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Update on Processing of Medicare Claims Impacted During the Government Shutdown – November 20, 2025

Multiple expiring Medicare statutory payment provisions lapsed on October 1, 2025, due to the absence of Congressional action. With the passage of the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. 119-37), Congress retroactively restored many of these payment provisions, effective from October 1, 2025, through January 30, 2026. This includes retroactively restoring the suspension of statutory provisions that restrict payment for telehealth services provided to beneficiaries in their homes and outside of rural areas. 

During the shutdown, in general, the Medicare Administrative Contractors (MACs) processed claims consistent with the pricer software, fee, and payment schedules available on cms.gov. CMS has instructed the MACs to perform mass adjustments to any paid claims that are inconsistent with the most recent Congressional action, including a payment adjustment for low volume inpatient hospitals and a payment adjustment for the Medicare-dependent hospital program. 

On November 6, 2025, CMS instructed the MACs (see Update on Processing of Telehealth and Acute Hospital Care at Home Claims) to return a subset of telehealth claims submitted on or before November 10, 2025, that, at that time, were no longer payable because the statutory provisions temporarily suspending various Medicare telehealth requirements expired on October 1, 2025, or were claims CMS could not identify as payable under current law. For professional claims, those claims were returned with the following messages: CARC 16 and RARC M77. These claims are now payable, provided they meet all applicable Medicare requirements. Practitioners may resubmit those returned claims to CMS, as well as submit any other telehealth claims held in anticipation of possible Congressional action. Practitioners are also encouraged to identify which beneficiaries were charged for telehealth services with dates of service on or after October 1, 2025, that are retroactively payable and instead submit applicable claims to Medicare, refunding any overpayment to beneficiaries. Our instruction to practitioners to append the GY modifier on certain telehealth claims is rescinded and providers may resubmit previously denied claims.

Similarly, beginning on November 10, 2025, CMS instructed the MACs to return claims for the Acute Hospital Care at Home initiative for dates of service of October 1, 2025, or later. Hospitals may resubmit those claims to CMS.

Facilities, practitioners, and suppliers should be observing a return to normal processing operations over the coming days across the MACs and do not need to contact the MACs unless you observe specific discrepancies.

Update on Processing of Telehealth and Acute Hospital Care at Home Claims – November 6, 2025

In the absence of Congressional action, beginning October 1, 2025, many of the statutory limitations on payment for Medicare telehealth services that were, in response to the COVID-19 Public Health Emergency, lifted and subsequently extended through legislation again took effect. These statutory limitations include restrictions on payment for many telehealth services provided to beneficiaries in their homes and outside of rural areas, and the provision of hospice recertifications that require a face-to-face encounter via telehealth. These limitations are not applicable to all Medicare telehealth services, such as those for behavioral and mental health services, those for monthly ESRD-related clinical assessments, and those provided by applicable Medicare Shared Savings Program Accountable Care Organizations (ACO) participants.

CMS has been continuously evaluating our operations since October 1, 2025, and taking action when operationally feasible. To date, to ensure that CMS pays only the telehealth claims consistent with current law, CMS has instructed the Medicare Administrative Contractors (MACs) to pay telehealth claims with dates of service on and after October 1, 2025, when CMS can definitively confirm that the claims are for behavioral and mental health services or otherwise meet the requirements described at Section 1834(m) of the Social Security Act. CMS has identified these claims using the list of HCPCS codes identified in Table 1. Additionally, we have instructed the MACs to process Medicare telehealth claims with a place of service code 10 (patient’s home) that contains a diagnosis code in the F01.A0-F99 range if the services were not performed by physical therapists (PTs), occupational therapists (OTs), speech language pathologists (SLPs), or audiologists. We have further released a small batch of other telehealth claims that we can identify should be permissible to pay under current law.

However, due to systems limitations and recognizing that not all telehealth claims for behavioral and mental health services necessarily include a diagnosis code in the above range — often to further protect the privacy of the patient — we have not been able to identify all claims that are payable under current law. These limitations have also impacted our ability to identify telehealth services performed by clinicians in applicable Medicare Shared Savings Program ACOs, who may receive payment for covered telehealth services to certain Medicare beneficiaries without geographic restrictions, including in the beneficiary’s home, per section 1899(l) of the Social Security Act as added by the Bipartisan Budget Act of 2018 (Pub. L. 115-123). To date, this subset of telehealth claims, including those submitted by clinicians in applicable ACOs and those that we’re not able to identify as for behavioral and mental health services, has been held.

To resolve this subset of claims and improve cash flow for practitioners, CMS is taking further action. For the subset of telehealth claims that are currently being held, and that were submitted on or before November 10, 2025, with dates of service on or after October 1, 2025, CMS will be returning those claims to providers. For professional claims, claims will be returned with the following messages: CARC 16 and RARC M77. Practitioners may resubmit returned claims that meet the statutory requirements detailed below.

Further, for all claims submitted on or after November 10, 2025, with dates of service on or after October 1, 2025, and for returned claims, CMS has revised instructions for the submission of telehealth claims, based on whether or not the services meet current law: Practitioners may submit telehealth claims, as they normally would, for services that meet the applicable requirements under current law, including:

  • Clinicians in applicable Medicare Shared Savings Program Accountable Care Organizations (ACOs). Clinicians in the applicable Medicare Shared Savings Program ACOs may provide and receive payment for covered telehealth services to certain Medicare beneficiaries without geographic restrictions, including in the beneficiary’s home, if furnished in accordance with section 1899(l) of the Social Security Act (Act). For more information, including information on which ACOs qualify for these flexibilities, visit: https://www.cms.gov/files/document/shared-savings-program-telehealth-fact-sheet.pdf (PDF).
  • Behavioral and mental health services not performed by OTs, PTs, SLPs, or audiologists. Applicable clinicians may provide and receive payment for the diagnosis, evaluation, and/or treatment of a mental health disorder without geographic restrictions, including in the beneficiary’s home, if furnished in accordance with section 1834(m) of the Act and its implementing regulations, including applicable in-person visit requirements. If a behavioral or mental health condition is treated during a service reported using a code used in broader circumstances (such as an E/M visit code), CMS encourages practitioners to indicate that with a diagnosis code in the range F01.A0-F99, when appropriate for the specific service. CMS notes that use of these particular diagnosis codes is not necessarily required in every individual case.
  • Monthly ESRD-related clinical assessments. Applicable clinicians may provide and receive payment for monthly ESRD-related clinical assessments described in section 1881(b)(3)(B) of the Act without geographic restriction, including in the beneficiary’s home, if furnished in accordance with section 1834(m) of the Act and its implementing regulations.
  • Other Services. Services that otherwise meet the statutory requirements for originating site and geographic restrictions, which would generally be billed with Place of Service 02 for Telehealth Provided Other than in Patient’s Home.

Should practitioners perform telehealth services beyond those for which Medicare can currently pay in anticipation of possible Congressional action that restores a broader range of telehealth services payable by Medicare (which may or may not be retroactive), practitioners may choose to continue to hold claims and may want to evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage (ABN). Further information on use of the ABN, including ABN forms and form instructions is available at: https://www.cms.gov/medicare/forms-notices/beneficiary-notices-initiative/ffs-abn.

Should practitioners not want to hold these claims, practitioners may submit (or resubmit, if applicable) these claims by including the GY modifier on the claim. The use of the GY modifier informs Medicare that the practitioner performed a telehealth service that is currently statutorily excluded from payment, and the claim will be denied, affording the beneficiary and practitioner with the rights of a denied service. Should Congress act in the future and restore a broader range of telehealth services payable by Medicare, CMS will provide future guidance on whether practitioners will need to resubmit telehealth claims that included the GY modifier.

Additionally, legal authority for the waivers that are required for the Acute Hospital Care at Home (AHCAH) initiative ended on September 30, 2025. CMS has communicated that all hospitals with active AHCAH waivers had to discharge or return all inpatients to the hospital on September 30, 2025, in the absence of Congressional action to extend the initiative and underlying waivers (https://qualitynet.cms.gov/acute-hospital-care-at-home). If hospitals submit AHCAH claims with dates of service of October 1, 2025, or later, they will be returned to the provider for correction. Should hospitals perform AHCAH services beyond those for which Medicare can currently pay, in anticipation of possible Congressional action, hospitals may choose to continue to hold claims and may want to evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage (ABN). Further information on use of the ABN, including ABN forms and form instructions is available at: https://www.cms.gov/medicare/forms-notices/beneficiary-notices-initiative/ffs-abn.

Should hospitals not want to hold these claims, hospitals may submit (or resubmit, if applicable) these claims for denial. The submission of non-covered days or a completely non-covered claim with bill type 110 and condition code 21 informs Medicare that the hospital provided AHCAH services on days that are currently statutorily excluded from payment, and the claim will be denied, affording the beneficiary and hospital with the rights of a denied service. Should Congress act in the future and retroactively extend the waivers, CMS will provide future guidance on whether hospitals will need to resubmit AHCAH claims previously submitted for non-covered days or denial.

Table 1.

0362T908479615997158
0373T9085396160G0396
0591T9611096161G0397
0592T9611296164G0406
0593T9611396165G0407
907859611696167G0408
907919612196168G0410
907929612796170G0442
908329613096171G0443
908339613196202G0444
908349613296203G0513
908369613397151G0514
908379613697152G2086
908389613797153G2087
908399613897154G2088
908409613997155G0560
908459615697156 
908469615897157 

CPT® codes (all codes in table except those beginning with “G”), descriptions and other data only are copyright 2025 American Medical Association. All Rights Reserved.

Physician Fee Schedule: CY 2026 Final Rule – Learn What's New

CMS issued the CY 2026 Physician Fee Schedule (PFS) final rule that announces final policy changes for Medicare payments under the PFS and other Medicare Part B issues.

See a summary of key provisions effective on or after January 1, 2026. 

Average Sales Price Files: October 2025

CMS posted the October Average Sales Price (ASP) and Not Otherwise Classified (NOC) pricing files and crosswalks on the 2025 ASP Drug Pricing Files webpage.

Appropriate use of place-of-service codes 

Review the revised Skilled Nursing Facility 3-Day Rule Billing (PDF) fact sheet and the SNF PPS section of Medicare Payment Systems to learn more about place-of-service codes.
 

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