Breaking: Federal Shutdown Possible Again (National Council)

Dear Member,

Currently, six bills, funding approximately 78 percent of government operations — inclusive of funding for the Department of Health and Human Services (HHS) — remain funded under a continuing resolution that expires Jan. 30. 

As we approach the federal funding deadline, the path forward for reaching a funding deal is not yet clear and another shutdown appears increasingly likely.

If Congress is unable to pass a funding bill before midnight on Friday, the federal government will again experience a shutdown.

Should that occur, HHS will furlough a large percentage of its staff (FY26 HHS Contingency Staffing Plan). HHS staff who administer mandatory programs, including Medicare and Medicaid, will continue to work and emergency surveillance operations will continue.

We anticipate Medicaid and Medicare reimbursements would continue uninterrupted during a shutdown. However, with staff furloughs, certain Medicaid operations would slow and Medicaid-related rulemaking, along with activity related to approval of Medicaid waivers, would be suspended for the length of the shutdown.

SAMHSA Contingency Staffing Plan

The Substance Abuse and Mental Health Services Administration (SAMHSA) will retain 98 staff (13% of its workforce):

• 5 exempt staff
• 93 excepted staff
  • 39 civil service staff
  • 54 Commissioned Corps Officers

SAMHSA Activities That Will Continue

Certain core behavioral health programs will remain active, including:

• Disaster behavioral health response teams
• Disaster Distress Helpline (24/7/365 crisis counseling)
• 988 Suicide & Crisis Lifeline

Previously funded operations, including the following, will continue using available balances:

• The Treatment Services Locator
• The Treatment Referral Line

While we have not yet been able to confirm that this will remain true in the case of another shutdown, during the previous shutdown in fall 2025, SAMHSA grants from the prior year (e.g., 988 crisis services, state opioid response, mental health/substance use block grants) had funds that remained available to be spent by the grantees. SAMHSA retained Commissioned Corps Officers to help manage administration of these grant programs, and states were able to continue drawing down funds for state programs that relied on federal funding that had been awarded prior to the start of the shutdown.

Staff will remain available to:

• Route letters indicating suicidal ideation to local crisis services.
• Respond to opioid treatment program regulation exception requests and emergencies.

Activities That Will Not Continue

Because many Government Publishing Office staff would be furloughed, a shutdown would likely mean delays for:

• Responses to grant recipient requests (e.g., prior approvals).
• Summary statements for unfunded applications.
• Release of new Notices of Funding Opportunity (NOFOs), reducing turnaround time for applicants.

Medicare Telehealth Update

As it was during the fall shutdown, if the telehealth waivers expire on Jan. 30, absent Congressional action, the statutory limitations that were in place for Medicare telehealth services before the COVID-19 public health emergency would retake effect for most telehealth services beginning Feb. 1. HHS has posted summary of Medicare telehealth flexibilities and the Centers for Medicare and Medicaid Services has an FAQ.

The conferenced FY26 bill for Labor, Health and Human Services, Education and Related Agencies included a two-year extension for Medicare telehealth flexibilities.

We know the uncertainty caused by a potential shutdown makes planning difficult, and we are committed to provide updates, answer any questions you may have and provide additional resources needed to make this process as smooth as possible.

If you have any questions related to the potential shutdown or any other policy issues, contact the National Council Policy Team at Policy@TheNationalCouncil.org.