Federal funding freeze sparks health care chaos

• "There is so much confusion and so much information flowing out there," Darcy Shargo, CEO of the Maine Primary Care Association, told Axios Tuesday afternoon. "The sooner that all of this is really clear the better, because you can't make any contingency plans right without any clarity."

State of play: U.S. District Judge Loren L. AliKhan blocked President Trump's order to temporarily halt outgoing federal funds minutes before it was to take effect Tuesday in response to a lawsuit filed by a group of nonprofits including the American Public Health Association.

• The stay is in effect until Monday.

Health providers went on red alert late Monday after the White House announced that federal grants, loans and other financial assistance programs would be temporarily halted pending reviews of programs to ensure they're in line with Trump's recent executive orders.

• The initial two-page memo from the White House budget office stated that Medicare and Social Security benefits wouldn't be affected but didn't mention Medicaid or other health care programs.
• Another memo circulated Tuesday afternoon clarified that Medicaid and direct benefit program funds wouldn't be frozen, despite the fact that the states reported being locked out of their Medicaid federal funding portals for most of the day.
• The White House later said the outage didn't affect Medicaid payments.

The confusion was compounded by the ongoing freeze on external communications at HHS, which has roiled medical researchers and clinicians.

Hospitals, community health centers and other providers spent much of Tuesday figuring out how long they'd be able to stay afloat without Medicaid reimbursements and federal grants.

• The initial memo "was so vague and and so unclear as to what the impact would be that we spent a good portion of the morning trying to understand that," said Carter Friend, CEO of York County Community Action Corporation, which runs a health center in Maine.
• Community health centers in particular often rely on federal funds to care for underserved patients, including those who can't pay for their services. The centers got $34 billion of grants from HHS' Health Resources and Services Administration between fiscal years 2018 and 2022.

Zoom in: In Virginia, a survey of the commonwealth's 200 federally qualified health centers found every one would have to close if they lost access to Medicaid reimbursements, which in some cases make up more than 70% of their revenue.

• A Richmond-area center with three locations said it would be forced to shutter and lay off staff within two weeks, Joe Stevens, a spokesperson for the Virginia Community Healthcare Association, told Axios.
• For Denver Health, a safety-net health system in Colorado, the Trump administration's funding pause was "jarring to the many leaders, clinicians and researchers across our health system who rely on federal funding to provide essential, life-saving care to our community," said spokesperson Dane Roper.
• The health system received $89 million in federal grant funding for its programs and personnel last year, he said.

Between the lines: The Trump administration's omission of Medicaid from its initial memo follows a pattern from the Trump campaign of ignoring the benefit program that provides health insurance to more than 70 million Americans, said Joan Alker, executive director of Georgetown University's Center for Children and Families.

• Trump and GOP lawmakers in Congress have repeatedly said they won't take away Medicare or Social Security benefits in quests to help pay for an extension of tax breaks, but they make no such promises for Medicaid.

The bottom line: "There is a lot of anxiety from what's to come," Stevens of the Virginia Community Healthcare Association said. "I don't know if this is over. I think it's you can breathe a sigh of relief today, but who knows what tomorrow we're going to face?"

Alayna Alvarez contributed reporting