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April 24, 2020

Health Law Weekly

COVID-19: Updates and Developments (Week of April 20)

  • April 24, 2020

Congress cleared this week an interim coronavirus relief package totaling roughly $484 billion that injects more funding into the small business loan program, provides additional aid to hospitals, and includes money for virus testing. President Trump signed the measure on April 24. 

The relief package, which the Senate approved by voice vote and the House passed by a 388 to 5 margin, includes roughly $310 billion for the Paycheck Protection Program (PPP). The PPP was created under the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) to provide forgivable loans to small businesses that keep employees on the payroll.

The additional funding in the interim relief measure reserves $30 billion for community-based lenders, small banks, and credit unions, and $30 billion for mid-sized banks and credit unions. The package also allots an additional $60 billion for economic injury disaster loans.

The PPP last week exhausted the $350 billion set aside in the CARES Act for the program. While expanding funding for the PPP had overwhelming bipartisan support, Democrats wanted the interim relief measure to include additional relief for hospitals and state and local governments.

The package that emerged after a week of negotiations between House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) and Treasury Secretary Steve Mnuchin and Senate Majority Leader Mitch McConnell (R-KY) adds $75 billion for hospitals, with a substantial portion targeted at rural providers, and $25 billion for virus testing.

Governors last week asked Congress for $500 billion in aid to help states and territories plug substantial budget shortfalls resulting from the public health crisis. While no additional funding was included in the interim package, the administration signaled the fourth major stimulus legislation could address the needs of state and local governments and include spending on infrastructure.

Some Republicans, however, are putting the brakes on the next round of stimulus, and the timing to begin negotiations on a fourth major relief package is unclear. Senate lawmakers are not expected to travel back to Washington, DC until May 4. The $2 trillion CARES Act was enacted at the end of March.

McConnell this week cast doubt on additional funding for state and local governments. “What I’m saying is we’re going to take a pause here, . . . we’re going to have everyone back in the Senate and clearly weigh, before we provide assistance to states and local governments.”

Agency Action

Department of Health and Human Services (HHS)

April 22—HHS awarded nearly $162 million to help rural health care providers and communities combat the COVID-19 pandemic. The Health Resources and Services Administration (HRSA) is distributing $150 million in CARES Act funding to 1,779 small rural hospitals through the Small Rural Hospital Improvement Program. The agency is providing an additional $11.5 million in CARES Act funding to Telehealth Resource Centers, which provide technical assistance on telehealth in rural and underserved areas.

April 22—HHS is distributing an additional $20 billion in relief funding of the $100 billion set aside in the CARES Act for health care providers. HHS earlier made an initial disbursement of $30 billion in CARES Act funding based on a provider’s Medicare fee-for-service payments in 2019. HHS took this approach so providers could receive the initial round of funding as quickly as possible. The additional $20 billion will be allocated to ensure that the entire $50 billion in general distributions is based on providers’ net patient revenues. Part of the CARES Act funding also was set aside for targeted distributions, including $10 billion for hospitals in areas that are most impacted by the COVID-19 outbreak, $10 billion for rural health clinics and hospitals, and $400 million for Indian Health Service facilities.

Centers for Medicare & Medicaid Services (CMS)

April 23—CMS issued a toolkit to help states expand telehealth coverage under their Medicaid and Children’s Health Insurance Programs (CHIP) during the coronavirus pandemic. Medicare recently has expanded payment for 80 additional telehealth services, and CMS wants states to take similar steps for their Medicaid and CHIP programs. CMS said the toolkit will help states identify barriers to telehealth and ways to address eligibility, coverage, and reimbursement restrictions.

April 22—CMS unveiled a new toolkit to help state and local governments navigate health care workforce issues during the COVID-19 pandemic. The toolkit, which was developed by the Healthcare Resilience Task Force, consolidates information on funding flexibilities, liability protections, and workforce training and also includes best practices for state and local health care decision makers. “This toolkit includes a full suite of available resources to maximize responsiveness based on state and local needs," CMS said. The online toolkit also includes an assistance center, information exchange of case studies, and additional peer-to-peer communications.

April 22—CMS has approved 54 Medicaid waivers under Section 1135. These waivers give states additional flexibilities to administer their Medicaid programs during the coronavirus outbreak. CMS recently approved additional Medicaid waivers for Ohio and Wisconsin.

April 21—CMS approved Washington’s application for a Medicaid demonstration that allows the state to target services on a geographic basis rather than statewide in response to COVID-19. The waiver also permits the state to vary the amount, duration, and scope of services based on population needs; to provide different services to different beneficiaries in the same eligibility group, or different services to beneficiaries in the categorically needy and medically needy groups; and to triage access to long-term services and supports based on highest need. The waiver is retroactive to March 1, 2020 and remains in place for 60 days after the end of the public health emergency. The waiver is the first issued under Section 1115 in response to the COVID-19 pandemic.

April 21—CMS issued a Frequently Asked Question encouraging health insurance issuers to relax otherwise applicable utilization management processes, as permitted by state law. For example, CMS said, issuers could waive prior authorization for post-acute care to help expedite a patient’s transition to this setting. Noting that access to in-network providers may be limited because of the COVID-19 pandemic, CMS also encouraged issuers to work with out-of-network providers to help ensure enrollees aren’t balance billed. In addition, CMS noted that issuers may want to consider applying utilization management practices to formulary drugs that are being prescribed off-label to treat COVID-19 to prevent drug shortages and ensure availability. CMS cautioned, however, that any changes to utilization management policies must comply with essential health benefit requirements and not discriminate based on age, disability, or health conditions.

April 20—Clinicians that participate in a clinical trial for a drug or biological used to treat COVID-19 patients may earn credit in the Merit-based Incentive Payment System under the Quality Payment Program, CMS announced. “Today’s action encourages clinicians to report data that will help us monitor the spread of the virus, find innovative medical solutions, and unleash scientific discovery as we seek to overcome this terrible disease,” CMS Administrator Seema Verma said. To receive credit, clinicians must attest that they participate in a COVID-19 clinical trial and report their findings through a clinical data repository or clinical data registry.

April 19—Nursing homes will be required to inform residents and their representatives of COVID-19 cases in their facilities under new regulatory requirements that are in the works, CMS said. In a memorandum to state survey agency directors, CMS indicated that rulemaking is forthcoming that will require nursing homes to inform residents and their representatives within 12 hours of a single confirmed infection of COVID-19, or of three or more residents or staff with respiratory symptoms occurring within 72 hours. Nursing homes also will be required to provide weekly updates to residents and their families, or each time there is confirmed infection or more than three residents or staff with respiratory symptoms. Failure to comply with the new reporting requirements could trigger enforcement action, the agency said. In the rulemaking, CMS also will mandate that nursing homes report confirmed or suspected cases of COVID-19 directly to the Centers for Disease Control and Prevention (CDC) in a standardized format. Under current regulations and guidance, nursing homes must notify state or local health departments of suspected or confirmed cases of COVID-19 but reporting directly to CDC is voluntary. Nursing homes have been the epicenter of a number of COVID-19 clusters. CDC and CMS officials said the data collection effort will help support local and national surveillance of COVID-19, monitor trends in infections rates, and inform policies and actions for protecting this vulnerable population.

April 19—CMS issued recommendations for hospitals to resume elective procedures and other non-emergent medical procedures in states that meet the “gating criteria” outlined in the Guidelines for Opening Up America Again, which the administration issued last week. In mid-March, CMS recommended that hospitals limit non-essential care and expand surge capacity for COVID-19 patients. CMS noted that in areas with a low incidence of COVID-19 infections that are ready to enter Phase I of the reopening guidelines, hospitals may begin resuming non-emergent care that isn't COVID-19-related. “[A]s states and localities begin to stabilize, it is important to restart care that is currently being postponed, such as certain procedural care (surgeries and procedures), chronic disease care, and, ultimately, preventive care,” CMS said. 

Food and Drug Administration (FDA)

April 21—FDA authorized the first diagnostic test for COVID-19 that allows patients to self-collect samples at home. The agency re-issued an emergency use authorization for the Laboratory Corporation of America (LabCorp) COVID-19-RT-PCR Test with the option for a home collection kit that contains nasal swabs and saline. Patients perform the nasal-swabs and then mail their sample to LabCorp for testing. The tests are expected to be available in most states in the coming weeks, but patients will need a doctor’s order for the test. “With this action, there is now a convenient and reliable option for patient sample collection from the comfort and safety of their home,” said FDA Commissioner Stephen M. Hahn, M.D.

April 20—FDA issued guidance temporarily allowing pharmacies not registered as outsourcing facilities to compound certain human drug products for hospitalized patients for the duration of the COVID-19 public health emergency. The agency previously issued guidance loosening rules for outsourcing facilities that compound drug products used to support patients hospitalized with COVID-19 during the public health emergency. To further address shortages of certain drugs that are in high demand because of the pandemic, FDA is allowing state-licensed pharmacies or federal facilities to compound certain drugs without a patient-specific prescription under circumstances and conditions outlined in the guidance. FDA noted that the measure is temporary and the agency may reevaluate its position depending on needs and circumstances.

Department of Justice (DOJ)

April 22—DOJ has blocked hundreds of internet domains that have been used in COVID-19 scams including advertising fake vaccines and cures, operating fraudulent charity drives, and delivering malware, the agency announced. As of April 21, the Federal Bureau of Investigation had received more than 3,600 complaints related to COVID-19 scams. Some of the scams included using fraudulent websites to solicit and collect donations for COVID-19 aid and to spoof government programs and organizations to collect personally identifiable information.

Substance Abuse and Mental Health Services Administration (SAMHSA)

April 20—SAMHSA is expediting the distribution of $110 million in emergency grants that was set aside in the CARES Act to bolster access to substance use treatment and mental health services during the COVID-19 pandemic. The grants will provide up to $2 million for successful state applicants and up to $500,000 for successful territory and tribal applicants for 16 months, SAMHSA said.

Equal Employment Opportunity Commission (EEOC)

April 23—Employers may require employees to undergo a COVID-19 test before entering the workplace without running afoul of the Americans with Disability Act (ADA), the EEOC said in updated giodamce. Under the ADA, any mandatory medical test of employees must be “job related and consistent with business necessity.” EEOC said determining whether an employee entering the workplace has COVID-19 meets the standard for mandatory medical testing. Employers should ensure the “tests are accurate and reliable” consistent with guidance from the FDA and the CDC, the EEOC said.

Centers for Disease Control and Prevention

April 23—CDC is distributing $631 million in CARES Act funding to state and local public health authorities for expanding COVID-19 testing, contact tracing, and surveillance efforts. CDC Director Robert Redfield said implementing aggressive contact tracing, surveillance, and testing is key to reopening the economy.

Other Developments

April 21—The Bipartisan Policy Center’s Rural Health Task Force issued a report on the challenges facing rural health care that are underscored by the COVID-19 pandemic. The report builds on prior recommendations to stabilize and transform the rural health care infrastructure.

April 20—New York State Nurses Association (NYSNA) is suing the state’s health department and two hospitals, Montefiore Medical Center and Westchester Medical Center, alleging they failed to protect the health and safety of nurses treating COVID-19 patients. NYSNA, the state’s largest nursing union, filed three separate lawsuits alleging defendants failed to provide adequate PPE, to properly train registered nurses redeployed from hospital units to treating COVID-19 patients, and to provide adequate protections for high-risk employees, including nurses who were pregnant. “More than seven in ten of our nurses are reporting exposure to COVID-19 and most are still untested. These lawsuits were filed to protect our nurses, our patients and our communities from grossly inadequate and negligent protections,” said NYSNA Executive Director Pat Kane, RN in a statement. The lawsuit against the New York Department of Health was filed in a state trial court and seeks injunctive relief, including that each nurse be allotted at least one N95 respirator daily. The lawsuit against Westchester Medical also was filed in a state trial court and seeks an injunction “against hazards that cause or are likely to cause death or serious physical harm to nurses.” The third lawsuit, against Montefiore, was filed in the U.S. District Court for the Southern District of New York for violations of federal labor law. That action seeks an injunction requiring the hospital “to restore safe working conditions.”