What the Shutdown Means to Healthcare

Mandatory vs. discretionary spending

• Medicare and Medicaid are mandatory (or “entitlement”) programs to a large extent. That means their funding is not entirely reliant on the annual appropriations process.
• Because they are mandatory, benefits under those programs generally continue, even during a “lapse in appropriations” or shutdown.

Antideficiency Act “exceptions”

Under the Antideficiency Act (which prohibits federal agencies from incurring obligations without appropriations), there are certain exceptions that permit continued activity even during a funding lapse. Among those are functions to protect life and property, and certain functions tied to the Constitution (e.g. the President, Congress). Some parts of administering health programs may be deemed essential under that rubric (though many administrative/support functions might be suspended).

Operational constraints / impacts

While benefits generally continue, some supporting functions can be delayed, limited, or suspended, depending on available appropriations, staff, or discretionary authority. For example:

• New enrollments or eligibility determinations might face delays if staff are furloughed.
• Some outreach, oversight, audits, or administrative tasks funded through discretionary appropriations may be curtailed.
• Expanded services that require new or supplemental funding (e.g. certain telehealth programs or expansions) might be put on pause if their authorization depends on budgeted discretionary funding.

What you can count on (in a shutdown)

• Beneficiaries of Medicare and Medicaid should continue to receive their benefits (i.e. payments for covered services) under existing eligibility.

• Providers should continue to submit claims and be reimbursed under those programs.

• State Medicaid programs continue as well — states will still make payments to providers under Medicaid (provided they have appropriated state funds, and the federal share is legally obligated)

What is less certain / potential risks

• New enrollments or eligibility changes may be delayed or suspended if staff are furloughed or because the administrative apparatus is limited.

• Some parts of program enforcement, audits, oversight, and monitoring (which often rely on discretionary funding) may be scaled back.

• Certain expansions, new pilot programs, or enhancements that require fresh appropriations could be delayed.

• If the shutdown drags on, states or providers might hit cash-flow problems (especially if they rely on federal matching funds) or uncertainty in federal reimbursements for certain services.

Bottom line

• You should keep submitting Medicare & Medicaid claims; the legal authority and funding mechanisms to pay them remain in force during a shutdown. Expect slower human responses, but not a legal halt in benefit payments.

• State Directed Payments (SDPs):  All processing of SDP applications will stop, but not the timetables for filing.  Keep filing them.

• Medicare Appeals and Wage Index reclasses:  You must continue to submit them, but the timetable for responses from CMS will be impacted.  Filers are now getting email notices the government offices processing these filings is currently closed.

• Your Medicare MAC should be open:  MACs are funded by CMS but MAC employees are not federal workers.  Check you MACs web pages for updates.

Medicare & Medicaid statutory architecture

Many of the payment and eligibility obligations in Medicare and Medicaid are mandated in Title XVIII and Title XIX of the Social Security Act (codified to 42 U.S.C. §§ 1395 et seq. and §§ 1396 et seq.). These create mandatory obligations (not discretionary) so long as the statutory and trust-fund framework supports them.