HHS to Restore States’ Public Health Funds to Comply With Order

The US Department of Health and Human Services will continue providing over $11 billion in public health care grants to 23 states and Washington, D.C., following a federal judge’s order blocking plans to end the payments, the agency said.

Judge Mary S. McElroy granted the mostly Democratic-led states’ motion for a temporary restraining order in the US District Court for the District of Rhode Island on April 3. HHS filed a notice of compliance Monday, saying it would notify all its departments, employees, and contractors of the order.

The agency, however, also filed an emergency motion for reconsideration the same day, saying McElroy should have considered whether she had jurisdiction under the Administrative Procedure Act before entering the TRO. In a similar case April 4, the US Supreme Court allowed the federal government to continue withholding education-related grants due to jurisdictional concerns.

Under the federal Tucker Act, the US Court of Federal Claims has exclusive jurisdiction over suits alleging the US is obligated to pay money under a contract or grant, HHS said. The question here, as in the Supreme Court case, was whether the Tucker Act or the APA applied, the agency said. McElroy should vacate her decision in light of the justices’ answer, it said.

McElory explained in an April 5 opinion that the states were likely to win on the merits of their challenge because HHS didn’t reasonably end the grants or provide a reasonable explanation for doing so.

HHS didn’t follow a congressionally mandated procedure for ending grants under Substance Abuse and Mental Health Services Administration programs only for “cause,” McElroy said. The agency didn’t find that the states “materially failed” to comply with grant conditions, or provide notice and an opportunity to be heard before freezing the money, she said.

HHS allegedly ended the grants because they’d been made during the Covid-19 pandemic, but the end of the pandemic didn’t provide “cause” for terminating them, McElroy said.

Ending the other mass grants likely was arbitrary and capricious because there was no evidence they were intended to be used only during the pandemic, McElroy said. Congress previously ended some Covid-era public health spending, but left these grants in place, which suggests it didn’t intend to terminate them all, she said.

The states’ attorneys’ general represented the plaintiffs. The US Department of Justice represented HHS.

The case is Colorado v. U.S. Dep’t of Health & Human Servs., D.R.I., No. 1:25-cv-00121, notice filed 4/7/25.