America’s biggest pediatric medical center has reached a settlement deal with Texas officials and the Trump administration concerning transgender youth treatment that involves a $10 million payment to the state, according to an announcement made Friday by the administration and Texas Attorney General Ken Paxton.
Texas Children’s Hospital, located in Houston, released a statement saying it agreed to the settlement “to protect our resources from endless and costly litigation.” The medical facility, which treats over 1 million patients each year, stated that Paxton’s office and the U.S. Department of Justice had been investigating its treatment practices for three years, forcing the hospital to “navigate an unconscionable campaign of mistruths and mischaracterizations.”
The medical center declared in 2022 that it would cease providing gender-affirming hormone treatments to minors following Paxton’s legal opinion labeling such treatment as “child abuse” and Gov. Greg Abbott’s directive for the state’s child welfare department to investigate such care reports as abuse. Texas became the largest state by population to prohibit gender-affirming treatment for minors in 2023 — with at least 27 states banning or limiting it — and the U.S. Supreme Court decided in June 2025 that states have the authority to implement such bans.
According to Paxton, the settlement will mandate that Texas Children’s establish a “detransition clinic” offering free treatment to transgender patients for five years to “reverse the damage” from gender-affirming treatment. He characterized it as the nation’s first “detransition clinic” of this type, though this claim could not be immediately verified.
“This historic settlement reflects an institutional and fundamental shift away from radical ‘gender’ ideology,” Paxton stated when announcing the settlement.
Paxton’s office did not make the agreement document public, and Texas Children’s statement did not address the settlement’s specific provisions.
The head of the LGBTQ rights organization Equality Texas stated that Texas Children’s “has lost its integrity and put politics over patients” and described the settlement as “embarrassing.”
“Paxton is blackmailing a hospital system into creating a resource that no one is asking for,” CEO Brad Pritchett said in a statement. “It ignores the actual science and years of data about the overwhelming benefits of gender-affirming care.”
During the Trump administration, the U.S. Department of Health and Human Services has begun using its regulatory authority to prevent gender-affirming treatment for minors, while the DOJ has demanded access to healthcare providers’ records. Acting U.S. Attorney General Todd Blanche stated Friday that the DOJ would “use every weapon at its disposal” to halt gender-affirming treatment for children.
Paxton is campaigning for the U.S. Senate and revealed the settlement fewer than two weeks before a May 26 runoff election where he faces a close contest to defeat GOP incumbent Sen. John Cornyn. President Donald Trump — who has actively worked to restrict transgender rights — has not publicly backed a candidate in this race.
Leading medical organizations consider access to gender-affirming treatment essential for individuals with gender dysphoria. Transgender young people, families and healthcare providers have characterized it as life-saving for youth experiencing depression or suicidal thoughts because their gender identities differ from their assigned sex at birth.
Gender-affirming treatment can involve counseling, puberty-blocking medications, hormone therapy for physical changes or surgical procedures to alter chests and genitals, though surgeries are uncommon for minors.
The hospital stated it fully collaborated with Paxton’s office and the DOJ, providing over 5 million documents and conducting its own internal reviews. All investigations demonstrated that it never broke the law, according to the hospital.
“These efforts have required significant staff time and financial resources to defend ourselves,” the hospital’s statement read. “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.”
Paxton announced the agreement also mandates that Texas Children’s dismiss — “and never again hire” — five physicians who delivered gender-affirming treatment, commit to never providing such care again and modify its bylaws so any doctor violating state law automatically forfeits hospital privileges.
The $10 million payment will be directed to the state’s Medicaid program. Paxton had claimed the hospital submitted fraudulent billings, which the facility denied.
