IHPP - Weekly, October 27, 2025

Summary

As the impacts of the government shutdown intensify, the Senate is planning votes on several bills this week, including a Sen. Cruz (R-TX) bill to pay air traffic controllers, a Sen. Sullivan (R-AK) bill to pay the military, and a compromise bill between Sen. Johnson (R-WI) and Sen. Van Hollen (D-MD) to pay federal workers and active-duty military. This comes ahead of the anticipated lapse in funding for the Supplemental Nutrition Assistance Program (SNAP) and open enrollment for Affordable Care Act (ACA) marketplace on November 1. As far as an off ramp out of the shutdown, both sides remain strong on their positions and no compromise on the enhanced premium tax credits has emerged. Additionally, any bill to ease the pain of the shutdown could further extend the length of the shutdown.

Update on Medicare Fee-for-Service (FFS) Claims Processing

On October 21, 2025, CMS announced it is lifting the hold on most Medicare FFS claims that had been paused following the September 30 expiration of several statutory payment “extenders.” Medicare Administrative Contractors (MACs) have been instructed to resume processing claims for:

• Ground ambulance transports,
• Federally Qualified Health Centers (FQHCs), and
• Behavioral and mental health telehealth services.

Additionally, services paid under the Physician Fee Schedule in localities with a Geographic Practice Cost Index (GPCI) below the 1.0 floor for work RVUs will now be paid, though at slightly reduced rates, unless Congress acts to restore the GPCI floor retroactively. Of 109 localities, more than 50 have GPCIs below 1.0 (see full list here).

Claims for non-behavioral telehealth and Acute Hospital Care at Home services remain on hold pending potential congressional action to reauthorize those flexibilities.

Additionally, in updated FAQs issued October 15, 2025, CMS confirmed that for beneficiaries who began home-based behavioral/mental health telehealth services on or before September 30, 2025, the usual 6-month prior in-person visit requirement is not applied. Instead, those patients will need at least one in-person, non-telehealth visit every 12 months. For other patients initiating telehealth after that date, the 6-month prior in-person visit requirement remains in force. CMS also notes that for behavioral health services furnished via telehealth by RHCs and FQHCs in the patient’s home, the in-person requirement is delayed until January 1, 2026.

Regulatory Update

The Office of Management and Budget (OMB) completed reviewing the following:

• Medicaid and Immigration Status. A final rule titled, “Medicaid Eligibility Changes Under the Affordable Care Act of 2010; Giving States Freedom to Use Immigration Information to Determine State Residency for Medicaid Eligibility.” The final rule is part of the Trump administration’s efforts to increase federal oversight on states using Federal Medicaid funding for the health care of undocumented immigrants.

OMB is also reviewing the following:

• Medicare:
  • CY 2027 Medicare Advantage/Part D Policy. Proposed CY 2027 policy and technical changes to Medicare Advantage, Medicare Prescription Drug Benefit, Medicare Cost Plan, and PACE
  • Medicare Payment Rules. The CY 2026 Physician Fee Schedule final rule, the CY 2026 Hospital Outpatient PPS final rule, the CY 2026 ESRD final rule, and the CY 2026 Home Health PPS final rule.
  • Procurement of Domestic PPE. An advance notice of proposed rulemaking that would detail program incentives and requirements for Medicare providers and suppliers to invest and phase-in the procurement of American made personal protective equipment (PPE) and essential medicine to secure our nation’s health and safety.

• Medicaid:
  • Gender-Affirming Care.
    • A proposed rule titled, “Medicaid Program; Prohibition on Federal Medicaid Funding for Sex Trait Modification Procedures Furnished to Children and Youth.”
    • A proposed rule titled, “Medicare and Medicaid Programs; Hospital Condition of Participation: Limiting Participation Based on the Performance of Sex Trait Modification Procedures on Children.”
  • State Directed Payments. A proposed rule titled, “Medicaid Managed Care-State Directed Payments.” The proposed rule appears intended to advance a presidential memorandum released on June 6, which directs HHS to “eliminate waste, fraud, and abuse in Medicaid, including by ensuring Medicaid payments rates are not higher than Medicare, to the extent permitted by applicable law.”

• Prescription Drugs:
  • A proposed rule titled, “Improving Transparency into Pharmacy Benefit Manager Fee Disclosure” and a proposed rule addressing Transparency in Coverage requirements.
  • CMMI Drug Pricing Models. A proposed rule for a Global Benchmark for Efficient Drug Pricing (GLOBE) Model and a proposed rule for Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model

• Nutrition:
  • Head Start. A notice from the Administration for Children and Families titled, “Publish Request for Information: Nutrition Services in Head Start Programs

• Immigration:
  • Unaccompanied Children. An interim final rule titled, “Unaccompanied Children Program Foundational Rule; Update to Include Proof of Identity and Income Verification Standards.”