Texas Children’s Hospital Gender-Affirming Care Settlement

Texas Children’s Hospital, the largest pediatric hospital in the United States, agreed on May 15, 2026, to pay $10 million, permanently stop providing gender-affirming care to minors, fire five physicians, and open the nation’s first detransition clinic. The Texas Children’s Hospital gender-affirming care settlement resolved allegations by the U.S. Department of Justice and the Texas Attorney General’s office that the Houston hospital improperly billed Medicaid and private insurers for gender-transition treatments provided to patients under 18.¹

The hospital denied the allegations and said it entered the agreement to “protect our resources from endless and costly litigation.” The settlement itself states that no liability was determined.²

What Texas Children’s Agreed to Do

The agreement runs well beyond a check. Its terms rewrite how the hospital treats an entire category of patients and reach into its bylaws, its staffing, and its records systems.

A $10 million payment to the State of Texas, resolving allegations that the hospital billed Medicaid for treatments the state considered illegal gender-transition interventions.³
A permanent commitment never to provide gender-transition services, along with a bylaw amendment so that any physician who violates the state’s ban automatically loses hospital privileges.²
Termination and permanent revocation of privileges for five physicians who had provided gender-affirming treatments, with a bar on rehiring or credentialing them in the future.⁴
Creation of a dedicated detransition clinic, fully funded by the hospital for its first five years and offered free of charge to patients during that period.³
Maintenance of a “Potential GAC Patient List” built from diagnostic codes specified by the Attorney General’s office, with annual compliance audits.⁵
Enhanced internal compliance protocols and removal of all press releases related to gender-transition services from the hospital’s website.⁵

The DOJ described the hospital’s approach during the investigation as “proactive” and “solution-driven,” and noted that Texas Children’s produced more than five million documents over the three-year probe.⁶

What the Government Alleged

The federal complaint alleged that Texas Children’s submitted false billings to Medicaid and private insurers for gender-transition treatments, including through the use of inaccurate diagnosis codes. The DOJ cited violations of the False Claims Act, the Federal Food, Drug, and Cosmetic Act, and federal fraud and conspiracy statutes.¹

The state’s parallel theory was that after Texas Senate Bill 14 took effect on September 1, 2023, banning puberty blockers, cross-sex hormones for transition, and gender-transition surgeries for minors, any billing of Texas Medicaid for those treatments amounted to healthcare fraud. SB 14 also prohibits the use of public money, including Medicaid and child health plan reimbursements, for such care.⁷

Texas Children’s has said its own internal investigations found no violations of law, and the settlement expressly preserves the hospital’s denial of the allegations.²

The Detransition Clinic

The most unusual part of the agreement is the requirement that Texas Children’s create a clinic specifically for people who received gender-transition care before the age of 21 and now want to reverse or manage the effects of those treatments. Attorney General Ken Paxton called it the first facility of its kind in the nation.³

Under the settlement, the clinic will offer surgery, endocrinology, primary care, fertility counseling, psychiatry, psychotherapy, speech pathology, and obstetrics and gynecological services for adults who previously underwent gender-transition procedures.⁸ The hospital funds all costs for the first five years, and services during that period are free to patients.³

The clinic must be established within 90 days of the effective date of the final signed settlement, with a dedicated website and a donation page. As of early June 2026, it had not opened. The settlement was still in the “term sheet” phase, meaning the final agreement had not been signed and the 90-day clock had not started. Hospital officials had not disclosed operational details or leadership, though a spokesperson said the clinic would “formalize the supportive, multidisciplinary services we already deliver to all patients who need our care.”⁸

The Patient List and Privacy Questions

The “Potential GAC Patient List” provision has drawn particular scrutiny. Texas Children’s must compile the list using specific diagnostic codes designated by the Attorney General’s office and audit it annually through its compliance department.⁹

The settlement does not address the confidentiality of the list, does not specify how many patients may appear on it, and does not say how the state intends to use the information.⁹ Texas Children’s has said it has not been asked to share the list with outside parties and that doing so would not be “legally permissible,” citing HIPAA and its own patient-privacy obligations.⁵

How the Investigation Started

On March 4, 2022, days after Attorney General Paxton issued a nonbinding opinion characterizing gender-affirming procedures on minors as child abuse and Governor Greg Abbott directed the state’s family-services agency to investigate parents whose children received such treatments, Texas Children’s publicly announced that it would stop all hormone and surgical interventions on children.¹⁰

Dr. Eithan Haim, a Dallas surgeon who had trained at the hospital, alleged that the announcement was false and that the program continued behind closed doors. He said doctors implanted a puberty-blocking device in an 11-year-old three days after the announcement, and that procedures increased over the following year.¹¹ Haim retrieved redacted patient scheduling records and provided them to Christopher Rufo, who published them in City Journal on May 16, 2023. The Texas Attorney General’s office opened its investigation into the hospital days later.¹⁰

Haim was later charged with four counts of wrongfully obtaining individually identifiable health information. Federal prosecutors dropped the charges on January 24, 2025, without stating a reason.¹²

The Broader Federal Campaign

The Texas Children’s agreement is the most prominent outcome so far of a federal enforcement push that accelerated in 2025. President Trump signed Executive Order 14187, “Protecting Children from Chemical and Surgical Mutilation,” on January 28, 2025, and Attorney General Pamela Bondi issued an April 22, 2025, memorandum directing the DOJ to prioritize civil and criminal investigations of gender-affirming care providers under the False Claims Act, the Federal Food, Drug, and Cosmetic Act, and the federal female genital mutilation statute.¹³

In July 2025, the DOJ said it had issued more than 20 subpoenas to doctors and clinics.¹⁴ NYU Langone Health confirmed receiving a federal grand jury subpoena from prosecutors in the Northern District of Texas seeking identifying information and medical records for all adolescent patients who received transition-related care over the previous six years.¹⁵ HHS General Counsel Mike Stuart identified at least 17 children’s hospitals for potential referral to federal investigators.¹⁶

Several courts have resisted the subpoena campaign. On May 13, 2026, U.S. District Judge Mary S. McElroy in Rhode Island quashed an administrative subpoena to Rhode Island Hospital, ruled the request lacked a proper purpose, permanently enjoined the DOJ from using any records obtained, and referred the matter for potential attorney-disciplinary proceedings against the government’s lawyers.¹⁷ On June 24, 2026, Judge Katherine Polk Failla in Manhattan ordered the DOJ to stop seeking transgender-youth medical records from New York City hospitals, writing that she could not “conceive of a crime that would require the breadth of disclosure sought in the subpoena.”¹⁵ At least seven federal courts had pushed back against the campaign by mid-2026, and the DOJ has said that judicial rulings vacating federal guidance will not affect its investigations.¹⁶

Reactions

Attorney General Paxton, then in a May 26, 2026, U.S. Senate primary runoff, called the deal a historic victory.¹⁸ The DOJ described the agreement as part of its effort to “end pediatric gender-affirming care.”¹

Karen Loewy of Lambda Legal said the hospital was “bending the knee” to political pressure.¹⁹ Critics have pointed to a 2024 Harvard University study of private insurance data finding that fewer than one percent of minors nationally are transgender and received puberty blockers or hormone treatments, arguing the enforcement push is disproportionate to the scale of the medical practice.⁵ Sixteen state attorneys general filed a federal lawsuit on August 1, 2025, challenging the constitutionality of Executive Order 14187 on Tenth Amendment and statutory-authority grounds.¹³

1
U.S. Department of Justice. Justice Department Secures Landmark Resolution
2
MedPage Today. Texas Children’s Hospital Settlement
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Texas Attorney General. Attorney General Paxton Makes History Securing Landmark Healthcare Fraud Settlement
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Houston Public Media. Texas Children’s Settlement Ken Paxton Gender-Affirming Care
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Houston Public Media. Texas Children’s Hospital Transgender Detransition Clinic
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NBC News. Texas Children’s Hospital Detransition Clinic Settlement
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Texas Legislature. Senate Bill 14 Enrolled Text
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Texas Tribune. Texas Children’s Hospital Transgender Detransition Clinic
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ABC 13. Texas Children’s Hospital Will Have to Create Potential Gender-Affirming Care Patient List
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City Journal. A Whistleblower on Gender-Affirming Care Speaks Out
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U.S. House Judiciary Committee. Written Testimony of Dr. Eithan Haim
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Texas Tribune. Transgender Care Data Leak Texas Children’s Hospital
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STAT News. Gender-Affirming Care Minors DOJ Subpoenas Suggest Criminal Probe
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U.S. Department of Justice. Department of Justice Subpoenas Doctors and Clinics
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New York Times. Transgender Youth Medical Records DOJ Judge
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Jurist. Federal Grand Jury Subpoena to NYU Langone
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Civil Rights Litigation Clearinghouse. In Re: Motion to Quash Administrative Subpoena to Rhode Island Hospital
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Spectrum News. Texas Children’s Hospital Settles With State, Trump
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Washington Blade. Texas Children’s Hospital Reaches $10 Million Settlement With DOJ Over Gender-Affirming Care