A Policy Shift Impacting Medical Coding in Healthcare

A recent executive order from President Donald J. Trump has introduced potential shifts in healthcare policy, raising questions about insurance coverage, medical coding, and compliance for hospitals and healthcare facilities.

On Jan. 28, the administration issued the “Protecting Children from Chemical and Surgical Mutilation” Executive Order, which blocks federal funding for gender-affirming care for individuals under 19. This includes puberty blockers, hormone therapy, and gender-related surgeries.

While the order does not ban these treatments outright, it prevents federally funded hospitals and clinics – including those accepting Medicare and Medicaid – from covering them. As a result, medical coders, billers, and compliance teams must navigate new challenges regarding insurance coverage, claim approvals, and documentation requirements.

Legal Challenges and Injunction

The order was immediately challenged in court. On March 5, U.S. District Judge Brendan Hurson of Maryland issued a preliminary injunction, temporarily blocking the order’s enforcement while legal proceedings continue.

The lawsuit, filed by the American Civil Liberties Union (ACLU), Lambda Legal, and Parents, Families, and Friends of Lesbians and Gays (PFLAG) National, argued that the order disrupted necessary medical care and posed serious health risks to transgender youths.

The Court sided with the plaintiffs, citing potential negative impacts, including severe distress and heightened gender dysphoria; increased anxiety, depression, and suicide risk; uncertainty in accessing medical care; and fear of discrimination and hate crimes.

With the injunction, hospitals and clinics can continue providing gender-affirming care – for now. However, future policy shifts remain possible, as the case remains in the courts.

Implications for Medical Coders

Medical coders must prepare for potential changes, even as the legal battle unfolds. If the executive order is upheld, coding for gender-affirming care could become more restrictive, requiring coders to be precise in their documentation to ensure accurate claims processing.

Key Documentation Challenges

Clarifying medical necessity is one such challenge: hormone therapy is prescribed not only for gender transition, but also for menopause, early puberty, and endocrine disorders. Coders must justify the primary diagnosis to support claim approvals.Surgical coding distinctions is another challenge: procedures such as mastectomies for gender affirmation versus breast cancer treatment require clear documentation, as coverage will depend on the medical necessity.

Navigating insurance coverage is yet another consideration: Medicare and Medicaid may deny claims, while private or state-funded insurers may still approve them. Coders must track payor-specific policies carefully.

Compliance Risks and Claim Denials

If the executive order is enforced, coders should expect heightened scrutiny, audits, and claim denials for gender-related procedures. To minimize risks, coders must ensure thorough documentation to meet compliance standards, monitor state laws (as some still mandate insurance coverage for gender-affirming care), and understand payor-specific policies, as private insurers may cover treatments that federal programs restrict.

With insurers implementing different policies, coders may face conflicting coverage decisions, where one payor denies a claim while another approves it. Staying informed on shifting regulations is critical to avoid delays and denials.

The Role of Coders and Training Needs

With the uncertainty surrounding enforcement, hospitals must invest in coder training to prevent billing errors, claim rejections, and compliance violations. Coders should work with compliance teams to ensure accurate documentation that aligns with evolving regulations, monitor updates from federal and private insurers to stay informed, request clear physician documentation (especially for cases where diagnosis codes have multiple interpretations), and remain proactive in understanding legal and policy shifts to anticipate changes in reimbursement and claim processing.

Now more than ever, medical coders play a vital role in healthcare institutions’ compliance and financial stability.

Conclusion

The Trump Administration’s executive order has introduced uncertainty into the funding and documentation of gender-affirming care. While a federal judge has temporarily blocked enforcement, the policy remains under review, leaving room for further developments.

Medical coders must remain proactive, adaptable, and well-informed to navigate these ongoing policy shifts and ensure billing accuracy and compliance.

Key Takeaways

Medical coders must stay updated on changing regulations. Accurate documentation is essential to secure claim approvals, and close collaboration with compliance teams is critical for avoiding errors and audits.

As legal challenges unfold, healthcare professionals must stay prepared for potential policy shifts, ensuring ethical medical practices and financial stability for providers and patients.

What’s Next?

Hospitals should invest in coder training and compliance resources to navigate these policy changes effectively. Meanwhile, medical professionals and patients will watch closely as the legal case unfolds.

For now, gender-affirming care remains covered in federally funded institutions. However, how long that will remain the case is uncertain. The only certainty is that medical coders must be ready to adapt.

Programming note:

Listen live today when Penny Jefferson reports this story as the special guest during Talk Ten Tuesday with Chuck Buck at 10 am Eastern.

References

American Civil Liberties Union. (2025, March 5). Federal judge grants preliminary injunction against Trump’s anti-trans healthcare order. ACLU. https://www.aclu.org/press-releases/federal-judge-grants-preliminary-injunction-against-trumps-anti-trans-healthcare-order

Associated Press. (2025, March 5). Nationwide block extended on Trump’s executive order targeting transgender youth healthcare. AP News. https://apnews.com/article/293f3825495e23a5b7e7075c414dbffe

Kaiser Family Foundation. (2025, February 10). President Trump’s executive order on gender-affirming care: Responses by providers, states, and litigation. KFF. https://www.kff.org/policy-watch/president-trumps-executive-order-on-gender-affirming-care-responses-by-providers-states-and-litigation

New Yorker. (2025, February 20). Where do trans kids go from here?. The New Yorker. https://www.newyorker.com/news/the-lede/where-do-trans-kids-go-from-here

Reuters. (2025, March 8). Families say Trump administration violates court order on youth gender treatments. Reuters. https://www.reuters.com/business/healthcare-pharmaceuticals/families-say-trump-administration-violates-court-order-youth-gender-treatments-2025-03-08

The White House. (2025, January 28). Executive order on protecting children from chemical and surgical mutilation. The White House. https://www.whitehouse.gov/presidential-actions/2025/01/protecting-children-from-chemical-and-surgical-mutilation