iProtean—How the Government Shutdown Affects Health Services

This week’s newsletter comes a few days earlier than usual because we want our subscribers to have a full picture of the impact of the government shutdown on public health. Thanks to the American Health Lawyers Association, we can present a summary.


The shutdown began on October 1, resulting from the Senate’s vote to reject a House of Representatives plan that would have kept the government funded for several more months but delayed implementation of key portions of the Affordable Care Act (ACA) for one year.


Many federal employees across all healthcare sectors have been furloughed. The Department of Health & Human Services implemented its contingency staffing plan that furloughs more than half of its employees. Some agency programs continue operations but only if they either do not rely on annual appropriations or they involve the safety of human life or the protection of property.


Medicare and Medicaid program reimbursement will proceed but a government shutdown for any period of time beyond three or four weeks could impede certain critical administrative functions such as Medicare claims processing, and therefore impact providers’ pocketbooks. Likewise, while substantial ACA implementation will continue, long-term furloughs could affect certain components of the law (such as the exchanges) because they depend on governmental employees to help run the IT component, among other aspects of the program. Thus, the magnitude of the shutdown’s impact will depend on how long it lasts.


The following services remain open:


  • Funding for Medicaid and the Children’s Health Insurance Program will continue uninterrupted because funding has already been set aside for these programs;
  • Funding for Medicare will continue uninterrupted but only in the short term. If the political impasse stretches beyond several weeks, the program could be disrupted by the reduction in HHS staff;
  • CMS will continue to implement the ACA, “including coordination between Medicaid and the Marketplace, as well as insurance rate reviews, and assessment of a portion of insurance premiums that are used on medical services;”
  • State and federal health insurance exchange programs will continue as planned; however, because IT underpins the exchanges, it isn’t clear how well the exchanges will function on the internet (CMS has not publicly stated whether the IT contracts are already issued and funded);
  • The National Institutes of Health (NIH) will continue to provide patient care for current NIH Clinical Center patients (the NIH Clinical Center is the agency’s research hospital);
  • The U.S. Food and Drug Administration (FDA) is operating only for “vital activities” such as high-risk recalls and other “critical public health issues;”
  • The Substance Abuse and Mental Health Services Administration will continue programs such as the Suicide Prevention Lifeline using the balance of available grants; and
  • Other programs supported through mandatory funding such as the Centers for Disease Control and Prevention (CDC) Global HIV/AIDS Program will continue.


However, several programs important to public health will be disrupted if a congressional compromise cannot soon be reached. For example:

  • Outside of matters related to “imminent threats of the safety of human life or protection of property,” CMS, FDA, NIH and other federal agencies will not publish regulations or other guidance during the shutdown;
  • CMS will not fund task forces that work to prevent healthcare fraud and abuse, and will scale back on Medicare provider audits;
  • The CDC seasonal influenza program, which tracks flu outbreaks and certain infectious diseases will stop;
  • No action will be taken on any grants related to medical research, improvement of the healthcare system and monitoring substance abuse programs;
  • No new patients will be admitted to the NIH Clinical Center. NIH-funded researchers may continue to work for as long as their money holds out but additional funds will not be released during the shutdown; and
  • FDA will not be able to support much of its food-safety activities such as routine inspections and public notification programs. FDA’s laboratory research and some compliance and enforcement activities have been suspended.


This summary was prepared by Nili S. Yolin (Mintz Levin Cohn Ferris Glovsky & Popeo PC, New York, NY). iProtean thanks AHLA’s Regulation, Accreditation, and Payment Practice Group leadership and AHLA for this alert. Sources include the Office of Legal Counsel, Department of Justice and DHHS Contingency Staffing Plan.   


iProtean subscribers, we will be reporting on the speakers’ presentations from our symposium in upcoming issues of this newsletter. Also, please look for your new course, Making Difficult Decisions About Services & Programs, Part One in your library. This advanced Finance course features Marian Jennings, Nathan Kaufman and Lisa Goldstein.



For a complete list of iProtean courses, click here.

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