NASHVILLE, Tenn. — Federal officials do not have to reinstate $7 million in family planning grant funding to the state while a Tennessee lawsuit challenging federal rules regarding abortion counseling remains ongoing, an appeals court ruled this week.

Tennessee lost its bid to force the U.S. Department of Health and Human Services to restore its Title X funding while the state challenged the federal Department of Health and Human Services program rules. The 6th U.S. Circuit Court of Appeals, in upholding a lower court's ruling, did not agree with Attorney General Jonathan Skrmetti's argument that the federal rules infringe on Tennessee's state sovereignty.

In a 2-1 finding, the judicial panel ruled Tennessee cannot use its state laws to "dictate" eligibility requirements for a federal grant.

"And Tennessee was free to voluntarily relinquish the grants for any reason, especially if it determined that the requirements would violate its state laws," the Monday opinion stated. "Instead, Tennessee decided to accept the grant, subject to the 2021 Rule’s counseling and referral requirements."

The Tennessee Attorney General's office has not yet responded to a request for comment.

The federal government last year pulled $7 million in Title X funding, intended for family planning grants for low-income recipients after Tennessee failed to comply with the program requirements to counsel clients on all reproductive health options, including abortion.

Inside the lawsuit

Title X funding cannot be allocated toward an abortion, but the procedure must be presented as a medical option. Tennessee blocked clinics from counseling patients on medical options that aren't legal in the state, which has one of the strictest anti-abortion laws in the country.

In the lawsuit filed in federal court last year, Skrmetti argued HHS rules about Title X requirements flip-flopped in recent years and that the HHS requirement violates Tennesseans' "First Amendment rights not to engage in speech or conduct that facilitates abortions."

After Tennessee lost the funding last year, Gov. Bill Lee proposed a $7 million budget amendment to make up for the lost funds that had previously gone to the state health department. The legislative funding may have hurt Tennessee's case to restore the federal funding as judges pointed to the available money as evidence Tennessee will not be irreparably harmed if HHS isn't forced to restore its funding stream.

Last August, the federal government crafted a workaround and granted Tennessee's lost funds to the Virginia League for Planned Parenthood and Converge, which distributed them to Tennessee organizations. The funds are earmarked for family planning services for low-income residents and directly bypass the state health department, which previously distributed the grants.

Skrmetti filed the lawsuit against the HHS two months later.

Latest federal funding fight

The family planning funding was the second federal funding fight to erupt in 2023.

In January 2023, Tennessee announced it would cut funding for HIV prevention, detection, and treatment programs that are not affiliated with metro health departments, rejecting more than $4 million in federal HIV prevention funds.

Tennessee said it could make up the lost fund with state dollars but advocates decried the move and its potential impact on vulnerable communities as the state remains an HIV-transmission hotspot. The Commercial Appeal, part of the USA TODAY Network, later confirmed Tennessee gave up funding after it tried and failed to cut out Planned Parenthood from the HIV prevention grant program.