Congress has a little over two weeks until federal funding expires. At this point, passing the bundle of 12 appropriation bills or an omnibus package by the September 30th deadline is unlikely. While a Continuing Resolution (CR) that funds the government for a short period of time is possible, the divided Congress is careening towards the possibility of a “funding gap” and a government shutdown. Government agencies and programs that depend on discretionary funding through annual appropriations acts (e.g., funding for community health centers) would be shuttered, but those based on mandatory spending, like Medicaid and CHIP, would remain funded. Keep reading to learn more about the potential funding gap and how health care spending could be impacted.

Medicare, Medicaid, and Other Federal Spending

Medicare:

  • Funding for Medicare benefits is considered mandatory spending and is not subject to the annual congressional appropriations process. If a shutdown happens, CMS will direct the Medicare Administrative Contractors (MACs) to continue to process all Medicare Fee-for-Service (FFS) claims and payments.

Medicaid:

  • Although most mandatory spending programs bypass the annual appropriations process and automatically receive funding each year, Medicaid is funded in the annual appropriations acts. However, Congress provided advance appropriations for Medicaid in the Consolidation Appropriations Act, 2023 (CAA) for the first quarter of FY 2024. As a result, the Medicaid program will have funds to operate for the first quarter of FY 2024 even if the government shuts down by September 30th.
  • An $8 billion cut to Medicaid Disproportionate Share Hospital (DSH) payments is also set to take effect unless Congress passes a short-term CR to fund the government.

Federal Grants:

  • Mandatory budget authority grants include social services block grants, affordable insurance exchange grants, grants to states for Medicaid, payments to states for child and family support enforcement, and Temporary Assistance for Needy Families (TANF). While funding for these grant programs is controlled by mandatory spending, funding for each program’s administration staff may be provided through annual appropriations – this could be disrupted if the government shuts down.
  • Grants controlled by discretionary budget authority are awarded after annual appropriations acts. A funding gap could delay the administration of these programs depending on the grant award period, grant extensions, and the amount and type of state and local contributions provided. Discretionary HHS grants that could be impacted include those awarded by Health Resources and Services (HRSA) and the Substance Abuse and Mental Health Services Administration (SAMHSA).

Other Health Programs: Additional programs that must be funded and are in Congress’ “to-do” list, include:

  • Legislation to reauthorize and fund community health centers and the National Health Service Corps.
  • The Pandemic and All-Hazards Preparedness Act (PAHPA), which aims to help the U.S. detect and counter infectious disease outbreaks.
  • The SUPPORT for Patients and Communities Act, which funds treatment and education programs to combat the opioid epidemic.

Appropriations Bills and the House Agenda

To date, the House has only passed one of the 12 appropriation bills – the Military Construction and Veterans Affairs appropriations. Forming consensus on the remaining measures before the deadline seems unlikely as a new impeachment inquiry into President Biden is occupying much of the chamber’s time.  Click here to get-real time updates on the status of each appropriations bill.