Government shutdown persists. Over the weekend, the Trump administration announced it would use a different US Department of Defense funding source for federal troops’ October 15, 2025, paychecks, eliminating a flashpoint that might have led to negotiations and potentially ended the shutdown, which is on its 17th day as of this writing. The Trump administration also found ways to pay federal law enforcement and fund Special Supplemental Nutrition Program for Women, Infants, and Children payments. With those issues at least temporarily addressed, lawmakers may take longer to reach an agreement to reopen the government.
While the House remained out of session again this week, the Senate returned Tuesday and continued to hold votes on the House-passed “clean” continuing resolution (CR), which continued to fail to achieve the 60 votes necessary for passage. Republican leaders also began to tee up action on fiscal year (FY) 2026 appropriations bills, including a test vote on the House-passed Defense bill, which Senate appropriators intend to make a vehicle for additional FY 2026 bills, potentially including the Labor-HHS bill. Ultimately, the standalone Defense bill failed in a 50 – 44 vote, with only three Democratic senators (Cortez Masto (NV), Fetterman (PA), and Shaheen (NH)) voting in support. Senate Republicans also aimed to push forward a vote to go to conference on a “mini-bus” of three FY 2026 funding bills that previously passed both chambers (Military Construction-Veterans Affairs, Agriculture and FDA, and Legislative Branch) to force Democrats to vote on additional full FY 2026 bills. That vote didn’t occur this week but could occur at a later date.
CMS modifies Medicare claims shutdown guidance. CMS initially instructed all Medicare Administrative Contractors (MACs) on October 15, 2025, to hold claims with dates of service of October 1, 2025, or later. This included all claims under the Medicare Physician Fee Schedule (PFS), ground ambulance transport claims, and all federally qualified health center claims, despite the fact that only certain Medicare extenders expired in absence of congressional action. Services impacted by the expired extenders include telehealth services that don’t meet the originating site/geographic requirements, PFS services that are delivered in localities with work Geographic Practice Cost Indices below 1, and ambulance transport claims. CMS stated that providers could continue to submit claims but payment would not be released until the hold is lifted.
Stakeholders expressed concern about how this broad hold would impact payment to physicians. Later on October 15, CMS updated its website and backtracked the broad hold. The agency directed MACs to process and pay held claims in a timely manner, with the exception of select claims for services impacted by the expired provisions.
CMS also put out information on telehealth payments in Medicare Advantage (MA) plans. CMS directed MA plans to the agency’s October 1, 2025, guidance and noted that MA plans may hold telehealth claims given the expiration of telehealth flexibilities but must continue to meet prompt payment requirements for out-of-network providers. Read more about this complicated message in this week’s Regs & Eggs blog post.
HHS issues additional layoff notices during shutdown. Late on October 10, 2025, various agencies, including HHS, laid off staff as the government shutdown continues. Some staff have since been rehired, and HHS has not yet officially announced the reductions in force (RIFs). HHS noted in a court filing that although 1,760 HHS employees received RIF notices, roughly half were sent in error, and HHS layoffs totaled 982. Reporting also suggests that most RIFs were within the Centers for Disease Control and Prevention, Substance Abuse and Mental Health Services Administration, and Health Resources and Services Administration. Many of the staff let go were those deemed nonessential during the shutdown.
These latest RIFs are being challenged in federal court, including in the US District Court for the Northern District of California, where the judge granted a temporary restraining order and blocked the administration from implementing additional RIFs during the shutdown. The RIFs were followed by an executive order (EO), “Ensuring Continued Accountability in Federal Hiring,” that directs federal agencies to create a strategic hiring committee to ensure that agency hiring is consistent with the administration’s priorities. It also directs agencies to create annual staffing plans to ensure career appointments are in high-needs areas, eliminate duplicative functions or positions, and promote employee accountability.
White House announces additional most-favored nation agreements. Two additional pharmaceutical companies announced they would provide drugs to state Medicaid agencies at the most-favored nation (MFN) price and directly to consumers at a discounted price. The first was announced late October 10, 2025. The second focuses specifically on a fertility medication and follows the February EO, “Expanding Access to In Vitro Fertilization,” which aimed to reduce the cost of in vitro fertilization treatment. Prior to these most recent announcements, the first MFN announcement was made on September 30, 2025. The FDA also announced the first nine recipients of the national priority voucher pilot program, which was created in June 2025 and provides expediated drug or biologic product review for products aligned with national health priorities.
Federal judge extends stay on Biden STLDI regulation. The plaintiff filed the lawsuit in the US District Court for the Eastern District of Texas, alleging that the Biden administration violated the Administrative Procedure Act when issuing its 2024 final rule that limited the availability of STLDI plans. Once the Trump administration took office, it requested a 90-day stay of all pending litigation. The judge granted the stay in February 2025 and extended it multiple times. HHS, the US Department of Labor, and the US Department of the Treasury noted that they planned to issue new STLDI rulemaking by mid-2026 and to de-prioritize enforcement of the 2024 final rule. In this most recent stay, the judge ordered the agencies to provide a status report on the rulemaking every six months, with the first report due April 2026. As a result, the administration is not enforcing the Biden regulations that generally limit STLDI plans to three months.
The government shutdown will extend at least into next week. The Senate will be in session, and committee action will include a Senate Health, Education, Labor, and Pensions Committee hearing on the 340B Program and a Senate Aging Committee hearing on shoppable services. The House is likely to remain out of session, although Speaker Johnson (R-LA) could call members back with 48-hours’ notice.
