By Lynn Shapiro Snyder. I have been a managed care, Medicare and Medicaid attorney for over 30 years. Although this focus includes compliance and enforcement work, I also do a lot of work helping entrepreneurs bring new ideas to the health care marketplace. Providing strategic, legal and regulatory assistance for some of these innovations has been some of the most rewarding work for me.

It used to be the case that when an innovator wanted to launch a new drug or device in the United States, the key regulatory tollgate was the federal Food and Drug Administration (FDA). That standard focuses on safety and efficacy. Once that tollgate was satisfied, the company could promote its product, and the product would enjoy general distribution in the marketplace. Those days are over.

Two new additional tollgates include access to identifier codes – especially for certain medical devices and coverage for the innovation. The focus of this blog is on the new coverage challenges to innovation.

In the United States, we have a wide variety of payers of health benefits. There are publicly funded payers such as Medicare and Medicaid. There are privately funded payers such as self-funded employers and private health insurance plans. Traditionally, the scope of covered benefits focused more on illnesses. The new benefits focus on prevention and population health management. There are enumerated benefits, enumerated exclusions and general coverage phrases like covering what is “reasonable and necessary.”

More and more payers will be offering similar benefits as Title I of federal health reform is implemented. This is because a proposed federal regulation will be issued soon by Department of Health and Human Services to define the “Essential Health Benefits Package” for individual and small group health plans. This benefits package is supposed to be comparable to coverage by existing employer plans.

Who decides whether an innovation fits within an existing covered benefit or whether a new coverage decision is needed so that patients can get access to the innovation? And, what is the criteria for confirmation of coverage? Is it enough that the innovation is comparable to existing options? Does it have to be breakthrough? While there is a whole body of literature about randomized control trials and other data points needed to establish FDA approval, what should be the study protocol to establish a positive coverage determination by the payer? Finally, should the new cost of the innovation even play a role in the coverage decision-making process?  These are the key questions across payers.

Centers for Medicare & Medicaid Services (CMS) uses the MEDCAC – the Medicare Evidence Development & Coverage Advisory Committee- to provide independent guidance and expert advice on specific clinical topics.  In its deliberations, the MEDCAC reviews and evaluates available evidence, including medical literature and technology assessments, and listens to public testimony.  The Committee then makes coverage recommendations to CMS based on its review.  Private payers usually have some type of technology assessment processes. (more…)

By Lynn Shapiro Snyder. Reproduced with permission from BNA’s Health Care Policy Report, 18 HCPR 680 (May 3, 2010). Copyright 2010 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Health reform is a process, not an outcome. The health care industry needs to treat Phase II of health reform—–implementation by the Executive Branch—with the same focus and zeal as they did with Phase I—deliberation and passage by the Legislative Branch. It may not be as sexy as Capitol Hill but industry participation in shaping implementation through the Executive Branch could have an even greater impact for industry efforts. Phase II is when the rubber of ‘‘the law’’ meets the road of ‘‘the real world.’’ We are one month into implementation so now is the time for the health care industry to step up to the plate and continue to shape the details of federal health reform currently being developed and implemented by the Executive Branch.

As with any topic of public policy, proposed laws are discussed in Congress. Final laws are sent to the Executive Branch for interpretation and rulemaking within something called ‘‘congressional intent.’’ Public comments hopefully are considered by the relevant agencies writing the regulations. Challenges to the regulatory process may occur when the regulations go too far from the words and intent of the statute. Eventually, issues may be sent back to Congress to amend the law. The federal Medicare program has worked this way for over 43 years.

However, in the implementation of federal health reform, we are seeing new creative elements to the implementation process. The Obama administration is asking industry to take steps that are not in the statute. For example, on April 19 Department of Health and Human Services Secretary Kathleen Sebelius sent letters to health insurance companies asking them to continue to cover young adults so that they can remain on their parents’ policies notwithstanding the terms of the policies (18 HCPR 604, 4/26/10). This health reform provision does not take effect until Sept. 23, 2010. She was seeking
collaboration with industry on a topic that could make sense for all involved.

Sebelius also recently sent a letter to the health insurance industry trade group, America’s Health Insurance Plans, challenging the group’s interpretation of a section of the statute related to the coverage for children with pre-existing health conditions even before any regulations were published (18 HCPR 469, 4/5/10). The statute appears to nullify pre-existing illness exclusion contractual provisions for enrolled children later this year but there was a question whether guaranteed issue of health insurance for these and other children had to wait until after 2013. Nevertheless, the administration obtained a promise from private health insurers for guaranteed issue this year for this particular population notwithstanding what some believe are the words in the statute.

Successful implementation of the 2000+ pages of the federal health reform law requires collaboration between the Executive Branch and the health care industry stakeholders. This is because the law is based upon actions to be taken by key health care industry stakeholders, such as health insurers to increase access, and health care providers to achieve Medicare savings.

And since we never had a federal department of health insurance before this new law—health insurance had been regulated mostly at the state level—the Executive Branch’s need for continuous public input and collaboration with industry is even more compelling. The same is true for some of the creative new pilot programs designed to customize the Medicare payments for certain providers.

A big part of implementation is in the Executive Branch’s federal rulemaking activities. That is when the public has the formal opportunity to collaborate with the administration on federal health reform. Not all provisions in the recently enacted Patient Protection and Affordable Care Act (Pub. L. No. 111-148) and its companion, the Health Care and Education Reconciliation Act (Pub. L. No. 111-152), require a federal regulation. Some provisions are self-executing while others specifically require a designated federal official to publish regulations on a particular topic. For other provisions, it depends.

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By Lynn Shapiro Snyder. There is nothing like a cold, hard statistic to hang your hat on. What better way is there to drive home your point in the courtroom, the conference room, the Senate chamber? But as much as numbers illuminate, they also obfuscate. Take, for instance, a recent New York Times article announcing that women outnumber men on our  nation’s payrolls. We have reached an historic milestone.

But before you break out the champagne, take a closer look. You actually do not need to search very hard. In fact, all it will take is a glance—one brief, passing glance into any of the thousands of corporate board rooms across America.

As of 2009, a wan 15.2 percent of Fortune 500 board members were women.  That means, for the average 10-person corporate board, there aren’t even two women in the room.  Suddenly the numbers aren’t looking so good. With women making up more than half of America’s workforce, how can there be so few women at the highest level where business decision-making gets done – the corporate boardroom.  The board recruits and retains the CEO and sets company policy.

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