Coronavirus Flash Update June 4, 2020

Coronavirus Flash Update: June 4, 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 4, 2020

The Latest News

  • U.S. COVID-19 cases exceed 1,843,164 and 105,895 U.S. deaths. (Source: CDC) (Updated 6/4/20)
  • U.S. stock market: On Wednesday the major U.S. benchmarks posted gains, with the Dow rising 527 points, the S&P 500 gaining 42 points, and the Nasdaq climbing 74 points. (New)
  • A powerful bipartisan group of congressional health leaders wrote to Department of Health and Human Services Secretary Alex Azar yesterday requesting that he clarify by June 10 the agency’s plan and timeline for disbursing the Provider Relief Funds allotment for Medicaid-dependent providers. Congress initially authorized $100 billion in Provider Relief Funds through the CARES Act and added $75 billion through the Paycheck Protection and Health Care Enhancement Act. Many Medicaid-dependent providers have received little or no aid from the Provider Relief Fund as a result of the disbursement formulas used which have been heavily dependent on Medicare patient mix data. The agency has sought input from state Medicaid programs in their development of a Medicaid-dependent formula and is rumored to be ready to release these funds as early as today or tomorrow. The letter was signed by Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) and House Energy and Commerce Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR). (New)
  • University of California, San Francisco (UCSF) confirmed this week they have been the target of a malicious cyber-attack in their IT network. According to Bloomberg News, there are indications that the attack targeted or included UCSF’s COVID-19 research on antibody testing and clinical trials for a treatment. (New)
  • The increase in cyber-attacks on the health care sector and specifically on COVID-19 related research and technology was further reflected by the North Atlantic Treaty Organization (NATO) statement on the “destabilizing and malicious cyber activities” directed against the health care sector during the pandemic. (6/3/20) (New)

COVID-19 Federal & State Legislation   

  • Bill 4.0: The Senate passed R. 7010, the Paycheck Protection Program Flexibility Act, by voice vote on Wednesday. The bill would extend the period of time Paycheck Protection Program (PPP) recipients would have to spend the loan in order to qualify for loan forgiveness. The current eight-week requirement could expire today for some loan recipients, but under H.R. 7010 businesses would have 24 weeks or until the end of the year, whichever comes first to spend the loan dollars and still qualify for forgiveness. The bill would also maintain forgiveness amounts for businesses that were unable to rehire employees or resume business levels by the end of the year and repeal the CARES Act provision that barred companies with forgiven PPP loans from deferring their payroll tax payments. The bill had passed the House by a vote of 471-1 last week and now awaits the President’s signature – he is expected to sign it.
  • The Senate confirmed Brian Miller to a new position created by the CARES Act to serve as special inspector general for the pandemic. The position was created to ensure that public funds were not misspent as distribution is made throughout the federal government. Brian Miller served for nearly a decade as the Inspector General of the General Services Administration and in senior positions at the Justice Department. The Senate vote was 51-40.
  • For the full details on the HEROES Act, H.R. 6800, which passed the House on May 15:
  • 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”   

Federal Communications Commission   

  • The FCC has approved another $16.46 million in telehealth funding to health care providers. (6/3/20) (New)

Department of Health and Human Services   

  • The Department of Health and Human Services (HHS) Coronavirus toolkit page has been updated. (Updated 6/3/20)
  • 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 5/29/20)
  • The HHS Office of the Assistant Secretary for Response and Preparedness (ASPR) released a resource documents for hospitals during civil unrest. (6/3/20) (New)
  • ASPR releases a document providing health care resources for secondary disasters. (6/3/20) (New)
  • ASPR has released guidance on visitation to retirement communities. (6/3/20) (New)
  • ASPR has released a fact sheet on rural health and COVID-19. ASPR also posted this more detailed document on rural health and COVID-19. (6/3/20) (New)
  • ASPR announced $250 million in aid for health care system preparedness. These dollars were awarded to state hospital associations and other groups to help hospitals and other providers in their ongoing response to the pandemic. (6/2/20) (New)
  • HHS announced a task order with Emergency BioSolutions to advance manufacturing capabilities and capacity for a potential COVID-19 vaccine. (6/1/20) (New)
  • The HHS Biomedical Advanced Research and Development Authority (BARDA) announced a partnership with Genentech to support the acceleration of a Phase 2 clinical trial to evaluate two novel therapeutics for the potential treatment of hospitalized patients with severe COVID-19. (6/1/20) (New)
  • BARDA announced it was entering a partnership with Quidel Corporation to develop a rapid multi-plex diagnostic test to detect the SARS-CoV-2 virus within an hour. (6/2/20) (New)
  • BARDA announced it was entering a partnership with Siemens Healthineers to develop automated total antibody test for COVID-19. (6/2/20) (New)

Centers for Disease Control and Prevention  

Centers for Medicare & Medicaid Services  

  • The Centers for Medicare and Medicaid Services (CMS) latest news alerts. (Updated 6/1/20)
  • And for the latest COVID-19 related CMS guidance and FAQs visit the CMS Current Emergencies webpage. (Updated 6/2/20)
  • CMS released a notice that additional flexibilities would be provided for Centers for Medicare and Medicaid Innovation payment models in response to the COVID-19 pandemic. A fact sheet summarizes the changes for each CMMI payment model. (6/3/20) (New)
  • CMS has updated it Medicare Fee-for-Service Billing FAQs. (6/3/20) (New)
  • CMS has released new testing guidance for the uninsured. This guidance includes information on enrollment, claiming and data reporting, and eligibility. CMS also has a FAQs on the uninsured and state flexibilities. (6/3/20) (New)
  • CMS has announced enhanced enforcement actions based on nursing home data and inspection. (6/2/20) (New)
  • CMS has posted state-by-state data on COVID-19 nursing home cases for residents and staff. (6/1/20) (New)
  • CMS jointly with the CDC sent a letter to governors with recommendations on testing for nursing homes and vulnerable communities. (6/1/20) (New)
  • CMS also updated their toolkit for nursing homes. (6/1/20) (New)
  • CMS has updated their COVID-19 FAQ on Medicare Fee-for-Service which includes all topics like billing for testing, treatment, and different types of settings. (5/28/20)
  • CMS has released Fact Sheet on Medicare, Medicaid, and CHIP payment methods for care provided at alternative testing sites under the direction of state and local governments and health care providers. (5/26/20)

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

  • 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 1. $48.518 billion of the $72 billion allocated to these distribution pools has been attested to. (Updated 6/3/20)
  • HHS - the CARES Act Provider Relief Fund (PRF) FAQs (Updated 6/3/20) have been updated and capture numerous modifications. The FAQ changes include:
  • Defining “Health Care Related Expenses Attributable to Coronavirus” (New) - A new FAQ notes that this is broad and may cover a range of items and services, including:
    • supplies used to provide healthcare services for possible or actual COVID-19 patients; equipment used to provide healthcare services for possible or actual COVID-19 patients; workforce training; developing and staffing emergency operation centers; reporting COVID-19 test results to federal, state, or local governments; building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.
    • There is additional clarity that that these expenses attributable to COVID-19 may have been incurred prior to the date on which they received their payment. Further, PRF payments can be used for expenses incurred on any date, so long as they are attributable to COVID-19 and were used to prevent, prepare for, and respond to coronavirus (HHS expects it would be “highly unusual” to have incurred eligible expenses prior to 1/1/2020).
  • Defining “Lost Revenues that are Attributable to Coronavirus” (New) - Per the FAQ:
    • This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care. Providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus. Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus. HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining healthcare delivery capacity, such as using Provider Relief Fund payments to cover: Employee or contractor payroll; Employee health insurance; Rent or mortgage payments; Equipment lease payments; and Electronic health record licensing fees.
  • New FAQ on Parent Entities Attesting to Terms and Conditions and Keeping Payments (New) - Per the FAQ:
    • [T]he parent organization with subsidiary billing TINs that received payments may attest and keep the payments as long as providers associated with the parent organization were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020 and can otherwise attest to the Terms and Conditions. The parent organization can allocate funds at its discretion to its subsidiaries. If the parent organization would like to control and allocate Provider Relief Fund payments to its subsidiaries, the parent organization must attest to accepting its subsidiaries’ payments and agreeing to the Terms and Conditions.
  • New FAQs on Data Resubmission (New)
    • Based on these new FAQs, it appears certain providers were flagged for data verification, which may require additional follow-up and communication prior to receiving funds. HHS notes that common issues prompting a submission to be flagged for further review included “information entered not matching tax documentation, providers with significantly lower than expected Medicare revenue, and apparent data entry errors.”
  • For such impacted providers, HHS released new guidance on the following questions (New):
    • What action should I take in order to resubmit my revenue information? (Added 6/2/2020)
    • Will the amount of the potential payment be affected if my submission has been identified for resubmission? (Added 6/2/2020)
    • Do all providers who submitted revenue information in the Provider Payment Portal have to resubmit their information? (Added 6/2/2020)
  • The updated FAQs also provided the new guidance below (New):
    • Providers that affirmatively attested to PRF payments received may reject those funds and retract the attestation by calling the provider support line (866-569-3522).
    • Providers that did not submit revenue information (i.e., an application) for the $20 billion (i.e., Round 2) General Distribution by June 3 are no longer eligible for a Round 2 payment. These providers will still be considered for future PRF payments.
    • HHS provided clarity that the June 3 deadline to submit revenue information was only for providers who wanted to be considered for the Round 2 payment. Providers were not required to attest to Round 2 payments by June 3. HHS reminds providers that they have 90 days from the receipt of Round 2 payment to attest and agree to the Terms and Conditions (this 90-day time period to attest and agree to the Terms and Conditions applies to all PRF payments).
      • By extension, this guidance indicates that providers were not required to submit revenue information by June 3 if they were not seeking a Round 2 payment.
      • While submitting revenue information appears to be required for all PRF payment recipients, HHS has not announced a specific deadline by which they must do so.
    • HHS has completely revised its Provider Relief Fund webpage. (Webpage Updated 6/3/20)
    • HHS released Indian Health Service Provider Relief Fund allotment Terms and Conditions. (6/2/20) (New)
    • The COVID-19 Provider Relief Fund – the A&B General Distribution Attestation and Application Process Guide has been updated. (Updated 5/27/20)
    • HHS released a statement extending the Provider Relief Fund attestation deadline for an additional 45 days. This allows providers 90 days from the date they received a payment to accept the Terms and Conditions or return the funds. (5/22/20)
    • The CARES Provider Relief Fund hotline is (866) 569-3522.

Food and Drug Administration  

  • FDA provides a daily roundup on COVID-19 related actions. The latest announcements. (Updated 6/3/20)
    • 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 6/2/20)
    • FDA maintains its COVID-19 FAQs for the general public. (Updated 5/29/20)
    • FDA webpage for health professionals. (6/2/20) (New)
    • The agency also maintains a public database of drug shortages. (Updated 6/2/20)
  • The FDA has added two ventilators developed by NASA to the list of authorized ventilators, ventilators tubing connectors, and ventilators accessories. The same list notes a new emergency resuscitator for the Fitbit Flow. (6/3/20) (New)
  • The FDA has released updated guidance for institutional review boards to expand patient access during the COVID-19 emergency. (6/3/20) (New)
  • FDA Resources for Healthcare Professionals. (6/3/20) (New)
  • The FDA updated their guidance on utilizing and implementing alternative inspection tools while postponing foreign and domestic routine surveillance facility inspections. (6/2/20) (New)
  • The FDA has announced action to increase the supply of alcohol-based hand sanitizer. (6/1/20) (New)
  • The FDA has posted a voluntary EUA template for at-home sample collection kits. (5/29/20)
  • The FDA has issued guidance entitled “Effects of the COVID-19 Public Health Emergency on Formal Meetings and User Fee Applications” to address questions on formal meetings with industry, user fee application goals and timelines, and the prioritization of application reviews during the public health emergency. (5/28/20)

Health Resources and Services Administration   

  • The Health Resources and Services Administration (HRSA) has awarded $20.3 million to expand addiction workforce in underserved communities where the pandemic has increased the need. (6/2/20) (New)
  • HRSA provides COVID-19-related information, resources, and FAQs here. HRSA has updated its progress reports including FAQs on health center reporting. (Updated 6/1/20)

Department of Homeland Security/FEMA/DOD   

  • The Department of Homeland Security (DHS) posts a weekly update of its response to COVID-19. (Updated 6/1/20)
  • The Federal Emergency Management Administration (FEMA) has posted a state-by-state allocation list of PPE and other supplies. (5/29/20)
  • The President announced his intent to extend the Title 32 orders through mid-August. Title 32 gives the governors authority to command their National Guard forces, while 100% federally funded, to meet emergency COVID-19 relief needs within their states. (5/28/20)

Department of Justice/Federal Trade Commission/Litigation   

  • The Department of Justice maintains an anti-price gouging & anti-fraud webpage with information on reporting complaints and resources on prevention. (5/26/20)
  • Litigation: On May 29, a Georgia woman pled guilty for violating the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) by selling an unregistered pesticide, “Toamit Virus Shut Out,” which she claimed protected against viruses, such as COVID-19 on eBay. The pesticide took the form of a card-shaped device to be worn around the user’s neck and was marketed as a “layer of safety protection effect, thus reducing the risks and probability of infection and transmission.” The FIFRA authorizes the Environmental Protection Agency (EPA) to regulate the production, sale, distribution, and use of pesticides in the United States. The Environment and Natural Resources Division’s Environmental Crimes Section prosecuted the defendant because Toamit Virus Shut Out was not registered with EPA, and it is illegal to distribute or sell unregistered pesticides. Defendant imported the pesticide from Japan and later sold it to individuals around the United States. She will be sentenced June 29. (New)

Small Business Administration   

  • Small Business Administration (SBA) – In response to the CARES Act requirements, the SBA Paycheck Protection Program (PPP) website has updated its FAQs for lenders and borrowers. (Updated 5/27/20)
  • The SBA released the Paycheck Protection Program Loan Forgiveness process, which includes the application and instructions. (5/15/20)

Department of Treasury/IRS/Federal Reserve   

  • The Department of Treasury website for CARES Act business assistance programs.
  • The Federal Reserve announced an expansion in the number and type of entities eligible to directly use its Municipal Liquidity Facility program. Under the new terms all states will be able to have at least two cities or counties eligible to directly issue notes to the Municipal Liquidity Facility regardless of population. (6/3/20) (New)
  • The Internal Revenue Service (IRS) announced a temporary administrative relief to help certain retirement plan participants or beneficiaries who need to make plan elections remotely by allowing remote signatures. (6/3/20) (New)
  • A&B Federal Tax Group provides guidance on a little-known rule that could allow disaster losses from 2020’s COVID-19 pandemic to be used as losses for 2019. Read more here. (6/1/20) (New)
  • The Department of Treasury has jointly announced with the SBA that $10 billion is being set aside of the Round 2 Paycheck Protection Program funding for use exclusively by Community Development Financial Institutions (CDFIs) to target relief to low-income communities. (5/28/20)

Other Agencies   

  • The Department of Commerce Economic Development Administration has announced that applications would be accepted for competitive grant awards on a rolling basis to help communities prevent, prepare for, and respond to the pandemic. (5/27/20)
  • For information on COVID-19 waste regulation and environmental compliance issues during the pandemic, read the A&B Environmental & Land Use Briefing. (5/22/20)

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 North Atlantic Treaty Organization (NATO) issued a statement on the “destabilizing and malicious cyber activities” directed against the health care sector during the pandemic. (6/3/20) (New)
  • President Trump announced he would halt funding for and withdraw U.S. membership in the World Trade Organization, stating during a Rose Garden ceremony that “We will be today terminating our relationship with the World Health Organization and redirecting those funds to other worldwide and deserving urgent global public health needs…The world needs answers from China on the virus.” (5/29/20)

Insurance Issues   

  • For a 50-state review of business interruption insurance related issues see this new COVID-19 Insurance Litigation and Regulatory Issues tracker. The tracker is updated weekly. (Updated 5/31/20)
  • On May 26, U.S. Representative Carolyn Maloney (D-N.Y.) introduced R. 7011—the Pandemic Risk Insurance Act of 2020. The legislation would create the Pandemic Risk Reinsurance Program, providing “compensation for business interruption losses resulting from future pandemics or public health emergencies.” The bill would apply only to “covered public health emergenc[ies]” declared “on or after January 1, 2021.”
  • Notable filings and orders include:
  • On May 28, Alissa’s Flowers, Inc., the owner and operator of a flower shop in Independence, Missouri, initiated a putative class action in federal court against its insurer State Farm Fire and Casualty. Plaintiff alleges that while the insurance industry has offered relief to auto policyholders in the form of reduced premiums, “insurers have not offered any sort of premium relief to businesses.” Plaintiff argues that businesses ought to have been extended premium relief for commercial liability insurance policies. Plaintiff alleges claims for breach of contract, unjust enrichment, and declaratory and injunctive relief and seeks to represent a nationwide class of similarly situated persons and entities. The case is Alissa’s Flowers, Inc. v. State Farm Fire and Cas. Co., No. 2:20-cv-04093-WJE (W.D. Mo.)
  • On May 27, MTDB Corp. dba Striker Lanes, a bowling alley, initiated a putative class action in the Northern District of Illinois against its insurer, American Automobile Insurance Company. The Complaint seeks a declaratory judgment that plaintiff and the putative class “sustained direct physical loss or damage to property” as a result of SARS-CoV-2 or COVID-19, that SARS-CoV-2 and/or COVID-19 are covered causes of loss, and that plaintiffs and the class are therefore entitled to coverage. Plaintiff also alleges that they are entitled to coverage for losses resulting from certain governmental orders. Plaintiff seeks to represent a class of Illinois businesses insured under policies issued by defendant. The case is MTDB Corp. v. Am. Auto. Ins. Co., No. 1:20-cv-03127 (N.D. Ill).

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:

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