More than two weeks into the shutdown, no appropriations deal or continuing resolution (CR) has passed Congress to unlock funding. The Senate has repeatedly failed to advance the House’s funding proposals, falling short of the 60 votes needed to proceed. Meanwhile, the House earlier passed a CR that would have extended funding through November 21st and preserved some health-related provisions (such as telehealth and hospital-at-home), but the Senate rejected that version. This is largely due to that bill not including an extension of the enhanced premium subsidies currently provided to thousands of individuals in the Affordable Care Act’s Marketplaces. As of now, no agreement has been made and we don’t know when the shutdown will end.  

Federal agencies have begun layoffs in programs deemed non-essential. The Centers for Disease Control and Prevention (CDC) has reportedly completed mass terminations across divisions including disease surveillance and lab operations. The White House has also indicated that it will unveil a list of “Democrat programs” slated for permanent cuts if the impasse continues. Meanwhile, President Trump has reallocated certain resources (such as customs revenues or unspent defense funds) to keep military pay despite the funding lapse.  

An updated staffing summary confirms that Medicare, Medicaid and fraud/abuse operations will continue under a reduced workforce. However, many supportive and discretionary activities like routine surveys and federal rulemaking are stalled or operating with barebones staffing. The Centers for Medicare and Medicaid Services (CMS) memo QSO-26-01-ALL remains in effect, guiding which survey and certification tasks may proceed under this extended shutdown.  

For Medicare, CMS will continue to process and pay held claims in a timely manner with the exception of select claims for services impacted by the expired provisions (e.g., telehealth services under the COVID-19 flexibilities). Although the telehealth coverage rules for Medicare have changed, CMS states that providers may choose to still provide the services even though there is no guarantee that the claims will get retroactively paid. AHPA leaders are actively reaching out to our health system’s Congressional delegation advocating for retroactive coverage. Here is a CMS fact-sheet on telehealth that got updated on Wednesday, October 15. We are hearing that when a CR is passed, the telehealth flexibilities and the hospital-at-home model will be extended.  

Medicare Dependent Hospitals (MDH) and Low Volume Hospitals (LVH) are also impacted by the shutdown. While Medicare claims are unaffected, the lapse in funding means that these hospitals won’t receive the added payments until Congress acts. In the past, Congress has authorized retroactive coverage and claims have been reprocessed. We expect the same to happen as there is bipartisan support for these programs.  

For Medicaid, CMS’ contingency plan indicates that Medicaid will be funded for at least the first quarter of FY 26 via advance appropriations. However, on October 1st, $8 billion reductions in Medicaid Disproportionate Share Hospital (DSH) payments went into effect. Here are the Medicaid DSH allotments that each state receives from the federal government. The impact on hospitals will depend on how states handle the payment reductions; these cuts have always been delayed in the past so there is no precedent. AHPA continues to closely monitor this.  

The Rural Health Transformation Fund tasked with providing additional funding to states remains active but the review of state applications may be delayed if the shutdown persists. The $50 billion program was launched in September 2025 and state applications are due November 5, 2025. CMS hasn’t released any new communications impacting this program since the shutdown. Details about the program can be found here.  

What’s Next?  

The biggest barrier remains in the Senate. Republicans want a “clean CR” (funding extension without policy riders), while Democrats want to embed certain policy priorities — especially the extension of the ACA enhanced premium tax subsidies — before agreeing to reopen the government. These subsidies, originally expanded under the American Rescue Plan and later extended through the Inflation Reduction Act, significantly reduce monthly premiums for individuals purchasing coverage through the ACA Marketplaces. They are currently set to expire at the end of this year, which would result in higher costs for millions of enrollees if not renewed. 

Senate floor rules require 60 votes to advance most spending measures, meaning bipartisan votes are needed. Compounding the stalemate, some in leadership are reportedly preparing further layoffs and cuts, raising questions about how long contingency operations can sustain vital functions. For now, the path forward is uncertain and federal health programs continue to operate in a state of prolonged ambiguity.