Texas Children’s Hospital, the largest children’s hospital in the United States, has agreed to open what officials describe as the nation’s first dedicated “detransition clinic” for minors as part of a major legal settlement tied to transgender healthcare investigations in Texas.
The Houston-based hospital will also fire five doctors accused of violating the state’s ban on gender-affirming care for minors. The agreement settles parallel investigations led by Texas Attorney General Ken Paxton and President Donald Trump’s Justice Department.
State and federal officials announced Friday that the hospital will pay $10 million over allegations that it improperly billed Texas Medicaid for treatments now prohibited under state law. Investigators also accused the hospital of using false billing codes while seeking reimbursements.
Paxton’s office said the years-long investigation focused on procedures and treatments provided to transgender youth at the 1,000-bed medical center.
Under the settlement, Texas Children’s Hospital must permanently revoke the privileges of the five unidentified physicians involved. The doctors will not be rehired or credentialed again by the institution, according to the attorney general’s office.
The agreement also forces the hospital to rewrite its internal bylaws. Any physician found violating Texas laws restricting gender-affirming treatment for minors would automatically lose hospital privileges.
A central piece of the settlement is the creation of the new clinic. State officials said the facility will provide services intended to reverse or manage the effects of gender transition procedures. For the first five years, those services will be offered free to patients.
A spokesperson for Texas Children’s said the program would expand care the hospital already provides.
“The detransition clinic “will formalize the supportive, multidisciplinary services we already deliver to all patients who need our care.””
The hospital denied wrongdoing while confirming the settlement.
“We stand proud knowing we will always put our purpose over politics and that we have and will continue to follow the law,” the hospital said in a statement.
Texas Children’s also said it chose to settle the case to avoid prolonged legal battles and refocus resources on patient care.
Federal investigators described the agreement as part of a broader crackdown on healthcare providers offering gender-related treatments to minors. The Justice Department said its investigation found potential violations involving fraud, conspiracy, and false claims submitted to the government.
The department added that the hospital cooperated during the investigation “as highlighted by its multi-million-dollar commitment to providing care to the victims who most need it.”
The settlement marks a major political and legal victory for conservative opponents of gender-affirming care for minors. The Trump administration has expanded investigations into hospitals and providers across the country, including a criminal probe involving one of New York City’s largest hospital networks.
Civil rights organizations and LGBTQ advocacy groups strongly criticized the agreement, arguing it places political pressure above established medical practices.
“It is deeply appalling to see (the hospital) capitulate to the relentless pressure campaigns of both AG Paxton and the Trump Administration to end this care and penalize physicians who faithfully and lawfully provided it,” said Karen Loewy, senior counsel at Lambda Legal.
The full settlement agreement has not yet been publicly released.
