A federal judge on Tuesday temporarily halted the Trump administration’s freeze on federal financial assistance, bringing to a close arguably the most chaotic day in Washington since the president assumed power.
U.S. District Judge Loren AliKhan blocked Trump’s aid freeze scant minutes before it was set to take effect at 5 p.m. ET Tuesday. The administrative stay — which was requested by a group of nonprofits suing the administration for withholding federal dollars — lasts until another court hearing on the issue Monday afternoon.
A lack of clear answers from the White House about what programs would be affected by the funding pause caused widespread worry and confusion on Tuesday, including in the healthcare sector, which receives the majority of federal grants.
The situation was exacerbated by states and providers losing access to key portals through which they draw down federal funds, including for Medicaid. The sites remained down even after the Trump administration clarified that the massive safety-net insurance program was exempt from the spending moratorium.
However, states have recovered access to their Medicaid portals as of Wednesday morning, multiple state officials confirmed to Healthcare Dive.
It appears that states regained access in waves, with Oklahoma, for example, able to access the system by 3:30 p.m. ET on Tuesday but New York not being able to do so until Wednesday morning.
The Medicaid portal was never meant to be shut down and no payments were affected, according to White House Press Secretary Karoline Leavitt and Republican lawmakers.
“The problem has been clarified and the Medicaid portal is fully operational as we speak,” Sen. Mike Crapo, R-Idaho, said Wednesday morning during the Senate HELP Committee’s confirmation hearing of Robert F. Kennedy, Jr. as HHS Secretary.
The Office of Management and Budget sent a memo to federal departments on Monday instructing them to pause federal financial assistance until officials can make sure spending aligns with President Donald Trump’s executive orders cracking down on diversity, equity and inclusion programs and a range of other conservative flashpoints.
The memo said Medicare and Social Security funding could continue but was vague about what programs were subject to the pause. The omission of Medicaid —which currently provides health insurance to 80 million Americans, almost half of them children — sparked anxiety among the states, which rely on federal dollars for at least half of their Medicaid spending.
On Tuesday, states lost access to the payment system through which they draw down federal funds. A warning message on the portal stated that payments may be delayed or rejected “due to Executive Orders regarding potentially unallowable grant payments.”
That warning message is now gone.
Medicaid directors or health department officials for Colorado, Michigan, Arkansas, Oklahoma, South Carolina and New York also confirmed they’ve regained access to the payment portal.
“We're able to access the federal Payment Management System (PMS) this morning and the federal wire transfers we were expecting are in our account,” Marc Williams, a spokesperson for the Colorado’s Department of Health Care Policy and Financing, said.
Multiple officials stressed that patient services have not been affected.
Losing federal aid for long enough could have forced states to consider cutting reimbursement to doctors and hospitals caring for Medicaid patients, or restrict member benefits, according to experts.
The funding freeze is viewed by many as unconstitutional, given the executive branch doesn’t have the power to unilaterally rescind funds appropriated by Congress. Democratic attorneys general from 22 states and the District of Columbia have also filed their own lawsuit over the president’s actions.
