Healthcare providers have been sounding the alarm for years, and the federal government shutdown that stretched from October 1 through November 12, 2025 made the problem impossible to ignore. Critical telehealth programs and hospital-at-home waivers had been tied to short-term spending legislation, turning them into hostages every time Congress fought over the budget.
Since then, the story has gotten more complicated. Congress restored the waivers, let them lapse into a second brief shutdown, and eventually passed a genuinely longer extension than anything telehealth policy has seen in years. None of that resolved the underlying problem. It just moved the deadline.
This isn’t how you run a healthcare system. It’s crisis management dressed up as policy, and the 2026 extension proves the pattern is durable even when Congress does more than the bare minimum.
Key Takeaways
Medicare telehealth waivers lapsed October 1, 2025, during a 43-day shutdown, then were restored and extended twice more. On February 3, 2026, Congress signed H.R. 7148, extending telehealth flexibilities through December 31, 2027, and the Acute Hospital Care at Home waiver through September 30, 2030. It’s the longest extension telehealth policy has gotten since the COVID-19 public health emergency ended, but it’s still not permanent. The CONNECT for Health Act would make it law for good, but remains stalled despite bipartisan cosponsors. Bottom line for healthcare organizations,keep contingency plans ready. Congress hasn’t shown any sign of taking telehealth off the budget-negotiation table.
What Happened to Telehealth During the 2025 Government Shutdown?
The federal government shutdown didn’t just inconvenience bureaucrats. It disrupted actual patient care. Medicare telehealth waivers expired because they were attached to the spending bill that finances the federal government. When that bill lapsed on October 1, 2025, the waivers went with it. Hospital-at-home programs got caught in the same mess.
The Centers for Medicare & Medicaid Services told hospitals that patients receiving acute care at home needed to be transferred to traditional facilities or discharged. Healthcare organizations scrambled to relocate patients who were getting hospital-level treatment in their own homes. These moves disrupted treatment plans and created real difficulty for families and medical teams who had to coordinate mid-treatment transfers that served no medical purpose.
Telehealth providers serving Medicare patients in rural areas or treating people with mobility limitations faced immediate problems. Services that had become routine suddenly weren’t available. Providers couldn’t bill Medicare for telehealth visits that fell outside the narrow pre-pandemic coverage rules. They had to choose between providing care they couldn’t bill for or turning away patients who depended on virtual visits.
Kyle Zebley, senior vice president of public policy at the American Telemedicine Association, described the situation plainly in an interview with Chief Healthcare Executive. Even with bipartisan support for telehealth, the healthcare community “ended up the victim” of budget politics.
Did Congress Extend Medicare Telehealth Waivers Again?
Yes, twice more since the shutdown ended. When the 43-day shutdown finally closed on November 12, 2025, Congress passed the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, restoring the waivers retroactively through January 30, 2026.
That deadline arrived with no permanent fix in place, and the federal government briefly shut down again for four days at the end of January 2026. On February 3, 2026, Congress passed H.R. 7148, the Consolidated Appropriations Act, 2026, and President Trump signed it into law. Section 6209 of that Act extends the core Medicare telehealth flexibilities through December 31, 2027, roughly two years from signing. Section 4 of a companion measure extended the Acute Hospital Care at Home waiver through September 30, 2030, a five-year runway.
That’s a meaningfully longer extension than the two- and three-month patches Congress had been issuing. Geographic and originating-site restrictions remain lifted through 2027. Occupational therapists, physical therapists, speech-language pathologists, and audiologists can continue billing Medicare for telehealth services through the same date. Audio-only behavioral health visits became a permanent part of Medicare policy rather than a temporary flexibility, independent of the 2027 deadline.
One new wrinkle: starting January 1, 2028, most non-behavioral telehealth services reprocess back toward pre-pandemic in-person visit requirements for new mental health patients, unless Congress acts again before then. The extension bought real time. It did not remove the recurring deadline from the calendar.
Why Does Congress Keep Extending Telehealth Instead of Making It Permanent?
The political situation makes no sense on the surface. Telehealth has broad bipartisan support. Rural legislators recognize that telehealth helps constituents who live hours from specialty care. Urban representatives see telehealth addressing transportation barriers and improving access for disabled and elderly constituents. Provider organizations across specialties support permanent telehealth flexibilities, and patient advocacy groups consistently lobby for continuation.
As Zebley put it in the aftermath of the 2025 lapse, “I say that, totally being grateful for bipartisan support. Never will we as a community take that for granted. But despite all that support and despite all that gratitude that we’ve shown for it, we still have ended up the victim here.”
So why hasn’t Congress made these changes permanent, even after passing its longest extension yet?
Several factors explain the gap:
Budget Scoring
The Congressional Budget Office must calculate the cost of making telehealth flexibilities permanent. Expanding covered services increases federal spending in CBO projections, even if telehealth potentially reduces costs by preventing emergency department visits, hospital admissions, or disease complications. Budget rules prioritize short-term spending projections over potential long-term savings, making permanent expansions harder to justify financially than temporary extensions, however long those extensions run.
Fraud and Abuse Concerns
Some policymakers remain worried about fraud risk in telehealth, particularly for behavioral health services and in Medicare Advantage. The Department of Health and Human Services Office of Inspector General has issued reports highlighting vulnerabilities in telehealth billing. Their concerns include questions about medical necessity for services provided without established patient-provider relationships and potential for inappropriate prescribing in audio-only visits. The 2026 Act responded to this in a small way by requiring unique billing identifiers when providers contract with third-party telehealth platforms, which adds claims complexity but signals Congress is still treating fraud oversight as unfinished business rather than a solved problem.
Competing Priorities
Healthcare policy competes with numerous other legislative priorities. In budget negotiations, telehealth extensions keep getting bundled into larger packages rather than receiving standalone consideration. This means telehealth policy stays secondary to broader fiscal debates about government funding, debt limits, and spending levels, and the 2026 fight was no exception.
Legislative Mechanics
Passing permanent reforms requires different legislative processes than extending existing temporary policies. Extensions can be included in continuing resolutions and omnibus spending bills through relatively streamlined procedures. Permanent reform would likely require committee consideration, hearings, and potentially reconciliation with other healthcare policies. The CONNECT for Health Act, the standing bill that would make telehealth flexibilities permanent, has sat with 212 House cosponsors and 71 Senate cosponsors since early 2025 without a floor vote. The path of least resistance is still another extension, just a longer one this time.
What Does Telehealth Policy Uncertainty Cost Healthcare Organizations?
The uncertainty creates real, measurable costs for healthcare organizations even after a two-year extension:
Investment Decisions
Health systems still hesitate to invest heavily in telehealth infrastructure when the reimbursement horizon caps out at a known date rather than running indefinitely. Expanding telehealth capacity requires capital investment in technology platforms, training staff, establishing workflows, and ensuring regulatory compliance. Organizations have more confidence with a 2027 date on the calendar than they did with a 90-day window, but “more confidence” is not the same as certainty.
Workforce Planning
Hiring clinicians specifically for telehealth roles or training existing staff on virtual care delivery requires confidence that those capabilities will remain billable well past any single hiring cycle. A two-year window helps, but rural hospitals and community health centers that plan staffing three to five years out are still working against a countdown clock.
Patient Expectations
Patients who integrated telehealth into their routine care lived through a period where the service disappeared, came back, nearly disappeared again, and then was extended. That whiplash undermines patient confidence even after the extension passed, and many patients still don’t understand why a February 2026 signing didn’t put the question to rest permanently.
Administrative Burden
Healthcare organizations still had to monitor legislative developments through two shutdowns and two separate spending bills in a five-month window, prepare contingency plans for potential lapses, communicate with patients about coverage changes, and adjust billing systems each time policy shifted. This administrative overhead diverts resources from patient care. Companies like Medwave, which provide billing, credentialing, and payer contracting services to healthcare providers, spent the better part of five months helping clients prepare for lapses that partially happened, reverse those preparations when waivers were restored, and then update systems again once the 2027 extension took effect.
What Happened to the Hospital-at-Home Waiver?
The hospital-at-home waiver became collateral damage during the 2025 shutdown, then received the most stable outcome of any piece of this policy fight. The Acute Hospital Care at Home waiver, launched during COVID-19, allows hospitals to provide acute inpatient care to appropriate patients in their homes while billing at inpatient rates.
Research on hospital-at-home programs has shown promising results. A study published in the Journal of the American Geriatrics Society found that hospital-at-home care was associated with lower costs, shorter lengths of stay, fewer lab tests and procedures, and lower rates of delirium compared to traditional inpatient care. Patient satisfaction scores were consistently higher for home-based acute care.
During the October-November 2025 shutdown, CMS directed hospitals to transfer patients receiving acute care at home to traditional facilities or discharge them, forcing mid-treatment relocations that served no clinical purpose. That experience appears to have shifted the calculus in Congress. The February 2026 Act extended the Acute Hospital Care at Home waiver through September 30, 2030, a five-year runway that’s substantially longer than the two-year telehealth extension passed in the same bill.
Hospital systems that invested in building hospital-at-home programs now have more room to plan than telehealth providers do, though the underlying dependency on periodic congressional reauthorization hasn’t gone away. It’s simply been pushed out further.
What Happens When the Telehealth Extension Expires in 2027?
Absent further action, most non-behavioral Medicare telehealth flexibilities are scheduled to revert toward pre-pandemic rules after December 31, 2027. Geographic and originating-site restrictions would return, meaning many Medicare beneficiaries would again need to be in a qualifying rural facility rather than their own home to receive covered telehealth services. A related change also takes effect January 1, 2028, for many new mental health telehealth patients, who would need an in-person visit before ongoing virtual care unless Congress acts again.
The CONNECT for Health Act would remove this cliff entirely by making the flexibilities permanent, and it has meaningful bipartisan cosponsorship in both chambers. It has not received a floor vote in either chamber as of this writing. Healthcare organizations should treat late 2027 the way they treated late 2025: as a deadline that has a real chance of arriving without a permanent resolution attached.
Breaking the Cycle: Could Congress Finally Make This Permanent?
Breaking this cycle requires Congress to treat telehealth as core healthcare policy rather than a budget bargaining chip. The 2026 extension proved Congress is capable of a longer runway when pressure is high enough. It did not prove Congress is willing to remove the runway concept altogether.
Several approaches could still change that:
Pass the CONNECT for Health Act
The permanent fix already exists as drafted legislation with 212 House cosponsors and 71 Senate cosponsors. It doesn’t need a new framework, only a floor vote in each chamber and a willingness to score it honestly against the long-term savings telehealth can generate by preventing costlier acute episodes.
Permanent Baseline Coverage with Periodic Review
Make core telehealth flexibilities permanent while requiring CMS to report to Congress annually on utilization, outcomes, and program integrity. This provides stability while maintaining oversight, and it addresses the fraud-and-abuse concerns that keep surfacing in committee discussions.
Separate Telehealth from Budget Negotiations
Pass standalone telehealth legislation outside the context of government funding bills. This allows telehealth policy to be evaluated on healthcare merits rather than fiscal bargaining dynamics, and it would have prevented telehealth coverage from lapsing twice in five months purely because of unrelated funding disputes.
Evidence-Based Sunset Provisions
Structure any future extension with clear metrics for checking whether it’s working. If telehealth meets defined benchmarks for access, quality, and cost-effectiveness by the 2027 deadline, coverage becomes permanent. If metrics aren’t met, Congress revisits the policy with actual data rather than repeating the same short-term patch.
None of these approaches are radical. They apply standard policy-making practices to telehealth instead of treating it as a perpetual temporary measure that happens to have gotten a longer leash.
Medicare Telehealth Waivers and the 2026 Extension FAQ
How long are Medicare telehealth waivers extended?
Medicare telehealth flexibilities are extended through December 31, 2027, under H.R. 7148, the Consolidated Appropriations Act, 2026, signed February 3, 2026. The Acute Hospital Care at Home waiver runs through September 30, 2030.
Is Medicare telehealth coverage permanent now?
No. The 2027 date is an extension, not a permanent fix. The CONNECT for Health Act would make the flexibilities permanent, but it has not received a floor vote in either chamber.
What happens to telehealth coverage after December 31, 2027?
Absent further congressional action, most non-behavioral telehealth flexibilities revert toward pre-pandemic geographic and originating-site restrictions. Related in-person visit requirements for new mental health telehealth patients take effect January 1, 2028.
Did telehealth waivers actually lapse in 2025?
Yes. They lapsed October 1, 2025, when a 43-day government shutdown began, and were restored retroactively when the shutdown ended November 12, 2025.
Was there a second telehealth lapse in 2026?
The January 30, 2026 extension deadline coincided with a brief, roughly four-day government shutdown before H.R. 7148 was signed on February 3, 2026, extending coverage through 2027.
How does this affect telehealth billing for my practice?
Providers should continue billing under current telehealth rules through 2027, but should build contingency plans for the 2027-2028 transition the same way they did for 2025, including monitoring CMS guidance and maintaining flexible scheduling for affected patients.
Why does Congress keep extending telehealth instead of making it permanent?
CBO budget scoring rules make permanent expansion look more expensive in short-term projections than repeated temporary extensions, even though telehealth may reduce costs long-term by preventing more expensive acute episodes. Fraud oversight concerns and competing legislative priorities add further friction.
What is the Acute Hospital Care at Home waiver?
It’s a Medicare program launched during COVID-19 that lets hospitals provide acute inpatient-level care to appropriate patients in their own homes while billing at inpatient rates. It was extended through September 30, 2030 in the 2026 spending bill.
What is the CONNECT for Health Act?
It’s bipartisan legislation (H.R. 4206 in the House, S. 1261 in the Senate) that would make current Medicare telehealth flexibilities permanent rather than subject to periodic extension. It has over 200 House cosponsors but has not reached a floor vote.
Which telehealth flexibilities became permanent rather than temporary?
Audio-only telehealth for behavioral and mental health services became a permanent part of Medicare policy in the 2026 legislation, independent of the broader 2027 extension deadline that applies to most other telehealth flexibilities.
Healthcare Deserves Better Than Governing by Deadline
Two shutdowns and two spending bills in five months demonstrated that tying essential healthcare services to short-term budget legislation creates unnecessary disruption for patients and providers, even when the eventual outcome is a longer extension than usual. The question is whether Congress will use the runway through 2027 to pass permanent reform or simply set up the next crisis on a longer fuse.
Patients receiving hospital-level care at home deserve not to be relocated mid-treatment because of budget politics. Rural beneficiaries who rely on telehealth for specialty care deserve certainty that those services will remain available past 2027. Healthcare organizations deserve the policy stability necessary to invest in care delivery models that improve access and outcomes without a countdown clock attached.
Healthcare providers have adapted remarkably well to policy uncertainty. They’ve built contingency plans, maintained flexibility in their operations, and found ways to continue serving patients despite two shutdowns in a single winter. But adaptation to dysfunction shouldn’t be necessary. The burden shouldn’t fall on providers and patients to work around Congress’s inability to make stable policy decisions.
Medwave handles billing, credentialing, and payer contracting for healthcare providers. The constant policy shifts create ongoing operational work. We help our clients prepare for potential lapses, adjust their billing systems when extensions pass or fail, and work with insurance companies to clarify coverage when rules change. But we’d much rather help providers operate under stable, predictable policy that runs past the next election cycle rather than the next appropriations deadline.
It’s time for Congress to make telehealth policy permanent, or at minimum, pass the CONNECT for Health Act so patients and providers aren’t perpetually bracing for the 2027 cliff the way they braced for 2025’s. The evidence supporting telehealth is clear. The bipartisan cosponsorship exists on paper. The two-year extension proves Congress can act decisively when forced to. What’s still missing is the political will to remove the deadline instead of just moving it.
Until that changes, Medwave will keep helping healthcare providers navigate whatever comes next, whether that’s a permanent fix, another extension, or another lapse. For guidance on how the current telehealth rules affect your practice’s billing and coding workflows, our team is ready to help.
Co-Founder and COO of Medwave, bringing more than 30 years of hands-on experience in healthcare revenue cycle management, payer contracting, and medical credentialing.