HHS Continues Layoffs Despite Court Order as Government Shutdown Enters Fourth Week

The U.S. Department of Health and Human Services (HHS) is proceeding with plans to lay off nearly 1,000 employees, despite a federal judge's order temporarily halting shutdown-related layoffs. This development comes as the government shutdown enters its fourth week, with negotiations between Democrats and Republicans at an impasse over healthcare subsidies.

HHS Argues Court Order Does Not Apply to Its Employees

Thomas Nagy, the HHS's head of personnel, stated in a court filing that the 982 HHS employees who received reduction-in-force (RIF) notices are not represented by the unions that filed the lawsuit seeking to halt the layoffs. As a result, Nagy argues that the temporary restraining order granted by Judge Susan Illston of the California Northern District Court does not apply to these workers.

The lawsuit, brought by the American Federation of Government Employees (AFGE) and the American Federation of State, County and Municipal Employees (AFSCME), challenged the Trump administration's decision to implement layoffs during the shutdown. Judge Illston's order described the shutdown-driven layoffs as "unprecedented in our country's history" and suggested that the administration's actions appeared politically motivated and potentially illegal.

However, Nagy's filing contends that the HHS has not issued any RIF notices implicated by the court's temporary restraining order. He noted that while the Centers for Disease Control and Prevention (CDC) previously had AFGE bargaining units, the HHS terminated their collective bargaining agreements in August.

Impact on HHS Operations and Public Health Programs

The ongoing shutdown and potential layoffs have significantly affected HHS operations. Approximately 32,000 HHS workers are currently on furlough, and the department has scaled back various activities, including:

• Halting oversight of research grants and contracts
• Pausing data collection and analysis
• Suspending responses to public requests for information

Among the affected employees are those responsible for the CDC's Morbidity and Mortality Weekly Report, staff coordinating the nation's measles response, and workers involved in Ebola outbreak response in the Democratic Republic of Congo. Epidemic intelligence service officers, who investigate disease outbreaks, were also impacted.

The Trump administration has faced criticism for targeting what it perceives as "Democrat-oriented" priorities in its layoff strategy. Since January, the HHS workforce has been reduced from approximately 82,000 to 79,700 employees through voluntary resignations and previous layoffs.

Healthcare Programs and Medicare Payments Amid Shutdown

While federal healthcare programs such as Medicare, Medicaid, and the Children's Health Insurance Program are largely unaffected by a brief shutdown due to their mandatory funding status, other areas have experienced disruptions. Medicare funding for telehealth and hospital-at-home services has been halted, and there was brief uncertainty regarding Medicare payments to physicians.

The Centers for Medicare & Medicaid Services (CMS) initially announced a pause on all Medicare payments to doctors but quickly retracted the statement, clarifying that they would continue to process and pay most claims. This reversal has somewhat alleviated concerns among healthcare providers, though uncertainty persists as the shutdown continues.

As negotiations between Democrats and Republicans remain stalled, with the Senate set to vote on the GOP's clean funding bill for the 11th time, the healthcare industry watches closely for developments that could impact both federal employees and the delivery of critical health services.