Health Policy Report

March 24, 2020

The Week in Review

Lawmakers on Capitol Hill scrambled to pass legislation aimed at stemming the outbreak of the novel coronavirus (COVID-19). The latest effort — a massive $1.6 trillion stimulus package (Division A SummaryDivision B Summary) — is currently stalled after Senators failed (47-47) to invoke cloture on a procedural motion that would have lined up a vote on final passage of the measure. Democrats have taken issue with several aspects of the GOP’s revised bill and are pushing for additional funding, suggesting that the package could ultimately top $2 trillion when the dust settles.

eanwhile, former Vice President Joe Biden built on his commanding lead for the 2020 Democratic presidential nomination last week., overwhelmingly beating Sen. Bernie Sanders (I-VT) in the Arizona, Florida, and Illinois primaries. With 1,991 delegates needed to clinch the nomination, Vice President Biden currently leads with 1,151 after his strong showing yesterday, followed by Sen. Sanders who sits at 857. In other notable election news, eight-term Rep. Dan Lipinski (D-IL) lost his primary to his primary to Marie Newman — a business consultant and progressive activist. Rep. Lipinski becomes the first House incumbent of the 116th Congress to lose a primary in 2020.

The Week Ahead

Senators will try to advance the Phase III legislation again this morning, as Senate Majority Leader Mitch McConnell (R-KY) lined up another procedural vote for 9:45 AM in hopes of clearing the package through Congress prior to the end of the day. If Senators are unable to break the 60-vote threshold, it’s likely they will likely resume negotiations in hopes of reaching a broader compromise. Meanwhile, Speaker Nancy Pelosi (D-CA) is preparing to release the House Democrats’ Phase III bill that will serve as the party’s official counteroffer.

McConnell Releases ‘Phase III’ Coronavirus Response Bill

Senate Majority Leader Mitch McConnell (R-KY) officially introduced his “Phase III” legislation last Thursday, aimed at stemming the impacts of the novel coronavirus (COVID-19) outbreak. Leader McConnell’s 247 page Coronavirus Aid, Relief, and Economic Security (CARES) Act (Division A and Division B) seeks to address a host of pressing issues pertaining to the outbreak, including a tranche of provisions that seek to provide direct financial help to individual taxpayers, relief for small businesses, support for health care professionals, and additional steps to stabilize the economy and job market. The bill does not, however, include a series of big ticket priorities — such as funding for certain expiring health care programs and infrastructure improvements — that lawmakers were hopeful to tack on to this legislation.

Senators are working to finalize bill text for Phase III of the COVID-19 response legislation after days of marathon negotiation sessions. Senate Republicans and Democrats have been working with White House officials to broker an agreement on the bill after Majority Leader Mitch McConnell (R-KY) released his opening offer on Friday. However, reports suggest that there are several disagreements that have yet to be ironed out — thus delaying the release of the updated bill text. With 60 votes needed for final passage out of the chamber — coupled with the fact that Sens. Cory Gardner (R-CO) and Rick Scott (R-FL) are self-quarantining as a precaution and Sen. Rand Paul (R-KY) has tested positive for COVID-19 — it will be vital for the Leader McConnell to secure Democratic support on the final vote.

The bill would further expand Medicare telehealth flexibilities, including for federally qualified health centers (FQHC) and rural health clinics (RHC) and for home dialysis patients. Furthermore, it would enable physician assistants and nurse practitioners to order home health services. The bill would temporarily lift the Medicare sequester and institute an add-on payment for hospital inpatients with COVID-19, boosting payments to providers during the emergency. The bill would also introduce new flexibilities for the use of health savings accounts (HSA) during the emergency. It would clarify that all testing, regardless of whether a diagnostic has an emergency use authorization from the Food and Drug Administration, must be covered without cost sharing by insurers. Additionally, the bill would align 42 CFR Part 2 regulations with HIPAA. Vaccines that receive an “A” or “B” rating from ACIP would need to be covered without cost sharing within 15 days. Community Health Centers would also receive $1.32 billion in supplemental funding to combat the epidemic.

Additionally, the bill would make a number of changes to mitigate supply shortages, including requiring additional information from drug manufacturers regarding interruptions of supply, requiring the strategic national stockpile to include certain types of medical supplies, and prioritizing Food and Drug Administration reviews that could mitigate shortages. Lastly, the bill would place limits on how much employers must pay out for sick and family leave and expands the Secretary of Labor’s ability to exempt small businesses from paid sick and family leave provisions.

Second Coronavirus Response Package Signed Into Law

Last Wednesday, the Senate passed a multibillion-dollar relief package (H.R. 6201) that seeks to address rising concerns about the novel coronavirus (COVID-19) outbreak. Senators voted 90-8 to pass the second coronavirus response package, with Sens. Marsha Blackburn (R-TN), Ron Johnson (R-WI), Jim Inhofe (R-OK), James Lankford (R-OK), Mike Lee (R-UT), Rand Paul (R-KY), Ben Sasse (R-NE), and Tim Scott (R-SC) voting against the legislation. The package was signed into law by President Donald Trump shortly after final passage. The legislation grants paid sick leave to employees of companies of fewer than 500 people and bolsters unemployment insurance. It also includes requirements for insurers to cover COVID-19 testing with no cost sharing. Senate Majority Leader Mitch McConnell backed the bill, despite citing “real shortcomings” with the final negotiated product. He clarified that in the situation Congress “should not let perfection be the enemy of something that will help even a subset of workers.”

The package requires insurers to cover COVID-19 testing without cost sharing and waives cost sharing for testing under Medicare, Medicaid, TRICARE, and the VA. It gives states the option to cover testing and related services for their uninsured populations at 100 percent federal medical assistance percentage (FMAP). It additionally provides $1 billion for compensating providers for testing of uninsured individuals, as well as $206 million for testing by the Department of Defense (DoD), Department of Veterans Affairs (VA), and Indian Health Service. The bill also provides states with a 6.2 percentage point increase on traditional FMAP for all medical services during the length of the Public Health Emergency. It will not apply to expansion or administrative FMAP. The FMAP is conditioned on states Medicaid programs covering COVID-19-related treatment, vaccines, and therapeutics at zero cost-sharing and on states not making their eligibility standards more restrictive or increasing any cost sharing.

The package also makes a technical correction the Coronavirus Preparedness and Response Supplemental Appropriations Act to clarify that, for the purposes of establishing a relationship with a provider to waive current prohibitions surrounding the furnishing of telehealth services in the Medicare program, during the current public health emergency, furnishing a service allowable under the Medicare program, even if the program did not pay for such service, is a qualifying relationship. Additionally, the package codifies provisions that certain National Institute for Occupational Safety and Health (NIOSH)-approved personal respiratory devices have temporary liability protections under the Public Readiness and Emergency Preparedness (PREP) Act if they are for emergency use. Lastly, the package requires employers to provide two weeks paid sick leave and up to three months of paid family leave for employees affected by the virus, the cost of which could then be claimed by the employer as a tax credit. The tax credits, which are fully refundable and may be claimed against an employer’s payroll tax obligation, may also be used to offset employers’ share of their employees’ health insurance premiums during sick or family leave.

Health ‘Extenders’ Possible Inclusion in COVID-19 Package

At the end of 2019, lawmakers reauthorized a variety of expiring health care-related programs through May 22, 2020. This new deadline was designed to give Democrats leverage in negotiating drug pricing reforms. However, since the outbreak of the novel coronavirus, COVID-19, lawmakers have shown interest in passing longer-term extensions of the programs at the same time as they work to enact an economic relief package to combat the economic slowdown precipitated by the epidemic. With President Donald Trump’s signing of the second COVID-19 relief package — focused on testing, sick leave, unemployment insurance, and Medicaid funding — lawmakers are turning their attention to the broader effects of a COVID-19-related slowdown in the economy and to clearing the decks of necessary business over the coming months.

A reauthorization of these health “extenders” — which we estimate to be in the neighborhood of $130 billion for a five-year extension, or around $50 billion not including the Temporary Assistance for Needy Families (TANF) block grant — historically have been extended by coupling the policies with program offsets. However, as of this moment, it is not yet clear if offsets will be required for some or all of these extensions.

As of now, it is unclear: (1) whether health extenders will be addressed by Congress in a COVID-19 package, and (2) of which package it would be a part. Extenders were not included in Senate Majority Leader Mitch McConnell’s (R-KY) “Phase III” COVID-19 package, however, this does not preclude their being included in a final bill should these negotiations ultimately increase the size and scope of the bill. The relevant committees also recognize that an extenders package must be completed before the May 22 deadline, and if Congress wants to recess for an indeterminate amount of time following the passage of COVID-19 relief bills, it may need to do so now.

FDA Announces Guidance for Non-Invasive Remote Monitoring Devices

The Food and Drug Administration (FDA) announced last week that they would allow manufacturers of certain FDA-cleared, non-invasive, vital sign-measuring devices to expand their use so that health care providers can use them to monitor patients remotely (guidance). Part of the administration’s efforts to address the ongoing COVID-19 pandemic, the guidance explains that devices that measure body temperature, respiratory rate, heart rate, blood pressure, and more will allow health providers to remotely monitor a patient’s vital signs from home. The guidance is intended to reduce the need for hospital visits and minimize the risk of exposure to COVID-19 and reflects the administration’s commitment to “ease burdens on health care providers and facilities as they face this public health emergency,” according to FDA Principal Deputy Commissioner Dr. Amy Abernethy.

The FDA clarified that the policy will only apply to certain modifications to the indications, claims, functionality, or hardware or software of FDA-cleared non-invasive remote monitoring devices, and the guidance will only be in effect during the public health emergency. Examples of modifications outlined by guidance include: (1) the inclusion of monitoring statements related to patients with COVID-19 or co-existing conditions (such as hypertension or heart failure); (2) for subject devices previously cleared only for use in hospitals or other health care facilities, a change to the indications or claims regarding use in the home setting; and (3) hardware or software changes to allow for increased remote monitoring capability. Due to the guidance being released in response to the public health emergency, the policies will go into effect for the duration of the public health emergency without comment period.

Telehealth Policies in Response to the COVID-19 Outbreak

Since the beginning of the COVID-19 outbreak, Congress and the Trump administration have issued a number of policies and waivers designed to lower restrictions on and encourage telehealth services. These policies address opioid treatment services, doctor visits, Health Insurance Portability and Accountability Act (HIPAA) regulations, Medicare conditions for telehealth services, and more. Additionally, Vice President Pence announced on Wednesday that the administration would release regulations allowing licensed physicians to practice in any state during the emergency, going a step further than CMS guidance that allows for out-of-state practice limited by individual state laws.

Under each heading in this TRP document, policies are arranged in order of announcement. We will update this document as new policies are announced, and the link above will always go to the most recent version.