As the federal government shutdown drags on, an alarming message began circulating across the healthcare community: “physicians won’t get paid until the government reopens.”
The claim spread quickly – through social-media groups, billing forums, and even some state associations – but like many viral half-truths, it oversimplified a far more nuanced reality.
The truth is that most Medicare physician claims continue to be paid. The Centers for Medicare & Medicaid Services (CMS) claims processing contractors remain operational because Medicare funding is considered mandatory, not discretionary.
So, how did a false “no-payment” narrative take hold? The confusion stems from a specific and technical issue: several temporary Medicare payment provisions known as legislative “extenders” expired on Oct. 1, when Congress failed to renew them before the funding lapse. These expirations don’t halt the entire system, but they do suspend payments tied to those specific statutory authorities.
What’s Still Being Paid
Traditional Medicare claims under the permanent Physician Fee Schedule are still flowing; however, claims involving services that depend on recently expired laws are being held or paid at reduced rates. And that’s where the pain points begin.
The Extenders That Expired
1. The Geographic Practice Cost Index (GPCI) Floor
For nearly two decades, Congress has renewed a “1.0 floor” on the work
component of the GPCI, but that floor expired Oct. 1. Without reauthorization, CMS reverts to raw geographic adjustments, reducing payments by roughly 2-4 percent for many providers in lower-cost states.
2. Non-Behavioral Telehealth Flexibilities
The pandemic-era telehealth waivers that allowed physicians to bill Medicare for virtual visits from a patient’s home – without rural restrictions – were also temporary. Those authorities lapsed with the shutdown. Behavioral health delivered via telehealth remains protected under separate legislation, but most other telehealth codes (e.g., 99212-99215 with POS 10) are now non-payable until Congress acts.
3. Ambulance Add-On Payments
Ambulance suppliers in rural and super-rural areas have long relied on 2-percent (urban), 3-percent (rural), and 22.6-percent (super-rural) add-ons to offset thin margins. These too were authorized only through Sept. 30.
4. Low-Volume Hospital (LVH) and Medicare-Dependent Hospital (MDH) Programs
These two hospital payment categories provide supplemental support to small rural facilities heavily dependent on Medicare. Both programs expired with the shutdown, stripping away enhanced payments and forcing hospitals back to standard Inpatient Prospective Payment System (IPPS) rates. For some facilities, that means losing hundreds of thousands of dollars per month.
The Bottom Line
There is no blanket freeze on physician billing. Most payments continue under statutory funding. But the lapse of temporary Medicare extenders has created real, localized financial disruption.
As Congress negotiates a continuing resolution, the reauthorization of these extenders will likely be bundled into any short-term spending deal. Until then, providers should:
- Monitor cash flow closely;
- Flag claims linked to the expired provisions;
- Communicate with patients about potential telehealth non-coverage; and
- Stay tuned to CMS updates as the situation evolves.
Physicians in rural regions, telehealth-heavy practices, and ambulance suppliers are right to feel anxious.
