Gender-Affirming Care: Multi‑State Lawsuit Challenges HHS Declaration

Background 

As previously discussed in Foley’s healthcarelawtoday, on December 18, 2025, the U.S. Department of Health & Human Services (HHS) held a press conference focused on what it defined as “sex rejection procedures” (SRPs), also known as gender-affirming care (GAC) for minors, and outlined next steps. During the press conference, HHS announced the publication of a Declaration (the focus of this discussion), the publication of two new proposed rules, and announced that the U.S. Food and Drug Administration (FDA) had issued twelve warning letters to manufacturers of breast binders for deceptive advertisement to children.  

On December 23, 2025, 18 states (including California, Illinois, Massachusetts, Michigan and, New York), and the District of Columbia (collectively, the States) filed a complaint to block the enforcement of the “Declaration” issued by U.S. Health and Human Services (HHS) Secretary Robert F. KennedyJr. on December 18, 2025, titled: “Safety, Effectiveness, and Professional Standards of Care for Sex-Rejecting Procedures on Children and Adolescents.”

What Providers Need to Know Now

While the lawsuit is ongoing and the States have asked the court for preliminary relief to stop enforcement of the Declaration, the Kennedy Declaration remains the formal position of HHS, unless and until the Oregon district court rules otherwise. This means providers will need to evaluate their compliance and operational posture under the policy, as distinguished from the simultaneously-proposed changes to Medicaid coverage and hospital Conditions of Participation, which are still at the proposed rule stage and not yet in effect.

The Declaration

As we reported previously, the Declaration questions standards of medical practice currently in place to treat gender dysphoria or related disorders and claims that they do not sufficiently address the safety, long-term outcomes, and appropriate professional protocols for performing “Sex Rejecting Procedures” (SRPs), also referred to in the medical community as gender-affirming care (GAC), on minors.

The Declaration stated that SRPs for minors diagnosed with gender dysphoria are “neither safe nor effective” and do not meet “professionally recognized standards of health care.” It further warned that health care providers and institutions offering such care could be excluded from participation in Medicare, Medicaid, and other federal health programs.

The Complaint

In the complaint, filed in federal court in Oregon, the States argue that the Declaration:

1. Exceeds Secretary Statutory Authority

The complaint asserts that no statute permits the Secretary of HHS to define or declare nationwide a “professionally recognized standard of health care.” The States note that the Declaration states it is issued “pursuant to the authority vested in HHS Secretary” and “is informed 42 C.F.R. § 1001.2.” The regulation stated in the Declaration (42 C.F.R. § 1001.2) only defines “professionally recognized standards of health care” but does not authorize the Secretary to “declare” what those standards are. The States argue that no statute confers upon the Secretary the authority to define what is considered a professionally established standard of care, and they note an agency cannot grant itself authority to create substantive law by promulgating a regulation not authorized by statute.

The States also argue that the Declaration directly contravenes the Medicare statute expressly prohibiting any federal officer or employee from exercising “any supervision or control over the practice of medicine” (42 U.S.C. § 1395).

2. Fails to Comply with Procedural Rulemaking Requirements Under Medicare

The States argue that the Declaration is a final agency action that changes a substantive legal standard under the Medicare Act. Under federal law, such changes require formal rulemaking, including publication in the Federal Register and at least 60 days for public comment. The complaint asserts that HHS bypassed these mandatory notice-and-comment procedures, and that no statutory exception applies, rendering the Declaration procedurally invalid.

3. Fails to Comply with Procedural Rulemaking Requirements Under APA

The Administrative Procedures Act (APA) mandates notice‑and‑comment rulemaking for substantive or “legislative” rules. The States argue that the Declaration constitutes a legislative rule and is “not exempt from notice-and-comment rulemaking as an interpretative rule[], general statement[] of policy, or rule[] of agency organization, procedure, or practice.” Although the States argue that the notice‑and‑comment process is required, they further state that even if the Declaration were exempt as an interpretive rule, a substantive rule must still be published in the Federal Register at least 30 days before its effective date, which did not occur.

4. Contravenes Law

The States argue that the Declaration violates multiple provisions of the Medicaid Act, including:

• Conflicts with Medicaid Statutory Requirements — The Declaration would effectively amend approved state Medicaid and Children’s Health Insurance Program (CHIP) plans by excluding otherwise qualified providers, thereby violating States’ rights to determine provider eligibility and breaching federal guarantees of plan approval and funding.

• Violations of Beneficiary Protections — The States say the Declaration would block providers who offer GAC to minors from participating in Medicaid. That means Medicaid patients could lose access to qualified providers and would not have the “free choice” of provider that the law guarantees. They also argue this breaks Medicaid’s comparability rule, which requires equal benefits for people in similar situations. Under the Declaration, one group of patients (such as those with certain physical conditions) could still get this kind of care, but another group (minors diagnosed with gender dysphoria) could not — just because of their diagnosis or age. Finally, they argue it violates Medicaid’s requirement to cover services that are deemed medically necessary under state law by licensed providers.

5. Consists of Arbitrary and Capricious Decision-Making

The States further argue that the Declaration is arbitrary and capricious because it failed to address serious reliance interests endangered by prior policy while also failing to show good reasons for the new policy. In particular, the States argue that the Declaration fails to address a number of the issues that the Declaration creates, such as the shortage of Medicaid providers, particularly in pediatrics and endocrinology, reliance interests of States in structuring their Medicaid Programs based on the availability of providers who meet statutory criteria for eligibility; and the harms to patients and providers within States.

They also argue that the Declaration disregards reasonable or less extreme alternatives, such as restricting (but not banning) certain forms of care, and fails to explain its legal basis.

Conclusion

As noted above, while the lawsuit is ongoing, the Kennedy Declaration remains the formal position of HHS, unless and until the Oregon district court rules otherwise. This means providers will need to evaluate their compliance and operational posture under the policy, as distinguished from the simultaneously-proposed changes to Medicaid coverage and hospital Conditions of Participation, which are still at the proposed rule stage and not in effect.

As counsel experienced in both healthcare regulatory compliance and administrative law, Foley & Lardner is actively advising advise providers, hospital systems, and medical groups on the ever-changing risk landscape. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector with any questions.