25 states and D.C. seek emergency block of Trump administration Medicaid work rule, citing exemption paperwork and legal authority

California, New York and other states asked a federal court to halt a new Centers for Medicare & Medicaid Services (CMS) interim final rule tied to Medicaid work-related requirements, arguing the rule unlawfully changes how medically vulnerable recipients are exempted.

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A coalition of at least 25 states and the District of Columbia filed suit to challenge a Trump administration Medicaid work rule and asked a federal court to issue an emergency order blocking the policy from taking effect, according to multiple news reports. California and New York were among the states described as leading the challenge, with Virginia and other jurisdictions also participating.

The challenge targets an Interim Final Rule issued by CMS, the federal agency that administers the Medicaid program alongside state governments. The reported aim of the rule is to impose new documentation requirements related to who must comply with Medicaid work, volunteering, or school-attendance rules, and who is exempt on the basis of severe medical conditions.

According to the reports, the plaintiffs argue the interim final rule unlawfully changes the exemption process set out in earlier guidance. They allege that before the rule was issued in early June, highly vulnerable Medicaid recipients were expected to be automatically exempt, with agencies reviewing existing health records to grant exemptions without requiring individuals to submit additional paperwork before the requirements begin.

The states’ complaints, as described in the coverage, identify CMS Administrator Dr. Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy Jr. as defendants. The litigation seeks to prevent implementation while the courts review whether CMS exceeded its legal authority and whether the interim final rule aligns with Congress’s intent for Medicaid eligibility and program integrity.

A separate report by The Associated Press described the suit as part of a broader conflict over the administration’s interpretation of Medicaid work requirements and the mechanics of exemptions. The AP reported that Democrats in at least 25 states and the District of Columbia joined the challenge, seeking to stop what they characterize as a shift that could affect Medicaid coverage for large numbers of enrollees.

The court request comes as federal officials continue emphasizing program integrity and fraud controls in Medicaid. A policy brief from KFF described recent federal actions focused on program integrity, providing context for the administration’s regulatory approach even as the pending case centers on whether this particular rule was adopted lawfully.

If the emergency request is granted, the practical effect would be to pause the rule’s new paperwork and exemption framework while the case proceeds, potentially affecting state eligibility operations and federal oversight timelines. If it is denied, states would likely face nearer-term compliance and administrative burdens related to identifying and documenting exemptions as the reported January 2027 start date approaches.

Why It Matters

The case tests the limits of agency authority under federal Medicaid law and how interim final rules can change operational requirements before full rulemaking.
The emergency request reflects a near-term administrative stakes for states, especially around how and when enrollees prove medical exemptions tied to Medicaid work-related requirements.
The dispute centers on due process and practical access to coverage, with plaintiffs alleging the paperwork shift could delay or disrupt exemption determinations for medically vulnerable enrollees.
The outcome could shape how CMS structures future program integrity or fraud-prevention efforts that rely on state-run eligibility processes.

Sources

Key Facts

At least 25 states and the District of Columbia sued the Trump administration to challenge a Medicaid work-related rule and sought an emergency court order, according to news reports.
California, New York, Virginia, and other jurisdictions were named as part of the coalition described in the coverage.
The lawsuit targets a CMS Interim Final Rule, described as changing documentation requirements for exemptions tied to Medicaid work, volunteering, or school-attendance rules.
Reports said the rule requires certain individuals to provide proof of exemption based on severe medical conditions.
The plaintiffs alleged that before the rule was issued in early June, highly vulnerable recipients were expected to be automatically exempt through review of existing health records rather than additional paperwork.
Coverage reported CMS Administrator Dr. Mehmet Oz and HHS Secretary Robert F. Kennedy Jr. as defendants.
Reported implementation timing cited in the coverage was January 2027 for the requirements described in the interim final rule.