As we highlighted earlier this month, CMS released both the Contract Year 2019 Final Rules for Medicare Advantage and Part D (Final Rules) and the 2019 Call Letter. These documents are not typically released at the same time, so there is a lot of information for Medicare Advantage organizations and Part D plan sponsors to absorb. One major topic area that CMS focuses on in these documents is the prevention of opioid misuse and abuse.

As you know, we have been following this topic closely in the last few months: first, we discussed how the proposed rules set out a framework for plan sponsors to monitor and reduce the potential misuse of frequently abused prescription drugs. We then discussed the Advance Notice and Call Letter outlining utilization review controls for Part D plans to use to address opioid misuse and abuse.

The Final Rules and 2019 Call Letter work together to establish a number of new policies aimed at helping Medicare plan sponsors prevent and combat prescription opioid overuse. There is significant discussion, including CMS’s response to commenters, in the final documents linked above. Here, we provide a high-level overview of the new policies.

Continue Reading CMS Continues to Focus Medicare Plans on Preventing Opioid Abuse

This week, the focus shifts back to the Congressional push around addressing the opioid epidemic after the President’s speech on drug pricing was postponed. Both committees of jurisdiction in the House and Senate are moving on opioid legislation this week, so that has our immediate attention. The speech delay offers a momentary reprieve for stakeholders, but there’s still a Request for Information of some kind pending at the Office of Management and Budget, so it is likely that there will be action in this eventually.

Additionally, on our radar are new Democratic proposals around expansion of health coverage as well as the Administration’s potential action regarding ACA nondiscrimination protections. We cover this and more in this week’s health care preview, which you can find here.

In 2017, FDA issued only 44 Warning Letters to medical device establishments. Of those, 11 were related to pre-market issues, which include investigational device exemption violations or lack of approval or clearance. Only 33 of the device Warning Letters in 2017 were issued for cGMP, Quality System, or MDR violations, a remarkable figure since FDA regularly sent over 100 device regulation compliance Warning Letters every year from 2011 to 2015.

One might expect that fewer Warning Letters means fewer inspections, but FDA’s inspection database shows that the number of device compliance inspections has remained fairly consistent from 2011 through 2017. The number of inspections has certainly decreased from a high of 1,859 in 2011, but FDA conducted 1,624 device compliance inspections in 2014, 1,533 in 2015, 1,539 in 2016, and 1,551 in 2017. Clearly, the sudden drop off in Warning Letters has been much steeper than the modest decrease in inspections.

What could be driving this decrease in Warning Letters? I briefly explore three possibilities below. Continue Reading Drop in Warning Letters for Medical Devices Raises Interesting Questions About the Industry

The all-too-common story of a healthcare company declaring bankruptcy in the face of aggressive Medicare recoupment actions before the company even has a hearing before an Administrative Law Judge (ALJ) may get a new ending – at least in the Fifth Circuit.  Although the Fifth Circuit Court of Appeals remanded the case, Family Rehabilitation, Inc. v. Azar, back to the district court and thus it is still too soon to tell the ultimate outcome, it reversed the district court and held that there is jurisdiction for a district court to enjoin CMS recoupment during the administrative appeals process.  This decision is a big win for companies navigating the difficult and seemingly one-sided process of Medicare recoupment actions. Continue Reading Fifth Circuit Decision is Rare Victory Permitting District Court to Enjoin Recoupment Before Provider Exhausts Administrative Remedies

On Monday, CMS published a number of policies changing the dynamics of the individual market, including the Benefit and Payment Parameters for 2019 Final Rule, guidance on hardship exemptions, and a bulletin on transitional (grandmothered) plans. When interpreting all of these policies it’s important to keep in mind the following: What is success? And who is defining it?

The Obama Administration managed ACA implementation with the clear intention of making sure the outcome met the goals of the law: more people covered, more choices of coverage for those people, and lower premiums.  While the success of their efforts can be debated, the intention was always known.

For the Trump Administration, it is not necessarily clear how successful implementation of this next rule will be judged.  Are they trying to maximize the number of people covered, maximize the number of choices available or lower premiums?  What is the organizing principle?  Is it as simple as providing additional regulatory flexibility?

There are two other stakeholders who also have to determine their definition of success in the face of this rule: states and insurers.  For states, they will have to determine if and how they will use the additional flexibility granted to them under their rule.  Insurers, with the loss of the individual mandate and CSRs, and the looming threat of STLDIs and AHPs, have to decide if the rule provides a stable environment for participation.

From now through the start of the next open enrollment period, we expect significant backstage drama as insurers, states, and the Administration answer these questions.  The offerings and premiums available to Americans six days before the midterm elections depend on these decisions. Continue Reading CMS Benefit and Payment Rule: What is Success for the ACA?

In a recent Antitrust Alert, our colleagues Dionne Lomax, Bruce Sokler, Robert Kidwell, and Shawn Skolky discuss the allegations in the consolidated class actions, In re Blue Cross Blue Shield Antitrust Litig., the court’s analysis, and its market implications.  In this antitrust case against the Blue Cross Blue Shield Association and various individual Blue Plans, a federal court recently ruled that certain allegedly restrictive practices are properly analyzed under the Sherman Act’s per se standard, which deems certain types of agreements inherently unlawful. The court’s April 5 decision, which relied on two Supreme Court decisions from the 1960s and 1970s, runs contrary to a recent growing trend to apply the rule of reason to modern business relationships by analyzing the competitive impact of restrictions and weighing the procompetitive benefits against the potential anticompetitive effects.

 

Congress will continue its work in addressing the opioid crisis this week with a hearing in the Senate Finance Committee. There were reports last week that Congress will also consider legislation around telemedicine, which is sure to capture stakeholders attention. The Administration is also going to take another look at drug pricing which is setting the stage for another busy work period. We cover this and more in this week’s preview, which you can find here.

Last month, the Department of Health and Human Services’ Office of Inspector General (OIG) released its latest report on compliance with the Drug Supply Chain Security Act (DSCSA). As we discussed in a prior post, the DSCSA requires enhanced security and accountability for prescription drugs throughout the U.S. pharmaceutical supply chain, with phased-in obligations for the various trading partners over 10 years, beginning with the law’s passage in November 2013. Covered trading partners include manufacturers, repackagers, wholesale distributors, and dispensers.

The OIG’s most recent study focuses on dispensers of various sizes and types, including independent retail pharmacies, chain retail pharmacies, and small and large hospital pharmacies. Of the 40 dispensers interviewed, the agency found that all them had received at least some drug product tracing information from their trading partners, and 26 of these dispensers received all required elements of this information. The remaining 14 dispensers were missing a few of the required elements. Two of the dispensers were unaware of the DSCSA. The following table summarizes the missing information:

The OIG also found that dispensers received drug product tracing information in a variety of transmission modes and formats. The agency believes this is a result of dispensers and their trading partners using different systems rather than adopting a standardized way to exchange this information. Neither the DSCSA nor FDA guidance requires a uniform transmission mode or format for the exchange of drug product tracing information.

To facilitate dispensers’ compliance with the DSCSA, the OIG recommends that FDA offer educational outreach to dispensers where appropriate. Specifically, the agency recommends that FDA provide education to ensure that dispensers understand their responsibilities to receive complete drug product tracing information from trading partners before taking ownership of drug products.

For its part, FDA concurred with the OIG’s recommendation and intends to review its dispenser communications plan and identify and create opportunities to work with dispenser-centric trade and professional organizations to provide additional education and outreach. FDA also noted in its response that, as the last trading partner in the supply chain before a drug product is dispensed to a patient, dispensers play a vital role in ensuring patient safety, making it essential that they understand their product tracing responsibilities under DSCSA.

We will continue to monitor and report on the industry’s implementation of the DSCSA, including the OIG’s planned study of the extent to which drug product tracing information can be used to trace drugs through the entire supply chain.

In a previous blog, we reviewed pending and approved 1115 waivers in 8 states. We also highlighted the trends we see in 1115 waivers, such as changes to coverage requirements, a time limit on how long certain beneficiaries can receive Medicaid coverage, lock-outs if an individual fails to pay a premium or meet the work requirement, and drug testing requirements.

It is important to remember that the proposals and concepts we see in 1115 waivers are developed at the state level. And there is typically a lot of state action surrounding 1115 waivers to guide what actually goes into a waiver application.

We have reviewed the state action, legislation, and executive orders as they relate to 1115 waivers, with a specific focus on how states are viewing work requirements, time limits, and lock outs. This summary focuses on states that do not have a pending or approved 1115 waiver including those provisions.

Our analysis shows that 1115 waiver applications are not likely to slow down and trends surrounding Medicaid work requirements are likely to continue. 

Click here to see the analysis on current state activity surrounding Medicaid work requirements.

*Alisa Laufer and Nicole Meyerson contributed to this blog post.

 

In March, the Medicaid and CHIP Payment and Access Commission (MACPAC) released its biannual report to Congress. MACPAC is an independent congressional agency that advises Congress on issues relating to Medicaid. In its report, the Commission made a three part recommendation in regards to streamlining Medicaid managed care authorities. Continue Reading Federal Commission Recommends Streamlining Medicaid Waiver Authorities