Coronavirus Flash Update March 18, 2020

Coronavirus Flash Update: March 18, 2020

Alston & Bird’s Coronavirus Flash provides updates on policy and regulatory actions under consideration across many important industries being monitored by our teams. Links to key government and legal resources are provided throughout the report.

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UPDATED 9:00 AM ET ON WEDNESDAY, MARCH 18, 2020 

The Latest News

  • According to the CDC, U.S. COVID-19 cases exceed 5881 and 107 U.S. deaths.
  • Last Friday, President Trump declared a national emergency under the Stafford Act, which allows the federal government to marshal additional resources and authorize greater regulatory flexibility to, in this case, respond to the coronavirus outbreak.
  • Last week President Trump expanded the travel ban to include travelers from Europe, the U.K., and Ireland for 30 days (U.S. citizens and individuals legally in the U.S. are excluded).
  • U.S. stock market ended last week and started this week down and breaking records back to 1987; however, some rebound was evident at the close of markets on Tuesday.
  • Department of Treasury Secretary Mnuchin announced that the federal government is pushing back the April 15 due date for paying taxes owed, providing individuals and many businesses 90 additional days to pay.
    • Hilton Hotels Worldwide announced plans to close with CEO Christopher Nassetta stating that the coronavirus outbreak has hit the industry in a devastating way. Marriott International is starting to furlough what it expects will be tens of thousands of employees as it closes hotels across the globe.
    • In addition to San Francisco and several other Bay Area counties, two additional California counties, Orange and Sacramento, have issued shelter-in-place orders. There is speculation that San Diego county and New York City may follow suit. It appears some Bay Area counties will soon be taking enforcement actions against facilities continuing to operate in the “gray zone” – sending sheriffs to escort employees home.

Emergency Funding/Supplemental/Stimulus Legislation

  • Congress is moving towards quick passage of a second Coronavirus Response bill, after passage on March 5 of an $8.3 billion Emergency Supplemental package (by a nearly unanimous vote).
    • The first bill focused on additional funding for key federal agencies responding to the coronavirus epidemic.
    • The second bill, H.R. 6201, seeks to soften the COVID-19 economic impact, particularly on individuals, by providing additional assistance for low-income food and nutrition programs, unemployment insurance, emergency paid and unpaid leave program, emergency sick leave, and employer tax credits to partially offset the costs of the paid sick leave. The House passed H.R. 6201 late last week and amended it (H. Res. 904) early this week; the Senate is expected to vote by mid-week.
  • A third bill, so called ‘3.0 or stimulus,’ is already under development with an expectation that financial assistance in the billions of dollars could be made available for industries especially impacted by the coronavirus directly, or indirectly, as a result of the economic downturn: airlines and travel related businesses, the hospitality industry, small retailers, and hospitals and health care providers. The timing for Congressional action could be anywhere between the next few days to the next few weeks.

Key Administrative and Regulatory Actions   Business

  • On a call held March 13, U.S. Customs and Border Protection’s (“CBP”) said cargo operations remain mostly unaffected by the COVID-19 pandemic.
    • There are no additional screening requirements for cargo because medical professionals have advised that COVID-19 is transmitted by people not cargo.
    • CBP headquarters staff have been directed to work from home, if able, starting March 16. If more CBP staff is exposed, ill, or impacted personally by school closures and the like, there could be an impact to cargo processing.
  • On Monday, the U.S. Chamber of Commerce reiterated its call for the U.S. to lift tariffs on Chinese goods, and the Consumer Brands Association wrote to the Administration that export controls could limit U.S. supplies of vital products.
  • COVID-19 has had significant impact on business planning, and the Financial Industry Regulatory Authority (FINRA) published guidance for its broker-dealer members regarding the impact – for the full analysis read this advisory.
  • Organizations for Economic Cooperation and Development (OECD) is continuing work (through virtual meetings) on digital tax issues with the objective of reaching a political decision on main elements at the July 1-2, 2020, OECD/G20 Inclusive Framework on BEPS meetings in Berlin.
  • Internal Revenue Service (IRS) announced that coronavirus related testing and treatment costs can be covered by high-deductible health plans (HDHP) without jeopardizing their status.
  • S. Tax Court cancels trial sessions and closes court to the public.  IRS suspended all non-essential travel for 30 days unless “mission critical,” and IRS Chief Counsel approved telework for employees.
  • On Tuesday the Federal Trade Commission (FTC) released a statement that they were taking a, “variety of measures to respond to the new and challenging circumstances associated with the COVID-19 coronavirus crisis.”
  • The House Energy and Commerce Committee Chair Frank Pallone, Jr. (D-NJ), Judiciary Committee Chair Jerrold Nadler (D-NY), Subcommittee on Antitrust, Commercial and Administrative Law Chair David N. Cicilline (D-RI), and Subcommittee on Consumer Protection and Commerce Chair Jan Schakowsky (D-IL) sent the FTC a letter urging them to take steps to protect American consumers from price gouging during the COVID-19 pandemic.
  • Federal antitrust agencies to extend merger reviews. On March 17, the Department of Justice Antitrust Division (DOJ) announced it will be asking some merging parties to voluntarily grant the DOJ an additional 30 days to investigate. https://www.justice.gov/opa/pr/justice-department-announces-antitrust-civil-process-changes-pendency-covid-19-event.  This comes one day after the director of the Federal Trade Commission’s (FTC) Bureau of Competition posted a notice explaining that parties should expect the FTC to reach out to discuss “appropriate modifications of statutory or agreed-to timing arrangements” in its antitrust investigations, while reserving the right to seek court relief if extensions are not provided.  https://www.ftc.gov/news-events/blogs/competition-matters/2020/03/changes-bureau-procedure-during-covid-19-coronavirus.  Also on March 17, the agencies began receiving federal pre-merger notification (Hart-Scott-Rodino Act) filings exclusively via electronic submission, and announced that no “early terminations” will be granted until further notice.  Therefore, even transactions that don’t pose significant antitrust concerns cannot close before the expiration of the full statutory waiting period (typically 30 days).  https://www.ftc.gov/enforcement/premerger-notification-program/guidance-filing-parties.
  • Mortgage-backed and asset-backed securities are beginning to feel the impact of the coronavirus outbreak. To understand the basic disclosures to consider with any securitization read this Advisory
  • Last week, the DOJ released a statement noting that the department is prepared to pursue “bad actors” who take advantage of the COVID-19 crisis.
  • Last week, the Securities and Exchange Commission (SEC) issued an order giving relief to some companies that cannot timely file their reports due to concerns, including the need to update risk disclosures in response to business threats.
  • The SEC released staff guidance last week to assist issuers’ compliance with federal proxy and annual meeting rules. Additional detail and analysis is provided in this A&B advisory.
  • Securities litigation likely to be impacted by the coronavirus is reviewed in this A&B advisory.
    • One securities class action lawsuit has already been filed against Norwegian cruise lines, its CEO and its CFO, as shareholders allege they made false and misleading statements regarding the impact of the coronavirus and the company’s focus on customer safety during the outbreak of the coronavirus pandemic
  • With possible disruptions impacting business operations in China and elsewhere, as well as disruption for U.S. companies relying on the supply of both component parts and finished goods outside the U.S., the question is whether the coronavirus is a force majeure event that will excuse their nonperformance. For more information, click here.
  • No announcement or guidance has been released on COVID-19 related disruptions to imports or exports, but there has been some talk of U.S. trading agencies suspending some overseas travel. Per DHS/TSA/Coast Guard, shipping does not yet appear to be impacted − each U.S. port director is determining what ships to let in, and many are allowing all in (although prohibitions for certain crew members from leaving the ship while in U.S. ports has occurred).
  • Large employers are assessing policies, and potential liability, to ensure a safe and secure workplace. The CDC has released guidance for employers related to employee information on COVID-19 (available here).
  • Environmental Protection Agency (EPA) has identified 274 disinfectant products that can be used against SARS-CoV-2 (the cause of COVID-19), but which one you use matters – some products kill the virus in 15 seconds while others require at least 10 minutes
  • EPA created a website, Coronavirus and Drinking Water and Wastewater, which states that the risk to water supplies from the COVID-19 virus is low, and “Americans can continue to use and drink water from their tap as usual.”
  • The Department of Labor (DOL) released guidance last week on preparing the workplace for COVID-19.
  • Employers and employees considering domestic travel decisions can find information in this A&B advisory.
  • Cybersecurity Preparedness and Response
    • On cybersecurity, there’s more than a virus in the air – there’s malware and spyware too. To better understand the proactive steps Health Insurance Privacy and Accountability Act (HIPAA) covered entities and business associates can take to protect their systems and their clients’ information during the coronavirus pandemic, read this A&B advisory.
    • The expanded use of working from home using remote access resources has companies increasing the need to guard against cybersecurity threats. For an overview of issues to consider and prepare for, visit COVID-19 and Cyber.

Healthcare

  • On Friday theS. Citizenship and Immigration Services posted an announcement clarifying that any treatment or preventive services related to COVID-19 will not negatively affect any individual as part of a future Public Charge analysis.
  • The Occupational Safety and Health Administration (OSHA) is providing this temporary guidance regarding required annual fit-testing allowing enforcement discretion, which is to take effect from the date of this memorandum and remain in effect until further notice.
  • Centers for Medicare & Medicaid Services (CMS) has created a website for all coronavirus related documents. Several new items since last Wednesday include:
    • New telehealth guidance was announced this week broadening access to Medicare telehealth service regardless of patient residence and covering a wide range of services. The telehealth waiver has been expanded, states can cover telehealth without approval, and HIPAA rules will be relaxed and penalties waived. Factsheets related to these changes:
    • On Tuesday, CMS approved its first 1135 waiver in Florida.
    • A guidance on the blanket waivers allowed under the national emergency executive order.
    • CMS national emergency guidance.
  • On Monday, CMS announced steps to improve testing of patients in emergency departments with a memorandum for Medicare participating hospitals, and the agency released a factsheet on telehealth benefits for Medicare beneficiaries. CMS also released a memorandum regarding EMTALA, allowing for alternative testing sites and other guidance.
    • CMS announces new guidance on nursing home patients and visitors.
    • Late Tuesday, CMS released guidance to Program of All-Inclusive Care for the Elderly (PACE) Organizations
    • Information and FAQs for individuals, issuers, and states on COVID-19 health coverage benefits.
    • CMS releases FAQs for state Medicaid and Children’s Health Insurance Program (CHIP) Agencies.
    • A guidance for health care workers on protective masks. This release included a memorandum to state survey agencies who inspect nursing homes and other health care post-acute and acute facilities.
    • A guidance regarding health care workers in home health agencies and dialysis centers.
    • CMS issued guidance to help Medicare Advantage and Medicare Part D plans respond to COVID-19.
  • The Department of Health and Human Services (HHS) Office of the Assistant Secretary of Preparedness and Response (ASPR) announced last week that a diagnostic test for COVID-19 was nearing completion and would process up to 1,000 tests in 24 hours. Since this March 9 announcement, FDA has given four companies emergency approval for coronavirus diagnostic tests and assays (Roche Holding, Thermo Fisher, Hologic, and LabCorp).
  • This week the Food and Drug Administration (FDA) announced new authority for states to develop diagnostic tests for COVID-19 so that laboratories will not be required to engage with the FDA and for commercial developers once granted emergency use.
  • The FDA acknowledged the growing shortages of personal protective equipment, and an A&B analysis of the agency’s FAQs is available here.
  • The FDA announced last week it was postponing most foreign inspections through April, although there may be some case-by-case exceptions. For a deeper dive, review this A&B analysis.
  • Also last week, the FDA and the FTC issued warning letters to seven companies for selling fraudulent COVID-19 products.
  • The Centers for Disease Control and Prevention (CDC) latest guidance on Personal Protective Equipment (PPEs)
  • Last week the CDC awarded $560 million to state and local jurisdictions to support COVID-19 response. The funding list by jurisdiction is available here.
  • The CDC’s FAQs for health professionals.
  • The CDC’s latest guidance on Lab Biosafety Guidelines.

Other News

  • Hospitals and other providers are feeling the surge with many facilities at capacity. Many critical items are in short supply, including ventilators, N95 respirators, COVID-19 tests, swabs, and personal protective equipment. The need to expand the workforce, find space for testing and quarantines, and expand services is requiring a significant use of hospital reserves. The loss of elective services is further undermining the bottom line and can disproportionately impact small and rural hospitals.
  • The Joint Commission on Accreditation for Healthcare Organizations (The Joint Commission) announced it was suspending surveying in response to the coronavirus outbreak. The suspension is expected to last through April.
  • The National Waste & Recycling Association (NWRA) asked the Federal Highway Administration (FHWA) to issue guidance to states to allow hauling of extra heavy loads of COVID-19 waste via special permits.
  • The NWRA asked the Federal Motor Carrier Safety Administration (FMCSA) to include medical waste haulers in the exemption from Hours of Service regulations.
  • The Healthcare Waste Institute (HWI) of the NWRA has asked states to grant flexibility for regulated medical waste (RMW) handling to extend maximum storage times at health care and treatment facilities and allow storage of large quantities at treatment facilities.

For background and the most up-to-date information, please visit the Centers for Disease Control and Prevention Coronavirus Disease 2019 website: HERE. The additional federal agency links are provided by the White House Coronavirus Task Force:   U.S. Department of Health and Human Services:

Centers for Disease Control and Prevention:

What you should know:

Situation Updates:

Information for Businesses:

Information for Travel and Transportation:

Information for Healthcare Providers, First Responders, and Research Facilities:

Information for Families and Households:

Information for Schools and Childcare Providers:

Information for Community Events and Gatherings:

Information for Military Response:

Alston & Bird Coronavirus Links

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Marilyn K. Yager
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