Rock Weekly: Maverick’s Government Shutdown Update

October 27, 2025

Maverick Health Policy is a consulting firm located in the Washington, D.C. area that specializes in digital health and payment policy. Maverick tracks and analyzes the activity inside the beltway and industry activity beyond the beltway on topics like health data exchange, price transparency, telehealth, artificial intelligence, and value-based care. In collaboration with our friends at Rock Health, we offer the latest on what health care stakeholders need to know about the federal government shutdown. For more information, you are welcome to attend our webinar on Wednesday, October 29, at 1:00 pm ET. You can reserve your spot here.

The shutdown is now the second-longest funding lapse in modern history. Prior to October 1, the Trump administration issued unprecedented guidance directing agencies to prepare for mass layoff plans, targeting employees in programs not aligned with the President’s priorities. No previous shutdowns carried the threat of mass firings.

Thousands of federal workers were laid off – not just furloughed – after a post on “X” on October 10, 2025, by Office of Management & Budget (OMB) Director Russell Vought. The sudden announcement was met with immediate pushback from Republicans and Democrats.

• HHS reinstated 700 of the 1,300 CDC employees that it laid off on Friday, October 10, attributing the mistaken firings to a “coding error.” More here.

• There is uncertainty about whether the layoffs are legally binding. A federal district court in San Francisco granted a temporary restraining order pausing shutdown-related layoffs as part of a lawsuit brought by federal employee unions. In response, HHS’s head of personnel argued that HHS can still proceed with firing nearly 1,000 employees because those workers are not represented by the plaintiff unions that sued. The federal district court then reasserted its order in an emergency hearing, declaring that it does apply to those HHS employees, as well as others represented by unions the administration stopped recognizing earlier this year.

HHS quickly implemented its shutdown plan on October 1, 2025, which meant that HHS furloughed about 32,000 employees and about 15,000 HHS employees were retained to perform activities required by law – like the NIH continuing to care for its patients and the FDA continuing to respond to emergency outbreaks related to foodborne illness and the flu. Other activities stopped, including those related to contracts, grants, data collection, and analysis.

• Telehealth & Hospital-at-Home Flexibilities Expire with Shutdown: Medicare telehealth flexibilities and hospital-at-home waivers expired on September 30, 2025.
  • Medicare patients who were receiving hospital-level care at home were forced to return to institutional facilities.
  • Telehealth providers are temporarily not being paid for the services that expired because CMS directed Medicare Administrative Contractors (MACs) to implement a temporary hold on traditional Medicare telehealth claims, and extended the hold two weeks later, to avoid reprocessing should Congress reinstate the policies. CMS also recommended that telehealth providers send their Medicare patients an Advance Beneficiary Notice of Noncoverage (ABN), which would allow the provider to directly bill their patients for telehealth visits if Medicare ultimately denies those claims.
  • What this means: Patients can no longer receive telehealth services in their homes; they must be in a rural area or an approved originating site like a doctor’s office. Even for services that are still eligible, payments are delayed until Congress renews funding. Providers offering services under the expired rules risk nonpayment. It is anticipated that telehealth services will be reinstated, but it is unclear when this will happen, and it seems unlikely that an extension would be made permanent.
• No Surprises Act Arbitration Continues: CMS confirmed that the balance billing independent dispute resolution (IDR) process will remain operational. The IDR process, established under the No Surprises Act, is primarily funded through administrative fees rather than congressional appropriations.
  • What this means: The parties can continue submitting disputes online, and certified entities will proceed with resolving them.
• CMS Temporarily Recalls Furloughed Workers: CMS is temporarily recalling all furloughed employees on Monday, October 27 to support the Medicare and ACA Marketplace Open Enrollment periods, which run from October 15 to November 7 and November 1 to January 15, respectively. The agency is repurposing user fees for research data, bypassing the need for Congressional appropriations, to pay the recalled employees for the time they work during the shutdown.
  • What this means: CMS staff will be available to process applications and manage call centers for Medicare and ACA open enrollment periods.