Provider pay caught in the middle during government shutdown

CMS puts provider payments on hold

The notice on the CMS website stated that select Medicare reimbursements will be held temporarily as lawmakers agreed on a budget for the government, thereby ending the government shutdown. A previous version of the notice announced a broader hold on reimbursements for all claims paid under the Medicare Physician Fee Schedule.

However, CMS walked back the temporary reimbursement hold. Now, the pause only applies to claims with "services impacted by the expired Medicare legislative payment provisions passed under the Full-Year Continuing Appropriations and Extensions Act, 2025." In other words, MACs will wait to process claims that are related to expired programs, such as some telehealth and rural health services.

However, CMS vowed that it will "continue to process and pay held claims in a timely manner with the exception of select claims for services impacted by the expired provisions."

So far, no provider reimbursements have been delayed since statute already requires all claims to be held for at least 14 days, CMS said. The agency instructed providers to continue to submit claims.

The effect on revenue cycle management

As CMS explained in its notice, the pause on claims reimbursement for certain services should not have a significant impact on provider revenue cycles. MACs already have 30 days to reimburse providers for Part B claims before having to pay interest on the amount owed. The most recent government shutdown started on Oct. 1.

However, that could change if the shutdown continues. Already, this shutdown is on track to break records -- it is currently tied with the fourth-longest shutdown, which occurred in 2013 and lasted 17 days. The longest shutdown ever lasted 35 days and occurred during President Donald Trump's first term.

"Independent practices, particularly in GU, rely heavily on Medicare revenue, so while I can say, to date, there hasn't been a significant cashflow interruption, there will be by next week," says Mara R. Holton, M.D., a physician at Anne Arundel Urology and chair of the Health Policy Committee at LUGPA.

With a pause on Medicare reimbursements, practices will start to feel the pinch, impacting payroll, supplies and rent, among other expenses, Holton said.

"Independent practices, specifically, operate on much lower margins and much lower volumes, so this type of holdback on pay can really start to hit the bottom line within a couple of weeks," she explained.

From a 30,000-foot view, adds Darryl Drevna, senior director of regulatory affairs at AMGA, the government shutdown also creates a lot of uncertainty for medical groups.

"Anytime you have these claims holds, even though they're still within that 30-day payment window, the uncertainty about what's happening can be really confusing and disruptive to operations," Drevna stated. This disruption, he added, will be particularly pronounced in the context of telehealth provisions, which expired on Oct. 1 as a result of the shutdown.

"Now, you have a situation in which you don't know whether you can continue providing that care and get reimbursed retroactively or if you just stop doing it," Drevna explained. "That's really going to slow down or give pause to your care delivery processes, which internally influence revenue cycle management."

Telehealth reimbursement stuck despite bipartisan support

In particular, telehealth reimbursement remains in limbo during the government shutdown, despite widespread support for continuing flexibilities from the COVID-19 pandemic, which expanded coverage of virtual care.

Both Republicans and Democrats have proposed spending packages that would extend telehealth policies through Nov. 21 and Oct. 31, respectively. However, neither bill gained traction, resulting in a lapse on Oct. 1 -- the starting date for holding claims.

The American Telemedicine Association (ATA) is concerned not only that the lapse in telehealth Medicare coverage will limit access to care for some of the most vulnerable populations, but also that commercial payers will follow Medicare's lead.

Kyle Zebley, senior vice president of public policy at the ATA, stated that many private payers have continued to cover telehealth services without congressional action during the shutdown, as both providers and payers recognize the patient dependence on these services.

"Still, as Medicare reimbursement goes, so often goes commercial coverage, forcing providers to make difficult choices about sustaining virtual care," added Zebley, who also serves as executive director of ATA Action, the ATA's advocacy arm. "The impact on healthcare delivery, and on patients' well-being nationwide, is deeply concerning."

ATA Action is urging Congress to enact a short-term solution to restore telehealth Medicare coverage for flexibilities. However, the group believes codifying telehealth flexibilities, including reimbursement for expanded utilization, is needed to ensure patient access to care, when and where they need it.

What should revenue cycle teams do?

Reimbursement from Medicare may be secure for now, but revenue cycle teams should remain cautious as the shutdown enters another week.

"Top of line, rest assured, you are going to get reimbursed as CMS said in its guidance," Drevna stated. "Beyond that, I think you need to tread cautiously on what is covered and not covered, and that's an individual situation."

Revenue cycle teams can choose to hold claims themselves to gain more clarity on whether coverage for telehealth services or other expired policies will continue under the new budget. They also have the option to provide notice to patients that services may not be covered as a result of policy and regulation, Drevna added.

"You'll have to know your patient population and how they're going to react to that," he said.

Practice leaders should also examine their expenses in preparation for a potentially record-breaking shutdown, according to Holton.

"See what expenses can be shifted, assess credit lines and those sorts of things, so that you can weather several more weeks, because my personal estimation is that the shutdown isn't going to end immediately, although I wish it would," Holton said.

She also advised practices to exercise caution, particularly around telehealth.

"Both because reimbursement is in question, as are flexibility governing its medical appropriateness," she explained.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.