Medical Society of Virginia

Federal government shutdown - Potential impact on health programs

3 October 2013

The federal government shutdown at 12:00 a.m. on Oct. 1 for the first time in 17 years, after Congress failed to reach an agreement on federal spending bills for fiscal 2014. Many government programs are being forced to stop operating while the shutdown continues. Of note to the health care community, the Department of Health and Human Services (HHS) will furlough 52 percent of its employees.

Click here to view a memorandum that was released last week by HHS that outlines the department’s contingency staffing and operating plans for the shutdown. The following HHS activities will continue during the federal government shutdown:

  • The Medicare program will experience little disruption, and claims will be paid. Other activities conducted by the Centers for Medicare and Medicaid Services (CMS), including health care fraud and abuse control, the Center for Medicare and Medicaid Innovation, and activities related to implementation of the Affordable Care Act, will continue. States will continue to receive funding for Medicaid and the Children’s Health Insurance Program.
  • Medicare Administrative Contractors will continue to perform all functions related to Medicare fee-for-service claims processing and payment.
  • The National Institutes of Health will continue patient care for current patients and have minimal support for ongoing protocols.
  • The Food and Drug Administration will continue limited activities related to its user fee funded programs, as well as select vital activities.
  • The Indian Health Service will continue providing direct clinical health care services and referrals.

Among the activities that will not continue:

  • CMS will not continue discretionary funding for health care fraud and abuse strike force teams, and fewer recertification and initial surveys for Medicare and Medicaid providers will be completed.
  • FDA will be unable to support most of its food safety, nutrition, and cosmetics activities.
  • With limited exceptions, NIH will not admit new patients or initiate new protocols, nor will it take any actions on grant applications or awards.
  • The Centers for Disease Control and Prevention will be unable to support the annual seasonal influenza program.
  • The Health Resources and Services Administration will be unable to make payments under the Children’s Hospital GME Program and Vaccine Injury Compensation Claims.

In Virginia, the federal government shutdown is not expected to interrupt specific state services but Gov. Bob McDonnell’s administration is still bracing for the impact it will have on the state budget. He said that as many as one-third of the commonwealth’s 172,000 federal employees could be furloughed, which would impact individual tax revenues. If the shutdown continues, McDonnell has said he has several options to help replace the loss of federal funds, including a state-created Federal Action Contingency Fund and an economic contingency fund. Virginia Secretary of Health and Human Resources William A. Hazel, M.D. said that the federal government shutdown should not impact bigger programs like Medicare, Medicaid and other state programs related to health care if it does not run on for too long; however, there is no way to tell how long it will continue.

MSV is watching news coverage of the federal shutdown closely and will send out communications as information becomes available.