Nine states challenge federal mandate that disabled people receive care in community

STAT News – Thursday, January 29, 2026
By O. Rose Broderick

A lawsuit targeting a landmark disability law has received new life after nine states filed an update that seeks to undercut federal mandates that people with disabilities receive care in their communities.

Texas, Florida, and seven other states allege that the Biden administration’s 2024 update to Section 504 of the Rehabilitation Act of 1973 is unconstitutional — specifically, the requirement that states must fund services in the “most integrated setting.”

Section 504 prohibits discrimination against people with disabilities in any setting that receives federal financial assistance, including health care facilities. Disability advocates say a retreat from this protection could eventually funnel people requiring long-term care back into facilities that sequestered them from society and that they fought for decades to escape.

“The right to live and participate in the community is one of the most fundamental rights under disability law,” said Alison Barkoff, a disability rights lawyer and the former head of the Administration for Community Living. “It is a hard-fought right that people with disabilities have been using since the Olmstead decision in 1999, and any efforts to weaken the integration mandate seriously concern me.”

The new filing submitted last week is the latest iteration of a lawsuit filed in 2024, when 17 states argued that the entire Section 504 statute was unconstitutional, including the 2024 update that added gender dysphoria as a protected disability. Several states withdrew from the litigation in 2025, after President Trump’s Department of Health and Human Services nixed that update and published other rules that restricted care for transgender minors and adults.

The updated lawsuit alleges that the Biden administration’s changes were unconstitutional under the spending clause and exceeded the scope of HHS’s authority under Section 504 and the Americans with Disabilities Act, even though the Supreme Court upheld the integration mandate in the Olmstead v. L.C. decision in 1999.

The lawsuit’s outcome could have major implications for millions of Americans, especially after Congress voted in 2025 to slash state Medicaid funding, a major source of care for people with disabilities. If successful, the lawsuit would be a major blow to people with disabilities, especially after the Trump administration has explicitly targeted diversity, equity, inclusion, and accessibility since taking office.

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