CMS issues guidance calling quits on expanded telehealth flexibilities
On day one of the government shutdown, the Centers for Medicare & Medicaid Services (CMS) sent out a Medicare Learning Network Connects Newsletter offering guidance on Medicare billing and telehealth services during the lapse in appropriations.
The CMS reaffirmed in the guidance that pandemic-era expanded telehealth flexibilities have ended for Medicare beneficiaries. Per standard course of action, the CMS has directed Medicare Administrative Contractors (MACs) to implement a temporary claims hold for 10 business days on telehealth claims.
Assuming the hold starts Oct. 1, claims will begin to be processed Oct. 15. The guidance says that providers can still submit claims during the temporary hold, but they will not receive payment.
The claims hold is meant to avoid the reprocessing of claims in the event that Congress re-ups the flexibilities.
According to pre-pandemic rules, Medicare beneficiaries must be located in a rural health clinic or rural hospital to conduct a telehealth visit with a provider in another geographic location, excluding mental health services. Audio-only visits are no longer allowable.
Some other telehealth services from before the pandemic are still allowed, such as telehealth visits for home dialysis related to end-stage renal disease. The CMS also notes that some types of practitioners can no longer render telehealth services. Such providers include occupational therapists, physical therapists, speech-language pathologists and audiologists.
Certain accountable care organizations under the Medicare Shared Savings Program can still perform telehealth services regardless of the beneficiary’s geographic location and beneficiaries can conduct visits in their homes.
The CMS says providers who continue performing telehealth services should consider sending an Advance Beneficiary Notice of Noncoverage, a notice typically required to be sent to patients when Medicare won’t cover their services. It also said providers should consider holding telehealth claims.
“In the absence of Congressional action, practitioners who choose to perform telehealth services that are not payable by Medicare on or after October 1, 2025, may want to evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage,” the CMS wrote. “Practitioners should monitor Congressional action and may choose to hold claims associated with telehealth services that are not payable by Medicare in the absence of Congressional action.”
The Alliance for Connected Care issued a statement commending the CMS for the claims hold.
“We appreciate rapid CMS action this morning to direct all Medicare Administrative Contractors (MACs) to implement a temporary claims hold,” Chris Adamec, executive director of the Alliance for Connected Care, wrote in an email. “While this does not mitigate the patient access challenges of the telehealth lapse, it may help to reduce [the] administrative burden associated with it.”
“Most providers and hospital systems are taking calculated risks to continue care during this time, but long-term continuity depends on action by our telehealth champions in Washington to restore these flexibilities and ensure retroactive reimbursement,” Kyle Zebley, executive director, ATA Action and senior vice president, public policy at the American Telemedicine Association, said in a statement. “Medicare patients woke up this morning without telehealth coverage for the first time since the pandemic, five years ago. Our healthcare services are regressing, falling woefully short for millions of patients in need.”
What will and won’t continue at HHS
The Department of Health and Human Services (HHS) will furlough 32,460 employees, or 41%, according to the agency’s staffing contingency plan released Monday. The estimate is called a “second-day staffing level,” based on the number of employees the department expects to need on the second day of a shutdown after staff have completed necessary shutdown functions.
The actual number of employees remaining at the agency will fluctuate throughout the shutdown, depending on the activities that need to occur.
This plan reflects the anticipated number of staff who will be on board during the second business day after a funding lapse, following the completion of initial shutdown activities. HHS expects to complete initial shutdown activities within the first day after receiving notification from OMB to implement the contingency plans. The plan has been updated to reflect staffing and funding levels as of July 2025.
Medicare, Medicaid, OIG’s Health Care Fraud and Abuse-related activities, and other mandatory health program payments will continue.
HHS will continue to perform certain functions, including direct medical services through the National Institutes of Health and Indian Health Services, emergency preparedness for disease outbreaks and natural disasters, and medical device and drug reviews.
“Some HHS agencies have mandatory, multiple-year, carryover, or user fee funds which are not affected by a lapse in annual appropriations,” the contingency plan says. “A total of 35,096 staff are estimated to continue to be paid by these funds and remain working during a lapse in appropriations.”
CDC communications to the public will be interrupted.
Global strategy firm Capstone projects a short-term government shutdown will have “minimal impact” on operations at HHS. According to HHS’ contingency staffing plan, the agency expects staff supporting mandatory funded activities like Medicare, Medicaid and other mandatory health program payments from furloughs, Capstone noted in a report released Wednesday morning.
CMS will maintain the staff necessary to ensure that payments for mandatory federal healthcare programs, such as Medicare and Medicaid, continue. Potential staff losses via furloughs and terminations may lead to minor administrative delays, Capstone wrote.
NIH research grinds to a halt
As the U.S. government shuts down due to a failure of Congress to pass a spending bill, the National Institutes of Health is implementing a contingency staffing plan that will again roil a research apparatus that has already been heavily disrupted during the second Trump administration, Fierce Biotech reports.
At FDA, new applicants put on hold
With a government shutdown now in effect, the U.S. FDA—already shaken up by headcount reductions earlier this year—has sought to keep many of its functions running for the foreseeable future, Fierce Pharma reports.
But the shutdown, which at least one former senator predicts could drag on for a month or more, will still have very real consequences for biopharma companies that don’t yet have an application in with the regulator, experts warned.
The FDA has committed to retaining 86% of its staff—equivalent to 13,872 workers—during the shutdown, according to a contingency plan posted on the Department of Health and Human Services website.
In its contingency plan, HHS noted that the FDA will not be able to accept applications for new drugs, generics, biologics, biosimilars or medical devices that require payment of a user fee while the shutdown is in effect. If companies have not already filed for a review of their products, they will now have to wait until Congress reaches a funding accord.
Healthcare stakeholder statements
“Nurses are very clear that Republicans are to blame for any government shutdown; they manufactured this impasse by refusing to negotiate with Democrats as a means to further degrade and gut critical public services and to advance an agenda to privatize vital functions currently provided by the federal government for the greater public good,” National Nurses United wrote in a statement to the press.
“We urge Congress to come together to fund the government for Fiscal Year 2026 and extend vital health and safety net programs that millions rely on,” the Catholic Health Association said. “A government shutdown jeopardizes the health and stability of millions of families—especially those living paycheck to paycheck and communities that depend on essential services. The ripple effects of inaction extend across the economy, deepening hardship for those already most vulnerable.”
“A shutdown only stifles access to care, impacts training opportunities for preparing the next generation of physicians and leaves our patients scrambling for alternative care—or worse yet, going without care,” the American Academy of Family Physicians wrote in a statement. “On behalf of family physicians across the U.S., we urge our elected leaders to recognize the human faces behind every policy decision and reach a swift bipartisan resolution that preserves access to care.”