As the clock struck midnight Wednesday, funding for the federal government expired, triggering a shutdown of many services and agencies while those deemed “mandatory” continue to operate.
The shutdown substantiates just how deeply divided the U.S. Congress is at the moment — both ideologically and in terms of numbers, with the House and Senate separated by just a handful of votes each.
It’s unclear how long the shutdown will last. The shortest on record have lasted just a few hours. The longest took more than a month to resolve.
For hospitals and health systems, some impacts are easier to forecast than others. Here’s what we know at this time:
- Medicare — In general, Medicare payments to hospitals are mandatory and not affected by a shutdown. The Centers for Medicare & Medicaid Services (CMS) has instructed Medicare administrative contractors to implement a temporary claims hold of up to 10 days. Providers may continue to submit claims during this period, but payment will not be released until the hold is lifted.
- Medicaid (Medi-Cal) — Medicaid is a mandatory program but relies on annual appropriations. CMS has confirmed there is sufficient funding for Medicaid through the first quarter of the fiscal year (Oct. 1 through Dec. 31). There would be payment uncertainty if the funding lapse continues for more than the first quarter.
- Medicare contractors — Depending on the length of the shutdown, payments to contractors could be disrupted.
- Medicare cuts — Billions of dollars in cuts triggered by an increase in the deficit generated by the One Big Beautiful Bill Act will not go into effect until mid-January. Congress still has time to act to prevent those Medicare sequestration cuts independent of the shutdown.
- Rural Health Transformation Program — Funding for this program is mandatory and therefore not subject to a shutdown.
- Critical health care programs — Without congressional action, these programs expired Sept. 30:
- Medicaid disproportionate share hospital (DSH) cut extension
- Telehealth waivers (CMS suggests that practitioners who choose to perform telehealth services that are not payable by Medicare on or after Oct. 1 may want to evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage; practitioners may choose to hold claims associated with telehealth services that are not payable by Medicare in the absence of congressional action.)
- Hospital-at-home extensions (On Sept. 26, CMS confirmed that, for all hospitals with active Acute Hospital Care at Home waivers, all inpatients must be discharged or returned to the hospital.)
- Workforce development programs
- And more
- CMS administrators — As California’s Hospital Fee Program is currently pending with CMS, depending on the duration and scope of the shutdown (which could include layoffs), processing could be delayed.
CHA is working closely with our partners at the American Hospital Association to stay close to our congressional representatives from both sides of the aisle. As they navigate the political side of this equation, it’s critical that they stay informed of the impact of a shutdown on various aspects of health care delivery.
We’ll continue to both update you as we have more information and keep lawmakers informed and engaged so they can protect patients, hospitals, and communities as they work toward a federal funding agreement.
