CHA News

Essential Information for Hospitals as Federal Shutdown Looms

This post has been archived and contains information that may be out of date.

Barring any last-minute actions, Congress appears unable to prevent a shutdown of the federal government on Sept. 30.  

Like prior federal government shutdowns, Medicare, Medicaid, and Children’s Health Insurance Program payments to providers and Social Security checks to beneficiaries — among other essential services — will continue. The Centers for Medicare & Medicaid Services’ (CMS) contingency staffing plan indicates that it has sufficient Medicaid funding for the first quarter of federal fiscal year 2024. If a continuing resolution to extend agency funding is not passed before Oct. 1, CMS notes that approximately 49% of its staff will be retained to conduct essential activities like making payments to providers, conducting federally facilitated exchange operations, and continuing Center for Medicare and Medicaid Innovation pilots. However, it is likely the shutdown could delay approval of the new Medi-Cal Hospital Fee Program.

Additionally, with congressional attention focused on keeping the government open (or reopening it), the passage of several legislative items that are important to hospitals could also be delayed. These include:  

  • Medicaid DSH Cuts Delay: While a delay has broad congressional support, approximately $8 billion nationally in Medicaid disproportionate share hospital (DSH) cuts required by the Affordable Care Act are scheduled to take effect on Oct. 1. CHA notes that a temporary delay of the DSH cuts is included in the current draft of the Senate’s seven-week continuing resolution.  
  • FEMA Public Assistance Funding: In early September, the Federal Emergency Management Agency (FEMA) issued guidance that until additional disaster relief funds were appropriated, there would be no new obligations of public assistance that are not essential for lifesaving and life-sustaining activities. The White House has requested $16 billion in additional disaster relief funding, however, the Senate’s continuing resolution only includes $6 billion. 
  • Community Health Center Funding: Expires on Oct. 1. While the committees of jurisdiction are working on legislation, there are disagreements over funding levels and offsets. The Health Resources and Services Administration  has indicated that in the absence of a 2024 budget or a continuing resolution, it will continue operations with carry-over funding.    
  • Pandemic All-Hazards Preparedness Act: This also expires on Oct. 1.   

During the budget discussions, CHA will continue to educate the California delegation about our key priorities, which include delaying the harmful Medicaid DSH cuts, reauthorizing FEMA funding, and preventing the further expansion of site-neutral payments. CHA will continue to provide updates on the federal budget negotiations via CHA News and issue federal alerts as needed.