Potential Government Shutdown: Threat Assessment Report

Healthcare Ready

Situation Overview

• There [is less than one week] until the September 30 deadline for Congress to pass 12 spending bills to avert a government shutdown.  

• There are currently two options for Congress if new appropriations bills are not enacted by October 1:

• Pass 12 appropriation bills by September 30 or the government will shut down until they are passed into law.

• Pass a short-term continuing resolution that will keep agencies operational through a specified date. 

• Every government shutdown has different impacts to federal agencies and departments however essential services remain running – such as processing Medicare claims.   

Potential Impacts to Healthcare

Potential Impacts to Centers for Medicare and Medicaid Services (CMS)

• The Medicare Program will continue to operate in the event of a government shutdown because it is paid for with mandatory funds outside of the discretionary appropriations process.*

• While Medicare will continue to process claims, most of the CMS workforce will be furloughed.

• CMS would suspend funding for healthcare fraud and abuse teams as well as conducting fewer certifications for providers. *

•  A government shutdown could also affect any Medicaid disproportionate share hospital (DSH) payments. Federal law requires that state Medicaid programs make DSH payments to qualifying hospitals. A shutdown would drastically impact those qualifying hospitals’ ability to provide health care services to their communities and ultimately affect a patient’s ability to access health care.

Potential Impacts to Health Centers and Health Centers Workforce

• The Community Health Center Fund, which provides roughly 70% of federal funding for health centers, also expires on September 30.

• Lawmakers in both the House and Senate are currently reviewing distinct bills aimed at bolstering funding for health centers and critical workforce programs.

• The Senate Health, Education, Labor and Pensions (HELP) Committee is holding a hearing on September 21 on the Bipartisan Care and Health Workforce Act.

• Anticipated disruptions in funding have the potential to affect the day-to-day operations of health centers, leading to possible immediate or long-term consequences for patient access to services. As funding sources vary by individual health center, depending on the specific health center, interruptions or reductions in funding could result in adverse effects on site operations, as well as initiatives designed to attract and retain staff. The National Association of Community Health Centers (NACHC) hosted a press briefing on potential impacts on September 18.

Potential Impacts to the Department of Health and Human Services (HHS)

• In the event of a government shutdown, FDA will continue its core functions such as responding to public health emergencies, monitoring drug shortages and emerging outbreaks, supporting medical product recalls, and other critical public health issues. 

• Additionally, the regulation of medical devices by CDRH will continue in the event of a government shutdown because it is funded through user fees.*

• HHS will continue COVID-19 activities by utilizing funding provided in the FY20 and FY21 emergency supplemental appropriations bills.

• The Administration for Strategic Preparedness and Response (ASPR) will maintain minimal readiness for all hazards which will be critical ahead of a potential tripledemic (flu, COVID-19, and RSV) this fall and winter. With drug shortages continuing to affect the nation, it is critical that all other readiness functions are in place to mitigate any surges in respiratory illnesses. 

• The National Institutes of Health (NIH) will continue COVID-19 research and clinical activities.

• While roughly 40% of HHS’ workforce would be furloughed if the government shut down, HHS will use exceptions in the Antideficiency Act (ADA) to retain staff in support of funded activities for Medicare, Medicaid, and other mandatory health program payments.

Potential Impacts to Veterans Affairs

• Most veterans and active-duty service members’ health benefits will not be affected by a government shutdown.*

• All Veterans Health Administration (VHA) facilities would remain operational during a government shutdown.   

Potential Impacts to Pandemic Preparedness

• The Pandemic and All-Hazards Preparedness Act (PAHPA) was first enacted in 2006. Last reauthorized in 2019, the legislation provides funding for a vast number of preparedness programs and initiatives related to medical counter measures; the Strategic National Stockpile (SNS); and other preparedness programs carried out at local, state, and federal levels.

• The Senate HELP Committee advanced 2333, the Pandemic and All-Hazards Preparedness and Response Act (PAHPARA) with bipartisan support in July.

• Also in July, the House Energy and Commerce Committee passed two bills along party lines R. 4421, the Preparing for All Hazards and Pathogens Reauthorization Act, and H.R. 4420, Preparedness and Response Reauthorization Act.

• Although PAHPA and its subsequent reauthorizations received unanimous bipartisan support when passed, there are notable differences among the Senate and two House versions. The potential effects on preparedness programs and initiatives due to a delay in reauthorization remain uncertain. Nevertheless, a potential decrease in funding or a prolonged delay in reauthorization could substantially impact preparedness and response programs of national significance.