The purpose of this subpart is to implement sections 1902(a)(19) and 1902(a)(30)(A) of the Act to protect Medicaid beneficiaries and ensure Medicaid payment is consistent with quality of care by prohibiting Federal financial participation in payments by States for sex-rejecting procedures for a child under the age of 18.

(a) As relevant to this subpart, section 1902(a)(19) of the Act requires that States ensure that care and services will be provided in a manner consistent with the best interests of the recipients.

(b) As relevant to this subpart, section 1902(a)(30)(A) of the Act requires that States' payment methods be consistent with quality of care.

As used in this subpart—

Female means a person of the sex characterized by a reproductive system with the biological function of (at maturity, absent disruption or congenital anomaly) producing eggs (ova).

FFP means Federal financial participation.

Male means a person of the sex characterized by a reproductive system with the biological function of (at maturity, absent disruption or congenital anomaly) producing sperm.

Sex means a person's immutable biological classification as either male or female.

Sex-rejecting procedure means, except as specified in paragraph (3) of this definition, any pharmaceutical or surgical intervention that attempts to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex by either of the following:

(1) Intentionally disrupting or suppressing the normal development of natural biological functions, including primary or secondary sex-based traits; or

(2) Intentionally altering an individual's physical appearance or body, including amputating, minimizing or destroying primary or secondary sex-based traits such as the sexual and reproductive organs.

(3) For purposes of this definition, the term sex-rejecting procedure does not include procedures undertaken—

(i) To treat an individual with a medically verifiable disorder of sexual development; or

(ii) For purposes other than attempting to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex; or

(iii) To treat complications, including any infection, injury, disease, or disorder that has been caused by or exacerbated by the performance of sex-rejecting procedure(s).

(a) Except as provided in paragraph (c) of this section, a State plan must provide that the Medicaid agency will not make payment under the plan for sex-rejecting procedures for children under the age of 18.

(b) Except as provided in paragraph (c) of this section, FFP is not available in State expenditures for sex-rejecting procedures for children under the age of 18.

(c) FFP will remain available for cross-sex hormone therapy for a tapering period of up to 6 months from October 13, 2026, for beneficiaries who were receiving such therapy as of October 13, 2026.