Coronavirus Flash Update March 23, 2020

Coronavirus Flash Update: March 23, 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 MONDAY, MARCH 23, 2020 

The Latest News

  • U.S. COVID-19 cases exceed 15,219 and 201 U.S. deaths. (Source: WHO)
  • U.S. Stock market: Last week ended with another steep decline in the markets on Friday, with the Dow falling over 900 points and S&P 500 down over 100 points, each ending the week down over 8%, and the Nasdaq down over 270 points, ending the week down almost 7%. Weekend trading in stock futures point to more losses on Monday, with trading in Dow futures halted on Sunday after the 5% limit down was triggered.
  • In a joint statement the federal financial institution regulatory agencies and state banking regulators encouraged financial institutions to work constructively with borrowers affected by COVID-19 and provide additional information regarding loan modifications.
  • On Sunday, the Department of Justice (DOJ) filed its first enforcement action against COVID-19 fraud, successfully obtaining a temporary restraining order against the operators of the website, “coronavirusmedicalkit.com.” The site claimed to be distributing vaccines for a $4.95 shipping fee, though no known vaccine is effective against COVID-19. The complaint was filed in the Western District of Texas by the DOJ’s Civil Division.
  • President Donald Trump invoked the Defense Production Act on March 18 to prioritize and expand the nation’s ability to produce key medical supplies such as ventilators and personal protective equipment. In addition, the Department of Defense announced the release of five million masks and other supplies from its reserves. For those wanting to understand the Act, read this A&B blog.

Emergency Funding/Supplemental/Stimulus Legislation

  • Late last week and through the weekend, Congress moved quickly to a third bill, initially called “3.0 or stimulus,” which is focused on financial assistance in the billions of dollars for both individuals and industries hit hardest by the coronavirus.
    • Last Thursday, the Senate GOP leadership released Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which includes financial assistance totaling nearly $2 trillion. A summary and section by section of the CARES Act, S. 3548, can be found here and here. The full text can be found here.
    • Among the many items proposed, the CARES Act would provide cash payments of $1,200 to taxpayers, extend tax filing deadline to July 15, liberalize net operating loss rules, modify interest expense limitations for businesses, and implement other tax code changes to assist individuals and businesses.
    • Senate Majority Leader Mitch McConnell failed on a cloture vote to cut off debate and move to a final vote. The cloture vote failed 47-47, absent the 60 votes needed.
    • The Democratic leadership released a statement on Sunday saying that their bill, the Take Responsibility for Workers and Families Act, would provide more comprehensive relief; no details have been released.
    • Negotiations proceed again today.
      • Congress has already passed two bills in the past two weeks:
    • The first bill, the Coronavirus Preparedness and Response Supplemental (CPPRS) (H.R. 6074), which included $8.3 billion in emergency supplemental funds for key federal agencies responding to the coronavirus epidemic – it passed on March 5.
    • The second bill, the Families First Coronavirus Response Act (FFCRA) (H.R.6201), primarily seeks to mitigate the impact individuals with provisions on low-income food/nutrition assistance, unemployment insurance, emergency leave, and employer tax credits to partially offset the costs of required leave.

Key Administrative and Regulatory Actions Legal and Financial Issues  

  • On March 13, 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 respond to the coronavirus outbreak.
  • 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.
  • The Federal Financial Institutions Examination Council (FFIEC) issues updated guidance specific to pandemic planning.
  • On March 18, the S. Alcohol and Tobacco Tax and Trade Bureau (TTB) issued tax exemption for production of hand sanitizers by distilled spirit permittees.
  • Internal Revenue Service (IRS) Notice 2020-17 Extending the time for income Tax payments: The Treasury Department and IRS have extended the due date for federal income tax payments due April 15, 2020, to July 15, 2020, for payments due up to $10 million for corporations and up to $1 million for individuals—regardless of filing status—and other unincorporated entities. Associated interest, additions to tax, and penalties for late payment are also suspended until July 15, 2020.
  • 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 March 17 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.
  • The DOJ released a statement noting that the department is prepared to pursue “bad actors” who take advantage of the COVID-19 crisis.
  • Effective March 19, the Homeland Security Investigations announced that Immigration and Customs Enforcement (ICE) will suspend future service of NOIs until further notice and any employers who were served NOIs during the month of March 2020 and have not already responded will be granted an automatic extension for 60 days from effective date.
  • Federal antitrust agencies to extend merger reviews. On March 17, the DOJ announced it will be asking some merging parties to voluntarily grant the DOJ an additional 30 days to investigate. 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. 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).
  • Understanding how federal agencies will review merger transactions during the coronavirus outbreak has business and legal implications. The A&B Mergers & Acquisitions Group examines what you need to know.
  • Mortgage-backed and asset-backed securities are beginning to feel the impact of the coronavirus outbreak. To understand the basic disclosure and diligence issues to consider with any securitization, read this advisory.
  • 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 two weeks ago to assist issuers’ compliance with federal proxy and annual meeting rules. Additional detail and analysis is provided in this A&B advisory.
  • Securities litigation is likely to be impacted by the coronavirus and 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 the company 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.
    • For the many firm clients that have experienced sharp stock price drops in recent days, the C-level management and board members will be concerned about their personal liability. One important thing for them to consider is the scope of D&O insurance coverage for potential shareholder lawsuits, and we regularly assist clients in evaluating that coverage.

International Business and Trade   

  • 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 information see this A&B advisory.
  • On March 20, the Organizations for Economic Cooperation and Development (OECD) outlined tax policy steps countries can take to respond to the economic impact of the coronavirus pandemic, including, for example, waiving or delaying payroll-related taxes and employer and self-employed social security contributions, providing tax breaks to health and emergency workers, extending deadlines for tax filing and payments, accelerating tax refunds, deferring estimated payments, liberalizing loss carryforward and carryback provisions, etc.
  • 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.
  • Status of US CBP cargo operations: Two Houston shipping terminals have suspended operations due to a COVID-19 issue. The CBP message can be found here.
  • Transportation and other supply chain update: While cargo flows continue, there is uncertainty due to shortage of truck drivers or removal of vessels from trade lanes. In addition, express delivery firms are under pressure to fill cargo void. Travel bans due to COVID-19 caused a severe drop in the capacity, in a way that express delivery firms are under increased pressure.
  • Emerging global trade controls restricting exports: On March 15, 2020, the European Union (“EU”) imposed EU-wide export restrictions on certain personal protective equipment (“PPE”), such as gloves, face shields and protective garments. These measures were adopted mainly by EU member states in which the production of PPE is concentrated, such as Germany, France, Poland, Bulgaria, and the Czech Republic.
  • Ongoing state of US-China bilateral relationship and trade negotiations through crisis: On March 18, Murphy and Rep. Cunningham sent a letter to Congressional Leadership rrging tariff suspension during the coronavirus emergency. Letter from several U.S. trade associations representing business in many sectors proposed the immediate elimination of Section 301 tariffs in order to offset the economic impacts of the COVID-19 outbreak. When asked about the letter, the President saidhe, “couldn’t imagine why Americans would want that.”
  • General US agency operations, especially Treasury, State, CBP, Commerce and USTR as they administer trade laws and policies: Temporary travel restrictions applicable to land ports of entry and ferries service between the United States and Canada. Restrictions are in force from March 20 to April 20, 2020. See FR Notice here. CBP said to be considering extensions for duty payments due to the COVID-19 pandemic.
  • Two weeks ago, 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).
  • On March 19, U.S. State Department announced a level four travel advisory applying to all international travel.
  • On a recent call, U.S. Customs and Border Protection’s 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, cargo processing could be affected.

Workplace & Home Issues   

  • Government Closure/Stay-at-Home orders are being released in multiple state and local jurisdictions initially started earlier this week in several California bay area counties. To date, states issuing these orders include California, Connecticut, Delaware, Illinois, Kentucky, Louisiana, Ohio, Nevada, New Jersey, New York, and Pennsylvania.
  • The State of New York has passed a COVID-19 sick leave law requiring paid leave to workers who are subject to an order of mandatory or precautionary quarantine or isolation for COVID-19.
    • For those asking how to define “federal crucial infrastructure sectors” the Department of Homeland Security’s Cyber Infrastructures division outlines 16 sectors.
    • These orders challenge business to understand who is an “essential business” and other implications and to understand the business and legal implications, read this A&B advisory.
  • The Department of Labor (DOL) released a statement which includes an overview of key COVID-19 related DOL and Occupational Safety and Health Administration (OSHA) documents which includes:
  • OSHA’s practical guidance to prevent the spread of COVID-19
  • OSHA’s COVID-19 website
  • Wage and Hour Division (WHD) guidance on Families First Coronavirus Response Act (FFCRA): Employee Paid Leave Rights
  • WHD guidance on FFCRA: Employer Paid Leave Requirements
  • WHD FAQs on COVID-19 and the Fair Labor Standards Act
  • WHD FAQs on COVID-19 and the Family and Medical Leave Act
  • Trying to make sense of all these changes? A&B provides brief overviews of what you need to know:
    • Coronavirus Impact on Health Benefits: A Deeper Dive
    • Employee Leave Requirements Under FFCRA advisory
    • COVID-19 FAQs for Employers
  • Employers and employees considering domestic travel decisions can find information in this A&B advisory.
  • Cyberhygeine has become a focus in the workplace and for those working from home, here are six practical tips to stay protected while working from home during the coronavirus outbreak.
  • The construction industry is confronting multiple coronavirus related crises. To understand the trends read this A&B advisory on the five best practices.
  • Last week, the Cybersecurity and Infrastructure Security Agency (CISA) released guidance to help state and local jurisdictions and the private sector identify and manage their essential workforce while responding to COVID-19.
  • Environmental Protection Agency (EPA) has identified 274 disinfectant products that can be used against SARS-CoV-2 (the cause of COVID-19). 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.”
  • Occupational Safety and Health Administration (OSHA) updated its website, clarifying that no special precautions (beyond existing requirements) are required for municipal solid waste and recycling suspected or known to contain or be contaminated with COVID-19.
  • 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.

Cyber Security & Privacy

  • On March 18, five Democratic senators sent letters to the White House and Google’s parent company, Alphabet, Inc., expressing concern about the privacy of users of the company’s COVID-19 screening site.
  • Responding to reports that the federal government is considering using customer location data from companies including Google, Facebook, IBM and others in combatting COVID -19, Senator Markey urged the White House Office of Science and Technology Policy to consider consumers’ privacy interests.
  • The Ohio Attorney General issued a warning about Coronavirus related scams and how consumers can avoid them.
  • With 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.

Health Care 

  • On March 19, Department of Health and Human Services Secretary Alex Azar hosted a call on COVID-19 response with his counterparts from the G7 countries.
  • The U.S. 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, including the CMS national emergency guidance. Several new items this past week include:
    • On Sunday, CMS announced relief for providers participating in quality reporting programs, including granting exceptions from reporting requirements and extensions for clinicians/providers participating in Medicare quality reporting programs for the upcoming measure and data submission for those programs. The release includes tables listing the impacted programs and extensions.
      • Waivers: Further information continues to be released on blanket waivers after the initial guidance on March 13 response to the national emergency executive order.
    • On Sunday, March 22, CMS issued provider enrollment FAQs for 1135 blanket waiver, available here: In addition, there is an FAQ on telehealth services (Q11) and requirements if a practitioner seeks to furnish Medicare telehealth services from his or her home.
    • An A&B advisory on the section 1135 waivers provides background, how to request them, EMTALA considerations, overview of Medicaid and CHIP 1135 waivers, and guidance for health care providers and suppliers.
    • Early last week, CMS approved its first 1135 waivers in Florida and Washington. CMS has posted a toolkit on 1135 waivers.
  • A snapshot of some submitted waivers:
    • California 1135 waiver (3/16);
    • Illinois 1135 waiver request (3/19): Illinois Hospital Association waiver request (3/20);
    • Massachusetts 1135 waiver request (3/20);
    • Mississippi 1135 waiver request (3/18) [side note: MS emergency telehealth policy: waiver];
    • North Carolina 1135 waiver request(3/17);
    • North Dakota 1135 waiver request (3/18);
    • New Hampshire 1135 waiver request (3/18); and
    • South Dakota 1135 waiver request (3/19).
      • CMS released recommendations last week on adult elective surgeries and non-essential procedures. This release provides details including that decisions will be made at the local level by the clinician, patient, hospital, and state and local health departments.
      • On March 19, CMS announced that the implementation of the Minimum Data Set 3.0 v1.181 for nursing home and swing bed providers set for October 1, 2020 was now delayed.
      • To clarify COVID-19 coverage for the diagnosis and treatment, CMS released FAQs on Catastrophic Health Coverage; the agency states that it will not bring enforcement action against any health issuer that amends its catastrophic plans to provide coverage without imposing cost-sharing requirements for COVID-19 related services before an enrollee meets the catastrophic plan’s deductible. CMS also notes that the use of enforcement discretion and the FAQs issued align with the IRS guidance released which provides flexibility to high deductible plans to provide COVID-19 health benefits without applying a deductible or cost-sharing.
    • New telehealth guidance was announced last 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 Sunday, CMS released new tools for state Medicaid and Children’s Health Insurance Programs (CHIP) and updated (March 18) FAQs. The tools include:
    • On March 16, 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 released new guidance last week on nursing home patients and visitors.
      • Last week, 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.
      • 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.
      • 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 on March 9 that a diagnostic test for COVID-19 was nearing completion and would process up to 1,000 tests in 24 hours.
      • On Sunday, the ASPR announced the funding of a phase 2/3 clinical trial in a joint partnership with Regeneron Pharmaceuticals to develop a potential treatment for COVID-19.
    • Over the weekend, the Food and Drug Administration (FDA) announced that it had issued the first Emergency Use Authorization for Point of Care Diagnostic for the Cepheid Xpert Xpress SARS-CoV-2 test. A copy of the authorization letter can be found This follows the Agency granting emergency use authorization (EUA) to two new tests (Hologic and LabCorp), bringing the total number to four (Roche Holding and Thermo Fisher).
      • On Sunday, the FDA took actions to increase the availability of ventilators and accessories, as well as other respiratory devices, to supporting patients with respiratory failure or difficult breathing through the issuance of enforcement policy for respiratory devices and other accessories.
    • FDA issued an immediately in effect guidance for industry and FDA that allows 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. The devices include those that measure body temperature, respiratory rate, heart rate, and blood pressure.
    • FDA issued a revised guidance (Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic) to clarify what is applicable to any pandemic, not just an influenza pandemic.
  • One week after the FDA announcement that it was postponing most foreign inspections through April, FDA Commissioner Hahn announced last week that the Agency will scale back domestic inspections for all FDA-regulated products, including drugs, devices, biological products, foods, animal feed, and tobacco. For a deeper dive on industry considerations to these delays, review these A&B advisories on domestic inspections and foreign inspections.
  • President Trump noted last week the accelerated testing of drugs to treat coronavirus, specifically referencing two drugs (chloroquine and hydroxychloroquine) that are currently approved to treat malaria and severe arthritis. However, Commissioner Hahn cautioned that while it was important to provide hope while stating that the vaccine trial underway was a Phase 1 and expected to take at least 12 months to complete.
  • Last week the FDA issued, “FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic,” to assist sponsors in assuring the continued safety of trial participants, while minimizing risks to trial integrity, and maintaining compliance with good clinical practices (GCPs) during the pandemic. Included in the new guidance are the options for phone contact and virtual visits in clinical trials.
  • FDA has added respirators to its authorized list.
  • To assist in the conservation of masks and gowns the FDA has provided strategies and added glove conservation strategies on Friday.
  • Last week, the 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.
  • On March 20, the FDA issued a statement that the Agency is beginning to see unauthorized fraudulent test kits that are being marketed to test for COVID-19 in the home. Earlier in March, the FDA and the FTC issued warning letters to seven companies for selling fraudulent COVID-19 products.
  • The Health Resources and Service Administration (HRSA) launched an information collection effort last week to support the response to COVID-19 pandemic by surveying HRSA-funded health centers on their response. This information collection effort was initiated pursuant to today’s waiver of the Paperwork Reduction Act.
  • The Centers for Disease Control and Prevention (CDC) released its latest guidance on Personal Protective Equipment (PPE). On March 18, the CDC released updated guidance on strategies for optimizing the use of eye protection, isolation gowns, facemasks, and N95 respirators.
    • The CDC also updated its infection control
    • Developed new guidance on the use of respirators beyond manufacturer designated shelf life.
    • The CDC’s FAQs for health professionals.
    • The CDC’s latest guidance on Lab Biosafety Guidelines.

Other News

  • The World Health Organization (WHO) provides daily “situation” reports.
  • 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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