In observance of Sukkot, there will be no Digest next week.

Shutdown Effect:

With the government shut down, agencies posted their “contingency” plans for the shutdown, essentially a guide to what they can, and can’t do, during the shutdown. While the focus here is specifically on agencies relevant to us, this is a good resource to find the plans for most federal agencies. This is also a solid overview of the many agencies and how they’re affected.  One important note is that while payments to providers will likely continue, agencies will be running with reduced staff, and those staff won’t be getting paid. Expect delays, even from those agencies that have staff that are required to continue working.  

• CMS:

  • General survey enforcement will be suspended, although complaint surveys will be investigated. Initial licensure surveys will also be suspended.

  • CMS full contingency plan is here. The QSO with specifics is here (PDF).

  • Medicare telehealth coverage lapsed with the government shutdown.  

• VA benefits to providers will be paid.

• HUD’s will not process (PDF) new underwriting, but will continue to service existing loans.

• HHS’ contingency plan is here.   

WHITE HOUSE:

The White House focused this week on new tariffs on lumber, a new guidance from the Council on Environmental Quality to streamline federal permitting, and politically navigating the ongoing government shutdown. 2 items of interest:

• Pfizer became the first major pharmaceutical company to agree to implement “Most Favored Nation” pricing for drugs in America, following the Executive Order from earlier this year. For now, the announcement remains light on specifics, but the company elaborated (slightly) in a formal press release. The Wall Street Journal has a few other details. 

• The President issued an EO to explore new ways to harness AI to tackle pediatric cancer.  It’s yet another sign of the Administration’s intent to double down on AI and deploy it throughout the federal government and beyond.

CONGRESS:

Welp, welcome to a government shutdown. Following Congress’ inability to find a path forward, the federal government officially shut down on Wednesday morning. With yet another vote failing on Friday, and no votes currently scheduled, the earliest it would end is Monday.  Both sides appear to be dug in, as Democrats continue to believe this is their best chance to find healthcare reform. With White House’s Office of Management and Budget (OMB) Director Russ Vought using the shutdown as cover to conduct mass layoffs, the Administration canceling energy products, mainly in blue states, and Senate Majority Leader John Thune not getting involved in the Administration’s activities, there’s not a lot of optimism for a quick resolution. Elsewhere in the political world:

• The Administration continues to push hard for more redistricting efforts across the country, even threatening primary challenges to Governors that don’t play ball. 

• AI regulation efforts at the federal level are all over the place, but Senator Ted Cruz’s “framework” seems to be the lead in the clubhouse at the moment. 

• Yet another Congressman is leaving to run for state office, with Arizona Congressman David Schweikert announcing his candidacy for Governor.  It opens a prime pickup spot for Dems in 2026.

• Beyond the broader societal implications of a government shutdown, it’s sometimes easy to forget that that shutdowns have a real impact on those who work for the government and keep things running.

• In the past, we’ve discussed some of the challenges that the GOP have had with their candidates. It looks like Senate Majority Leader Thune is working hard to make sure the new crop of candidates avoid those issues.

AGENCIES:

Before the shutdown, CMS sent out a QSO outlining the new parameters of the Civil Monetary Penalty Reinvestment program. It’s available here (PDF).  They’ve also standardized the application. The applications still go first to the state agency, but from there, they go to a central office in Baltimore. 

They also released the final guidance for the third round of the Medicare Drug Price Negotiation program. The fact sheet is here (PDF). The guidance and ancillary documents can be found at the 2028 central resource page. 

A judge ruled in favor of MA plans against a Biden-era rule that implemented a new payment methodology for audit recoveries.

FROM THE NOTEBOOK:

• There’s a strong push underway to exempt healthcare workers from the new $100,000 H1-B fee, something that even the White House says they’re considering. 

• After vetoing a similar effort last year, Governor Gavin Newsom signed California’s expansive AI bill into law. Here’s a good summary of the bill. 

• Several more insurers are pulling their MA plans in yet another state, highlighting the ongoing uncertainty in the insurance market. 

• North Carolina’s Medicaid cuts went into effect on October 1^st, following the Legislature’s inability to come to an agreement.