Potential Government Shutdown: Impacts on Hospitals and Healthcare Programs

Healthcare Policy Update
Sep 19, 2025
Article Background

What’s happening

If Congress does not pass legislation funding the government by midnight on September 30th, the federal government will shut down. Many healthcare programs are tied to government funding and would therefore expire on the same date. Lawmakers are seeking to avoid these outcomes, but they cannot be ruled out, given the intense partisan political climate.

Of interest

A shutdown could have serious impacts on the US Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS), such as:

HHS would furlough a large number of staff throughout the operating divisions.
The regulatory process could be held up, leading to delays in publishing Medicare payment rules.
Payments under Medicare fee-for-service could be delayed, with a longer shutdown resulting in Medicaid and disproportionate share hospital (DSH) payments being delayed.
CMS may pause review of Medicaid state plan amendments and waivers.

Additionally, the following healthcare policies, among others, would expire without Congressional action:

Medicare telehealth flexibilities
Community health center funding
Graduate medical education programs
Low-volume hospital payment adjustment
Medicare-dependent hospital program
Medicaid DSH payments
Acute Hospital Care at Home Waiver

These policies would expire not because of the shutdown, but rather because they are authorized only through September 30th, and end barring legislation extending them.

Why you should care

Congress failing to address government funding and expiring healthcare programs could impact when hospitals are paid. Hospital leaders should be informed about these possibilities and their implications.

Looking to learn more?

Our partners at McDermott+, one of healthcare’s most trusted and respected policy and lobbying consulting firms, wrote a note offering valuable insights into what a shutdown could mean and how it could affect organizations; including describing the consequences of a government shutdown process, potential legislative possibilities, anticipated impacts on HHS operating divisions, and the expiring health programs.

Click here to read the potential government shutdown note from McDermott+.