Texas Children’s Hospital Agrees to Open Nation’s First ‘Detransition Clinic’

The Houston-based hospital agreed to pay $10 million, terminate five physicians, and establish a clinic focused on reversing gender-affirming treatments for minors as part of a settlement with Texas and the Trump administration, drawing sharp condemnation from LGBTQ advocates and medical rights groups.

Texas Children’s Hospital, the largest children’s hospital in the United States, will open what officials describe as the nation’s first “detransition clinic” for minors as part of a sweeping settlement agreement with Texas Attorney General Ken Paxton and the U.S. Department of Justice over allegations tied to gender-affirming care and Medicaid billing practices.

The settlement, announced Friday, requires the Houston-based hospital system to pay $10 million, permanently terminate five physicians who provided gender-affirming treatments to minors, and establish a multidisciplinary clinic designed to help patients reverse the effects of gender-transition-related medical interventions.

State and federal officials framed the agreement as a major victory in the growing national effort to restrict gender-affirming healthcare for transgender youth.

In a statement announcing the settlement, Paxton said the clinic would “help patients reverse the damage caused by ideologically-motivated physicians who harmed patients by performing dangerous medical interventions for the purpose of ‘transitioning.’”

The Justice Department described the agreement as the first federal resolution prioritizing what it called “restorative care” for minors who underwent gender-transition procedures.

“The Justice Department will use every weapon at its disposal to end the destructive and discredited practice of so-called ‘gender-affirming care’ for children,” Acting Attorney General Todd Blanche said in a statement. “Today’s resolution protects vulnerable children, holds providers accountable, and ensures those harmed receive the care they need.”

The settlement stems from a years-long investigation into whether Texas Children’s improperly billed the state Medicaid program for gender-affirming treatments using false diagnostic codes after Texas banned certain forms of gender-affirming medical care for minors.

Paxton’s office alleged that the hospital engaged in inaccurate billing practices to seek Medicaid reimbursement for treatments prohibited under Texas law. Reuters reported that the hospital system produced more than five million documents during the investigation.

Texas Children’s denied wrongdoing and said it cooperated fully with both state and federal authorities throughout the probe.

“We are settling to protect our resources from endless and costly litigation,” the hospital said in a statement. “This settlement will allow us to redirect those precious resources to focus on the life-saving care and groundbreaking discoveries of our exceptional clinicians and scientists.”

The hospital added that it has “always put our purpose over politics” and maintained that it followed applicable laws.

A spokesperson for Texas Children’s said the detransition clinic would formalize services the hospital already provides to patients seeking supportive care following medical treatment.

Under the agreement, the hospital will fund all services offered through the clinic for at least the first five years, according to Paxton’s office. The hospital must also revise its bylaws to require automatic loss of privileges for any physician found to be in violation of Texas’ ban on gender-affirming care for minors.

The identities of the five physicians slated for termination have not been publicly released.

The settlement arrives amid escalating national attacks on transgender healthcare access, particularly for minors. Since returning to office, President Donald Trump’s administration has intensified investigations into hospitals and healthcare systems providing gender-affirming care to transgender youth.

Federal investigators are also examining additional healthcare providers across the country, including a criminal probe involving a major New York City hospital network, according to Reuters.

Civil rights organizations and LGBTQ advocacy groups sharply criticized the agreement, warning it could further stigmatize transgender people and embolden similar actions in other states.

Karen Loewy, senior counsel at Lambda Legal, called the settlement “deeply appalling” and accused Texas Children’s of surrendering to political pressure from Paxton and the Trump administration.

“Physicians who faithfully and lawfully provided this care are now being punished for following established medical standards,” Loewy said.

Brad Pritchett, chief executive officer of Equality Texas, said the state was “blackmailing a hospital system into creating a resource that no one is asking for.”

“It is embarrassing that a hospital once revered for its care has lost its integrity and put politics over patients,” Pritchett said.

Andrea Segovia, senior field and policy director for the Transgender Education Network of Texas, warned that the agreement could become a blueprint for other conservative-led states seeking to curtail transgender healthcare access.

“It’s terrifying what other states will take from this,” Segovia told the Texas Tribune, adding that it was “infuriating” to see resources directed toward detransition services while broader healthcare access continues to shrink.

Major medical organizations, including the American Academy of Pediatrics, American Medical Association and American Psychological Association, continue to support gender-affirming care for transgender youth, describing it as medically necessary and evidence-based care for some patients experiencing gender dysphoria.

The settlement agreement itself has not yet been publicly released.