How a U.S. default would impact health care

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Today’s edition: Indiana’s medical licensing board is disciplining a doctor for discussing the case of a 10-year-old Ohio rape victim with a reporter. Over 70 House Democrats voted for a divisive bill to permanently place fentanyl copycats in a category reserved for the most dangerous drugs. But first … 

Medicare and Medicaid payments would be disrupted if the debt ceiling is breached

There’s still no final deal on raising the nation’s borrowing limit. And that has some health-care CEOs nervous. 

Key negotiators are getting closer to securing an agreement before the government runs out of money as the nation lurches closer to an unprecedented default, The Post’s Rachel Siegel and Jeff Stein report this morning.

But time is running short. Treasury Secretary Janet Yellen has said the government may be unable to cover all of its payment obligations as soon as June 1, which is known as the “X-date.” 

With the clock ticking, we’re taking a look this morning at what a default would mean for the nation’s health-care system. 

The gist: The federal government would likely stop sending certain Medicare reimbursements to health providers and funds to state Medicaid programs. But the worst-case scenarios would probably only arise if the default lasts for weeks or months, rather than a few hours or days.

The Post’s Rachel Siegel:

First, let’s be up front: This has never happened before. So that makes it virtually impossible to game out exactly what will happen if the debt ceiling is breached, experts admit.

  • “This is the time to be able to step back and recognize that, since we’ve never been here before, we don’t know exactly how all this would play out,” said G. William Hoagland, a senior vice president at the Bipartisan Policy Center and a former Senate Budget Committee staffer. “But it cannot be good for our delivery of health-care services for needy Americans and for the elderly.” 

But what’s the actual deadline? The exact date for a potential default isn’t certain. The Bipartisan Policy Center’s debt ceiling estimates are watched closely, and the influential think tank estimated Tuesday that the country is at an “elevated risk” of running out of money between June 2 and June 13 if the debt limit isn’t raised.

One more date to keep an eye on is June 15. That’s when an influx of quarterly tax payments are due, which could help the Treasury “muddle through the remainder of June” and pay the government’s bills on time if it hasn’t already run out of reserves, according to Moody’s Analytics. 

White House and Republican negotiators are still working to hammer out the details of a deal with the goal of completing legislative text by Sunday night, our pals at The Early 202 report this morning. But that timeline could always slip, and obstacles are ahead.

If the United States falls behind on its financial obligations, it would disrupt Medicare and Medicaid payments. 

Medicare: In the short term, a default would prevent providers from receiving Medicare reimbursements. Moody’s Analytics says a short-term breach would still roil financial markets, yet some experts say the health-care impact may not be hugely adverse for some facilities if the default is brief.

Rural hospitals would likely be hardest hit since many are already struggling financially and it could make it difficult for facilities to keep up with their overhead costs. Medical groups would also likely feel the squeeze because they typically don’t carry large reserves forward each year, according to Anders Gilberg, a senior vice president at the Medical Group Management Association.

Medicaid: If the Treasury runs out of reserves, the government would no longer be able to pay federal funds to state Medicaid programs. 

Immediately, governors would need to determine if they’re able to shift around state funds to fill the gap, said Kate McEvoy, the executive director of the National Association of Medicaid Directors. She expressed doubt that states could move around enough cash to fully make up for the loss of the federal dollars.

These are some of the biggest expenses the country wouldn’t be able to pay if the Treasury runs out of reserves beginning June 1:

The real impact on the health system would come during a prolonged, weeks- or months-long default. That would lead to a risky scenario where some providers second-guess whether to even treat Medicare and Medicaid patients at all. 

“This would just be another straw on the camel’s back in terms of building upon other frustrations that health-care providers have had with these two major federal health-care entitlement programs,” such as low reimbursement rates, said Bernard Yaros, an assistant director at Moody’s Analytics. 

The Centers for Medicare and Medicaid Services hasn’t issued guidance to providers and others about what a default would look like, several lobbyists and officials from trade groups said. But that wasn’t a particular surprise, some added, because they say doing so could signal that a breach could happen.

  • In a statement, an agency spokesperson said that “while the precise impact on CMS’s programs depends on many uncertain factors, it is clear that if the federal government is prevented from making good on its promises, there would be significant consequences for Medicaid, Medicare, and the Affordable Care Act Marketplaces.”

Indiana disciplines doctor in 10-year-old rape victim’s abortion

Breaking last night: Indiana’s medical licensing board is disciplining Caitlin Bernard, an OB/GYN who made headlines last year for performing an abortion for a 10-year-old Ohio rape victim, our colleagues Kim Bellware and Dan Rosenzweig-Ziff report. 

After a roughly 14-hour hearing Thursday, the board decided Bernard broke patient privacy laws by telling an Indianapolis Star reporter about the patient’s care. The seven-member board of governor appointees gave the doctor a letter of reprimand and ordered her to pay a $3,000 fine for violating ethical standards and state laws by discussing the case with a reporter.

Bernard’s lawyers argued she didn’t run afoul of privacy laws, discussing the case in a general and “deidentified” manner that’s typical for doctors. On the other side, Cory Voight, an attorney for the state Republican attorney general’s office, framed Bernard’s action as undermining trust in medical professionals.

Over 70 House Democrats back GOP bill to crack down on fentany copycats

The House passed a Republican-led bill yesterday to permanently classify fentanyl-related substances as Schedule I narcotics under the Controlled Substances Act — a category reserved for the most dangerous drugs. 

The HALT Fentanyl Act passed 289-133 with support from 74 Democrats, many of whom are considered moderate or represent swing districts that could respond negatively to a vote against a bill aimed at curbing the availability of fentanyl analogues.

The measure was met with opposition by 132 House Democrats, including some prominent lawmakers in the party who cited concerns that the legislation would further entrench mandatory minimum sentences and lead to over-incarceration. Those concerns were echoed by more than 150 public health, criminal justice and civil rights organizations, who urged lawmakers to reject the legislation.   

President Biden’s recent nod of support for two of the bill’s key provisions seemed to give cover for vulnerable House Democrats to vote for the measure. It remains unclear how the legislation will fare in the Democratic-controlled Senate.

Rep. Cathy McMorris Rodgers (R-Wash.), co-sponsor of the bill:

Rep. Frank Pallone Jr. (D-N.J.), who voted against the legislation:

👀 All eyes on the fight over South Carolina’s new abortion ban

On tap today: A South Carolina judge will consider a request to temporarily block the state’s new abortion ban while a legal challenge against it works its way through the courts. 

The state’s Republican Gov. Henry McMaster signed the ban into law yesterday, which prohibits abortions after fetal cardiac activity is detected. Doctors who violate it would lose their license and face potential civil lawsuits, felony charges, a fine of up to $10,000 and two years in jail.

The legislation took effect immediately — and a legal battle is already underway. Abortion providers, including Planned Parenthood South Atlantic, filed a lawsuit yesterday challenging the ban’s legality under the state constitution’s privacy protections.

  • Plaintiffs in the case are asking Judge Clifton Newman to swiftly block the law, saying it “flies in the face” of a state Supreme Court decision earlier this year that struck down similar restrictions passed in 2021. 

The bigger picture: The new ban ends an access point for women to get abortions in the South since the Supreme Court overturned Roe v. Wade. Until yesterday, the procedure was legal until 22 weeks of pregnancy in South Carolina, as Republicans struggled for months to reach a consensus on new restrictions on abortion. 

Planned Parenthood South Atlantic:

New this a.m.: Fifty-eight percent of Americans disapprove of the Supreme Court’s job performance generally, and most don’t trust the court to make decisions about reproductive and sexual health, according to a survey from KFF that comes nearly a year after the justices struck down Roe v. Wade.

The survey also gauged the public’s views on mifepristone, a key abortion pill that’s at the center of a high-stakes legal battle brought by antiabortion groups seeking to revoke the Food and Drug Administration’s decades-old approval of the drug. Roughly 6 in 10 surveyed said it would be inappropriate for a court to overturn the FDA’s approval of a medication, including most Democrats and Independents. Republicans, however, were practically evenly divided, the poll found. 

What is long covid? For the first time, a new study defines it.

Researchers have identified a dozen symptoms that best define long covid based on a government-funded study made up of nearly 10,000 participants, The Post’s Amanda Morris reports, citing findings published in JAMA

Loss of smell or taste, chronic cough, brain fog and fatigue are among the 12 symptoms that are the most distinctive to long covid. Researchers cautioned that the findings are preliminary, and it’s too soon to use the symptom list to determine eligibility benefits.

Why it matters: Experts say research from the National Institutes of Health’s four-year, $1.15 billion RECOVER initiative could help standardize the definition of long covid and impact how the condition is diagnosed and studied. 

  • The Food and Drug Administration fully approved Pfizer’s antiviral medication Paxlovid for the treatment of mild to moderate covid in adults at risk of severe illness, the agency announced yesterday. 
  • Twenty-five House Democrats are pressing the federal health department for information on the steps it’s taking to remedy reports of alleged labor exploitation and abuse of migrant children after they’ve been released from the agency’s custody, according to a letter sent yesterday to HHS Secretary Xavier Becerra
  • Neuralink, Elon Musk’s brain-implant company, said last night that it has regulatory approval to conduct the first clinical trial of its experimental device in humans, The Post’s Daniel Gilbert and Faiz Siddiqui write. The FDA and the company didn’t respond to a request for comment.

Miles-long trains are blocking first responders when every minute counts (By Andrea Salcedo, Luz Lazo and Lee Powell | The Washington Post)

With Fat Joe concerts and Super Bowl ads, a cadre of billionaires is mounting an unorthodox campaign against hospitals (By Rachel Cohrs | Stat )

CDC reports second death linked to surgery in Mexico (By Sabrina Malhi | The Washington Post)

Thanks for reading! See y’all next week.

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