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From Health Law Daily, October 1, 2013

Appropriations standoff in Congress leads to furloughs, reduced operations by federal healthcare agencies

By Paul Clark

A majority of HHS employees will be furloughed as a result of the impasse in Congress regarding passage of a continuing resolution (CR) to fund federal government operations until December 15, 2013. According to an HHS contingency staffing plan, 52 percent of HHS employees will be furloughed. This includes 65 percent of CMS employees and 45 percent of FDA employees. HHS had 78,198 employees as of October 1, 2013; a total of 40,512 will be furloughed. CMS had 5,994 employees; 3,881 will be furloughed. The FDA had 14,779 employees; 6,620 will be furloughed.

Activities relating to the new health insurance marketplaces instituted under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), and which open today, October 1, are unaffected by the stand-off in Congress.

Appropriations provided under the Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) expired at midnight September 30. The Senate rejected a House version of the CR that would have provided funding for government operations through December 15, but would have delayed the individual mandate to purchase health insurance under PPACA until October 1, 2014. The House-passed CR also amended the Internal Revenue Code to repeal the 2.3 percent excise tax on medical devices that was instituted under PPACA.

CMS operations. The HHS contingency plan notes that CMS activities related to implementation of PPACA are largely unaffected by Congress’ failure to agree on a continuing resolution. In particular, CMS will still provide support to state-based marketplaces in determining which people signing up for health insurance are eligible for Medicaid. CMS will continue providing insurance rate reviews for plans offered in the new marketplaces. The Medicare program will continue uninterrupted and both Medicaid and the Children’s Health Insurance Program are fully funded.

CMS also clarified that during the time that the partial government shutdown is in effect, Medicare Administrative Contractors will continue to perform all functions related to Medicare fee-for-service claims processing and payment.

On the other hand funding has stopped for CMS’ health care fraud and abuse strike force teams. In addition, CMS will reduce the number of recertification and initial surveys for Medicare and Medicaid providers.

FDA operations. The FDA will continue limited activities related to its user fee-funded programs including the activities in the Center for Tobacco Products. The agency also will continue maintaining critical consumer protection to handle emergencies, high-risk recalls, civil and criminal investigations, import entry review, and other critical public health issues. The FDA will retain sufficient staff to inspect regulated products and manufacturers, conduct sample analysis on products and review imports offered for entry into the U.S.

The FDA will cease safety activities such as routine establishment inspections, some compliance and enforcement activities, monitoring of imports, notification programs, and the majority of the laboratory research necessary to inform public health decision-making.

Military health care. The Defense Health Agency said that “we will likely see some impact on the delivery of health care services within our military hospitals and clinics. Inpatient, acute and emergency outpatient care in our medical and dental facilities will continue, as will private sector care under TRICARE.” Other impacts. In its contingency plan the Department of Justice noted that Health Care Fraud and Abuse Control programs will continue because they are “funded with permanent indefinite appropriations or other funding not subject to annual appropriation.” The Federal Register published a notice on Tuesday noting that during the partial government shutdown it will only publish notices and regulations relating to “imminent threats to the safety of human life or protection of property,” but leaving it up to individual agencies to determine if documents they want published in the Federal Register relate to emergency activities. The Office of the Federal Register further explained that “FR readers might not immediately see the effect of a government shutdown because of the lead time needed to publish our material.”

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