Oct. 3, 2025

What the Government Shutdown Means for Health Care

With Congress failing to reach agreement on spending authorization by the Oct. 1 deadline, the federal government is currently shuttered. While many functions of the federal government have ceased operations until Congress is able to pass legislation to fund the government, work that is deemed "essential" like Medicare and Medicaid will continue to operate with some caveats.

In follow-up to information that was shared with all WSMA members via email earlier this week, we want to provide you with the latest on impacts you and your practice may see:

CMS and HHS operations during a shutdown

• The Medicare program is operational, and the Centers for Medicare and Medicaid Services will have enough to fund Medicaid through the first quarter of FY 2026, according to its shutdown plan. The agency will also retain essential staff to process Children's Health Insurance Program payments to eligible states.
• On Oct. 1, CMS released additional guidance, Update on Medicare Operations: Telehealth, Claims Processing, and Medicare Administrative Contractors During the Shutdown.
• More than half of CMS staff continue working, but policymaking and oversight of CMS contractors will likely halt.
• The Department of Health and Human Services has released its FY 2026 Contingency Staffing Plan, which states:
  • Staff will be expected to support mandatory programs, including Medicare, Medicaid, the Office of Inspector General's Health Care Fraud and Abuse activities, and other mandatory health payments
• WSMA's understanding is:
  • Medicare claims processing and Medicaid funding will continue.
  • However, federal furloughs or firings may delay administrative functions, such as appeals, provider enrollment, quality reporting, or waiver reviews.

Medicare telehealth flexibilities

• Current Medicare telehealth flexibilities expired on Sept. 30, 2025.
• Until Congress passes legislation extending the COVID-era flexibilities:
  • Telehealth coverage will revert to pre-COVID rules: limited to rural patients only and generally requiring patients to be at a medical facility, not their home.
  • Audio-only telehealth services will no longer be covered.
  • The Acute Hospital Care at Home program authority will lapse.
  • The only exception: telehealth for mental health and substance use disorder treatment remains.
  • The American Medical Association released a statement on telemedicine flexibilities last week.

What physicians should consider

• Care delivery continues, but administrative and regulatory functions may slow.
• Telehealth flexibilities have lapsed until Congress acts. Physician practices should plan patient scheduling accordingly, while noting that when the shutdowns end, Congress has typically made policies retroactive.
• Uncertainty remains around the length and severity of the shutdown, as well as the Trump administration's stricter stance on agency workforce cuts.

Please do not hesitate to reach out to the WSMA with questions or comments. We will keep you apprised of updates in our publications.