Health Reform WK-EDGE Sifting through the Obama Administration’s ‘regulatory dump’
Friday, January 20, 2017

Sifting through the Obama Administration’s ‘regulatory dump’

By Bryant Storm, J.D.

Following the 2016 Presidential Election, the outgoing Obama Administration undertook a number of “last minute” regulatory actions. Among the most significant of those actions are Final rules, which amend or make new agency policy regarding a wide array of subject matter: drug and device applications and approvals, food safety, Medicare payment systems, the physician fee schedule, Medicare facility requirements, Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) eligibility and risk adjustment, and fraud and abuse sanctions and safe harbors for the federal health care programs.

While many of the rules make significant changes to current policy regarding life sciences and health care law, the effective dates for the regulations range considerably, from days to years in the future. Additionally, there is some suggestion that, under a new administration, Congress could take action to undo some of the Obama Administration’s final administrative push. For example, the Congressional Research Service (CRS) issued a report on “major” Obama Administration rules which are potentially eligible to be overturned by the 115th Congress. Because the turnover in party control in the White House is coupled with a Republican majority in both houses of Congress, lawmakers are in a unique position to utilize the Congressional Review Act (CRA) (5 U.S.C. §§801-808) to overturn rules issued by the Obama Administration’s agencies.

Nevertheless, in the so-called “lame duck” period between Election Day (November 8, 2016) and Inauguration Day (January 20, 2017), the Obama Administration published over 25 rules.

The following is a summary—grouped by topic area—of those regulatory actions:

Medicare and Medicaid

On November 14, 2016, CMS published a Final rule (81 FR 79562) with comment period revising the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for calendar year (CY) 2017 to implement applicable statutory requirements and changes arising from CMS’ continuing experience with these systems (see OPPS, ASC payment rates updated; off-campus PBD billing system established, November 14, 2016).

On November 15, 2016, CMS issued a Final rule (81 FR 80170) revising the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that CMS payment systems are updated to reflect changes in medical practice and the relative value of services (see PFS improves payment accuracy, requires MA network provider enrollment, November 15, 2016).

On December 14, 2016, CMS published an Interim Final rule (81 FR 90211) implementing new requirements for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans.

On January 3, 2017, CMS published a Final rule (82 FR 180) implementing three new Medicare Parts A and B episode payment models, a Cardiac Rehabilitation (CR) Incentive Payment model, and modifications to the existing Comprehensive Care for Joint Replacement model under Section 1115A of the Social Security Act (SSA) (see Final rule puts quality at the heart of new Medicare payment models, January 3, 2017).

On January 5, 2017, HHS published a Final rule (82 FR 1210) setting forth the calculation of the 340B ceiling price and application of civil monetary penalties. The Health Resources and Services Administration (HRSA) plans to begin enforcing the requirements of the Final rule at the start of the next quarter, April 1, 2017 (see 340B gets teeth with CMPs, January 5, 2017).

On January 13, 2017, CMS published a Final rule (82 FR 4504) revising the conditions of participation (CoPs) home health agencies (HHAs) must meet in order to participate in the Medicare and Medicaid programs. The regulations are effective July 13, 2017 (see Home health rule emphasizes patient rights, quality improvements, January 13, 2017)

Fraud and Abuse

On December 7, 2016, the HHS Office of Inspector General (OIG) published a Final rule (81 FR 88334) amending the civil monetary penalty (CMP) rules of the OIG to incorporate new CMP authorities, clarify existing authorities, and reorganize regulations on civil money penalties, assessments, and exclusions to improve readability and clarity (see HHS’ CMP authority grows alongside anti-kickback safe harbors, December 7, 2016).

Also on December 7, 2016, via Final rule (81 FR 88368) the OIG amended the safe harbors to the anti-kickback statute by adding new safe harbors that protect certain payment practices and business arrangements from sanctions under the anti-kickback statute. The rule also amended the CMP rules by codifying revisions to the definition of ‘‘remuneration” (see HHS’ CMP authority grows alongside anti-kickback safe harbors, December 7, 2016).

On January 12, 2017, the OIG published a Final rule (82 FR 4100) amending the regulations relating to exclusion authorities under the authority of the HHS OIG. The rule incorporates statutory changes, early reinstatement provisions, policy changes, and clarifies existing regulatory provisions. The regulations are effective February 12, 2017 (see HHS OIG’s exclusion authority loosens, allows more discretion, January 12, 2017).


On November 30, 2016, CMS published a Final rule (81 FR 86382) implementing provisions of the ACA and the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The rule: (1) codifies eligibility provisions; (2) provide states more flexibility to coordinate Medicaid and CHIP eligibility notices, appeals, and other related administrative procedures; (3) modernizes Medicaid eligibility pathways; and (4) codifies certain CHIPRA eligibility-related provisions (see CMS aligns Medicaid and CHIP, exchange appeals, proposes additional changes, November 30, 2016).

On December 22, 2016, CMS published a Final rule (81 FR 94058) setting forth 2018 payment parameters and provisions related to the risk adjustment program, cost-sharing parameters and cost-sharing reductions, and user fees for federally-facilitated exchanges and state-based exchanges on the federal platform (see Final rule updates ACA risk adjustment, cost sharing, and consumer choice, January 4, 2017).


On November 8, 2016, the FDA published a Final rule (81 FR 75800) implementing section 505(q) of the federal Food, Drug, and Cosmetic Act (FDC Act) (21 U.S.C. §355(q)), which governs the manner in which the FDA handles certain citizen petitions and petitions for stay of action (PSAs) to ensure that petitions are not used to improperly delay approval of applications.

On November 18, 2016, the FDA issued a Final rule (81 FR 81685) updating the current good manufacturing practice and labeling regulations regarding medical gases. The requirements are intended to reduce the likelihood of misidentification (see FDA amends gas container manufacturing and labeling under pressure of safety concerns, November 18, 2016).

On November 23, 2016, the FDA published a Final rule (81 FR 84465) amending the time and extent application (TEA) process for over-the-counter (OTC) drugs by establishing timelines and performance metrics for the FDA’s review of non-sunscreen TEAs, as required by the Sunscreen Innovation Act (SIA).

On November 29, 2016, the FDA published a Final rule (81 FR 85854) establishing the requirements for the electronic filing of entries of FDA-regulated products in the Automated Commercial Environment (ACE) or any other electronic data interchange (EDI) system authorized by the U.S. Customs and Border Protection Agency (CBP), in order for the filing to be processed by CBP and to help the FDA in determining admissibility of that product.

On December 14, 2016, the FDA published a Final rule (81 FR 90186) amending the regulations on accreditation of third-party certification bodies to conduct food safety audits and to issue certifications to provide for a reimbursement (user fee) program to assess fees for the work FDA performs to establish and administer the third-party certification program under the FDA Food Safety Modernization Act (FSMA).

On December 19, 2016, the FDA published a Final rule (81 FR 91722) banning powdered surgeon's gloves, powdered patient examination gloves, and absorbable powder for lubricating a surgeon's glove. The FDA banned the devices because it determined that an unreasonable and substantial risk of illness or injury exists, which cannot be corrected or eliminated by labeling or a change in labeling.

On December 19, 2016, the FDA published a Final rule (81 FR 91731) renaming pediatric hospital beds as pediatric medical cribs and establishing special controls for these devices.

On December 20, 2016, the FDA published a Final rule (81 FR 92603) establishing that when two or more different types of regulated medical or biologic products comprise a combination product, the postmarketing safety requirements that apply will be those based on the type of application under which the product received marketing authorization (see FDA streamlines rules on combination product postmarketing safety reporting, December 20, 2016).

On December 29, 2016, the FDA published a Final rule (81 FR 95863) describing when it will refuse to accept a tobacco product submission (or application) because the application has not met a minimum threshold for acceptability for FDA review. Under the rule, FDA will refuse to accept a tobacco product submission, for example, that is not in English, does not pertain to a tobacco product, or does not identify the type of submission.

On January 9, 2017, the FDA published a Final rule (82 FR 2193) describing the circumstances in which a product made or derived from tobacco that is intended for human consumption will be subject to regulation as a drug, device, or a combination product under the FDC Act. The rule will be effective February 8, 2017 (see Product use intent key component in tobacco product regulation, January 9, 2017).

On January 18, 2017, a variety of agencies, including HHS, published a Final rule (82 FR 7149) to better protect human subjects involved in research, while facilitating valuable research and reducing burden, delay, and ambiguity for investigators. The majority of the rule’s provisions go into effect in 2018.

Other Rules

On December 12, 2016, HHS published a Final rule (81 FR 89393) making changes to HHS’ adoption of the Office of Management and Budget (OMB) Uniform Administrative Requirements published on December 19, 2014 and the technical amendments published on January 20, 2016.

On December 14, 2016, a Final rule (81 FR 90194) was published by the DEA creating a new Controlled Substances Code Number for ‘‘Marihuana Extract.’’

On December 15, 2016, HHS published a Final rule (81 FR 90926) amending the World Trade Center (WTC) Health Program to improve existing provisions, including appeals of enrollment, certification, and treatment decisions, as well as the procedures for the addition of health conditions for program coverage..

On December 19, 2016, HHS published a Final rule (81 FR 91852) clarifying the regulations for family planning services under Title X of the Public Health Service Act and protecting access to family planning services.

On December 30, 2016, the Drug Enforcement Administration (DEA) published a Final rule (81 FR 96992) updating the DEA regulations for the import and export of tableting and encapsulating machines, controlled substances, and listed chemicals, and its regulations relating to reports required for domestic transactions in listed chemicals, gamma-hydroxybutyric acid, and tableting and encapsulating machines (see Controlled substances importers/exporters now required to use electronic submissions, January 3, 2017).

MainStory: StrategicPerspectives NewsFeed AgencyNews BiologicNews CHIPNews CostSharingNews DrugNews FraudNews HealthInsuranceExchangeNews MedicaidNews MedicarePartBNews OutpatientFacilityNews ProviderPaymentNews ProgramIntegrityNews TrumpAdministrationNews

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