CMS added a six month taper to its Medicaid funding rule, and the drugs that are 88 percent of the spending are excluded from it

Two numbers in the same document do not sit easily together.

The Centers for Medicare and Medicaid Services filed a final rule for public inspection on Tuesday afternoon that stops federal Medicaid money going to what the rule defines as sex-rejecting procedures for people under 18, and stops federal money in a separate Children's Health Insurance Program going to the same procedures for people under 19. It is docketed CMS-2451-F and publishes on Thursday. It takes effect sixty days after that, which is 12 October.

CMS changed two things from what it proposed in December. The larger one is a tapering allowance: for a child already receiving cross-sex hormone therapy on the effective date, a state may keep claiming the federal match on those medications for up to six months. The agency writes that the period is meant to give beneficiaries and providers a chance to phase off the medication, and that it is not a clinical guideline.

Now the second number. In its own impact analysis, CMS puts total hormone therapy spending for children aged 6 to 17 in 2023 at $23.8m, of which 88 percent, or $21.0m, was GnRH analogues, which the document glosses as puberty blockers. The remaining $2.8m was estrogen, anti-androgen and testosterone. Puberty blockers are excluded from the tapering allowance. So the allowance covers the category holding about one eighth of the money, and the agency gives its reason: it writes that puberty blockers work differently on withdrawal, and cites research indicating puberty resumes within six to eighteen months after they stop.

The money is small and it is mostly prescriptions

The rule is projected to reduce federal Medicaid spending by about $175m across ten fiscal years, 2027 through 2036, in 2027 dollars. That is the whole fiscal effect.

The base is smaller still. Analysing 2023 claims from the T-MSIS research files under six ICD-10 codes, CMS identified about $31m of total Medicaid and CHIP spending, federal and state shares combined, on these services for this age group. Of that, prescription drug hormone therapy was $23.5m and professional services hormone therapy was $4.8m. Outpatient hospital care with a surgical procedure was $2.2m. Inpatient hospital care with a surgical procedure was $180,553, all of it in the 15 to 18 bracket.

Roughly 11,000 comments, and more than nine in ten against

CMS states that it received approximately 11,000 timely pieces of correspondence on the December proposal, that supportive comments were less than 10 percent of them and that comments in opposition were more than 90 percent. It finalised the rule as proposed, with the tapering allowance and one drafting change swapping the word child for individual inside a definition.

The other modification is technical and worth stating precisely. The definition of the procedure now reads on individuals rather than on children, because the definition applies at any age; it is the prohibition, not the definition, that carries the age limits of 18 and 19.

What states have to do

CMS counts 56 Medicaid respondents and 56 CHIP respondents, meaning the 50 states, the District of Columbia and five territories. It estimates that about 27 states and one territory already restrict some or all of the procedures and will need no policy review. For the other 28 it assumes four hours of staff time each, 112 hours in total, at $11,131, half of which the federal government matches.

That is the administrative cost of the rule as the agency scores it. The Office of Information and Regulatory Affairs found the rulemaking significant under Executive Order 12866.