the private sector doesn’t hold these indirect costs to be so valuable as to pay them,” Harris said.

Rep. Tom Cole, who chairs the appropriations subcommittee that oversees HHS, told Price that current levels of proposed cuts to the NIH and CDC are highly unlikely to be supported by Congress. He said NIH and the Centers for Disease Control and Prevention are every bit as important as national defense. "Frankly, you're much more likely to die in a pandemic than you are in a terrorist attack," said Cole, adding: "I'd rather fight Ebola (the deadly virus) in West Africa than in West Dallas."

Regarding drug prices, Regulatory Focus described Price’s reference to President Trump’s planned “bidding” system, although he did not elaborate on Trump’s call to double user feeds in an effort to offset budget cuts to the FDA.

Price also critiqued the structure of the current Medicaid program during the hearing, calling the system "broken" because it focuses too much on funding and not enough on ensuring beneficiaries achieve better health outcomes. It has been previously noted that Price has expressed support in the past for requiring Medicaid beneficiaries to pay premiums in exchange for program participation and lowering those premiums depending on beneficiaries meeting healthy behavior requirements, such as getting physicals.

May 30, 2017

Medicare Backlog Must Be Fixed

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Since 2014, the American Hospital Association (AHA) has been in court with HHS regarding HHS’ failure to meet statutorily-imposed deadlines for Medicare administrative appeals. And, as has been reported, the Medicare appeals backlog has reached its all-time worst. If you’re a healthcare provider or supplier waiting for a hearing before an Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Appeals (OMHA) – the third level of the Medicare appeals process – you’ve likely been waiting years to have your case heard or, at least, you’re expecting such a wait.

The suit centered on the Recovery Audit Contractor program. The RAC program's mission is to correct improper Medicare payments by identifying and collecting over- and underpayments. Healthcare providers have the option of appealing recovery auditors' findings, and HHS' Office of Medicare Hearings and Appeals administers hearings concerning denied Medicare claims. Claim denials that reach the third level (of five possible levels) of the appeals process are brought before administrative law judges, who issue decisions regarding coverage determinations.

Court order

Recently, a court determined that there were equitable grounds to issue a writ of mandamus. The Court reasoned that even with certain good faith efforts made by HHS to reduce the backlog (such as a Proposed Rule issued this past summer), the appeals backlog was “still unacceptably high.” In its decision, the Court found that HHS did not “point to any categorically new administrative actions” and continues “to promise the elimination of the backlog only ‘with legislative action’ — a significant caveat.”

The Court ordered HHS to achieve the following reduction thresholds, as proposed by AHA, from the current backlog of cases pending at the ALJ level:

  • 30% by December 31, 2017;
  • 60% by December 31, 2018;
  • 90% by December 31, 2019; and
  • 100% by December 31, 2020

In the ruling, U.S. District Court Judge James Boasberg ordered HHS to eliminate the backlog in accordance with the timeline AHA outlined in its motion for summary judgment. Boasberg also ordered HHS to file progress reports every 90 days on its efforts to reduce the backlog.

AHA Statement

On December 6, 2016, the AHA released a statement from its general counsel: AHA General Counsel Melinda Hatton said the decision “is a victory for hospitals that continue to have billions of dollars in Medicare reimbursement tied up in a heavily backlogged appeals system. To meet the court-ordered backlog reductions, we trust that HHS will implement real reforms critical to resolving the backlog, including fundamental reforms of the Recovery Audit Contractor program.”

Good news for providers

As cited by the Advisory Board, William Dombi, VP for law at the National Association for Home Care and Hospice, said the "ruling may finally spur concrete action by [CMS] to reduce what are wholly unreasonable delays in providing appeal rights to Medicare beneficiaries and providers of health services." However, HHS has said even with additional resources, it likely will not be able to eliminate the backlog before 2021, so we will continue to monitor this story.

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