Shutdown deal offers short-term relief, long-term headaches for medical practices

When federal funding was restored this week after a historic shutdown, many physician practices exhaled — but only slightly. The compromise keeps federal agencies open, but it leaves major health care policies on temporary extensions and sets up another round of uncertainty early next year.

“It just makes running a medical practice really hard,” said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), in an interview on Off the Chart: A Business of Medicine Podcast. “For those practices that do a lot of telehealth [and] might be located in an area that has a geographic adjustment below 1.0 on that work RVU, [it’s] a total mess.”

The latest short-term funding package extends some health care provisions only through Jan. 30, 2026. Physicians Practice recently reported on these implications in its shutdown coverage, “Funding deal ends government shutdown: What it means for practices.”

ACA subsidies still in limbo

A major unresolved issue is the fate of enhanced Affordable Care Act premium tax credits, which are set to expire at the end of 2025. Research from KFF found that average marketplace premiums could more than double if Congress does not act. Their analyses, “ACA marketplace premium payments would more than double on average next year if enhanced premium tax credits expire” and “Calculator: ACA enhanced premium tax credit,” outline the projected increases.

“The advanced premium tax credits expire at the end of the year, and those individuals that buy insurance on the exchanges … could see their premiums go up two times, three times, four times, five times,” Gilberg said.

For practices with a high ACA marketplace payer mix, this could mean more uninsured patients and more financial uncertainty.

His advice heading into 2026:

• Verify eligibility and benefits aggressively at the start of the year.
• Track payer mix shifts.
• Prepare to counsel patients on insurance changes.

Telehealth coverage: restored, but only for now

During the shutdown, key Medicare telehealth flexibilities expired on Oct. 1 — a change that forced many practices to convert virtual visits to in-person appointments. The new funding deal retroactively reinstates those flexibilities, but only through Jan. 30, 2026.

MGMA highlighted the temporary nature of the extension in its statement, “MGMA statement on Senate passed funding package.”

“We’re limping along,” Gilberg said. “This all expires at the end of January again.”

MGMA is calling for a multi-year extension, outlined in their advocacy resource, “MGMA supports long-term access to telehealth services.”

Geographic work floor and another claims reprocessing mess

Another challenge stems from the expiration of the Medicare 1.0 work GPCI floor. Practices in states such as North Carolina and Indiana — where the entire state is below the floor — received lower Medicare payments during the shutdown period.

“Now we have a situation where all those claims are going to get reprocessed,” Gilberg said. Practices may need to send corrected claims or even small patient balance bills.

MGMA continues to push Congress to pass a permanent floor to prevent recurring disruption.

PAYGO cliff avoided — but the cost shifts to the debt

Congress also waived approximately $3.4 trillion in statutory PAYGO cuts that would have triggered a 4% Medicare payment reduction starting in 2026. The American Medical Association warned about that risk earlier this year in its analysis, “AMA comments on 2026 Medicare fee schedule.”

“If Congress didn’t do that, there would be across-the-board 4% cuts,” Gilberg said. Avoiding that cut keeps physicians whole — but pushes the cost onto the federal debt.

Fee schedule changes may matter more than the shutdown

Gilberg emphasized that the 2026 Medicare physician fee schedule final rule may affect practices more than the shutdown itself. CMS released the rule on Oct. 31 in its comprehensive resource, “Calendar year 2026 Medicare physician fee schedule final rule.”

For independent practices, Medical Economics provided a detailed breakdown in “2026 Medicare physician fee schedule: A policy ‘grab bag’ that hurts independent practice, telehealth regulations.”

The rule includes:

• A 2.5% increase to the conversion factor for 2026
• Additional adjustments pushing the effective increase above 3% for many practices
• A 2.5% “efficiency” cut to work RVUs
• Practice expense changes that could reduce payments for specialists who primarily practice in facilities

“Some specialties could see a 10% cut overall,” Gilberg said, “even with the higher conversion factor.”

Legislative short-termism makes planning impossible

Long-term planning remains a challenge as Congress repeatedly ties major health care “extenders” — such as telehealth, payment floors and lab cuts — to short-term budget deals.

“It’s like a light switch with Congress,” Gilberg said. “It just turns off, then on, then off.”

The instability affects everything from staffing to technology investments.

What’s ahead in 2026: payment reform and prior authorization

MGMA will push Congress for broader physician payment reform in 2026, particularly because the temporary bump to the conversion factor expires again in 2027.

“We will be advocating for physician payment reform next year,” Gilberg said.

Prior authorization is also expected to dominate the policy landscape. CMS is implementing major changes under its new prior authorization regulation, “CMS interoperability and prior authorization final rule.”

The rule will:

• Require certain payers to adopt electronic PA workflows
• Establish shorter PA turnaround times
• Increase transparency in decision-making

Gilberg said these regulatory changes offer “some exciting things,” even if Congress remains stalled.

MGMA is also advocating for:

• Multi-year telehealth extensions
• A permanent 1.0 work GPCI floor
• Restoration of APM bonus incentives
• ACA tax credit fixes

But Gilberg is realistic. “This Congress,” he said, “has not shown … a real desire to work on health care policy.”

For now, he advised practice leaders to prepare for another turbulent year — and to model multiple scenarios around Medicare reimbursement, telehealth policy, and patient coverage as 2026 unfolds.