Twenty-one states, plus the District of Columbia, filed a lawsuit Sept. 2 against HHS and CMS, challenging a rule that will cut off Medicaid and CHIP federal funds for youth gender-affirming care.
The rule, released in August and set to take effect Oct. 13, restricts states from using Medicaid federal matching funds for puberty blockers, gender-affirming hormone therapy and related surgeries for those younger than 18. The rule also restricts federal CHIP funds from covering those interventions for those younger than 19. The cuts apply to cases of gender dysphoria.
The lawsuit, filed in the Massachusetts district court, alleges CMS lacks statutory authority for the rule. The lawsuit also said the move conflicts with other law, is arbitrary and capricious, oversteps with healthcare regulation and violates the Spending Clause. The states are calling to vacate the rule.
“In the six decades of the Medicaid program, CMS has never before invoked the [Social Security Act’s] general administrative provisions to categorically exclude from federal reimbursement medically necessary care that states have elected to cover, based on the diagnosis or purpose for which that care is provided,” the lawsuit said.
California is one plaintiff in the case. A Sept. 17 news release from the California Department of Managed Health Care said the state’s Department of Health Care Access and Information is developing a state-only funded grant pathway to pay for these services. The funding will not be available by Oct. 13, but the state anticipates reimbursing providers retroactively.
“Please do not cancel services or redirect patients, and please stay tuned for more details on state reimbursement for these services,” the news release said.
CMS and HHS told Becker’s they do not comment on ongoing litigation.
