COVID-19: Federal Update (4/15)
Capitol Hill Update
Congressional leadership and White House officials are continuing negotiations on the next round of COVID-19 response legislation, eyeing a compromise solution on the next tranche of funding for pressing response efforts. While Treasury Secretary Steven Mnuchin and Senate Minority Leader Chuck Schumer (D-NY) suggested that an agreement could be struck by the end of this week, Senate Republicans have remained steadfast in their position that the “Phase 3.5” effort should only address funding for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), and that funding for other priorities — such as health care response efforts, states, and local governments — should be taken up in the forthcoming “Phase IV” legislation. As such, timing on consideration and passage of the next round of COVID-19 legislation remains in flux. Lawmakers will not convene for legislative business until May 4 at the earliest. The Senate will convene for its next pro forma session tomorrow at 3 PM EST, with the House convening on Friday at 10 AM EST. The North Texas Commission will continue to monitor and keep you apprised of any updates.
COVID-19: What We’re Hearing
Appropriations. House Appropriators are working to draft fiscal year (FY) 2021 spending bills by the first week of May. Markups and full consideration of the bills are not expected to occur until Congress returns to Washington.
House Appropriations Chairwoman Nita Lowey (D-NY) has sent each of the 12 Appropriations Subcommittee the preliminary 302(b) allocations for FY 2021.
Appropriators have pushed their expectations for completing FY 2021 spending work past the late spring-early summer dates that leadership targeted earlier this year.
Provider Funding. On Friday April 10, CMS began to disburse an initial $30 billion tranche of emergency relief funding to health care providers based on their Medicare fee-for-service revenue in 2019.
This first tranche is drawn from the CARES Act’s $100 billion Public Health and Social Services Emergency Relief Fund (PHSSEF). The first $26 billion of funding for hospitals and providers was released via electronic transfer, and the remaining $4 billion will be disbursed by paper check for providers for whom that is how they normally receive payment.
Providers receiving funds must agree to a set of terms and conditions, including reporting and documentation requirements, charging only in-network rates for COVID-19 care, and certifying that the funds will only be used to prevent, prepare for, and respond to coronavirus. Those that do not agree must contact HHS within 30 days to remit the payment.
The Department of Health and Human Services (HHS) is expected to release a list of frequently asked questions to clarify that the intention for this funding is to support providers that have lost revenue. Providers who ceased operation as a result of the pandemic will likely still be eligible to receive funds if they provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
The administration is reaching out to providers with a lower percentage of their revenue coming from Medicare fee-for-service to gather feedback on how best to distribute additional funds from the $100 billion fund.
Administrator Verma foreshadowed a second round of CMS distributions with first priority going to providers such as nursing homes and children’s hospitals that do not derive a large portion of their revenue from Medicare fee-for-service.
An additional chunk in the neighborhood of $30 billion will be set aside from the $100 billion to fund COVID-19 care for the uninsured. Kaiser Family Foundation estimated yesterday that care for the uninsured, reimbursed at Medicare rates, would run between $13.9 and $41.8 billion.
$34 billion has already starting flowing to providers via the Accelerated/Advance Payment Program. These payments are separate from the PHSSEF funding and must be returned and carry a 10.25 percent interest rate, which CMS says it cannot change unilaterally.
COVID-19 3.5. In a joint statement, Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) called for further changes to the PPP, saying that many eligible small businesses are unable to access these loans. A summary of the Democrats’ updated counteroffer can be read here.
Additional Democratic priorities in this proposal include: (1) $100 billion for health care providers; (2) $150 billion for state and local governments; (3) a 15 percent increase in SNAP benefits; and (4) technical fixes to election assistance funding from the CARES Act.
While President Donald Trump and Senate Majority Leader Mitch McConnell (R-KY) have expressed the desire to address additional funding for health care, states, and local governments in the “Phase IV” legislation, Speaker Nancy Pelosi (D-CA) has remained steadfast in her position that the “Phase 3.5” effort must include these priorities in order for the bill to pass by unanimous consent in the House.
Treasury Secretary Steven Mnuchin and Leader Schumer have opened talks on the next round of response legislation and have expressed optimism about the possibility of reaching a compromise before the end of the week.
COVID 4.0 Policies that currently enjoy bipartisan support include funding for health care needs, additional money for the PPP, more unemployment insurance and direct payment relief, and a fix for struggling pension programs.
It remains to be seen whether both parties can strike an agreement on big-ticket legislative items such as infrastructure, as Republicans on Capitol Hill are pushing back against using COVID-19 legislation as a vehicle to carry unrelated policy priorities.
A bipartisan group of House lawmakers have introduced legislation that would allocate $250 billion in direct funding for local governments of all sizes. The measure would provide funding for all local governments with fewer than 500,000 people, and would also allow governments to offset lost revenue due to the pandemic.
Energy and Commerce Ranking Member Greg Walden (R-OR) expects another push for action on surprise billing in the next round of relief. During the Phase III negotiations, Chairman Frank Pallone (D-NJ) and Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) were actively trying to tack their surprise billing legislation onto the package.
Speaker Pelosi penned a “Dear Colleague” letter to members outlining her priorities for the Phase IV legislation. She has been advocating for additional health care provider funding, election support, stronger workforce protections, and repealing the 2017 tax law provision that caps the State and Local Tax deduction. The Speaker hopes to craft and consider the legislation by the end of this month.
COVID-19: What’s Happened
SBA. SBA published a detailed breakdown of the PPP funding that has been distributed thus far.
SBA issued a new interim final rule clarifying the process of applying for PPP loans for individuals who report self employed income on a 1040 Schedule C
The SBA and Treasury Department updated their list of frequently asked questions on the Paycheck Protection Program.
SBA issued an interim final rule outlining additional guidance for the paycheck protection program. TRP’s comprehensive analysis of the small business provisions contained in COVID-19 response bills can be read here. The loan application form can be accessed here.
DOT. The Department of Transportation (DOT) awarded $10 billion in grant funding for airports to certain operating expenses during the COVID-19 pandemic. A breakdown of the disbursements can be read here. A list of frequently asked questions regarding this funding can be read here.
DOT issued a final order on service obligations for air carriers receiving financial relief through the CARES Act.
DOT and the Federal Transit Administration (FTA) announced a total of $25 billion in federal funding allocations to help the public transit systems respond to the COVID-29 outbreak.
Ed. The Department of Education announced the availability of $3 billion in emergency education relief funding for states to allocate in support of institutions that have been adversely impacted by the outbreak. A breakdown of the funding allocations can be read here.
Treasury. Secretary Mnuchin announced that the Treasury Department reached an agreement in principle with ten airlines on grant funding to cover certain operating expenses.
The Treasury Department released eligibility guidance for State, Local, and Tribal government funding from the CARES Act.
The Treasury Department issued a statement clarifying that Social Security recipients will not need to file an abbreviated tax return to receive direct payment relief.
The Treasury Department has issued guidance for airlines to apply for up to $58 billion in grants and loans as mandated by the Phase III COVID-19 legislative response bill.
Legislative Response. TRP’s newest COVID-19 policy memo analyzes telehealth and rural health policies in the relief legislation. This includes expanded capabilities and funding for telehealth, funding for community health centers and other rural health supports, backing for telehealth and rural health infrastructure, and more. Click here to read the memo.
TRP has published a memo that looks at the substance use and mental health policies contained in the CARES Act. This includes new funding for SAMHSA, new funding for Certified Community Behavioral Health Centers, relaxed disclosure requirements for SUD-related health records, and more. Click here to read the memo.
TRP has published a memo that examines the provider-related provisions contained in the CARES Act. This includes critical funding for hospitals and providers impacted by the COVID-19 pandemic, greatly expanded flexibilities for providers to operate through the pandemic, and mandated coverage of coronavirus-related therapies and testing. Click here to read the memo.
TRP has published an analysis of the medical device-related provisions in the CARES Act, including new reporting requirements, a study on the security of the medical device supply chain, and storage requirements. Click here to read the memo.
TRP has published a memo on the Medicare and Medicaid provisions in the CARES Act and other COVID-19-related legislation. This analysis examines new telehealth policies, emergency payment provisions, new flexibilities on prescription drug fills, and more. Click here to read the memo.
TRP’s memo on the COVID-19 relief packages dives into how the pharmaceutical industry may be impacted by provisions on therapy and vaccine development, drug supply chain transparency, over-the counter drug regulation reform and more. Click here to read the memo.
President Donald Trump signed the Phase III legislation into law on Mar. 27. TRP’s analysis of the Phase III legislation can be read here. Our memo on the bill’s provisions pertaining to the Public Health and Social Services Emergency Fund (PHSSEF) can be read here.
The Phase II legislative response bill was signed into law on Mar. 18. TRP’s full analysis of the Phase II bill can be read here.
An $8.3 billion emergency supplemental appropriations bill cleared both chambers and was signed into law on Mar. 6. TRP’s analysis of the Phase I legislation can be read here.
The Treasury Department and IRS announced the implementation of certain paid sick and family leave requirements mandated by the second COVID-19 legislative response package. TRP’s breakdown of the paid leave provisions can be found here.
Telehealth. The Federal Communications Commission’s (FCC) COVID-19 Telehealth Program application portal officially launched yesterday. Click here for details.
TRP has published a comprehensive analysis of the telehealth policies for the COVID-19 national emergency. Click here to read the telehealth memo.
Census. Officials are pushing to delay deadlines for completing the 2020 Census. Field Operations from the U.S. Census Bureau have been postponed until June 1, and the deadline to finish the count has been delayed until Oct. 31.
CMS. The Centers for Medicare & Medicaid Services has published a list of frequently asked questions on the enhanced Medicaid Federal Medical Assistance Percentage (FMAP).
CMS and the Departments of Labor and Treasury issued guidance that ensures Americans with private health insurance have access to free COVID-19 testing.
CMS has temporarily suspended a series of rules for health care facilities in a move aimed at bolstering frontline medical staffs.
CMS has issued a series of regulatory changes that seek to provide flexibility and bolster the health care system to address the COVID-19 outbreak. TRP’s analysis of the rule can be read here. A list of new frequently asked questions can be read here.
CMS has issued a series of updated guidance documents focused on infection control to prevent the spread of the COVID-19 for certain inpatient and outpatient care settings.
CMS has published additional frequently asked questions for state Medicaid and CHIP agencies regarding COVID-19 response efforts. A list of FAQs for state Medicaid and Children’s Health Insurance Program (CHIP) agencies can be read here.
CMS posted a transcript of its Mar. 31 national stakeholder call. A full list of CMS call transcripts and recordings can be found here.
CMS sent a letter to hospitals on behalf of Vice President Mike Pence requesting they report data in connection with their efforts to fight the COVID-19.
CMS issued guidance for health care providers regarding the expansion of the accelerated and advance payments program for providers and suppliers during COVID-19 emergency.
CMS announced that it is granting exemptions from reporting requirements and granting extensions for clinicians, providers, and facilities participating in Medicare quality reporting programs.
HHS. TRP’s memo on the bill’s provisions pertaining to the PHSSEF can be read here.
HHS announced that it will not penalize HIPAA-covered business associates for sharing patient information intended to assist the government combat COVID-19.
HHS issued an emergency use authorization declaration stating that circumstances exist to justify the authorization of emergency use of drugs and biological products during the COVID-19 outbreak.
The Fed. The Federal Reserve announced a series of emergency actions that would provide more than $2 trillion in COVID-19 loans to businesses, state, and local governments.
The Federal Reserve announced the creation of a lending facility that will provide liquidity for lenders for the purposes of funding up to $349 billion authorized by the CARES Act. The interim final rule can be read here.
Federal regulators announced they will temporarily allow community banks with a lower leverage ratio to skirt certain prescriptive capital requirements.
The Federal Reserve and four other financial agencies announced they will consider comments on Volcker rule modifications until May 1.
On Mar. 24, The Federal Reserve will be scaling back its examination of banks to focus more intently on the potential risks that arise from the outbreak.
The Federal Reserve announced on Mar. 23 a series of emergency moves aimed at stemming the economic impact of the outbreak. These actions include three new emergency lending facilities, as well as a new program that will support lending to eligible small-and medium-sized businesses that support efforts by the Small Business Administration (SBA).
The Federal Reserve announced that it will establish a Primary Dealer Credit Facility to support dealers’ market-making as the economy continues to slow due to the COVID-19 pandemic.
The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) outlined actions aimed at providing banks additional flexibility to support households and businesses during the outbreak. Details on these steps can be read here.
Social Distancing. The Trump administration has recommended the use of cloth masks for those who need to go out in public.
Surgeon General Jerome Adams stated that he anticipates the Trump administration’s social distancing guidelines to be extended past Apr. 30.
President Trump announced that the administration will be extending its social distancing guidelines through Apr. 30.
The guidance outlines a series of steps — including avoiding social gatherings of 10 or more people — aimed at mitigating the spread of the virus.
Centers for Disease Control and Prevention (CDC) issued guidance on Mar. 16 recommending that Americans cancel or postpone gatherings of 50 more people for the next eight weeks.
DOL. The Department of Labor issued a temporary rule implementing the paid family and medical leave provisions of the Families First Coronavirus Response Act. TRP’s analysis of the rule can be read here.
The Trump administration offered a broad definition of “health care providers” that may be excluded from paid sick and family leave, as well as broad exceptions to family leave for companies with fewer than 50 workers in the rule. This led some Members of Congress to say that the rule veers away from what Congress intended when it passed the law.
HUD. The Department of Housing and Urban Affairs (HUD) has begun allocating $3 billion in funding for communities through the Community Development Block Grant, Emergency Solutions Grant, and Housing Opportunities for Persons With AIDS programs to address COVID-19 issues.
CFPB. The Consumer Financial Protection Bureau (CFBP) issued guidance urging lenders to provide information to credit reporting agencies about the work they are doing to provide relief to consumers during the COVID-19 emergency.
USTR. The Office of the United States Trade Representative (USTR) published a list of exemptions on certain medical items from the tariffs imposed by President Donald Trump on Chinese goods.
USTR opened a comment docket for members of the public, businesses, and government agencies to submit comments if they believe further modifications to the 301 tariffs may be necessary in response to the outbreak.
FDA. The Food and Drug Administration (FDA) issued an update on steps the agency is taking to help mitigate supply interruptions of food and medical products.
FDA has provided new guidance on patient access to certain Risk Evaluation and Mitigation Strategy (REMS)-requited drugs during the COVID-19 public health emergency.
FDA issued guidance allowing manufacturers of certain non-invasive, FDA-cleared devices to expand their use so that health care providers can use them to monitor patients remotely.
FDA is suspending routine surveillance inspections for food, drugs, medical devices and tobacco to protect its workers from COVID-19 and because of industry concerns about visitors. Inspections triggered by specific reasons, like contamination, outbreaks or other emergencies, will continue.
EO on Medical Resources. President Trump signed an executive order that seeks to stymie hoarding of health and medical resources to respond to the spread of COVID-19.
President Trump issued an executive order on prioritizing and allocating resources to respond to the spread of COVID-19.
REAL ID. President Trump announced that the federal government would be extending the compliance deadline for REAL ID, responding to concern from the travel industry as well as lawmakers, who have been increasingly worried that a rush to DMVs to meet the Oct. 1 deadline could put people at risk.
Tech. The White House announced the launch of a COVID-19 High Performance Computing Consortium aimed at providing researchers with access to computing resources needed to bolster scientific research on the virus.
The Trump administration issued a call to action urging the tech industry to collaborate and utilize data on COVID-19 and related viruses using artificial intelligence (AI). It includes curated articles and data compiled by the Allen Institute for AI. Additional information on this database can be found here.