Texas Children's Hospital, the largest children's hospital in the United States, has agreed to establish the nation's first 'detransition clinic' and pay $10 million in damages and civil penalties as part of a settlement that concluded a multi-year investigation by the Trump administration and the state of Texas.
Settlement Details
Republican Texas Attorney General Ken Paxton and the Department of Justice announced separately on Friday that the Houston-based hospital would also terminate five physicians who provided gender-affirming care to transgender minors. The settlement resolves allegations that the hospital manipulated billing codes to seek reimbursement from Texas's Medicaid program.
The hospital maintained it complied with all laws and produced over 5 million documents during the investigation, which began in 2023. 'Today we made the difficult decision to settle with the Texas Attorney General and the Department of Justice, closing a chapter that has been wrought with falsehoods and distractions,' the hospital stated. 'To be clear — we are settling to protect our resources from endless and costly litigation.'
Political Context
The settlement marks a significant victory for the Trump administration's efforts to restrict gender-affirming care for minors. In 2025, the Supreme Court allowed states to ban such care, enabling 26 states to block access. The DOJ has investigated over a dozen hospitals and clinics offering transition care to youth, and this week launched its first known criminal probe of a New York hospital for providing gender-affirming care. More than 40 hospitals, including those in states where such care remains legal, have closed their programs.
Detransition Clinic Services
A hospital spokesperson said the detransition clinic will 'formalize the supportive, multidisciplinary services we already deliver to all patients who need our care.' Under the agreement, the hospital will provide services at the clinic free of charge for the first five years. Detransition generally refers to individuals who once sought a gender transition and later reversed, stopped, or altered aspects of it. Data on detransition is limited, with some preliminary studies indicating reasons include mental health concerns, identity changes, or external pressure and discrimination.
While the detransition experience is complex, Republicans have used stories from a small group of detransition activists—backed by conservative nonprofits—to push policies restricting gender-affirming care for all.
Background of Investigation
Paxton had long targeted Texas Children's Hospital's transgender youth program. The hospital came under scrutiny in May 2023 after former doctor Eithan Haim alleged the hospital was causing 'malicious harm' to children and shared information with conservative activist Christopher Rufo, who published a story claiming the hospital secretly provided transgender care to minors. At that time, gender-affirming care for minors was legal, but the Republican-led Texas legislature passed a ban effective September 2023.
In 2024, the Biden administration indicted Haim for violating HIPAA by sharing patient information with Rufo. However, during Trump's first week back in office, federal prosecutors dropped the case. Haim and Rufo praised Paxton and the DOJ's actions on Friday. Haim was invited by Sen. Josh Hawley (R-Mo.) to attend Trump's joint address to Congress in March 2025.
Reactions from Advocates
Civil rights advocates condemned the settlement, arguing it disregards medical best practices for transgender people to score political points. 'Paxton is blackmailing a hospital system into creating a resource that no one is asking for. It ignores the actual science and years of data about the overwhelming benefits of gender-affirming care, and it completely disregards the huge number of trans people who owe their lives to the very care Paxton is opposing,' said Brad Pritchett, CEO of Equality Texas.
Kelley Robinson, president of the Human Rights Campaign, stated: 'AG Ken Paxton didn't uncover fraud — he weaponized the law to remove medical professionals and strip trans youth of the care that they and their families have every right to access. And the Trump Administration is taking it further — pursuing criminal charges in New York by violating patient and provider privacy to build a bogus case.'
