Behavioral health services were mostly exempt from the pre-pandemic telehealth limitations that kicked in for Medicare recipients when the federal government shutdown began 15 days ago. Yet, a newly announced freeze on claims dated Oct. 1 and beyond will pause reimbursement for providers in the mental health and substance use disorder (SUD) space.

“In the absence of Congressional action, practitioners who choose to perform telehealth services that are not payable by Medicare on or after Oct. 1, 2025, may want to evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage,” officials from the Centers for Medicare and Medicaid Services wrote in an Oct. 15 update.

So far, telemental health providers that accept Medicare plans like Talkspace (Nasdaq: TALK), LifeStance (Nasdaq: LFST), Anywhere Clinic, Eleanor Health and Thriveworks have not been affected substantially, company leaders told Behavioral Health Business. Still, that doesn’t mean broader concerns aren’t still looming.

Talkspace, which has a large digital outpatient mental health practice with a diverse population of patients and various reimbursement pathways, has so far felt “no impact” since the shutdown, a spokesperson told BHB.

Scottsdale, Arizona-based behavioral health outpatient provider LifeStance (Nasdaq: LFST) is in a similar position, with few Medicare and Medicare Advantage patients accounting for just “single digits” of its total patient population. The company noted that “the pause or expiration of the telehealth waiver is not expected to disrupt care for the vast majority of patients we serve,” a spokesperson told BHB.

But providers with different ratios of Medicare patients could struggle financially in the meantime.

“If we were, for example, 50% Medicare, this could be really damaging for us, but we probably see about 20% Medicare patients, and so that freeze for the size of our practice won’t hurt us,” Dr. Sam Zand, founder and CEO of Anywhere Clinic, told BHB. “But my colleagues who have a small practice, maybe they see half Medicare patients, and this could really affect their payroll, their ability to cover their overhead.”

Anywhere Clinic is a Las Vegas-based provider of telepsychiatry and psychedelic therapy. The company also has satellite offices in the 29 states it operates across.

On top of reimbursement delays, since Oct. 1, providers like Anywhere Clinic cannot accept new Medicare patients as a result of this, possibly delaying access to critical mental health or psychiatry services for some.

“What we’re seeing is that within the next 12 months, patients who’ve been seen virtually for the last three or four years are having to set up that one-time a year in-office visit, and we’re no longer able to accept new Medicare patients unless they are seen in the office that first visit,” Zand said.

LifeStance has already started to take steps and schedule Medicare patients for in-person visits “to mitigate any risks to access posed by interruptions in the telehealth waiver to them,” a spokesperson said.

For a Medicare population of individuals mostly over age 65, those who experience mobility and transportation challenges can make that requirement a barrier.

The implications for patients’ physical and mental health – particularly for individuals in rural areas – go beyond just losing access for the meantime, Zand explained.

“It’s not only just losing their ability to work with a therapist or a psychiatric provider, sometimes they’re on medications that have stopped abruptly,” Zand said. “That could be quite dangerous – even fatal. These are serious problems that I don’t think are being given enough attention.”

William McKinney, CEO of Worcester, Massachusetts-based Eleanor Health, a mostly virtual addiction treatment provider that operates in 13 states, said that “there’s been understandable concern about recent changes to Medicare telehealth flexibilities,” but little impact on the care it provides.

“We don’t see any immediate federal regulatory or legislative risk to SUD telehealth care,” McKinney told BHB. “A bipartisan amendment to extend Medicare telehealth flexibilities is expected to move forward once Congress finalizes the next funding compromise, and in the meantime, the Medicare Administrative Contractors are simply holding claims until that happens.”

Still, ongoing headwinds for telehealth providers of behavioral health services remain.

Thriveworks, a provider of in-person and virtual therapy, hasn’t been directly impacted yet. However, due to the many shifts in policy and regulatory changes that could be on the horizon for telehealth providers, the company is taking a “wait and see approach to see how it may impact access in the future,” Jenny Welling-Palmer, the company’s chief strategy officer, told BHB.

One key area that providers of telemental health and psychiatry services are continuing to watch closely is what changes may come down the pipe for telehealth prescribing rules from the Drug Enforcement Administration (DEA).

Both Zand and McKinney said they expect this to be fleshed out by the end of the year, but it will impact their work.

“On the prescribing side, we expect the DEA to extend the COVID-era telehealth flexibilities before the end of the year while they complete the rulemaking process for special registration,” McKinney said. Still, he expects that “virtual behavioral health and addiction care will continue uninterrupted.”

Whenever the decision does come to fruition, it could leave some providers in reaction mode as they try to adjust to the regulatory and compliance requirements quickly.

“If this freeze continues, then we just won’t have any further guidance for a while,” Zand said. “We have about two and a half months until 2026, when a new DEA rule may be enforced, and I think this government freeze is potentially delaying this so that U.S. practitioners we don’t know what to do, and we’re sitting here in limbo with really serious regulatory changes pending.”

The ripple effect of this could create a “musical chairs” scenario, Zand said, where even non-Medicare patients who are being seen virtually may have to scramble to find someone in person within two months.

“I think that collaboration among specialties for telehealth and in-office really is the answer to this problem,” Zand said. “I’m hoping that all the different regulatory bodies see it that way as well.”

Although outcomes for telemental health services have been proven to be on par with in-person services, permanency around these pandemic-induced flexibilities that expanded access is still lacking. Legislation introduced to the House in early September seeks to extend these flexibilities through 2027, but the bill – H.R. 5081, the Telehealth Modernization Act – has seen little movement since.