CMS Threatens to Halt Funding Over Gender‑Affirming Care at Children’s Hospitals

30 June 2025

Mehmet Oz is the administrator of the Centers for Medicare and Medicaid Services. Photo: saul loeb/Agence France-Presse/Getty Images

The Centers for Medicare & Medicaid Services, under CMS Administrator Dr. Mehmet Oz, has sent letters to nine leading U.S. children’s hospitals demanding extensive data on their gender‑affirming treatments for minors including procedures such as puberty blockers, hormone therapy, and sex‑reassignment surgeries amid a pending review of federal funding eligibility. These institutions were notified in May that they had 30 days to substantiate the quality and safety of care provided, and that continued funding could be jeopardized if adequate evidence was not submitted.

The letter warns of a possibility to remove funding or exclude the hospitals from Medicaid and insurance marketplaces, a move justified by concerns over treatments purportedly lacking robust scientific support and potentially causing lifelong consequences. At least one major hospital, Children’s Hospital Los Angeles, has responded by suspending its gender‑care program, citing financial reliance on federal health reimbursement.

Administrators within the affected hospitals are reviewing the CMS inquiry seriously, with some placing gender‑affirming services under temporary pause to evaluate compliance. This action follows an executive order issued earlier in 2025 by President Trump that directed federal agencies to curtail funding for gender‑affirming medical interventions for minors, a policy that already prompted confusion and halts in key states.

Critics argue that the CMS initiative signals a political intrusion into clinical decision‑making and places medically vulnerable transgender youth at risk. Advocates assert that gender‑affirming care remains evidence‑based and essential to reducing risks such as mental health crises among minors . Proponents, including CMS, dispute this, contending that long‑term outcomes are insufficiently documented and the interventions can cause irreversible harm without ample evidence .

The nine hospitals receiving scrutiny include high-profile institutions located in Boston, Los Angeles, Seattle, Philadelphia, Oakland, Pittsburgh, Denver, Cincinnati, and Washington, D.C. many of which rely heavily on Medicaid and federal funding streams . The CMS has stated that failure to provide satisfactory documentation could trigger broader enforcement actions, including the termination of federal reimbursements and disqualification from Medicaid altogether.

Outside of federal policy, state actors are taking countervailing steps. Attorneys general in Massachusetts, California, and several other states have affirmed legal protections for minors seeking gender‑affirming care under state law, further complicating the legal landscape. Legislative challenges and court injunctions have temporarily blocked federal efforts to restrict funding, though CMS continues its review amid ongoing legal uncertainty .

This dispute forms part of a broader federal campaign targeting gender‑related healthcare, including studies commissioned by HHS promoting so‑called “gender exploratory therapy” and characterizing gender‑affirming care as experimental portraying youth treatments as potentially harmful interventions. Medical and psychological societies have sharply criticized these moves and reaffirmed their commitment to evidence‑based standards and the rights of clinicians and patients to make independent care decisions .

The CMS letters and related executive actions mark a significant shift in federal policy that could reshape pediatric healthcare. Facilitating state-federal conflicts, the tension centers on whether medicine for transgender youth should be subject to political scrutiny or upheld as a standard component of care. Hospitals caught between federal compliance requests, state protections, and legal obligations must now reevaluate their protocols and legal strategies.

For parents and advocates, the stakes are high. Children relying on puberty blockers or early hormone access face the real possibility of disrupted care during the review period. Providers may be forced to navigate complex legal and clinical risks in pursuing care for transgender minors.

The next 60 to 90 days will be critical: hospitals must submit detailed data, and CMS must decide whether to proceed with enforcement. Concurrently, lawsuits challenging federal rejections are likely to unfold, testing the limits of healthcare rights and agency authority. What emerges will define how inclusive, autonomous, and evidence‑based pediatric care remains in the United States.