Coronavirus Flash Update June 18, 2020

Coronavirus Flash Update: June 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 THURSDAY, JUNE 18, 2020

The Latest News

  • U.S. COVID-19 cases exceed 2,150,474 and 115,870 U.S. deaths. (Source: CDC) (Updated 6/18/20)
  • U.S. stock market: On Wednesday the major U.S. benchmarks posted mixed results, with the Dow and S&P dropping 170 and 11 points, respectively, while the Nasdaq gained 14 points. (New)
  • The Federal Reserve Board announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations. The Main Street Lending Program minimum loan size is $250,000 while the maximum loan size is $300 million. Principal payments would be fully deferred for the first two years of the loan, and interest payments would be deferred for one year. (6/16/20) (New)
  • Under the proposal, two loan options would be offered. Borrower eligibility requirements for the proposed nonprofit facilities would be modified from the for-profit facilities to reflect the operational and accounting practices of the nonprofit sector and include:
    • Minimum of 50 and maximum of 15,000 employees;
    • Financial thresholds based on operating performance, liquidity, and ability to repay debt;
    • An operational history of at least five years; and
    • A limit on endowments of no more than $3 billion.
  • The deadline for feedback is Monday, June 22 and comments may be submitted here.
  • HHS expects to distribute $15 billion to eligible Medicaid and CHIP providers through the Provider Relief Fund (PRF), and it requires an application process. Join the webcast to learn more about the application process. Pre-registration is required to reserve a spot on your preferred date. More detail on the Medicaid/CHIP PRF disbursement requirements can be found in the A&B Flash HHS CARES Act PRF section: (New)

 COVID-19 Federal & State Legislation   

  • Bill 4.0: Substantive action on the next emergency stimulus bill appears to be taking a back seat to the development of policing reform legislation and efforts to finalize fiscal year 2021 appropriations bills. However, COVID-19 remained a priority for several congressional committees, and hearings this week included a focus on whether to consider retaining the COVID-19 related waivers and pay for telehealth when the public health emergency ends, and the necessity for better COVID-19 data collection and transparency on race and ethnicity. (New)
  • For the full details on the HEROES Act, H.R. 6800, which passed the House on May 15:
  • The Paycheck Protection Flexibility Act, H.R. 7010, was enacted on June 5. To learn more, see this A&B Summary of the Paycheck Protection Flexibility Act. (6/5/20)
  • Bill 3.5: Paycheck Protection Program and Health Care Enhancement Act, (R. 266) was enacted on April 24. Also available are a section-by-section summary and an overview of the health care provisions.
  • A&B detailed summaries are below:
    • A&B Summary5 Small Business Provisions
    • A&B Summary5 Health Care Enhancement Provisions
  • Bill 3.0: Coronavirus Aid, Relief, and Economic Security (CARES) Act, (R. 748) passed on March 27. A congressional section by section summary is available here.
  • A&B detailed summaries are below:
  • Congress has passed three coronavirus emergency response bills and the first two are below:
  • Bill 1.0: Coronavirus Preparedness and Response Supplemental (CPPRS) (R. 6074) passed on March 5
  • Bill 2.0: Families First Coronavirus Response Act (FFCRA) (R. 6201) passed on March 18

Transition to “Reopening”   

Department of Health and Human Services   

  • The Department of Health and Human Services (HHS) Coronavirus toolkit page has been updated. (Updated 6/17/20)
  • HHS has a tracking feature that allows public viewing of all COVID-19 HHS grants and cooperative agreement awards on its website. The grants were distributed through programs in the ACF, ACL, ASPR, CDC, DHHS/OS, HRSA, IHS, NIH, and SAMHSA. (Updated 6/15/20)
  • HHS has released a fact sheet on Operation Warp Speed, the initiative to find a COVID-19 vaccine by January 2021. (6/16/20) (New)
  • The HHS Administration for Community Living (ACL) has updated its COVID-19 Resources webpage. (Updated 6/16/20)
  • The HHS Office of Biomedical Advanced Research and Development Authority (BARDA) has announced a partnership with Ortho Clinical Diagnostics to further the development of two automated antibody tests for COVID-19. (6/17/20) (New)
  • BARDA has announced a partnership with Immunexpress Inc. to determine the risk of sepsis in COVID-19 in hospital emergency departments or ICUs. (6/16/20) (New)
  • The National Institutes of Health has announced it is launching a nationwide analytics platform to collect COVID-19 patient data for research to help the speed the development of treatments. (6/15/20) (New)
  • The HHS Office of Civil Rights (OCR) has issued guidance on how the HIPAA Privacy Rule permits covered health care providers to contact their patients who have recovered from COVID-19 to inform them about how they can donate their blood and plasma containing antibodies to help other patients with COVID-19. (6/12/20)

HHS/CDC/CMS/HRSA CARES Act Provider Relief Funds   

  • HHS has posted a resource on Provider Relief Fund disbursements to serve as summary of the key details. (6/18/20) (New)
  • HHS announced three new Provider Relief Fund allotments completing the initial $100 billion authorized by the CARES Act. The additional $75 billion for the Provider Relief Fund authorized by the Paycheck Protection and Healthcare Enhancement Act remains to be distribution and neither the breakdown nor the disbursement formulas are known. (6/9/20) The three new allotments are:
  • $10 billion for safety net hospitals – for purposes of this disbursement, safety net hospitals are defined as those with a Medicare Disproportionate Share Payment percentage of 20.2 % or greater, and an average uncompensated care per bed of $25,000 or more, and profitability of 3 percent or less as reported to CMS. HHS has posted the state-by-state breakdown. (6/9/20)
    • HHS has provided additional detail on the Safety Net definitions and data source methodology. (6/16/20) (New)
    • HHS released additional information on the hospital safety net distribution, clarifying that HHS had extracted information from the CMS Hospital Cost Reports and Provider Specific Files to identify acute care facilities and children’s hospitals that met each of the following criteria, respectively: (6/11/20)
      • Acute Care Facilities: A Medicare Disproportionate Patient Percentage of 20.2% or greater; Annual uncompensated care of at least $25,000 per bed; and Net Operating Margin of 3.0% or less.
      • Children’s Hospitals: A Medicare Disproportionate Patient Percentage of 20.2% or greater; Net Operating Margin of 3.0% or less.
    • $10 billion is a second round funding for hot spot hospitals. To determine eligibility for this funding, hospitals had to submit their information by June 15 through the teletracking portal. On Monday, June 8, HHS sent communications to all hospitals asking them to update information on their COVID-19 positive-inpatient admissions for the period January 1, 2020 through June 10, 2020. This information will be used to determine the second round of funding for COVID-19 hotspot hospitals. (6/9/20)
    • $15 billion for Medicaid and Children’s Health Insurance Program (CHIP) providers that participate in state Medicaid and CHIP programs and have NOT received a payment from the Provider Relief Fund General Allocation. The Provider Relief Fund portal will soon be open to allow eligible Medicaid and CHIP providers to report their annual patient revenue, which will be used as a factor in determining their payment. The payment to each provider will be at least 2 percent of reported gross revenue from patient care. The final amount each provider will receive will be determined after the data is submitted, including information about the number of Medicaid patients providers serve. (6/9/20)
    • HHS - the CARES Act Provider Relief Fund (PRF) webpage and Portal (Updated 6/17/20)
    • HHS expects to distribute $15 billion to eligible Medicaid and CHIP providers through the Provider Relief Fund. Join the webcast to learn more about the application process. Please pre-register to reserve a spot on your preferred date (New):
    • And the PRF FAQs (Updated 6/16/20) have been updated and capture numerous modifications.
      • The updated FAQs for high impact distribution state that emergency department admissions and patients admitted for observation should not be included in the count of COVID-19 positive inpatient admissions.
    • The CDC has posted an updated dataset of provider recipient specific payment from the Provider Relief Fund general distribution high impact targeted allocation and/or rural targeted allocation. The dataset includes who has attested to receiving one or more payments and agreed to the terms and conditions as of June 10. $23.605 million has been paid for testing and $130.030 million has been paid for treatment. (Updated 6/12/20)
    • The COVID-19 Provider Relief Fund – the A&B General Distribution Attestation and Application Process Guide has been updated. (Updated 5/27/20)
    • The CARES Provider Relief Fund hotline is (866) 569-3522.

Centers for Disease Control and Prevention  

Centers for Medicare & Medicaid Services  

  • The Centers for Medicare and Medicaid Services (CMS) latest news alerts.(Updated 6/11/20)
  • And for the latest COVID-19 related CMS guidance and FAQs visit the CMS Current Emergencies webpage. (Updated 6/17/20)
  • CMS has posted a Toolkit on State Actions to Mitigate COVID-19 Prevalence in Nursing Homes. (6/17/20) (New)
  • CMS has updated its Medicare Fee-for-Service billing FAQs. (6/16/20) (New)
  • CMS has updated its 1135 waiver information. (6/16/20) (New)
  • CMS released a press statement that seizing nursing home resident federal economic incentive payments is prohibited. (6/11/20)

Food and Drug Administration  

  • FDA provides a daily roundup on COVID-19 related actions. The latest announcements. (Updated 6/17/20)
    • FDA updated its FAQs on Testing for SARS-CoV-2, including posting a list of antibody tests that are being removed from the “notification list” of tests being offered. (Updated 6/17/20)
    • FDA maintains its COVID-19 FAQs for the general public. (Updated 6/17/20)
    • FDA webpage for health professionals. (Updated 6/10/20)
    • The agency also maintains a public database of drug shortages. (Updated 6/17/20)
    • The FDA has published a new webpage on COVID-19 Educational Resources. (Updated 6/12/20)
  • The FDA has revised its Remdesivir fact sheet for health care providers to warn of potential drug interactions as well as clarifying under what circumstances the unapproved remdesivir is permitted emergency use for COVID-19. (Updated 6/15/20)
  • The FDA issued warning letters to three companies marketing adulterated and misbranded COVID-19 antibody tests. (6/17/20) (New)
  • The FDA announced a new process for facilitating diagnostic testing availability for asymptomatic testing and sample pooling by posting a molecular diagnostic template for manufacturers and laboratories. (6/17/20) (New)
  • The FDA revoked emergency use authorization for the Chembio Diagnostic System, Inc. antibody test due to performance concerns with test accuracy. (6/17/20) (New)
  • The FDA has revoked the emergency use authorization for hydroxychloroquine and chloroquine after several recent clinical trials could not verify their safe use as treatments for COVID-19. (6/15/20) (New)
  • The FDA has issued an emergency use authorization for Cue Health Inc.’s COVID-19 test. (6/10/20) (New)
  • The FDA issued an FDA Voices, titled Rare Disease Therapy Development and Access Remain Top FDA Priorities During COVID-19. (6/11/20)
  • The FDA issued a warning letter to outoftheboxremedies.com for misleading claims related to products for the treatment of COVID-19. (6/11/20)
  • The FDA posted updated FAQs on hospital beds, stretchers, and mattresses during COVID-19. (6/10/20)
  • The FDA has released a Spanish translation of FAQs on the EUA for Remdesivir for certain hospitalized COVID-19 patients. (6/1/20)

Department of Homeland Security/FEMA   

  • The Department of Homeland Security (DHS) posts a weekly update of its response to COVID-19. (Updated 6/15/20)
  • The DHS, jointly with the Department of Justice, announced that Migrant Protection Protocol (MPP) hearings would resume on July 17. (6/16/20) (New)
  • The DHS office of Science and Technology has launched a tool to calculate the natural decay of SARS-CoV-2 in the air under various environmental conditions. (6/12/20)
  • FEMA released an updated state-by-state PPE data. (6/12/20)
  • FEMA released a document on developing mass care and emergency assistance plans for pandemics. (6/12/20)

Department of Justice/Federal Trade Commission/Litigation   

  • The Federal Trade Commission (FTC) announced it was releasing state-level information to the public about the COVID-19 complaints it receives with online shopping problems, including items not arriving or not arriving when promised and items that are different than advertised, being the most common in many states. The FTC also released the number of complaints related to other types of fraud, Do Not Call, identity theft, and other complaints received. The information is available nationally and by each state on the FTC’s interactive COVID-19 complaint data dashboards. Between January 1 and June 8, 2020, the FTC has received more than 91,000 total COVID-19-related complaints with consumers reportedly losing a total of more than $59.2 million. (6/11/20)

Small Business Administration   

Department of Treasury/IRS/Federal Reserve   

  • The Department of Treasury website for CARES Act business assistance programs.
  • The Internal Revenue Service (IRS) announced new rules for health care spending flexibility as authorized under the CARES Act, including expansion of qualified medical expenses, and how telehealth is treated under high deductible spending health plans. (6/17/20) (New)
  • The recent IRS guidance to expand the medical condition exception, also provides a COVID-19 medical condition travel exception. A&B translates this IRS guidance to offer a better understanding of the IRS procedures and FAQs covered in the recent information. (6/16/20) (New)
  • The IRS alerted nursing homes that Economic Impact payment generally belong to the recipient, not nursing homes or care facilities. (6/16/20) (New)
  • The Department of Treasury released a statement on the opening of the lender registration for the Main Street Lending Program. The full details and portal were posted by the Federal Reserve Bank of Boston. (6/15/20) (New)
  • The Federal Reserve Board announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations. (6/15/20) (New)
  • The Federal Reserve Board announced it will resume examination activities for all banks, after previously announcing a reduced focus on exam activity due to the pandemic. (6/15/20) (New)
  • The Federal Reserve Board announced updates to the Secondary Market Corporate Credit Facility, which will begin buying a broad portfolio of corporate bonds to support market liquidity and the availability of credit for large employers. (6/15/20) (New)
  • The Internal Revenue Service (IRS) announced tax relief for certain taxpayers affected by COVID-19 involved in new markets tax credit transactions. (6/12/10)
  • The IRS announced new guidance for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic. (6/11/20)

Other Agencies   

  • The U.S. Department of Agriculture announced the purchase of more than $2.2 billion of meat, fruits, vegetables, and special crops and dairy products for food and nutrition programs. (6/16/20) (New)
  • The U.S. Census Bureau has released its Monthly Retail Trade Report. (6/15/20) (New)
  • The Cybersecurity and Infrastructure Security Agency (CISA) has posted a COVID-19 disinformation toolkit. (6/17/20) (New)
  • The Department of Defense COVID-19 Joint Acquisition Task Force announced that its domestic partnership to ramp up domestic N95 mask production is expected to exceed 1 billion by 2021. (6/11/20)
  • The Air Force concluded a mass rapid oral fluid COVID-19 test of roughly 2% or 7800 of Air Force personnel. (6/11/20)
  • The U.S. Department of Education has issued a proposed rule to prohibit COVID-19 related education aid from going to foreign nationals and non-citizens. (6/11/20)
  • The Environmental Protection Agency announced it was working with FEMA to transfer an additional 22,000 pieces of excess PPE to emergency and health professionals. (6/11/20)
  • The Federal Communications Commission has announced another 62 telehealth funding applications to health care providers totaling $2.25 million. (6/17/20) (New)
  • The U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) announced an additional two month extension of its foreclosure and eviction moratorium through August 31 for homeowners with FHA-insured Single Family mortgages. (6/17/20) (New)
  • HUD has announced the award of nearly $40 million in housing counseling grants to help individuals and families avoid foreclosure. (6/16/20) (New)
  • The Department of Labor issued guidance to help states protect against fraud in the unemployment insurance program. (6/16/20) (New)
  • S. Patent and Trademark Office announced that it would provide expedited processing for patent and trademark applications for qualifying COVID-19 medical goods or services, namely, pharmaceutical products or medical devices subject to FDA approval and medical services or medical research related to prevention, diagnosis, or treatment of COVID-19. Applicants interested in taking advantage of this expedited procedure must petition the Director of the USPTO for expedited processing, and the USPTO will waive the fee for such a petition. If granted, the application will receive examination that is expedited by “approximately two months.” (6/12/20) (New)

Trade and International Business Issues   COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle

  • The Export-Import Bank of the United States (EXIM) has revised key features of two short-term export credit insurance products to allow for streamline application during the pandemic. (6/9/10)

Business Insurance Issues Related to COVID-19   

  • For a 50-state review of business interruption insurance related issues see this new COVID-19 Insurance Litigation and Regulatory Issues tracker. (Weekly update 6/15/20)
  • On June 8, the Illinois Department of Insurance issued Company Bulletin 2020-15 requesting that “all insurers licensed or authorized to transact insurance business in [Illinois] . . . err on the side of the policyholder when paying claims as a result of riots, civil commotion, or vandalism” and “base payouts on business activity levels that eliminate the impact of COVID-19.” The Department further encourages insurers to “err on the side of the policyholder when considering the use of exclusions that may or may not be applicable.”
  • On June 4, Hagens Berman Sobol Shapiro LLP filed a putative class action on behalf of its client, American Traders, Inc. d/b/a Ramada Inn Modesto against all Farmers Insurance Group companies seeking declaratory relief, statutory damages, and damages for breach of contract. Plaintiff asserts that defendants denied Plaintiff’s claim for business interruption coverage for losses allegedly resulting from California’s civil authority orders without conducting an investigation “to determine the precise physical loss or damage that resulted from the governmental orders.” Plaintiff further asserts that the risk of loss of income and increased expenses due to governmental action is not limited or excluded in the policy. Plaintiff seeks to represent a class of California policyholders insured by Defendants with coverage for Business Income, Extended Business Income, Civil Authority, Tips Included, Dependent Property, and/or Extra Expense Coverage.  The case is American Traders, Inc. d/b/a Ramada Inn Modesto v. Mid-Century Ins. Co., et al., No. CV-20-002477 (Stanislaus Cnty. Sup. Ct., Cal.).
  • On June 5, Lieff Cabraser Heimann & Bernstein, LLP filed a putative class action on behalf of its client, Water Sports Kauai Inc. dba Sand People—a small business retailer selling gifts, furnishings, and jewelry amongst other items—against insurer Fireman’s Fund Insurance Company, et al. Plaintiff alleges that it was forced by government orders issued in Hawaii to completely shut down its operations in response to COVID-19. Plaintiff emphasizes its commitment to its employees, noting that despite the shutdown, it has continued paying medical benefits to its employees, and had anticipated re-hiring employees upon receipt of insurance coverage payments from the Defendants. However, Plaintiff alleges that, as part of a “premeditated strategy” the Defendant insurers summarily denied Plaintiff’s claim for coverage.  Plaintiff seeks to represent both a nationwide class and a Hawaii subclass, and has brought claims for Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing, Unfair or Deceptive Trade Practices under Hawaii law, and Declaratory Relief. The case is Water Sports Kauai Inc. v. Fireman’s Fund Ins. Co., et al., No. 3:20-cv-03750-JCS (N.D. Cal.)

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:   What You Should Know:

Information for Businesses:

Information for Travel and Transportation:

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

Alston & Bird Coronavirus Links

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