October 3, 2013
By Julie Barnes and Thomas Bartrum*
For the first time since 1995, the federal government shut down on Tuesday after Congress failed to pass appropriations legislation to fund federal agencies and set spending priorities. Short of adopting a formal budget, Congress had the option to pass a continuing resolution (CR) to keep the government funded by extending last year's budget. In the absence of new legislation, and in the aftermath of the Senate's rejection of a House plan that would have provided federal funding for a few more months while delaying implementation of key provisions of the Affordable Care Act (ACA), the federal government officially closed in the early morning of October 1, when the prior CR, passed last March, expired.
The Democrat-controlled Senate roundly rejected the House's proposed changes to the ACA, which included, among others: a one-year delay of major provisions; repealing the medical-device tax; allowing businesses to decline to offer abortion coverage; and eliminating health care subsidies for congressional members and staff. The Senate insisted instead on a clean CR, i.e., one that would fund the government at current spending levels, including the ACA. Now, after the first two days of the federal government shutdown, there is no sign of moving past the political stalemate in Congress. The average length of past government shutdowns is 6.4 days.
In anticipation of such an event, on September 30 the Congressional Research Service (CRS) issued a report titled "Affordable Care Act (ACA) and the Appropriations Process: FAQs Regarding Potential Legislative Changes and Effects of a Government Shutdown," detailing the expected impact of a government shutdown on the implementation of the ACA. CRS concludes, in general, that ACA implementation will continue in large part despite a lapse in annual appropriations. Not only is funding available from sources other than annual discretionary appropriations, but in some instances agencies may continue to perform certain types of activities as excepted by the Antideficiency Act, which generally prohibits continued government operations in the absence of appropriations.
Based on the U.S. Department of Health & Human Services (HHS) Contingency Staffing Plan for Operations in the Absence of Enacted Annual Appropriations, it appears that CMS will be relying solely on the exception to the Antideficiency Act permitting government action authorized by law, i.e., other funding sources, as opposed to the protection of human life or property exception being utilized by other HHS agencies, e.g., the Indian Health Service and Centers for Disease Control and Prevention.
Sources within CMS advise us that the overwhelming majority of CMS personnel at the regional office level are on furlough after being given four hours to shut down. CMS sent out a notice on Tuesday stating that that contractors should operate as usual, but given the lack of personnel at the regional office level, one can expect a backlog of enrollment, certification, and survey issues even after the shutdown ends, which will only be exacerbated the longer the shutdown continues. Sources advise that fee-based surveys such as CLIA will continue to be processed, and state surveying agencies can continue to perform complaint-based surveys where authorized by state law; however, where federal issues are raised on a survey done under state law auspices, reimbursement by the federal government would be delayed. Contractors seem to be operating as usual, and at least one contractor states that is has not been advised to change or stop any enrollment or payment processing, which is consistent with Tuesday's CMS notice.
The question everyone would like answered is how long the shutdown will last. Consensus seems to be that resolution is unlikely this week. If the impasse on the continuing resolution does not end within a week, some sources in Washington, DC believe it will be rolled up into a potential settlement related to lifting the debt ceiling in two weeks. Regardless of the timing of the resolution, the result is sure: we should all--attorneys, providers, suppliers, vendors, and others--expect additional delay in processes deemed vital by the health care community.
*We would like to thank Julie Barnes (Washington, DC), and Thomas E. Bartrum (Baker Donelson Bearman Caldwell & Berkowitz PC, Nashville, TN), for providing this email alert.