Medicare Telehealth, Hospital at Home Program Impacted by Government Shutdown

The federal government shutdown has triggered the automatic expiration of two temporary but widely adopted Medicare programs effective October 1, 2025. Coverage of telehealth and the Acute Hospital Care at Home program began during the COVID-19 pandemic and enabled remote consultations and hospital-level care at home. In the last year, about 4 million Medicare patients used telehealth services, while 31,000 beneficiaries took advantage of the hospital-at-home program. Because Congressional approval is needed to extend these programs, both are currently unavailable. As a result, hospitals such as Mayo Clinic and OSF Healthcare have had to discharge or transfer patients, sometimes due to overcrowded facilities. The shutdown has also caused confusion among private insurers, with some erroneously halting telehealth coverage for non-Medicare patients, despite no federal directive. In rural areas, where telemedicine often substitutes for in-person care, the impact is especially severe. Bipartisan legislative efforts to preserve these services stalled earlier in 2025. Currently, some Democratic lawmakers are calling for the Department of Health and Human Services to provide additional flexibility and guidance for these programs while the government is shutdown, allowing patients to continue receiving telehealth and hospital-at-home care. Mass General Brigham in Massachusetts is attempting to adapt, reorganizing its plan to utilize alternative home-care models without the Hospital Care at Home program. Other providers reiterated their hope that Congress will soon renew both telehealth visits and the hospital-at-home program (Stateline, October 10; Inside Health Policy, October 9).

HHS, CDC Impacted by Reductions in Force

On Friday, October 10, the Office of Management and Budget Director confirmed that reductions in force (RIF) had begun. Fierce Healthcare reported the impact on the Department of Health and Human Services workforce, with more than 600 positions cut from the Centers for Disease Control and Prevention (CDC). This figure accounts for erroneous termination notices and reinstatements for some individuals over the weekend. According to an HHS spokesperson, the Trump Administration aims to leverage the government shutdown to reduce wasteful spending and curtail programs that are at odds with its desired policy goals. The American Federation of Government Employees has condemned the shutdown RIFs and is filing suit against the administration with the American Federation of State, County and Municipal Employees. Four infectious disease associations stressed the negative impact of RIFs in the CDC and their threat to the agency’s core functions that support the health and safety of the country (Inside Health Policy, October 10; Fierce Healthcare, October 13).

CMS Administrator Pushes for States to Use Automated Verification Systems to Ensure Compliance with Medicaid Work Requirement

At a discussion of CMS’ Medicaid priorities hosted by the Aspen Institute, CMS Administrator Mehmet Oz opined that state-led employment services should play a vital role in ensuring that beneficiaries are not only meeting the 80-hour-per-month work requirement, but they will also be expected to support beneficiaries by connecting them with employment or community service opportunities. Oz noted that CMS is looking for states to use automated verification processes and take a more active role in ensuring beneficiaries reach their targets to support the success of their programs (Inside Health Policy, October 8; Archive, October 8).

Several Healthcare Rules Move to OMB, Despite Shutdown

Despite the ongoing shutdown and new reductions in force, federal rulemaking continues. The Office of Management and Budget (OMB) has received several rules related to healthcare in the two weeks since the shutdown began, including final regulation on Medicare outpatient hospital and end-stage renal disease treatment payments, as well as a proposed rule on drug pricing. The proposed rule, Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model, is a demonstration to be conducted by the CMS Innovation Center, following an announcement from the President about a pricing deal with Pfizer. The Medicare proposed payment rules were released over the summer and are in the final stages of rulemaking. The ESRD payment rule faced some pushback over lower-than-anticipated payment rates for 2026. The hospital outpatient payment rule is notable in that it seeks to enact site-neutral policies, reimbursing doctors who administer Part B drugs at the Medicare physician fee rate. Though it appears that CMS has retained sufficient staff to send rules to OMB, it remains to be seen if the finalization of the rules will be delayed or if the administration will proceed with implementation. At least two other final rules for home health payment and the Medicare physician fee schedule are still in the rulemaking process (Inside Health Policy, October 10).