(Sept. 30, 2025) - What would a federal government shutdown mean for health care providers? In the past, it would mean a time of uncertainty followed by a belabored return to business as usual. However, the health care policy situation in 2025 is different from what it was during the winter 2018-2019 shutdown period because of the various health care extenders that now characterize the post-COVID environment.
There are many health care extenders that are non-controversial that will lapse at midnight tonight absent Congressional action. These include the Medicare-dependent Hospital program, the Medicare low-volume hospital adjustment, Medicare telehealth waivers, the hospital at home program extension, and relief from the Affordable Care Act’s Disproportionate Share Hospital payment cut. It is anticipated these programs or provisions will all be extended eventually.
In the past, when a government shutdown occurred, the bill that inevitably ended the shutdown would contain language applying its provisions retroactively to the time when the shutdown began. In other words, programs that lapsed because of a shutdown would have that lapse erased, and private sector entities were entitled to backfill the federal government for services provided during the now-cancelled shutdown period. Agencies would usually issue guidelines to help such entities determine whether they should hold receipts for services they provided for which they could bill for later or whether they should simply bill the agency with the expectation they would eventually receive payment once the dust settled.
Of these five major health care extenders, the one that falls most firmly into this pattern are the Medicare telehealth flexibilities. They were extended three times, most recently by a continuing resolution of a previously passed appropriations bill. While we expect that these flexibilities will indeed return as soon as Congress passes a bill to fund the federal government, they will not technically exist on Oct. 1. It is important for providers to look for guidance from the Centers for Medicare & Medicaid Service handling telehealth visits covered today by these flexibilities. As of the morning of Sept. 30, CMS has not officially released any guidance on how it would address a lapse in authorization of telehealth flexibilities. In recent years, CMS has said providers should be prepared to return to pre-pandemic Medicare rules if Congress does not extend the waivers.
Another COVID era extender at risk for expiration are the flexibilities for hospitals to provide care through the acute hospital at home program. On Sept. 26, CMS confirmed that the guidance on the CMS hospital-at-home website continues to stand. “For all hospitals with active [Acute Hospital Care at Home] waivers, all inpatients must be discharged or returned to the hospital on Sept. 30, 2025, in the absence of Congressional action to extend the initiative. CMS will no longer accept waiver request[s] for participation in the AHCAH initiative after September 1, 2025.”
The other three health care extenders, MDH, LVH, and DSH are connected to each hospital’s annual Medicare cost report. Since they likely will be extended and backdated to cover claims throughout any shutdown period, hospitals should continue to budget as if they will exist for all federal fiscal year 2026 Quarter 1/calendar year 2025 Q4. The Kansas Department of Health and Environment has communicated to the Kansas Hospital Association they have made all the DSH payments for FFY 2025 and do not have the calculations available to make payments for FFY 2026. They do not expect any DSH issues due to the shutdown.
Please be advised that government shutdowns are fluid and the facts on the ground can change quickly. We will continue to provide guidance as the situation develops.