COVID-19 and Pharmacies: Latest Legal Developments

An overview of the most recent legal developments related to COVID-19 that are relevant to pharmacies.

Except for the 1917 influenza pandemic, what our country is currently experiencing is unprecedented. There is no playbook on how to respond to the coronavirus disease 2019 (COVID-19) pandemic and the law is frantically trying to catch up with events unfolding on the ground. This article discusses the most recent legal developments related to COVID-19 that are relevant to pharmacies.


CARES Act Provider Relief Fund

As part of the CARES Act, Congress established a $100 billion Provider Relief Fund. On April 10, 2020, the Department of Health and Human Services (HHS) announced immediate payments to Medicare providers from this fund. HHS has made it clear that these funds are payments—not loans—and do not need to be repaid by the providers receiving them.

Providers eligible to receive a portion of these payments include all facilities and providers that billed Medicare on a fee-for-service basis in 2019. For larger groups, payments will be made to the central office, according to that respective billing organization’s TIN.

HHS has announced a number of restrictions on the use of these funds. Three restrictions of note are:

  • Providers must agree to not seek out-of-pocket payment (due to being out-of-network) from a COVID-19 patient that are greater than what patients would have paid if they were receiving care from an in-network provider.
  • Providers receiving greater than $150,000 total in funds will be required to provide quarterly reports regarding the use of such funds.
  • Within 30 days of receipt of a payment under this program, providers must accept the terms and conditions of the program via an online portal on the HHS website at If any provider is unwilling or unable to accept the terms and conditions, it should contact HHS and return any funds within 30 days. An analysis of these terms and conditions will also be included in the whitepaper referenced above.

Key facts for providers to know:

  • Payments will be administered by UnitedHealthcare Group in partnership with HHS.
  • Automated payments will be direct deposited into the provider’s bank account on file with UnitedHealthcare Group or CMS.
  • Payments will come via Optum Bank and carry the description “HHS Payment.”
  • Providers should complete the attestation within 30 days of receipt of payment.
  • Payments began on April 10, 2020, but are scheduled to occur over a period of several weeks.

Payments from this fund are different from the CMS Accelerated and Advanced Payment Program and the Paycheck Protection Program. This is a cash infusion intended to serve as a temporary stopgap for providers suffering financially due to COVID-19. These grants are not a loan or advance and are not required to be repaid unless a provider fails to adhere to the terms and conditions or is required to provide reporting and does not do so.

Approximately $70 billion of the Provider Relief Fund has not been distributed. HHS expects to use the remaining funds to make targeted distributions to providers in areas particularly impacted by COVID-19; rural providers; providers with lower shares of Medicare reimbursement or that predominantly service the Medicaid population; and providers treating the uninsured.

CARES Act Programs for Small Businesses

The CARES Act also provides for loan programs to support small businesses, which are in addition to other SBA 7(a) loan programs. The primary loan program is the Paycheck Protection Program. This program provides forgivable loans to small businesses for funds intended to cover payroll, rent/mortgage payments, and utilities for a period of 8 weeks.

No collateral or personal guarantees are required, and the maximum loan amount is the lesser of $10 million or 2.5 times the employer’s previous 12-month average of the allowed expenses. Note that as of April 16, 2020, the SBA has announced that the Paycheck Protection Program loan amounts have been exhausted. However, Congress is currently attempting to negotiate additional funding for this program or the funding of new programs to address small businesses that did not receive funding under this program.


The Clinical Laboratory Improvement Amendments of 1988 (CLIA) requires laboratories to meet standardized certification parameters in order to perform tests on human specimens. However, if the test can be performed with a “minimal level of complexity and low risk of erroneous results,” an exception can be granted to perform the testing in a non-laboratory setting (eg, a pharmacy or clinic).

Those excepted tests are known as CLIA-waived tests. Before a pharmacy or clinic can perform point-of-care testing (POCT), that provider must obtain a CLIA Certificate of Waiver or Certificate of Compliance from its state CMS office. Alternatively, a pharmacy or clinic can collect and send specimens to a reference lab for testing without being required to have a CLIA certificate.

Specimen Gathering

For a pharmacy engaged only in specimen gathering for testing that will occur at a CLIA-certified laboratory, there is generally no requirement that the pharmacy hold a CLIA Certificate of Waiver. However, the FDA recommends that pharmacies participating in public testing for COVID-19 communicate with local and state public health staff to determine which persons meet the criteria for testing as well as the procedures for collecting, storing, and shipping specimens.

Pharmacies should also consult with the laboratories that will be conducting the testing to determine any additional requirement for proper specimen gathering. Many state health departments have specific requirements regarding pre-approval for submissions to certain laboratories; testing criteria; specimen types; specimen collection and handling; specimen shipping; and results reporting for public health laboratories. Additionally, private CLIA-certified laboratories may have similar requirements that the pharmacy will need to review with that particular lab prior to specimen gathering.


For pharmacies that hold a CLIA Certificate of Waiver or are planning to obtain certification, POCT is an option. POCT can be conducted entirely within the clinic, pharmacy, or even the parking lot of a mobile drive-through testing site.

Many companies are rolling out POCT, and the FDA is authorizing their immediate use under its power to issue an Emergency Use Authorization (EUA). All FDA-approved tests under an EUA for COVID-19 use at the point-of-care are CLIA-waived.

Current POCT technology for COVID-19 requires a proprietary piece of equipment set with 1-time use cartridges with all the necessary testing chemicals. Results typically come back in less than an hour.

State Laws

In addition to federal statutory and regulatory compliance, pharmacies must also confirm that POCT is permitted under their specific state’s laws and regulations. Some states, such as California, Colorado, Georgia, New Jersey, North Dakota, Pennsylvania, and Washington, have regulations in their pharmacy practice acts regulating POCT. Pharmacies considering POCT should consult with their state board of pharmacy to identify the specific regulations and requirements in their state. Pharmacies may also consider seeking waivers from their state boards of pharmacy and boards of health to allow for expanded in-pharmacy collection and testing during the COVID-19 outbreak.

Personal Protective Equipment (PPE)

Pharmacy staff conducting COVID-19 specimen gathering and/or POCT should comply with FDA and CDC recommendations regarding the use of PPE. The CDC recommends that health care personnel who are performing nasopharyngeal swabs on a known or suspected COVID-19 patient wear an N95 or higher-level mask (or a facemask if an N95 or equivalent mask is not readily available), eye protection, gloves, and a gown.

If N95 masks are not available, the CDC has approved the use of KN95 as a “suitable alternative.” Also, the CDC has permitted multiple other types of foreign-sourced masks that are the equivalent of N95 masks when local supplies are unavailable.

When supplies of N95 are scarce, the CDC allows the re-use of N95 masks by health care personnel for multiple encounters with different patients. However, the N95 masks need to be removed after each encounter. N95 masks and other disposable similar products should not be shared between multiple health care personnel. Also, at this time, the CDC is allowing the use of expired N95 masks for care of patients with COVID-19.

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or


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