Texas filed an amended lawsuit on January 23, 2026 (Texas v. Kennedy), joined by eight other states: Alaska, Florida, Indiana, Kansas, Louisiana, Missouri, Montana, and South Dakota. They're challenging the HHS "integration mandate" under Section 504 of the Rehabilitation Act, which requires states to serve people with disabilities in community settings rather than institutions when appropriate.

This isn't abstract legal theory. If these states win, the federal requirement to fund Medicaid Home and Community-Based Services (HCBS) waivers could fall. States could treat community-based care as optional, not mandated. Families who rely on those waivers to keep their children or adult relatives at home would lose a federally-backed right.

The timing matters. This lawsuit converges with $665 billion in federal Medicaid cuts over ten years (from H.R. 1/OBBBA), state-level HCBS cuts in Idaho, Maryland, and Colorado, and a CMS fraud crackdown that's frozen home care funding for some families. Kim Musheno of The Arc called it "an existential threat to an already fragile developmental disability services system" in a March 30, 2026 statement to DisabilityScoop.

What Section 504 and the Integration Mandate Are

Section 504 of the Rehabilitation Act (1973) is a civil rights law. It says programs that receive federal funds can't discriminate based on disability. Medicaid receives federal funds. That's the link.

The "integration mandate" is an HHS rule interpretation of Section 504, formalized in an updated 2024 rule. It requires states to provide disability services in "the most integrated setting appropriate" to each person's needs. That phrase comes from Olmstead v. L.C., a 1999 Supreme Court case that held unnecessary institutionalization violates the Americans with Disabilities Act (ADA).

In practice, this means: if someone with a disability can be served in their home or community with appropriate supports, the state can't force them into an institution just because it's administratively easier or cheaper.

HCBS waivers exist because of this principle. They let states use Medicaid funds to pay for services in homes and communities instead of nursing facilities or ICF/IID placements. Without the integration mandate as a federal rule, states would no longer be required to offer those waivers.

What the Nine States Are Arguing

The plaintiff states aren't challenging Section 504 itself this time. They originally filed a lawsuit in 2023 arguing Section 504 was unconstitutional, but withdrew that claim after widespread disability community backlash. The renewed lawsuit (Texas v. Kennedy) focuses on HHS rule overreach.

Their central arguments:

• HHS's 2024 integration mandate rule "exceeds the legitimate scope of Section 504 and the ADA"
• It's "coercive" under the Spending Clause (states accept federal Medicaid dollars but are then required to structure services in ways they didn't explicitly agree to)
• HHS lacks statutory authority to mandate how states deliver community-based care

The practical effect: if the court agrees with the states, the federal government could no longer require HCBS waivers as a condition of Medicaid funding. States would decide on their own whether to fund community services.

What Happens to HCBS Waivers If the States Win

HCBS waivers don't disappear immediately if this lawsuit succeeds. But the legal footing changes.

Right now, states operate HCBS waivers under Medicaid's 1915(c) authority. The integration mandate rule ensures that offering those waivers is expected, not optional. States that refuse to offer HCBS could be found out of compliance with federal civil rights law.

If the integration mandate falls:

• States could argue they're no longer required to fund HCBS waivers at all
• States facing budget pressure could scale back or eliminate waiver programs without federal penalty
• Families on waiting lists could face indefinite delays with no federal recourse
• People currently receiving waiver services could see those services cut or converted to institutional placements

The ADA Title II still exists. Olmstead is still Supreme Court precedent. But if HHS can't enforce the integration mandate through Section 504, the mechanism for compelling states to fund community-based care weakens significantly.

What Olmstead Rights Mean for Your Family

Olmstead v. L.C. (1999) is the landmark Supreme Court case that established the integration mandate. Two women with intellectual disabilities and psychiatric conditions were kept in a Georgia state hospital even after their treatment team said they could be served in the community. The Court ruled that unnecessary institutionalization is discrimination under the ADA.

Here's what Olmstead protects in concrete terms:

• You can refuse institutional placement if community services can meet your family member's needs
• Your state must have a comprehensive, effectively working plan to move people out of institutions and into community settings
• If your family member is on an HCBS waiver waiting list, the state can't force institutional placement while they wait

That protection doesn't evaporate if this lawsuit succeeds, but enforcement gets harder. Right now, HHS can tie Medicaid funding compliance to the integration mandate rule. If that rule falls, families would need to bring individual ADA Title II lawsuits to enforce Olmstead rights: a slower, more expensive, less accessible path.

If You Live in One of the Nine Plaintiff States

The plaintiff states are: Texas, Alaska, Florida, Indiana, Kansas, Louisiana, Missouri, Montana, and South Dakota.

If you live in one of these states and your family member receives HCBS waiver services or is on a waiting list, contact your state Attorney General's office. You don't need to be a lawyer. A short message works:

"I'm a constituent and a family member of someone who receives (or is waiting for) Medicaid HCBS waiver services. Texas v. Kennedy threatens those services. I urge you to withdraw from this lawsuit."

You can find your state AG's contact information through your state government website. Many have online contact forms specifically for constituent concerns.

Document your family member's current services now:

• Provider names, service types, hours per week
• When services started
• Any waiting list position or service gaps
• How those services enable your family member to live at home instead of an institution

If this lawsuit succeeds and your state moves to cut HCBS funding, that documentation becomes the record you'll need to argue for continuity of care or to file an individual Olmstead claim.

What Families in All States Can Do

Even if you don't live in a plaintiff state, this case sets federal precedent. If the integration mandate falls, other states could follow the same argument to reduce HCBS funding.

Sign up for advocacy alerts:

• DREDF (Disability Rights Education & Defense Fund): dredf.org/protect-504
• The Arc: thearc.org (advocacy alerts section)
• National Health Law Program (NHeLP): healthlaw.org

DREDF is hosting a webinar on protecting Section 504 and the integration mandate. Check dredf.org/protect-504 for the schedule and registration link.

Support organizations filing amicus briefs in Texas v. Kennedy. Disability advocacy groups including The Arc, APSE, and DREDF are expected to file friend-of-the-court briefs arguing against the plaintiff states' position. Financial support for those legal efforts helps.

Know your overlapping protections:

• ADA Title II still requires public entities (including state Medicaid programs) to provide services in the most integrated setting
• State laws in some states have independent community living mandates that don't depend on the federal integration mandate rule
• Olmstead is Supreme Court precedent and remains binding unless overturned (which is not what this lawsuit seeks)

If the integration mandate rule falls, those protections remain. They're harder to enforce without the HHS rule tying them to Medicaid funding, but they don't disappear.

What This Lawsuit Is Really About

The plaintiff states frame this as a federalism issue: HHS is overstepping its authority by dictating how states must structure Medicaid services.

The disability community sees it differently. Without the integration mandate, states can return to a default of institutional care, which is often cheaper in the short term and easier to administer. Community-based services require distributed providers, individualized plans, and coordination across multiple agencies. Institutions consolidate all of that under one roof.

The question isn't whether community living is better for people with disabilities. Decades of research confirm it is. The question is whether the federal government can require states to fund it as a condition of receiving Medicaid dollars.

If the answer becomes no, families will need to fight state by state to preserve HCBS waivers. That's a much harder fight than defending a federal rule.

Where the Lawsuit Stands Now

Texas v. Kennedy was filed in the Northern District of Texas on January 23, 2026. No hearing date has been set as of March 31, 2026.

The case is in the early stages. HHS (now under Secretary Robert F. Kennedy Jr.'s leadership) will file a response. Disability advocacy organizations will file amicus briefs. The court could rule on motions to dismiss before moving to a full hearing on the merits.

A ruling against HHS at the district court level would likely be appealed. This case could take years to resolve fully, potentially reaching the Supreme Court.

In the meantime, HCBS waivers continue to operate. The integration mandate rule is still in effect. But families should prepare for the possibility that the legal foundation of community-based Medicaid services could weaken significantly.

If Your Family Member Is on an HCBS Waiting List

Waiting lists for HCBS waivers already span years in most states. Some families wait five, seven, or ten years. If the integration mandate falls, those lists could freeze entirely as states decide whether to continue funding waivers.

What you can do now:

• Confirm your family member's position on the waiting list (contact your state Medicaid agency)
• Document any deterioration in functioning or increased care needs that could qualify for priority placement
• Explore alternative Medicaid waiver pathways while you wait
• Connect with community living resource centers that can advise on non-waiver supports

If you're in a plaintiff state, document any communication from the state about your waiting list status. If your family member is offered institutional placement while waiting for HCBS, consult a disability rights attorney before accepting. That offer could be an Olmstead violation.

What Comes Next

Watch for:

• HHS response brief (likely within 60 days of the January 23 filing)
• Amicus briefs from disability advocacy organizations
• Court scheduling of initial motions hearings
• State-level legislative activity in plaintiff states (some may try to preemptively restructure HCBS as optional programs)

The disability community beat back the original Section 504 constitutional challenge in 2023. This renewed lawsuit is narrower but potentially more dangerous because it doesn't attack a civil rights law directly; it attacks the administrative rule that makes that law enforceable in the Medicaid context.

If you're waiting for a waiver, receiving waiver services, or planning for a family member's future community living, this lawsuit affects you. The best defense is an informed community that knows its rights and uses them.