This Week in Washington - October 3, 2014

On Tuesday, September 30, CMS released data surrounding physicians and academic hospitals’ financial ties to drug and device makers. The Open Payment website attempts to make public all payments to doctors and teaching hospitals by drug and medical device companies. The payments range from meals to promotional speaking to research.

The current online version of the website consists of a massive spreadsheet that identifies the recipients of 4.4 million payments totaling nearly $3.5 billion during the last five months of 2013. According to CMS, payments were made to an estimated 1,360 teaching hospitals. CMS also noted that more than 400 teaching hospitals had registered in the Open Payments system to review the payments attributed to them.

The payment disclosure requirement was included in the Affordable Care Act (“ACA”) and requires manufacturers to report to the federal government any gifts or payments worth at least $10 that they give physicians or teaching hospitals. Payments that were disputed by physicians or hospitals and not corrected before the end of the review and dispute period (September 11, 2014) were not included in this batch of data. CMS has indicated the disputed data will likely be included in the Open Payments system when the database is refreshed in early 2015.

Additional Telemedicine Groups Write Congress on Telemedicine Initiative

Late last Friday, September 26, a group of 13 telemedicine advocates wrote the House Energy and Commerce Committee to offer suggestions on how the Committee should help technology in its 21st Century Cures initiative.

The organizations, including the Telecommunications Industry Association, HIMSS and Intel, said Congress should allow greater use of telemedicine by accountable care organizations, federally qualified health centers and critical access hospitals.

In June, a coalition of hospitals led by Hall Render weighed in on the same topic. The coalition sent a letter to the committee suggesting: (1) expansion of the electronic health records donation Stark Law and Anti-Kickback Statute safe harbors to allow hospitals to provide telehealth equipment to physicians; (2) removing any physician shortage or rural requirement on patient location for reimbursement; and (3) adding an exclusion under the Civil Monetary Penalties Law to allow hospitals to provide patients home health monitoring equipment and services at discharge.

The Hall Render coalition is seeking inclusion of these changes in the next session of Congress, which starts in 2015.

CMS Report Details RAC Collections in FY 2013

On Monday, September 29, CMS sent to Congress a statutorily required report detailing the overpayment collections made by Recovery Audit Contractors (“RACs”). According to the report, RACs collected $3.65 billion in Medicare overpayments during FY 2013, an increase from the $2.3 billion that was collected in FY 2012. In addition, RACs blocked $22 million in improper payments from being made through a prepayment review demonstration program that was operational in 11 states.

This report, which was mandated under Section 1893(h) of the Social Security Act, focused only on the fee-for-service Medicare RAC program. Information on other RAC programs will be reported separately.

FDA Posts Draft Framework for Oversight of Lab Tests

On Tuesday, September 30, the Food and Drug Administration (“FDA”) posted a draft of its “risk-based” framework for oversight of laboratory developed tests, as well as draft guidance for the industry on reporting requirements. The agency expects the public comment period on this draft guidance to begin today, October 3. The period will last for 120 days from the date of publication in the Federal Register.