Court Blocks Federal Effort to Restrict Health Center Services Based on Immigration Status

On September 21, 2026, the U.S. District Court for the District of Rhode Island ruled that the U.S. Department of Health and Human Services ("HHS") and several other federal agencies [1] unlawfully reinterpreted Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ("PRWORA"). HHS’ reinterpretation would have applied PRWORA's immigration-based eligibility restrictions to health centers. The court vacated the agencies' notices (collectively, the “PRWORA Notices”) and permanently enjoined the agencies from enforcing the PRWORA Notices against the plaintiff states.

PRWORA prohibits certain noncitizens from receiving "Federal public benefits," subject to certain exceptions.

Shortly after PRWORA was enacted, federal agencies issued guidance on how far the law reaches. In 1996, the Attorney General specified community-level programs that fall within PRWORA's "Life/Safety Exemption," which exempts certain in-kind programs that are necessary for the protection of life or safety and do not condition assistance on a person's income or resources.

In 1998, HHS issued a notice interpreting "Federal public benefit" to cover programs that provide benefits to individuals or households based on eligibility criteria and identified HHS programs that met that definition. The Health Center Program was not among them. As a result, for nearly three decades, PRWORA's restrictions were not understood to apply to health centers.

In July 2025, the U.S. Department of Justice ("DOJ") issued an order announcing the Attorney General's decision not to exempt any programs under the Life/Safety Exemption beyond those exempted by the statute.

Around the same time, HHS published a notice rejecting its 1998 interpretation. HHS broadened its reading of "Federal public benefit" and identified 13 additional programs as providing “Federal public benefits,” including the Health Center Program, Head Start, and Title X. The HHS notice went into effect immediately.

On July 21, 2025, a coalition of states [2] and the District of Columbia sued in the U.S. District Court for the District of Rhode Island.

On September 10, 2025, the court granted the states' motion for a preliminary injunction, finding that the agency notices were substantive rules that required notice-and-comment rulemaking.

On September 21, 2026, the court granted summary judgment to the states. The court held that:

• The PRWORA Notices are procedurally invalid because the agencies issued them without notice-and-comment rulemaking.
• DOJ's decision not to exempt any programs under the Life/Safety Exemption is contrary to law. PRWORA gives the Attorney General discretion to identify which programs qualify for the exemption, not discretion to decline to identify any.

The court vacated the PRWORA Notices and permanently enjoined the agencies from enforcing them, or the interpretations in them, against the plaintiff states by any other means. The court's order expressly allows the agencies to issue new rules on PRWORA after a notice-and-comment process.

For the plaintiff states, the September 21 decision removes the immediate conflict between the statutory obligation to serve medically underserved populations by providing health services “for all residents of the area served by the center” [3]  and the notice’s requirement to restrict services based upon immigration status.

While the September 21 decision ends the case in the district court, the underlying issue remains open as:

• The federal government may appeal the decision to the First Circuit.
• The agencies may start over through notice-and-comment rulemaking. The Department of Labor rescinded its notice in March 2026 and said it would pursue notice-and-comment rulemaking. HHS could take the same approach.
• The injunction protects the plaintiff states; however, it is not clear how the decision applies to health centers in other states. Interestingly, HHS has not yet updated its website to reflect the September 21 decision.
  

If you have questions, please reach out to the Powers Community Health Center Team.