Breakthrough cancer detection device gets parallel FDA, CMS review

A breakthrough cancer in vitro diagnostic (IVD) device that uses next generation sequencing (NGS) to detect genetic mutations in solid tumors took only six months from product application to FDA approval and a preliminary national coverage determination (NCD) from CMS, thanks to the Parallel Review program. Foundation Medicine’s FoundationOne® CDx™ (F1CDx) received simultaneous overlapping review by the FDA and CMS, which reduces the time necessary to marketing and coverage of innovative medical devices.

The Parallel Review program for medical devices was fully implemented in October 2016 following a pilot program (see Parallel Review program will be fully implemented and extended indefinitely, Health Law Daily, October 24, 2016). Ordinarily, CMS does not begin the NCD decision-making process until after a device has been approved or cleared for marketing by the FDA, which results in a longer wait before Medicare beneficiaries can access the device. Through Parallel Review, manufacturers receive feedback from both agencies through the clinical trial design stage, which helps them to design trials that fulfill evidentiary requirements for both steps of the process, potentially eliminating the need for additional trials.

Although the F1CDx device is a laboratory-developed test and therefore generally would not require premarket review from the FDA, Foundation Medicine requested Breakthrough Device designation for the test. The 21st Century Cures Act (P.L. 114-255) expanded the Expedited Access Pathways (EAP) program to breakthrough technologies that provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions (see Will the Cures Act address what ails the FDA approval process?, Health Law Daily, March 9, 2017). The FDA granted that designation because the F1CDx test has “potential to consolidate multiple companion diagnostic claims for patients and health care providers into a single test.”

Happy Thanksgiving

The health law editorial team at Wolters Kluwer Legal & Regulatory U.S. is out of the office for the Thanksgiving holiday. We will resume our regular posting schedule on Monday, November 27th. In the interim, we invite you to check out the USDA’s Five Tips for a Food Safe Thanksgiving.

Two-year commitment needed for CSR stability

At least two years of continuous funding for cost-sharing reduction (CSR) benefits is necessary to stabilize and strengthen the individual health insurance marketplace, according to a coalition of health care and health insurance providers. In a letter to the chair and ranking member of the Senate Committee on Health, Education, Labor, and Pensions, a group including America’s Health Insurance Plans, the American Hospital Association, the American Academy of Family Physicians, the American Medical Association, BlueCross BlueShield Association, the American Benefits Council, and the U.S. Chamber of Commerce requested a firm commitment to CSR payments.

Under Section 1402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), many individuals enrolling in qualified health plans through the marketplace are eligible for reduced cost sharing based on income. These reductions are guaranteed by the ACA; the federal government is supposed to make CSR payments to insurers offering plans in the marketplace to cover the reduced prices paid by plan enrollees, but the law does not guarantee those payments. The Trump Administration has not yet committed to continuing to make the payments.

In the letter, the providers and insurers explained that nearly 60 percent of enrollees in qualified health plans have CSR benefits, but noted their concern about uncertainty about CSR payment funding. They requested two full years’ funding for the CSR program, and warned that without that certainty, premiums will increase and fewer insurers will participate in the marketplace.

Timing key for internal audits, self-disclosure

There is an art to conducting internal compliance audits and determining when to begin a self-disclosure protocol—the ideal compliance program should promote prevention, detection, and resolution of any conduct that fails to comply with the requirements of state and federal health care programs. Knowing when to perform an internal investigation or audit to encourage a healthy program is key, according to Leia C. Olsen, shareholder, Hall Render, who was presenting at a Health Care Compliance Association (HCCA) webinar.

Olsen noted that many qui tam actions arise when employees do not feel as though their concerns are being heard and taken seriously. She stressed the importance of having a mechanism for reporting incidents, and timely monitoring identified issues and implementing remedial measures. However, she noted that qui tam suits can potentially be prevented not only by conducting an internal investigation, but also by self-disclosing, which can trigger the public disclosure bar. Self-disclosure of identified wrongdoing is encouraged by the Department of Justice and HHS, but, per the Yates memorandum, all relevant facts must be provided by a company before it can receive credit for cooperating and voluntary self-disclosure. Therefore, it is important to conduct a thorough investigation, collecting all available information and documentation, before self-disclosing.

The 60-day refund rule, promulgated under Sec. 6402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), together with the Fraud Enforcement and Recovery Act of 2009 (FERA) (P.L. 111-21), creates False Claims Act (FCA) liability for providers who fail to report and return identified overpayments within 60 days of identifying the overpayment. Therefore, Olsen said, the time to meet the reasonable diligence standard after learning of a potential overpayment is limited. Having a protocol in place to quickly decide whether to self-disclose is critical in securing the greatest amount of cooperation credit.