What Does the Government Shutdown Mean for Hospital Finances?

The dance between House Republicans and the Senate to complete a budget came to an unfruitful end last night, resulting in the first shutdown of the federal government in the past 17 years.

House Republicans made repeated attempts to defund, and then alter or delay portions of, the Patient Protection and Affordable Care Act. The Democrat-led Senate rejected the House's resolutions, and President Obama previously said he would not negotiate on altering his landmark healthcare reform law.

So what does the government shutdown mean for hospitals, health systems, physicians and other healthcare professionals that rely heavily on government-based healthcare funding? In short, not a lot — at least for now.

According to the Washington Post, about 800,000 federal workers will be furloughed due to the shutdown. However, 1.3 million federal workers considered to be "essential" will still be on the job, although they currently won't be paid.

When it comes to HHS, more than half of its staff will be on furlough. One of the most pertinent healthcare agencies for hospitals is CMS. According to the agency's contingency plan, CMS will still dish out Medicare reimbursements to healthcare providers as they are essential to the life of beneficiaries. "In the short term, the Medicare program will continue largely without disruption during a lapse in appropriations," the plan reads. In addition, much of the PPACA will still be rolled out, including the health insurance exchanges, insurance rate reviews and more. Veterans Affairs hospitals and clinics will remain fully operational as well.

HHS also said that states will still receive funding for Medicaid and the Children's Health Insurance Program today due to last year's advanced appropriations legislation.

However, some government healthcare actions will come to halt. For example, CMS will temporarily shut down its Medicare and Medicaid fraud and abuse strike force teams. Also, the agency will not conduct as many recertification and initial surveys for Medicare and Medicaid providers, which could hang up some program payments. The Health Resources and Services Administration will not make payments for the children's hospital graduate medical education program.

Other health agencies, including the Agency for Healthcare Research and Quality, Centers for Disease Control and Prevention and National Institutes of Health, will operate at a much reduced capacity. A lack of NIH funding could disproportionately affect academic medical centers and teaching hospitals, which rely on NIH as sources of revenue and research.

When the federal government shut down in 1995 and 1996, the stalemate lasted for several weeks before a budget was finally approved. Congress can still pass legislation to fund the government, with President Obama's signature, but it remains to be seen when that will occur.

More Articles on Government and Healthcare:
AHRQ, CDC, NIH Suspend Health, Quality Services as HHS Closes Due to Government Shutdown
Senate Rejects House Version of Spending Bill With PPACA Delay
Government Shutdown Imminent as Lawmakers Debate PPACA Funding

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