BREAKING: Federal Judge Stops HHS from Terminating $11B in Public Health Grants

In yet another ruling frustrating the Trump administration from carrying out broad spending cuts in healthcare, “A federal judge on Friday indefinitely prohibited the Department of Health and Human Services from terminating $11 billion in public health grants set aside for states.”

As the New York Times’s Zach Montague reported on Friday afternoon, May 16, “The order extends an earlier, more temporary ruling in April by the judge, Mary S. McElroy of the U.S. District Court for the District of Rhode Island. In that earlier ruling, she found that the government could not abruptly wipe out a pandemic-era funding stream that many state and local health departments relied upon. In the opinion Judge McElroy issued on Friday, she wrote, ‘The health care funding terminations would constrain the States’ infectious disease research, thwart treatment efforts to those struggling with mental health and addiction, and impact the availability of vaccines to children, the elderly, and those living in rural communities. Not to mention that the terminations were effective immediately, ignoring the States’ reliance on the funds.’” Per that, Montague wrote, “The Department announced the cutoffs on March 24. A coalition of 23 states and the District of Columbia then sued to stop the sudden change, arguing that they had been given no time to prepare for budget shortfalls and could face devastating shortages in many critical treatment areas.”

And, he continued, “Judge McElroy on Friday directed federal health agencies to “take every step necessary to effectuate this order” while the case proceeds — namely, disbursing the funds, which had already been allocated by Congress for the purposes of the state programs. Notably, however, her order only applies to those jurisdictions involved in the lawsuit. Judge McElroy’s rulings mean that funding will remain in place for that coalition of Democratic-led states, which together represent more than 185 million Americans, or a little over half of the United States population counted in the last census.”

As the Associated Press’s Devina Bose wrote on Friday afternoon, “The lawsuit filed April 1 by 23 states and the District of Columbia sought to immediately halt $11 billion in cuts, alleging that it would decimate public health infrastructure across the country. The money, allocated by Congress during the pandemic, supported COVID-19 initiatives and mental health and substance abuse efforts. The federal government argued that because the pandemic is over, the states no longer need the money. But McElroy, who granted a temporary restraining order last month in the case, wrote in her decision that the U.S. Department of Health and Human Services doesn’t have the power to decide that money isn’t necessary anymore,” Bose wrote.

McElroy wrote that the federal government’s decision to rescind the money isn’t just an economic loss — “ample evidence” provided by the states shows that it will decimate “key mental health, substance abuse, and other healthcare programs ... worsening public health outcomes and placing their residents at risk.” McElroy wrote that the federal government's decision to rescind the money isn't just an economic loss -- "ample evidence" provided by the states shows that it will decimate "key mental health, substance abuse, and other healthcare programs ..., worsening public health outcomes and placing their residents at risk."

Also reporting on Friday afternoon, the Boston Globe’s Christopher Gavin quoted Judge McElroy in stating that “There is ample evidence to support the States’ position that the Public Health Funding Decision is causing immediate damage to their healthcare programs and the safety of their residents. While the Court acknowledges HHS’ position that it may be unable to recover the grant funds if it later prevails, Congress’s direction that the funds remain intact and the States’ reliance on the continuation of the funding overshadows that argument,” the judge wrote. Gavin noted that “Rhode Island Attorney General Peter F. Neronha co-led the lawsuit with his peers in Colorado, California, Minnesota, and Washington. Attorneys general of Arizona, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, and Wisconsin also signed onto the lawsuit,” he added.

Gavin quoted a statement by Neronha in which Neronha described the cuts as a “hacksaw approach to government reduction. If we don’t have our health, we don’t have anything, and that’s why today’s preliminary injunction is such a critical win. I am grateful that this funding, which focuses on childhood vaccination and immunization, health disparities among high-risk and underserved populations, and laboratory testing capacity, among other initiatives, will again be available to our states,” he added.

Meanwhile, in a Friday afternoon report, the Rhode Island Current’s Nancy Lavin quoted Judge McElroy as stating in her ruling that “Agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration.” Lavin noted that “The order does not end the case, but seeks to resolve short-term harms of frozen funds as the court process continues. Other federal judges, including in Rhode Island, have reached similar conclusions in response to the flurry of lawsuits prompted by the abrupt halt of federal grants and aid since Trump took office,” Lavin wrote.

And she added that “This case pertains specifically to funds appropriated under the Inflation Reduction Act and Infrastructure Investment and Jobs Act, and already awarded to nonprofit recipients. Six environmental and health-related nonprofit groups, including three in Rhode Island, filed the federal complaint on March 14. The lawsuit alleges the frozen grant payments forced nonprofits to halt projects already underway, suspend hiring and contemplate layoffs, according to court documents.”

Lavin further quoted Judge McElory as stating that “The Nonprofits were left adrift as they scrambled to make sense of the Government’s actions here. The pause placed critical climate, housing, and infrastructure projects in serious jeopardy, while also threatening the livelihoods of the Nonprofits’ employees as well as their fundamental missions.” By contrast, Judge McElory opined that “the Government is not harmed where an order requires them to disburse funds that Congress has appropriated and that Agencies have already awarded.”

The text of the full ruling can be found here.