Skip to Main Content
April 17, 2020

Health Law Weekly

COVID-19: Updates and Developments (Week of April 13)

  • April 17, 2020

Federal and state governments began considering this week plans for reopening the economy, with President Trump unveiling April 16 guidelines for doing so.

The guidelines, called Opening up America Again, propose a three-phased approach once states meet certain threshold criteria, including a "downward trajectory" of coronavirus and flu-like cases within a 14-day period and a "robust testing program" for at-risk health care workers. To move between phases, states must have "no evidence of rebound" and again satisfy the "gating criteria." 

The guidelines note that state and local officials may need to tailor the application of the criteria to local circumstances and governors may need to work together on a regional basis.

The guidelines, which rely on state governors to assess and decide their readiness to reopen their economies, also list "core state preparedness responsibilities," including the ability "to quickly set up safe and efficient screening and testing sites."

Meanwhile, lawmakers and the administration continued to wrangle about an interim relief measure to inject more funding into the small business loan program under the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act).

While boosting funding for the Paycheck Protection Program (PPP) has bipartisan support, Democrats want the measure to include an additional $100 billion for hospitals and $150 billion for state and local governments, on top of the $250 billion that Republicans have proposed for the PPP. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) also want to focus more relief on minority-owned companies and others struggling to secure loans.

“Small businesses, hospitals, frontline workers and state and local governments across the country are struggling to keep up with this national crisis,” Pelosi and Schumer said in a joint statement issued April 13. “They need more help from the federal government and they need it fast,” the lawmakers said.

In an April 14 press briefing, Treasury Secretary Steve Mnuchin urged lawmakers to “top up” the small business loan program immediately and consider further stimulus later. “The federal government has just started sending CARES Act funding to hospitals and states. They haven’t come close to using that money,” Mnuchin told reporters. He said the administration would consider a fourth stimulus package later, which could potentially include spending on infrastructure.

Senate Majority Leader Mitch McConnell (R-KY) said the Senate is not expected to travel back to Washington DC before May 4, though that could change. “While other CARES Act programs such as hospital funding and assistance for state governments are just beginning to push out money, 70% of the PPP’s funding has been already allotted in just a week and a half,” he said. Later in the week, the administration indicated that funding for the PPP had run out. 

The National Governors Association (NGA), led by Maryland Governor Larry Hogan (R), also called on Congress to provide $500 billion in funding for states and territories to help plug substantial budget shortfalls resulting from the public health crisis. In addition, Hogan said states need flexibility to use funds already allocated to them under the CARES Act for non-COVID-19 expenses.

“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery,” Hogan said.

Later in the week, Democrats unveiled a $30 billion plan for a comprehensive national testing strategy, including boosting the supply and manufacturing chain and expanding reporting and contact tracing.

“We need to have testing kits widely available across America so that we can beat this pandemic and help those affected. We need to track the results in real-time so we can quickly spot flare-ups. We need a dedicated, domestic supply chain to produce millions of effective and accurate tests to ensure they are readily available in every community, large and small,” Schumer said April 15.

Agency Action

Department of Health and Human Services (HHS)

April 16—HHS inked a new deal under the Defense Production Act (DPA) with General Electric, in partnership with Ford, to produce 50,000 ventilators by July 13. The total contract price is $336 million.

April 13—HHS announced five new contracts that, together with two earlier contracts, are set to deliver more than 137,000 ventilators to the Strategic National Stockpile by year’s end. HHS last week announced contracts with General Motors and Philips under the DPA. The latest contracts under the DPA are with General Electric ($64.1 million), Hill-Rom ($20.1 million), ResMed ($39.1 million), Medtronic ($9.1 million), and Vyaire ($407.9 million). HHS also entered into two additional contracts, though not pursuant to the DPA, with Hamilton ($552 million) and Zoll ($350.1 million) for ventilator production.

Centers for Medicare & Medicaid Services (CMS)

April 15—Medicare will pay nearly double for high-production COVID-19 diagnostic tests that can produce results rapidly and accurately, CMS announced. CMS Administrator Seema Verma called the rapid tests “an absolute game-changer for nursing homes, where risk of Coronavirus infection is high among our most vulnerable.” Effective April 14 through the duration of the COVID-19 national emergency, Medicare will pay $100 for COVID-19 clinical diagnostic lab tests that use high-throughput technologies that increase testing capacity and provide faster results. Medicare pays about $51 for other COVID-19 lab tests. According to CMS, high-throughput lab tests can process more than 200 specimens a day but require more sophisticated equipment and specially trained technicians and are more time intensive.

April 14—CMS postponed the 2019 benefit year HHS Risk Adjustment Data Validation (HHS-RADV) process so individual and small group health insurers can focus on responding to the COVID-19 pandemic. CMS plans to provide future guidance this summer on the updated timeline for 2019 benefit year HHS-RADV activities that are planned to begin in 2021, the agency said in a memorandum. CMS previously announced a similar suspension of the Medicare Advantage RADV program. The HHS-RADV was slated to get underway in late May. CMS said postponing the process will delay the release of 2019 benefit year HHS-RADV error rates and the publication of 2019 benefit year HHS-RADV results to issuers.

April 13—CMS issued Frequently Asked Questions for states on the Families First Coronavirus Response Act (FFCRA) and the CARES Act that address enhanced federal Medicaid funding and other benefit and eligibility issues.

April 13—CMS has now approved 50 state Medicaid waivers under Section 1135. The Section 1135 waivers give states additional flexibilities to administer their Medicaid programs during the coronavirus outbreak. CMS recently approved waivers for Utah, as well as Puerto Rico and Commonwealth of Northern Mariana Islands.

April 13—CMS provided supplemental guidance for long term care (LTC) facilities for purposes of cohorting them based on COVID-19 status. Under the guidance, licensed LTC facilities generally can transfer/discharge residents to another certified LTC facility without state agency approval. The guidance indicates, however, that transfer/discharge of a resident for COVID-19 cohorting purposes to a non-certified LTC facility does require state agency approval. The guidance builds on recommendations CMS issued April 2 on mitigating the spread of the virus in nursing homes, including designating separate facilities or units for residents based on their COVID-19 status.

April 11—CMS and the Departments of Treasury and Labor issued guidance to implement statutory requirements under the FFCRA and CARES Act that private insurers cover at no cost COVID-19 diagnostic testing and certain services relating to testing, including urgent care, emergency room, and in-person or telehealth visits. Notably, the guidance also extends the requirement to covering antibody testing without out-of-pocket expenses.

Office for Civil Rights (OCR)

April 16—OCR resolved a complaint filed against the Pennsylvania Department of Health (PDH) after it revised its triage policies to help ensure individuals with disabilities don’t face discrimination if the state needs to ration health care resources. OCR last week resolved similar concerns against the state of Alabama after it removed ventilator rationing guidelines that allegedly discriminated on the basis of disability. Earlier this month, 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 complaints from disability rights advocates in Pennsylvania, including Disability Rights of Pennsylvania, alleging state guidelines weren’t in compliance with Section 504, Title II, and Section 1557. The complaint alleged that Pennsylvania’s Crisis Standards of Care for Pandemic Guidelines “unlawfully singled out and authorized the denial of treatment to individuals with disabilities when prioritizing access to critical care and ventilators” and used “preexisting conditions that are disabilities” to determine a priority score. To resolve the complaint, the PDH revised the guidelines, including removing criteria that automatically deprioritized persons on the basis of particular disabilities and requiring individualized assessments to support triaging decisions. As a result, OCR closed its complaint investigation without a finding of liability.

National Institutes of Health (NIH)

April 10—NIH launched a new study to determine the number of undetected cases of COVID-19 in the U.S. adult population by testing for antibodies in their blood. As part of the “serosurvey,” researchers will collect and analyze blood samples from as many as 10,000 volunteers. The study is aimed at determining the extent the novel coronavirus spread undetected in the United States and provide key data on communities and populations most affected.

Food and Drug Administration (FDA)

April 16—FDA is temporarily loosening rules for compounding certain drug products used to support patients hospitalized with COVID-19 during the public health emergency. The move is aimed at addressing shortages of certain drugs that are in high demand because of the pandemic. Under the guidance, the FDA said it would not take enforcement action against outsourcing facilities that compound drug products that are copies of an approved drug, use bulk substances not on the agency's approved list, or that don't meet certain manufacturing requirements related to product stability testing and establishing an expiration date. The protection extends only if certain conditions detailed in the guidance are satisfied, including that the drug product is one that the FDA identifies as in short supply. Most of the drugs on the FDA list are those used to support patients while they are ventilators such as muscle relaxers and anesthetics. 

Occupational Safety and Health Administration (OSHA)

April 13—OSHA issued new guidance that prioritizes enforcement activities during the COVID-19 pandemic on those workplaces with high risks of exposure to the virus such as hospitals, nursing homes, emergency responders, home or hospice care, and biomedical laboratories. The guidance indicates OSHA will focus inspections on these high-risk settings. Formal complaints alleging exposure to the coronavirus in medium or lower-risk settings normally will not result in an onsite inspection. In these cases, OSHA instead will use non-formal procedures to investigate alleged hazards, though an onsite inspection is possible if the response is unsatisfactory. The guidance also details information about the scope, scheduling, and procedures of inspections.

Health Resources and Services Administration (HRSA)

April 15—HRSA announced it is temporarily waiving query fees for health care entities to search the National Practitioner Data Bank. “This waiver supports efforts to mobilize and deploy health professionals against the COVID-19 pandemic by reducing costs and expediting credentialing, hiring, privileging, and licensing processes,” HRSA said in an emailed announcement. The waiver is retroactive from March 1 through May 31.

Other Developments

April 15—Four House Democrats, Representatives Jan Schakowsky (IL), Peter DeFazio (OR), Rosa DeLauro (CT), and Lloyd Doggett (TX), want to advance provisions in the next round of coronavirus legislation they said would prevent drug companies from “price gouging on any potential vaccine or treatments for COVID-19.” The lawmakers outlined three minimum protections: not granting pharmaceutical manufacturers exclusivity for any COVID-19 vaccine, drug, or treatment; prohibiting “profiteering” by mandating upfront that manufacturers charge “reasonable” prices; and requiring full transparency through public reporting of a manufacturer’s total expenditures on any vaccine or treatment.

April 15—National and state medical groups led by the American Medical Association (AMA) are asking Congress to provide further aid to physicians in response to the COVID-19 pandemic. In a letter to House and Senate leaders, the groups raised “significant concerns” about physician practices being unable to repay money advanced by Medicare pursuant to the Accelerated and Advance Payment Program that the CARES Act expanded. The groups recommended that lawmakers, in the next round of stimulus legislation, postpone recoupment until 365 days after the advance payment and extend the repayment period for at least two years; reduce the per-claim recoupment amount from 100% to 25%; waive interest during the extended payment period; and authorize HHS to issue more than one advance payment. The groups also urged Congress to provide a positive Medicare payment update in 2020; increase Medicaid and TRICARE payment rates for the duration of the public health emergency; waive budget neutrality for the Medicare payment changes for evaluation and management services that will be implemented on January 1, 2021; and extend sequestration relief through the end of next year. In addition, the groups said lawmakers should provide physicians with direct financial relief, grants, and loans; require group health plans to cover telehealth and telephone services to the same extent as Medicare through the duration of the COVID-19 pandemic; and consider broader liability protections for health care providers.

April 13—The American Hospital Association wants CMS to take additional steps to expand the role of home health agencies in efforts to combat COVID-19. In a letter to CMS Administrator Seema Verma, AHA urged the agency to allow home health agencies to count telehealth encounters as in-person visits for payment purposes. The group also urged CMS to ease documentation requirements and allow the use verbal orders and eligibility certifications to expedite discharges form hospitals to homecare. “[H]ospitals are relying on home health agencies as a critically valuable discharge option for both patients with and without the virus. Such transfers allow hospitals to focus limited resources on those COVID-19 patients requiring hospital-level care,” the letter noted.  

April 13—AHA asked the Treasury Department and the Federal Reserve for more guidance on hospital’s access to financing through the Main Street New Loan Facility under the CARES Act. Specifically, the group wants clarification of eligibility for nonprofits and public hospitals, compensation restrictions, and the earnings before interest, taxes, depreciation, and amortization test.

April 13—The Medicare Shared Savings Program could lose more than half of participating health care organizations as a result of the COVID-19 pandemic, according to a recent survey by the National Association of Accountable Care Organizations (NAACOS). The group surveyed Accountable Care Organizations (ACOs) in an online poll between April 3 and April 8. Fifty-six percent of respondents indicated they may leave the program over fears of accruing massive losses. Almost 80% of ACOs said they were “very concerned” about their ACO performance this year, NAACOS said. “When ACOs made a commitment to assume risk, they didn’t expect they’d be handling the risk of a global pandemic,” said Clif Gaus, Sc.D., NAACOS President and CEO. “Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31.” NAACOs and other health care organizations asked CMS last month to hold harmless providers participating in alternative payment models from performance-related penalties for 2020. “CMS has yet to adequately mitigate the costs and disruptions of the pandemic,” Gaus said.