U.S. Health Care Industry To Feel Effects of Government Shutdown

The nation's health care agencies, providers and services will continue to experience a range of effects as long as the partial government shutdown -- which entered its second day on Wednesday -- continues, Modern Healthcare reports.

CMS

On Tuesday, CMS issued a notice reassuring staff and the public that Medicare's administrative contractors will continue to perform all functions related to fee-for-service claims processing and payments while the shutdown is in effect, according to Modern Healthcare (Zigmond, Modern Healthcare, 10/1).

CDC

Meanwhile, CDC said it will continue to provide "minimal support" on public health initiatives, including investigations into any outbreaks, processing lab samples and keeping a 24/7 operations center open, according to an HHS contingency staffing plan released Monday (Pittman, MedPage Today, 10/1).

However, CDC will halt its assistance programs for state and local health programs and suspend its annual seasonal influenza program because the services are funded with discretionary spending (Zigmond, Modern Healthcare, 10/1).

FDA

Although an estimated 45% of FDA employees have been furloughed during the shutdown, the agency is better positioned to weather it than many other regulatory departments, The Hill's "RegWatch" reports.

According to HHS' contingency plan, most of FDA's programs -- such as those at the Center for Tobacco Products -- are funded by user fees. The agency also has identified other functions and activities that will continue to operate, such as product approvals and formal communications processes involving drug and device safety. In addition, HHS said the agency's public health and safety efforts, including high-risk recalls, civil and criminal investigations and analysis of certain imported items, will continue.

However, the government closure will bring certain FDA activities to a halt, including most laboratory research programs, some compliance and enforcement activities and routine inspections of some industry establishments (Goad, "RegWatch," The Hill, 10/1). Some of those inspections involve food and cosmetics manufacturers, Modern Healthcare reports. In addition, the shutdown could delay FDA guidance on biologics and biosimilars, as well as social media outreach.

Health Resources and Services Administration

According to Modern Healthcare, more than half of employees at the Health Resources and Services Administration -- which administers the 340B federal drug discount program -- are being furloughed during the shutdown. Although the program's database will remain online, the agency has delayed a quarterly registration period for providers and pharmacies, which was scheduled to start on Oct. 1.

This means that there will be fewer or no 340B audits and that drug pricing adjustments could be affected, Modern Healthcare reports. In addition, some providers could be overpaying for some medications and manufacturers could experience revenue losses (Lee, Modern Healthcare, 10/1).

During the shutdown, HRSA will also halt payments for the Children's Hospitals Graduate Medical Education Program, according to HHS (MedPage Today, 10/1).

NIH

Meanwhile, NIH's biomedical and clinical research initiatives are among the federal programs that are expected to take a hit as they rely on discretionary spending funds, according to Modern Healthcare (Zigmond, Modern Healthcare, 10/1). HHS' plan states that NIH will stop accepting new patients for its clinical trials -- unless they are deemed as "medically necessary" -- and cease its implementation of new trial protocols but that it will offer "minimal support" for existing protocols (MedPage Today, 10/1).

Department of Veterans Affairs

On Tuesday, the Department of Veterans Affairs said it expects the government shutdown to hamper the progress the agency has made in reducing the backlog of veterans' disability claims, because it no longer has the funds to pay its claims processors for overtime work, the Washington Post's "Federal Eye" reports.

In a tweet on Tuesday, Tommy Sowers -- VA's assistant secretary for public and intergovernmental affairs -- acknowledged the shutdown's effect on the agency's progress. "B/c of #shutdown @VAVetBenefits overtime ends today. After decreasing backlog by 30% we project it will start increasing," he wrote (Vogel, "Federal Eye," Washington Post, 10/1).