Medicare backs off plan to pause doctor payments amid shutdown

STAT News -Wednesday, October 15, 2025
By Daniel Payne and Tara Bannow

The Centers for Medicare and Medicaid Services said late Wednesday that it was not pausing all Medicare payments to doctors, after a statement earlier in the day stated it would.

Instead, the agency will only wait to process claims that are related to programs that have expired, such as some telehealth or rural services.

The change comes just hours after the agency said it was pausing all Medicare payments to doctors, a move that surprised and worried clinicians, community health centers, and other health care providers.

“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,” the agency said in an update to its website Wednesday night, adding that no payments had been delayed yet.

CMS did not respond to a request for comment.

CMS announced the pause in a notice on its website on Wednesday. The pause is happening because Congress needs to reauthorize certain Medicare payment programs related to telehealth and rural providers, and that reauthorization has gotten wrapped up in the overall deal to reopen the government.

An extended payment pause could have caused cash flow concerns for doctors, several groups representing providers told STAT. There are fears that, in some cases, claims could be left unpaid, should the renewal of programs that have lapsed not be made retroactive. Ground ambulance transport services and Federally Qualified Health Centers could also be affected by the pause in some payments.

The paused payments include those going back to Oct. 1, when the government shutdown started and several health care programs lapsed. 

A pause on all Medicare payments to clinicians would have created “a potentially unprecedented problem” for medical groups, said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association. In previous cases in which the telehealth and rural programs expired, CMS continued paying those claims at lower rates and fixed them retroactively once Congress extended the programs, he said. It’s unclear why that’s not happening this time.

“It’s unprecedented that they’re not paying any claims based on the fact that two of these extenders are expired now,” Gilberg said of the original statement from CMS. “For context, we support Congress going back to fix these things, but we’re not saying that you should hold all claims and impede cash flow for every single Medicare Part B claim for their inaction to get the government shutdown resolved.”

Medicare payment for doctors is a top priority for physician groups in Washington, where the amount of money the program pays has become an annual battle between lobbyists and lawmakers. The large number of physicians paid through Medicare — and the program’s huge power in the U.S. health system — have caused provider groups to closely watch any changes from CMS.

CMS likely paused payments to keep from having to reprocess them — a time-consuming and expensive process — should Congress act, said Jeffrey Davis, a director at McDermott+ who previously worked at the Health and Human Services Department, said of the original statement. But that statement surprised him, he said, because it said all physician fee schedule payments would be paused, not just those affected by the lapsed congressional programs.

Payment pauses have occurred in previous shutdowns when there was uncertainty about whether certain Medicare payment provisions would be extended, Davis said, but were typically limited to 10 business days and focused on the services affected by expiring programs.

More than a decade ago, Medicare would routinely hold payments to doctors when Congress failed to override a now-defunct physician payment policy, called Sustainable Growth Rate. That policy called for major cuts to doctors’ pay, and Medicare didn’t want to pay the lower pay rates, because Congress would always eventually boost them. Congress replaced that payment system in 2015.

The payments pause probably won’t inflict the same level of disruption as doctors and hospitals saw in 2020, when they had to shut down elective services during the Covid-19 pandemic, temporarily cutting off a main source of revenue, said Rick Kes, a health care partner with the consulting firm RSM. Still, providers will be clamoring for a fix if their cash flows start to become affected.

“They’ll probably start to remember that time frame and be like, ‘We don’t want to have to try to find cash to make payroll. Let’s get this back on track so we can get our payments paid when we normally expected them to be paid’,” Kes said of the first statement from CMS.

The pause also comes as the Trump administration has sought to put intense political pressure on Democrats to agree to Republicans’ terms for reopening the government. The administration has gone so far as to fire federal workers across agencies and blame Democrats for the firings, arguing without evidence that they were forced to by budget constraints.

Some Medicare payments to clinicians are now the latest issue riding on a government deal.

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