COVID-19: Federal Update (6/5)
— LOWEY PREVIEWS HOUSE APPROPS SCHEDULE FOR JULY. Appropriators brace for busy July as House looks to clear FY 2021 spending bills.
— SENATE EYES PUBLIC LANDS PACKAGE NEXT WEEK. Leader McConnell has queued up votes on a bipartisan measure that would permanently fund the Land and Water Conservation Fund (LWCF).
— TRUMP TEAM ENVISIONS UP TO $1 TRILLION FOR NEXT STIMULUS ROUND. Trump administration officials increasingly expect to spend up to $1 trillion in the next round of economic stimulus.
— TRUMP ISSUES EXECUTIVE ORDER SEEKING TO SPUR ACTION ON INFRASTRUCTURE PROJECTS. The order seeks to waive certain environmental and permitting requirements to expedite construction of highways and other energy infrastructure projects on federal lands. — IRS EASES OPPORTUNITY ZONE REQUIREMENTS. Taxpayers will have more time to meet specific Opportunity Zone deadlines due to the COVID-19 public health emergency.
Capitol Hill Update
— LOWEY PREVIEWS HOUSE APPROPS SCHEDULE FOR JULY. In a “Dear Colleague” letter to Members on the House Appropriations Committee yesterday, 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. — SENATE EYES PUBLIC LANDS PACKAGE NEXT WEEK. Senators have completed legislative business for the week, and will return next Monday afternoon to begin consideration of a sweeping public lands bill. Senate Majority Leader Mitch McConnell (R-KY) has queued up votes on a bipartisan measure that 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. While the bill currently enjoys strong bipartisan support in the upper chamber, it remains to be seen whether the Senate will consider amendments to the underlying bill. Meanwhile, a bipartisan group of House lawmakers introduced companion legislation to the Senate’s bill yesterday.
Washington Insider: What We’re Reading
Trump administration officials increasingly expect to spend up to $1 trillion in the next round of economic stimulus, according to people familiar with the matter, though action on a measure is unlikely until at least next month. While officials coalesced on that limit after Senate Majority Leader Mitch McConnell (R-KY) told them the bill could approach $1 trillion, President Donald Trump has not made a final decision. President Trump has said he wants to include an infrastructure package and other measures in the next stimulus that would push spending beyond that amount. Leader McConnell has said that there are no plans to do a stimulus bill before the July 3 two-week recess, leaving action on any such measure after July 20.
After passing legislation to amend a forgivable loan program for coronavirus-stricken small businesses on Wednesday, the Senate was working on a related bill Thursday that would give borrowers another tax break on their loans. Sen. John Cornyn (R-TX) who introduced the bill in early May, told reporters that leadership was trying to pass the bipartisan measure, but said it still faced obstacles. The bill would give borrowers a second tax benefit, a practice sometimes described as double-dipping. The borrowers already don’t have to treat forgiven loans as income and the bill would allow them to get a business expense deduction.
The majority of U.S. public school districts need to make major building repairs in at least half of their schools, yet many districts are unable to pay for updates or have postponed them to improve security in case of a shooting, according to a federal report. The U.S. Government Accountability Office (GAO) on Thursday released a study that was the agency’s first on the issue since 1996. Based on a survey of hundreds of districts, the report found that many are left on their own to pay for building repairs but often lack the necessary dollars, leaving them stuck with aging buildings that can pose health and safety risks.
The Hill: New Trump Air Rule Will Limit Future Pollution Regulations, Critics Say The Environmental Protection Agency (EPA) on Thursday announced a proposal critics say not only restricts the Clean Air Act but will undermine future administrations seeking to reduce air pollution. The proposal changes how the government justifies its own air pollution regulations, limiting how the EPA weighs carbon pollution that impacts climate change as well as the benefits of tackling multiple air pollutants at once. The proposal dictates how the agency must compile its cost-benefit analysis for future air rules — a lengthy, technical pro-con list defending a rule that is most often scrutinized by staffers and those who plan to sue over their regulations.
COVID-19: What We’re Hearing
— 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.
House. The lower chamber is expected to ramp up on the appropriations process in the coming weeks, with the goal of marking up and clearing all 12 measures by the end of July. Previously, House Majority Leader Steny Hoyer (D-MD) had indicated that the House could complete the markup process by June.
Senate. Senate Appropriations Chairman Richard C. Shelby (R-AL) indicated that his committee tentatively plans to mark up begin marking up spending bills during the third week of June.
— ‘CARES 2.0’ STATE OF PLAY. Leader McConnell 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:
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 business 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.
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.
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.
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. 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.
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.
COVID-19 Legislative & Regulatory Trackers
— TRUMP ISSUES EXECUTIVE ORDER SEEKING TO SPUR ACTION ON INFRASTRUCTURE PROJECTS. The Trump administration issued an executive order yesterday calling on federal agencies to waive certain environmental and permitting requirements to expedite construction of highways and other energy infrastructure projects on federal lands.
— IRS EASES OPPORTUNITY ZONE REQUIREMENTS. The IRS announced yesterday 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.
— CMS PUBLISHES COVID-19 NURSING HOME DATA. The Centers for Medicare and Medicaid Services (CMS) published its first set of COVID-19 nursing home data and results from inspections conducted by the agency since Mar. 4, 2020.
— HHS ISSUES GUIDANCE REQUIRING LABS TO PUBLISH DETAILED COVID-19 TESTING DATA. The Department of Health and Human Services (HHS) issued guidance outlining detailed reporting requirements for labs with respect to COVID-19 testing information.
— HHS AMENDS PREP ACT DECLARATION. 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.
— FEDERAL RESERVE EXPANDS MUNICIPAL LENDING FACILITY. 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.
— BIPARTISAN COMMITTEE LEADERS PRESS HHS ON PROVIDER FUNDING. The Chairs and Ranking Members of the House Energy & Commerce Committee and the Senate Finance Committee wrote to Department of Health and Human Services (HHS) Secretary Alex Azar yesterday demanding a timeline for paying out the remainder of the $175 billion in COVID-19 funds that Congress appropriated months ago.
— SBA AND TREASURY ANNOUNCE $10 BILLION IN PPP FUNDING FOR CDFIs. SBA and Treasury Department announced they will set aside $10 billion in PPP funding for Community Development Financial Institutions.
— TREASURY PUBLISHES UPDATED FAQS ON CORONAVIRUS RELIEF FUND. 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. TRP’s analysis of these new FAQs can be read here.
— HHS ISSUES RFI ON HEALTH CARE SYSTEM ‘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.
— CMS OUTLINES CHANGES TO CMMI MODELS DURING PUBLIC HEALTH EMERGENCY. 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.
— CMS ISSUES GUIDANCE ON OPTIONAL COVID-19 TESTING GROUP. CMS issued guidance to states addressing implementation of the Optional COVID-19 Testing (XXIII) Group.
— HHS ANNOUNCES $250 MILLION TO SUPPORT HEALTH CARE SYSTEMS RESPONDING TO COVID-19. 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.
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.
— OCC LETTER TO MAYORS: EXTENDED SHUTDOWNS WILL HURT LENDERS. The Office of the Comptroller of the Currency (OCC) Acting Comptroller Brian Brooks penned a letter to the U.S. Conference of Mayors this week saying that extended COVID-19 shutdowns could hurt banks’ ability to lend.
— CMS ISSUES GUIDANCE FOR STATES ON RANGE OF COVID-RELATED POLICIES AND ACTIVITIES. 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 UNVEILS NEW ENFORCEMENT ACTIONS FOR NURSING HOMES. CMS unveiled new 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.
— HHS, BARDA ANNOUNCE NEW CDMO MANUFACTURING CONTRACT. The Department of Health and Human Services (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.
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.
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.
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.
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 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.
— 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.
— IRS. 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 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).
— MEDICARE AND MEDICAID. The Centers for Medicare and Medicaid Services (CMS) has offered a series of regulatory flexibilities and guidances:
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).
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.
— 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. 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. The National Institutes of Health issued its first guidance on COVID-19 treatment options that are currently under review (updated May 12).