The federal government shutdown that extended through October and into early November 2025 exposed a vulnerability that healthcare providers have been warning about for years: critical telehealth programs and hospital-at-home waivers remain tied to short-term spending legislation, making them perpetual hostages to budget negotiations.
When the shutdown ended, Medicare telehealth waivers were restored—but only temporarily. And now, healthcare organizations are facing the same cycle they’ve endured repeatedly since the COVID-19 public health emergency ended: advocating for extensions, preparing for potential lapses, and operating under persistent uncertainty about whether their programs will be funded beyond the next few months.
This isn’t sustainable policy. It’s crisis management disguised as governance.
What Actually Happened During the Shutdown
The federal government shutdown disrupted telehealth programs, with Medicare waivers expiring because they were tied to the last spending bill that financed the federal government. Hospital-at-home programs were also affected by the expiration in federal waivers for telehealth.
The impact wasn’t theoretical. The Centers for Medicare & Medicaid Services told hospitals that patients getting acute care at home were to be transferred to brick-and-mortar facilities or discharged. Healthcare organizations scrambled to relocate patients receiving acute hospital care in their homes, disrupting treatment plans and creating logistical nightmares for families and clinical teams.
For telehealth providers serving Medicare beneficiaries in rural areas or patients with mobility challenges, the lapse meant services that had become standard care were suddenly unavailable. Providers couldn’t bill Medicare for telehealth services that don’t fall under the narrow pre-pandemic telehealth coverage rules, forcing difficult decisions about whether to provide unbillable care or deny access to patients who relied on virtual visits.
The American Telemedicine Association’s senior vice president of public policy, Kyle Zebley, characterized the situation bluntly in an interview with Chief Healthcare Executive: even with bipartisan support for telehealth, the healthcare community “ended up the victim” of budget politics.
The Pattern: Short-Term Extensions as Policy
When asked about prospects for permanent reform or at least a multi-year extension, Zebley acknowledged the likely outcome: “If we were to forecast what will happen next, I think the scenario you laid out of a short-term funding bill, having attached to it a short-term extension of the Medicare telehealth flexibilities and acute hospital care at home. That’s how it works now, unfortunately and has worked for a few decades, and it’s getting worse every year”.
This cycle isn’t new. Medicare telehealth coverage has been expanded and contracted through temporary legislative patches for years. What changed during COVID-19 was the scale and scope of telehealth utilization, which grew exponentially when in-person care became difficult or dangerous. The Section 1135 waivers issued during the public health emergency allowed Medicare beneficiaries to receive telehealth services regardless of geographic location, permitted audio-only visits for certain services, expanded the types of providers who could deliver telehealth, and allowed patients to receive care in their homes rather than requiring them to travel to healthcare facilities.
When the public health emergency ended in May 2023, Congress extended many of these flexibilities temporarily. Then extended them again. And again. Each extension has been tied to broader spending legislation, making telehealth policy a bargaining chip in budget negotiations rather than a healthcare policy decision evaluated on its merits.
According to the Medicare Payment Advisory Commission (MedPAC), telehealth utilization among Medicare fee-for-service beneficiaries peaked at approximately 52 visits per 1,000 beneficiaries per month during the height of the pandemic. By 2024, utilization had stabilized at roughly 35-40 visits per 1,000 beneficiaries monthly—substantially higher than pre-pandemic levels but well below the pandemic peak. This suggests telehealth has found a sustainable role in Medicare coverage, filling gaps in access while not replacing in-person care wholesale.
Yet despite evidence that telehealth has become integrated into routine care delivery, Congress continues treating it as a temporary experiment requiring periodic reauthorization.
Why Permanent Reform Remains Elusive
The political dynamics are paradoxical. Telehealth enjoys broad bipartisan support. Rural legislators recognize telehealth’s value for constituents who live hours from specialty care. Urban representatives see telehealth addressing transportation barriers and improving access for disabled and elderly constituents. Provider organizations across specialties support permanent telehealth flexibilities. Patient advocacy groups consistently lobby for continuation.
As Zebley noted: “I say that, totally understanding our bipartisan support, being so grateful for it. Never will we as a community take that for granted. But despite all that support and despite all that gratitude that we’ve shown for it, we still have ended up the victim here”.
So why hasn’t Congress made these flexibilities permanent? Several factors explain the inertia:
Budget Scoring
The Congressional Budget Office must score the cost of making telehealth flexibilities permanent. Expanding covered services increases federal spending in CBO projections, even if telehealth potentially reduces costs by preventing emergency department visits, hospital admissions, or disease complications. Budget rules prioritize short-term expenditure projections over potential long-term savings, making permanent expansions harder to justify fiscally than temporary extensions.
Fraud and Abuse Concerns
Some policymakers remain concerned about fraud risk in telehealth, particularly for behavioral health services and in Medicare Advantage. The Department of Health and Human Services Office of Inspector General has issued reports highlighting vulnerabilities in telehealth billing, including concerns about medical necessity determinations for services provided without established patient-provider relationships and potential for inappropriate prescribing in audio-only visits.
These concerns aren’t baseless—telehealth fraud schemes have resulted in significant enforcement actions. But the solution should be targeted anti-fraud measures, not blanket restrictions on legitimate telehealth services. Permanent telehealth coverage with strong program integrity safeguards would be more effective than periodic temporary extensions with minimal oversight.
Competing Priorities
Healthcare policy competes with numerous other legislative priorities. In budget negotiations, telehealth extensions often get bundled into larger packages rather than receiving standalone consideration. This means telehealth policy becomes secondary to broader fiscal debates about government funding, debt limits, and spending levels.
Legislative Mechanics
Passing permanent reforms requires different legislative processes than extending existing temporary policies. Extensions can be included in continuing resolutions and omnibus spending bills through relatively streamlined procedures. Permanent reform would likely require committee consideration, hearings, and potentially reconciliation with other healthcare policies. The path of least resistance is another short-term extension.
The Cost of Uncertainty
The policy uncertainty creates real costs for healthcare organizations:
Investment Decisions
Health systems hesitate to invest in telehealth infrastructure when they can’t predict whether Medicare will reimburse for services beyond the next few months. Expanding telehealth capacity requires capital investment in technology platforms, training staff, establishing workflows, and ensuring regulatory compliance. Organizations struggle to justify these investments when the return depends on temporary policy extensions.
Workforce Planning
Hiring clinicians specifically for telehealth roles or training existing staff on virtual care delivery requires confidence that those capabilities will remain billable. Uncertainty about telehealth coverage makes workforce planning difficult, particularly for rural hospitals and community health centers where telehealth may be essential for maintaining access.
Patient Expectations
Patients who have integrated telehealth into their routine care don’t understand why coverage periodically lapses due to Congressional budget fights. The whiplash of services being available, then unavailable, then available again undermines patient confidence and creates confusion about what’s covered.
Administrative Burden
Healthcare organizations must monitor legislative developments, prepare contingency plans for potential lapses, communicate with patients about coverage changes, and adjust billing systems repeatedly as policies change. This administrative overhead diverts resources from patient care.
Hospital-at-Home: Collateral Damage
The hospital-at-home waiver has become collateral damage in telehealth policy uncertainty. The Acute Hospital Care at Home waiver, launched during COVID-19, allows hospitals to provide acute inpatient care to appropriate patients in their homes while billing at inpatient rates.
Research on hospital-at-home programs has shown promising results. A study published in the Journal of the American Geriatrics Society found that hospital-at-home care was associated with lower costs, shorter lengths of stay, fewer lab tests and procedures, and lower rates of delirium compared to traditional inpatient care. Patient satisfaction scores were consistently higher for home-based acute care.
Despite this evidence, the waiver remains temporary and tied to telehealth extensions. During the shutdown, CMS directed hospitals to transfer patients receiving acute care at home to traditional facilities or discharge them, forcing mid-treatment relocations that served no clinical purpose.
Hospital systems that invested in building hospital-at-home programs face the same uncertainty as telehealth providers: will this waiver be extended again, or will they need to wind down programs that improve outcomes and reduce costs?
What Happens Next
Zebley’s prediction for the immediate future is sobering: “We probably will be back in that circumstance, at the very least for this next measure that will reopen the federal government”—meaning another short-term extension tied to the next spending bill.
The pattern is likely to continue: temporary extensions measured in months rather than years, each requiring renewed advocacy, each creating another potential lapse point, each perpetuating uncertainty for providers and patients.
Zebley expressed hope that “this lapse will be a rallying cry that will prove to policy-makers the error of their ways,” and argued for building “a case for why we need permanency, and again, if not permanency, at the very least a multi-year extension of these flexibilities”.
But hope isn’t policy. And rallying cries have been issued before.
Breaking this cycle requires Congress to treat telehealth as core healthcare policy rather than a budget bargaining chip. Several approaches could achieve this:
Permanent Baseline Coverage with Periodic Review
Make core telehealth flexibilities permanent while requiring CMS to report to Congress annually on utilization, outcomes, and program integrity. This provides stability while maintaining oversight.
Multi-Year Authorizations
If permanent coverage isn’t politically viable, authorize telehealth flexibilities for 5-7 years rather than months. This allows adequate time to evaluate outcomes and provides sufficient stability for healthcare organizations to invest appropriately.
Separate Telehealth from Budget Negotiations
Pass standalone telehealth legislation outside the context of government funding bills. This allows telehealth policy to be evaluated on healthcare merits rather than fiscal bargaining dynamics.
Evidence-Based Sunset Provisions
Structure extensions with clear metrics for evaluating success or failure. If telehealth meets defined benchmarks for access, quality, and cost-effectiveness, coverage becomes permanent. If metrics aren’t met, Congress revisits the policy.
None of these approaches are radical. They simply apply standard policy-making practices to telehealth instead of treating it as a perpetual temporary measure.
The October-November 2025 shutdown demonstrated once again that tying essential healthcare services to short-term budget legislation creates unnecessary disruption for patients and providers. The question is whether Congress will learn from this latest lapse or simply set up the next crisis a few months down the road.
Healthcare deserves better than governing by crisis. Patients receiving hospital-level care at home deserve not to be relocated mid-treatment because of budget politics. Rural beneficiaries who rely on telehealth for specialty care deserve certainty that those services will remain available. And healthcare organizations deserve the policy stability necessary to invest in care delivery models that improve access and outcomes.
Short-term extensions may be politically expedient, but they’re clinically and operationally disruptive. It’s time for Congress to make telehealth policy permanent—or at minimum, stable enough that patients and providers aren’t perpetually bracing for the next lapse.
Sources:
- Southwick, Ron. “When shutdown ends, telehealth extension likely won’t last long.” Chief Healthcare Executive, November 2025.
- Medicare Payment Advisory Commission (MedPAC). Reports to Congress on Medicare telehealth utilization and policy recommendations.
- Centers for Medicare & Medicaid Services. Acute Hospital Care at Home waiver program information and guidance.
- Department of Health and Human Services Office of Inspector General. Reports on telehealth program integrity and fraud vulnerabilities.
- Journal of the American Geriatrics Society. Research on hospital-at-home program outcomes and cost-effectiveness.
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