This bulletin applies to both NC Medicaid Direct and NC Medicaid Managed Care.
This bulletin replaces in full the Updated Guidance for NC Medicaid Payments to Planned Parenthood – Dec. 8, 2025, bulletin.
Overview of H.R.1 and Court Actions
H.R.1 (Pub. L. No. 119-21) was signed into law on July 4, 2025, by President Trump. H.R.1 prohibits Medicaid payments to certain prohibited entities for one year, effective July 4, 2025. This provision was temporarily blocked from implementation by a Federal District Court Judge, who issued a temporary restraining order (TRO) effective through July 21, 2025. The preliminary injunction only applied to Planned Parenthood meeting certain criteria.
On July 28, 2025, the Federal District Court Judge granted a preliminary injunction to Planned Parenthood Association of Utah, Planned Parenthood League of Massachusetts and all other members of the Planned Parenthood Federation of America, Inc., which includes the NC Planned Parenthood entities (Planned Parenthood South Atlantic).
On Sept. 11, 2025, the U.S. Court of Appeals for the First Circuit stayed both of the preliminary injunctions issued in July 2025. The stay allowed the H.R.1 provisions to take effect and Medicaid payments to be prohibited to Planned Parenthood while legal challenges continued.
On Dec. 2, 2025, a Federal District Court Judge, in a lawsuit filed by the District of Columbia and 22 States, including North Carolina (collectively the “Plaintiff States”), granted a preliminary injunction to the Plaintiff States to allow payment to entities that may be considered a “prohibited entity” under Section 71113 of H.R.1 while legal challenges continue.
On Dec. 8, 2025, the U.S. Court of Appeals for the First Circuit entered an administrative stay of the preliminary injunction granted on Dec. 2, 2025, to the Plaintiff States while legal challenges continue. The stay allows Section 71113 of H.R.1 to remain in effect and Medicaid payments to “prohibited entities” to cease while legal challenges continue.
Updated Payment Guidance
Pursuant to the stay issued on Dec. 8, 2025, NC Medicaid’s payment guidance related to entities impacted by Section 71113 of H.R.1 will revert back to the guidance issued in the Sept. 19, 2025, provider bulletin and summarized below.
H.R.1 defined prohibited entities as follows:
The term ‘‘prohibited entity’’ means an entity, including its affiliates, subsidiaries, successors, and clinics—
(A) that, as of the first day of the first quarter beginning after the date of enactment of this Act—
(i) is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code;
(ii) is an essential community provider described in section 156.235 of title 45, Code of Federal Regulations (as in effect on the date of enactment of this Act), that is primarily engaged in family planning services, reproductive health, and related medical care; and
(iii) provides for abortions, other than an abortion—
(I) if the pregnancy is the result of an act of rape or incest; or
(II) in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless an abortion is performed; and
(B) for which the total amount of Federal and State expenditures under the Medicaid program under title XIX of the Social Security Act for medical assistance furnished in fiscal year 2023 made directly, or by a covered organization, to the entity or to any affiliates, subsidiaries, successors, or clinics of the entity, or made to the entity or to any affiliates, subsidiaries, successors, or clinics of the entity as part of a nationwide health care provider network, exceeded $800,000.
NC Medicaid-enrolled organizations with the legal name “Planned Parenthood South Atlantic” are impacted by this provision.
- These providers may continue to receive payment from NC Medicaid for services rendered with Dates of Service (DOS) through Sept. 10, 2025.
- NC Medicaid payments will cease for identified prohibited entities for DOS on or after Sept. 11, 2025, through the timeframe identified in H.R. 1.
- NC Medicaid will reprocess and recoup any paid claims and medical home payments for DOS on or after Sept. 11, 2025, that are not in compliance with this provision.
Impacted providers should work with their NC Medicaid members to support transition to other providers for care. Providers and beneficiaries may use the NC Medicaid Provider and Health Plan Lookup Tool to explore options in their area.
Ongoing Monitoring and Commitment
NC Medicaid understands that this situation is rapidly evolving and will continue to monitor any changes as it relates to this provision.
NC Medicaid is committed to maintaining access to health services for Medicaid beneficiaries while also complying with all applicable federal requirements. NC Medicaid appreciates your ongoing partnership.
Contact
NCTracks Call Center: 800-688-6696
For questions related to NC Medicaid Managed Care, contact the health plans for more information. Contact information is available on the Health Plan Contacts and Resources webpage.