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July 31, 2020

Health Law Weekly

COVID-19 Updates and Developments (Week of July 27)

  • July 31, 2020

Senate Republicans unveiled July 27 a new round of legislative measures to address the continuing economic fallout of the COVID-19 pandemic.

The $1 trillion relief package, dubbed the HEALS Act, includes additional aid for health care providers, a second round of direct assistance payments, an extension of unemployment insurance benefits, though at a much lower level ($200 instead of $600) than currently offered; and liability protections from COVID-related lawsuits for businesses, schools, and other organizations as they reopen.

The GOP plan, which was released as a series of bills, does not provide any significant funding for state and local governments, which is a priority for Democrats.

In May, House Democrats passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800), which included, among other things, nearly $1 trillion in funding for state and local governments; an additional $75 billion for COVID-19 testing, contact tracing, and isolation measures; and more direct payments to individuals and families.

In a statement, the National Conference of State Legislatures (NCSL) said the proposed Senate relief package “ignores the economic realities in the states by not providing this critical aid.” According to NCSL, “[s]tates have already made across-the-board budget cuts,” and “[m]ost have already allocated significant portions of their Coronavirus Relief Funds from the CARES Act, including providing funds to local governments.”

But Senate Majority Leader Mitch McConnell (R-KY) disagreed, pushing back on spending another “trillion dollars bailing out state and local governments that have only spent 25% of the money” allocated under the CARES Act.

House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) blasted the GOP proposal, saying it doesn’t go nearly far enough to address the nation’s dire economic crisis and calling out in particular the two-thirds reduction in supplemental unemployment benefits, the sweeping liability protections, and the lack of funding for state and local governments.

As progress during the week on a major relief measure stalled, Democrats and Republicans pointed fingers, accusing the other side of refusing to negotiate.

McConnell meanwhile sought to move forward with a pared down measure to temporarily extend unemployment benefits, which expire July 31, but met with resistance from Democrats who say a comprehensive relief package is essential. As the week drew to a close, the path forward remained unclear.   

Agency Action

Department of Health and Human Services (HHS)

July 28—HHS, the Department of Energy (DOE), and the Department of Veterans Affairs (VA) announced a new initiative to coordinate and share health data, research, and expertise to help combat COVID-19. The initiative, called the COVID-19 Insights Partnership, creates a framework for HHS and VA to use DOE’s high-performing artificial intelligence resources for COVID-19 research and analyzing health data, with a focus on vaccine and therapeutic development and outcomes, virology, and other critical scientific topics to better understand COVID-19.

Centers for Medicare & Medicaid Services (CMS)

July 30—CMS and the Centers for Disease Control and Prevention (CDC) announced that health care providers can get paid to counsel patients who are being tested for COVID-19 about the importance of self-isolation while awaiting their results and before the onset of symptoms. The agencies emphasized the importance of early self-isolation, even in asymptomatic individuals, in reducing the spread of COVID-19. CMS will use existing evaluation and management payment codes to reimburse providers who counsel patients on self-isolation.

Food and Drug Administration (FDA)

July 29—FDA posted a new template for commercial developers to use in submitting emergency use authorization (EUA) requests for COVID-19 diagnostic tests at home or in other settings besides a laboratory that could be available without a prescription. FDA Commissioner Stephen M. Hahn, M.D. said the ability to perform the tests at home, similar to a pregnancy test, with rapid results would be “a game changer in our fight against COVID-19 and will be crucial as the nation looks toward reopening.”

July 24—FDA reissued an EUA for the LabCorp COVID-19 RT-PCR Test to include indications for testing asymptomatic individuals and to allow pooled sample testing containing up to five individual swab specimens. Sample pooling allows multiple people to be tested at once. The samples—in this case from five individuals—can be tested in a pool or “batch” using one test, rather than running each individual sample on its own test. If the pool is positive, then each sample is tested to pinpoint the individuals in the batch who are positive.

Other Developments

July 29—Representatives Cindy Axne (D-IA) and Neal Dunn, MD (R-FL) introduced bipartisan legislation to clarify that funding from the Public Health and Social Services Emergency Fund to health care providers isn’t taxable. The Eliminating the Provider Relief Fund Tax Penalties Act of 2020 would ensure that all health care providers, regardless of taxpaying status, will not be subject to taxes on aid provided through the Provider Relief Fund (PRF), the lawmakers said. The measure also guarantees expenses attributable to the PRF are tax deductible. “It is critical that every dollar of assistance to our health care providers can go as far as possible to keep people safe and healthy. Our bipartisan legislation will ensure that we aren’t shortchanging our providers by approving aid with one hand and taxing it with the other,” Axne said. At the end of June, nearly 20 groups representing health care providers urged Congress to pass legislation clarifying that the relief funding isn’t taxable. “Without such a correction, tax-paying health care providers lose at least 21 percent of the benefit of these funds and are treated unequally as compared to non-tax-paying providers,” the groups said. For-profit health care providers had sought to exclude the funds as a qualified disaster relief payment under Section 138 of the Internal Revenue Code. But the Internal Revenue Service rejected that approach.

July 29—The American Hospital Association (AHA) is urging CMS not to resume medical review activities throughout the COVID-19 public health emergency. At the end of March, CMS suspended most Medicare fee-for-service medical review including pre- and post-payment reviews conducted by Medicare Administrative Contractors, Recovery Audit Contractors (RACs), and others. According to AHA, the agency is planning to restart these audits on August 3. “The AHA is deeply concerned about CMS’s decision to resume these burdensome audits during a pandemic,” the group said in a letter to CMS Administrator Seema Verma. “Requiring hospitals on the front line to divert their time, attention and resources away from patient care toward managing medical reviews—especially in the case of reviews conducted by RACs, which are paid on a contingency fee basis and thus incentivized to make inappropriate denials—will have a detrimental effect on their ability to manage the pandemic for their communities at the very time when it is needed most,” the letter said.