DOJ and Texas AG Paxton secured $10M settlement forcing Texas Children's Hospital to end transgender youth care, create detransition clinic

On May 15, 2026, the U.S. Department of Justice and Texas Attorney General Ken Paxton announced a joint settlement with Texas Children's Hospital resolving a fraud investigation into the Houston hospital's billing for pediatric gender-affirming care. Under the agreements, the hospital committed to stop performing puberty-blocker and cross-sex-hormone procedures on minors, to pay over $10 million combined in damages and civil penalties, and to permanently terminate and bar five physicians who had provided the procedures. DOJ's theory rested on the Food, Drug, and Cosmetic Act, the False Claims Act, and federal fraud and conspiracy statutes, alleging the hospital submitted false billing codes to public and private payors to secure insurance coverage for the procedures; the hospital denied all allegations, and DOJ noted the claims remain allegations with no determination of liability.

As a further term, the hospital agreed to establish what both offices described as the nation's first dedicated "detransition clinic," a multidisciplinary program funded by the hospital for at least five years to provide free care to patients who discontinue gender transition. Acting Attorney General Todd Blanche said the department "will use every weapon at its disposal to end the destructive and discredited practice of so-called 'gender-affirming care' for children," and Associate Attorney General Stanley Woodward said the resolution "puts providers of so-called 'gender affirming care' on notice." Paxton's office separately credited the settlement as securing "the nation's first-ever detransition clinic." The action follows a broader Justice Department civil investigation into providers of gender-affirming care for minors nationwide, of which this settlement was the department's first announced resolution.