HOUSTON — Texas Children’s Hospital has agreed to create what state and federal officials describe as the nation’s first “detransition clinic,” pay $10 million and revoke privileges for five physicians as part of a settlement with the Texas Attorney General’s Office and the U.S. Department of Justice over gender-transition care for minors.
The settlement, announced Friday, resolves a years-long investigation into whether the Houston-based pediatric hospital violated Texas law and Medicaid billing rules while providing transition-related medical care to minors. Attorney General Ken Paxton’s office said the agreement requires Texas Children’s to stop providing gender-transition services to minors, establish new compliance measures and fund the clinic’s services for five years at no cost to patients.
Paxton called the settlement a major victory and said the hospital would pay $10 million for allegedly billing Texas Medicaid for services the state says were not allowed, including claims involving what his office described as false diagnosis codes. His office also said the hospital must terminate and revoke privileges for multiple physicians involved in the care.
The Justice Department said the agreement is the first resolution under its national investigation into providers of pediatric gender-affirming care. DOJ officials said Texas Children’s agreed not to perform procedures on children that include puberty blockers and cross-sex hormones.
Texas Children’s said it settled to end costly litigation and investigations, not because it agreed with the allegations. In a public statement, the hospital said it had produced more than 5 million documents to state and federal authorities and maintained that reviews continued to support its position that it complied with the law.
The hospital said the decision to settle was difficult but necessary to protect resources and keep its focus on patient care. Texas Children’s also said the new clinic would provide “supportive, multidisciplinary services” already delivered to patients who need care, though the hospital has not released details about when the clinic will open or exactly what services it will offer.
The agreement follows Texas’ 2023 law banning most gender-transition medical treatments for minors. That law, Senate Bill 14, prohibits physicians from prescribing puberty blockers, hormone therapy or performing transition-related surgeries for people under 18 for the purpose of gender transition. Supporters of the law argue such treatments are inappropriate for minors and say the state has a duty to protect children from medical decisions they may later regret.
Opponents argue the settlement is part of a broader political campaign against transgender people and medical providers. LGBTQ advocates and some Democratic lawmakers said the clinic was being created through legal pressure rather than medical judgment. They also argued that patients who stop or reverse treatment already can receive follow-up care through existing medical channels, and that the settlement could discourage doctors from providing care in politically sensitive areas.
The dispute highlights the sharp divide over gender-affirming care for minors. Paxton and other state officials frame the issue as protecting children and enforcing state law. Medical and civil-rights critics frame the issue as government interference in decisions that they say should be made by doctors, parents and patients.
The settlement also raises questions about how hospitals will operate in states with strict limits on transgender medical care. Texas Children’s is one of the largest pediatric hospitals in the country, and its agreement could become a model for future enforcement actions or settlements involving other medical providers. Reuters reported that the agreement includes bylaw changes that would automatically revoke privileges for doctors who violate Texas’ ban on gender-transition care for minors.
For now, the legal fight between Texas officials and Texas Children’s appears resolved through settlement. But the larger debate over transgender medical care, state authority, parental rights, medical standards and federal enforcement is far from over.
