Government shutdown prompts key telehealth changes

Major changes to Medicare telehealth coverage became effective October 1, 2025, as the Centers for Medicare & Medicaid Services (CMS) confirms the expiration of COVID-era flexibilities due to the ongoing federal government shutdown. These changes, highlighted in CMS’s October 1, 2025, MLN Connects Bulletin, will immediately impact how providers deliver care, bill for services and communicate with their patients.

What is changing and why?

Unless Congress acts, Medicare telehealth coverage has reverted to pre-pandemic rules for most services, with the exception of behavioral and mental healthcare. This means Medicare will no longer reimburse providers for telehealth visits delivered to patients in their homes or outside of rural areas. Hospice recertifications must also return to in-person visits. These restrictions may also impact eligibility for other Medicare benefits that require telehealth documentation.

CMS guidance and claims processing

CMS has instructed all Medicare Administrative Contractors (MACs) to implement a temporary claims hold for services affected by the fiscal 2025 expiration date. This standard practice, which typically lasts up to 10 business days, is intended to avoid the reprocessing of large volumes of claims should Congress enact retroactive measures.

Providers may continue to submit claims during this period; however, CMS will not release payment until the hold is lifted. Due to the agency’s 14-day payment floor for reimbursing electronic claims, CMS anticipates that the delay should have a limited impact. However, depending on the duration of the shutdown, some MACs could run out of available funds.

CMS encourages providers who continue delivering telehealth services not reimbursed by Medicare to consider issuing an Advance Beneficiary Notice of Noncoverage (ABN) to beneficiaries and holding related claims, pending congressional action.

Additionally, the agency clarified that under the reinstated rules, Medicare can no longer reimburse occupational therapists, physical therapists, speech-language pathologists and audiologists for telehealth services.

Telehealth coverage varies by payer

To ensure compliance, providers should review payer agreements and reimbursement terms for telehealth services and monitor changes from commercial and Medicaid payers.

For example, providers in Medicare Shared Savings Program Accountable Care Organizations (ACOs), may continue providing and billing for covered telehealth services to eligible beneficiaries without geographic restrictions and in the beneficiary’s home. This flexibility, established by the Bipartisan Budget Act of 2018, remains in place through calendar year 2025 and does not require special application or approval, according to CMS.

Also, Medicare Advantage plans may continue to provide Part B benefits via telehealth and are not automatically impacted by the changes to fee-for-service (FFS) Medicare.  Providers will need to make determinations based on the benefits provided under the Medicare Advantage plans they currently accept. In addition, certain providers participating in ACOs may remain eligible to provide telehealth, but this will be dependent on whether the ACO is under two-sided risk with prospective beneficiary assignment.

Medicaid programs are not subject to the same statutory limitations as FFS Medicare. As a result, most states support expanded telehealth services. The specific payment mechanisms for Medicaid Managed Care should be spelled out in many contracts, but providers should check with their individual state Medicaid programs and watch for Medicaid Managed Care notices and guidance.

Action steps for providers

Providers should proactively identify patients with upcoming telehealth appointments that may be affected and determine whether to convert these visits to in-person, audio-only or reschedule them. Clear communication via patient portals, email or direct outreach is essential for maintaining trust and continuity of care, and for explaining any changes to the visit format and the reasons behind them.

If providers continue telehealth visits despite Medicare coverage limitations, they should inform patients that the services may not be reimbursed and clearly explain any potential financial responsibility.

Additionally, before choosing to hold claims for non-covered telehealth services pending further legislative guidance, providers should evaluate interim compliance strategies and assess potential fraud exposure.

Stay informed

Strong bipartisan support exists for extending telehealth flexibilities, but future legislative action is neither guaranteed nor clearly defined. Our team at Norton Rose Fulbright is closely monitoring these developments and will provide timely updates as additional information becomes available. If you have any questions or need guidance on how these changes affect your organization, please do not hesitate to contact us.