Government shutdown would spare Penn

Despite Penn’s reliance on federal government funding, the University is unlikely to be heavily affected by the stalemate in Congress that could cause a government shutdown.

Congress must pass a spending bill by Oct. 1, or else the federal government will be forced to cease all but “essential” services. House Republicans passed a resolution that would allow the government to stay open, but it contained a provision that would strike funding from the 2010 health care reform law — known as Obamacare — that the Democrat-controlled Senate will almost certainly reject.

Regardless of whether the chambers reach an agreement before the deadline, money from the government will still flow into Penn’s coffers in the short term. In particular, Medicare and Medicaid — big sources of revenue for the health system — are deemed essential services.

“We believe that the Medicare and Medicaid payments we receive will continue in the event of a short-term shutdown,” Susan Phillips,spokesperson for Penn Medicine, said in an email. Medicare and Medicaid are not funded by the bill that is bouncing around in Congress, so hospital reimbursements would continue whether or not the bill is passed before the Tuesday deadline.

However, should the gridlock remain, government health programs could get backed up. “If the shutdown extends into weeks, payments could be delayed or other administrative problems could come into play,” Phillips said.

According to tax filings, Penn received almost $375 million in Medicare payments — an average of over a million per day — in 2011, the latest year for which documents are available.

On the research side, Penn receives millions of dollars a year in National Institutes of Health and National Science Foundation support — but those, too, would be safe in the event of a shutdown.

“It is unlikely that a short-term government shutdown will have a major impact on Penn,” Associate Vice President for Federal Affairs Bill Andresensaid in a statement. “Of greater concern is the impact that a long-term sequestration will have on Penn, its students and faculty,” he added, referring to the spending cuts that slashed the federal research budget earlier this year.

The Senate plans to vote on the House spending bill at 12:30 p.m. Friday, whereit is expected to pass a modified version that leaves funding for the health care law intact.

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