Healthcare: Nine Ways a Federal Slowdown Hits the Little Guy

THIS WAS AN OLD BLOG POST FROM THE LAST SET OF FEDERAL SHUTDOWNS. SOMEHOW SEEMS RELEVANT IN 2018-19, SO I’M REPOSTING. “THE MORE THINGS CHANGE, THE MORE THEY STAY THE SAME.”

 

Nine Ways a Federal Slowdown Hits the Little Guy

The press seems drunk with stories outlining the risks of the Sequester, the Debt Ceiling, and the Fiscal Cliff. The investment world has its own views, and Congress is shouting out its views on both sides of the aisle.

I’m surprised, though, how little is being said about the Little Guy in government. I’m pretty convinced a federal shutdown won’t cause a nuclear meltdown, but even a small delay in an Agency’s funding could hit healthcare regulation very hard.

Here are nine little ways that funding delays could hit the healthcare community.

1. Travel Budgets: Goodbye, enforcement!

It seems silly, but an Agency without appropriations generally can’t send its employees on travel. This means you won’t get FDA to certify your new plant to open. You won’t get certain Medicare fraud units into your hospital. You can’t get your NIH research partner to visit you.

This isn’t a big policy issue, but a piece of bureaucracy for the little guys in government. Most travel near the start of a fiscal year is “forward-funded,” to avoid this very problem. Once the risk of shutdown is known, though, travel is tough for even the most critical programs.

You might not enjoy hosting FDA inspectors, but if they can’t certify your new blockbuster’s plant you may feel otherwise.

2. Contractor Spending

Not every federal program is run by feds alone. Contractors perform key tasks at Medicare including getting claims paid on time. Their contracts with CMS might be well funded, but if the government shuts down, contracts funded with general appropriations (not the trust funds) are frozen, too.

Doctors and hospitals like their claims paid, and most of us want fraud and abuse shut down.

3. Sequesters

Various flavors of sequester are still a risk to government, but the sequester could hit Medicare providers particularly hard. Certain cancer drugs under Part B, for example, are paid at 106% of ASP levels. Apply a sequester and, presto, doctors feel they’re losing money.

This is just a little bureaucratic change in payment, almost certain to be fixed retroactively. It’s the little issues, though, that sometimes cause the most damage.

When doctors gets mad enough to leave Medicare, it’s hard to get them back. We might need to find Mama a new doctor.

4. Salary

In the past, any  federal shutdown was both brief and reimbursed to employees. This time, says the Washington Post, this might not be true. If civil servants start losing real money due to the political posing in Congress, they may start seeing red.

Even more to the point, feds who aren’t paid are prohibited from showing up voluntarily. In the past, firefighters have been kept from showing up at forest fires. Do you think a new drug reviewer would be treated any better?

Without salary, there’s no one around for emergencies, including your own healthcare issues.

5. Clinical care

Superstorm Sandy closed some hospitals but most found a way to stay open. A federal care facility like a VA hospital or even Walter Reed (where Congress still gets care) has a much harder time staying open.

I’m guessing that  VA nursing homes could survive hurricanes but not even a brief shutdown.

6. Collaborative research

At NIH and countless other federal research sites, little petri dishes sit with someone’s experiments. Dogs and other research animals (not chimps anymore, of course) sit in cages waiting for someone to check on their progress. Sometimes the researchers can break into their own labs, sometimes not.

Many federal research projects are in collaboration with private industry (CRADAs). If civil servants aren’t allowed into the labs, the petri dishes fail and the investment in collaborative research is gone.

The bargain of getting the feds to co-sponsor your project doesn’t look so good if the lab fails.

7. Claims payment, claims data, claims analysis

CMS doesn’t run its own system to get the claims checks out the door. Nor does it massage the claims data so we might tell if we’re seeing fewer strokes or more. The Agency certainly doesn’t do its “big data” analysis to see how we might improve clinical care.

Shut down the government, and we shut down data analysis for both claims payments and program integrity (fraud and abuse) purposes. Ouch.

8. Clarifying regulations

No one seems in favor of more pages of federal regulations, but we’re at a point in health reform (ACA, Obamacare) where a few answers might be a very fine idea. The rollout of ACOs, the sweeteners based on quality and satisfaction, and even the groundrules for FDA’s biosimilars reviews could all use a little clarification. Without a budget, there’s not a Federal Register.

Inquiring minds might want to know how agencies are approaching healthcare regulation these days, but with a budget showdown this guidance isn’t happening.

9. Safety net subsidies

Let’s not focus exclusively on regulated industries that might suffer in the bottom line. There are people in real life who are counting on help. Premium subsidies that can’t pass through the exchanges. Social security deductions (unaffected) that can’t be forwarded to Medicare healthplans (potentially affected).

Of all the areas where little guys get creamed in a government slowdown, healthcare has got to be one of the most painful.