WASHINGTON — A new memo from the White House budget office indicates that Medicaid payments should not be affected by a pause on some federal grants. States, though, on Tuesday were reporting difficulties accessing Medicaid payment portals.

“Mandatory programs like Medicaid and SNAP will continue without pause,” the White House Office of Management and Budget stated in a two-page memo sent to Capitol Hill Tuesday. 

The budget office caused confusion when it issued a memo Monday ordering federal agencies to pause grants and loans. The directive, according to the Tuesday memo, only applies to programs specifically related to certain programs the Trump administration finds objectionable, including those related to diversity, transgender inclusion, and climate change, among others. The pause is set to take effect on Tuesday at 5 p.m., and is the second time in less than a week that sweeping White House policy actions caused confusion across federal agencies. 

But amid the confusion, states saw interruptions accessing their Medicaid funding portals, lawmakers said. 

Sen. Ron Wyden (D-Ore.) posted on the social networks X and Bluesky Tuesday that his staff had confirmed that Medicaid portals in all 50 states were down following the federal funding freeze. Taylor Harvey, a spokesperson for the Senate Finance Committee, of which Wyden is a ranking member, confirmed that states are not able to interface with the tool they use to submit claims to get paid by the federal government. Harvey said his team learned about the portal disruption from the National Association of Medicaid Directors. The NAMD did not immediately respond to STAT’s questions. 

Harvey wasn’t convinced by the budget office’s Tuesday memo that said Medicaid was not affected. He said it’s possible that information technology or third-party operators are affected, which is disrupting the intermediary payment systems. 

“We’re focusing on what’s happening versus what they’re saying is happening,” Harvey said. “It’s pretty obvious they just threw a big breaker switch on the federal government.” 

Medicaid and the Children’s Health Insurance Program covered more than 79 million low-income people, as of last October, making it the largest federally funded health care program by enrollment. Spending on Medicaid reached $870 billion in 2023. The federal government covers 68% of that total, with the rest funded by states.

White House Press Secretary Karoline Leavitt said during a midday press briefing that she would have to “check back on” whether Medicaid was implicated by the funding pause. Leavitt said more broadly that “assistance that is going directly to individuals will not be impacted by this pause.”

The federal government does not pay individual Medicaid members directly, unlike with programs like Supplemental Security Income. Rather, Medicaid funding is paid as grants to states, which run the programs, said Joan Alker, executive director of Georgetown University’s Center for Children and Families. 

If the Trump administration didn’t intend to affect Medicaid, it should have made that clear in its original memo, as it did for Medicare and Social Security, Alker said. 

“The fact that Medicaid was not explicitly excluded in the memo to begin with is already incredibly troubling and a real slap in the face to the over 70 million Americans who rely on Medicaid for their health insurance, including the most vulnerable populations,” Alker said.

Interruptions in access to payment portals would cause cash flow problems for states, health insurers, and providers if states can’t withdraw Medicaid funds from their U.S. Treasury accounts, said Edwin Park, a research professor and Medicaid expert at Georgetown University. He also said the decision was unlawful.

“States are entitled to federal funding as long as they’re in compliance with federal requirements under the Medicaid statute,” Park said. “And blocking federal funding in this way, even if it’s only for 24 hours, is a violation of the Medicaid statute. It’s unconstitutional.”

There are no signs yet that Medicaid enrollees have had delays in their care, or that hospitals, doctors, and health plans have not been paid.

Jill Talley, a spokesperson for the Medicaid Health Plans of America, a lobbying group for health insurers, said the group’s members have not yet reported any problems with obtaining state Medicaid funding. However, Talley said MHPA had also seen the reports from the National Association of Medicaid Directors that states were being locked out of their Medicaid accounts.

The freeze prompted groups including the American Public Health Association and the National Council of Nonprofits to sue the White House on Tuesday with the U.S. District Court for the District of Columbia, seeking a temporary restraining order to prevent the pause from going into effect. The lawsuit argues that the White House violated three different provisions of the Administrative Procedure Act. 

“For all practical purposes, they shut down the government. They stopped people from getting the money they’re owed and done the work for. They did this without any real notice and they told us we can’t talk to our program people at the CDC. So, you can’t even find anybody to get answers,” said Georges Benjamin, the executive director of the American Public Health Association. “This is a political disaster, and a mismanagement failure. It’s going to be a big problem and the White House is oblivious to the chaos they have caused.”

Beyond Medicaid, universities issued conflicting guidance about whether and how to proceed with research funded by federal grants. Stanford issued a university-wide email stating that it was not “necessary or appropriate” to pause federally-funded research activities. 

The University of Chicago, meanwhile, took the opposite tack, writing to its staff: “[W]e are requesting that all University researchers working on federal grants temporarily suspend their non-personnel spending on federal grants as much as possible during this period of substantial uncertainty.”  

“Right now, a major concern is the immediate chaos that’s happening. We saw it last week with the NIH freezes throughout the scientific community, and now we’re seeing it across the country for any entity, including states, that receive federal money,” said Andrea Ducas, the vice president of health policy at the Center for American Progress, a liberal-leaning think tank.