Government Shutdown Triggers Expiration of Key Medicare Telehealth Waivers

Before the federal government shutdown, Medicare had a number of “telehealth flexibilities” in place that were adopted during the COVID-19 public health emergency (PHE). These flexibilities:

• Allowing beneficiaries to receive telehealth services from their home (regardless of geographic location)

• Permitting audio-only telehealth (telephone) in certain cases

• Broadening the types of providers eligible to bill for telehealth

• Relaxed origin-site restrictions (so patients do not always need to be at a designated medical facility)

• The “Acute Hospital Care at Home” waiver program (allowing certain hospital-level care services to be provided at a patient’s home)

These flexibilities were not extended beyond September 30, 2025, so on October 1, 2025, many of the flexibilities expired.

What Changed as of Oct. 1, 2025 (Due to Lapse in Flexibilities)

With the expiration of those flexibilities (coinciding with the shutdown), several key items reverted to the pre-PHE rules for traditional Medicare. Some of the main rollbacks include:

Some exceptions that remain, particularly for mental health / behavioral health services. Many of the pre-PHE restrictions have not yet been reapplied (or have more permanent allowances) for mental health care.

Claims Processing & Payment Handling During the Shutdown

Because of the intersection of the government shutdown and the lapse of telehealth flexibilities, the handling of Medicare telehealth claims is somewhat complex. Here is what is known so far:

1. Temporary Claims Hold for Telehealth

• CMS has instructed Medicare Administrative Contractors (MACs) to implement a 10-business-day payment hold on telehealth claims submitted under the now-expired flexibilities.
  • This means providers can still submit telehealth claims, but they will not be paid immediately during the hold period.

2. Delayed Processing / Uncertainty of Payment

• Because telehealth flexibilities lapsed, standard Medicare rules may be enforced going forward. That means claims for services that no longer meet traditional Medicare telehealth eligibility could be denied.
  • If Congress extends or restores flexibilities, the telehealth claims submitted during the hold or lapse period may be reconsidered (i.e. you may receive a retroactive payment).

Key Risks & Uncertainties

• Retroactive Reinstatement is Possible but Not Certain

Historically, when Congress has reinstated programs after a government shutdown, they have often made benefits retroactive to the date of shutdown. This is not guaranteed, especially for telehealth flexibilities that require specific legislative authority.

• Providers Could Face Financial Risk

Because of the hold period and the possibility of denied claims, providers may suffer cash flow issues.

• Patient Access Will Be Reduced

Medicare beneficiaries who live in urban / non-rural areas or those who relied on home telehealth or audio-only visits, may lose access to care via telehealth under standard (stricter) rules.

• Scope Varies by Medicare Program Type

The rollback primarily affects traditional Medicare (Part A / B).

• Duration Matters

The fate of the policy and payments is tied directly to the outcome of congressional negotiations and whether or not telehealth flexibilities are extended.