Texas Children’s Hospital (TCH), one of the largest pediatric hospitals in the U.S., has agreed to create a clinic dedicated to helping transgender youth detransition back to their sex assigned at birth. This decision is part of a settlement agreement with Texas Attorney General Ken Paxton and the U.S. Justice Department following allegations that the hospital billed Medicaid for gender-affirming care using false diagnosis codes.
Key Takeaways
Texas Children’s Hospital will open a detransition clinic and pay $10 million to settle allegations it improperly billed Medicaid for gender-affirming care.
- Texas Children's settles probe, agrees to create first detransition clinic
- Settlement includes $10M payment and termination of five physicians
- Clinic will offer free services for its first five years
- Hospital denies wrongdoing but seeks to end costly litigation
The settlement, announced on Friday, includes a $10 million payment to the state and the termination of several physicians who provided gender-affirming treatments. The detransition clinic will offer free services for its first five years. According to Paxton’s office, the hospital also agreed to stop providing puberty blockers, hormonal therapy, or surgery that aligns with a patient’s gender identity.
The settlement comes amid ongoing efforts by President Donald Trump's administration to restrict gender-affirming care. In January 2025, Trump issued an executive order directing federally funded institutions to end such treatments for minors. Texas had previously banned hormonal therapy and gender-affirming surgery for children in 2023.
The hospital stated that the settlement was reached after three years of investigations and cooperation with authorities. In a statement, TCH said it settled to protect its resources from costly litigation and redirect focus to life-saving care. Civil rights groups criticized the agreement, arguing it prioritizes politics over sound medical practice.
Paxton's office stated that the settlement mandates TCH to fire five doctors who performed gender transition surgeries on children. The resolution brings to a close a years-long investigation by Texas' Healthcare Program Enforcement Division, which concluded that TCH fraudulently billed Texas Medicaid for 'unallowable and illegal ‘gender-transition’ interventions.'
The settlement follows a lengthy investigation by the state of Texas and the DOJ, which alleged that the hospital manipulated billing codes to seek reimbursement from the state’s Medicaid program. The hospital said it complied with all laws and produced more than 5 million documents over the course of the investigation, which began in 2023.
The settlement is also a significant victory in the Trump administration's efforts to block access to gender-affirming care for minors. In 2025, the Supreme Court cleared the way for states to ban gender-affirming care for minors, opening the door for 26 states to block access. The DOJ has investigated more than a dozen hospitals and clinics that offer transition care to youth.
The hospital first came under scrutiny in May 2023 after Eithan Haim, a former doctor at Texas Children’s, alleged that the hospital was causing 'malicious harm' to children. The Republican-led state legislature passed a ban on such care, which went into effect in September 2023.
Civil rights advocates have decried the settlement, saying it disregards best medical practices for transgender people and scores political points in the larger conservative anti-trans movement.
How this summary was created
This summary synthesizes reporting from 5 independent publishers using AI. All sources are cited and linked below. NewsBalance is a news aggregator and media literacy tool, not a news publisher. AI-generated content may contain errors or inaccuracies — always verify important information with the original sources.