Government Shutdown Hits SSDI Recipients and Healthcare Providers

This is day 27 of the partial government shutdown.

The ongoing government shutdown will likely affect Social Security Disability (SSDI) recipients who are applying for Medicare. By law, SSDI recipients must wait two years from the date of their receipt of disability benefits to qualify for Medicare. Delays in decisions caused by the shutdown could have a significant impact on these individuals. The President has vowed that he “won’t budge an inch” and is ready for the shutdown to “last for years.”

SSDI is available to Americans who have worked and paid into Social Security for a required number of quarters and face a long-term disability that limits their ability to work. After an application is approved, recipients get between $700 and $1,700 per month in disability insurance payments. The application process is long, and status is often only granted after an appeal. 

The good news is that during the shutdown, people already receiving SSDI payments will continue to receive those payments. The bad news is that for people waiting on hearings and processing of their SSDI applications may see a huge slowdown. People waiting to get their Medicare benefits after being on SSDI for over two years may also have to wait to get their Medicare cards. 

While judges are still working without pay, the administrative staff that assists with processing SSDI requests and hearings have been furloughed. 

Some states give SSDI recipients medical assistance. Some people on SSDI qualify for Medicaid. If SSDI recipients do not receive medical assistance, medical expenses could possibly wipe out all of their SSDI benefits.

In a double whammy, under the new financial rules governing revenue recognition, healthcare entities can’t recognize revenue for patients that qualify for SSDI Medicare but have had the application process stopped by the furlough of federal workers.

How does this work in the real world? Let’s say a patient is admitted to a hospital. They have been on SSDI for over two years and are waiting for their Medicare card. The hospital treats the patient waiting to bill Medicare for the stay. As a result of the shutdown, the Medicare card has not been issued. Since they can’t determine who is the contracted party or the amount that will be realized at the end of the period, for financial statement purposes, they can’t recognize revenue for the patient. The timing of the shutdown couldn’t be worse: it is hitting at year’s end for all healthcare providers.

New accounting rules require that healthcare entities “identify the contract(s) with a customer.” This means that for Medicaid pending and now SSDI Medicare pending patients, healthcare entities can’t recognize revenue until the patient is actually enrolled in Medicaid or Medicare.

Disabled Americans that may have used SSDI payments (yet been slowed by the shutdown) to pay medical expenses will most likely end up as charity cases for hospitals and healthcare providers. And again, SSDI recipients that should get their Medicare cards may not get them during the shutdown. Will healthcare providers be able to retroactively bill Medicare when the Medicare benefits are finally issued? It is currently up for debate.

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