To this point I have seen nothing from the Hochul administration, OASAS or OMH on the matter of the federal pause we first told you about last night.

Having said this:

1) Following (below the dotted line) is an email I just received from the Congressional Progressive Caucus Center in Washington re: the OMB order to federal agencies to pause all federal grants, loans and financial assistance programs. 

2) Below the email is an article from Healthcare Dive that was just published online on this topic.

3) I have added several announcements from OMH at the bottom of this email.  

4) Please see the following links (directly below) for advice regarding how you / your employees might respond if ICE shows up at one of your programs.  I would start with the third link first and work your way up.

https://www.immigrationadvocates.org

https://www.ilrc.org/resources/how-advocate-persons-arrested-ice

https://www.nilc.org/resources/healthcare-provider-and-patients-rights-imm-enf/

5) For more on the Congressional Progressive Caucus Center use this link:

https://www.progressivecaucuscenter.org/our-vision

6)  These links will take you to some useful information from the National Council of Nonprofits:

• The National Council of Nonprofits’ running list of federal Executive Orders, which will be updated frequently: 

https://www.councilofnonprofits.org/files/media/documents/2025/chart-executive-orders.pdf

• This article from the National Council of Nonprofits, “Head on a Swivel Advocacy” helps to give some context for the flurry of Executive Orders and includes a link to share the impact on your nonprofit: https://www.councilofnonprofits.org/articles/head-swivel-advocacy

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Yesterday, the White House directed all federal agencies to pause all federal grant, loan, and financial assistance programs. This will have immense, harmful implications for individuals and communities nationwide. Below, I outline some key questions—some of which we can answer, many of which we cannot—and the potential effects this pause will have. We will continue to monitor this, along with our partners, and will provide timely updates as more information becomes available. 

First, a disclaimer: this analysis is based on currently available information, which is limited. Additionally, I am cognizant that this broad directive will impact millions of people who depend on federal funding for food, shelter, and other necessities. Nothing here should be construed as an instruction for any person or entity to stop using federal funds they have received.

What funding did the administration pause?

The White House’s memo requires all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities” to review them for alignment with the President’s priorities.

The memo does not identify specific federal funding programs to pause and only identifies extremely narrow exemptions (more on that below). Agencies reportedly received additional information this morning with specific questions to consider and accounts to examine, but it is not clear yet whether this guidance will narrow the memo’s impact. 

As a result, agencies may respond by cutting off funding for innumerable programs Congress has funded. I’ll get into some possible examples below. 

What kinds of federal funds are covered here? Are we just talking grants? 

In addition to federal grants, the White House’s directive covers cooperative agreements, direct appropriations, food commodities, loans, insurance, and more. 

Specifically, the memo defines “federal financial assistance” to include all forms of assistance listed in paragraphs (1) and (2) of the definition of this term at 2 CFR 200.1, and assistance received or administered by recipients or subrecipients of any type except for assistance received directly by individuals. 

The memo doesn’t specify whether states are included in the definition of recipients—more on why that matters below. 

What funding isn’t cut off? 

The memo states, “nothing in this memo should be construed to impact Medicare or Social Security benefits” and purports to exempt “assistance provided directly to individuals.” Again, I’ll dive deeper into this below. 

Give me some examples—what funding might stop flowing?

In the realm of grants alone, we could be talking about cancer research funded by the National Institutes of Health; funding for community health centers; funding to get lead out of drinking water at schools and child care centers—this list goes on and on. It’s hard to underscore just how sweeping this is.  

The White House claims to exempt “assistance provided directly to individuals.” However, a lot of federal funding that ultimately goes to individuals is administered by another entity. For example, states and tribes administer the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which gives low-income moms and babies resources to buy nutritious foods and infant formula, along with other services. Because this federal assistance is not given directly to individuals, this memo could be interpreted to cut off WIC funding. Indeed, WIC is listed among the programs the White House has told agencies to examine. 

Does this only apply to new federal funding going forward? 

No. The memo halts the “issuance of new awards” and “disbursement of Federal funds under all open awards.” This means that agencies must stop sending out funding that’s already been awarded. 

What if a federal agency is currently considering applications for federal funding? 

The memo instructs agencies to pause all activities to consider applicants for funding opportunities, too. 

When does the pause go into effect? 

Today, January 28, at 5:00PM. 

When will the pause be lifted? 

The memo does not say.

It directs agencies to report to the White House by February 10 (in less than two weeks), describing the programs the pause implicates. The memo does not say when the White House will review that information or decide whether or not to lift a funding pause. At the same time, guidance issued to agencies this morning asks for “all planned obligations and disbursements through March 15, and asks for a response by Feb. 7.”

Who will decide whether this pause gets lifted? 

The memo does not say, but it seems like the White House, plus Trump loyalists installed at agencies.

While the White House will get the reports mentioned above, the memo also directs all agencies to, for every federal financial assistance program, “assign responsibility and oversight to a senior political appointee to ensure Federal financial assistance conforms to Administration priorities.” So, presumably, a Trump appointee will also have a role in deciding whether to let funding out the door or hold it back.

What does it mean to “conform” to administration priorities? 

The memo doesn’t define this—so, it could mean whatever the administration wants it to mean.

The memo specifically condemns “the use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies.” It also refers to several executive orders issued last week, including those targeting funding from the Infrastructure Investments and Jobs Act (IIJA) and Inflation Reduction Act (IRA) and diversity, equity, and inclusion (DEI) programs. 

Additionally, the guidance issued today poses the following question, among others: “Does this program support any activities that must not be supported based on executive orders issued on or after January 20, 2025 (including executive orders released following the dissemination of this spreadsheet)?”

Presumably, this means the administration will gauge whether a given federal funding program adheres to its policy vision—however it chooses to define that—and previous and future executive orders, then decide whether funding can continue to flow. 

Is this legal? 

No. A coalition of state attorneys general has announced that they will sue the administration later today. 

Please stay tuned for further information as it becomes available. 

Congressional Progressive Caucus Center

Progressive Caucus Action Fund

catherine@progressivecaucuscenter.org

She/Her/Hers

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Dive Brief

Trump freezes federal grants with big potential impact on providers, Medicaid

Trump’s budget office has ordered all federal agencies to pause financial assistance, including grants, pending a review of their programs.

Published Jan. 28, 2025

Rebecca Pifer
Senior Reporter8 min

The Trump administration is freezing a massive swath of government funding until agencies review their programs for compliance with the president’s recently signed executive orders, sparking widespread confusion and worry in the healthcare industry.

The move — likely unconstitutional given Congress, not the president, has the power of the purse — could seriously harm healthcare providers nationwide, many of which rely on federal grants to operate, and may even pause federal Medicaid funding to states, according to experts.

The pause does not apply to Medicare and Social Security benefits, or grants and loans that are directly provided to individuals, according to a memo from the Office of Management and Budget.

But besides those carveouts, the wording of the funding freeze is vague, according to experts. That makes it difficult to ascertain what specific healthcare monies will be affected.

“This memo was broadly drafted,” said Julian Polaris, a partner focusing on health policy at legal and consulting firm Manatt. “We’re waiting to see which programs agency staff identify as subject to the pause or not.”

Freeze of federal aid

On Monday, Trump’s acting budget director sent a memo to department heads directing them to halt all financial assistance, including grants and loans, starting today at 5 p.m. ET. Agencies have to submit detailed information on all their spending to the Office of Management and Budget by Feb. 10.

Programs can resume after the OMB certifies that they align with Trump’s orders, which range from ramping up the deportation of illegal immigrants to ensuring federal dollars aren’t being spent to fund abortion care.

The HHS said it is concerned with the latter order.

The massive healthcare department will reevaluate all programs, regulations and guidance to make sure they don’t pay for or promote elective abortions, Dorothy Fink, the acting secretary of the HHS, said in a statement yesterday — the HHS’ first public communication since Trump took office Jan. 20, amid a larger pause on public messaging from his administration.

The HHS’ civil rights office said it also enforces conscience and religious exercise laws nationwide, and will review its regulations and guidance in those areas to “strengthen enforcement” of those laws, Fink said.

Such laws been used by providers to justify refusing services to LGBTQ individuals and by pharmacists to refuse dispensing medication used for miscarriages.

The HHS did not respond to a request for more information, including on what financial assistance would be paused pending OMB review.

Huge implications for healthcare

Given a significant portion of federal grants are related to healthcare, the funding suspension could result in in a broad number of programs temporarily grinding to a halt, freezing billions of dollars in payments to health centers, hospitals, universities and research groups across the country.

The HHS currently has almost 38,000 active grants, according to government data. Across all awards and contracts (including grants), the department has authorized $714.5 billion in spending for the 2025 fiscal year.

HHS grants fund programs from the Centers for Disease Control and Prevention to support public health, research opportunities from the National Institutes of Health and initiatives from the Administration of Children and Families to improve the wellbeing of needy communities.

They also go to states for Medicaid, the whopping safety-net insurance program that currently covers almost 80 million Americans.

The federal government helps states fund Medicaid through open-ended grants that, as the memo is worded, could be affected by the freeze. If the pause extends long enough — Washington matches state Medicaid funding on a quarterly basis — it could throw state spending into disarray, as the federal government covers at least half of states’ Medicaid costs.

In 2023, the federal and state governments spent $871.7 billion on Medicaid, with the federal government covering $591.4 billion, according to the CMS.

A pause in Medicaid funding “would be disastrous for states,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, said in a statement.

However, Medicaid could be exempt from the order, as a pause would be inconsistent with the law under which the federal government matches state Medicaid payments, Sam Bagenstos, a law professor at the University of Michigan and OMB general counsel from 2021 to 2022, wrote on Bluesky.

“On our read, agencies should not pause activities that are legally mandated” like Medicaid payments to states, Polaris said. “It’s basically an exception to the pause.”

Even if there is a pause for a few weeks, “it shouldn’t have a big effect on states” given the quarterly nature of Medicaid payments, according to Polaris. States could also move money around to protect their normal operations.

But if the pause is longer, states may have to consider delaying payments to providers or insurers, which could harm Medicaid beneficiaries’ ability to access care, said Matt Fiedler, a senior fellow at the USC-Brookings Schaeffer Initiative for Health Policy.

Still, state Medicaid programs are uncertain whether the freeze applies to their funding or not.

“We are still trying to assess and understand the implications of the OMB memo on Medicaid and other public health insurance programs,” Amir Bassiri, New York’s Medicaid director, said over email. “There are differences of opinion with regards to the interpretation of the memo and this is still being analyzed legally.”

Medicaid aside, the financial health of many providers would be affected by a pause in financial assistance from Washington.

Federal grants are the main source of funding for health centers, thousands of outpatient clinics nationwide that provide primary care in underserved areas, according to the National Association of Community Health Centers. Similarly, many reproductive health providers rely on Title X grants to provide family planning and preventive health services to low-income individuals.

U.S. hospitals also receive a number of grants to bolster and train their workforces, help prepare them for disasters and emergencies and expand services in rural areas, among other initiatives.

However, “it’s a program-by-program and grant-by-grant analysis,” so it’s not clear exactly what the Trump administration might allow to continue versus move to cut, Polaris said.

An unconstitutional order

With the memo, Trump is asserting that the president has the unilateral power to halt funding that’s already been approved by Congress, a move that directly conflicts with the Impoundment Control Act of 1974.

Currently, federal agencies are allowed to pause financial assistance for review, but only under certain conditions, according to a brief from law firm Akin. Taxpayer dollars must still be spent as Congress directed. The executive branch can’t decide to refuse entirely how appropriated funds are spent without getting congressional approval.

The order raised alarm among Democrat lawmakers.

“Congress approved these investments and they are not optional, they are the law,” Senate Minority Leader Chuck Schumer said via X on Monday.

Trump could also have no desire to stop the flow of federal dollars, but is instead using the freeze as a pretext to make the case for an aggressive interpretation of executive power moving forward, according to Fiedler.

“The memo is unclear,” Fiedler said. “Pause the funding unless it’s inconsistent with other law. The question is — what’s inconsistent with federal law, and what federal law are we talking about, and how will that be applied in practice?”

“How this plays out remains to be seen,” he added.

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You are cordially invited to attend the New York State Behavioral Health Tobacco Summit on Wednesday, April 2, 2025. In-person sites will be available in New York City, Albany, and Buffalo. All are welcome to attend. Likewise, please feel free to forward this invitation to others who may be interested in this summit. After successful summits in 2010 and 2019, this third iteration is intended as a call to action for the next steps to address the needs of folks who are using or at risk of using tobacco and nicotine products.

The summit will feature Dr. Jill Williams, the medical director of the New York City Tobacco Comprehensive Treatment and Technical Assistance Center, and Dr. Marc Manseau, clinical associate professor of psychiatry at the New York Grossman School of Medicine. The program will explore innovative and evidence-based strategies for closing gaps in enduring disparities.

Register today.  For any questions or concerns, please contact the Summit Planning Team at NYS-BHSummit@caiglobal.org.

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 Announcement on Updated Inpatient Psychiatric Services and Comprehensive Psychiatric Emergency Program (CPEP) Regulations

January 2025

OMH has promulgated updated regulations for operating psychiatric inpatient services in general hospitals (14 NYCRR Part 580), private psychiatric facilities (14 NYCRR Part 582), and Comprehensive Psychiatric Emergency Programs (14 NYCRR Part 590), effective upon publication in the State Registry on Dec. 18, 2024.

These updates follow Guidance on Evaluation and Discharge Practices for 9.39 Emergency Departments, psychiatric inpatient programs and CPEPs released in October 2023. In October 2024, OMH also updated Guidance for Outpatient Treatment Programs on Collaborating with Hospitals on Admissions and Discharge which added standards for outpatient providers on working with individuals discharged from inpatient psychiatric units in general hospitals, private psychiatric facilities, CPEPs, and Emergency Departments.

These changes are aimed at improving admission and discharge processes and to ensure services are collaborative and tailored to the individual needs of individuals receiving services. The amended OMH regulations will require hospitals to direct their staff to:

Check the Psychiatric Services and Clinical Knowledge Enhancement System for prior psychiatric and medical history, wellness plans, psychiatric advance directives, and contact information of current providers when treating individuals.

• Obtain information from outpatient providers and other collateral sources of information to help inform assessment, treatment, and discharge planning.
• Determine if the individual has complex needs based on the new regulatory definition. For adults, the definition is aligned with eligibility for Health Home Plus care management and triggers that allow managed care plans to conduct utilization review. For children and youth, the definition is aligned with current enrollment in or eligibility for High Fidelity Wrap around care management in Health Homes serving children; eligible for or receiving the Children’s Home and Community Based Service waiver for children with a serious emotional disturbance.
• Conduct screenings for substance use.  Conduct screenings for suicide and violence risk –including asking about access to firearms or other weapons, during assessment and again prior to discharge.
• Establish a discharge plan reflecting the individual’s social support levels and address psychiatric, substance use disorder, chronic medical, and social needs.
• Provide a verbal sign-out or warm handoff with outpatient or residential programs for individuals with complex needs on the day of discharge or as soon as possible afterward.
• Provide written discharge summary to outpatient and/or residential program within seven days of discharge.
• Schedule follow-up appointments within seven calendar days after an individual is discharged.
• Coordinate discharge details with care managers for those enrolled in outpatient, residential, or residential treatment facility care management.
• For individuals with complex needs, per the regulatory definition, refer to care management if not already enrolled.
• Offer appropriate pharmacological interventions for substance use disorders and consider long-acting injectable medications for individuals with a history of non-adherence to oral antipsychotic medications.

 To support implementation of these regulations, OMH has established the Office of Hospital Care and Community Transitions to provide hospitals with technical assistance on implementing these new regulations. Staff from this new office will help hospitals improve admissions and discharge planning for individuals with complex needs as defined in the updated regulations. OMH will also be updating guidance and hosting webinars for hospitals to review the changes in more detail. 

The finalized regulations can be found on the OMH Website.