Will the Government Shut Down in January 2026? What Providers Need to Know

As the January 30 deadline approaches, American physicians face uncertainty about federal government operations. After the longest shutdown in U.S. history in late 2025, healthcare providers now confront renewed funding risks. This article delivers verified information relevant to medical practices and will be updated as events unfold. This is not official guidance—physicians should consult CMS communications and their Medicare Administrative Contractors for authoritative updates.

Current Situation: What We Know

The Deadline

Congress has until midnight on January 30, 2026, to pass funding legislation for six remaining appropriations bills covering approximately 78% of federal discretionary spending. Without new legislation, a partial government shutdown will begin on January 31, 2026.

Why Another Shutdown Risk?

The current funding impasse is driven in large part by disagreements in Congress over Department of Homeland Security (DHS) appropriations. Negotiators have attached policy conditions that have complicated the passage of the remaining spending bills. The funding package totals $1.2 trillion and includes departments critical to healthcare operations.

Already Funded Agencies

Six of twelve appropriations bills have already been signed into law and are funded through September 30, 2026:

• Department of Veterans Affairs
• Department of Agriculture (including FDA)
• Department of Commerce
• Department of Justice
• Department of Interior
• Legislative Branch

At-Risk Agencies

The six remaining appropriations bills include:

• Department of Defense
• Department of Labor (which releases employment data, including healthcare sector information)
• Department of Health and Human Services
• Department of Education
• Department of Transportation and Housing and Urban Development
• Department of Homeland Security

Impact on Healthcare Operations

Medicare: Core Operations Continue

The good news: Medicare is classified as a “mandatory” program with permanent funding through statutory obligations, meaning coverage will continue during a shutdown. Key facts for physicians:

• Patient coverage remains active: Patients can continue to see their doctors and receive Medicare-covered services
• Claims submission continues: Physicians can continue submitting claims to Medicare Administrative Contractors (MACs)
• Payments generally continue: Medicare payments to providers are statutory obligations and are expected to continue

Potential disruptions:

• Administrative delays: CMS may delay certain administrative actions due to staffing furloughs
• Longer wait times: Patients calling Medicare may experience extended hold times due to reduced staff
• Payment processing: While payments are legally required, some processing delays may occur due to reduced staffing
• Reduced customer service: Fewer CMS staff available to assist with billing questions or issues
• Initial enrollment delays: New Medicare enrollment applications may be temporarily halted

Official guidance: Physicians should consult the CMS contingency plan (available at cms.gov) for specific details on which functions continue during a shutdown.

Medicaid: Short-Term Stability with State Variations

According to CMS guidance, Medicaid has sufficient funding to operate through the first quarter of fiscal year 2026 based on advance appropriations. Important considerations:

• State operations continue: State Medicaid programs will continue processing claims and maintaining patient coverage
• Federal oversight may be reduced: Administrative functions at the federal level may be limited due to staffing furloughs
• State-by-state differences: Medicaid operates differently across states; physicians should consult their state Medicaid agency for specific guidance
• Patient impact minimal: For patients and providers, core Medicaid operations continue at the state level
• Unwinding oversight: The “unwinding” process (eligibility reevaluations) may face federal oversight delays

Note: Federal financial responsibility for Medicaid continues, but some federal administrative support may be temporarily reduced.

Telehealth: Already Restricted (Independent of Shutdown)

Important: Current telehealth restrictions are the result of expired pandemic-era flexibilities, not the government shutdown. Medicare telehealth flexibilities expired on October 1, 2025, per CMS guidance on the conclusion of temporary COVID-19 policies. Current limitations include:

• Telehealth largely limited to rural areas (pre-pandemic rules restored)
• Patients cannot receive most telehealth services in their homes under standard Medicare rules
• Exception: Mental health and substance use disorder services retain expanded telehealth access
• Exception: Physicians in certain Medicare Shared Savings Program ACOs retain telehealth flexibilities
• Audio-only services have ended for most patients

Physicians providing non-behavioral health telehealth services should consider issuing Advance Beneficiary Notices of Noncoverage (ABN) to inform patients they may be financially responsible for these services.

CMS guidance: For current telehealth coverage rules, consult the Medicare Telehealth Services page at cms.gov.

Affordable Care Act Marketplace: Operations Continue

ACA coverage continues during shutdowns. The federal marketplace (Healthcare.gov) will continue eligibility verification using carryover fees from insurers. However, approximately half of the CMS staff would be furloughed, potentially complicating oversight and support functions.

Programs at Immediate Risk

Important context: Many of these programs require regular legislative reauthorization regardless of government shutdown status. The timing coincides with shutdown risks, but these are separate budgetary challenges that Congress must address independently.

Community Health Centers (CHCs)

Community health centers face immediate funding challenges. The Community Health Center Fund, which accounts for over 70% of CHC funding, was extended only through January 30, 2026. Without Congressional action:

• Direct federal funding (approximately 15% of CHC revenue) stops
• Centers must rely solely on Medicaid, Medicare, and private insurance reimbursements
• Financial instability affects workforce planning and borrowing capacity
• Services to underserved populations may be reduced

Expired Medicare Payment Provisions

Several Medicare payment provisions expired on October 1, 2025, and remain in limbo:

• Medicare Hospital at Home Program: Extended only through January 30, 2026
• Work Geographic Practice Cost Index (GPCI) floor: Extended only through January 30, 2026 (affects physician payments in certain states)
• Medicare-Dependent Hospital (MDH) Program: Extended only through January 30, 2026
• Medicare Low Volume Adjustment (LVA) Program: Extended only through January 30, 2026
• Ground ambulance add-on payments: Extended only through January 30, 2026

Teaching Health Centers

Graduate Medical Education (GME) funding for teaching health centers expired September 30, 2025, and has not been renewed. Note: This is a separate reauthorization issue, not directly caused by the shutdown, but represents an ongoing funding gap affecting medical education in underserved areas.

Hospital Operations

Hospitals may experience:

• Immediate payment reductions: Loss of Medicare-dependent hospital payments and low-volume adjustments
• Medicaid DSH cuts: An $8 billion reduction to Medicaid Disproportionate Share Hospital allotments took effect with the last shutdown and remains in effect
• Hospital-at-home program uncertainty: Hospitals with active AHCAH waivers face program expiration
• Delays in compliance activities: Survey and certification activities may slow or pause

Research and Public Health

• NIH: Research grants and new studies may be delayed
• CDC: Disease surveillance and monitoring may be reduced (though emergency response continues)
• FDA: Routine inspections and new drug/device reviews may slow (emergency functions continue)
• HRSA: National Health Service Corps funding expired September 30, 2025

What Doctors Should Do Now

Immediate Action Items

1. Review your payer mix: Identify what percentage of your revenue comes from Medicare, Medicaid, and other sources
2. Check official guidance sources:
3. CMS Contingency Plans: Visit cms.gov and search for “contingency staffing plan”
4. Your Medicare Administrative Contractor (MAC): Check your regional MAC website for claims processing updates
5. State Medicaid Agency: Consult your state’s Medicaid website for state-specific guidance

3. Prepare staff: Brief front-office staff on potential patient questions about coverage continuity
4. Review cash reserves: Ensure adequate working capital to weather potential payment delays
5. Document telehealth services carefully: Ensure all telehealth services meet current Medicare requirements or obtain proper ABNs
6. Contact your legislators: Communicate how shutdown uncertainty affects patient care and practice operations

Patient Communication

Patients will have questions. Be prepared to explain:

• Medicare coverage continues: Patients with Medicare can still receive care
• Medicaid coverage continues: Medicaid patients can still receive services
• Appointment changes: Inform patients if you must modify telehealth or hospital-at-home services
• Billing clarity: Explain if certain services may not be covered due to expired provisions

Financial Planning

Consider these strategies:

• Accelerate claims submission: Submit claims promptly before any processing delays occur
• Monitor accounts receivable: Track Medicare payment timing closely
• Communicate with your practice management team: Ensure billing staff understands potential issues
• Review credit lines: Confirm access to short-term financing if needed
• Plan for worst-case scenario: The last shutdown lasted 43 days

Clinical Considerations

• Hospital-at-home patients: Develop contingency plans for patients currently in hospital-at-home programs
• Telehealth patients: Identify patients who may need transition to in-person care
• Community health center partnerships: Check on the status of CHC partners serving your vulnerable patients

Historical Context: Lessons from Recent Shutdowns

The 2025 Shutdown (October 1 – November 12, 2025)

The most recent 43-day shutdown offers valuable lessons:

• Medicare payments continued with some administrative delays
• Congress eventually restored lapsed policies retroactively
• Healthcare providers with thin margins faced cash flow challenges
• The shutdown cost the economy an estimated $3 billion

Key Takeaway from Previous Shutdowns

While core Medicare and Medicaid operations continue, administrative delays and uncertainty create operational challenges. Historically, providers have been “made whole” through retroactive payments and policy extensions, but the interim period requires careful cash management.

What Happens If a Shutdown Occurs?

Day 1-7: Limited Impact

• Medicare and Medicaid claims continue to be submitted
• Most payments process normally due to the 14-day payment floor
• Essential HHS staff remain working
• Public health emergency functions continue

Week 2-4: Growing Concerns

• Payment processing delays may emerge
• Customer service becomes more limited
• CMS oversight activities slow
• Community health centers face cash flow stress
• Hospitals begin to feel pressure from expired payment add-ons

Beyond 30 Days: Serious Disruption

• Medicaid funding becomes uncertain (first quarter funding expires)
• Community health centers may reduce services or staff
• Research activities stall
• Provider confidence in timely payments decreases
• Patient access to certain services may be affected

Political Outlook and Timeline

Note: This section reflects the current situation as of January 27, 2026. Political dynamics can shift rapidly. Physicians should monitor official congressional and CMS communications for real-time updates.

This Week’s Key Dates

• Tuesday, January 28: Senate expected to begin debate on funding package
• Thursday/Friday, January 30: Deadline for funding legislation
• House reconvenes: Not until February 2, 2026 (after the deadline)

Possible Scenarios

These are potential outcomes based on current reporting; actual events may differ:

1. Full funding package passes: All six remaining bills pass the Senate and become law by January 30
2. Partial shutdown: Some bills pass while others stall, resulting in selective agency shutdowns
3. Complete shutdown of remaining agencies: All six bills fail to pass by deadline
4. Short-term continuing resolution: Another temporary funding extension passes (though this appears less likely given recent statements)

Congressional Dynamics (As Reported)

• Republicans hold 53-47 majority in Senate but need 60 votes to overcome filibuster
• Negotiations continue over appropriations conditions
• House is in recess until February 2, complicating rapid amendments
• Outcomes remain uncertain as legislative discussions continue

Beyond January 30

Even if Congress averts a shutdown on January 30:

• March-April 2026: Another potential funding cliff may emerge if only a continuing resolution passes
• Fiscal Year 2027 budget: President expected to release FY2027 budget request in February 2026
• Medicare policy uncertainties: Multiple Medicare payment provisions need long-term reauthorization
• Affordable Care Act subsidies: Enhanced premium tax credits remain a contentious political issue

Resources for Physicians

Official Government Resources

• CMS Contingency Plans: cms.gov/about-cms/emergency-preparedness-response-operations/contingency-staffing-plans
• Medicare Administrative Contractors: Check your regional MAC website (find your MAC at cms.gov/medicare/coordination-benefits-recovery/mac-overview)
• State Medicaid Agencies: Contact information available through medicaid.gov
• Department of Health and Human Services: hhs.gov
• Congressional Budget Office: cbo.gov

Professional Organizations

• American Medical Association (AMA): Monitoring Medicare payment issues and providing advocacy resources
• American Academy of Family Physicians (AAFP)
• American College of Physicians (ACP)
• Specialty-specific medical societies: Many are tracking shutdown implications

State and Local Resources

• State medical societies: Often provide localized guidance
• State Medicaid agencies: Information on state-specific Medicaid operations
• Local health departments: Community-level health services information

Key Takeaways for Physicians

1. Medicare and Medicaid coverage continues during shutdowns, but administrative functions may slow
2. Payment delays are possible but historically have been temporary
3. Community health centers and safety-net providers face the most immediate risk
4. Telehealth restrictions are already in place regardless of shutdown status
5. Multiple Medicare payment provisions need Congressional reauthorization
6. The situation remains fluid and could change rapidly as negotiations continue
7. Physician advocacy matters – contact your representatives to express concerns

As of January 27, 2026, the potential for a partial government shutdown beginning January 31 remains a concern due to ongoing congressional disagreements over appropriations. While core Medicare and Medicaid operations will continue based on their statutory funding, physicians should prepare for potential administrative delays, payment processing issues, and uncertainty around several Medicare payment programs that require separate legislative reauthorization.

The healthcare community has demonstrated resilience through previous shutdowns, but repeated funding uncertainties create unnecessary stress on an already strained system. Physicians should stay informed through official CMS and MAC channels, communicate clearly with patients and staff, and maintain prudent financial management during this period of uncertainty.

Most importantly: Continue providing excellent patient care. While government funding challenges are concerning, your patients depend on your commitment to their health. Focus on what you can control—clinical excellence, clear communication, and operational preparedness.

Stay Updated: Monitor cms.gov, your Medicare Administrative Contractor, and your state Medicaid agency for official guidance as the situation develops.

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Sources

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This article was last updated on January 27, 2026. The situation is evolving rapidly. Physicians should monitor official CMS communications and their Medicare Administrative Contractor websites for the most current information.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or medical practice advice. Physicians should consult with their practice management teams, legal counsel, and professional organizations for guidance specific to their situations.