COVID-19: Federal Update (6/16)
— WASHINGTON RAMPS UP ON POLICING REFORM. President Trump is set to issue an executive order around the matter today.
— TRUMP TEAM WEIGHS $1 TRILLION FOR INFRASTRUCTURE TO SPUR ECONOMY. The Trump administration is considering a $1 trillion infrastructure package to spur the economy.
— FEDERAL RESERVE TO EXPAND MAIN STREET LENDING PROGRAM TO NONPROFITS. The central bank will be seeking feedback on a proposal to expand the Main Street Lending Program for certain nonprofit organizations.
— FED SET TO BEGIN PURCHASING CORPORATE DEBT. The move is aimed at slashing borrowing costs and stymieing COVID-related economic hardships
Capitol Hill Update
— WASHINGTON RAMPS UP ON POLICING REFORM. With public pressure mounting following a wave of protests across the country against police brutality, officials in Washington are readying a series of actions around comprehensive police reform legislation. This afternoon, President Donald Trump is poised to issue an executive order that seeks to promote the inclusion of social and mental health workers alongside police officers, best guidelines for use of force, as well as transparency. The executive order precedes a big day on Capitol Hill tomorrow that will provide a strong indicator of how closely-aligned the two sides are on a bipartisan police reform effort. Congressional Republicans — spearheaded by Sen. Tim Scott (R-SC) — are set to release a proposal that hones in on transparency, use of force restrictions, and training, while Members on the House Judiciary Committee meet to markup the Democrats’ Justice in Policing Act (text; summary). While lawmakers have expressed a sense of urgency with respect to clinching meaningful reform, timing on passage of a bipartisan deal is unclear as of now.
— SENATE EYES PASSAGE OF PUBLIC LANDS PACKAGE. The Senate will convene later this afternoon as it looks to advance a sweeping public lands package. The bill would permanently fund the Land and Water Conservation Fund (LWCF), while also addressing billions of dollars in deferred maintenance backlogs on existing public lands and national parks. A vote on final passage is expected to occur tomorrow, which would send the bill to the House for consideration. House lawmakers are reportedly eyeing a vote on The Great American Outdoors Act ahead of the July 4 recess.
Washington Insider: What We’re Reading
The Trump administration is considering a $1 trillion infrastructure package to spur the economy, viewing the renewal of the current surface transportation authorization law, set to expire Sept. 30, as a possible vehicle to get it through Congress, according to sources. The Department of Transportation draft follows House Democrats’ own offer of $500 billion legislation to renew infrastructure funding for five years, but Senate Republicans have rebuffed calls of including such spending in coronavirus relief legislation.
Federal Reserve Chairman Jerome Powell told lawmakers Tuesday that a full recovery from the pandemic-driven recession is “unlikely” until Americans no longer fear contracting COVID-19, despite recent strong economic data. In his testimony before the Senate Banking Committee on Tuesday, the Fed chief warned that the U.S. economy will continue to suffer as long as the coronavirus lingers.
The Supreme Court on Monday denied the Trump administration’s attempt to challenge California’s so-called sanctuary law that limits local cooperation with federal immigration authorities. The case involves a California law which then-Gov. Jerry Brown signed in 2017. The far-reaching law put in place various policies that collectively bar state and local resources from being used to assist federal immigration enforcement efforts.
A House subcommittee investigating billions of dollars in coronavirus aid is demanding that the Trump administration and some of the nation’s largest banks turn over detailed information about companies that applied for and received federal loans intended for small businesses. The requests Monday came after Treasury Secretary Steven Mnuchin told Congress last week that the names of loan recipients and the amounts disbursed as part of the $600 billion-plus Paycheck Protection Program are “proprietary information” and do not have to be made public.
COVID-19: What We’re Hearing
— ‘CARES 2.0’ STATE OF PLAY. While Senate Majority Leader Mitch McConnell (R-KY) has indicated that Congress will likely need to pass another round of COVID-19 relief legislation, Republicans are pushing for a more narrowly-targeted relief package following better-than-expected jobs numbers for the month of May. Conversely, Congressional Democrats are remaining steadfast on their push for another robust stimulus package. As the public health emergency continues to unfold, lawmakers are mulling over several policy options for the next round of legislation, including:
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.
House Democratic leadership appears open to negotiating a deal on liability protections. House Majority Leader Steny Hoyer (D-MD) 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.
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.
A key option on the table includes enhancing a tax credit that would give employers a tax break for keeping workers on the payroll.
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.
PPP. Following Congressional passage of the Paycheck Protection Program Flexibility Act, Lawmakers are eyeing further reforms to the PPP.
Prior to Senate passage of H.R. 7010, Sens. Ron Johnson (R-WI) and Mike Lee (R-UT) — who had expressed concerns and opposition to the House-passed bill — secured a letter from key Small Business Committee members in both chambers clarifying that the intent of the legislation is not to reauthorize the program through the end of the year without additional reforms.
Small Business Committee Chairman Marco Rubio (R-FL) and Sen. Susan Collins (R-ME) have also indicated they are working on a technical change to the legislation that would ensure businesses can have their loans forgiven in some form regardless of whether they reach the 60 percent threshold.
Additionally, there has been a bipartisan push in Congress to expand PPP eligibility to 501(c)6 organizations and other currently ineligible nonprofits in the next round of COVID-19 relief legislation.
Surprise Billing. Reports out of the Trump administration suggest that the White House will push for action on surprise medical bills ahead of the next round of relief legislation.
During the CARES Act 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.
Budget Reform. A bipartisan group of House lawmakers penned a letter to Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) calling for provisions that address the federal debt and trust funds for Medicare and Social Security to be included in the next round of COVID-19 relief legislation.
— APPROPRIATIONS UPDATE. As the COVID-19 pandemic continues to upend the Congressional schedule, lawmakers are adjusting their expectations for consideration of fiscal year (FY) 2020 spending bills.
Senate. The Senate Appropriations Committee plans to begin marking up spending bills next week. Appropriators will look to clinch a bipartisan agreement on the 302(b) funding allocations for each of the 12 bills ahead of the forthcoming markups.
House. In a “Dear Colleague” letter to Members on the House Appropriations Committee, Chairwoman Nita Lowey (D-NY) provided an overview of the Committee’s plan of attack for addressing fiscal year (FY) 2021 spending bills next month.
Appropriators will hold subcommittee and full committee markups on funding bills during the weeks of Jul. 6 and Jul. 13, with floor consideration likely occurring the weeks of Jul. 20 and Jul. 27, according to Chairwoman Lowey. She also plans to offer additional details on the schedule — as well as the specific order in which the bills will be considered — later this month.
COVID-19 Legislative & Regulatory Trackers
— SBA REOPENS EIDL AND EIDL ADVANCE PROGRAM. The Small Business Administration (SBA) announced yesterday that it has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19.
— FEDERAL RESERVE TO EXPAND MAIN STREET LENDING PROGRAM TO NONPROFITS. The Federal Reserve announced it will be seeking feedback on a proposal to expand the Main Street Lending Program for nonprofit organizations.
The proposal would make loans available to 501(c)(3) and 501(c)(19) organizations with 50 to 15,000 employees, but 501(c)(6)s and nonprofits with endowments larger than $3 billion would not be eligible under the program.
— FED SET TO BEGIN PURCHASING CORPORATE DEBT. In a move aimed at slashing borrowing costs and stymieing COVID-related economic hardships, the Federal Reserve announced plans to begin purchasing debt from corporations.
— FDA ENDS EMERGENCY USE FOR ANTI-MALARIA MEDICINES. The Food and Drug Administration (FDA) withdrew its emergency use authorizations for hydroxychloroquine and chloroquine as COVID-19 treatment options. In a separate warning, the agency cautioned that the use of the anti-malaria medications could blunt the effectiveness of the antiviral Remdesivir.
— SBA, TREASURY ISSUE NEW GUIDANCE ON PPP FLEXIBILITY. Following the enactment of the Paycheck Protection Program Flexibility Act, the SBA and Treasury Department issued revised guidance for the PPP. Click to view the updated interim final rule, borrower application, and lender application.
— FED OPENS MAIN STREET LENDING PROGRAM FOR LENDER REGISTRATION. The Federal Reserve officially opened lender registration for its Main Street Lending Program. Click here to access the necessary registration documents.
— HHS ANNOUNCES $25 BILLION IN RELIEF FUNDING FOR MEDICAID PROVIDERS, SAFETY NET HOSPITALS. The Department of Health and Human Services (HHS) announced the allocation of $25 billion from the Provider Relief Fund, including $15 billion for Medicaid and CHIP providers, as well as $10 billion for safety net hospitals. TRP’s comprehensive analysis of the COVID-19 provider relief fund can be read here.
— HHS ANNOUNCES COVID-19 TRAINING AND TECHNICAL ASSISTANCE FUNDING FOR HEALTH CENTERS. The Department of Health and Human Services (HHS) announced $8 million in funding through the Health Resources and Services Administration (HRSA) to support COVID-19 training and technical assistance for more than 70 organizations.
— NIH TO STUDY COVID-19 TREATMENTS FOR CHILDREN. The National Institutes for Health (NIH) has launched a study to evaluate drugs prescribed to treat COVID-19 in infants, children and adolescents across the country.
AS PREVIOUSLY REPORTED…
— PPP FLEXIBILITY ACT. President Donald Trump signed a bill giving PPP recipients more time and flexibility in using their loans. Click here to read TRP’s analysis of this legislation.
— 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.
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.
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.
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.
Phase III. The CARES Act was signed into law on Mar. 27. TRP’s analysis of the Phase III legislation can be read here.
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. TRP’s comprehensive analysis of the small business provisions contained in COVID-19 response bills can be read here.
PPP. SBA and Treasury Department have taken a piecemeal approach to implementing the PPP. While conducted with the aim of getting the emergency program up and running as quickly as possible, the government’s process of issuing FAQs and guidance as the program runs has created uncertainty in certain areas.
The loan application form can be accessed here.
The SBA and Treasury Department updated their running list of frequently asked questions on the PPP (May 27).
SBA issued guidance on how to calculate PPP loans by business type.
SBA published a list of all lenders participating in the PPP.
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.
CDFI. SBA and Treasury Department announced they will set aside $10 billion in PPP funding for Community Development Financial Institutions (CDFI).
EIDL. Following overwhelming demand for Economic Injury Disaster Loans (EIDL) and accompanying $10,000 grants, SBA has limited eligibility for the program to agricultural businesses.
— FEDERAL RESERVE. Among other actions intended to mitigate an economic meltdown, the Fed has established 11 lending facilities intended to support the flow of credit to households, businesses, and municipalities. Many of these facilities are backed by Treasury funds provided under the CARES Act.
Open Market Operations. At the onset of the pandemic, the Federal Open Market Committee (FOMC) lowered interest rates to 0-.25 percent in an effort to spur economic activity. Fed Chairman Jerome Powell, however, has indicated that the Fed is unlikely to pursue negative interest rates. The Fed is continuing to purchase Treasuries and mortgage-backed securities (MBS) with the aim of reducing strain on the financial sector.
Main Street Lending Program. The Main Street Lending Program supports lending to small- and medium-sized businesses through the purchase of eligible commercial loans. More information on the program can be found here.
Term Asset-Backed Securities Loan Facility (TALF). First created to deal with the liquidity crisis in the Asset-backed Securities (ABS) market in 2008-09, the Fed recently recreated this program to respond to COVID-19. Similar to the first version, TALF will allow issuers of ABS to effectively sell into a Fed backed Special Purpose Vehicle. More information on the program can be found here.
Municipal Liquidity Facility (MLF). The Fed will purchase up to $500 billion in state and local debt with the intention of supporting cash-strapped municipal governments’ access to liquidity. More information on the program can be found here.
The Federal Reserve announced that it is expanding the scope of cities that will be able to borrow money through its emergency program for state and local governments. This expansion will allow at least two cities or counties in every state to be eligible, regardless of population (Jun. 3).
Primary and Secondary Market Corporate Credit Facilities. The Fed will make loans to and purchase the bonds of investment-grade larger companies through two corporate credit facilities. More information on the program can be found here.
Financial Markets. In addition to the above actions intended to support the flow of credit in the economy, the central bank has established several other facilities intended to facilitate the continued functioning of commercial paper markets, money markets, and primary dealer markets.
— TREASURY. The Treasury Department updated its list of frequently asked questions that provide examples of eligible and ineligible expenditures of the state, local, and tribal Coronavirus Relief Fund on May 28. TRP’s analysis of these new FAQs can be read here.
CRF. The Treasury Department released a list of the payments that have been made to states and qualifying localities through the Coronavirus Relief Fund.
Employee Retention Credit. The Treasury Department has released a list of frequently asked questions pertaining to the Employee Retention Credit (May 8).
— 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.
— EO ON 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 order (May 19).
— EO ON PERMITTING. The Trump administration issued an executive order calling on federal agencies to waive certain environmental and permitting requirements to expedite construction of highways and other energy infrastructure projects on federal lands (Jun. 4)
— IRS. The IRS announced that it will ease some of the requirements for the Opportunity Zone program to give taxpayers more time to meet specific deadlines due to the COVID-19 public health emergency. Click here to read the guidance in its entirety (Jun. 4).
The Internal Revenue Service (IRS) published a list of frequently asked questions on COVID-related relief for retirement plans and IRAs (May 4).
— HHS. Among key initiatives led by the Department of Health and Human Services (HHS) at large:
Testing. The Trump administration published a report on its national COVID-19 testing strategy as mandated by the “Phase 3.5” measure.
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 (May 20).
Drug Manufacturing. HHS and the Biomedical Advanced Research and Development Authority (BARDA) announced a $628 million contract with Emergent BioSolutions to advance manufacturing capabilities and capacity COVID-19 vaccines and therapeutics (Jun. 1).
HHS and the BARDA announced a four-year, $354 million agreement with Phlow Corporation aimed at expanding U.S.-based pharmaceutical manufacturing for COVID-19 response (May 20). TRP’s analysis of the agreement can be read here.
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 (May 15).
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 (May 13).
PREP ACT. HHS issued an amendment to its existing PREP Act declaration clarifying that covered countermeasures under the Declaration include qualified products that limit the harm COVID-19 might otherwise cause.
Resilience. HHS’ Office of the Assistant Secretary for Health (OASH) published a request for information on opportunities to strengthen the U.S. healthcare system over the long-term term, including policies and programs that can be improved to mitigate the risk of COVID-19 and avoid negative impacts on patient outcomes.
— MEDICARE AND MEDICAID. The Centers for Medicare and Medicaid Services (CMS) has offered a series of regulatory flexibilities and guidances:
Flexibilities. CMS published a “flexibilities table” that shows the changes the agency has made or will be making to Innovation Center models in response to the COVID-19 public health emergency (Jun. 3).
State Fact Sheet. CMS published a fact sheet for state and local governments that outlines how these entities can seek payment for care in alternate care sites through CMS programs (May 26).
State COVID Guidance. CMS issued guidance to states on COVID-19 survey activities, CARES Act funding, enhanced enforcement for infection control deficiencies, and quality improvement activities in nursing homes.
CMS unveiled enforcement actions for nursing homes based on early trends in the most recent data regarding incidence of COVID-19 in residential care facilities. The enhanced enforcement targets facilities with persistent infection control violations, and CMS will also enforce lower-level violations to ensure greater attention to infection control practices (Jun. 1).
CMS published its first set of COVID-19 nursing home data and results from inspections conducted by the agency since Mar. 4, 2020 (May 31)
1135 Waivers. A full list of the 1135 waiver approval letters can be accessed here (Updated Jun. 1).
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 (May 14).
MA Plan FAQs. CMS updated its list frequently asked questions related to the public health emergency for Medicare Advantages plans (May 13).
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 (May 8).
Medicaid, CHIP FAQs. CMS published a tranche of frequently asked questions for state Medicaid and CHIP programs regarding COVID-19 response efforts (May 5).
— HEALTH CARE PROVIDER FUNDING. TRP’s comprehensive analysis of these distributions can be read here.
Website. HHS has updated its webpage outlining details on provider relief and related health funding.
Click here for a list of extensive frequently asked questions on the fund (updated May 26).
Click here for a detailed overview on all of the COVID-related provider funding
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. Additionally, HHS cited providers who will receive further, separate funding, including dentists and providers that solely take Medicaid.
Compliance. 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.
Hospital Preparedness Fund. The Department of Health and Human Services Office of the Assistant Secretary for Preparedness and Response (HHS ASPR) announced it is allocating $250 million to aid U.S. health care systems treating patients and responding to the COVID-19 pandemic (Jun. 2)
This tranche of funding from the Hospital Preparedness Program seeks to support hospitals and other health care entities to train workforces, expand telemedicine and the use of virtual healthcare, procure supplies and equipment, and coordinate effectively across regional, state and jurisdictional, and local health care facilities to respond to COVID-19.
— 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.
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 (updated Jun. 2).
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 (Updated May 21).
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 (Updated May 21).
Drug Development. FDA published guidance documents related to drugs being developed for COVID-19.
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 (May).
The second guidance document is intended to assist sponsors in the clinical development of drugs for treating or preventing COVID-19 (May).
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 (Updated May 11).
Antigen Test. FDA issued an emergency use authorization for the first COVID-19 antigen test (May 8).
Device Shortages. FDA published guidance on reporting requirements for medical device shortages (May).
Remdesivir. FDA issued an emergency use authorization for the antiviral Remdesivir (May 1).
— CDC. 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.
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) (Apr. 27).
SAMHSA released $15 million in supplemental grant awards for tribal COVID-19 behavioral health response (May 1)
— NIH. 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.
The National Institutes of Health issued its first guidance on COVID-19 treatment options that are currently under review (updated May 12).