Potential Government Shutdown and Telehealth Flexibilities Set to Expire

Published in VGM Government Relations on September 29, 2025

September 30 represents an important date for HME providers for two reasons: 1) The potential of a government shutdown and how that affects HHS and CMS, and 2) the expiration of Telehealth Flexibilities unless a Continuing Resolution (CR) is agreed upon in time. 

HHS Outlines Contingency Staffing Plan During Potential Government Shutdown 

In preparation for a possible lapse in federal appropriations or a “Government Shutdown,” the U.S. Department of Health and Human Services (HHS) has released its comprehensive Contingency Staffing Plan. The plan details how the department will continue critical operations, which programs will continue, and which ones might be interrupted.  

HHS Staffing Breakdown Stats 

• Total Employees Pre-Lapse: 79,717. 
• Furloughed Employees: 32,460. 
• Retained Employees: 47,257. 

Impact To HME Providers During A Government Shutdown 

For HME providers, the implications of a shutdown are primarily tied to Medicare, Medicaid, FDA oversight, and CMS operations. 

Services That Will Continue 

• Medicare and Medicaid Claims Processing and Reimbursement: 
  These programs are funded through mandatory appropriations, so claims processing and payments to HME providers will continue. This ensures that providers can still receive reimbursement for covered equipment and services. 
• FDA Oversight of Medical Devices: 
  The FDA will continue critical functions such as: 
  -Emergency response to product recalls. 
  -Monitoring for adverse events. 
  -Screening imported medical products.  
  These activities help ensure that HME products remain safe and compliant.
• CMS Core Operations: 
  CMS will retain staff to support mandatory activities, including oversight of Medicare contractors. However, some oversight functions may be limited, potentially delaying audits or reviews. 

Services That May Be Disrupted 

• Grant and Contract Processing: 
  HHS will suspend non-exempt activities, including processing of new grants and contracts. This could affect providers involved in federally funded pilot programs or research initiatives as well as delaying new contracts.  
• Public Communication and Data Analysis: 
  Agencies like CDC and CMS may reduce public-facing communications and data analysis. This could impact access to updated guidance or utilization data relevant to HME providers. 

What Can You Do?  

• Continue submitting claims as usual.  
• Monitor CMS and FDA updates for any changes in guidance or operations.  
• Prepare for possible delays in non-essential communications or contract-related activities. 

Telehealth Flexibilities Set To Expire September 30. 

Congress has until September 30, 2025, to extend or make permanent important telehealth flexibilities that lifted geographic and originating site restrictions on telehealth services for Medicare beneficiaries and providers. As a refresher, the current extension preserves several key policy modifications:

• Removal of geographic restrictions and the expansion of originating sites to include the patient’s home. 
• Broadening of telehealth eligibility for practitioners. 
• Allowing audio-only telehealth for some services. 
• Continuing telehealth services for FQHCs and RHCs. 
• Delay of in-person requirements for mental health services and hospice care recertification. 
• Extension of the Acute Care Hospital at Home program, providing inpatient services outside of a hospital. 

What Happens On October 1?  

CMS has confirmed that beginning October 1, 2025, Medicare will revert to pre-PHE regulatory standards, unless specific provisions have been extended by legislation or CMS rulemaking. 

• Patients must be at an approved originating site such as a rural clinic, hospital, or federally qualified health center for most telehealth services to be reimbursed. 
• Home-based telehealth visits for most specialties will no longer be covered unless the patient meets very specific exceptions. 
• Audio-only visits are no longer broadly payable. The telephone E/M codes 99441 to 99443 were deleted. 

What Can You Do?  

1. Review Current CMS Guidance 

Check the latest CMS updates to confirm which flexibilities have expired and which may have been extended or modified. Pay close attention to: 

• Face-to-face visit requirements. 
• Documentation standards for medical necessity. 
• Telehealth billing codes and modifiers. 

 2. Update Internal Policies 

Ensure your intake, documentation, and billing procedures reflect the reinstated requirements. This may include: 

• Requiring in-person visits for certain DME prescriptions. 
• Adjusting workflows for patient assessments. 
• Training staff on new compliance protocols. 

3. Communicate With Referral Sources 

Educate physicians and discharge planners about the return to standard documentation and face-to-face requirements to avoid delays in equipment delivery. 

4. Monitor Legislative Activity 

Some flexibilities may be reinstated or extended through congressional action such as the CONNECT Act or the Telehealth Modernization Act. Stay engaged with VGM Group, AAHomecare, and other industry groups for updates. 

 5. Audit Recent Claims 

Review claims submitted under telehealth flexibilities to ensure compliance and avoid future audits or denials. 

For additional questions, reach out to VGM. We will continue to monitor this situation closely and keep you up to date with any developments as they occur.