A US appeals court panel has allowed President Donald Trump's administration to block Medicaid funds to Planned Parenthood while legal challenges continue.

A federal judge in July ruled Planned Parenthood clinics nationwide must continue to be reimbursed for Medicaid funding as the nation's largest abortion provider fights Trump's efforts to defund the organisation in his signature tax legislation.

Medicaid is a government health care program that serves millions of low-income and disabled Americans. Nearly half of Planned Parenthood's patients rely on Medicaid.

A provision in Trump's tax bill instructed the federal government to end Medicaid payments for one year to abortion providers that received more than $800,000 from Medicaid in 2023, even to those like Planned Parenthood that also offer medical services including contraception, pregnancy tests and STD testing.

Planned Parenthood Federation of America and its member organisations in Massachusetts and Utah filed a lawsuit in July against Health and Human Services Secretary Robert F Kennedy Jr.

"While the Trump administration wants to rip away reproductive freedom, we're here to say loud and clear: we will not back down," Dominique Lee, President and CEO of Planned Parenthood League of Massachusetts said in a statement. "This is not over."

Planned Parenthood said Thursday's ruling means that more than 1.1 million patients can't use their Medicaid insurance at its health centres. That also puts as many as 200 of those health centres at risk of closure, Planned Parenthood said in a statement.