by Kristin Rowan, Editor
Medicaid Payment System Goes Dark
On Monday, January 27, President Trump, through the Office of Management and Budget, announced a temporary freeze on federal spending while his newly designated head of the Department of Government Efficiency ensures all spending follows the executive orders the President has signed. The memo was vague and caused widespread confusion across government departments. Almost immediately after the memo was circulated, Medicaid programs could not access the Payment Management Services web portal, the entity responsible for paying Medicaid claims.
The Memo
The language used in the memo on federal spending was broad and overreaching. As such, many federal organizations were unclear as to whether the memo applied to them. The message in the memo was that the administration intended to curb any spending that does not improve the day-to-day lives of the people. Throughout the day Monday, the White House sent clarifications about what programs would not be impacted. Among them were food assistance programs like SNAP, WIC, and Meals on Wheels, and Medicaid. The medicaid payment portal went down, despite this clarification.
Exclusions
Multiple state and federal agencies reached out to the White House for clarification following the release of the memo. Explicitly excluded from the freeze are direct benefit plans like Social Security and Medicare. In addition to the programs named in the memo, clarification on additional programs that would not be impacted included Medicaid. Despite the temporary website outage, claims were still being processed and payments were still being made.
Immediate Lawsuits
Almost simultaneously with the distribution of the memo, several non-profit organizations filed suit against the federal government. They called Trump’s action an “unlawful and unconstitutional” act, even temporarily. The pause on federal spending was set to go into effect at 5 p.m. ET on Tuesday. Minutes before, U.S. District Judge Loren L. AliKhan put a pause on the pause.
Temporary Freeze on the Temporary Freeze
To allow both sides time to construct an argument, the judge stayed the funding freeze until Monday, February 3. That morning, the judge will hear arguments and consider the issue. After the stay, attorneys general from 22 states and D.C. filed their own lawsuit to permanently block the freeze and prevent any future attempts to cut off already approved federal funding.
Then Comes the Thaw
If the judge allows the freeze to move forward, Trump has given every agency until February 10 to account for and explain all spending programs within their departments. Once the accounting has been reviewed, likely the OMB and the Department of Government Efficiency will determine which federal spending programs can resume operation.
There is no indication yet as to whether Trump will extend the February 10 deadline, given the delay in the courts. By the time the judge rules on Monday, however, we hope the White House will have issued additional details and guidance to avoid additional disruption to essential services like Medicare and Medicaid.
Final? Ruling
Early Monday, Judge AliKhan said she was not convinced by the argument that nonprofit groups have no case against the funding freeze since the OMB rescinded the memo. The administration argued that a brief pause on funding to align federal spending is within the law. The administration also suggests that the courts have no standing to block it. AliKhan has indicated that she will likely grant a longer temporary order to stay the funding freeze.
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Kristin Rowan has been working at The Rowan Report since 2008. She is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news .She also has a master’s degree in business administration and marketing and runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing. Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com
©2025 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com
