On May 15, 2026, the U.S. Department of Justice (DOJ) and Texas Attorney General Ken Paxton announced a major civil settlement with Texas Children’s Hospital (TCH), the nation’s largest pediatric hospital, resolving allegations tied to its former provision of gender-affirming care to minors.[1]
TCH’s agreement with the DOJ and the Texas Attorney General is the first of its kind following President Trump’s Executive Order 14187 (January 28, 2025) directing federal agencies to end certain gender-affirming interventions for minors and to investigate suspected fraud relating to that care.
The DOJ described the TCH settlement as a “landmark” step that “protects vulnerable children, holds providers accountable, and ensures those harmed receive the care they need.” In the announcement, Acting Attorney General Todd Blanche made clear the DOJ’s commitment to rigorous enforcement, proclaiming that “[t]he Justice Department will use every weapon at its disposal to end the destructive and discredited practice of so-called ‘gender affirming’ care for children.”
TCH Settlement Resolves Allegations of False Billing for Gender-Affirming Care
The DOJ and the Texas Attorney General’s Office alleged that TCH: (1) violated Texas Senate Bill 14 (2023), which banned healthcare providers from facilitating gender-affirming care for minors; and (2) fraudulently billed public and private payers by using false diagnosis codes to conceal illegal gender-transition interventions.
Under the terms of the civil settlement, TCH is required to:
- Pay more than $10 million in damages and civil penalties to resolve allegations that it submitted false claims to federal payers and related allegations involving false billings to federal and private payers for puberty blockers and cross-sex hormones.
- Cease performing sex-rejecting procedures on minors, including the administration of puberty blockers and cross-sex hormones.
- Establish and fund the nation’s first multidisciplinary “detransition” or restorative care clinic to provide medical support to children harmed by prior interventions and, further, to offer these services for free for the first five years of the clinic’s operation.
- Terminate its relationships with five physicians involved in providing gender-affirming care to patients.
TCH described the agreement as a “difficult decision” to avoid prolonged litigation after cooperating with investigators and producing millions of documents. The hospital has maintained it followed all applicable laws at the time and stopped providing hormone treatments for minors in 2022.
Judges Express Skepticism in Response to DOJ’s Initial Investigatory Actions
Early efforts by the DOJ to comply with EO 14187 were met with resistance and judicial skepticism. In July 2025, the DOJ announced that it had issued more than 20 administrative subpoenas and Civil Investigative Demands (CIDs) to hospitals and providers seeking confidential patient records relating to gender-affirming care provided to minors. A number of recipients successfully challenged the subpoenas in federal court. In quashing or otherwise limiting the government’s demands, courts—including the District of Massachusetts, the District of Rhode Island, and the Western District of Washington— cited overbreadth, insufficient evidence of fraud, patient privacy concerns, and questions about the investigation’s purposes. In quashing one such subpoena, a judge in Rhode Island recently wrote that, “[The Justice Department] has proven unworthy of [its] trust at every point in this case.”
Recent Issuance of Grand Jury Subpoenas Signal Change in DOJ Tactics
Following these initial setbacks, the DOJ has implemented a new criminal investigation strategy designed to avoid a similar outcome. NYU Langone Health, one of the largest health care systems in the northeastern United States, recently reported receiving a grand jury subpoena (dated around May 7, 2026) and noted that it was one of several institutions targeted by the grand jury. Issued by the United States Attorney’s Office for the Northern District of Texas, the subpoenas seek similar categories of materials, including patient records, provider information, and related data on gender-affirming care for minors.
Grand jury subpoenas are powerful investigative tools that can be issued only by a criminal prosecutor and are rarely limited by the courts. Additionally, unlike administrative subpoenas and CIDs, recipients seeking to challenge a grand jury subpoena must do so in the jurisdiction from which it was issued—in this case, the Northern District of Texas—on the narrow grounds that “compliance [with the subpoena] would be unreasonable or oppressive.”[2]
What's Next?
The DOJ has made clear that it will aggressively enforce its mandate to end gender-affirming care for minors. And following a series of setbacks, the DOJ has adopted an aggressive strategy designed to preempt or overcome future legal challenges to its demands in these investigations. This strategy includes the use of a criminal grand jury to subpoena documents—and potentially witness testimony—relating to patients receiving gender-affirming care from hospitals and affiliated health care providers. Because of this, grand jury subpoena recipients seeking to challenge the subpoenas must overcome both the heavy presumption of regularity courts apply to grand jury proceedings and the historical limitations on the judicial review of “matters occurring before the grand jury.”
Those are heavy burdens to overcome. However, this investigation may prove to be sufficiently expansive to justify such challenges. Vedder’s team of seasoned, highly competent Government Investigations and White Collar Defense attorneys—including former prosecutors in the Northern District of Texas—is prepared to present those challenges when appropriate and otherwise assist any subpoena recipients in navigating these difficult waters.
1. See Press Release, “U.S. Dep’t of Justice, Justice Department Secures Landmark Resolution to End Pediatric ‘Gender-Affirming Care’ and Create Detransition Clinic” (May 15, 2026), available at https://www.justice.gov/opa/pr/justice-department-secures-landmark-resolution-end-pediatric-gender-affirming-care-and
2. See FEDERAL RULE OF CRIMINAL PROCEDURE 17(c)(2).
