Federal Court Deals Trump Administration Another Setback on Its Efforts to Curtail Gender Affirming Care for Minors

The latest chapter in the Trump Administration’s multiprong effort to limit the availability of gender affirming care (“GAC”) to minors played out this week in an hours-long hearing in Eugene, Oregon. On March 19, 2026, Judge Mustafa Kasubhai of the United States District Court for the District of Oregon stated that he will partially grant a requested order to invalidate a declaration as to the medical validity of gender affirming care issued by Department of Health and Human Services (“HHS”) Secretary Robert F. Kennedy Jr. (the “Kennedy Declaration”). The Kennedy Declaration purported to supersede existing state standards of medical care by asserting that what he labeled as “sex‑rejecting procedures” for minors are “neither safe nor effective” and therefore “fail to meet professionally recognized standards of health care.” The December 18, 2025, Kennedy Declaration left hospitals and practitioners who provide gender affirming care vulnerable to potential exclusion from participating in Medicaid and other federal health care programs that are a lifeblood for many children’s hospitals that treat a high volume of Medicaid patients. Alarm about such Draconian enforcement of the Kennedy Declaration was further heightened when the HHS General Counsel proceeded to publicly refer 13 children’s hospitals to HHS’s Office of the Inspector General (“OIG”) for investigation and possible exclusion because they provide GAC to minors.

On December 23, 2025, a coalition of 19 states and the District of Columbia (“Plaintiff States”), led by Oregon, filed a lawsuit against Secretary Kennedy, OIG, and HHS (the “Defendants”).¹ The states sought declaratory and injunctive relief, arguing that the Declaration exceeds HHS’s statutory authority, violates notice-and-comment rulemaking requirements under both the Medicare Act and the Administrative Procedure Act (“APA”), and is contrary to several provisions of the Medicaid Act. On January 6, 2026, Plaintiff States filed a motion for summary judgment, and Defendants filed a motion to dismiss the action, or in the alternative, for summary judgment. Oral argument was held March 19, 2026.

At the March 19 hearing, which lasted almost six hours, Judge Kasubhai indicated that he plans to deny Defendants’ motion to dismiss and to partially grant Plaintiff States’ request to invalidate the Kennedy Declaration. As a threshold matter, Judge Kasubhai determined that the Kennedy Declaration is a final agency action subject to judicial review. He further indicated that the Kennedy Declaration constituted a substantive change in the law that could only be adopted after notice-and-comment rulemaking, which the declaration had not undergone. Judge Kasubhai also indicated that he agreed with Plaintiff States’ claim that the Kennedy Declaration is unlawful and should be set aside because it exceeds HHS’s authority by purporting to dictate standards of medical care that supersede existing professional standards.

Judge Kasubhai told the parties that he intends to take under advisement Plaintiff States’ claim that the Kennedy Declaration violates various provisions of the Medicaid Act. In terms of the specific relief the Court intends to order, Judge Kasubhai indicated that he will vacate the Kennedy Declaration as unlawful, and requested further briefing within 14 days from the parties regarding the scope of Plaintiff States’ request to enjoin Defendants from enforcing, implementing, or relying on the Kennedy Declaration.

The Kennedy Declaration is just one component of the Trump Administration’s broader effort to prohibit GAC for minors nationwide. In January 2025, President Trump issued an executive order² that directed the executive branch to promote policies that recognize the “male and female sexes” as immutable. U.S. Attorney General Pam Bondi implemented this executive order by issuing an April 2025 memorandum directing the Department of Justice (“DOJ”) to investigate and prosecute practitioners who offer GAC to minors, defining such treatments as “mutilation,” for violations of the Food, Drug, and Cosmetic Act and the False Claims Act. DOJ proceeded to issue virtually identical subpoenas to 20 children’s hospitals seeking a wide range of documents, including complete patient records for minors who received GAC. A handful of children’s hospitals, including one represented by Ropes and Gray, challenged the validity of these subpoenas in court, arguing that they had been issued for an improper purpose. Those motions to quash were granted, and DOJ is now appealing those rulings.

HHS has also issued a proposed rule to prohibit the use of federal Medicaid funds for “sex-rejecting procedures” for individuals under 18 and to prohibit federal CHIP funding for those under 19. Under the proposed rule, mental health services would remain eligible for federal funding, and states could still use state-only funds outside Medicaid/CHIP to cover these procedures if they choose. In a companion move, CMS proposed to amend the Medicare/Medicaid Conditions of Participation so as to bar hospitals that perform “sex-rejecting procedures” on minors from participating in those programs. The notice and comment period for these new proposed rules has closed, but HHS has not yet issued any final rule changes in this space.

As far as the Kennedy Declaration is concerned, it is expected that the Court will issue a written order in the coming weeks, which is likely to be followed by a Government appeal to the Ninth Circuit. If Judge Kasubhai fully grants Plaintiff States’ injunctive relief, HHS and HHS-OIG will be prohibited from considering the Kennedy Declaration or a similar superseding federal standard of care in any exclusion proceeding.