Friday night, the World’s Most Deliberative Body, failed to pass a bill – already approved by the House – to fund the federal government’s operation through February 16, 2018. As things stand, the government is “shut down” until the differences between Democrats and Republicans can be resolved.
For those expecting a repeat of the 2013 shutdown with accompanying video of veterans being turned away from Vietnam War memorial, I think you will be disappointed. Republican control of the White House means broad discretion to make a shutdown as painful or painless as politics require. The US Parks Service has already announced they will not be closing outdoor attractions on the Mall in Washington.
There are consequences to a shutdown, of course. The Anti-Deficiency Act prohibits obligating funds that exceed appropriations by Congress. However, most activities related to health care are not appropriated by Congress. Medicare and Medicaid are mandatory expenditures and they will continue to hum along as always.
The Anti-Deficiency Act also provides for an exception for expenditures related to the protection of life and property. Direct health care services delivered by the National Institutes of Health, for example, will continue.
Finally, the Department of Justice has determined that administrative activities that are “necessarily implied” for the continuation of authorized (i.e. funded) activities can also continue. For example, the Office of Medicare Hearings and Appeals will retain 559 of its 667 employees during a shutdown and continue processing Medicare claims appeals.
All HHS employees will report to work on Monday as part of an “orderly shutdown.” After that, if the standoff continues, about 40,000 will be furloughed. Agencies and offices that are largely dedicated to grant-making and are employee intensive, like the Substance Abuse and Mental Health Services Administration, will furlough most of their staff. The Indian Health Service, which provides direct health care services, will furlough only 5 percent of its workforce.
A breakdown of the shutdown’s impact by HHS agency can be found here.
A shutdown of a few days is not likely to have much of an effect on the US Medical Economy. If the impasse continues into next week, there will be some downstream implications mostly in the form of delays to:
- Release of Medicare rules
- Development of FDA policy on devices and drugs
- Approval of NIH grants
- Completion of contract negotiations like those ongoing between the VA and CERN
An extended government shutdown will, in the end, be more like a government slowdown.
Government shutdowns are always ill-advised and at this point Democrats do not appear to be getting much traction outside their base with their demand to include provisions related to the Obama-era policy known as Deferred Action for Childhood Arrivals (DACA) in the spending bill. For that reason, we expect a Continuing Resolution to be approved early in the week to fund the government through Feb. 8 or 16. Wash, rinse, repeat.
The usual Trump Tweet Caveat applies.
Call with questions. We are here 24/7/365 awaiting the next vote…at 1am Monday.
