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Hospitals in rural and underserved areas could lose out on billions of dollars in federal funding if the government shutdown drags on.

Why it matters: Many hospitals already run on tight margins and are bracing for fallout from Medicaid cuts and other changes in the One Big Beautiful Bill Act.

The big picture: The immediate concern is health policies that expired when government funding lapsed at midnight Tuesday. Health providers and their lobbyists expect Congress will make providers whole in an eventual funding deal and reimburse claims made during the shutdown.

• But that's not a given. And uncertainty about how long the shutdown will go on is leaving some of the most financially vulnerable hospitals in limbo.
• "There's just that underlying fear of, oh my gosh, what if they can't come together on any agreement to open the government again, and we all get looped into it," said Kelly Lavin Delmore, health policy adviser and chair of government relations at Hooper Lundy Bookman.

State of play: Safety-net hospitals face an $8 billion cut to Medicaid add-on payments in the absence of a government funding package.

• The cuts to so-called disproportionate share hospital payments originate from the Affordable Care Act.
• Congress has postponed the pay reductions more than a dozen times, but the most recent delay expired on Tuesday and Congress hasn't signaled if or when it will step in.

Additionally, two long-running programs that give pay bumps to rural hospitals expired yesterday.

• One program adjusts Medicare payment upward for rural hospitals that discharge relatively few patients.
• The other gives increased reimbursement rates to rural hospitals that have at least 60% of patients on Medicare.
• They were designed to keep care available in communities that might otherwise not be able to support a hospital.

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The shutdown could also create administrative headaches — and potential safety vulnerabilities — for health providers and for patients.

The big picture: More than 40% of HHS employees are on furlough until Congress can pass a government funding deal.

• The nearly 32,500 staff put on unpaid leave could permanently lose their jobs if President Trump follows through on threats to fire those deemed nonessential in a funding lapse.

State of play: Many HHS functions ground to a halt yesterday, including recertification of health care facilities, the mailing out of Medicare cards and other patient engagement, and administration of the vaccine injury compensation program, according to a shutdown contingency plan.

• Medicare coverage of expanded telehealth services and at-home hospital care has already stopped.
• Providers and patients may have trouble getting in touch with program administrators and other officials to answer questions during the shutdown.
• "In past shutdowns, we've come across things where you didn't really expect individuals to not be there when you needed them," said Delmore of Hooper Lundy Bookman.

Essential functions will continue, including the processing of Medicare claims and maintaining "minimal readiness" for crises like pandemic flu and natural disasters, according to HHS.

• The administration also said it has enough funding to pay Medicaid claims through the first quarter of the new fiscal year, though payments beyond that aren't guaranteed.

Zoom in: Efforts to guard the nation's cybersecurity infrastructure, a growing concern in health care, could also lag in a long shutdown.

• The Cybersecurity and Infrastructure Security Agency — a key coordinating agency that sends out timely advisories for cyber threats — estimated only about a third of its workers would be retained during a shutdown.
• What's more, a law that offered key protections to companies sharing information about cybersecurity threats with other companies and the government lapsed yesterday, The Hill reported.

Tell Congress: Protect Access to 24/7 Care — because when the doors close, it is too late.

More than 300 hospitals are now at risk of closure, threatening access to critical care. We’re here to heal, but we need your help to stay here.

Learn more.

The adults likeliest to lose Medicaid coverage from new work requirements tend to be sicker and may be juggling multiple prescription drugs for chronic and function-limiting illnesses, a new study found.

Why it matters: It's the latest evidence to suggest that the work requirements in the GOP budget law will weigh heaviest on those in poorer health, though many may be eligible for state-by-state exemptions.

• About 5 million adult, nondisabled enrollees are projected to lose their coverage by 2034 due to rules requiring them to work or volunteer 80 hours a month.

What they found: Researchers writing in JAMA Network found 41% of those beneficiaries at risk of disenrollment because of the work requirements had three or more chronic conditions.

• 12% were taking at least five prescription drugs.
• More than 20% had abnormal levels of lipids in the bloodstream, obesity, hypertension, urinary incontinence, depression or arthritis, with greater prevalences among those age 50 to 64.

The bottom line: These people could suffer worsening health if they're unable to document clinical conditions for an exemption from work requirements and wind up being disenrolled from the program.