To hold or not to hold: that is the question for certain Medicare fee-for-service claims
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October 23, 2025 – We in the health policy world have been kept on our toes lately as the Centers for Medicare & Medicaid Services (CMS) has made multiple updates regarding the status of processing certain claims under Medicare fee-for-service (traditional Medicare) during the ongoing government shutdown. The main question CMS has been grappling with is whether to hold or not to hold certain Medicare claims. I’m going to attempt to break down how CMS has chosen to answer that question and lay out the current status of Medicare fee-for-service claims processing. For more on this topic, listen to our Health Policy Breakroom podcast.
What happened?
As described in a previous Regs & Eggs blog post, certain Medicare “extenders” got tied to the government shutdown. These policies are temporary in nature, but Congress routinely extends them every year. They include (but are not limited to):
- The waivers to the Medicare telehealth geographic and originating site restrictions. These waivers have allowed Medicare telehealth services to be performed in both urban and rural areas and have allowed Medicare beneficiaries to receive telehealth services from their homes. Other telehealth flexibilities have included:
- Expanding the list of eligible practitioners.
- Allowing telehealth to be provided through audio-only telecommunications.
- Allowing telehealth to be used for a required face-to-face encounter prior to the recertification of a patient’s eligibility for hospice care.
These waivers and flexibilities expired on September 30, 2025, for the majority of services (with the exception of behavioral health and mental health services, which still have the originating site and geographic waivers in place).
- The work geographic practice cost index (GPCI) floor of 1.0. Medicare Physician Fee Schedule payments are updated by geographic factors called GPCIs. There are 109 GPCI localities, each with three different GPCIs: work, practice expense, and malpractice. To augment payments in rural areas, Congress temporarily enacted a floor of 1.0 for the work GPCI and extended that floor multiple times. Of the 109 localities, more than 50 have work GPCIs below 1.0 and are therefore supported by the work GPCI floor. The latest extension expired on September 30, 2025.
The full list of GPCIs for 2025 can be found here (Addendum E), and these localities have work RVUs below 1.0:
Alabama
Arizona
Arkansas
Atlanta
Austin
Beaumont
East St. Louis
Fort Lauderdale
Hawaii, Guam
Idaho
Indiana
Iowa
Kansas
Kentucky
Metropolitan Kansas City
Metropolitan St. Louis
Miami
Minnesota
Mississippi
Montana
Nebraska
Nevada
New Hampshire
New Mexico
New Orleans
North Carolina
North Dakota
Ohio
Oklahoma
Puerto Rico
Rest of Florida*
Rest of Georgia*
Rest of Illinois*
Rest of Louisiana*
Rest of Maine*
Rest of Michigan*
Rest of Missouri*
Rest of New York*
Rest of Oregon*
Rest of Pennsylvania*
Rest of Texas*
South Carolina
South Dakota
Southern Maine
Tennessee
Utah
Vermont
Virgin Islands
West Virginia
Wisconsin
Wyoming
*In these cases, multiple GPCIs cover an individual state. Some parts of the state have work GPCIs at or above 1.0, and the rest of the state have work GPCIs below 1.0.
- Ambulance add-on payment. There are three separate add-on payments to the ambulance base and mileage rates under the Ambulance Fee Schedule for ground ambulance transports. All three add-on payments expired on September 30, 2025.
- Hospital at Home: CMS implemented the Acute Hospital Care at Home (AHCAH) waiver program to allow Medicare beneficiaries to receive acute-level care at home. The waiver expired on September 30, 2025.
- The Medicare-dependent hospital (MDH) program and low-volume hospital payment adjustment: The MDH program supports hospitals that are dependent upon Medicare reimbursement and are thus more vulnerable to inadequate Medicare payments than other hospitals, and the low-volume adjustment helps to level the playing field for hospitals in small, isolated communities whose operating costs often outpace their revenue. Both programs were created by Congress and must be periodically extended by Congress. The MDH program and low-volume adjustment both expired on September 30, 2025.
While these extenders aren’t predicated on any government funding decisions, they happened to be included in the short term fiscal year 2026 continuing resolution (CR) that passed the US House of Representatives on September 19, 2025, and has been stalled in the Senate since then. Congress could theoretically take up the extenders in a separate bill not tied to government funding, but most attention currently is on reopening the government.
Since the House-passed CR included these extenders, CMS expected, at least initially, that whatever government funding legislation was eventually enacted would extend the extenders. This is not CMS’s first rodeo in terms of a government shutdown or expiring Medicare extensions. In the past, CMS has tried to hold all Medicare claims that could potentially be impacted until Congress acts. That way, those claims would only need to be processed by Medicare Administrative Contractors (MACs) once, presumably after Congress enacted final policies. This approach also avoids a scenario where MACs have to process claims before Congress acts, then reprocess them after Congress acts, which can be a time-consuming and expensive endeavor.
The work GPCI floor illustrates why CMS wanted to hold claims initially during this shutdown. In this case, the cost of reprocessing claims may be as much or more than the difference between the final payments for services. Many localities that have work GPCIs that are below the 1.0 mark are just below 1.0. In fact, the locality with the lowest work GPCI, Mississippi, has a work GPCI of 0.950 in 2025. Hypothetically, let’s say that a payment for a service in that state would be $99.75 with a work GPCI below 1.0 and $100 with the 1.0 floor. If MACs were to process the claim at $99.75 (for a date of service on or after October 1, 2025), and Congress were to restore the floor retroactive to October 1, 2025, MACs would be required to reprocess the claim at $100, which is a difference of only $0.25. Processing and reprocessing the claims could cost more than $0.25 cents, so from that perspective it could make sense for CMS to try to avoid having to reprocess claims for these very small discrepancies. Simply put, CMS may feel that the juice may not be worth the squeeze here.
However, at the same time, many providers wanted MACs to process claims now in order to get $99.75, which they stated is better than getting nothing while the claim is held. Thus, CMS has been faced with a “dilemma” of holding claims or allowing them to proceed with the chance that some or all would eventually need to be reprocessed. CMS initially decided to hold these affected claims but has now lifted the hold for the majority of claims.
Here is a timeline of CMS action thus far:
- On October 1, 2025, CMS provided guidance on its website about claims processing and telehealth for Medicare fee-for-service. CMS instructed MACs to hold claims for 10 business days, which CMS said is its usual practice when Medicare extenders expire and there is uncertainty about future congressional action. CMS noted that this hold should limit payment impacts, since by law MACs have a 14-day payment floor for electronic claims. Section 1816(c)(3) of the Social Security Act states that MACs must wait 13 days to pay electronic claims (and therefore can start paying on the 14th day) and 28 days for paper claims (and therefore can start paying on the 29th day).
CMS also stated that “absent Congressional action, beginning October 1, 2025, many of the statutory limitations that were in place for Medicare telehealth services prior to the COVID-19 Public Health Emergency will take effect again for services that are not behavioral and mental health services. These include prohibition of many services provided to beneficiaries in their homes and outside of rural areas and hospice recertifications that require a face-to-face encounter.”
- On the morning of October 15, 2025, CMS updated its website to state that “in anticipation of possible Congressional action,” CMS had instructed MACs to continue holding certain claims, including “all claims paid under the Medicare Physician Fee Schedule, ground ambulance transport claims, and all Federally Qualified Health Center claims. Providers may continue to submit these claims, but payment will not be released until the hold is lifted.” This was surprising since it appeared that CMS was planning on holding all Physician Fee Schedule claims, not just those impacted by the Medicare extenders (telehealth and the work GPCI floor).
- In the late evening on October 15, 2025, CMS updated its website yet again to state that “Effective October 1, 2025, CMS instructed all Medicare Administrative Contractors (MACs) to hold claims with dates of service of October 1, 2025, and later for services impacted by the expired Medicare legislative payment provisions passed under the Full-Year Continuing Appropriations and Extensions Act, 2025. In light of the continuing government shutdown, CMS will continue to process and pay held claims in a timely manner with the exception of select claims for services impacted by the expired provisions. To date, no payments have been delayed as statute already requires all claims to be held for a minimum of fourteen days, and this recent hold is consistent with that statutory requirement. Providers may continue to submit claims accordingly.” This update clarified that CMS would only hold claims impacted by the Medicare extenders and not a broader set of claims.
- On October 21, 2025, CMS updated its website again and instructed MACs to lift the hold on the majority of Medicare claims with dates of service on or after October 1, 2025, including claims paid under the Medicare Physician Fee Schedule, ground ambulance transport claims, and Federally Qualified Health Center claims. With respect to telehealth services, MACs will process claims that CMS can definitively confirm are for behavioral and mental health services. CMS has directed MACs to continue to temporarily hold claims for other telehealth services (i.e., those that CMS cannot definitively confirm are for behavioral and mental health services) and for AHCAH claims.
What does this mean?
Now that CMS has released the hold for many claims, what are the practical ramifications?
- For telehealth and AHCAH services, this means that MACs still will not be processing claims that no longer align with existing Medicare coverage policies. If CMS were to process these non-covered services, the claims would be denied—which explains why MACs will continue to hold them. For telehealth, most non-behavioral health and non-mental services are no longer covered. These telehealth coverage policies are a bit convoluted, and CMS recently released a frequently asked questions document to help address potential confusion about which telehealth services are still covered and which are not. As a reminder, CMS also instructed providers to hold telehealth claims. While MACs aren’t processing them anyway, it may make sense for providers just to hold them for now as we wait for Congress to act.
- For all Physician Fee Schedule services with work GPCIs below 1.0, CMS will now have MACs start to process claims with dates of service on or after October 1, 2025. Now that the hold has been lifted and the claims will start to be processed, there is a chance that some claims would need to be reprocessed if Congress eventually restores the work GPCI floor of 1.0 retroactive to October 1, 2025. As discussed, reprocessing claims can be costly, but with no concrete end to the government shutdown in sight, CMS made the decision that it could no longer hold thousands of impacted claims.
- Regarding the MDH program, should Congress restore the program retroactively (as it has done during previous program lapses), it typically takes time to restart. When the MDH program lapsed in late 2017 through early 2018, for example, it was retroactively restored via legislation in February 2018, and CMS did not issue an extension notice until April 26, 2018.
- All other Medicare fee-for-service claims will start to be processed as usual.
Since there was a temporary hold in place, MACs may choose to stagger payment of claims as they work through any backlog that may have amassed. While MACs can’t pay claims for 14 days once they receive them, they typically try to pay claims within 30 days. We will see if MACs are able to maintain this usual timeline for paying claims over the next few weeks or if there are some residual delays in making certain payments.
That was certainly a whirlwind of action, and CMS may continue to update its guidance to MACs as the shutdown continues. Regs & Eggs will keep you posted with any further updates!
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.
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