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COVID-19: Federal Update (5/26)

Quick Takes

— HOUSE SET TO LEVERAGE NEW REMOTE VOTING FLEXIBILITIES. House lawmakers are set to utilize their new remote voting resolution to convene virtual hearings, markups, and vote by proxy.

— CONGRESS MULLS OPTIONS FOR PPP FLEXIBILITY. House and Senate lawmakers have introduced dueling proposals that seek to ease restrictions and promote flexibility on PPP funding.

— SENATE EYES NDAA, PUBLIC LANDS PACKAGE IN JUNE SESSION. Leader McConnell outlined the upper chamber’s work schedule for next month prior to adjourning for the Memorial Day district work period.

— TAX CREDIT FOR KEEPING WORKERS ON PAYROLL DRAWS BIPARTISAN INTEREST. Lawmakers are looking to expand an existing wage subsidy to keep workers on payrolls and help businesses stay afloat.

SBA ISSUES NEW RULES ON PPP LOAN FORGIVENESS. The SBA and Treasury Department published two new rules pertaining to loan forgiveness for the PPP (see here and here).

Capitol Hill Update

— HOUSE SET TO LEVERAGE NEW REMOTE VOTING FLEXIBILITIES. The House will return to Washington tomorrow as leadership looks to utilize the lower chamber’s new remote work flexibilities. The rule change will allow Members to submit votes for up to ten absent lawmakers by proxy and permit committees to convene hearings, markups, and depositions through a chief administrative officer-approved software platform. These changes will only last 45 days before needing renewal and will not extend beyond the 116th Congress. In the coming days and weeks ahead, House leadership expects to utilize these remote work flexibilities to convene virtual hearings, markups, and consideration of key 2020 legislative priorities including fiscal year (FY) 2020 appropriations, the National Defense Authorization Act (NDAA), and reauthorization of expiring Surface Transportation and Water Resources Development programs.

— CONGRESS MULLS OPTIONS FOR PPP FLEXIBILITY. The House plans to vote on a bill from Reps. Dean Phillips (D-MN) and Chip Roy (R-TX) under suspension of the rules that would reform the Paycheck Protection Program (PPP). Specifically, the legislation would: (1) provide flexibilities on how small businesses use PPP loan funding; (2) give businesses 24 weeks to spend the funds instead of eight; and (3) eliminate a non-statutory requirement preventing non-payroll costs from accounting for more than 25 percent of loan forgiveness. Prior to adjourning for their Memorial Day district work period, a bipartisan group of senators introduced a similar measure that would double the loan forgiveness period to 16 weeks, allow businesses to use the loan funds for investments to reopen safely, and extend the program through December. If the two chambers are able to strike an agreement this week, it’s possible that the bill could land on President Donald Trump’s desk for signature before to the end of the month.

— FISA REAUTHORIZATION, SUSPENSION BILLS ON TAP FOR HOUSE. In addition to the Paycheck Protection Program Flexibility Act, the lower chamber is scheduled to take up a bill that would reauthorize and reform the Foreign Intelligence Surveillance Act. Lawmakers will also take up seven bills under suspension of the rules, including: (1) a bill that would require the Small Business Administration (SBA) to submit a report on PPP and Economic Injury Disaster Loan program; (2) legislation that would reauthorize major medical facility projects for the Department of Veterans’ Affairs; and (3) an act requiring the Federal Bureau of Investigations (FBI) to provide information on suicide rates in law enforcement.

Washington Insider: What We’re Reading

The Wall Street Journal: Tax Credit for Keeping Workers on Payrolls Draws Bipartisan Interest ($)

Lawmakers are increasingly looking to expand an existing wage subsidy to keep workers on payrolls and help businesses stay afloat in a move to stem rising unemployment rates and economic hardship. The $3 trillion package passed by the House this month features an expanded wage subsidy, known as the employee retention tax credit. That proposal, which would add about $194 billion to a $55 billion tax credit created in March, is gaining bipartisan support even as lawmakers clash over other legislation to aid the economy during the pandemic.

The Hill: Trump Anti-Reg Push Likely to End Up in Court

An executive order signed by President Trump directing agencies to slash regulations in order to boost the economy is likely to lead to a number of court challenges. Experts say speeding up the regulatory process or nixing public comment periods would likely be slammed in court unless the Trump administration can demonstrate their actions were necessary due to the pandemic.

Roll Call: Senate Leaves for Memorial Day Break, Full June Agenda Awaits on Return

The Senate will be away for the Memorial Day recess as scheduled, but Majority Leader Mitch McConnell has set up a full schedule for when lawmakers return in June. Before wrapping up the chamber’s business for the week on Thursday, the Kentucky Republican said that next month, the Senate will work on the fiscal 2021 defense authorization bill and is expected to take up a public lands package. That measure would permanently fund the Land and Water Conservation Fund and establish a fund for maintenance of national parks and other public lands.

The Hill: Lawmakers Ask For Briefings on Chinese Targeting of Coronavirus Research

Lawmakers in the House and Senate requested briefings from key federal agencies this week around a recent alert that Chinese hackers are targeting U.S. research groups involved in developing vaccines and treatments for the COVID-19 virus. Republican members of the House Science, Space and Technology Committee, including ranking member Frank Lucas (R-Okla.), sent a letter to FBI Director Christopher Wray and CISA Director Christopher Krebs on Friday asking for a briefing on the threat.

COVID-19: What We’re Hearing

— GOP ‘CARES 2.0’ PRIORITIES. While Republicans would generally prefer more time to analyze implementation of the CARES Act prior to moving onto another round of relief legislation, the GOP has started to indicate the policies they would like to champion in the next tranche of negotiations.

  1. Liability. Senate Majority Leader Mitch McConnell (R-KY) and Sen. John Cornyn (R-TX) are working on legislation that would limit the liabilities of health care workers, business owners, and employees from lawsuits pertaining to the COVID-19 outbreak.

  2. Leader McConnell emphasized that any future COVID-19 relief efforts must include these protections in order for the Senate to consider additional relief legislation. Democrats have largely been dismissive of these efforts, arguing that it would water down federal consumer protection efforts.

  3. Unemployment Reform. Senate Republicans are spearheading efforts on reforming the enhanced unemployment benefits so that generous payments approved in the CARES Act don’t become an obstacle to rehiring workers.

  4. A key option on the table includes enhancing a tax credit that would that give employers a tax break for keeping workers on the payroll.

  5. State and Local Governments. GOP lawmakers have floated policies that would promote more flexibility to use CARES Act funding to offset lost revenue.

  6. While there is bipartisan agreement that more needs to be done to help stymie economic hardships for these entities, allocating additional funding has become a divisive issue within the Republican conference.

  7. It appears likely that some Senate Republicans — particularly those who are up for re-election — would coalesce behind a bipartisan proposal that would provide additional funding and flexibility to address needs at the state and local level.

COVID-19 Legislative & Regulatory Trackers

NEW TODAY…

— SBA ISSUES NEW RULES ON PPP LOAN FORGIVENESS. The Small Business Administration (SBA) and Treasury Department published two new rules pertaining to loan forgiveness for the PPP.

  1. The first rule provides details on the requirements for businesses to earn loan forgiveness. The second rule overviews lenders’ responsibilities in the forgiveness process, as well as SBA’s procedures for reviewing loans to determine borrower eligibility.

— WHITE HOUSE PUBLISHES CONGRESSIONALLY-MANDATED COVID-19 TESTING REPORT. The Trump administration published a report on its national COVID-19 testing strategy as mandated by the “Phase 3.5” measure.

RECENT DEVELOPMENTS…

— TRUMP ADMINISTRATION ISSUES EXECUTIVE ORDER PUSHING DEREGULATION. The Trump administration issued an executive order calling on agencies to target regulations “that may inhibit economic recovery” during the COVID-19 pandemic. Click here to read TRP’s analysis of this new order.

— HHS ALLOCATES COVID-19 FUNDING FOR SNFs AND TRIBAL PROVIDERS. The Department of Health and Human Services (HHS) announced on May 22 that it has begun distributing roughly $4.9 billion in COVID-19 provider funding to skilled nursing facilities. The same day, it also announced $500 million in funding for tribal hospitals, clinics, and urban health centers, a $100 million increase over the previously reported sum for those providers.

— HHS EXTENDS COMPLIANCE DEADLINE FOR PROVIDER RELIEF FUNDING. HHS announced on May 22 that it would allow providers eligible to receive provider relief funding from the CARES Act an additional 45 days to accept the Terms & Conditions for such payments. Providers will now have a total of 90 days from receipt of payment to make the attestation to HHS.

— CDC PUBLISHES GUIDELINES FOR REOPENING SCHOOLS AND BUSINESSES. The Centers for Disease Control and Prevention (CDC) published detailed guidelines for reopening schools and businesses that have been shut down amid the COVID-19 outbreak.

AS PREVIOUSLY REPORTED…

— HEROES ACT. The House passed the Democrats’ sweeping $3 trillion HEROES Act following weeks of intraparty negotiations and assessments of current COVID-19 response efforts. The bill is considered dead-on-arrival in the GOP-controlled Senate and White House. TRP’s comprehensive analysis of this legislation can be read here.

  1. As written, the bill would represent the largest federal response to the COVID-19 pandemic to date, with provisions that would provide another round of direct payments to individuals and families, additional funding for health care providers and COVID-19 testing, as well as nearly $1 trillion in aid to state and local governments.

— LEGISLATIVE RESPONSE. TRP has published several in-depth policy memos that analyze actions that Congress and the federal government have taken to address the COVID-19 outbreak. Click here for the full list of memos.

  1. Telehealth. Congress and the Trump administration have issued a number of policies and waivers designed to lower restrictions on and encourage telehealth services. Click here to read TRP’s memo on these telehealth policies.

  2. Phase 3.5. President Donald Trump signed the $483.4 billion “COVID-19 Phase 3.5” bill into law. TRP’s comprehensive analysis of the Phase 3.5 legislation can be read here.

  3. Health Extenders. TRP has published a memo explores the “health extenders” that the CARES Act reauthorized through Nov. 2020, what’s on the table for these programs in the fall, and the questions that will shape the conversation. Click here to read the memo.

— SMALL BUSINESSES. The Small Business Administration (SBA) and Treasury Department have issued several resources related to implementation of the PPP and Economic Injury Disaster Loan (EIDL) program.

  1. PPP Resources. Among the resources available on the PPP:

  2. SBA updated their list of frequently asked questions on the PPP on May 19.

  3. SBA issued an interim final rule outlining additional guidance for the PPP. 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.

  4. SBA provided an update on its PPP loan data, as well as an updated state-by-state breakdown.

  5. SBA issued guidance on how to calculate PPP loans by business type.

  6. SBA is temporarily restricting incoming applications for PPP loans to only those submitted by the country’s smallest lenders.

  7. SBA published a list of all lenders participating in the PPP.

  8. SBA issued an interim final rule clarifying the process of applying for PPP loans for individuals who report self-employed income on a 1040 Schedule C.

  9. EIDL Eligibility. SBA announced that agricultural businesses are now eligible for SBA’s EIDL and EIDL Advance programs.

— TREASURY. The Treasury Department released a list of the payments that have been made to states and qualifying localities through the Coronavirus Relief Fund.

  1. Employee Retention Credit. The Treasury Department has released a list of frequently asked questions pertaining to the Employee Retention Credit.

  2. Coronavirus Relief Fund. Treasury Secretary Steven Mnuchin issued guidance and frequently asked questions that provide examples of eligible and ineligible expenditures of the state, local, and tribal Coronavirus Relief Fund.

— OVERSIGHT. The Congressional Oversight Commission has issued its first report outlining how it will review the Treasury Department and Federal Reserve’s efforts to implement Subtitle A of the CARES Act. This will include an analysis of the lending programs and facilities designed for businesses and municipalities.

— IRS. The Internal Revenue Service (IRS) published a list of frequently asked questions on COVID-related relief for retirement plans and IRAs.

— THE FED. Key banking agency, including the Federal Reserve, have advanced a variety of regulatory flexibility and lending programs.

  1. Supplementary Leverage Ratio. The Federal Reserve and other banking regulatory agencies made additional changes to the supplementary leverage ratio to increase banking organizations’ ability to support credit to households and businesses during the COVID-19 pandemic.

  2. Liquidity Coverage Ratio. The Federal Reserve and other banking regulatory agencies published an interim final rule that modifies the Liquidity Coverage Ratio to support banking organizations’ participation in the Money Market Mutual Fund Liquidity Facility and the PPP Liquidity Facility.

  3. PPP Liquidity Flexibility. The Federal Reserve expanded access to its PPP Liquidity Facility for for additional lenders, and also broadened the criteria for collateral that can be pledged.

  4. Main St. Lending Program. The Federal Reserve will expand the scope and eligibility for the Main Street Lending Program.

  5. Municipal Liquidity Facility. The Federal Reserve expanded the scope and duration of its Municipal Liquidity Facility to offer up to $500 billion in lending to states and municipalities during the pandemic.

— HHS. Among key initiatives led by the Department of Health and Human Services (HHS) at large:

  1. Testing. HHS and the Health Resources and Services Administration (HRSA) allocated $225 million to Rural Health Clinics provided by the “Phase 3.5” legislation to bolster COVID-19 testing.

  2. Drug Manufacturing. HHS and the Biomedical Advanced Research and Development Authority (BARDA) announced a four-year, $354 million agreement with Phlow Corporation aimed at expanding U.S.-based pharmaceutical manufacturing for COVID-19 response. TRP’s analysis of the agreement can be read here.

  3. Drug Development. The Trump administration announced a framework and leadership for “Operation Warp Speed“— a national program aimed at accelerating the development, manufacturing, and distribution of COVID-19 diagnostics, treatments, and vaccines.

  4. Workforce, Telehealth. HHS and HRSA awarded $15 million in grant funding to 159 organizations across five health workforce programs to bolster telehealth capabilities in response to the COVID-19 pandemic.

— MEDICARE AND MEDICAID. The Centers for Medicare and Medicaid Services (CMS) has offered a series of regulatory flexibilities and guidances:

  1. Nursing Homes. CMS released guidance (press release) for state and local officials on reopening nursing homes. In a document that corresponds to the broader administration phases for opening up the U.S., the agency laid out several factors that it says should inform state and local health officials’ decisions on reopening.

  2. Medicaid Guidance. CMS released a new CMCS Informational Bulletin that provides states with guidance on how to temporarily modify certain provider payment methodologies and capitation rates under their Medicaid managed care contracts during the public health emergency.

  3. MA Plan FAQs. CMS updated its list frequently asked questions related to the public health emergency for Medicare Advantages plans.

  4. Medicaid, CHIP FAQs. CMS published a tranche of frequently asked questions for state Medicaid and CHIP programs regarding COVID-19 response efforts. These FAQs cover a variety of topics, including: (1) emergency preparedness and response; (2) eligibility and enrollment flexibilities; (3) benefit flexibilities; (4) cost-sharing and financing flexibilities; (5) managed care flexibilities; and (6) information technology and data reporting.

  5. Interim Final Rule. CMS issued an interim final rule with comment period and blanket waivers under Section 1135 of the Social Security Act. These new flexibilities provide for Medicare coverage of serology tests, new coverage for services provided by pharmacists, and a waiver of the limitation on the types of practitioner that may furnish Medicare telehealth services.

  6. Hospitals. CMS also gave hospitals and other inpatient facilities new flexibilities that are intended to increase acute care hospitals’ capacity during the pandemic, as well as permitting off-campus hospital outpatient departments to apply to temporarily receive reimbursement under Medicare’s hospital outpatient prospective payment system, rather than under the physician fee schedule. TRP’s memo on the new flexibilities is available here.

  7. Part D, MA Guidance. CMS has updated its information related to COVID-19 guidance document for Medicare Advantage, Part D, and Medicare-Medicaid plans.

  8. LTCH, FQHC Waivers. CMS has issued additional blanket waivers to promote flexibility for Long-Term Care Hospitals (LTCH), Rural Health Clinics (RHC), Federally Qualified Health Centers (FQHC), and Intermediate Care Facilities.

  9. 1135 Waivers. A full list of the 1135 waiver approval letters can be accessed here.

— HEALTH CARE PROVIDER FUNDING. TRP’s comprehensive analysis of these distributions can be read here.

  1. PHSSEF Distributions. To date, HHS is providing a $50 billion general allocation for Medicare hospitals and providers, $10 billion for hospitals in highly impacted areas, $10 billion for rural providers, $500 million for the Indian Health Service, and $4.9 billion for skilled nursing facilities. It also establishes a program to fund COVID-19 care for the uninsured.

  2. HHS has published a list of frequently asked questions pertaining to the $50 billion general allocation of the COVID-19 provider relief fund. In addition, 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 the outbreak.

  3. The Health Resources and Services Administration (HRSA) launched a separate portal allowing providers who have conducted COVID-19 testing or provided treatment for uninsured COVID-19 individuals on or after February 4, 2020 to request reimbursement.

  4. HHS also cited providers who will receive further, separate funding, including dentists and providers that solely take Medicaid.

— FDA. The Food and Drug Administration (FDA) has published several guidance documents related to drugs being developed for COVID-19, compounding, medical devices, and the supply chain.

  1. Testing. FDA posted a list of antibody tests that are being removed from the “notification list” of tests being offered under the Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency.

  2. Drug Development. FDA published guidance documents related to drugs being developed for COVID-19.

  3. The first guidance document provides general recommendations to sponsors to help prepare them for pre-investigational new drug application (pre-IND) meeting requests for COVID-19 related drugs. The second guidance document is intended to assist sponsors in the clinical development of drugs for treating or preventing COVID-19.

  4. Pre-IND. FDA issued guidance providing general recommendations to sponsors to help prepare them for pre-investigational new drug application (pre-IND) meeting requests for COVID-19 related drugs.

  5. Clinical Development. Another FDA guidance is intended to assist sponsors in the clinical development of drugs for treating or preventing COVID-19.

  6. Antigen Test. FDA issued an emergency use authorization for the first COVID-19 antigen test.

  7. Device Shortages. FDA published guidance on reporting requirements for medical device shortages.

  8. Remdesivir. FDA issued an emergency use authorization for the antiviral Remdesivir.

  9. Supply Chain Exemptions. FDA issued guidance outlining an exemption and exclusion from certain requirements of the Drug Supply Chain Security Act during the public health emergency.

  10. Compounding. FDA issued guidance that will temporarily allow hospitals to compound certain sedatives used for COVID-19 patients during the public health emergency. Additional details on this policy from the FDA can be read here.

— CDC. The Centers for Disease Control and Prevention (CDC) published guidance documents that offer decision-making tools for reopening schools, workplaces, child care programs, mass transit systems, bars and restaurants, as well as youth programs and camps.

— SAMHSA. The Substance Abuse and Mental Health Services Administration (SAMHSA) awarded grant funding to increase access and improve the quality of community mental and substance use disorder (SUD) treatment services through the expansion of Certified Community Behavioral Health Clinics (CCBHC).

— NIH. National Institutes of Health (NIH) launched a study to investigate the whether the COVID-19 pandemic has resulted in pregnancy-related health issues. The agency plans to incorporate this data into broader registry on how COVID-19 impacts maternal health.

  1. The National Institutes of Health issued its first guidance on COVID-19 treatment options that are currently under review.

  2. NIH and the Foundation for the NIH (FNIH) announced that they will launch a new public-private partnership with more than a dozen biopharmaceutical companies.

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