The Department of Health and Human Services has decided not to finalize its most far‑reaching proposal to cut Medicare and Medicaid funding to hospitals that provide gender‑affirming care to minors, according to an internal document obtained by NPR.
The proposed regulation would have used a Medicare and Medicaid “conditions of participation” rule to bar federal payments to any hospital offering pediatric gender‑affirming services — a move HHS officials framed as limiting “ideologically driven surgical interventions on vulnerable children.” The Centers for Medicare and Medicaid Services told NPR it does not comment on future rulemaking but said the administration opposes such interventions.
Though framed around surgery, the rule would have applied broadly to gender‑affirming care for young people, most of which consists of mental‑health services, puberty blockers and hormone therapy. Surgery for people under 18 is rarely performed.
Legal and health policy experts called the proposed use of conditions of participation unprecedented. Sam Bagenstos, a Michigan Law professor who served as HHS general counsel during the Biden administration, noted that conditions of participation historically ensure basic safety standards — such as emergency protocols, staffing ratios or stockpiles of supplies — not restrictions on particular medical treatments for specific patient groups. He said the proposal raised legal questions, including potential conflicts with the Medicare Act, which limits the federal government’s ability to control medical practice regulated by states.
The proposal drew broad opposition from major medical organizations. The American Medical Association and the Children’s Hospital Association both submitted comments urging HHS to withdraw the rule, and dozens of other medical groups defended the use of puberty blockers and hormones as safe and sometimes effective for transgender youth. The agency received more than 30,000 public comments after the measure was proposed in December.
While this rule appears to be shelved for now and will not be finalized within the next year, it is only one element of a wider federal campaign targeting transgender health care. A separate proposed Medicaid rule that would bar federal reimbursement for transgender pediatric patients is still in the final review stage and could take effect in the coming weeks. In addition, Secretary of Health and Human Services Robert F. Kennedy Jr. issued a declaration intended to redefine standards of pediatric care; that declaration was later blocked in federal court in Oregon after a lawsuit brought by a coalition of Democratic‑led states. HHS has not appealed the court decision so far.
The Justice Department has issued administrative and criminal subpoenas to some hospitals seeking full medical records of transgender youth and employment files for their providers, though many of those requests have been blocked by courts. The administration has also reached settlements with hospitals in Texas and Ohio that included provisions for so‑called detransition clinics.
Advocates and policy experts say the decision not to finalize this particular Medicare/Medicaid condition of participation is a meaningful but limited setback for the administration’s broader agenda. Katie Keith, director of the Health Policy and the Law Initiative at Georgetown University, said a finalized rule would have been durable and far‑reaching; the choice not to finalize it should give hospitals greater confidence to resume or continue providing gender‑affirming care. Kellan Baker, a senior adviser on health policy at the Movement Advancement Project, said the administration’s decision to step back from this extreme measure is welcome but warned that the overall goal of restricting care for transgender people remains in place and that other tactics are still being used.
The regulatory effort has also had practical effects: 27 states now have laws banning some or all gender‑affirming care for minors, and some hospital clinics in states without bans have closed or curtailed services in recent months after facing federal pressure. That has left families in many parts of the country with reduced access to care.
The Medicare and Medicaid conditions‑of‑participation proposal has not been formally withdrawn and could be revived. The administration’s regulatory agenda lists a final action date for the proposed rule in December 2028, shortly before the end of the current presidential term.
For now, HHS’s decision not to move forward with its most aggressive funding‑cut proposal is being described by advocates as a narrow victory for transgender rights but not evidence of a broader retreat from the administration’s campaign targeting transgender people across federal policy, courts and enforcement efforts.