On March 18, 2020, the United States Food and Drug Administration (FDA) announced the suspension of all domestic routine surveillance facility inspections until further notice. FDA took this measure to protect the health and well-being of its staff and those who conduct the inspections for the agency under contract at the state level, and due
On January 1, 2020 California Consumer Privacy Act (“CCPA”) largely came into effect, albeit with several last-minute modifications and a need to promulgate regulations. As our colleagues have discussed previously here, CCPA joins other California laws safeguarding California residents’ privacy rights under the California Constitution. Despite uncertainty around the final regulatory parameters of the law, CCPA grants the California Attorney General (AG) the authority to begin enforcement on July 1, 2020. Further, there have been no indications that such enforcement will be delayed.
Re-issued Proposed CCPA Regulations
After the California legislature passed several amendments to the CCPA in October 2019, the California AG has been working on proposed regulations. The proposed regulations, initially introduced on October 12, 2019, went through three rounds of comment periods and were recently amended and reissued as the “Final Text of Regulations” on June 1, 2020. These proposed regulations notably add new aspects and regulatory hurdles to CCPA implementation most notably: (i) increasing requirements for initial notices; and (ii) adding new requirements on the contents in business’s privacy policies. These reissued proposed regulations were submitted to the California Office of Administrative Law (OAL) for review. The OAL has thirty working days to review these regulations, plus an additional sixty calendar days under the California Governor’s Executive Order N-40-20 related to the COVID-19 pandemic, to review the regulations for procedural compliance with state law.
CCPA Proposed Regulatory Framework
The CCPA applies to any for-profit business that: (i) collects personal information on California residents; (ii) does business in the state of California; and (iii) satisfies one or more of the following thresholds: (a) has annual gross revenues in excess of $25,000,000; (b) alone or in combination, annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices; or (c) derives 50 percent or more of its annual revenues from selling consumers’ personal information. Businesses that hit the thresholds will be covered even if they are located outside the state of California.
Notably, companies subject to CCPA must “at or before the point of collection” of personal information provide notice to consumers informing them of the categories of personal information the company collects and what purpose the information is used by the company. In addition, CCPA requires businesses to post a clear and conspicuous link on their website that says “Do Not Sell My Personal Information” and then to enable consumers to opt-out of the sale of their data to third parties. CCPA also establishes a wide-range of rights to consumers (as specified below). Companies should be aware of the potential added cost of business in responding to these rights and ensure that they do not discriminate against any individual who exercises their rights under CCPA.
On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit exposure of healthcare providers, patients, and staff to COVID-19 and conserve critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.
In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.
In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.
One of the many relief efforts contained in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), signed into law on March 27th, 2020, is a hiatus of sequestration as it applies to Medicare payments. Section 4408 of the CARES Act exempts Medicare from the effects of sequestration from May 1, 2020, through December 31, 2020. It also postpones the sunset of sequestration as it applies to Medicare from the end of 2029 to the end of 2030.
As background, on January 2, 2013, “sequestration,” automatic spending cuts applicable to all categories of the Federal budget, went into effect. Sequestration included a 2.0% reduction in most Medicare spending, and as a result of its implementation, many providers experienced reductions in their reimbursement. In addition to traditional fee-for-service Medicare payments, some Medicare Advantage plans reduced reimbursement under their contracts with providers to reflect the effect of sequestration, effectively passing on to providers the reductions in premiums recovered by such plans due to sequestration. Even non-Medicare reimbursement was affected for many providers whose participation agreements with plans contained fee schedules based off of Medicare reimbursement.
While this suspension of sequestration is certainly good news for providers participating in traditional fee-for-service Medicare, and plans offering Medicare Advantage products, the effect the suspension will have on reimbursement for providers participating in Medicare Advantage or commercial lines of business which rely on Medicare rates is slightly less clear.
The CARES Act, passed by Congress and signed into law on March 27, 2020, provides $100 billion for the Public Health and Social Services Emergency Fund (“Relief Fund”) to support eligible health care providers. Less than a month later, Congress passed the Payroll Protection Program and Health Care Act, providing an additional $75 billion to the Relief Fund, raising the total funds available to $175 billion. As of the end of April 2020, the Department of Health and Human Services (“HHS”) released to providers two tranches of Relief Funds totaling $50 billion. HHS disbursed the first $30 billion tranche (“Tranche 1”) between April 10 and April 17, 2020. Currently, HHS is disbursing the second $20 billion tranche (“Tranche 2”). Because these are grant funds – not loans – repayment is not required. What HHS requires is that the Recipients attest to and follow the Relief Fund’s Terms and Conditions. Before we turn to the Terms and Conditions, it is important to understand HHS’ Relief Fund disbursement process.
Relief Fund Disbursement Process
HHS disbursed the Tranche 1 Relief Funds as well as some of the Tranche 2 Relief Funds directly to providers participating in Medicare Part A and Part B. (“the Recipients”). Other Recipients must apply for the Relief Funds through the HHS’ on-line portal. No matter how the Recipient received the funds, either through direct payments or through the on-line application, all Recipients must attest to HHS’ published Terms and Conditions through the HHS on-line portal within 45 days after receiving the Relief Funds. Each tranche requires a separate attestation. If the Recipient retains the funds for at least 30 days without contacting HHS regarding the funds’ remittance, HHS deems the Recipient to have accepted the Terms and Conditions discussed below. There are two important considerations in determining whether to accept these funds:
- The Terms and Conditions for Tranche 2 Relief Funds differ in several respects from the Terms and Conditions for the Tranche 1 Relief Funds; and
- The Terms and Conditions listed provisions are not exhaustive and Recipients must also comply “with any other relevant applicable statutes and regulations”.
As an update to our prior blog post, on April 20, 2020 FDA announced the authorization of the first COVID-19 test for home collection of specimens. This announcement, made via the Agency’s FAQs on Diagnostic Testing for SARS-CoV-2 webpage, comes after weeks of FDA reporting that it has been working closely with manufacturers on such a test during the weekly Virtual Town Hall Meetings hosted by the Center for Devices and Radiological Health. FDA clarifies that the test is only authorized for home collection of specimens to be sent back to a laboratory for processing. FDA still has not authorized a COVID-19 test “to be completely used and processed at home.”
According to the Emergency Use Authorization (EUA) letter for the test, the new home collection method involves the use of a nasal swab, as opposed to a nasopharyngeal swab. Home collection is only permitted “when determined by a healthcare provider to be appropriate based on results of a COVID-19 questionnaire.” Instructions for self-collection must be made available to individuals online or as part of the collection kit, and the kit must include materials allowing the patient to safely mail the specimen to an authorized laboratory. The letter states that the EUA will be in effect until there is a declaration that the circumstances justifying this authorization is terminated or revoked.
Our colleagues Eric Moran and Elena M. Quattrone, attorneys at Epstein Becker Green, co-authored an article in The New York Law Journal, titled “Federal Courts Set Out Preconditions for Prisoner Release Because of COVID-19 Risk” (registration required).
Following is an excerpt:
As the COVID-19 pandemic continues its spread throughout the nation, federal prisons are experiencing…
Governor Murphy signed a number of bills into law on Tuesday, April 14, 2020 to help mitigate various negative impacts of the COVID-19 pandemic. The selection below illustrates new laws that specifically seek to facilitate the running of certain business operations as well as help licensed professionals, which may be of interest to a wide array of health care providers.
- Remote Notarial Acts: In order to keep various business operations moving, the Governor signed A-3903/S-2336, which allows remote notarial acts during a public health emergency and state of emergency as declared by the Governor in Executive Order 103. There are certain exceptions relating to family law and documents governed by the Uniform Commercial Code. This law is effective immediately, but it will expire once Executive Order 103 is rescinded.
- Remote Operations for Non-Profits: In what many nonprofit organizations may see as a welcome move Governor Murphy signed S-2342/A-3915, which amends New Jersey’s nonprofit corporation law to allow nonprofits to conduct certain corporate meetings using remote communication during a state of emergency declared by the Governor. Specifically, a meeting by the members may occur to the extent the board of directors authorizes and adopts guidelines and procedures governing such a meeting. The law is effective as of signing, and may be a useful tool for nonprofit organizations during this pandemic.
On April 10, 2020, the U.S. Department of Health and Human Services (“HHS”) provided additional details regarding its plan to provide billions in relief to providers in an effort to off-set healthcare-related expenses resulting from the Coronavirus (“COVID-19”) outbreak.
Passed into law on March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, also called the “CARES Act”, provided $100 billion in funding for the Public Health and Social Services Emergency Fund (the “Fund”). The Fund is a pre-existing resource overseen by the Office of Financial Planning & Analysis within HHS. The $100 billion added via the CARES Act was made available to qualifying healthcare providers to reimburse them for “health care related expenses or lost revenues that are attributable to [COVID-19]”. The CARES Act stipulated that the $100 billion would be made available to public entities, Medicare or Medicaid enrolled suppliers and providers and other entities as may be further specified in regulations or guidance, provided that any such provider must “provide diagnoses, testing or care for individuals with possible or actual cases of COVID-19”. Monies received from the Fund may not be used to cover expenses that have already been reimbursed through other sources or that other sources are obligated to reimburse. Little other detail regarding the funding or mechanism for disbursal was provided in the CARES Act itself.
In a new issuance on its website, found here, HHS provided additional details on the program. HHS noted that $30 billion out of the appropriated $100 billion will be distributed immediately via direct deposit, starting April 10, 2020. Further, HHS clarified that the money is “payment” and not a loan, and thus will not need to be repaid. The initial $30 billion tranche is being made available only to providers that received Medicare fee-for-service payments in 2019. The payments are being distributed according to the Taxpayer Identification Number (TIN) of the billing organization.
Among the many concerns arising from rampant spread of COVID-19, are provider concerns regarding potential liability for care provided during the pandemic due to limited medical resources. Providers and policy makers have discussed such concerns particularly given the currently limited number of available ventilators and qualified technicians as compared to the numbers of patients who may need access to such equipment. Congress and states have provided varying levels of liability protection, though such protections are themselves limited.
Under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), Congress provided liability protection to volunteer health care professionals providing health care services during the current public health emergency.  Specifically, the CARES Act exempts volunteer health care professionals from liability under federal or state law for any harm caused by an act or omission, unless the harm was caused by willful or criminal misconduct, gross negligence, reckless misconduct, conscious flagrant indifference, or under the influence of alcohol or intoxicating drugs, in providing health care services during the public health emergency with respect to the coronavirus. This provision preempts state or local laws that provide such volunteers with lesser protection from liability.
Notably, Congress chose not to extend liability protection to non-volunteer health care professionals, affording no wide-spread federal protection to those employed or contracted professionals treating patients during the emergency. Certain states, however, have extended liability protection to employed or contracted health care professionals through state orders. For example, Governor Cuomo of New York, through executive order, waived certain state laws to provide immunity from civil liability to certain health care professionals for any injury or death alleged to have been sustained directly as a result of an act or omission by such professional in providing medical services during the pandemic, unless such injury or death was caused by the professional’s gross negligence.