Top CMS official approved Medicaid funding for sex changes in Washington while targeting red states for audits

A top official at the Centers for Medicare & Medicaid Services (CMS) approved the use of federal Medicaid dollars for sex changes in Washington state while simultaneously playing a role in aggressive audits and enforcement actions targeting Republican-led states over their Medicaid practices.

Rory Howe, Director of the Financial Management Group at CMS, signed the formal approval of Washington State Plan Amendment WA-24-0034 on August 13, 2024, granting federal funding for what the amendment defines as “medically necessary gender affirming care for a client with a diagnosis of gender dysphoria” under the state’s Medicaid program. The policy allows Washington to receive federal reimbursement for services related to gender transition, including surgeries, hormones, and other treatments.

The approval came the same year as CMS, with Howe’s involvement, was auditing states like Texas, Florida, and Missouri over the way they handle their Medicaid programs. “The Centers for Medicare & Medicaid Services, or CMS, targeted three red states — Florida, Texas, and Missouri — for audits and enforcement last year as part of an effort to crack down on what they now contend is an improper use of Medicaid dollars” the National Review reported at the time. Internal communications point to Howe as a key figure in these enforcement actions.

Critics argue that the Biden administration selectively enforced Medicaid rules to pressure conservative states politically. Rep. Dan Crenshaw (R-TX) condemned the CMS actions, stating in a May 2024 press release: “The problem that we have today is that CMS is actually targeting states as a result of that disagreement. As first reported by National Review, records show that CMS targeted red states like Florida, Texas, and Missouri based on a new interpretation of state financing rules, arrangements that had previously been approved [by CMS] numerous times. That new interpretation would cost states like Texas billions of dollars. This is an attempt to force them to go into Medicaid expansion.”

An op-ed in the Washington Examiner by Lee Zeldin echoed the concerns, pointing to a February 2023 CMS bulletin that warned states about their use of provider taxes. The piece highlights the apparent inconsistency: “Republicans in Congress, especially those representing Florida, Texas, and Missouri, owe it to their constituents to start fighting back and holding Biden accountable. CMS’s political targeting is not just wrong. It is an unconscionable precedent. Just imagine a future Republican president targeting a blue state, such as my home state of New York. Though I would stand up and fight back, the best way to make sure this never happens is to make it clear it’s wrong regardless of what party does it.”

CMS’s internal communications and FOIA-obtained emails show Rory Howe was heavily involved in financial audits against Florida, Missouri and Texas. The disparity has led lawmakers to question whether CMS is enforcing rules equitably or using its regulatory power for political ends. Crenshaw’s office demanded that CMS explain why similarly structured programs in blue states have not been subjected to audits or enforcement actions.