Washington Watch for the Week of March 16, 2021

House to Consider Medicare Sequester, PPP Extension
The House of Representatives is planning to consider a legislative measure that would delay billions of dollars in automatic cuts to the Medicare program this week. The current moratorium on the 2% Medicare sequester expires on March 31, while the latest stimulus package triggers statutory pay-as-you-go requirements that would result in a 4%, or $36 billion, sequester to the program in early 2022. The 2010 Pay-As-You-Go (PAYGO) statute requires any addition to the federal deficit be offset by spending reductions, with the Office of Management and Budget (OMB) responsible for issuing a report at the end of the calendar year that would trigger the sequestration to mandatory programs.

Lawmakers are expected to advance the legislation (H.R. 1868), which was introduced on Friday by House Budget Chair John Yarmuth (D-Ky.), to waive and reset the PAYGO amounts and delay the 2% sequestration cuts for a period of nine months, through December 31. The House Rules Committee is scheduled to meet March 16 to set the terms for floor debate for the measure. There has historically been bipartisan support for waiving the PAYGO rules to avoid Medicare cuts, even with partisan opposition to the triggering legislation, as was the case with the GOP’s 2017 tax cut.

The House is also expected to vote this week to extend the Paycheck Protection Program (PPP) for two months beyond its current expiration on March 31. The bill (H.R. 1799) would extend the program’s funding authorization through June 30 and require the Small Business Administration (SBA) to spend the final 30 days completing applications that were submitted prior to June 1. The bill has been listed for floor consideration this week under suspension of the rules. The measure is expected to have Republican support. The budget reconciliation package signed into law on March 11 added $7.2 billion to the program, for a total lending authority of $813.7 billion. About $120 billion remained in the program as of March 7.

American Rescue Plan Act Signed into Law
The House of Representatives approved the $1.9 trillion American Rescue Plan Act (H.R. 1319) with a 220-211 vote last week, sending the measure to President Joe Biden for his signature. No Republicans supported the legislation, and Jared Golden (D-Maine) was the only Democrat to oppose it. The bill, which was previously amended by the Senate and advanced via the budget reconciliation process, restricts eligibility for the $1,400 stimulus checks and extends unemployment benefits at a lower level than that contained in the version of the bill initially passed by the House. The legislation includes $48 billion for COVID-19 testing and tracing and $7.5 billion for the Centers for Disease Control and Prevention’s (CDC) vaccine distribution efforts. It does not include a measure to increase the minimum wage, after the Senate’s parliamentarian ruled that the provision did not qualify for the fast-track budget reconciliation process, but it does include an expansion of the child tax credit and health insurance premium subsidies.

President Marks One Year of COVID With Announcements to Speed Vaccinations
President Joe Biden hosted executives from Johnson & Johnson (J&J) and Merck at the White House last week, following the announcement that the companies had reached a deal facilitated by the administration to speed production of J&J’s COVID vaccine. The agreement that will result in the production of 100 million more doses of the single dose, easily stored J&J vaccine. According to the administration, this doubling of the country’s order will help build a stockpile larger than the U.S. population, which could support the eventual vaccination of people under the age of 16 or any unexpected needs for doses as new variants of the virus emerge. The new J&J doses will be available in the second half of the year.

The President also addressed the nation for the first time since his inauguration on Thursday evening to mark the one- year anniversary of the start of the pandemic. During his speech, the President announced that he will direct states to make all U.S. adults eligible for vaccinations by May 1, and that his administration would reach its goal of 100 million shots during the first 100 days of his presidency by his 60th day in office. He also announced that the administration will start distributing vaccines to an additional 700 community health centers and will double the number of retail pharmacies receiving shots from the federal government. The administration will also double the number of mass-vaccination sites and has moved to authorize dentists, EMTs, paramedics, veterinarians, medical students, and other health professionals to administer shots through an expanded liability shield under the Public Readiness and Emergency Preparedness (PREP) Act of 2005.

The President previously said that he expects to have enough vaccine available by the end of May to vaccinate all U.S. adults, although more time will be necessary to administer the shots. The federal government plans to launch websites and a call center to help Americans locate available vaccination appointments by May 1. During his address, the President offered the Fourth of July as a goal for the nation to begin returning to normalcy.

CDC Releases Guidance for Vaccinated Individuals
The Centers for Disease Control and Prevention (CDC) has released its long-awaited guidance on how fully vaccinated individuals can safely behave. The Interim Public Health Recommendations for Fully Vaccinated People states that those who are fully vaccinated can visit with other fully vaccinated people indoors without wearing masks or physical distancing, visit with unvaccinated people from a single household who are at low risk for severe COVID-19 disease indoors without wearing masks or physical distancing, and refrain from quarantine and testing following a known exposure if they are asymptomatic. This population should continue to take precautions like wearing a mask and physical distancing when in public or when visiting with unvaccinated people who are at an increased risk for severe COVID-19 and should continue to avoid medium- and large-sized in-person gatherings.

Senate Expected to Advance HHS Nominees
The Senate voted to discharge the nomination of California Attorney General Xavier Becerra to be Secretary of Health and Human Services on Thursday by a vote of 51-48. The Senate Finance Committee deadlocked on Becerra’s nomination along party lines earlier this month, necessitating the procedural vote. Senator Susan Collins (R-Maine) joined Democrats in voting to bring the nomination for a vote. Collins stated that she received assurances from Becerra that he would work with her on drug pricing legislation. During his confirmation hearings, Republican panel members raised concerns about Becerra’s stance on abortion and his qualifications to lead the large health department.

The Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a March 17 vote on the nominations of Vivek Murthy to serve as Surgeon General and Rachel Levine to serve as Assistant Secretary of Health and Human Services. Both individuals are expected to be confirmed in the coming weeks.

House Democratic Plan to Restore Earmarks
Democrats in the House of Representatives have unveiled a plan to restore earmarks, now termed “Community Project Funding,” ending a decade-long ban on the practice. The proposal, which was released by Appropriations Chairwoman Rosa DeLauro (D-Conn.), would allow the inclusion of money in annual spending bills to benefit specific projects. The amount of money spent on earmarks would be capped at one percent of discretionary spending, lawmakers would only be permitted to submit 10 project requests, at most, along with evidence to justify their requests from their communities, and funds cannot flow to for-profit recipients. All requests would be posted online, with earmarks to be audited by a federal watchdog.

The House Transportation and Infrastructure Committee has already announced that lawmakers will be allowed to include earmarks in the next highway bill. A hearing will be held in April for panel members to discuss their policy priorities, ahead of the Sept. 30 deadline to pass surface transportation reauthorization legislation.

The Senate is still working on its own plan to revive congressionally directed spending.

Lawmakers Request Update to Ventilation Guidance
Top congressional committee leaders in the House of Representatives have sent a letter urging the Biden administration to update ventilation and respiratory protection guidance and standards to reduce aerosol transmission of COVID-19. The lawmakers noted recent findings indicating that existing guidance may not be extensive enough to protect individuals at greatest risk of exposure through aerosol transmission. The letter was sent by Education and Labor Chairman Bobby Scott (D-Va.), Appropriations Chairwoman Rosa DeLauro (D-Conn.), Energy and Commerce Chairman Frank Pallone (D-N.J.), and Select Subcommittee on the Coronavirus Chairman Jim Clyburn (D-S.C.) to the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA). The members suggest that the Defense Production Act (DPA) be invoked to address any potential shortages of respiratory protection.

President Extends COVID National Emergency
President Joe Biden has acted to extend the national emergency first declared on March 13, 2020 due to the COVID-19 pandemic and set to expire after one year. “The COVID-19 pandemic continues to cause significant risk to the public health and safety of the Nation,” the declaration states, “It is essential to continue to combat and respond to COVID-19 with the full capacity and capability of the Federal Government.” This extension, which relates to the national disaster declaration, is separate and distinct from the public health emergency declaration.

Debt Ceiling Deadline Set for Late Summer
The debt ceiling will be reinstated on Aug. 1 after a two-year suspension. Treasury officials are expected to be able to use what is known as “extraordinary measures” to push back the deadline for suspending or raising the debt limit, which must be done to avoid default on government payments and the subsequent serious economic consequences. Congressional leadership has not yet indicated how they plan to address the debt ceiling.

OSHA Releases COVID Guidance for Employers
The Occupational Safety and Health Administration (OSHA) has released updated COVID-19 guidance for employers. The guidance is intended to inform employers and employees in most workplace settings outside of health care to help identify risks of being exposed to or contracting COVID-19 at work and to help determine appropriate control measures to implement. The document, which recommends that employers provide vaccines to eligible employees, implement coronavirus prevention programs, and provide face coverings to all employees, comes in response to an executive order issued by President Joe Biden.

CMS Will Not Penalize Physicians for MIPS Performance in 2020 Due to COVID-19 Pandemic
In response to the ongoing COVID-19 public health emergency (PHE), the Centers for Medicare & Medicaid Services (CMS) will hold MIPS eligible clinicians harmless from financial penalties (up to 9%) for performance year 2020.  Instead, CMS will automatically apply the MIPS extreme and uncontrollable circumstances (EUC) policy to all eligible clinicians who do not submit any MIPS data for the 2020 performance period, resulting in a neutral payment for the 2022 payment year.  

For individuals, group practices, virtual groups, and alternative payment model entities who would like to submit data for the 2020 MIPS performance year and potentially earn a bonus but missed the submission deadline, CMS is reopening the MIPS EUC hardship exception application through March 31, 2021 to request reweighting of the MIPS performance categories. Note, groups and eligible clinicians who submit data in at least two MIPS categories will override the hardship exception and be eligible to earn a bonus from the exceptional performance bonus pool or potentially be subject to a penalty.