[Federal Register Volume 90, Number 242 (Friday, December 19, 2025)]
[Proposed Rules]
[Pages 59441-59463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-23464]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 441 and 457
[CMS-2451-P]
RIN 0938-AV73
Medicaid Program; Prohibition on Federal Medicaid and Children's
Health Insurance Program Funding for Sex-Rejecting Procedures Furnished
to Children
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would require that a State Medicaid plan
must provide that the Medicaid agency will not make payment under the
plan for sex-rejecting procedures for children under 18 and prohibit
the use of Federal Medicaid dollars to fund sex-rejecting procedures
for individuals under the age of 18. In addition, it would require that
a separate State Children's Health Insurance Program (CHIP) plan must
provide that the CHIP agency will not make payment under the plan for
sex-rejecting procedures for children under 19 and prohibit the use of
Federal CHIP dollars to fund sex-rejecting procedures for individuals
under the age of 19.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on February 17,
2026.
ADDRESSES: In commenting, please refer to file code CMS-2451-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-2451-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-2451-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: [email protected].
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: https://www.regulations.gov Follow the search instructions on
that website to view public comments. CMS will not post on
Regulations.gov public comments that make threats to individuals or
institutions or suggest that the commenter will take actions to harm an
individual. CMS continues to encourage individuals not to submit
duplicative comments. We will post acceptable comments from multiple
unique commenters even if the content is identical or nearly identical
to other comments. We encourage commenters to include supporting facts,
research, and evidence in their comments. When doing so, commenters are
encouraged to provide citations to the published materials referenced,
including active hyperlinks. Likewise, commenters who reference
materials which have not been published are encouraged to upload
relevant data collection instruments, data sets, and detailed findings
as a part of their comment.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this proposed rule may be found at https://www.regulations.gov/.
I. Background 1
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\1\ This document contains links to non-U.S. Government
websites. We are providing these links because they contain
additional information relevant to the topics discussed in this
document or that otherwise may be useful to the reader. We cannot
attest to the accuracy of information provided on the cited third-
party websites or any other linked third-party site. We are
providing these links for reference only; linking to a non-U.S.
Government website does not constitute an endorsement by CMS, HHS,
or any of their employees of the sponsors or the information and/or
any products presented on the website. Also, please be aware that
the privacy protections generally provided by U.S. Government
websites do not apply to third-party sites.
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Title XIX of the Social Security Act (the Act) authorizes Federal
grants to the States for Medicaid programs to
[[Page 59442]]
provide medical assistance to persons with limited income and resources
and title XXI of the Act authorizes Federal grants to States to provide
child health assistance to targeted low-income children under age 19
through a separate CHIP, a Medicaid-expansion program, or a combination
of the two. Separate CHIPs are programs under which a State receives
Federal funding from its title XXI allotment to provide child health
assistance through coverage that meets the requirements of section 2103
of the Act and 42 CFR 457.402. For the purposes of this proposed rule,
the term CHIP is used to refer to separate CHIPs. Medicaid and CHIP
programs are administered primarily by the States, subject to Federal
oversight and approval. Each State establishes its own Medicaid and
CHIP eligibility standards, benefits packages, and payment rates in
accordance with (and subject to) Federal statutory and regulatory
requirements. If States comply with requirements in the Federal
Medicaid and CHIP statutes and regulations (such as reflected in the
provisions of their Federally-approved State plans), the Federal
Government will match their expenditures with Federal funds. Each State
Medicaid program and CHIP must be described and administered in
accordance with a Federally approved State plan. This comprehensive
document describes the nature and scope of the States' Medicaid program
and CHIP and provides assurances that they will be administered in
conformity with applicable Federal requirements.
Under title XIX, the Federal Government makes matching payments to
States for medical assistance expenditures according to the formula
described in sections 1903 and 1905(b) of the Act. Under title XXI, the
Federal Government makes matching payments to States for child health
assistance at the enhanced Federal medical assistance percentage (FMAP)
established under section 2105 of the Act. Section 1903 of the Act
requires that the Secretary of Health and Human Services (the
Secretary) (except as otherwise provided) pay to each State which has a
plan approved under title XIX of the Act, for each quarter, an amount
equal to the FMAP of the total amount expended by the State during such
quarter as medical assistance under the State plan. Section 1905(b) of
the Act defines the FMAP. For CHIP, section 2105 requires the Secretary
to pay each State with an approved plan under title XXI of the Act, for
each quarter, an amount equal to the enhanced FMAP of expenditures in
the quarter, paid from the State allotment. The enhanced FMAP, as
defined at section 2105(b), for a State for a fiscal year, is equal to
the FMAP (as defined in the first sentence of section 1905(b)) for the
State increased by a number of percentage points equal to 30 percent of
the number of percentage points by which (1) such FMAP for the State is
less than (2) 100 percent; but in no case shall the enhanced FMAP for a
State exceed 85 percent.
As relevant to this proposed rule, among the statutory requirements
for Medicaid State plans, section 1902(a)(19) of the Act \2\ requires
that a State plan for medical assistance provide such safeguards as may
be necessary to assure that care and services under the plan will be
provided in a manner consistent with the best interests of the
recipients. Furthermore, under section 1902(a)(30)(A) of the Act,\3\
the State plan must provide such methods and procedures relating to
payment for care and services as may be necessary to assure that
payments are consistent with quality of care. Among the statutory
requirements for CHIP State plans, under section 2101(a) of the Act,
funds are provided to States to provide health care services to
uninsured, low-income children in an effective and efficient manner
that is coordinated with other sources of health benefits coverage for
children.
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\2\ Section 1902(a)(19) of the Act states that a State plan for
medical assistance must ``provide such safeguards as may be
necessary to assure that eligibility for care and services under the
plan will be determined, and such care and services will be
provided, in a manner consistent with simplicity of administration
and the best interests of the recipients.''
\3\ Section 1902(a)(30)(A) of the Act states that a State plan
for medical assistance must ``provide such methods and procedures
relating to the utilization of, and the payment for, care and
services available under the plan (including but not limited to
utilization review plans as provided for in section 1903(i)(4) of
the Act) as may be necessary to safeguard against unnecessary
utilization of such care and services and to assure that payments
are consistent with efficiency, economy, and quality of care and are
sufficient to enlist enough providers so that care and services are
available under the plan at least to the extent that such care and
services are available to the general population in the geographic
area.''
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Section 1102 of the Act requires the Secretary to make and publish
such rules and regulations, not inconsistent with the Act, as may be
necessary for the efficient administration of the functions with which
the Secretary is charged under the Act. In Medicaid, these Secretarial
functions would include oversight of Medicaid State programs for
consistency with the requirements of sections 1902(a)(19) and
1902(a)(30)(A) of the Act. In CHIP, these Secretarial functions would
include oversight of CHIP under section 2101(a), which calls for
effective and efficient administration of CHIP and coordination with
other health care programs, including Medicaid, and under section
2107(e) of the Act, carrying out the functions required by the Medicaid
provisions that apply to title XXI in the same manner as they apply
under title XIX.
On January 28, 2025, President Trump issued Executive Order (E.O.)
14187, Protecting Children from Chemical and Surgical Mutilation (E.O.
14187). Section 5(a) of that order directs the Secretary to take all
appropriate actions consistent with applicable law to end what the
order refers to as the chemical and surgical mutilation of children,
including regulatory and sub-regulatory actions for specific programs,
including Medicaid. The Centers for Medicare & Medicaid Services (CMS)
is aware that the U.S. District Court for the Western District of
Washington has issued a preliminary injunction that enjoins defendant
agencies from enforcing or implementing section 4 of E.O. 14187 within
the plaintiff States, as well as sections 3(e) or 3(g) of E.O. 14168,
Defending Women From Gender Ideology Extremism and Restoring Biological
Truth to the Federal Government (E.O. 14168), to condition or withhold
Federal funding based on the fact that a health care entity or health
professional provides ``gender-affirming care'' within the plaintiff
States. Washington v. Trump, 768 F. Supp. 3d 1239, 1282 (W.D. Wash.
2025). In addition, the U.S. District Court for the District of
Maryland has issued a preliminary injunction that enjoins the Federal
defendants in that case from conditioning, withholding, or terminating
Federal funding under section 3(g) of E.O. 14168 and section 4 of E.O.
14187, based on the fact that a healthcare entity or health
professional provides ``gender-affirming care'' to a patient under the
age of 19 and required that written notice of this order be given to
the aforementioned groups that Defendants may not take any steps to
implement, give effect to, or reinstate under a different name the
directives in section 3(g) of E.O. 14168 or section 4 of E.O. 14187
that condition or withhold Federal funding based on the fact that a
healthcare entity or health professional provides ``gender-affirming
medical care'' to a patient under the age of 19. PFLAG, Inc. v. Trump,
769 F. Supp. 3d 405, 455 (D. Md. 2025). We note that if this proposed
rule were to be finalized, it would not conflict with those preliminary
injunctions because, among other things, it would be based
[[Page 59443]]
on independent legal authority and section 5(a) of E.O. 14187 and not
the enjoined sections of the executive orders. In any event, any
regulatory provisions on this issue would not be effective until the
specified effective date of any final rule, and would not be
implemented, made effective, or enforced in contravention of any court
orders.
As further discussed later in this proposed rule, we propose to
implement sections 1902(a)(19) and 1902(a)(30)(A) of the Act by adding
a new subpart N to 42 CFR part 441 to prohibit the use of Federal
Medicaid dollars to fund sex-rejecting procedures, as defined in this
proposed rule, for individuals under the age of 18. In addition, we
propose to implement section 2103 of the Act by revising subpart D of
part 457 of the Act to prohibit the use of Federal CHIP dollars to fund
sex-rejecting procedures, as defined in this proposed rule, for
individuals under the age of 19. These proposed changes would not
prevent States from providing coverage for sex-rejecting procedures
with State-only funds outside of the Federally-matched Medicaid program
or CHIP.
A. The Rise of Sex-Rejecting Procedures for Treatment of Gender
Dysphoria in Minors
Over the past decade, increasing numbers of children and
adolescents have been diagnosed with gender dysphoria. The recorded
prevalence of gender dysphoria/incongruence increased substantially in
children and young people between 2011 and 2021, particularly in
recorded females. Levels of anxiety, depression and self-harm were
high, indicating an urgent need for better prevention and treatment of
mental health difficulties in these patients [with gender
dysphoria].\4\
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\4\ Stuart William Jarviset al., ``Epidemiology of gender
dysphoria and gender incongruence in children and young people
attending primary care practices in England: retrospective cohort
study,'' Archives of Disease in Childhood 110 (2025): 612,
doi:10.1136/archdischild-2024-327992.
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Similar research in Germany showed increasing rates in the
diagnosis of gender incongruence.\5\ Additionally, research in England
explained that ``[r]ecent increases in incidence of gender dysphoria/
incongruence have a range of potential explanations, including social
factors (for example, . . . increasing use of social media and
networking); increasing rates of emotional distress and poor mental
health in this age group, particularly for females; and changes in
supply and delivery of healthcare.'' \6\ The number of children
receiving medical interventions for gender dysphoria rose significantly
following the publication of the ``Dutch Protocol'' in an article in
the European Journal of Endocrinology in 2006.\7\ Over the past decade,
increasing numbers of children have received diagnoses of gender
dysphoria and received sex-rejecting procedures as recommended by the
World Professional Association for Transgender Health (WPATH) and the
Endocrine Society (ES).8 9 The WPATH Standards of Care for
the Health of Transgender and Gender Diverse People, Version 8 (SOC-8)
noted that the creation of a chapter on adolescents was due in part to
the ``exponential growth in adolescent referral rates.'' \10\ Surveys
measuring ``transgender'' identity find prevalence of 1.2 percent among
adolescents and ``gender diverse'' identities as high as 9 percent.\11\
WPATH also noted that female adolescents were seeking such procedures
at twice to seven times the rate of males.\12\
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\5\ Christian J. Bachmann et al., ``Gender identity disorders
among young people in Germany: Prevalence and trends, 2013-2022. An
analysis of nationwide routine insurance data,'' Deutsches
[Auml]rzteblatt International 121 (2024): 370-371, doi:10.3238/
arztebl.m2024.0098. ``Gender incongruence'' as defined by ICD-11 is
``characterized by a marked and persistent incongruence between an
individual's experienced gender and the assigned sex.'' See
``International Classification of Diseases 11th Revision (ICD-11),''
World Health Organization, accessed September 9, 2025, https://icd.who.int/en/.
\6\ Jarvis et al., ``Epidemiology of gender dysphoria,'' 619.
\7\ Henriette A. Delemarre-van de Waal and Peggy T. Cohen-
Kettenis, ``Clinical management of gender identity disorder in
adolescents: A protocol on psychological and pediatric endocrinology
aspects,'' European Journal of Endocrinology 155, Supp 1 (2006):
S131-S137, https://doi.org/10.1530/eje.1.02231.
\8\ E. Coleman et al., ``Standards of Care for the Health of
Transgender and Gender Diverse People, Version 8,'' International
Journal of Transgender Health 23, Supp 1 (2022): S1-S258, https://doi.org/10.1080/26895269.2022.2100644.
\9\ Wylie C. Hembree et al., ``Endocrine Treatment of Gender-
Dysphoric/Gender-Incongruent Persons: An Endocrine Society Clinical
Practice Guideline,'' The Journal of Clinical Endocrinology &
Metabolism 102, no. 11 (2017): 3869-3903, https://doi.org/10.1210/jc.2017-01658.
\10\ E. Coleman et al., ``Standards of Care,'' S43.
\11\ E. Coleman et al., ``Standards of Care,'' S43.
\12\ E. Coleman et al., ``Standards of Care,'' S43.
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Included in SOC-8 is the recommendation that care providers
``undertake a comprehensive biopsychosocial assessment of adolescents''
who seek medical transition \13\ and ``involve relevant disciplines,
including mental health and medical professionals,'' as well as
parents, ``unless their involvement is determined to be harmful.'' \14\
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\13\ Medical transition refers to the provision of hormonal or
surgical interventions, as adapted from the Department of Health and
Human Services, ``Treatment for Pediatric Gender Dysphoria Review of
Evidence and Best Practices,'' (November 19, 2025): 29, https://opa.hhs.gov/sites/default/files/2025-11/gender-dysphoria-report.pdf
[hereinafter ``HHS Review''].
\14\ Jennifer Block, ``US transgender health guidelines leave
age of treatment initiation open to clinical judgment,'' BMJ 378
(2022), https://doi.org/10.1136/bmj.o2303. See also E. Coleman et
al., ``Standards of Care,'' S50, S56, S58.
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The number of pediatric patients seeking sex-rejecting procedures
can only be roughly estimated. In recent years, ``the United States--
characterized by its decentralized and privatized healthcare system--
saw the emergence of many new specialty gender clinics, along with a
proliferation of independently practicing clinicians. According to a
recent conservative estimate, as of March 2023 there were 271 clinics
offering [pediatric medical transition] in the U.S., though 70 were
inactive due to legislative restrictions.'' \15\
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\15\ HHS Review, 57-58. See Luca Borah et al., ``State
restrictions and geographic access to gender-affirming care for
transgender youth,'' JAMA 330, no. 4 (2023): 375-378, doi:10.1001/
jama.2023.11299.
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An approach for gender dysphoria, referred to in this proposed rule
as sex-rejecting procedures,\16\ can involve the use of puberty
suppressing drugs to prevent the onset of puberty; cross-sex hormones
to spur the secondary sex characteristics of the opposite sex; and
surgeries including mastectomy and (in rare cases) vaginoplasty.
``Thousands of American children and adolescents have received these
interventions.'' \17\
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\16\ In this proposed rule, we have sought to use the term
``sex-rejecting procedures'' to refer to the set of procedures
encompassed in the proposed definition.
\17\ HHS Review, 9.
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A study published in 2023 estimated that between 2016 and 2020,
nearly 3,700 children between the ages of 12 and 18 diagnosed with
gender dysphoria underwent surgical procedures, including over 3,200
children who had breast or chest surgery, and over 400 children who had
genital surgery.\18\ Another analysis found that between 2017 and 2021,
more than 120,000 children ages 6 to 17 were diagnosed with gender
dysphoria and, of that group, more than 4,700 started taking puberty
blockers and more than 14,000 started hormonal therapy.\19\ However, as
discussed later in this proposed rule, current medical evidence does
not support a favorable
[[Page 59444]]
risk/benefit profile for the use of chemical or surgical procedures in
children to treat gender dysphoria.
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\18\ Jason D. Wright et al., ``National Estimates of Gender-
Affirming Surgery in the US,'' Jama Network Open 6, no. 8 (2023),
doi:10.1001/jamanetworkopen.2023.30348.
\19\ Robin Respaut and Chad Terhune, ``Putting numbers on the
rise in children seeking gender care,'' Reuters, October 6, 2022,
https://www.reuters.com/investigates/special-report/usa-transyouth-data/.
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B. Medical Evidence Regarding Sex-Rejecting Procedures for Minors
The existing guidelines to support the care of children and
adolescents experiencing gender dysphoria around the world vary in
their methodological rigor and quality.
On May 1, 2025, the United States Department of Health and Human
Services (HHS) released a comprehensive review of the evidence and best
practices for promoting the health of children and adolescents
diagnosed with gender dysphoria.\20\ On November 19, 2025, HHS
published a final version of the review following conclusion of the
peer review process (HHS Review).\21\ The HHS Review, informed by an
evidence-based medicine approach, indicated serious concerns about
outcomes associated with certain medical interventions, such as puberty
blockers, cross-sex hormones, and surgeries, that attempt to transition
children and adolescents away from their sex.\22\ The HHS Review
highlights evidence pointing to significant risks associated with the
use of these procedures, including irreversible harms such as
infertility, and finds extremely weak evidence of benefit.
Significantly, the HHS Review finds that the evidence base does not
support conclusions about the effectiveness of medical and surgical
interventions in improving mental health or reducing gender dysphoria
symptoms, stating that ``[a]nalysis of the biological plausibility of
harms is necessary, and suggests that some short- and long-term harms
are likely (in some cases expected) sequalae of treatment.'' \23\
Likewise, the data considered in the HHS Review indicate that the risk/
benefit profile of medical and surgical interventions for children and
adolescents diagnosed with gender dysphoria is unfavorable. While the
HHS Review itself does not make clinical, policy, or legislative
recommendations, it provides critical insights that should inform
policymakers as they make decisions to promote health and safety,
especially for vulnerable populations such as minors.
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\20\ HHS Review, 1. ``HHS Releases Comprehensive Review of
Medical Interventions for Children and Adolescents with Gender
Dysphoria,'' U.S. Department of Health and Human Services, released
May 1, 2025, https://www.hhs.gov/press-room/gender-dysphoria-report-release.html.
\21\ ``HHS Releases Peer-Reviewed Report Discrediting Pediatric
Sex-Rejecting Procedures,'' U.S. Department of Health and Human
Services, released November 19, 2025, https://www.hhs.gov/press-room/hhs-releases-peer-reviewed-report-discrediting-pediatric-sex-rejecting-procedures.html.
\22\ See ``Information Quality Guidelines,'' Office of the
Assistant Secretary for Planning and Evaluation (ASPE), accessed
August 11, 2025, https://aspe.hhs.gov/topics/data/information-quality-guidelines; ``HHS Information Quality Peer Review,'' ASPE,
accessed August 11, 2025, https://aspe.hhs.gov/hhs-information-quality-peer-review.
\23\ HHS Review, 134.
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Specifically, the HHS Review conducted an overview of systematic
reviews--also known as an ``umbrella review''--to evaluate the evidence
regarding the benefits and harms of hormonal and surgical interventions
for children and adolescents diagnosed with gender dysphoria. Existing
systematic reviews of evidence, including several that have informed
health authorities in Europe, were assessed for methodological quality.
The umbrella review found that the overall quality of evidence
concerning the effects of sex-rejecting procedures on psychological
outcomes, quality of life, regret, or long-term health, is very low.
Although the HHS Review acknowledges that systematic reviews offer
limited evidence regarding the harms of sex-rejecting procedures in
minors, it also provides plausible explanations for why evidence of
harms may not have been sought, detected or reported. This may be due
to several factors: the relatively recent adoption of hormonal and
surgical treatment approaches, shortcomings in existing studies in
consistently monitoring and reporting adverse effects, and publication
bias. Even in the absence of strong evidence from large-scale
population studies, the HHS Review notes, based on what is known about
human physiology and the effects and mechanisms of the pharmacological
agents used, there are known and plausible risks of significant harms
from puberty blockers, cross-sex hormones, and surgeries. These include
``infertility/sterility, sexual dysfunction, impaired bone density
accrual, adverse cognitive impacts, cardiovascular disease and
metabolic disorders, psychiatric disorders, surgical complications, and
regret.'' \24\
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\24\ HHS Review, 10.
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The HHS Review documents the weak evidence and growing
international retreat from the use of puberty blockers, cross-sex
hormones, and surgeries to treat gender dysphoria in minors \25\ and
the ``risk of significant harms.'' \26\ The HHS Review explains that
``many treatments (e.g. surgery, hormone therapy) can lead to
relatively common and potentially serious long-term adverse effects.''
\27\ The HHS Review includes a methodologically rigorous assessment of
evidence underpinning the use of surgical or endocrine interventions,
including puberty blockers and cross-sex hormones, while also drawing
on international practice evaluations such as the United Kingdom's Cass
Review, described in more detail below. The HHS Review documents
serious concerns regarding the lack of reliable evidence of benefits,
and risks of significant harms for this model of care that have mounted
in recent years, and points to psychotherapy (talk therapy) as a
noninvasive alternative. The HHS Review makes clear that ``the evidence
for benefit of pediatric medical transition is very uncertain, while
the evidence for harm is less uncertain.'' \28\ The HHS Review cites
widely accepted principles of medical ethics to conclude that when
``medical interventions pose unnecessary, disproportionate risks of
harm, healthcare providers should refuse to offer them even when they
are preferred, requested, or demanded by patients.'' \29\
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\25\ HHS Review, 63-65.
\26\ HHS Review, 10.
\27\ HHS Review, 230.
\28\ HHS Review, 15.
\29\ HHS Review, 15.
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We are aware that approximately 17 State Medicaid programs cover
sex-rejecting procedures for children, citing guidelines from several
major U.S. medical professional associations (American Medical
Association, the American Academy of Pediatrics, and the American
Psychological Association) who have issued statements deeming sex-
rejecting procedures, which they refer to as ``gender-affirming care,''
safe and effective.30 31 32 33 These medical society
endorsements further supported adoption of sex-rejecting procedures by
clinicians across the U.S. The HHS Review explains why such guidelines,
including the WPATH Standards of Care for the Health of Transgender and
[[Page 59445]]
Gender Diverse People, Version 8 (SOC-8), are not trustworthy according
to accepted standards for evaluating guideline quality. As the HHS
Review documents in detail, the creation of SOC-8 marked a ``clear
departure from the principles of unbiased, evidence-driven clinical
guideline development.'' \34\ In the context of developing its
recommendations, WPATH suppressed systematic reviews of evidence,
failed to manage conflicts of interest, and relied on legal and
political considerations rather than clinical ones.\35\ A recent
systematic review of international guideline quality concluded that
``[h]ealthcare professionals should consider the lack of quality and
independence of available guidance when utilizing this [WPATH and
Endocrine Society international guidelines] for practice.'' \36\
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\30\ Stacy Weiner, ``States are banning gender-affirming care
for minors. What does that mean for patients and providers?,''
AAMCNews, February 20, 2024, https://www.aamc.org/news/states-are-banning-gender-affirming-care-minors-what-does-mean-patients-and-providers.
\31\ ``APA adopts groundbreaking policy supporting transgender,
gender diverse, nonbinary individuals,'' American Psychological
Association, released February 28, 2024, https://www.apa.org/news/press/releases/2024/02/policy-supporting-transgender-nonbinary.
\32\ Alyson Sulaski Wyckoff, ``AAP continues to support care of
transgender youths as more states push restrictions,'' AAP News,
January 6, 2022, https://publications.aap.org/aapnews/news/19021/AAP-continues-to-support-care-of-transgender.
\33\ ``Criminalizing Gender Affirmative Care with Minors,''
American Psychological Association, accessed September 2, 2025,
https://www.apa.org/topics/lgbtq/gender-affirmative-care.
\34\ HHS Review, 181.
\35\ HHS Review, 182.
\36\ Jo Taylor et al., ``Clinical guidelines for children and
adolescents experiencing gender dysphoria or incongruence: a
systematic review of guideline quality (part 1),'' Archives of
Disease in Childhood 109, Supp. 2 (2024): s65-s72, doi:10.1136/
archdischild-2023-326499.
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1. European Approaches for the Treatment of Pediatric Gender Dysphoria
The HHS Review's current findings are aligned with conclusions
reached by multiple European countries. Sweden, Finland, and the United
Kingdom conducted independent systematic reviews of evidence
commissioned by their public health authorities. ``All three concluded
that the risks of medicalization \37\ may outweigh the benefits for
children and adolescents with gender dysphoria at the population level,
and subsequently sharply restricted access to medical gender transition
interventions for minors.'' \38\ These three countries now recommend
exploratory psychotherapy as the first line of treatment. Sweden and
Finland reserve hormonal interventions only for exceptional cases,
recognizing their experimental status.39 40 41
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\37\ ``Medicalization'' means ``the act of considering something
to be a medical problem, or representing it as a medical problem.''
Cambridge Dictionary, accessed August 8, 2025, https://dictionary.cambridge.org/us/dictionary/english/medicalization. This
definition is based on a plain meaning approach and note that the
authors of the study did not otherwise supply a specific definition
for the term.
\38\ HHS Review, 255. See Jonas F. Ludvigsson et al., ``A
systematic review of hormone treatment for children with gender
dysphoria and recommendations for research,'' Acta Paediatrica 112,
no. 11 (2023): 2279-2292, https://doi.org/10.1111/apa.16791;
National Institute for Health and Care Excellence (NICE), ``Evidence
Review: Gender Affirming Hormones for Children and Adolescents with
Gender Dysphoria,'' (2020), https://cass.independent-review.uk/wp-content/uploads/2022/09/20220726_Evidence-review_Gender-affirming-hormones_For-upload_Final.pdf; National Institute for Health and
Care Excellence (NICE), ``Evidence Review: Gonadotrophin Releasing
Hormone Analogues for Children and Adolescents with Gender
Dysphoria,'' (2020), https://cass.independent-review.uk/wp-content/uploads/2022/09/20220726_Evidence-review_GnRH-analogues_For-upload_Final.pdf; I. Pasternack et al.,
``L[auml][auml]ketieteelliset menetelm[auml]t sukupuolivariaatioihin
liittyv[auml]n dysforian hoidossa: Systemaattinen katsaus [Medical
approaches to treating gender dysphoria: A systematic review],''
Summaryx Oy (2019); Jo Taylor et al., ``Interventions to suppress
puberty in adolescents experiencing gender dysphoria or
incongruence: A systematic review,'' Archives of Disease in
Childhood 109, Supp 2 (2024): s33-s47, doi:10.1136/archdischild-
2023-326669; Jo Taylor et al., ``Masculinising and feminising
hormone interventions for adolescents experiencing gender dysphoria
or incongruence: A systematic review,'' Archives of Disease in
Childhood 109, Supp 2 (2024): s48-s56, doi:10.1136/archdischild-
2023-326670.
\39\ ``Children and young people's gender services: implementing
the Cass Review recommendations,'' NHS England, last updated August
29, 2024, https://www.england.nhs.uk/long-read/children-and-young-peoples-gender-services-implementing-the-cass-review-recommendations/.
\40\ ``Care of children and adolescents with gender dysphoria-
summary of national guidelines,'' The Swedish National Board of
Health and Welfare (Socialstyrelsen), December 2022, https://www.socialstyrelsen.se/globalassets/sharepoint-dokument/artikelkatalog/kunskapsstod/2023-1-8330.pdf.
\41\ ``One Year Since Finland Broke with WPATH `Standards of
Care','' Society for Evidence Based Gender Medicine, July 2, 2021,
https://segm.org/Finland_deviates_from_WPATH_prioritizing_psychotherapy_no_surgery_for_minors.
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In particular, the most influential effort to date has been the
United Kingdom's Cass Review--a 4-year independent evaluation of
pediatric gender medicine that was published in April 2024.\42\ The
findings of the Cass Review led to the closure of the United Kingdom's
Gender Identity Development Service (GIDS), which had been given a
rating of ``inadequate'' by the Care Quality Commission in 2021. The
Cass Review recommended a restructuring of the care delivery model--
away from the centralized ``gender clinic'' model of care toward a more
holistic framework centering on psychosocial support, to be delivered
through regional hubs. The Cass Review's findings also led the United
Kingdom to ban the use of puberty blockers outside of clinical trials,
and to significantly restrict cross-sex hormones. While cross-sex
hormones are still officially an available treatment, the National
Health Service (NHS) recently revealed that since the Cass Review was
published, no minor has been found eligible to receive cross-sex
hormones according to the updated policy. In the United Kingdom, minors
have never received gender dysphoria-related surgery through the NHS.
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\42\ Hilary Cass, ``Independent review of gender identity
services for children and young people: Final report,'' (2024),
https://cass.independent-review.uk/home/publications/final-report/.
---------------------------------------------------------------------------
In 2022, Sweden's National Board of Health and Welfare (NBHW)
reviewed and updated its guidelines for minors under the age of 18.
Sweden's NBHW determined that the risks of puberty suppressing
treatment with GnRH-analogues (injectable drugs that prevent the
ovaries and testicles from producing sex hormones) and gender-affirming
hormonal treatment likely outweigh the possible benefits.\43\
Specifically, Sweden's NBHW outlined that the first line of treatment
should be mental health support and exploratory psychological care.
Hormonal interventions can be a last resort measure for some youth.
Sweden has made the decision to no longer offer gender transition [sex-
rejecting procedures] to minors outside of research settings, and
restricted eligibility to the early childhood-onset of gender
dysphoria.
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\43\ ``Care of children and adolescents with gender dysphoria-
summary of national guidelines,'' The Swedish National Board of
Health and Welfare (Socialstyrelsen), December 2022, https://www.socialstyrelsen.se/globalassets/sharepoint-dokument/artikelkatalog/kunskapsstod/2023-1-8330.pdf. See also the Swedish
National Board of Health and Welfare (Socialstyrelsen), ``Care of
children and young people with gender Dysphoria--national knowledge
support with recommendations for the profession and decision
makers,'' (2022), https://www.socialstyrelsen.se/globalassets/sharepoint-dokument/artikelkatalog/kunskapsstod/2022-12-8302.pdf.
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In 2020, Finland's Council for Choices in Health Care, a monitoring
agency for the country's public health services, issued guidelines that
called for psychosocial support as the first line treatment, hormone
therapy on a case-by-case basis after careful consideration, and no
surgical treatment for minors. Finland has restricted eligibility for
hormone therapy to minors with early childhood-onset of gender
dysphoria and no mental health comorbidities.\44\
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\44\ Council for Choices in Healthcare in Finland, ``Summary of
a recommendation by COHERE Finland,'' June 16, 2020, https://palveluvalikoima.fi/documents/1237350/22895008/Summary_minors_en+(1).pdf/fa2054c5-8c35-8492-59d6-b3de1c00de49/
Summary_minors_en+(1).pdf?t=1631773838474.
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In Denmark, more than 1300 minors with gender incongruence were
``referred to the national service between 2016 and 2022 with
increasing referral numbers over time,'' of which females constituted
70 percent.\45\ The
[[Page 59446]]
increase in the number of referrals for these procedures and reports of
regret or reversal of hormone-induced changes to the body led Denmark
to take an approach that focuses on assessment and psychosocial support
for minors, and postpones decisions on hormone therapy, including
puberty blockers and cross-sex hormones, in circumstances ``when gender
incongruence has been brief,'' such as ``when there are concerns about
the stability of the experienced gender identity.'' \46\
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\45\ Nanna Ravnborg et al., ``Gender Incongruence in Danish
Youth (GenDa): A Protocol for a Retrospective Cohort Study of Danish
Children and Adolescents Referred to a National Gender Identity
Service,'' Journal of Clinical Medicine 13 (2024), https://doi.org/10.3390/jcm13226658.
\46\ Ravnborg et al., ``Gender Incongruence in Danish Youth
(GenDa).''
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In Norway, the Norwegian Commission for the Investigation of Health
Care Services (UKOM), an independent State-owned agency, made
recommendations in 2023 on the treatment offered to children and young
people with gender incongruence.\47\ The recommendations consisted of:
defining puberty blockers and surgical treatment for children as
experimental, revising national guidelines based on a systematic
knowledge summary, and consideration for a national registry to improve
quality and reduce variation in patient treatment. Norway's public
health authority has signaled an intention to respond to UKOM's
concerns by considering whether the current treatment guidelines need
to be adjusted.\48\
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\47\ Norwegian Healthcare Investigation Board (Ukom),
``Pasientsikkerhet for barn og unge med kj[oslash]nnsinkongruens
[Patient safety for children and adolescents with gender
incongruence],'' March 2023, https://ukom.no/rapporter/pasientsikkerhet-for-barn-og-unge-med-kjonnsinkongruens/sammendrag.
\48\ Jennifer Block, ``Norway's guidance on paediatric gender
treatment is unsafe, says review,'' BMJ 380 (2023), doi:10.1136/
bmj.p697.
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Other countries which have restricted various approaches to
treatment for minors (or have contemplated restrictions) include: New
Zealand,\49\ Italy,\50\ Brazil,\51\ and Australia.\52\
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\49\ Eva Corlett, ``New Zealand bans puberty blockers for young
transgender people,'' The Guardian, November 19, 2025, https://www.theguardian.com/world/2025/nov/19/new-zealand-bans-new-prescriptions-of-puberty-blockers-for-young-transgender-people.
\50\ Alvise Armellini, ``Italy moves to tighten controls on
gender-affirming medical care for minors,'' Reuters, August 5, 2025,
https://www.reuters.com/business/healthcare-pharmaceuticals/italy-moves-tighten-controls-gender-affirming-medical-care-minors-2025-08-05/.
\51\ AFP, ``Brazil prohibits hormone therapy for transgender
minors,'' MSN News, April 20, 2025, https://www.msn.com/en-in/news/other/brazil-prohibits-hormone-therapyfor-transgender-minors/ar-AA1D66l7.
\52\ Australian Associated Press, ``Queensland halts
prescription of puberty blockers and hormones for children with
gender dysphoria,'' The Guardian, January 28, 2025, https://www.theguardian.com/australia-news/2025/jan/28/queensland-halts-prescription-of-puberty-blockers-and-hormones-for-children-with-gender-dysphoria.
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In sum, there is growing international concern about the use of
hormonal and surgical interventions for pediatric gender dysphoria. We
are aware that some medical associations have endorsed sex-rejecting
procedures, but as the HHS Review makes clear, their endorsement is not
based on sound principles of evidence-based medicine. In addition to
other issues, we solicit comment of any published findings that measure
the effects of similar restrictions as proposed on insurers, providers,
and patients in these countries.
2. Medical Professional Societies Supporting Sex-Rejecting Procedures
We are aware that numerous organizations \53\ (including the
American Medical Association (AMA),\54\ the American Academy of
Pediatrics (AAP),\55\ and the American Psychological Association
56 57) have issued statements supporting access to sex-
rejecting procedures, including for minors. The most influential
sources of clinical guidance for treating pediatric gender dysphoria in
the U.S. are the WPATH and the ES clinical practice guidelines and the
AAP guidance document. We reviewed each of these documents and agree
with the conclusions of a recent systematic review of international
guideline quality by researchers at the University of York (the York
appraisal) that found all three documents as very low quality and
should not be implemented.\58\
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\53\ ``Medical Organization Statements,'' Advocates For Trans
Equality's Trans Health Project, accessed November 20, 2025, https://transhealthproject.org/resources/medical-organization-statements/.
\54\ ``Clarification of Evidence-Based Gender-Affirming Care H-
185.927,'' American Medical Association, last modified 2024, https://policysearch.ama-assn.org/policyfinder/detail/%22Clarification%20of%20Evidence-Based%20Gender-Affirming%20Care%22?uri=%2FAMADoc%2FHOD-185.927.xml.
\55\ Alyson Sulaski Wyckoff, ``AAP continues to support care of
transgender youths as more states push restrictions,'' AAP News,
January 6, 2022, https://publications.aap.org/aapnews/news/19021/AAP-continues-to-support-care-of-transgender.
\56\ ``APA adopts groundbreaking policy supporting transgender,
gender diverse, nonbinary individuals,'' American Psychological
Association, released February 28, 2024, https://www.apa.org/news/press/releases/2024/02/policy-supporting-transgender-nonbinary.
\57\ ``Criminalizing Gender Affirmative Care with Minors,''
American Psychological Association, accessed September 2, 2025,
https://www.apa.org/topics/lgbtq/gender-affirmative-care.
\58\ HHS Review, 141.
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As the HHS Review notes regarding the role of medical organizations
in the treatment of pediatric gender medicine:
U.S. medical associations played a key role in creating a
perception that there is professional consensus in support of pediatric
medical transition (PMT). This apparent consensus, however, is driven
primarily by a small number of specialized committees, influenced by
WPATH. It is not clear that the official views of these associations
are shared by the wider medical community, or even by most of their
members. There is evidence that some medical and mental health
associations have suppressed dissent and stifled debate about this
issue among their members.\59\
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\59\ HHS Review, 15.
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The Endocrine Society (ES) issued clinical practice guidelines in
2017 entitled ``Endocrine Treatment of Gender-Dysphoric/Gender-
Incongruent Persons.'' \60\ As the HHS Review notes:
---------------------------------------------------------------------------
\60\ Wylie C. Hembree et al., ``Endocrine Treatment of Gender-
Dysphoric/Gender-Incongruent Persons: An Endocrine Society Clinical
Practice Guideline,'' The Journal of Clinical Endocrinology &
Metabolism 102, no. 11 (2017): 3869-3903, https://doi.org/10.1210/jc.2017-01658.
---------------------------------------------------------------------------
In WPATH and ES guidelines, the principal goal of CSH
administration [cross sex hormone] is to induce physical
characteristics typical of the opposite sex. When hormone levels rise
beyond the typical reference range for a person's sex, they are
considered supraphysiologic. ES guidelines suggest that the sex an
individual identifies as--as opposed to their biological sex--should
determine the target reference range for hormonal concentrations.
Critics have argued that perceived identity does not alter
physiological processes and that such a belief can result in
inappropriate and potentially dangerous hormone dosing.\61\
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\61\ HHS Review, 124.
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The HHS Review states:
The ES 2017 guideline, which used the GRADE [Grading of
Recommendations Assessment, Development and Evaluation] framework, has
been criticized for making strong recommendations for hormonal
interventions in the setting of a weak evidence base. Notably, none of
the systematic reviews that supported the ES guidelines were based on
outcomes for children or adolescents. The ES recommendation to initiate
puberty blockade using gonadotropin-releasing hormone agonists was
derived by putting a higher value on achieving a ``satisfactory
physical appearance'' while putting the lowest value on avoiding
physical harms. The ES recommendation for the initiation of cross-sex
hormones no earlier than age 16 was justified by placing a higher value
on adolescent's purported ability to meaningfully consent to cross-sex
hormones (CSH) and placing a lower
[[Page 59447]]
value on avoiding harm from potentially prolonged pubertal
suppression.\62\
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\62\ HHS Review, 147.
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As explained in Chapter 9 of HHS Review, the guidelines issued by
the World Professional Association for Transgender Health (WPATH)
``have been rated among the lowest in quality and have not been
recommended for implementation by systematic reviews (SRs) of
guidelines.'' \63\ As the HHS Review points out: ``Despite their lack
of trustworthiness, for more than a decade WPATH guidelines have served
as the foundation of the healthcare infrastructure for gender dysphoric
(GD) youth in the United States. The WPATH Standards of Care guidelines
are embedded in nearly all aspects of healthcare including clinical
education, delivery of care, and reimbursement decisions by private and
public insurers.'' \64\ In 2022, WPATH issued guidelines entitled
``Standards of Care for the Health of Transgender and Gender Diverse
People, Version 8'' (SOC-8).\65\ These guidelines relaxed eligibility
criteria for children to access sex-rejecting procedures, and
ultimately recommend that adolescents wishing to undergo sex-rejecting
procedures receive them. Besides the problems identified in systematic
reviews of international guidelines, as the HHS Review states, ``in the
process of developing SOC-8, WPATH suppressed systematic reviews its
leaders believed would undermine its favored treatment approach. SOC-8
developers also violated conflict of interest management requirements
and eliminated nearly all recommended age minimums for medical and
surgical interventions in response to political pressures.'' \66\
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\63\ HHS Review, 157.
\64\ HHS Review, 157.
\65\ E. Coleman et al., ``Standards of Care.''
\66\ HHS Review, 14.
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The HHS Review goes on to explain: ``The recommendations are
couched in cautious-sounding language, stating that GD should be
`sustained over time,' particularly before administering CSH. However,
no clear standard is set; the only guidance offered is the vague and
clinically meaningless phrase `several years, leaving critical
decisions open to broad and subjective interpretation.' '' \67\
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\67\ HHS Review, 165.
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Regarding the WPATH guidelines, the HHS review states:
On the surface, WPATH SOC-8 might appear to recommend a cautious
approach toward assessment. Mental health providers are to conduct a
``comprehensive biopsychosocial assessment'' prior to initiating
medical interventions in order ``to understand the adolescent's
strengths, vulnerabilities, diagnostic profile, and unique needs to
individualize their care.'' At the same time, however, WPATH recommends
that clinicians use the International Classification of Diseases (ICD-
11) diagnosis of ``Gender Incongruence of Adolescence and Adulthood,''
which, unlike the DSM-5 diagnosis of ``Gender Dysphoria,'' requires
only ``marked and persistent incongruence between an individual's
experienced gender and the assigned sex.'' Because SOC-8 defines
transgender in a similar way (``people whose gender identities and/or
gender expressions are not what is typically expected for the sex to
which they were assigned at birth'') and provides no meaningful
distinction between this meaning of transgender and gender non-
conformity, SOC-8 effectively recognizes transgender identification as
a medical condition justifying medical interventions.\68\
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\68\ HHS Review, 194-195.
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The HHS Review also argues: ``Although WPATH's guidelines do not
necessarily discourage mental healthcare, they likewise do not require
it as a precondition for PMT [pediatric medical transition]. Some
guideline authors opposed even minimal requirements for mental health
support, arguing that such provisions were analogous to ``conversion
therapy.'' SOC-8's only formal recommendation is for a ``comprehensive
biopsychosocial assessment,'' although WPATH emphasizes that its
guideline is ``flexible,'' thereby leaving room for considerable
variation in clinical practice.'' \69\
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\69\ HHS Review, 196.
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While AMA and the AAP have not issued their own treatment
guidelines, they support the ES and WPATH guidelines, as discussed
previously in this proposed rule. AAP issued a policy statement in 2018
supporting the use of puberty blockers, cross-sex hormones, and
surgeries for minors.\70\ In support of sex-rejecting surgeries, AAP
stated that while ``current protocols [(ES, WPATH)] typically reserve
surgical interventions for adults, they are occasionally pursued during
adolescence on a case-by-case basis, considering the necessity and
benefit to the adolescent's overall health and often including
multidisciplinary input from medical, mental health, and surgical
providers as well as from the adolescent and family.'' The AAP
reaffirmed its policy statement in 2023, but also stated that it was
conducting its own review of the evidence and guideline development--
which still have not been released.\71\ Regarding the AAP policy
statement, the HHS Review states:
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\70\ Jason Rafferty, AAP Committee on Psychosocial Aspects of
Child and Family Health, AAP Committee on Adolescence, AAP Section
on Lesbian, Gay, Bisexual, and Transgender Health and Wellness,
``Ensuring Comprehensive Care and Support for Transgender and Gender
Diverse Children and Adolescents,'' Pediatrics 142, no. 4 (2018),
doi.org/10.1542/peds.2018-2162.
\71\ Alyson Sulaski Wyckoff, ``AAP reaffirms gender-affirming
care policy, authorizes systematic review of evidence to guide
update,'' AAP News, August 4, 2023, https://publications.aap.org/aapnews/news/25340/AAP-reaffirms-gender-affirming-care-policy.
---------------------------------------------------------------------------
The AAP 2018 policy statement is not technically a CPG [clinical
practice guideline] but has been widely cited in the U.S. as
influential in establishing how pediatricians respond to children and
adolescents with GD. Because the document offers extensive clinical
recommendations regarding every step of PMT--from social transition to
PBs [puberty blockers], CSH, and surgery--the York team assessed the
trustworthiness of the AAP guidance using the same criteria they
applied to CPGs. Using the AGREE II criteria, the AAP policy statement
received the second-lowest average score among all international
guidelines: 2 out of 7. As noted in Chapter 2, the AAP's policy
statement's use of ``gender diverse'' casts a very wide net regarding
which patients the organization considers eligible for medical
intervention. The statement has been heavily criticized in peer-
reviewed articles, which have pointed out that it is rife with
referencing errors and inaccurate citations. Despite persistent
advocacy among its members, who have petitioned the organization to
release updated, evidence-based guidance for treating pediatric GD, the
organization chose to reaffirm their policy statement in 2023.\72\
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\72\ HHS Review, 148-149.
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In addition to other issues, we solicit comment of any published
peer-reviewed findings that measure the effects of restrictions similar
to those in this proposed rule on insurers, providers, and patients in
international settings as well as the U.S.
C. United States' State Bans of and Coverage of Sex-Rejecting
Procedures
State lawmakers have adopted policy positions reflecting the
emerging evidence of sex-rejecting procedures administered to youth.
There are 27 States and one Territory that have enacted laws
restricting sex-rejecting procedures.\73\ These include Alabama,
[[Page 59448]]
Arkansas, Arizona, Florida, Georgia, Iowa, Idaho, Indiana, Kansas,
Kentucky, Louisiana, Missouri, Mississippi, Montana, North Carolina,
New Hampshire,\74\ North Dakota, Nebraska, Ohio, Oklahoma, Puerto Rico,
South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia,
and Wyoming. As of August 8, 2025, some of these States have ongoing
litigation proceedings impacting whether the State laws are partially
or fully enjoined by a court.
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\73\ See ``Policy Tracker: Youth Access to Gender Affirming Care
and State Policy Restrictions,'' KFF, last updated June 18, 2025,
https://www.kff.org/other/dashboard/gender-affirming-care-policy-tracker; ``Equality Maps: Bans on Best Practice Medical Care for
Transgender Youth,'' Movement Advancement Project, accessed August
11, 2025, https://www.lgbtmap.org/equality-maps/healthcare/youth_medical_care_bans.
\74\ New Hampshire's laws go into effect January 1, 2026 under
NH HB712 and NH HB377.
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There are a mix of age ranges for these bans. Of the 28 States and
Territories with enacted laws/policies (in effect or not), 25 States
prohibit some sex-rejecting procedures to young people under the age of
18, two States prohibit them for those under the age of 19, and Puerto
Rico prohibits them for those under the age of 21.
Of the 24 States and one Territory with restriction statutes in
effect as of August 8, 2025, 21 States and one Territory prohibit both
the prescribing of at least one type of sex-rejecting medication and
surgeries.\75\ No State bans only medications without also banning
surgeries. However, all the States and the Territory with restrictions
provide exceptions to the law/policies. The most common exceptions
include procedures to treat:
---------------------------------------------------------------------------
\75\ Arizona and New Hampshire currently do not prohibit sex-
rejecting procedures using medications; however, New Hampshire has a
new policy (NH HB377) taking effect January 1, 2026, that would
restrict sex-rejecting procedures using medications for minors.
Nebraska currently restricts, but does not fully ban, access to sex-
rejecting procedures using medications, so it was not included in
this count.
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A medically verifiable disorder of sexual development.
This allows treatment for children who are born with medical conditions
that affect their sexual development. These are rare conditions where a
child's reproductive or sexual anatomy does not develop in typical ways
due to genetic, hormonal, or other medical factors that can be
medically verified.
Any infection, injury, disease, or disorder that has been
caused or exacerbated by the performance of gender transition
procedures.
A physical disorder, physical injury, or physical illness
that would otherwise place the minor in danger of death or impairment
of bodily function.
We note that 12 States provide tapering off periods for patients
who started puberty blockers or hormones before enactment of the State
restriction, with some specifying specific dates (for example, in South
Carolina services cannot go beyond January 31, 2025) and others
specifying a period of time from the time of enactment (ranging between
6 months and 1 year). Ten States have grandfather clauses primarily
allowing minors who were already receiving treatment to continue
receiving it indefinitely. However, we note that many of these States
do not provide such exceptions or grandfather clauses for purposes of
prohibitions on State funding, including for State funding under the
Medicaid program and CHIP, for sex-rejecting procedures.
Conversely, 14 States and the District of Columbia have shield laws
protecting some or all sex-rejecting procedures, and three States have
executive orders (State EOs) protecting these procedures. These States
are Arizona,\76\ California, Colorado, Connecticut, Delaware, Illinois,
Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New
York, Oregon, Rhode Island, Vermont, and Washington. Shield laws and
State E.O.s often describe various types of sex-rejecting procedures
broadly, including medications and surgeries, and include these under
broader definitions of protected health care activities. These laws and
State E.O.s generally attempt to shield providers and recipients (of
all ages) against laws in other States that restrict these services.
They also often protect providers from adverse action by medical
malpractice insurers and licensure boards and allow for their address
to remain confidential. One State, Maine, has a shield law specific to
minors that allows minors 16 and over to receive hormone therapy when
the guardian has refused sex-rejecting procedures. Four States
explicitly provide child abuse and child custody protections for
parents who supported their children in receiving sex-rejecting
procedures. Four States have requirements for sex-rejecting procedures
to be covered under health plans. Arizona requires coverage for State
employee health plans. Illinois, Oregon, and Vermont require some level
of coverage of sex-rejecting procedures by all health insurance
providers. Vermont includes an exception for services that do not
comply with Federal law.
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\76\ Arizona banned pediatric sex-rejecting surgeries in 2022.
However, in 2023 the governor issued an executive order which
removes the exclusion of coverage for sex-rejecting surgery under
the state's healthcare plan for state employees and prohibits
investigative assistance to impose criminal or civil liability or
professional sanctions on persons or entities for providing,
assisting, seeking, or obtaining gender affirming care.
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Some States may experience negative financial impacts as a result
of having built their Medicaid programs and CHIPs, including policies
and operations, on the understanding that we would make Federal
Medicaid and CHIP payments to States for services that this proposed
rule would define as sex-rejecting procedures. We believe protecting
children enrolled in Medicaid and CHIP from the harms of sex-rejecting
procedures, including possible long-term and irreversible harms,
outweighs the possible financial costs some States may experience if
they begin to pay with State funds the full cost of sex-rejecting
procedures for children enrolled in Medicaid and CHIP.
Providers in these States may be concerned that this proposed
regulation would interfere with the physician-patient relationship.
This proposed regulation would only prohibit Federal Medicaid and CHIP
payment for certain services and does not require providers to
communicate certain advice or information to patients. Federal Medicaid
and CHIP payments will still be available for mental health counseling
and psychotherapy for gender dysphoria. We believe a prohibition on
Federal Medicaid and CHIP payments for sex-rejecting procedures is
needed to avoid the possibility of minors receiving irreversible or
risky pharmaceutical or surgical interventions, particularly in
circumstances where the minor may be of an age to not have the capacity
to understand the irreversible or long-term risks of these procedures
or have the capacity to continue to communicate with providers their
preferences regarding treatment after treatment has already begun.
Certain medical providers may also be relying on continued Federal
funding for sex-rejecting procedures. These providers may face
financial harm by the loss of the revenue from the proposed limitations
on Federal payment for these procedures; however, these providers have
other avenues to continue to receive compensation for providing medical
care. Providers may continue to receive payment for pharmaceutical or
surgical interventions for purposes of aligning a child's physical
appearance or body with an asserted identity that differs from the
child's sex from sources other than Medicaid or CHIP. Providers may
also receive payment for these services when
[[Page 59449]]
providing these procedures for the exempted purposes as outlined in the
proposed rule. Lastly, providers may be paid through Medicaid and CHIP
for providing other types of care for individuals diagnosed with gender
dysphoria, such as psychotherapy.
We also recognize that Medicaid and CHIP beneficiaries and their
families would be impacted by this proposed rule. Families of these
beneficiaries may look to obtain other health insurance or privately
pay for these services. Medicaid and CHIP beneficiaries who are unable
to find alternative means to pay for these services may either have to
rely on other methods of intervention such as psychotherapy or mental
health counseling, or never begin receiving these services because of
this proposed rule, if finalized. We are concerned about the
difficulties that these minors may experience and encourage other, less
invasive, ways to support these individuals, such as encouraging
psychotherapy as a first line of treatment.
This proposed rule would help to protect these children from the
risks of adverse effects of sex-rejecting procedures. CMS carefully
considered the scope of its limitation on Federal Medicaid and CHIP
payments and permits coverage of other procedures, such as
psychotherapy, which does not carry the same concerns of pharmaceutical
or surgical interventions included in the definition of sex-rejecting
procedures. Moreover, CMS does not believe Federal Medicaid and CHIP
payment for these sex-rejecting procedures is consistent with quality
of care given the state of the research into the effectiveness of these
procedures for the purposes included in our proposed definition of this
term, namely as treatments for gender dysphoria. In light of the HHS
Review, CMS believes State reliance on certain medical organizations
and the SOC-8 to justify covering sex-rejecting procedures is
misplaced.
In addition to other issues, we solicit comment on any published
studies or findings that measure the effects of similar restrictions as
proposed (or laws protecting these procedures) on insurers, providers,
and patients in these States.
Recently, the U.S. Supreme Court in United States v. Skrmetti, 605
U.S. 495 (2025), upheld Tennessee's law restricting certain surgical
and chemical interventions for minors diagnosed with gender dysphoria
(and similar conditions), referred to as Senate Bill 1 or ``SB1'' in
litigation challenging that law under the Equal Protection Clause of
the U.S. Constitution. SB1 prohibits a healthcare provider from
performing medical procedures, including surgery, and prescribing
puberty blockers, for a minor for the purpose of enabling the minor to
identify with a purported identity inconsistent with the minor's sex.
At the same time, SB1 allows healthcare providers to perform medical
procedures for minors if the procedure is to treat a minor's congenital
defect, precocious puberty, disease, or physical injury. On June 18,
2025, the Court found that SB1's prohibition of certain medical
procedures for minors diagnosed with gender dysphoria incorporates
classifications based on age and medical use--not the minor's sex.
Because the classifications turned on age and medical use rather than
sex, the Court held that SB1 was not subject to heightened scrutiny
under the Equal Protection Clause of the Fourteenth Amendment and went
on to find the law satisfied rational basis review. As discussed in
more detail later in this proposed rule, like the law at issue in
Skrmetti, this proposed rule would not discriminate on the basis of sex
and it is not based on an invidious discriminatory purpose. The
proposed rule is animated by significant child safety concerns when
sex-rejecting procedures are used for certain medical uses-that is to
align a child's physical appearance or body with an asserted identity
that differs from the child's sex.
D. Psychotherapy as the First Line Treatment for Children Diagnosed
With Gender Dysphoria
Since 2010, there has been a significant increase in mental health
conditions among teens and young adults.\77\ Current research has not
revealed a simple explanation for this rise in the need for youth
mental health services. The etiology of gender dysphoria remains
understudied.\78\ However, patients presenting to pediatric gender
medicine clinics have a high rate of comorbid mental health
conditions.\79\
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\77\ Patrick McGorry et al., ``The Lancet Psychiatry Commission
on youth mental health,'' Lancet Psychiatry 11, no. 9 (September
2024): 731-774, doi:10.1016/S2215-0366(24)00163-9.
\78\ HHS Review, 257.
\79\ HHS Review, 68.
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We believe interested parties supporting the use of sex-rejecting
procedures to treat gender dysphoria in children may state that
limiting access to these treatments (which prohibiting Federal Medicaid
and CHIP funding for them could do) will exacerbate these comorbidities
and lead to adverse mental health outcomes and increase suicide risks.
As noted previously, the Cass Review emphasized the lack of robust
evidence regarding the effectiveness of interventions such as puberty
blockers and cross-sex hormones to treat gender dysphoria and
incongruence in children and adolescents.\80\ Taylor et al. recently
conducted a review of 23 international, national, and regional clinical
guidelines that contained recommendations about the management of
children/adolescents experiencing gender dysphoria. They found that the
majority of these guidelines were developed without an independent or
evidence-based approach and raised questions about the credibility of
available guidance.\81\ As Sweden's national health authority has
recommended, ``[p]sychosocial support that helps adolescents deal with
natal puberty without medication needs to be the first option when
choosing care measures.'' \82\
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\80\ Cass, ``Cass Review.''
\81\ Jo Taylor et al., ``Clinical guidelines for children and
adolescents experiencing gender dysphoria or incongruence: a
systematic review of guideline quality (part 1),'' Archives of
Disease in Childhood 109, Supp. 2 (2024): s65-s72, doi:10.1136/
archdischild-2023-326499.
\82\ HHS Review, 256.
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While evidence on the benefits of medical and surgical
interventions to improve mental health or reduce symptoms of gender
dysphoria is lacking, psychotherapy has been proven to be an effective
intervention for many of the neurodevelopmental disorders and mental
health conditions that are highly prevalent in children and
adolescents, including those frequently co-occurring in patients
diagnosed with gender dysphoria.\83\ Psychotherapy and mental health
counseling are non-invasive interventions that would remain available
to youth under Medicaid's mandatory Early and Periodic Screening,
Diagnostic and Treatment (EPSDT) provisions in section 1905(r) of the
Act. EPSDT requires the provision of screening, vision, dental, and
hearing services, and such other necessary health care, diagnostic
services, treatment, and other measures described in section 1905(a) of
the Act to correct or ameliorate defects and physical and mental
illness and conditions discovered by the screening services, whether or
not such services are covered under the State plan. Most children
enrolled in Medicaid are entitled to coverage of robust and
comprehensive psychotherapy services under EPSDT . We note that under a
State's EPSDT program, States may only include tentative limits on
services and must take into account the individual needs of the child.
Thus, EPSDT is key
[[Page 59450]]
to ensuring that children receive appropriate mental health screenings
and treatments. Furthermore, we have developed numerous resources to
provide information regarding services and good practices for children
and youth with mental health conditions.\84\ While EPSDT is not a
required CHIP benefit for States that have separate CHIPs, many States
with such programs have opted to provide EPSDT services that mirror the
Medicaid standards set out at section 1905(r) of the Act to children
enrolled in CHIP. In addition, section 2103(c)(7) of the Act requires
States to provide mental health services in CHIP that are applied in
the same manner as required under section 2726(a) of the Public Health
Service Act [([42 U.S.C. 300gg-26(a)])] for group health plans under
such section.
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\83\ HHS Review, 257-260.
\84\ ``Children and Youth,'' Medicaid, accessed June 12, 2025,
https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/children-and-youth.
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E. States' Duty To Ensure Medicaid and CHIP Services for Children Are
Consistent With Quality of Care and the Best Interests of Beneficiaries
Under section 1902(a)(19) of the Act, State Medicaid agencies are
required to ensure that Medicaid-covered services are in the best
interests of beneficiaries; as relevant to this proposed rule, children
under age 18. Additionally, States are required, under section
1902(a)(30)(A) of the Act, to ensure that Medicaid payments for
Medicaid covered services are consistent, in relevant part, with
quality of care. Under section 2101(a) of the Act, CHIP programs are
required to provide health care services to uninsured, low-income
children in an effective and efficient manner that is coordinated with
other sources of health benefits coverage for children, including State
Medicaid programs. The research described previously in this proposed
rule indicates that sex-rejecting procedures lack the necessary
outcomes data to reasonably rely on for evidence of long-term
effectiveness.
On April 11, 2025, we issued a letter to State Medicaid Directors
to ensure Medicaid agencies were aware of growing utilization of
certain interventions offered to children to treat gender dysphoria,
and to remind States of their statutory responsibilities to ensure that
Medicaid payments are consistent with quality of care and that covered
services are provided in a manner consistent with the best interests of
recipients.\85\ In the letter, we also stated that due to the
underdeveloped body of evidence, the use of sex-rejecting procedures to
treat gender dysphoria lacks reliable evidence of long-term benefits
for minors and are now known to cause long-term and irreparable harm
for some children.\86\ A second letter, issued on May 28, 2025, was
sent to a number of hospitals to address significant issues concerning
quality standards and specific procedures affecting children diagnosed
with gender dysphoria. The letter requested hospitals to provide
information on their policies and procedures related to the adequacy of
informed consent protocols for children diagnosed with gender
dysphoria, including how children are deemed capable of making these
potentially life changing decisions and when parental consent is
required; changes to clinical practice guidelines and protocols that
the institution plans to enact in light of the recent comprehensive
review and guidance released by the Department; medical evidence and
any adverse events related to these procedures, particularly children
who later look to detransition; and complete financial data for all
pediatric sex-rejecting procedures performed at the institution and
paid, in whole or in part, by the Federal Government.\87\
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\85\ CMS, ``Puberty Blockers, Cross-sex Hormones, and Surgery
Related to Gender Dysphoria,'' April 11, 2025, https://www.cms.gov/files/document/letter-stm.pdf.
\86\ CMS, ``Puberty Blockers.''
\87\ Department of Health & Human Services, Centers for Medicare
and Medicaid Services, Urgent Review of Quality Standards and Gender
Transition Procedures, May 28, 2025, www.cms.gov/files/document/hospital-oversight-letter-generic.pdf.
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As outlined previously in this proposed rule, we take very
seriously the absence of rigorous scientific data demonstrating the
effectiveness of sex-rejecting procedures and the considerable evidence
regarding the risks. Given the potential risks and lack of clear
benefits associated with sex-rejecting procedures, we believe that
covering them with Federal Medicaid or CHIP funding would be, for
Medicaid beneficiaries, inconsistent with their best interests and with
quality of care; and, for CHIP beneficiaries, inconsistent with the
provision of health care services to uninsured, low-income children in
an effective and efficient manner that is coordinated with other
sources of health benefits coverage. In this section, we describe how
this proposed rule would intersect with existing statutory and
regulatory provisions.
1. Intersection With Nondiscrimination (Section 1557 of the Patient
Protection and Affordable Care Act)
This proposed rule is not a form of sex discrimination in violation
of section 1557 of the Patient Protection and Affordable Care Act
(Affordable Care Act).\88\ Section 1557 of the Affordable Care Act
prohibits discrimination on the basis of race, color, national origin,
sex, age, or disability in health programs or activities, any part of
which is receiving Federal financial assistance.
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\88\ The Patient Protection and Affordable Care Act (Pub. L.
111-148, 124 Stat. 119) was enacted on March 23, 2010. The
Healthcare and Education Reconciliation Act of 2010 (Pub. L. 111-
152, 124 Stat. 1049), which amended and revised several provisions
of the Patient Protection and Affordable Care Act, was enacted on
March 30, 2010. In this rulemaking, the two statutes are referred to
collectively as the ``Patient Protection and Affordable Care Act,''
``Affordable Care Act,'' or ``ACA''.
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A Federal court recently considered the question of whether the
prohibition on sex discrimination found in section 1557 of the
Affordable Care Act includes discrimination on the basis of gender
identity. On October 22, 2025, in State of Tennessee et al v. Kennedy
et al,\89\ the district court declared that ``HHS exceeded its
statutory authority when (1) it interpreted Title IX, as incorporated
into Section 1557, to prohibit discrimination on the basis of gender
identity, and (2) when it implemented Section 1557 regulations
concerning gender identity and `gender affirming care.' '' Accordingly,
the Court vacated the following regulations to the extent that they
expand Title IX's definition of sex discrimination to include gender-
identity discrimination: 42 CFR 438.3(d)(4), 438.206(c)(2), 440.262,
460.98(b)(3), and 460.112(a), and 45 CFR 92.101(a)(2)(iv),
92.206(b)(1)-(4), Sec. 92.207(b)(3) through(5), 92.8(b)(1),
92.10(a)(1)(i), and 92.208.\90\
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\89\ Tennessee v. Kennedy, ---F. Supp. 3d---,1:24CV161-LG-BWR,
2025 WL 2982069 (S.D. Miss. Oct. 22, 2025).
\90\ As part of a 2024 rulemaking implementing section 1557 of
the Affordable Care Act, HHS amended 42 CFR 440.262, 438.3(d) and
438.206(c)(2) to specifically include discrimination based on
``gender identity'' as a form of ``sex discrimination,'' and amended
42 CFR 457.495 to cross-reference amended 440.262. The amendments to
sections 438.3(d) and 438.206(c)(2) also apply to CHIP managed care
through cross references in Sec. Sec. 457.1201(d) and 457.1230(a)
that predated the section 1557 rulemaking. These amendments to the
Medicaid and CHIP rules were based on sections 1902(a)(4),
1902(a)(19), and 2101(a) of the Act. See Nondiscrimination in Health
Programs and Activities, 89 FR 37522 (May 6, 2024). In Tennessee v.
Kennedy, ---F. Supp. 3d---, 1:24CV161-LG-BWR, 2025 WL 2982069 (S.D.
Miss. Oct. 22, 2025), the court vacated 42 CFR 440.262, 438.3(d)(4),
and 438.206(c)(2) (among others) ``to the extent that they expand
Title IX's definition of sex discrimination to include gender
identity discrimination'' and declared HHS had ``exceeded its
statutory authority when (1) it interpreted Title IX, as
incorporated into Section 1557, to prohibit discrimination on the
basis of gender identity, and (2) when it implemented Section 1557
regulations concerning gender identity and `gender affirming
care.''' See also Texas v. Becerra, No. 6:24-CV-211-JDK (E.D. Tex.
Aug. 30, 2024), in which the court entered a nationwide stay of
certain regulations of the final rule, including 42 CFR 440.262,
438.3(d)(4), and 438.206(c)(2). Given Skrmetti's holding, we believe
that the outcome of this litigation will not affect the proposed
rule. As a result, CMS does not further discuss 42 CFR 440.262,
438.3, and 438.206 in this proposed rule.
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[[Page 59451]]
Notwithstanding the outcome of this litigation, the Court's holding
in Skrmetti, as explained previously in this proposed rule and
expounded upon below, supports our position that this proposed rule
would not discriminate on the basis of sex. In 2023, Tennessee enacted
a State law,\91\ SB1, which, in relevant part, prohibits a healthcare
provider from performing certain medical procedures, including surgery,
and from prescribing puberty blockers, for a minor for the purpose of
enabling the minor to identify with a purported identity inconsistent
with the minor's sex.\92\ SB1 does not prohibit healthcare providers
from providing those procedures if done to treat a minor's congenital
defect, precocious puberty, disease, or physical injury. The U.S.
Supreme Court analyzed SB1 under the Equal Protection Clause of the
Fourteenth Amendment and held that SB1 does not turn on sex-based
classifications, noting ``the law does not prohibit conduct for one sex
that it permits for the other.'' \93\
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\91\ Tenn. Code Ann. Sec. 68-33-101 et seq.
\92\ As defined by SB1, ``minor'' means an individual under
eighteen (18) years of age. Tenn. Code Ann. Sec. 68-33-102.
\93\ United States v. Skrmetti, 145 S. Ct. 1816 (2025).
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Like SB1, this proposed rule would apply uniformly to all children
regardless of the child's sex. This proposed rule would treat all
children the same when it would prohibit a State Medicaid or CHIP
agency from covering, as part of its Federally funded Medicaid program
and CHIP, the procedures that the proposed rule would define as sex-
rejecting procedures. At the same time, this proposed rule would permit
State Medicaid and CHIP agencies to continue to so cover procedures
when the child has a medically verifiable disorder of sexual
development, needs the procedure for a purpose other than attempting to
align the child's physical appearance or body with an asserted identity
that differs from the child's sex, or has complications, including any
infection, injury, disease, or disorder that has been caused by or
exacerbated by the performance of sex-rejecting procedure(s).
Further, this proposed rule would be neither arbitrary nor based on
an invidious discriminatory purpose. Rather, based on the review of
current research and the reasoning for similar conclusions reached and
actions taken by multiple European countries discussed previously in
this proposed rule, we believe that Medicaid and CHIP coverage and
payment of sex-rejecting procedures are not in the best interests of
minors and not consistent with quality of care or the effective and
efficient standard required under section 2101(a) of the Act.
Therefore, we are proposing to prohibit Federal funding for these
procedures in Medicaid and CHIP. This proposal is based on careful
consideration of the facts as described in detail in section I.B. of
this proposed rule and on our determination that the risks of sex-
rejecting procedures for children outweigh the benefits. We continue to
support Medicaid and CHIP coverage of services for children that
research shows may be helpful for treating gender dysphoria in children
without the risks of harm. Further, while State laws may differ, State
Medicaid agencies are not currently specifically prohibited under
Federal law from covering sex-rejecting procedures for Medicaid
beneficiaries who are 18 years of age and older.
2. Intersection With Sufficiency of Amount, Duration, and Scope (Sec.
440.230(c))
This proposed rule would also be consistent with 42 CFR 440.230,
which provides that a Medicaid State plan must specify the amount,
duration, and scope of covered services. CMS has long afforded State
Medicaid agencies considerable flexibility under Sec. 440.230 to
establish the amount, duration, and scope of covered Medicaid services,
and to develop State-specific medical necessity criteria and
utilization control procedures for covered services. State-specific
limits on amount, duration, and scope are frequently applied based on
an assessment of a beneficiary's specific circumstances, rather than
being blanket limitations. In addition to specifying the amount,
duration, and scope of covered services, historically, States have
determined whether, and how, to cover services and we make Federal
Medicaid payments to States if the services otherwise complied with
Federal law and regulation. Within CHIP, under Sec. 457.402(x), States
have the ability to add coverage of additional services if recognized
by State law.
Some States may be using the authorities under sections 1905 and
2110 of the Act, such as sections 1905(a)(6) and 2110(a)(24) of the
Act,\94\ to cover sex-rejecting procedures as services that are
recognized under State law.
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\94\ Section 1905(a)(6) of the Act states ``medical care, or any
other type of remedial care recognized under State law, furnished by
licensed practitioners within the scope of their practice as defined
by State law'' and section 2110(a)(24) of the Act defines ``child
health assistance'' as ``payment for part or all of the cost of
health benefits coverage for targeted low-income children that
includes any of the following . . . (24) Any other medical,
diagnostic, screening, preventive, restorative, remedial,
therapeutic, or rehabilitative services . . . if recognized by State
law . . .''
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However, this flexibility under Sec. 440.230 is not absolute.
Section 440.230 requires State Medicaid agencies to comply with certain
guidelines when determining the amount, duration, and scope of covered
services. States must detail their proposed coverage of services in a
State plan amendment and submit the State plan amendment to CMS for
approval. We review the State plan amendment to ensure that States meet
these guidelines. For example, under Sec. 440.230(b), State Medicaid
agencies must ensure that any covered service is sufficient in amount,
duration, and scope to reasonably achieve its purpose. If a state
limits the amount, duration or scope of a service without exception for
medical necessity, the State must explain to us the reasoning and
evidence to support the limitation prior to CMS approving the State's
submission. Similarly in CHIP, the flexibility under Sec. 457.402(x)
is not absolute. Section 457.60 requires States to submit a State plan
amendment when a State is making a change in policy or operation of the
program that affects the benefits provided. Like in Medicaid, States
must detail their proposed coverage of services in a State plan
amendment and submit the State plan amendment to CMS for approval. We
review the State plan amendment to ensure that States meet these
guidelines.
For this proposed rule, we have considered the risk/benefit profile
of sex-rejecting procedures for the purposes included in our proposed
definition and the alternative treatments available, before determining
that a national response prohibiting Federal Medicaid funding for sex-
rejecting procedures for children under age 18 enrolled in Medicaid and
under age 19 enrolled in CHIP is warranted. This prohibition includes
circumstances in which a provider may determine that a sex-rejecting
procedure is medically necessary for a child diagnosed with gender
dysphoria.
[[Page 59452]]
Lastly, this proposed rule is consistent with Sec. 440.230(c),
which prohibits State Medicaid agencies from arbitrarily denying or
reducing the amount, duration, or scope of a covered service to an
otherwise eligible beneficiary solely because of the diagnosis, type of
illness, or condition. This proposed rule reflects the agency's efforts
to address significant concerns about the risk/benefit profile of sex-
rejecting procedures for the uses included in our proposed definition
of that term, due to the safety concerns, risks of irreversible harm,
long-term health outcomes, and unestablished effectiveness associated
with those uses, as explained previously. This proposed rule takes into
account the different risk/benefit profiles of different uses of these
procedures, which is why it focuses on purposes that might be
associated with a particular diagnosis, type of illness or condition.
Our proposed definition of sex-rejecting procedures would exclude from
the definition certain uses of these procedures for which the risk/
benefit profile creates less significant concerns. Additionally, other
treatments, such as mental health treatment, would remain Federally
funded for children diagnosed with gender dysphoria.
As discussed previously in this proposed rule, we have considered
the concerns of States, providers, and beneficiaries who have relied on
CMS making Federal Medicaid and CHIP payment for these services.
Notwithstanding the potential financial burden to States, providers,
and individuals, and the psychological and physical impact on
beneficiaries who wish to receive these services, a nationwide
prohibition on Federal Medicaid and CHIP payments for these services is
warranted. We believe that the concerns of States, providers and
beneficiaries described previously in this proposed rule are outweighed
by the potential harm of sex-rejecting procedures for minors, including
potential long-term harm, especially when the possible benefits of
these services are unproven and the procedures are irreversible. More
data is needed on how the procedures that the proposed rule would
define as sex-rejecting procedures in children under age 18 in Medicaid
and under age 19 in CHIP affect the long-term health of such
individuals, including any impact on fertility, and whether these
procedures result in, or increase the risk of, sexual dysfunction,
impaired boned density, adverse cognitive impacts and other health
deviations, as mentioned previously.
3. Intersection With Early and Periodic Screening, Diagnostic and
Treatment (EPSDT)
This proposed rule also would be consistent with States'
obligations under the EPSDT requirement, even though it would limit
States' longstanding flexibility to develop State-specific processes
for determining when a service is medically necessary for an EPSDT-
eligible beneficiary under section 1905(r)(5) of the Act. Under EPSDT,
States must cover medically necessary services described in section
1905(a) of the Act for most Medicaid eligible children under the age of
21. Children eligible for EPSDT generally include beneficiaries under
the age of 21 enrolled: in Medicaid through a categorically needy
group; in Medicaid through a medically needy group in a State that has
elected to include EPSDT in the medically needy benefit package; in a
Medicaid-expansion CHIP program; or in a separate CHIP program that has
elected to cover EPSDT. This includes beneficiaries with an
institutional level of care who are eligible for Medicaid by virtue of
their enrollment in a home and community-based services (HCBS) waiver
under section 1915(c) of the Act. EPSDT is not available to
beneficiaries without satisfactory immigration status who are eligible
only for treatment of an emergency medical condition and other groups
of individuals under age 21 who are eligible only for limited services
as part of their Medicaid eligibility, such as, for example, family
planning services.
Under this proposed rule, sex-rejecting procedures for the uses
included in our proposed definition would no longer be Federally funded
as Medicaid-covered services for individuals under the age of 18 or as
CHIP-covered services for individuals under the age of 19, because such
services may pose a risk of harm to children, including long-term
irreversible harm, and result in adverse outcomes on their health
including infertility/sterility, sexual dysfunction, impaired bone
density accrual, adverse cognitive impacts, cardiovascular disease and
metabolic disorders, and psychiatric disorders. We are not endorsing or
requiring any particular treatment modality for gender dysphoria.
In our prior EPSDT coverage guidance,95 96we discuss how
States should approach their determination of whether a service is
medically necessary. In this prior guidance, we emphasize that States
(or their delegated entity) must take into account the particular needs
of the child. We explain that States should consider the child's long-
term needs, not just what is required to address the immediate
situation. The State should consider all aspects of a child's needs,
including nutrition, social development, and mental health and
substance use disorders. Accordingly, while sex-rejecting procedures
have been covered by some State Medicaid programs to address gender
dysphoria to alleviate its symptoms, these procedures can involve use
of puberty suppressing drugs to prevent the onset of puberty and cross-
sex hormones to spur the secondary sex characteristics of the opposite
sex. For children under 18 (or under 19 in CHIP) who have undergone the
suppression of puberty, these procedures may pose a significant risk of
harm, including possible long-term harm to a child's health, including
the risk of infertility and bone density loss, as discussed previously.
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\95\ CMS, ``EPSDT-A Guide for States: Coverage in the Medicaid
Benefit for Children and Adolescents,'' June 2014, https://www.medicaid.gov/medicaid/benefits/downloads/epsdt-coverage-guide.pdf.
\96\ CMS, State Health Official Letter #24-005, ``Best Practices
for Adhering to Early and Periodic Screening, Diagnostic, and
Treatment (EPSDT) Requirements,'' September 26, 2024, https://www.medicaid.gov/federal-policy-guidance/downloads/sho24005.pdf.
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As discussed previously in this proposed rule, some State Medicaid
programs and CHIPs have relied upon clinical guidelines that have
failed to meet the principles of unbiased, evidence-driven clinical
guideline development. As a result of this reliance, State Medicaid
programs and CHIPs have developed coverage criteria which may not have
considered the full effects of all aspects of a child's needs
(including long-term needs) as required under EPSDT.
F. Prohibition on Federal Funding and Coverage in a Separate CHIP
Title XXI of the Act allows States to implement CHIP as a separate
CHIP, a Medicaid-expansion program, or a combination of the two. Title
XXI-funded Medicaid expansion programs generally follow Medicaid rules.
This section relates to separate CHIPs.
States with separate CHIPs receive Federal funding from the title
XXI allotment to provide child health assistance through obtaining
coverage that meets the requirements of section 2103 of the Act and
regulations at Sec. 457.402. Section 2101(a) of the Act calls for the
provision of CHIP in a manner that is effective and efficient and
coordinated with other sources of
[[Page 59453]]
health benefits coverage for children, notwithstanding section
2110(a)(24) of the Act that allows States to cover additional services
that are recognized by State law. While CMS recognizes the considerable
State flexibility provided to States under section 2110(a)(24) of the
Act, CMS has concluded that it is in the best interest of children
under age 19 enrolled in CHIP to no longer permit Federal funding for
coverage of procedures when utilized for purposes of sex-rejecting
procedures because such services may result in adverse outcomes on
their health including infertility/sterility, sexual dysfunction,
impaired bone density accrual, diverse cognitive, cardiovascular
disease and metabolic disorders, and psychiatric disorders. Therefore,
CMS has concluded it is most efficient and effective, and in the best
interests of children, for CHIP to align and coordinate with the
Medicaid program.
Section 2103 of the Act and Sec. 457.410 allow States to choose
any of the following four types of health benefits coverage for
separate CHIPs: (1) Benchmark coverage in accordance with Sec.
457.420; (2) Benchmark-equivalent coverage in accordance with Sec.
457.430; (3) Existing comprehensive State-based coverage in accordance
with Sec. 457.440; and (4) Secretary-approved coverage in accordance
with Sec. 457.450. Regardless of the type of health coverage selected
by a State, States are required to provide all services identified at
Sec. 457.410(b) to children enrolled in CHIP. In addition to these
services, States have the flexibility to cover additional services at
Sec. 457.402, which lists the services included in ``child health
assistance.'' In addition to the specified services, Sec. 457.402(x)
permits states to select additional services and treatments that it
will cover. The majority of separate CHIP States have elected
Secretary-approved coverage. Under Secretary-approved coverage at Sec.
457.450, the Secretary currently has the discretion to determine
whether the coverage provided by a State is appropriate coverage for
the population of targeted low-income children covered under the
program. Recently, there have also been changes to allowable procedures
under the benchmark coverage options for CHIP under Sec. 457.420 as
described later in this proposed rule.
On June 20, 2025, we issued the ``Patient Protection and Affordable
Care Act; Marketplace Integrity and Affordability,'' final rule (90 FR
27074) (referred to hereafter as the ``2025 Marketplace final rule''),
which prohibits issuers of non-grandfathered individual and small group
market health insurance coverage--that is, issuers of coverage subject
to the essential health benefit (EHB) requirements--from providing
coverage for ``specified sex-trait modification procedures'' as an EHB
beginning with Plan Year 2026. This prohibition was proposed and
finalized because section 1302(b)(2)(A) of the ACA requires that the
scope of the EHB be equal to the scope of benefits provided under a
typical employer plan, and coverage of such procedures is not typically
included in employer-sponsored plans.\97\ In addition, on January 31,
2025, the U.S. Office of Personnel Management issued letter 2025-01A,
which prohibited coverage of certain surgeries and hormone treatments
for covered individuals in Federal Employees Health Benefits (FEHB) and
Postal Service Health Benefits (PSHB) Programs under age 19. That
letter was amended by letter 2015-01B, issued on August 15, 2025, which
eliminated the age limit and advised that for Plan Year 2026, chemical
and surgical modification of an individual's sex traits through medical
interventions (to include ``gender transition'' services) will no
longer be covered under the FEHB or PSHB Programs. Specifically, it
excludes hormone treatments that pertain to chemical and surgical
modification of an individual's sex traits (including as part of
``gender transition'' services) and clarifies that carriers should not
exclude coverage for entire classes of pharmaceuticals. For example,
GnRH agonists may be prescribed during in vitro fertilization (IVF),
for reduction of endometriosis or fibroids, and for cancer treatment or
prostate cancer/tumor growth prevention.\98\
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\97\ Patient Protection and Affordable Care Act; Marketplace
Integrity and Affordability, 90 FR 27152 (June 25, 2025). While
portions of the ``Patient Protection and Affordable Care Act;
Marketplace Integrity and Affordability,'' final rule (90 FR 27074),
have been challenged, the requirement that issuers of non-
grandfathered individual and small group market health insurance
coverage--that is, issuers of coverage subject to the essential
health benefit (EHB) requirements--cannot provide coverage for
``specified sex-trait modifications'' as an EHB will begin with Plan
Year 2026.
\98\ U.S. Office of Personnel Management (OPM) FEHB Program
Carrier Letter, Letter Number 2025-01A, ``Addendum to Call Letter
for Plan Year 2026,'' January 31, 2025, https://www.opm.gov/healthcare-insurance/carriers/fehb/2025/2025-1a.pdf. Amended by OPM
FEHB Programs Carrier Letter, Letter Number 2025-01B, ``Subject:
Chemical and Surgical Sex-Trait Modification Services for Plan Year
2026 Proposals,'' August 15, 2025, https://www.opm.gov/healthcare-insurance/carriers/fehb/2025/2025-01b.pdf.
---------------------------------------------------------------------------
As previously noted, section 2101(a) of the Act provides funds to
States to enable them to initiate and expand the provision of child
health assistance to uninsured, low-income children in an effective and
efficient manner that is coordinated with other sources of health
benefits coverage for children. As outlined previously in this proposed
rule, while the prohibitions on coverage are not identical, they will
effectively result in prohibition of coverage of sex-rejecting
procedures in both the FEHB Program and as an EHB beginning with Plan
Year 2026. Therefore, we are proposing to add a new section Sec.
457.476 to prohibit Federal financial participation for sex-rejecting
procedures under CHIP, to align CHIP with Medicaid, the FEHB Program,
and EHBs. Although title XXI of the Act does not apply EHB rules under
a separate CHIP, the services which must be covered under title XXI
also are EHBs. We note that similar to Medicaid, this proposed change
in CHIP would not prohibit Federal payment for procedures undertaken to
treat a child with a medically verifiable disorder of sexual
development; for purposes other than attempting to align a child's
physical appearance or body with an asserted identity that differs from
the child's sex; or to treat complications, including any infection,
injury, disease, or disorder that has been caused by or exacerbated by
the performance of sex-rejecting procedure(s).
We also note that section 2107(e) of the Act applies numerous
provisions in Medicaid in the same manner to title XXI as would be the
case under this proposed rule.
We take very seriously the weak evidence base supporting the safety
or effectiveness of sex-rejecting procedures in minors, and the
plausible evidence of harm, for the purposes included in our proposed
definition. Based on these factors, we propose to prohibit Federal CHIP
funds for sex-rejecting procedures for the purposes included in our
proposed definition. It is also important to reiterate that these
regulatory changes would not prohibit the use of Federal CHIP dollars
for mental health treatments for conditions such as gender dysphoria.
II. Provisions of the Proposed Regulations
A. General Discussion
We propose to exercise our separate authorities under sections
1902(a)(19) and 1902(a)(30)(A) of the Act to add a new subpart N to
part 441 to prohibit Federal Financial Participation (FFP) in Medicaid
for sex-rejecting procedures for the purposes included in our proposed
definition for individuals under the age of 18, as this is the age of
majority in most States. For CHIP, we
[[Page 59454]]
propose to exercise our authority under section 2103(c) of the Act to
revise subpart D of 42 CFR part 457 to prohibit the use of Federal CHIP
dollars to fund sex-rejecting procedures for the purposes included in
our proposed definition for individuals under the age of 19, as this
age aligns with the statutory definition of ``child'' at 2110(c)(1) of
the Act. While this proposal aligns with section 5(a) of E.O. 14187, we
are also proposing this change based on current evidence, which does
not conclusively support the use of sex-rejecting procedures to treat
gender dysphoria in children. It is important to emphasize that these
proposed regulatory changes would not prohibit the use of Federal
Medicaid or CHIP dollars for mental health treatments for conditions
such as gender dysphoria. Nor would these proposed changes prevent
States from providing coverage for sex-rejecting procedures with State-
only funds outside of the Federally-matched Medicaid program or CHIP.
We note that this proposed rule also does not prohibit Federal
reimbursement of procedures undertaken (i) to treat a child with a
medically verifiable disorder of sexual development; (ii) for purposes
other than attempting to align a child's physical appearance or body
with an asserted identity that differs from the child's sex; or (iii)
to treat complications, including any infection, injury, disease, or
disorder that has been caused by or exacerbated by the performance of
sex-rejecting procedure(s).
B. Prohibition on Medicaid Payment for Sex-Rejecting Procedures (Sec.
441.800)
We propose to add a new subpart N to 42 CFR part 441 to protect
Medicaid beneficiaries and ensure Medicaid payments are consistent with
quality of care by prohibiting Federal Medicaid payments to States for
sex-rejecting procedures provided to children under the age of 18. The
basis and purpose of proposed subpart N (as described previously in
this proposed rule) is reflected in proposed Sec. 441.800.
Within new subpart N, we propose at Sec. 441.802(a) that State
Medicaid plans must provide that the Medicaid agency will not make
payment under the plan for sex-rejecting procedures for children under
the age of 18. Per 42 CFR 430.10, the State plan is the vehicle through
which States assure that their Medicaid programs will be administered
in conformity with title XIX of the Act (including sections 1902(a)(19)
and 1902(a)(30)(A) of the Act) and CMS' implementing regulations, and
the State plan must also contain all information necessary for CMS to
determine whether the plan can serve as a basis for FFP. Proposed Sec.
441.802(a) would not preclude States from covering sex-rejecting
procedures with State-only funding outside of their Federally-matched
Medicaid programs. We propose at Sec. 441.802(b) that FFP would not be
available in State expenditures for sex-rejecting procedures for
children under the age of 18.
Proposed Sec. 441.801 would define sex-rejecting procedures as any
pharmaceutical or surgical intervention that attempts to align a
child's physical appearance or body with an asserted identity that
differs from the child's sex either by: (1) intentionally disrupting or
suppressing the normal development of natural biological functions,
including primary or secondary sex-based traits; or (2) intentionally
altering a child's physical appearance or body, including amputating,
minimizing, or destroying primary or secondary sex-based traits such as
the sexual and reproductive organs. However, our proposed definition
also provides that the term sex-rejecting procedures would not include
procedures undertaken: (i) to treat a child with a medically verifiable
disorder of sexual development; (ii) for purposes other than attempting
to align a child's physical appearance or body with an asserted
identity that differs from the child's sex; or (iii) to treat
complications, including any infection, injury, disease, or disorder
that has been caused by or exacerbated by the performance of sex-
rejecting procedure(s).
Given States' obligations under sections 1902(a)(19) and
1902(a)(30)(A) of the Act to assure care and services are provided
consistent with the best interests of Medicaid recipients and that
payments are consistent with quality of care, respectively, we believe
that our proposed prohibition of FFP in State expenditures for sex-
rejecting procedures for children under age 18 is necessary given the
lack of an adequate evidence base for the effectiveness of these
treatments for the purposes that would be included in our proposed
definition and the significant potential for negative and irreversible
side effects.
We note that CMS has imposed age limitations on the availability of
Federal funding for certain procedures in the Medicaid program before.
CMS has long prohibited, at Sec. 441.253, Federal funding for
permanent sterilizations furnished to individuals under age 21,
motivated by concerns about potential coercion, informed consent, and
patient regret that were based on data specifically related to
permanent sterilizations (see preamble discussion at 43 FR 52146, 52151
through 52153). In this context, our concerns about the effectiveness
of sex-rejecting procedures and the plausible evidence of harm motivate
our proposal to prohibit Federal funding for sex-rejecting procedures
for children under the age of 18. Specifically, this proposed rule
recognizes that the more cautious approach of psychosocial support to
treat individuals diagnosed with gender dysphoria prior to age 18--the
legal age of majority in nearly all U.S. States and Territories
99 100--better protects children and youth from adverse
effects of any such procedures.
---------------------------------------------------------------------------
\99\ CMS is aware that 3 States--Alabama, Nebraska, and
Mississippi--recognize higher ages as the age of majority. See ``Age
of Majority by State 2025,'' World Population Review, accessed
August 11, 2025, https://worldpopulationreview.com/state-rankings/age-of-majority-by-state. CMS is proposing to prohibit FFP in State
expenditures within the Medicaid program for sex-rejecting
procedures for children under the age of 18 to correspond to the
legal age of majority used by the overwhelming majority of States
and Territories. Because section 2110(c)(1) of the Act defines
``child'' for purposes of CHIP as an individual under age 19, CMS is
proposing to prohibit FFP in State expenditures within CHIP for sex-
rejecting procedures for children under age 19.
\100\ ``Age of Majority by State 2025,'' World Population
Review, accessed September 9, 2025, https://worldpopulationreview.com/state-rankings/age-of-majority-by-state.
---------------------------------------------------------------------------
Three states have a different, higher age of majority. Alabama and
Nebraska's age of majority is 19 and Mississippi has the highest age of
majority at 21.\101\ This rule would not conflict with the age of
majority in Alabama, Nebraska and Mississippi because these States
recognize higher ages of majority than this proposed rule. Under this
proposed rule, sex-rejecting procedures would be available for Medicaid
coverage at age 18, which is a lower age than the age of majority in
these States. Additionally, nothing in this proposed rule preempts
State authority to regulate the age of majority in their State, nor
does it interfere with a State's ability to fund these services with
State-only funds. Further, it is clear that in making policy choices
for the administration of a Federal program, State law is not
controlling. This proposed rule would make age 18 the floor of Federal
coverage for sex-rejecting procedures under the Medicaid program,
should a State include such procedures in their program.
---------------------------------------------------------------------------
\101\ ``Age of Majority by State 2025,'' World Population
Review, accessed September 9, 2025, https://worldpopulationreview.com/state-rankings/age-of-majority-by-state.
---------------------------------------------------------------------------
We originally considered establishing the prohibition on Federal
reimbursement of sex-rejecting procedures to individuals under age 19
as we are now proposing for CHIP.
[[Page 59455]]
However, age 19 has no specific meaning for the Medicaid program and,
as stated, is a year older than the legal age of majority in nearly all
U.S. States and Territories. By comparison, this is not true under
CHIP, as the statutory definition of a child in CHIP under section
2110(c)(1) of the Act is an individual under 19 years of age. In
addition to other issues, we solicit comment on the operational
feasibility of States in implementing the under age 18 prohibition in
Medicaid and the under age 19 prohibition in CHIP.
As discussed previously, States have obligations under sections
1902(a)(19) and 1902(a)(30)(A) of the Act to ensure that Medicaid-
covered care and services are provided in a manner consistent with the
best interests of beneficiaries and to assure that payments for
Medicaid-covered care and services are consistent with quality of care.
For the reasons discussed in this proposed rule, CMS believes
prohibiting Federal Medicaid funding for sex-rejecting procedures for
children under the age of 18 is warranted to help ensure that States
meet these statutory obligations.
We believe that the proposed definition of sex-rejecting procedures
provides an appropriate degree of clarity and certainty regarding which
sex-rejecting procedures would and would not be subject to the
prohibitions at proposed Sec. 441.802. We believe the proposed
definition is narrowly tailored and appropriate to exclude only
treatments CMS has determined to lack sufficient evidence of safety for
their intended purposes. Examples such as procedures to treat
precocious puberty, therapy subsequent to a traumatic injury, or the
use of hormone replacement therapy to treat a growth hormone deficiency
would not fall under the proposed definition of sex-rejecting
procedures, and Federal Medicaid payment for such procedures would
therefore not be prohibited for individuals under the age of 18, when
medically necessary. As the HHS Review explains, central precocious
puberty and gender dysphoria are distinct clinical entities. In
addition, because the proposed definition is narrowly tailored in this
way, we believe that States will be able to administer Medicaid
coverage for drugs in a manner that is consistent with both the
proposed rule and the requirements in section 1927 of the Act. Section
1927 of the Act governs the Medicaid Drug Rebate Program and payment
for covered outpatient drugs (CODs), which are defined in section
1927(k)(2) of the Act. In general, if manufacturers enter into a
National Drug Rebate Agreement (NDRA) as set forth in section 1927(a)
of the Act, payment is available for the CODs covered under that NDRA
for medically accepted indications.\102\ As defined in section
1927(k)(6) of the Act, ``medically accepted indications'' mean use for
a COD approved under the Federal Food, Drug, and Cosmetic Act or
approved for inclusion in any of the compendia described in subsection
1927(g)(1)(B)(i) of the Act. There is no pharmaceutical that is solely
indicated for these sex-rejecting procedures; the pharmaceuticals that
are used for these procedures are approved for other indications. Thus,
these pharmaceuticals will continue to be coverable by Medicaid
programs for other indications in accordance with section 1927 of the
Act. In addition, we note that this proposed rule only applies to
pharmaceuticals that are used in the proposed definition and would not
apply to other pharmaceuticals that are prescribed to a child.
---------------------------------------------------------------------------
\102\ The NDRA does not have a specific OMB number, however the
OMB package that contains all of the information a manufacturer has
to report once entering into an NDRA is included in CMS 367a-367e.
---------------------------------------------------------------------------
As noted previously, the proposed definition of sex-rejecting
procedures categorically would exclude procedures undertaken (1) to
treat a child with a medically verifiable disorder of sexual
development; (2) for purposes other than attempting to align a child's
physical appearance or body with an asserted identity that differs from
the child's sex; or (3) to treat complications, including any
infection, injury, disease, or disorder that has been caused by or
exacerbated by the performance of sex-rejecting procedure(s). We
reiterate that these proposed regulatory changes would not prohibit the
use of Federal Medicaid dollars for mental health treatments for
conditions such as gender dysphoria.
In addition, to further explain the meaning of terms used in the
proposed sex-rejecting procedures definition, we also propose
definitions at new Sec. 441.801 that would apply to subpart N of part
441. We propose to define FFP for purposes of subpart N of part 441 as
Federal financial participation, recognizing the longstanding term used
in the Medicaid program to describe the Federal Government's matching
arrangement with States and Territories. We also propose to define
``female'' as a person of the sex characterized by a reproductive
system with the biological function of (at maturity, absent disruption
or congenital anomaly) producing eggs (ova). We propose to define
``male'' as a person of the sex characterized by a reproductive system
with the biological function of (at maturity, absent disruption or
congenital anomaly) producing sperm. We propose to define ``sex'' as a
person's immutable biological classification as either male or female.
A landmark study of and model for anisogamy established that
differences in gamete size, and the associated differences in gamete
production time, lead to stable sexual dimorphism and the establishment
of two biological sexes: ovum producers (females) and sperm producers
(males).\103\ Additionally, more recent literature acknowledges
differences in sex roles but maintains that such differences can still
be traced to the concept of anisogamy and the resultant sexual
dimorphism that remain the root cause of sex specific selection, the
sex roles, and the determination of biological sex.\104\ We believe our
proposed definitions of female, male, and sex are appropriately rooted
in this concept and biological reality. In addition to other issues, we
solicit comments on whether these proposed definitions of ``sex'',
``male'', and ``female'' could pose challenges to States in
operationalizing this proposed prohibition on Federal reimbursement of
sex-rejecting procedures or other aspects of the Medicaid program or
CHIP.
---------------------------------------------------------------------------
\103\ G.A. Parker et al., ``The origin and evolution of gamete
dimorphism and the male-female phenomenon,'' Journal of Theoretical
Biology 36, no. 3 (1972): 529-553, https://doi.org/10.1016/0022-5193(72)90007-0.
\104\ Lukas Sch[auml]rer et al., ``Anisogamy, chance and the
evolution of sex roles,'' Trends in Ecology & Evolution 27, no. 5
(2012): 260-264, https://doi.org/10.1016/j.tree.2011.12.006.
---------------------------------------------------------------------------
Given the weak evidence base underlying sex-rejecting procedures
for children and the potential risk of harm, including long-term harm,
we believe this proposed rule appropriately implements the directives
to States under sections 1902(a)(19) and 1902(a)(30)(A) of the Act that
care and treatment provided under Medicaid must be in the best
interests of recipients, and that payment for services must be
consistent with quality of care.
C. Prohibition on CHIP Payment for Sex-Rejecting Procedures
We propose to revise subpart D in 42 CFR part 457 to prohibit
Federal CHIP payments to States for sex-rejecting procedures provided
to children. The purpose of this section is to ensure that CHIP is
operated in an effective and efficient manner that is coordinated with
other sources of health benefits coverage, including Medicaid, for
children consistent with section 2101(a) of the Act by prohibiting
Federal financial participation in payments by
[[Page 59456]]
States for sex-rejecting procedures for a child under the age of 19.
This would create consistency between CHIP coverage and Medicaid.
The prohibition on Federal financial participation for payments by
States for sex-rejecting procedures for children applies in the same
manner described in Medicaid at Sec. 441.802 to a State administering
a separate CHIP except that it applies to children under the age of 19
in accordance with the definition of a targeted low-income child at
Sec. 457.310. This prohibition applies to CHIP regardless of the type
of health benefit coverage option described at Sec. 457.410. The
definitions applied under Medicaid at Sec. 441.801 apply equally to a
separate CHIP.
We believe that our proposed prohibition of Federal CHIP payment
for sex-rejecting procedures is necessary given the need to align CHIP
coverage with coverage of these services in Medicaid, the lack of
scientific evidence regarding the effectiveness of these treatments,
and the significant potential for negative and often irreversible side
effects when used for the purposes included in our proposed definition
in children.
For each of these provisions outlined previously in this proposed
rule, we anticipate stopping the Federal reimbursement of sex-rejecting
procedures immediately upon the effective date of the rule finalizing
these provisions, for both Medicaid and CHIP.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-
3520, we are required to provide notice in the Federal Register and
solicit public comment before a ``collection of information''
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval. Collection of information is defined under 5
CFR 1320.3(c) of the PRA's implementing regulations.
To fairly evaluate whether an information collection should be
approved by OMB, 44 U.S.C. 3506(c)(2)(A) requires that we solicit
comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements. Comments, if received, will be responded to within the
subsequent final rule (CMS-2451-F, RIN 0938-AV73), if this proposed
rule is finalized.
A. Wage Estimates
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2024 National Occupational Employment and Wage
Statistics for all salary estimates (https://www.bls.gov/oes/tables.htm). In this regard, Table 1 presents BLS' mean hourly wage,
our estimated cost of fringe benefits and other indirect costs
(calculated at 100 percent of salary), and our adjusted hourly wage.
Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe benefits
Occupation Mean hourly and other Adjusted
Occupation title code wage ($/hr) indirect costs hourly wage ($/
($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Business Operations Specialist................ 13-1000 43.76 43.76 87.52
General and Operations Manager................ 11-1021 64.00 64.00 128.00
----------------------------------------------------------------------------------------------------------------
As indicated, we are adjusting our employee hourly wage estimates
by a factor of 100 percent. This is necessarily a rough adjustment,
both because fringe benefits and other indirect costs vary
significantly from employer to employer, and because methods of
estimating these costs vary widely from study to study. Nonetheless, we
believe that doubling the hourly wage to estimate the total cost is a
reasonably accurate estimation method.
B. Proposed Information Collection Requirements (ICRs)
1. ICRs Regarding Definitions (Sec. 441.801)
We anticipate that the proposed definitions (adding and defining
``female'', ``male'', ``sex'', and ``sex-rejecting procedure'') may
result in the need for some States to amend existing policy/manual
documents where those items are inconsistent with the parameters of
this proposed rule. However, we do not anticipate that this would
impact any active claims/billing forms or their instructions.
We estimate a potential of 56 Medicaid respondents and 56 CHIP
respondents consisting of 50 States, the District of Colombia, American
Samoa, Commonwealth of the Mariana Islands, Guam, Puerto Rico, and the
US Virgin Islands. Based on research discussed in section I.1.C.
(United States' State Bans of and Coverage of Sex-Rejecting Procedures)
of this proposed rule, approximately 27 States and one Territory have
laws enacted restricting some or all of the sex-rejecting procedures
that would be covered by this proposed rule. For these States and
Territories, we do not anticipate State staff will need to conduct a
review of policy documents for Medicaid or CHIP as these procedures are
currently banned (or will be banned).
For the remainder of States and Territories, we assume that State
staff will conduct a review for both Medicaid policy documents and CHIP
policy documents. As a result, we estimate 28 States and Territories
that would need to amend their existing policy documents consistent
with these definitions. We estimate it will take 3 hours at $87.52/hr
for a Business Operations Specialist to review existing State policy
documents to ensure consistency with the proposed definitions and 1
hour at $128.00/hr for a General and Operations Manager to review and
approve the necessary State policy document changes.
In aggregate we estimate a one-time State burden of 112 hours (28
States x 4 hr/response) at a cost of $10,936 [(3 hr x $87.52/hr x 28
States) + (1 hr x $128.00/hr x 28 States)]. When taking into account
the Federal administrative match of 50 percent, we estimate a one-time
State cost of $5,468 ($10,936 * 0.5). We assumed all services meeting
the proposed definition would no longer be covered by Medicaid nor
CHIP, and thus not eligible for Federal matching funds.
[[Page 59457]]
2. ICRs Regarding the Prohibition on Payment for Sex-Rejecting
Procedures (Sec. 441.802)
If this proposed rule is finalized, the following changes and
associated SPA template will be made available for public review/
comment under control number CMS-10398 #97, OMB 0938-1148) via the
standard PRA process which includes the publication of 60- and 30-day
Federal Register notices. In the meantime, the following scores the
potential impact for preparing and submitting the SPA. We will revisit
these preliminary estimates during the standard PRA process and revise
if needed.
Under the proposed provision, States and Territories would be
required to submit SPAs specifically indicating adherence to the
prohibition on claiming Federal funding of sex-rejecting procedures for
individuals under the age of 18 for Medicaid and for individuals under
the age of 19 for CHIP. The content of the SPA would be a simple
recitation of the prohibition. As indicated above, the template will be
made available for public review and comment if this proposed rule is
finalized. We intend to require all States and Territories to submit
this template for approval as part of their State plan.
We estimate a potential of 56 Medicaid and CHIP respondents
consisting of 50 States, the District of Colombia, American Samoa,
Commonwealth of the Mariana Islands, Guam, Puerto Rico, and the US
Virgin Islands. We estimate it will take 2 hours at $87.52/hr for a
Business Operations Specialist to prepare an initial SPA and 1 hour at
$128.00/hr for a General and Operations Manager to review and approve
the SPA for submission to CMS.
In aggregate, we estimate a one-time State burden of 168 hours (56
States x 3 hr/response) at a cost of $16,970 [(2 hr x $87.52/hr x 56
States) + (1 hr x $128.00/hr x 56 States)]. When taking into account
the Federal administrative match of 50 percent, we estimate a one-time
State cost of $8,485 ($16,970 * 0.5). We assumed all services meeting
the proposed definition would no longer be covered by Medicaid nor
CHIP, and thus not eligible for Federal matching funds.
C. Summary of Proposed Requirements and Burden Estimates
Table 2--Proposed Requirements/Burden Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Time per Total Labor
Regulation section(s) under OMB control No. (CMS Respondents Responses Total response time costs ($/ Total State
Title 42 of the CFR ID No.) (per State) responses (hr) (hr) hr) cost ($) cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 441.801.............. N/A................... 28 States and 1 28 4 112 Varies 10,936 5,468
Territories.
Sec. 441.802.............. CMS-10398 #97, OMB 56 States and 1 56 3 168 Varies 16,970 8,485
0938-1148. Territories.
---------------------------------------------------------------------------------------------------
Total................... ...................... 56.................... 2 84 Varies 280 Varies 27,906 13,953
--------------------------------------------------------------------------------------------------------------------------------------------------------
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the proposed rule's information collection requirements. The
requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed previously, please visit the CMS
website at https://www.cms.gov/regulations-and-guidance/legislation/paperworkreductionactof1995/pra-listing, or call the Reports Clearance
Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the DATES and ADDRESSES sections of this
proposed rule and identify the proposed rule (CMS-2451-P, RIN 0938-
AV73), the ICR's CFR citation, and the OMB control number.
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Regulatory Impact Statement
A. Statement of Need
Throughout the U.S., thousands of children are receiving sex-
rejecting procedures for the purpose of attempting to align their
bodies with an asserted identity that differs from their sex. As
outlined in this proposed rule, however, the current medical evidence
does not support conclusively these interventions and indicates that
they might lack clear benefits while posing a health and safety risk to
children. To help ensure that Medicaid services are provided in a
manner consistent with the best interests of the recipients and that
Medicaid payments are consistent with quality of care, we are proposing
a prohibition on State Medicaid Agencies from providing payment under
the plan for sex-rejecting procedures for children under the age of 18
and proposing a prohibition on State CHIPs from providing payment under
the plan for sex-rejecting procedures for children under the age of 19.
B. Overall Impact
We have examined the impacts of this proposed rule as required by
Executive Order 12866, ``Regulatory Planning and Review''; Executive
Order 13132, ``Federalism''; Executive Order 13563, ``Improving
Regulation and Regulatory Review''; Executive Order 14192, ``Unleashing
Prosperity Through Deregulation''; the Regulatory Flexibility Act (RFA)
(Pub. L. 96-354); section 1102(b) of the Social Security Act; and
section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts).
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as any regulatory action that is likely to result
in a rule that may: (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or Tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan
[[Page 59458]]
programs or the rights and obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, or
the President's priorities.
A regulatory impact analysis (RIA) must be prepared for a
regulatory action that is significant under section 3(f)(1) of E.O.
12866. Based on our estimates, the Office of Management and Budget's
(OMB) Office of Information and Regulatory Affairs (OIRA) has
determined this rulemaking is significant per section 3(f).
Accordingly, we have prepared a Regulatory Impact Analysis that to the
best of our ability presents the costs and benefits of the rulemaking.
C. Detailed Economic Analysis
1. Impacts on Federal Expenditures and Other Transfers
We estimate that this proposal would reduce Federal Medicaid
spending by about $188 million from fiscal year 2027 through fiscal
year 2036 (in real 2027 dollars). To estimate the impact of this
proposal, we analyzed data from T-MSIS TAF v8.0 for 2023. We selected
all claims with a gender dysphoria diagnosis and in the following
claims categories: inpatient hospital with surgical procedure;
outpatient hospital with surgical procedure; and professional services
and prescription drugs with hormone therapy. We included fee-for-
service and managed care encounter data. We also analyzed this data by
beneficiary age group and counted only spending for individuals ages 17
and younger. We note that the proposed policy would not prohibit
payment by a State Medicaid agency for these services for those age 18,
and those individuals and costs are not included as part of the
estimates. This data also includes CHIP expenditures for these
services.
For 2023, we identified about $31 million in total computable
Medicaid and CHIP spending for these services and individuals. States
that had not banned gender dysphoria treatments for children as of 2023
accounted for 76 percent of spending, including 92 percent of inpatient
treatment with surgery and 87 percent of outpatient treatment with
surgery.
Table 3--Medicaid Expenditures on Gender Dysphoria Treatment by Category of Service and Age Group, 2023
----------------------------------------------------------------------------------------------------------------
Age 6-12 Age 13-14 Age 15-18 Total
----------------------------------------------------------------------------------------------------------------
Inpatient hospital with surgery................. $0 $0 $180,553 $180,553
Outpatient hospital with surgery................ 15,526 23,534 2,145,082 2,184,142
Professional services hormone therapy........... 482,924 1,180,610 3,089,948 4,753,482
Prescription drug hormone therapy............... 2,566,749 6,130,955 14,779,884 23,477,588
---------------------------------------------------------------
Total....................................... 3,065,198 7,335,099 20,195,468 30,595,765
----------------------------------------------------------------------------------------------------------------
Source: Analysis of T-MSIS TAF v8.0.
Note: The T-MSIS data includes enrollment and spending by age groups, which includes ages 15-18 as one group.
The policy in this proposed rule would only affect Medicaid enrollees under age 18 (ages 15-17), but the table
above includes spending for individuals age 18. We note that we have adjusted for this when developing the
estimates in the RIA.
We projected this spending forward from 2023 through 2035 using
projected growth in Medicaid and CHIP spending on children from the
Mid-Session Review of the President's fiscal year 2026 Budget. We
assumed all services would no longer be covered by Medicaid or CHIP,
and thus not eligible for Federal matching funds. We solicit comment on
whether states that currently cover services would continue to cover
these services absent FFP as described in this proposed rulemaking.
States that currently cover these services under Medicaid would see
the largest reductions in Medicaid spending. We also assumed about 3
percent of spending would be delayed until individuals reach age 18,
reflecting 50 percent of the surgical procedures being paid by Medicaid
and CHIP in the future. Absent data or analysis on the impact of
prohibitions on these procedures, we assumed some individuals would
ultimately receive these services once eligible and believe 50 percent
is reasonable (considering that some individuals would no longer be
eligible for Medicaid in the future and some individuals may find other
sources of coverage).
Table 4 shows the annual impact of the proposal on total and
Federal Medicaid and CHIP spending in millions of dollars. These
estimates assume the policies in the proposed rule would be effective
as of October 1, 2026. Total Medicaid and CHIP spending would be
reduced by $318 million over 10 years, Federal spending would be
reduced by $188 million, and State spending would be reduced by $130
million (in real 2027 dollars). Actual impacts may vary from these
estimates. We have relied on the most recently available program data
for this analysis and projections of future enrollment and spending.
Actual future costs may vary if enrollment and spending are higher or
lower than projected.
Table 4--Projected Impacts of Prohibiting Coverage of Sex-Rejecting Procedures for Individuals Under 18 on Medicaid Spending
[In millions of real 2027 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2027-2036
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total...................................................... -30 -30 -30 -31 -32 -32 -32 -33 -34 -34 -318
Federal.................................................... -18 -18 -18 -18 -19 -19 -19 -19 -20 -20 -188
State...................................................... -12 -12 -12 -13 -13 -13 -13 -14 -14 -14 -130
--------------------------------------------------------------------------------------------------------------------------------------------------------
We have made reasonable assumptions about how individuals may use
these services in the future. A greater or lesser number of individuals
may still receive coverage for these services upon reaching age 18 than
we have assumed. In addition, it is possible some individuals may find
alternative coverage for these services (for example,
[[Page 59459]]
States covering services without Federal funding, or private
insurance). We have also not estimated if there would be any other
impacts on Federal expenditures (for example, increases in other
healthcare services related to gender dysphoria).
2. Costs
In addition, the proposed rule may result in several costs. States
would need to update State plans or waivers to comply with the proposed
changes to covered benefits. Those impacts are described in section
III. of this proposed rule. In addition, the changes in this proposed
rule may prevent or delay individuals from receiving these healthcare
services.
3. Alternatives
As an alternative to this proposed rule, we considered taking no
action to require that a State Medicaid or CHIP plan must provide that
the Medicaid or CHIP agency will not make payment under the plan for
sex-rejecting procedures for children in Medicaid under the age of 18
and children in CHIP under the age of 19 and to prohibit the use of
Federal Medicaid or CHIP dollars to fund sex-rejecting procedures for
these individuals. On January 28, 2025, President Trump issued E.O.
14187, Protecting Children from Chemical and Surgical Mutilation.
Section 5(a) of that order directs the Secretary to take all
appropriate actions consistent with applicable law to end what the
order refers to as the chemical and surgical mutilation of children
including regulatory and sub-regulatory actions for specific programs,
including Medicaid. In alignment with the Executive Order and the
evidence outlined in section I.B. of this proposed rule, CMS decided to
pursue this proposed policy. These proposed changes would not prevent
States from providing coverage for sex-rejecting procedures with State-
only funds outside of the Federally-matched Medicaid program or CHIP.
D. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant economic impact on a
substantial number of small entities. For purposes of the RFA, we
estimate that almost all hospitals and other healthcare providers are
small entities as that term is used in the RFA (including small
businesses, small nonprofit organizations, and small governmental
jurisdictions). The great majority of hospitals and most other
healthcare providers are small entities, either by being nonprofit
organizations or by meeting the Small Business Administration (SBA)
definition of a small business (having revenues of less than $9.0
million to $47.0 million in any 1 year). Individuals and States are not
included in the definition of a small entity.
For purposes of the RFA, approximately 96 percent of the health
care industries impacted are considered small businesses according to
the Small Business Administration's size standards. According to the
SBA's website at http://www.sba.gov/content/small-business-size-standards, the health care industries impacted fall in the North
American Industrial Classification System (NAICS) 446110 Pharmacies and
Drug Stores; 622111 Offices of Physicians (except Mental Health
Specialists); 621112 Offices of Physicians, Mental Health Specialists;
621493 Freestanding Ambulatory Surgical and Emergency Centers; 621498
All Other Outpatient Care Centers; and 622110 General Medical and
Surgical Hospitals. Table 5 shows the industry size standards for each
of these health care industries.
Table 5--Health Care Industry Size Standards
----------------------------------------------------------------------------------------------------------------
SBA size standard/
NAICS (6-digit) Industry subsector description small entity Total small
threshold (million) businesses
----------------------------------------------------------------------------------------------------------------
446110................................. Pharmacies and Drug Stores....... $37.5 18,461
621111................................. Offices of Physicians (except 16.0 129,117
Mental Health Specialists).
621112................................. Offices of Physicians, Mental 13.5 12,325
Health Specialists.
621493................................. Freestanding Ambulatory Surgical 19.0 5,569
and Emergency Centers.
621498................................. All Other Outpatient Care Centers 25.5 9,801
622110................................. General Medical and Surgical 47.0 1,169
Hospitals.
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Tables 6 through 11 aid in showing the distribution of firms and
revenues at their 6 digits NAICS code level. These tables aim to
provide an understanding of the disproportionate impacts among firms,
between small and large firms.
Table 6--NAICS 446110 Pharmacies and Drug Stores
[$37.5 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 18,461 100 $3,930,615.08
<$100K............................................ 560 3 50,953.57
$100K-$499K....................................... 1,733 9 292,525.68
$500-$999K........................................ 1,764 10 753,448.41
$1M-$2.499M....................................... 4,810 26 1,760,637.01
$2.5M-$4.999M..................................... 5,159 28 3,606,681.53
$5M-$7.499M....................................... 2,137 12 6,079,067.38
$7.5M-$9.999M..................................... 869 5 8,624,350.98
$10M-$14.999M..................................... 762 4 11,934,971.13
$15M-$19.999M..................................... 318 2 16,805,396.23
$20M-$24.999M..................................... 146 1 21,375,342.47
$25M-$29.999M..................................... 98 1 26,077,561.22
$30M-$34.999M..................................... 64 0 27,529,546.88
$35M-$39.999M..................................... 41 0 30,746,414.63
[[Page 59460]]
LARGE FIRMS........................................... ................. ................. ..................
Receipts>$40M..................................... 396 N/A 672,827,431.82
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Table 7--NAICS 621111 Offices of Physicians (Except Mental Health Specialists)
[$16.0 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 129,117 100 $1,463,302.41
<$100K............................................ 11,119 9 51,195.79
$100K-$499K....................................... 44,138 34 296,376.77
$500-$999K........................................ 30,224 23 712,231.21
$1M-$2.499M....................................... 24,522 19 1,559,970.11
$2.5M-$4.999M..................................... 10,388 8 3,475,423.18
$5M-$7.499M....................................... 3,799 3 6,048,868.65
$7.5M-$9.999M..................................... 1,945 2 8,498,150.64
$10M-$14.999M..................................... 2,003 2 11,844,361.46
$15M-19.999M...................................... 979 1 16,517,796.73
LARGE FIRMS........................................... ................. ................. ..................
Receipts >$20M.................................... 3,782 N/A 116,848,659.18
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Table 8--NAICS 621112 Offices of Physicians, Mental Health Specialists
[$13.5 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 12,325 100 $634,311.40
<$100K............................................ 2,125 17 52,448.00
$100K-$499K....................................... 6,341 51 261,018.29
$500-$999K........................................ 2,092 17 686,686.90
$1M-$2.499M....................................... 1,206 10 1,496,716.42
$2.5M-$4.999M..................................... 338 3 3,331,017.75
$5M-$7.499M....................................... 111 1 5,735,522.52
$7.5M-$9.999M..................................... 52 0 8,039,461.54
$10M-$14.999M..................................... 60 0 10,485,850.00
LARGE FIRMS........................................... ................. ................. ..................
Receipts >$15M.................................... 212 N/A 14,421,103.77
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Table 9--NAICS 621493 Freestanding Ambulatory Surgical and Emergency Centers
[$19.0 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 5,569 100 $2,713,466.15
<$100K............................................ 353 6 48,246.46
$100K-$499K....................................... 1,249 22 287,140.11
$500-$999K........................................ 867 16 724,727.80
$1M-$2.499M....................................... 1,265 23 1,648,132.81
$2.5M-$4.999M..................................... 845 15 3,602,647.34
$5M-$7.499M....................................... 413 7 5,999,140.44
$7.5M-$9.999M..................................... 223 4 8,392,170.40
$10M-$14.999M..................................... 241 4 11,472,634.85
$15M-19.999M...................................... 113 2 16,496,955.75
LARGE FIRMS........................................... ................. ................. ..................
Receipts >$20M.................................... 610 N/A 46,366,978.69
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
[[Page 59461]]
Table 10--NAICS 621498 All Other Outpatient Care Centers
[$25.5 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 9,801 100 $2,124,005.00
<$100K............................................ 1,079 11 48,916.59
$100K-$499K....................................... 2,925 30 283,037.26
$500-$999K........................................ 1,832 19 719,524.02
$1M-$2.499M....................................... 1,990 20 1,545,938.69
$2.5M-$4.999M..................................... 790 8 3,409,083.54
$5M-$7.499M....................................... 289 3 5,739,238.75
$7.5M-$9.999M..................................... 193 2 7,644,943.01
$10M-$14.999M..................................... 292 3 10,567,616.44
$15M-$19.999M..................................... 184 2 13,609,652.17
$20M-$24.999M..................................... 137 1 16,169,890.51
$25M-$29.999M..................................... 90 1 21,218,188.89
LARGE FIRMS........................................... ................. ................. ..................
Receipts >$30M.................................... 1,008 N/A 55,938,203.37
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Table 11--NAICS 622110 General Medical and Surgical Hospitals
[$47.0 Million size standard]
----------------------------------------------------------------------------------------------------------------
Firm size (by receipts) Firm count % of small firms Avg. revenue
----------------------------------------------------------------------------------------------------------------
SMALL FIRMS........................................... 1,169 100 $17,598,603.93
<$100K............................................ 59 5 49,491.53
$100K-$499K....................................... 150 13 270,466.67
$500-$999K........................................ 54 5 696,814.81
$1M-$2.499M....................................... 28 2 1,522,000.00
$2.5M-$4.999M..................................... 28 2 3,739,428.57
$5M-$7.499M....................................... 35 3 6,512,657.14
$7.5M-$9.999M..................................... 51 4 8,550,588.24
$10M-$14.999M..................................... 124 11 11,777,798.39
$15M-$19.999M..................................... 132 11 16,993,166.67
$20M-$24.999M..................................... 121 10 22,389,727.27
$25M-$29.999M..................................... 100 9 26,686,900.00
$30M-$34.999M..................................... 99 8 31,329,858.59
$35M-$39.999M..................................... 66 6 35,617,636.36
$40M-44.999M...................................... 122 10 42,184,385.25
$45M-$49.999M..................................... 1,169 5 17,598,603.93
LARGE FIRMS........................................... ................. ................. ..................
Receipts >$50M.................................... 1,404 N/A 884,790,689.46
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
Individuals and States are not included in the definition of a
small entity.
As shown in Table 12, all the industries combined, according to the
2022 Economic Census, earned approximately $2,364,153,884,000, while
the small firms for all the industries combined earned approximately
$325,819,624,000. Table 13 in section V.E. estimates a $31.6 million
reduction in total annualized monetized transfers from the Federal
Government and States to health care providers. This total estimated
reduction represents less than 1 percent of the total revenues of the
health care industries impacted and the total revenues of the small
firms in the health care industries impacted. It also represents less
than 1 percent of the total revenues of each health care industry
impacted and the total revenues of the small firms in each health care
industry impacted. As a result, this proposed rule if finalized would
result in a change in revenue of less than 1 percent for the impacted
health care industries.
Table 12--Total Revenues, All Firms and Small Firms, by NAICS Classification
----------------------------------------------------------------------------------------------------------------
Revenue Revenue
NAICS Total revenues (all test * Total revenues test *
firms) (%) (small firms) (%)
----------------------------------------------------------------------------------------------------------------
446110 Pharmacies and Drug Stores.......... $339,002,748,000.00 0.01 $72,563,085,000.00 0.04
621111 Offices of Physicians (except Mental 630,858,846,000.00 0.00 188,937,217,000.00 0.02
Health Specialists).......................
621112 Offices of Physicians, Mental Health 10,875,162,000.00 0.29 7,817,888,000.00 0.40
Specialists...............................
621493 Freestanding Ambulatory Surgical and 43,395,150,000.00 0.07 15,111,293,000.00 0.21
Emergency Centers.........................
621498 All Other Outpatient Care Centers... 77,203,082,000.00 0.04 20,817,373,000.00 0.15
[[Page 59462]]
622110 General Medical and Surgical 1,262,818,896,000.00 0.00 20,572,768,000.00 0.15
Hospitals.................................
--------------------------------------------------------------------
Total.................................. 2,364,153,884,000.00 0.00 325,819,624,000.00 0.01
----------------------------------------------------------------------------------------------------------------
Source: 2022 Statistics of U.S. Businesses, available at https://www.census.gov/programs-surveys/susb.html.
* Calculated using an estimated reduction in total annualized monetized transfers of $31.6 million (as shown in
Table 13) as a percentage of total revenues.
As its measure of significant economic impact on a substantial
number of small entities,
HHS uses a change in revenue of more than 3 to 5 percent. According
to Table 12, we do not believe that the 3 to 5 percent threshold will
be reached by the proposed requirements in this rule for NAICS 446110
Pharmacies and Drug Stores; 622111 Offices of Physicians (except Mental
Health Specialists); 621112 Offices of Physicians, Mental Health
Specialists; 621493 Freestanding Ambulatory Surgical and Emergency
Centers; 621498 All Other Outpatient Care Centers; or 622110 General
Medical and Surgical Hospitals. Therefore, the Secretary has certified
that this proposed rule will not have a significant economic impact on
a substantial number of small entities in these industries.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis RIA if a rule may have a significant impact
on the operations of a substantial number of small rural hospitals.
This analysis must conform to the provisions of section 603 of the RFA.
For purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. We are not preparing an analysis for section 1102(b) of the
Act because we have determined, and the Secretary certifies, that this
proposed rule would not have a significant impact on the operations of
a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2025, that
threshold is approximately $187 million. The proposed rule would not
mandate significant spending costs on State, local, or Tribal
governments in the aggregate, or by the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a rule that imposes substantial direct
effects on the States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. This proposed
rule will have a substantial direct effect on the ability of States to
receive Federal Medicaid funds for sex-rejecting procedures furnished
to children under age 18 and on the ability of States to receive
Federal CHIP funds for sex-rejecting procedures furnished to children
under age 19.
E. Accounting Statement and Table
Consistent with OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf), we have
prepared an accounting statement in Table 13 showing the classification
of the impact associated with the provisions of this proposed
rule.\105\
---------------------------------------------------------------------------
\105\ The effects attributable to this proposed rule might be
lower in magnitude than the aggregates presented here if other
actions, such as the HHS/CMS proposal titled ``Medicare and Medicaid
Programs; Hospital Condition of Participation: Prohibiting Sex-
Rejecting Procedures on Children,'' are finalized before
finalization of this proposal.
Table 13--Accounting Statement
----------------------------------------------------------------------------------------------------------------
Estimate Discount rate
Transfers (million) Year dollar (%) Period covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)................. $18.7 2027 7 2027-2036
18.7 2027 3 2027-2036
----------------------------------------------------------------------------------------------------------------
Quantitative:
Estimated reduction in transfers from Federal Government to healthcare providers (including hospitals,
physicians, and pharmacies) and to beneficiaries due to no longer covering sex-rejecting procedures for
individuals under 18.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)................. 12.9 2026 7 2027-2036
12.9 2026 3 2027-2036
----------------------------------------------------------------------------------------------------------------
Quantitative:
Estimated reduction in transfers from States to healthcare providers (including hospitals, physicians,
and pharmacies) and to beneficiaries due to no longer covering sex-rejecting procedures for individuals under
18.
----------------------------------------------------------------------------------------------------------------
Table 13 shows the annualized monetized transfer values required
under OMB Circular A-4. At a discount rate of 7 percent, the annualized
monetized transfers are $18.7 million to the Federal government and
$12.9 million to the States, reflecting a reduction in payment for
these services to healthcare providers. At a discount rate of 3
percent, the annualized monetized transfers are also $18.7 million to
the Federal government and $12.9 million to the States.
Mehmet Oz, Administrator of the Centers for Medicare & Medicaid
[[Page 59463]]
Services, approved this document on December 15, 2025.
List of Subjects
42 CFR Part 441
Grant programs--health, Health professions, Medicaid, Reporting and
recordkeeping requirements.
42 CFR Part 457
CHIP, Grant programs--health, Health professions, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC
SERVICES
0
1. The authority citation for part 441 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
2. Part 441 is amended by adding subpart N to read as follows:
Subpart N--Prohibition on Federal Medicaid Funding for Sex-
Rejecting Procedures Furnished to Children
Sec.
441.800 Basis and purpose.
441.801 Definitions.
441.802 General rules.
Sec. 441.800 Basis and purpose.
Basis and purpose. The purpose of this section is to implement
sections 1902(a)(19) and 1902(a)(30)(A) of the Act to protect Medicaid
beneficiaries and ensure Medicaid payment is consistent with quality of
care by prohibiting Federal financial participation in payments by
States for sex-rejecting procedures for a child under the age of 18.
(a) As relevant to this subpart, section 1902(a)(19) of the Act
requires that States ensure that care and services will be provided in
a manner consistent with the best interests of the recipients.
(b) As relevant to this subpart, section 1902(a)(30)(A) of the Act
requires that States' payment methods be consistent with quality of
care.
Sec. 441.801 Definitions.
As used in this subpart--
FFP means Federal financial participation.
Female means a person of the sex characterized by a reproductive
system with the biological function of (at maturity, absent disruption
or congenital anomaly) producing eggs (ova).
Male means a person of the sex characterized by a reproductive
system with the biological function of (at maturity, absent disruption
or congenital anomaly) producing sperm.
Sex means a person's immutable biological classification as either
male or female.
Sex-rejecting procedure means, except as specified in paragraph (3)
of this definition, any pharmaceutical or surgical intervention that
attempts to align a child's physical appearance or body with an
asserted identity that differs from the child's sex by either of the
following:
(1) Intentionally disrupting or suppressing the normal development
of natural biological functions, including primary or secondary sex-
based traits; or
(2) Intentionally altering a child's physical appearance or body,
including amputating, minimizing or destroying primary or secondary
sex-based traits such as the sexual and reproductive organs.
(3) For purposes of this definition, the term sex-rejecting
procedure does not include procedures undertaken--
(i) To treat a child with a medically verifiable disorder of sexual
development; or
(ii) For purposes other than attempting to align a child's physical
appearance or body with an asserted identity that differs from the
child's sex; or.
(iii) To treat complications, including any infection, injury,
disease, or disorder that has been caused by or exacerbated by the
performance of sex-rejecting procedure(s).
Sec. 441.802 General rules.
(a) A State plan must provide that the Medicaid agency will not
make payment under the plan for sex-rejecting procedures for children
under the age of 18.
(b) FFP is not available in State expenditures for sex-rejecting
procedures for children under the age of 18.
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
3. The authority citation for part 457 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
4. Section 457.476 is added to subpart D to read as follows:
Sec. 457.476 Limitations on coverage: Sex-rejecting procedures.
(a) Basis and purpose. The purpose of this section is to ensure
that CHIP is operated in an effective and efficient manner that is
coordinated with other sources of health benefits coverage, including
Medicaid, for children consistent with 2101(a) by prohibiting Federal
financial participation in payments by States for sex-rejecting
procedures for a child under the age of 19.
(b) The prohibition on Federal financial participation for payments
by States for sex-rejecting procedures for children applies in the same
manner described in Medicaid at Sec. 441.802 to a State administering
a separate CHIP except that it applies to children under the age of 19
in accordance with the definition of a targeted low-income child at
Sec. 457.310. This prohibition applies to CHIP regardless of the type
of health benefit coverage option described at Sec. 457.410. For
purposes of this section, the definitions applied under Medicaid at
Sec. 441.801 apply equally to a separate CHIP.
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
[FR Doc. 2025-23464 Filed 12-18-25; 8:45 am]
BILLING CODE 4120-01-P