Shutdown: HHS Contingency Plans If Negotiations Fail

Following the release of Congress' end-of-year continuing resolution package unveiled on December 17, President-elect Donald Trump made clear his opposition, according to news coverage-a move that both places key aging services policy wins at risk and also raises the specter of a government shutdown. The latter could take place if a deal is not reached and the current funding agreement expires at midnight Friday, December 20.

Contingency Plans

Several months ago, the Department of Health and Human Services (HHS) released an updated contingency plan to prepare for a potential lapse in government funding in federal fiscal year 2025, which began on October 1, 2024.

What Happens During A Shutdown

During a shutdown, non-essential services and discretionary programs funded by Congress through the annual appropriations process must cease operations until new funding legislation is passed and signed into law. However, essential services and mandatory spending programs, including Medicare, Medicaid, and Social Security, generally continue their operations with some interruptions to program support functions.

According to HHS, a funding lapse would result in the retention of 55% of HHS workers, or 49,625 employees, and the furlough of 45% of HHS workers, or 40,887 employees. These averages will vary across various operating divisions and offices. Below is a summary of programs run by the Centers for Medicare and Medicaid Services (CMS) that will be impacted, as well as those that will not.

Summary of Programs that Will Continue

• Medicare: According to CMS's contingency plans, the Medicare Program will continue during a lapse in appropriations. Other non-discretionary activities including Health Care Fraud and Abuse Control and Center for Medicare & Medicaid Innovation activities will also continue.
• Medicaid: CMS notes that it will have sufficient funding for Medicaid to fund the first quarter of FY 2025, based on the advance appropriation provided for in the FY 2024 appropriation. However, CMS will have sufficient funding in subsequent fiscal quarters only for regular Medicaid grant awards made within 30 days of the initiation of a lapse in appropriations.
• CHIP: CMS will maintain the staff necessary to make payments to eligible states for the Children's Health Insurance Program (CHIP).

Summary of Programs that Will Be Suspended

• Health Care Facility Survey and Certification: CMS survey and certification activities would focus on complaint investigations alleging the most serious incidents of resident or patient harm. Other survey activities, such as recertification surveys, initial surveys, and less serious complaint investigations, and all surveys by federal staff would be suspended.
• Policy and Rule Making: CMS payment rule development and other policy decisions would depend on the funding source and duration of a lapse in appropriation. With limited staff to review and provide operational support, delays in rule-making and other policy development would be expected.
• Contract Oversight: Under a lapse, CMS would be largely unable to provide oversight to many of its major contractors, including the Medicare Administrative Contractors, the Medicare Call Center, and other information technology (IT) contractors.
• Outreach and Education: Many national and community outreach and education activities performed by CMS would cease or slow down during a lapse. This could include local and national engagement activities, mailings, and other beneficiary facing activities.
• Beneficiary Casework: CMS beneficiary casework services would largely suspend during a lapse in appropriations.

All HHS contingency plan information can be found here, including impacts on various HHS operating divisions such as the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), and Health Resources Services Administration (HRSA).

LeadingAge will continue engaging with Congress and the Administration to bring the most up-to-date information available.