The federal government shut down on October 1, 2025, after lawmakers failed to reach a spending agreement. While Medicare and Medicaid are considered mandatory programs and will continue to operate, the lapse in appropriations will impact provider operations, particularly telehealth claims, the hospital-at-home program and supplemental payments. We don’t know how long the shutdown will last; AHPA leaders will continue to engage in advocacy efforts to address our health system priorities and ensure continuity of care.  

Telehealth Flexibilities 

With the telehealth flexibilities coming to an end on September 30th, CMS has directed all Medicare Administrative Contractors (MACs) to hold for 10 days all telehealth claims. This standard practice prevents having to reprocess large volumes of claims should Congress allow retroactive coverage. Providers can continue to submit telehealth claims but payments will not be released until the hold is lifted. All the telehealth flexibilities can be found here. AHPA and other trade organizations are advocating for retroactive coverage should the shutdown last longer than 10 days.   

Hospital-at-Home Program 

This waiver, which allows certain patients to receive inpatient-level care in the home setting, also expired. CMS has confirmed that patients must be either discharged or returned to the hospital by September 30th.  

Medicaid Disproportionate Share Hospital (DSH) 

Medicaid DSH cuts of $8 billion for FY 2025 officially took effect October 1st, though states may phase in reductions at their discretion. Historically, payments were restored retroactively once a shutdown ended. 

Medicare Dependent Hospital and Low Volume Hospital Programs 

These Medicare rural hospital “extenders” expired on September 30th. Historically, CMS has retroactively reprocessed claims when Congress reinstates these provisions. 

CMS Operations 

With CMS devoting most of its limited shutdown staff to essential payment functions, oversight activities and policy guidance will be largely suspended. Hospitals cannot expect clarifications, appeals processing or expedited regulatory relief until funding is restored. Additionally, HHS contingency planning signals that roughly 41% of its workforce is furloughed.  

What’s Next? 

The Senate needs 60 votes to pass any funding resolution. The negotiations include debate about extending the ACA-enhanced premium tax credits, which expire at year’s end without congressional action, and addressing Medicaid cuts included in the July spending bill. While not directly tied to provider reimbursement, these subsidies underpin insurance coverage for millions of Marketplace enrollees.