The federal shutdown will mean another setback for a beleaguered group: D.C. medical providers, particularly those serving low-income residents.
The federal government shutdown means payments related to publicly funded health programs will cease until further notice, city health care finance officials said Thursday. That includes payments made directly to health providers, as well as the massive “capitated” payments made to the managed-care organizations that handle most city Medicaid enrollees.
Providers and managed-care organizations who serve residents enrolled in Medicaid or the locally funded D.C. Healthcare Alliance were set to receive checks Friday for services already rendered. Those checks — totaling $89.2 million — are now on hold, said Health Care Finance Director Wayne Turnage, and will remain on hold until the shutdown breaks.
Pedro Ribeiro, a spokesman for Mayor Vincent C. Gray, said the payments have been placed on hold pursuant to legal advice from Attorney General Irvin B. Nathan, Chief Financial Officer Natwar M. Gandhi and the federal government. Turnage said the city is in a legal catch-22 where it is allowed to draw federal Medicaid funds, which generally cover 70 percent of claims, but it can’t use them to reimburse the Contingency Reserve Fund the city is relying on during the federal shutdown.
The city is telling providers to continue submitting their claims as normal and to expect them to be paid once Congress approves further city spending. What was not immediately clear Thursday was whether the managed-care organizations would in turn halt their payments to providers given the city’s halt on capitation payments.
Turnage said Thursday he does not think the MCOs would immediately halt provider payments, given that the Friday check was meant to cover October claims: “We hope and we would expect they are not using October payments to pay September’s bills,” he said.
The payment freeze comes during a year when city health providers serving city residents reliant on public health care programs have already undergone significant strife. The collapse last year of Chartered Health Plan, what had been the city’s largest MCO, left providers unpaid for months this year for $56 million worth of services delivered.
The good news for providers, such as it is, is that the shutdown will not affect the settlement of those outstanding claims. A $30 million grant program established to make Chartered’s medical creditors whole will continue operating as usual ahead of a Oct. 15 deadline for claims submissions, officials said.