Federal Medicaid Update From National Council
National Council
National Council Issues Notice on Rescission of Certain COVID-19 Relief Funds
Congress Passes Continuing Resolution; Updates on Medicare and Medicaid Released
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Improving Health Care Outcomes for Individuals With Profound Autism: National Council Webinar on Feb. 20, With Richard Edley, President/CEO of RCPA, Moderating
National Council Webinar for Update on Federal Policy Developments on Feb. 6
Updated Guidance on Federal Funds Freeze: January 30, 2025
RCPA provided some late updates yesterday on the Federal funding freeze, and late last evening, the National Council for Mental Wellbeing provided members a legal interpretation on the rescinding of the Office of Management and Budget (OMB) M-25-13 and the issuance of the new memorandum M-25-14.
The following is from the National Council:
On Wednesday afternoon, the White House Office of Management and Budget issued a new memorandum—M-25-14 — that rescinded the pause to federal funding contemplated in a previous memorandum first issued on Monday night.
The new memorandum, which was directed to “heads of executive departments and agencies,” features a two-sentence statement reading: “OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executives Order, please contact your agency General Counsel.”
In the short term, M-25-14 certainly relieves some of the confusion and anxiety that swept across the federal grants world since Monday night. Our previous client alerts have chronicled the chaos that emerged late Monday and throughout the day on Tuesday.
However, in our review, there are still five key Executive Orders issued by the Trump Administration not affected by the rescission of M-25-13. Those EOs include:
- Reevaluating and Realigning United States Foreign Aid, directly addressing foreign assistance funding;
- Unleashing American Energy, freezing all programmatic funding for “green new deal” programs;
- Protecting the American People Against Invasion, freezing Department of Justice and Department of Homeland Security programs and contracts pending a review of immigration enforcement programs;
- Ending Radical and Wasteful Government DEI Programs and Preferencing, terminating all DEIA programs and activities in the federal government; and
- Ending Illegal Discrimination and Restoring Merit-Based Opportunity, terminating all DEIA-funded grant programs and contracts.
While the upheaval following the issuance of M-25-13 may have prompted the Trump Administration to change course and move away from pausing all federal funding, we certainly anticipate that federal grants in the above-listed areas will remain subject to a comprehensive review and new standards. Federal grantees with programs in these specific areas should undertake a detailed review and be prepared for future agency actions.
Federal grantees should continue to keep apprised of the Administration’s actions, orders, and statements relating to federal funding — as the rescinded memorandum likely foretells future clashes as the Administration attempts to exert control over federal spending.
Chuck Ingoglia
President & CEO
Strategic Leadership
National Council for Mental Wellbeing
In addition, ANCOR sent the following information last night:
In what’s turning from a whirlwind couple of days into a whirlwind week, there were notable updates today on the OMB memo on the freeze of certain federal funding issued earlier in the week.
Today OMB withdrew the memo with a simple rescission statement after a federal judge temporarily blocked the funding freeze for open awards and current spending. The order remains in effect until February 3 when a hearing is scheduled to determine next steps.
As you may have seen, later in the day, Press Secretary Karoline Leavitt posted to X, “[t]his is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.” Without further specificity regarding the implicated executive orders, the situation remains fluid with the potential for later memos or other interpretive guidance which the White House maintains is authority held within the executive branch.
In other litigation, U.S. District Judge Jack McConnell made statements in court today indicating that another restraining order may be coming. With the memo rescinded, the Department of Justice Special Counsel argued the case is no longer relevant. However, the judge did not appear persuaded and asked for a draft protective order for response and consideration.
We’ll continue to keep you posted as we know more and hope to see you Friday (1/31) for our extended Members-Only Weekly Briefing at 12:30 pm ET to provide updates and review all available information together. See login information below:
Join Zoom Meeting: ancor-org.zoom.us/j/…
Meeting ID: 870 2745 7284
Passcode: 977618
In recent communications from the OMB, these actions will not impact programs that provide direct benefits to individuals and are explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.
RCPA will continue to communicate new developments with members as they emerge. If you have any questions, please contact your RCPA Policy Director.
Update Regarding Federal Funding Freeze
RCPA continues its efforts to update members on the White House funding freeze while partnering with the National Council for Mental Wellbeing and ANCOR in examining the implications stemming from the White House Office of Management and Budget’s (OMB) January 27 memorandum temporarily freezing federal disbursements to many federal programs.
The National Council has provided the following update:
Federal agencies have been directed to fill out a spreadsheet as part of an analysis by Feb. 7 to ensure compliance with the president’s most recent executive orders. This is a breakdown of which health programs are included in this latest action.
Notably, we recognize conflicting guidance has been issued. While the above report identifies Medicaid programs, a Q&A document from the administration notes that Medicaid will continue without pause. As of Tuesday morning, all 50 states reported outages of their Medicaid online portals, and the Trump administration has stated they are aware of the outages and expect the portals to be back online shortly.
Also, several groups have taken action to block this funding freeze. As of this writing, several Democratic state attorneys general said they would ask a court to block the freeze from taking effect. Several groups representing nonprofits, public health professionals and small businesses have already filed suit in D.C. asking the court to prevent the freeze from continuing. On Tuesday evening, U.S. District Court Judge Loren L. AliKhan issued a temporary stay on the funding freeze until Feb. 3 at 5:00 pm ET.
The funding freeze may lead to project delays or cancellations, resulting in layoffs of workers involved in these programs, and may ultimately increase the unemployment rate, making it vital lawmakers understand the impact of this freeze on communities across the country.
Most notable are the concerns with the intersects of Medicaid funding though the information that has been released. The Q&A document states:
Q: Is this a freeze on benefits to Americans like SNAP or student loans?
A: No, any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.
RCPA will continue to communicate new developments with members as they emerge. If you have any questions, please contact your RCPA Policy Director.
Update: Judge Blocks Trump’s Spending Freeze
A federal judge has halted President Donald Trump’s freeze on federal aid programs, ruling that the courts need more time to consider the potentially far-reaching ramifications of his order.
Minutes before the directive from Trump’s budget office was to take effect Tuesday, U.S. District Judge Loren AliKhan blocked the Trump administration from implementing it for now.
AliKhan’s order will expire February 3 at 5:00 pm. The Trump administration cannot suspend disbursement of any congressionally-appropriated funds until then. The judge described the move as a “brief administrative stay” intended to maintain the status quo while further litigation can play out.
“I think there is the specter of irreparable harm,” said AliKhan, an appointee of President Joe Biden.
The ruling is a win for nonprofit and public health groups who said even a brief implementation of Trump’s freeze could cause devastating outcomes for people who rely on federal funds for services, as well as the workers who provide them. The nonprofits also argued the order from the Office of Management and Budget intrudes on First Amendment rights by seeking to block funding for groups that engage in “DEI programs” or promote “Gender Ideology Extremism,” concepts targeted in Trump’s initial round of executive orders.
Justice Department attorney Daniel Schwei had argued that the groups had failed to show that they needed an immediate halt to the order issued by Trump’s budget office and set to take effect at 5:00 pm Tuesday. He said additional guidance offered by the Trump administration should alleviate concerns about the OMB directive cutting off essential programs.
“They request sweeping relief… not tethered to any identified grant programs,” Schwei said. “It would be appropriate to allow these issues to be addressed on a more orderly timeframe.
RCPA will continue to update members as we work with our national partners to gain greater clarification on this Federal action. If you have further questions, please contact your RCPA Policy Director.
