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News & Press: Government Affairs News

Outlook: How Would a Government Shutdown Affect You?

Friday, January 19, 2018   (0 Comments)
Posted by: Bradley Coffey, MA, AAOE Government Affairs
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Update: The Senate on Monday, January 22 voted on a funding package that would fund the federal government through February 8, 2018. The legislation fully funds the Children's Health Insurance Program (CHIP) for six years and delays unpopular taxes from the ACA.

Washington, DC - As of this writing on January 19, 2018 Congress is hurtling towards a government shutdown in which non-essential government services would be halted until Congress can reach agreement on a spending plan. This leaves healthcare in a tricky position. To many, being able to access healthcare is a necessity and on the other hand, being paid for services rendered to those insured by the government is a necessity for both short- and long-term business growth. So what happens to Medicare claims in a government shutdown? The short answer is, in the short-term nothing is likely to change.

According to the Department of Health and Human Services (HHS) contingency plan, approximately 50% of the HHS staff (approximately 40,459 employees) would be furloughed but Medicare operations would continue "largely uninterrupted". It is important to note that Medicare, as many practice administrators know, does not pay in real-time. There is a 14-day (two week) lag between claims submission and reimbursement. This is fairly good news for patients and providers provided a shut-down only lasts two weeks. If a shutdown exceeds two weeks (like the 2013 shutdown in October of that year did), providers could start to see their reimbursements delayed.

But, you may be asking, what about claims submitted before the shutdown and the end of the two week period occurs during the shutdown? Fortunately, Medicare spending is what's known as mandatory spending (the annual appropriations process, a government shutdown is a failure of that process, only affects discretionary spending). In April 2011 when a shutdown was seen as a very real possibility, HHS issued guidance stating that providers would continue to be paid on time in the short-term. In the long-term, claims may be disrupted not because the money for the program is not appropriated but because there are fewer employees at CMS that are able to process claims (in that same guidance, HHS estimated that 76% of CMS' staff would be furloughed if a shut down happened).

It may be comforting to know that during the 2013 shutdown, Medicare continued to pay physicians for services provided to Medicare beneficiaries. However, a shutdown would likely delay work on upcoming regulations such as the Medicare Physician Fee Schedule, Hospital Inpatient and Outpatient Prospective Payment System, 2019 Updates to the Quality Payment Program, and other Medicare policy programs.

AAOE will continue to update members on developments relating to any shutdown and its effects on reimbursement and/or patient care.

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