Settlement Ends Three-Year Investigation
The settlement concludes a multi-year investigation involving Texas Children’s Hospital, the nation’s largest pediatric medical center, and its past provision of gender-transition medical care for minors.
Texas officials alleged that the hospital improperly billed Texas Medicaid and other payors for prohibited procedures using inaccurate diagnosis codes. The hospital agreed to a $10 million payment to settle the investigation and related allegations.
What the Agreement Requires
Under terms announced by Texas officials, the hospital must stop providing youth gender-transition services, terminate and revoke the privileges of five doctors connected to that care, and establish a clinic described as a detransition clinic.
Texas officials said the clinic will provide restorative and follow-up care for patients who seek help addressing the effects of previous transition-related treatment. The hospital is expected to fund those services without charge for qualifying patients during the first five years.
The agreement includes a $10 million payment, an end to youth gender-transition services, permanent action involving five physicians, and the creation of a clinic focused on detransition-related care.
Texas Children’s Hospital Responds
Texas Children’s Hospital said it had complied with state and federal law. The hospital said it chose to settle after years of investigations and litigation pressure in order to redirect resources toward patient care, medical research, and its broader mission.
The hospital stated that the agreement would allow it to close a difficult chapter and focus again on life-saving care and the work of its clinicians and scientists.
Paxton Calls It a Major Shift
Attorney General Ken Paxton described the agreement as a major victory in his campaign against youth gender-transition medical care. His office said the new clinic would provide help to people who wish to address or reverse effects associated with prior interventions.
Paxton also said his office would continue investigating hospitals and providers it believes violate Texas law governing medical treatment for minors.
Earlier Lawsuit and Billing Allegations
Earlier in 2026, Paxton filed a lawsuit against Texas Children’s Hospital alleging that the facility violated the state’s ban on youth gender-transition medical care.
The state also alleged that the hospital used improper diagnosis codes to seek Medicaid reimbursement for procedures Texas officials considered prohibited under state law. The hospital disputed those allegations and maintained that it had followed the law.
The Clinic’s Purpose
The exact services to be offered by the proposed clinic have not been fully detailed publicly. Texas officials have said it will focus on people seeking support related to previous gender-transition medications, procedures, or surgeries.
Gender dysphoria is commonly described as distress that can occur when a person’s gender identity does not align with the sex assigned at birth. Care described as gender-affirming can range from social changes, such as names, pronouns, and clothing, to medical interventions including puberty blockers, hormone therapy, and, in limited cases, surgical treatment.
A Continuing National Debate
Supporters of the settlement say it creates accountability, transparency, follow-up care, and an option for patients who seek to discontinue or address aspects of prior treatment.
Critics argue the agreement is politically motivated and may restrict access to care supported by major medical organizations for some patients. The issue remains one of the most contested debates involving healthcare, parental rights, medical ethics, state law, and treatment for minors.