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July 10, 2020

Health Law Weekly

COVID-19 Updates and Developments (Weeks of June 29 and July 6)

  • July 10, 2020

With COVID-19 cases surging in a number of areas across the country, and some states pausing or slowing efforts to reopen their economies, the Trump administration is eying another round of stimulus legislation.

“The President is committed to do what we need to do in the next bill to protect kids, protect jobs, protect liability,” Treasury Secretary Steve Mnuchin said at a July 2 White House press briefing.

The President signed July 4 a measure (S. 4116) extending the popular Paycheck Protection Program (PPP) loan application period through August 8. The measure cleared the House and Senate by unanimous consent.
Mnuchin said there’s roughly $130 billion left under the PPP, which was enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide forgivable loans to small businesses.

“As I’ve said, it’s our priority when we get to the CARES 4 bill in July, we will look to work with the House and Senate on a bipartisan basis to repurpose that money.” 

The House passed May 15 by a 208-199 margin a $3 trillion relief package for the coronavirus pandemic, but the measure didn’t have the support of the White House or Republican lawmakers.

The Health and Economic Recovery Omnibus Emergency (Heroes) Act (H.R. 6800) includes nearly $1 trillion in funding for state and local governments; an additional $75 billion for COVID-19 testing, contact tracing, and isolation measures; more direct payments to individuals and families; and a host of other provisions.

Agency Action

Department of Health and Human Services (HHS)

July 9--HHS awarded more than $21 million to support health centers' COVID-19 response efforts. Of that amount, $17 million is devoted to 78 Health Center Program look-alikes to expand COVID-19 testing capacity, according to a press release. HHS also awarded more than $4.5 million to Health Center Controlled Networks. 

July 7—HHS is beginning “surge” testing in three “hotspots” for COVID-19: Jacksonville, FL; Baton Rouge, LA; and Edinburg, TX. The three communities were flagged for additional testing support from the federal government because of recent sharp increases in the level of new cases and hospitalizations for COVID-19. HHS in partnership with eTrueNorth and each of the local communities, will temporarily offer 5,000 tests per-city per-day, at no charge to those tested, for a period of five to 12 days, according to HHS. Testing is available for those five years and older regardless of whether they are experiencing symptoms.

July 7—HHS and the Department of Defense (DOD) jointly announced an $1.6 billion agreement with Novavax, Inc. to demonstrate commercial-scale manufacturing of the company’s COVID-19 investigational vaccine. The federal government will secure 100 million doses of the investigational vaccine expected to result from the manufacturing demonstration projects, HHS said in a press release. The doses could be used in clinical trials or distributed as part of the federal government’s COVID-19 vaccination campaign if the Food and Drug Administration grants Emergency Use Authorization or licenses the investigational vaccine. HHS and DOD entered into a similar manufacturing funding agreement with Regeneron, Inc. for the company’s COVID-19 investigational anti-viral antibody treatment. The company estimates between 70,000 and 300,000 treatment doses could be available to the federal government under the project as early as the end of summer or completed by the fall.

June 30—HHS is extending its public-private partnership with CVS, Rite-Aid, Walgreens, Quest, and eTrueNorth for COVID-19 testing. According to HHS, the partnership has scaled up to more than 600 COVID-19 testing sites in 48 states and the District of Columbia. Under the contract, retailers receive a flat fee for each test administered.

Food and Drug Administration (FDA)

June 30—FDA issued guidance for developing and licensing vaccines for COVID-19. The final guidance describes the agency’s current recommendations for data needed to facilitate the manufacturing, clinical development, and approval of a COVID-19 vaccine, FDA said. In addition, FDA said the guidance “strongly encourages the inclusion of diverse populations in all phases of clinical development, including populations most affected by COVID-19, specifically racial and ethnic minorities, as well as adequate representation in late phase trials of elderly individuals and those with medical comorbidities.” The guidance further underscores the importance of ensuring an adequate clinical trial size and the expectation that a vaccine would prevent disease or decrease its severity in at least 50% of who receive it. FDA also pledged that the push for developing and approving a vaccine for COVID-19 wouldn’t undermine the agency’s safety and effectiveness standards.

National Institutes of Health (NIH)

July 8—NIH launched a new clinical trials network aimed at enrolling thousands of volunteers to participate in testing of investigational vaccines and treatments for COVID-19. The COVID-19 Prevention Trials Network (COVPN) was established by merging four existing clinical trial networks that are funded by the National Institute of Allergy and Infectious Diseases (NIAID) related to HIV and other infectious diseases. HHS Secretary Alex Azar said the unified clinical trial network is a key part of the administration’s Operation Warp Speed to accelerate the availability of vaccines and other medical countermeasures for COVID-19. "Centralizing our clinical research efforts into a single trials network will expand the resources and expertise needed to efficiently identify safe and effective vaccines and other prevention strategies against COVID-19,” said NIAID Director Anthony S. Fauci, M.D.

Office for Civil Rights (OCR)

June 26—OCR resolved a complaint filed against Tennessee after it updated its crisis standards of care (CSC) plan to ensure individuals don’t face discrimination based on disability or age if the state needs to ration ventilators. The resolution is the fourth that OCR has reached with states concerning guidelines for rationing health care resources. In April, OCR issued a bulletin reminding covered entities that they must continue to comply with federal civil rights laws during the COVID-19 public health emergency. OCR enforces the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the Age Discrimination Act, and Section 1557 of the Affordable Care Act. OCR said it received a complaint from Disability Rights Tennessee and other advocacy groups alleging the state’s CSC guidelines would automatically disqualify individuals with certain diseases and other disabilities from use of a ventilator if resources were scarce. To resolve the complaint, the state updated the CSC plan to clarify that age and disability should not be used as criteria for allocating scarce medical resources; removing language allowing a patient’s long-term life expectancy to be used as a factor in resource allocation; and adding language that hospitals should not re-allocate ventilators from long term ventilator users, among other modifications.

Other Developments

July 7—The American Hospital Association (AHA), the Association of American Medical Colleges, and the Catholic Health Association is asking the federal government to extend the deadlines for tax-exempt hospitals to prepare community health needs assessments (CHNA) because of the COVID-19 outbreak. In a letter to the Department of Treasury and the Internal Revenue Service, the groups said COVID-19 is limiting the ability of hospitals to seek input from their communities and to devote the time and resources needed to complete the CHNAs. Hospitals that fail to prepare the CHNA on time face a $50,000 penalty excise tax under Section 4959 of the Internal Revenue Code, which isn’t subject to abatement, the letter said. Hospitals must conduct a CHNA at least once every three years to maintain their tax-exempt status under Section 501(c)(3). The current extension ends on July 15. The groups are asking for an extension until April 1, 2021, or a date that is six months after the expiration of the public health emergency, whichever is longer.

July 2—Thirty-four state hospital groups and several national organizations, including AHA, are urging HHS and CMS to delay the effective date of the hospital price transparency rule, “due to the burden it would represent for hospitals and health systems in the midst of responding to the COVID-19 public health emergency—until the matter is settled by the courts.” A federal court in the District of Columbia recently upheld the price transparency rule, which requires hospitals to publicly disclose price information. AHA is appealing the decision. “While we disagree with the agency on the value of public disclosure of negotiated rate information (as opposed to estimated out-of-pocket costs), we hope that you will agree that advancing this policy is not essential at this moment,” according to a letter the groups sent to HHS Secretary Alex Azar and CMS Administrator Seema Verma.

June 30—AHA released new estimates of mounting hospital financial strain from the COVID-19 pandemic, projecting $120.5 billion in losses largely due to low patient volumes from July 2020 through December 2020, an average of $20.1 million per month. The estimates are on top of the $202.6 billion in losses AHA projected between March 2020 and June 2020 in an earlier report, for a total of $323.1 billion in 2020. “And while potentially catastrophic, these projected losses still may underrepresent the full financial losses hospitals will face in 2020, as the analysis does not account for currently increasing case rates in certain states, or potential subsequent surges of the pandemic occurring later this year,” AHA said. Hospitals are reporting average declines of 19.5% in inpatient volume and 34.5% in outpatient volume compared to 2019, AHA said.