Texas Children’s Hospital Opens Detransition Clinic After Settlement

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Texas Children’s Hospital has opened a detransition clinic under a settlement with Texas Attorney General Ken Paxton (R) and the U.S. Department of Justice (DOJ). The clinic will provide care to eligible patients who previously underwent gender-transition interventions.

Paxton announced the clinic’s opening on October 27, fulfilling a central requirement of the agreement with the Houston-based hospital. His office described the clinic as the first of its kind in the United States.

The settlement, first announced in May and finalized this summer, also required Texas Children’s to pay $10 million to resolve state and federal claims involving billing for gender-transition interventions. Of that amount, $8.576 million went to the State of Texas.

What the Texas Detransition Clinic Will Provide

According to the attorney general’s office, the multidisciplinary clinic will provide medical care to patients through age 21 who previously underwent gender-transition interventions. It will also offer detransition-related obstetric and gynecological care to patients older than 21.

Patients may receive services at different Texas Children’s locations, depending on their individual needs and the recommendations of their care team. The settlement agreement describes a range of potential services, including medical and mental health care.

Texas Children’s must fully fund the clinic’s services for its first five years, allowing eligible patients to receive care at no cost during that period. The settlement also requires the hospital to promote the clinic on its website.

Texas Children’s Hospital Settlement and Medicaid Claims

The clinic is one component of a broader settlement stemming from an investigation into Texas Children’s Hospital and its provision of gender-transition interventions.

Paxton’s office alleged that the hospital improperly billed Texas Medicaid for interventions that were not eligible for coverage, in some cases by using false diagnosis codes. The claims were brought under the Texas Health Care Program Fraud Prevention Act and the federal False Claims Act.

The $10 million payment resolved those claims. The settlement includes a separate agreement with the Justice Department, which describes alleged billing conduct involving Texas Medicaid, Healthy Texas Women, and the Children’s Health Insurance Program (CHIP) beginning in 2016 and continuing through the agreement’s effective date. The federal agreement states that it is not an admission of liability by Texas Children’s Hospital or the affiliated Texas Children’s entities that are parties to it, nor a concession by the United States that its claims lack merit.

In addition to the payment and the clinic requirement, the settlement required the permanent termination of medical staff privileges for multiple physicians. It also requires Texas Children’s to change its bylaws to address the relinquishment of privileges when a physician performs gender-transition interventions covered by the settlement.

Texas Children’s previously said it settled to avoid lengthy and costly litigation and to redirect resources toward patient care.

Texas Laws on Gender Transition and Detransition Care

The Texas Children’s Hospital settlement follows legislation addressing gender-transition interventions for minors and insurance coverage for care after those interventions.

In 2023, the Legislature passed Senate Bill 14 (SB 14), authored by State Sen. Donna Campbell (R-Bulverde), which prohibits physicians and other health care providers from performing certain surgeries or prescribing puberty-blocking medications and hormone treatments to minors for gender-transition purposes, subject to exceptions in the law. It also bars public funding, as well as Medicaid and CHIP coverage, for prohibited services. SB 14 took effect on September 1, 2023, and in 2024 the Texas Supreme Court reversed a lower-court injunction against the law, rejecting a state constitutional challenge.

Some of the billing conduct alleged in the federal agreement predates SB 14. The settlement resolves billing-related claims; it is not a court finding that any of the alleged conduct violated the 2023 law.

During the 89th Legislative Session (2025), lawmakers passed Senate Bill 1257 (SB 1257), authored by State Sen. Bryan Hughes (R-Mineola), which established insurance coverage requirements for certain care related to gender-transition procedures and treatments.

Under the enacted law, an applicable health benefit plan that provides or has provided coverage for an enrollee’s gender-transition procedure or treatment must cover treatment of related adverse consequences, necessary monitoring, and care needed to manage, reverse, reconstruct from, or recover from that treatment. Applicable plans that offer transition-related coverage must also provide the specified coverage to an enrollee who previously underwent such treatment, even if they were not covered by the plan at the time.

SB 1257 took effect on September 1, 2025, with its coverage requirements applying to plans delivered, issued for delivery, or renewed on or after January 1, 2026. The law applies to specified plans and programs and excludes self-funded health benefit plans governed by the federal Employee Retirement Income Security Act (ERISA).

During the session, Texas Policy Research recommended that lawmakers vote for SB 1257. Its analysis emphasized access to follow-up and reversal care while also recognizing that the legislation imposed coverage requirements on affected health plans.

These insurance requirements are separate from the Texas Children’s settlement. SB 1257 requires coverage under applicable plans, not free care; the settlement, by contrast, requires the hospital to fund its clinic’s services for the first five years.

Policy Implications of the Texas Detransition Clinic

The clinic creates a dedicated avenue for eligible patients seeking care after gender-transition interventions. Its effectiveness will depend on whether patients can readily access appropriate specialists, obtain information about available services, and receive care tailored to their individual circumstances.

The five-year funding requirement also raises a longer-term question about the availability and cost of services after that period ends. Some patients may need care that extends beyond the settlement’s initial five-year funding commitment. SB 1257 may help some of them obtain coverage, but whether it does depends on the terms and applicability of their health plans.

The settlement also illustrates how state and federal authorities can use health care fraud enforcement and negotiated settlements to require changes in a hospital’s practices. The clinic requirement applies only to Texas Children’s; it does not establish a statewide requirement for other hospitals to create similar programs.

For Texas policymakers, the development may prompt further discussion about access to detransition-related care, oversight of Medicaid billing, and the responsibilities of health care providers. Those discussions will benefit from clear information about patient needs, treatment options, and the outcomes of the services offered.

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