Lawsuit challenges federal rule that disabled people receive care in community

A recent lawsuit challenging a crucial disability law has gained traction as nine states have filed an update aiming to undermine federal requirements for individuals with disabilities to receive care in community settings. Texas, Florida, and other states argue that the Biden administration’s 2024 revision to Section 504 of the Rehabilitation Act of 1973 is unconstitutional, particularly the mandate that states must fund services in the “most integrated setting.”

Section 504 prohibits discrimination against individuals with disabilities in any federally funded setting, including healthcare facilities. Advocates for disability rights express concerns that rolling back this protection could lead to a regression where individuals in need of long-term care are once again isolated in facilities, a practice they have fought against for years.

Alison Barkoff, a disability rights attorney and former head of the Administration for Community Living, emphasizes the significance of the right for individuals with disabilities to live and participate in the community. She highlights that this right has been upheld since the landmark Olmstead decision in 1999 and any attempts to weaken the integration mandate are troubling.

The recent filing is an update to a lawsuit initiated in 2024, where 17 states argued the unconstitutionality of the entire Section 504 statute, including the 2024 amendment that added gender dysphoria as a protected disability. Some states withdrew from the case in 2025, following actions by the Trump administration that reversed the gender dysphoria update and imposed restrictions on care for transgender individuals.

The updated lawsuit asserts that the Biden administration’s changes violated the spending clause and exceeded HHS’s authority under Section 504 and the Americans with Disabilities Act, despite the Supreme Court upholding the integration mandate in the Olmstead v. L.C. ruling. The outcome of the lawsuit could have far-reaching consequences for millions of Americans, especially after Congress cut state Medicaid funding in 2025, a critical source of care for individuals with disabilities.

If successful, the lawsuit could have detrimental effects on people with disabilities, particularly in light of the Trump administration’s focus on diversity, equity, inclusion, and accessibility. The implications of this legal battle are significant, and the outcome will be closely monitored by advocates and individuals with disabilities nationwide.

STAT’s coverage of disability issues is made possible by grants from the Robert Wood Johnson Foundation and The Commonwealth Fund, with no influence from financial supporters on journalistic decisions.