Photo: Jeremy Walke/Getty Images
The government shut down at 12:01 a.m. Wednesday, with much of the partisan stalemate focused on healthcare.
Republicans had a measure to keep the government running for the next seven weeks as already approved by the GOP-held House, according to The Hill. But Democrats were adamant that cuts to Medicaid be restored and that Affordable Care Act premium subsidies be continued past their expiration date at the end of the year.
WHAT THIS MEANS FOR HOSPITALS
Medicare and Medicaid reimbursement will continue, but Medicaid payments are dependent upon federal appropriation.
The two programs differ in their funding mechanisms. Medicare payments to hospitals are mandatory and are not subject to the annual appropriations. Therefore, they are unaffected by a government shutdown, the American Hospital Association told its members.
However, Medicaid is dependent on federal appropriations, and it does not have a trust fund. The Centers for Medicare and Medicaid Services has confirmed there is sufficient funding for Medicaid through the first quarter of 2026, the AHA said.
After that, there would be a funding lapse without a federal appropriation. Continuation of payments is not a certainty if the funding lapse were to continue for more than a calendar quarter, the AHA said.
Other programs critical to hospitals are telehealth and virtual care, especially as the latter pertains to acute hospital care at home programs built by health systems during the COVID-19 pandemic.
“The AHA urges Congress to work together on a bipartisan solution to fund the government. Several critical healthcare programs expire on October 1, including telehealth and hospital-at-home waivers, both of which enable patients to receive high quality care in patient-centered settings,” said an American Hospital Association spokesperson.
A Sept. 15 AHA letter to congressional leaders outlined the programs that needed to be addressed by Oct. 1.
Among other requests was an extension of the enhanced premium tax credits that help consumers who don't have health insurance through an employer or the government to afford coverage through the ACA marketplace.
President Donald Trump has said Democrats want the subsidies to provide healthcare to “illegal aliens.”
Without the premium tax credits, millions of people would be at risk of losing their coverage if they could not afford a 75% increase in their out-of-pocket premiums, according to the AHA.
Rural states are projected to experience a 30% decrease in marketplace coverage and a nearly 40% increase in their uninsured populations, the AHA said.
“This loss of coverage would put considerable stress on hospitals and health systems, which will experience more uncompensated care and bad debt,” AHA President and CEO Richard J. Pollack said in the letter. “There will also be an impact on the entire community, even those with coverage, because of an influx of uninsured patients into emergency departments causing longer waits, stress on the whole healthcare system and the inability to get the care they need.”
TELEHEALTH AND VIRTUAL CARE
As of Wednesday, provider payments for telehealth and virtual care ended, according to Kyle Zebley, senior vice president, Public Policy for the American Telemedicine Association.
The federal government expanded the use of telehealth and virtual care during the COVID-19 pandemic, and when the public health emergency ended, Congress continued their use through extensions. The ATA has long advocated for permanency for the programs.
Telehealth physician appointments have become the norm. Virtual care has allowed health systems to build hospital care at home programs that free up bed capacity and give patients the option to receive acute level care at home.
The shutdown is "devastating for telehealth,” Zebley said, “and for an overburdened health system.”
Prior to the pandemic, telehealth was limited by federal law, mostly to rural areas.
The shutdown does not automatically revert telehealth to those rural limitations, though providers must adhere to state laws. The real issue, Zebley said, is about coverage and reimbursement.
Health systems are dealing with the end of telehealth and virtual health Medicare payment in one of three ways, Zebley said. Some will stop it all together. Another group will continue telehealth and virtual services with the clear hope that Congress will retroactively pay them. And a third group will have the financial resources to ride out the shutdown until they start getting paid again.
“We cannot survive and thrive as a telehealth community,” Zebley said, and “Medicare beneficiaries can’t benefit until there is permanency or until there is the longest extension possible. Nobody is better positioned to make that happen than President Trump.”
Dr. Chris Gallagher, founder and chief strategy officer of Access TeleCare, a provider of acute specialty telemedicine, said: “Beyond greatly improving access to care, telemedicine significantly increases health equity. To provide an idea of the scope of telehealth’s impact, more than 84% of the patients that we provide care for through our hospital and clinic partnerships are medically underserved and vulnerable. Many of these patients receiving acute specialty telemedicine live in rural areas and designated health professional shortage areas.”
THE LARGER TREND
Due to the shutdown, thousands of federal workers now face unpaid leave. Trump has reportedly threatened to make furloughs permanent in mass layoffs.
As it stands, more than 150,000 federal employees will leave the U.S. government payroll this week after accepting buyouts, according to Reuters.
Workers who opted into a deferred exit program were kept on the payroll through September.
The buyouts were not part of the Department of Government Efficiency’s efforts to trim the workforce, but employees were given financial incentives with threats of dismissal if they declined the offer, the Reuters report said.
Agencies ordered to drastically slash their workforces over the last eight months are now reportedly hiring back hundreds of workers, according to NPR.
Email the writer: SMorse@himss.org