HHS action to unilaterally regulate practice of medicine through gender-affirming care restrictions has far reaching implications

Restricting access to gender-affirming care for children and adolescents was an early priority of the current administration, as indicated by Executive Order No. 14187, issued by President Trump on January 28, 2025, shortly after taking office. The executive order created significant uncertainty around the provision of such services by health care providers participating in federal health care programs (FHCPs). While some of this uncertainty was clarified in a flurry of activity last week, new legal questions have emerged with potentially far-reaching implications.

On December 18, 2025, the Centers for Medicare and Medicaid Services (CMS) announced two proposed rules related to gender-affirming care for minors. The first involves a plan to change Medicare hospital conditions of participation to prohibit many forms of gender-affirming care for transgender children and adolescents. The second proposes to prohibit the use of federal Medicaid and Children’s Health Insurance Program (CHIP) funds for gender-affirming care for minors. Both of the proposed rules rely on a same-day declaration by the Secretary of Health and Human Services (HHS) Robert F. Kennedy, Jr., asserting that certain gender affirming care for minors does not meet professionally recognized standards of health care and purporting to supersede contrary national or statewide of standards of care. 

Importantly, unlike the proposed rules, which must still go through the standard notice and comment process before having any legal effect, the declaration is effective immediately. As the Secretary hinted in the declaration, this means that, as of the date of the declaration, anyone performing these procedures is arguably subject to permissive exclusion from FHCPs.  Exclusion can be fatal for any entity that is involved in the US health care system because all insurance companies and providers (in addition to the FHCPs themselves) generally require suppliers, employees, and contractors to not be excluded. 

The declaration states:

Sex-rejecting procedures for children and adolescents are neither safe nor effective as a treatment modality for gender dysphoria, gender incongruence, or other related disorders in minors, and therefore, fail to meet professional recognized standards of health care. For the purposes of this declaration, “sex-rejecting procedures” means pharmaceutical or surgical interventions, including puberty blockers, cross-sex hormones, and surgeries such as mastectomies, vaginoplasties, and other procedures, that attempt to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex

Secretary Kennedy also writes: 

Under 42 U.S.C. § 1320a-7(b)(6)(B), the Secretary “may” exclude individuals or entities from participation in any Federal health care program if the Secretary determines the individual or entity has furnished or caused to be furnished items or services to patients of a quality which fails to meet professionally recognized standards of health care.

While the focus of the trade press has been on the proposed rulemaking regarding the hospital conditions of participation, the Secretary’s declaration raises concerns about whether HHS intends on using the permissive exclusion authority to exclude any health care participant involved in the “sex-rejecting procedures” described in the declaration. This would raise concerns beyond gender-affirming care and raise the question of whether the Secretary can unilaterally prohibit medical practices in the United States.

Reed Smith will continue to follow this regulatory effort by the administration. We will have deeper analysis of both of the involved regulations as well as the declaration forthcoming in a client alert that we are preparing for publication. If you have any questions about this or any other regulatory matter please do not hesitate to reach out to the authors or to the attorneys at Reed Smith.