Appeals court revives DOJ subpoena as Trump administration restricts Medicaid funding for youth gender-affirming care

The Trump administration has intensified its campaign against youth gender-affirming care. The Centers for Medicare and Medicaid Services finalized a rule on August 11, 2026, banning federal Medicaid and CHIP funding for pediatric transition treatments. Concurrently, the Department of Health and Human Services referred hundreds of providers to the Department of Justice for investigation into alleged billing fraud. Amid these actions, the Ninth Circuit Court of Appeals revived a federal subpoena against telehealth provider QueerDoc, ruling that the administration's policy goals are not improper.

CMS Medicaid funding ban

• ▪The Centers for Medicare and Medicaid Services rule banning federal funding for youth gender-affirming care is scheduled to take effect on October 13, 2026.
• ▪The Centers for Medicare and Medicaid Services rule includes a six-month tapering period allowing federal funds to cover hormones until April 2027 for youth already receiving treatment.
• ▪The Centers for Medicare and Medicaid Services finalized a rule on August 11, 2026, that bars federal Medicaid and CHIP funding for pediatric gender-affirming medications and surgeries.

Ninth Circuit subpoena ruling

• ▪A panel of the U.S. Court of Appeals for the Ninth Circuit ruled 2–1 on August 14, 2026, to revive a Department of Justice subpoena seeking records from Washington-based telehealth provider QueerDoc.
• ▪U.S. Circuit Judge Carlos T. Bea wrote for the Ninth Circuit majority that the Department of Justice subpoena was lawfully issued under the Health Insurance Portability and Accountability Act.
• ▪The Ninth Circuit panel remanded the QueerDoc case to the district court to evaluate whether the Department of Justice subpoena is overbroad or imposes an undue burden.

HHS fraud investigation referrals

• ▪Vice President JD Vance sent a letter to Attorney General Todd Blanche calling for the criminal prosecution of healthcare providers who intentionally miscoded gender-transition treatments to secure insurance coverage.
• ▪The Department of Health and Human Services released a report on August 13, 2026, titled 'Wolves in White Coats: How Doctors and Hospitals Pushed and Profited from the Fraud of "Gender Medicine."'
• ▪The Department of Health and Human Services referred hundreds of healthcare providers to the Office of Inspector General and the Department of Justice for investigation into diagnostic coding practices.

Medical provider billing practices

• ▪The Department of Health and Human Services report alleged that providers used unspecified endocrine disorder billing codes to compel insurance coverage for transgender care in children.
• ▪The Department of Health and Human Services report alleged that providers billed over $60 million in insurance claims for youth gender-affirming treatments from 2015 to 2025.

Patient impact concerns

• ▪The health policy organization KFF estimates that approximately 130,000 transgender youth covered by Medicaid or CHIP live in states where gender-affirming care remains legal.
• ▪Clinicians and advocates warned that the federal Medicaid funding ban will effectively revoke access to medical care for low-income transgender youth.

Regulatory legal strategy

• ▪Legal experts noted that the Centers for Medicare and Medicaid Services utilized the standard regulatory notice-and-comment process to better position the funding rule against expected legal challenges.
• ▪The Massachusetts Attorney General's office confirmed plans to challenge the Centers for Medicare and Medicaid Services funding rule in court.