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COVID-19: Federal Update (5/27)

Quick Takes

— HOUSE GOP MOUNTS LEGAL CHALLENGE TO NEW REMOTE VOTING RULES. House Republicans are expected to file a lawsuit aimed at blocking implementation of the lower chamber’s new remote voting resolution.

— CONGRESS CLOSING IN ON DEAL FOR PPP FLEXIBILITY. Congressional leadership is expressing optimism about reaching a deal that would provide PPP loan recipients with more time and flexibility in using these funds.

— SENATE ARMED SERVICES COMMITTEE SCHEDULES NDAA MARKUP. The Senate Armed Services Committee will mark up its annual defense policy bill the week of June 8.

— TRUMP ADMINISTRATION EXAMINING IDEA OF BACK-TO-WORK BONUSES. The Trump administration is examining proposals to provide cash incentives to encourage unemployed Americans to return to work.

— MCCONNELL: ANOTHER ROUND OF COVID-19 LEGISLATION ‘PROBABLY’ NEEDED. In a pivot from his most recent stance, Senate Majority Leader Mitch McConnell (R-KY) stated yesterday that Congress will “probably” need to pass another round of COVID-19 relief legislation in the coming weeks.

— HHS PUBLISHES SHORT REPORT PROVIDER FUNDING ALLOCATIONS. HHS published a brief update on how the $175 billion in provider relief funding was spent to April 30.

Capitol Hill Update

— HOUSE GOP MOUNTS LEGAL CHALLENGE TO NEW REMOTE VOTING RULES. House lawmakers will return for legislative business today and are set to utilize their new remote work flexibilities. However, these new rule changes are expected to be immediately challenged in court by House Republicans. Minority Leader Kevin McCarthy (R-CA) and 20 GOP lawmakers are expected to file a lawsuit today asking a federal judge to block the remote voting resolution, alleging that these new measures are unconstitutional. The lawsuit faces an uphill battle in court, as the courts have generally been reluctant to interfere in the rules Congress sets itself.

— CONGRESS CLOSING IN ON DEAL FOR PPP FLEXIBILITY. Congressional leadership is expressing optimism about reaching a deal that would provide loan recipients from the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) with more time and flexibility in using these funds. House Majority Leader Steny Hoyer (D-MD) stated yesterday that there is a “general consensus” in both chambers that the current eight-week period in which businesses must use the funds is too short, while Senate leadership is pushing for unanimous consent passage of legislation that would address these concerns. The lower chamber is scheduled to vote on a bill from Reps. Dean Phillips (D-MN) and Chip Roy (R-TX) tomorrow that would give businesses 24 weeks to spend the funds instead of eight and eliminate a non-statutory requirement preventing non-payroll costs from accounting for more than 25 percent of loan forgiveness. If the two sides are able to reach an agreement, it’s possible that Senators could pass a compromise measure by unanimous consent during the upper chamber’s pro forma session tomorrow, placing the bill on President Donald Trump’s desk for signature.

— FISA REAUTHORIZATION, SUSPENSION BILLS ON TAP FOR HOUSE. On the floor for today, 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 three bills under suspension of the rules, including: (1) an act requiring the Federal Bureau of Investigations (FBI) to provide information on suicide rates in law enforcement; (2) a bill that would provide public safety officer death and disability benefits for public safety officials who contract COVID-19; and (3) a measure condemning China for human rights violations against Uyghur Muslims.

Washington Insider: What We’re Reading

Defense News: Senate Armed Services Committee Schedules NDAA Markup

The Senate Armed Services Committee will mark up its annual defense policy bill the week of June 8, mostly in closed sessions, its leaders announced Tuesday. The Military Personnel Subcommittee set an open markup June 9 for its section of the National Defense Authorization Act, and the other subcommittee markups will be closed, per the panel’s custom. The full committee markup is set for June 10, said SASC Chairman Jim Inhofe (R-OK), and ranking member Jack Reed (D-RI)

The Wall Street Journal: Trump Administration Examining Idea of Back-to-Work Bonuses ($)

The Trump administration is examining proposals to provide cash incentives to encourage unemployed Americans to return to work, according to a top economic adviser, as the White House looks to revive the economy. White House National Economic Council Director Larry Kudlow made the comments after he was asked about a proposal by Sen. Rob Portman (R., Ohio) to provide a temporary $450-a-week bonus for unemployed workers returning to work, on top of their wages. Rep. Kevin Brady (R., Texas), the top Republican on the House Ways and Means Committee, has also discussed the idea and has spoken to Mr. Kudlow about it, according to a congressional aide.

The New York Times: Hunger Program’s Slow Start Leaves Millions of Children Waiting ($)

An emergency food assistance program Congress created two months ago has reached only a small fraction of the 30 million children it was intended to help. The program, Pandemic-EBT, aims to compensate for the declining reach of school meals by placing their value on electronic cards that families can use in grocery stores. However, as of May 15, only about 15 percent of eligible children had received benefits, according to an analysis by The New York Times.

The Hill: Key House Lawmakers Reach Deal on Surveillance Law Amendment

Key House lawmakers have struck a deal on an amendment that would block law enforcement from accessing Americans’ web browsing history without a warrant. The amendment from Reps. Zoe Lofgren (D-CA) and Warren Davidson (R-OH) to legislation reauthorizing surveillance programs set to be voted on this week was negotiated over the three-day Memorial Day weekend after it was confirmed Friday that leadership would allow it to be considered.

COVID-19: What We’re Hearing

— ‘CARES 2.0’ STATE OF PLAY. Senate Majority Leader Mitch McConnell (R-KY) stated yesterday that Congress will “probably” need to pass another round of COVID-19 relief legislation in the coming weeks — a pivot from his most recent stance that Congress must continue to analyze implementation of the CARES Act prior to moving additional stimulus relief. Key priorities that have emerged include:

  1. Liability. Leader McConnell 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. Leader McConnell emphasized that any future COVID-19 relief efforts must include these protections in order for the Senate to consider additional relief legislation.

  2. House Democratic leadership appears open to negotiating a deal on liability protections. Leader Hoyer emphasized that these protections must not undermine the health and rights of workers, but indicated that the issue is open for further discussion and negotiation.

  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 give employers a tax break for keeping workers on the payroll.

  5. State and Local Governments. Funding for state and local governments is a key pillar of the Democrats’ next stimulus bill. 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.

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…

— HHS PUBLISHES SHORT REPORT PROVIDER FUNDING ALLOCATIONS. The Department of Health and Human Services (HHS) published a brief overview of how the $175 billion in provider funding is being spent. The report contains a table of how much funding HHS has sent to providers by state as of Apr. 30.

RECENT DEVELOPMENTS…

— SBA ISSUES NEW RULES ON PPP LOAN FORGIVENESS. 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.

— 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. 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. TRP’s updated analysis of funding under the Provider Relief Fund is available here.

— 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. Phase I. 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.

  2. Phase II. 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.

  3. Phase III. The CARES Act was signed into law on Mar. 27. TRP’s analysis of the Phase III legislation can be read here.

  4. Phase 3.5. President Donald Trump signed the $483.4 billion “COVID-19 Phase 3.5” bill into law on Apr. 24. TRP’s comprehensive analysis of the Phase 3.5 legislation can be read here.

— 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 agencies, 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 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 practitioners 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. Antigen Test. FDA issued an emergency use authorization for the first COVID-19 antigen test.

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

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

  7. 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.

  8. Compounding. FDA issued guidance to temporarily allow pharmacies to compound drugs for hospitalized COVID-19 patients that are essentially copies of commercially-available drugs or provide such drugs to a hospital without a patient-specific prescription when certain conditions are met.

  9. It also issued guidance to temporarily allow outsourcing facilities to compound a drug that is essentially a copy of an approved drug, use a bulk drug substance not on the 503B list, and not meet certain stability testing and expiration date requirements when certain conditions are met.

— 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 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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