The largest children’s hospital in the United States has reached a settlement with the state of Texas and the Trump administration over the provision of gender-affirming care for transgender youths, agreeing to a $10 million payment. This development was announced on Friday by Texas Attorney General Ken Paxton and representatives from the administration.
Located in Houston, Texas Children’s Hospital disclosed in a statement that the settlement was reached to “safeguard our resources from protracted and expensive legal battles.” The hospital, which caters to over one million patients each year, claimed that it had been under investigation by Paxton’s office and the U.S. Department of Justice for three years. During this period, they contended with what they described as an “unjust campaign of misinformation and misrepresentation.”
In 2022, the hospital made public its decision to cease providing gender-affirming hormone treatments for minors. This decision followed a legal opinion from Paxton labeling such care as “child abuse” and directives from Governor Greg Abbott to the state’s child welfare agency to treat reports of this care as potential abuse. By 2023, Texas had enacted a law banning gender-affirming care for minors, joining at least 27 other states with similar restrictions. In a 2025 ruling, the U.S. Supreme Court upheld the rights of states to impose such bans.
As part of the settlement, Paxton announced that Texas Children’s Hospital will establish a “detransition clinic” that will offer free services to transgender patients for a period of five years. This clinic aims to “reverse the damage” perceived to have been caused by gender-affirming care. Paxton described this facility as the nation’s first of its kind, although this claim could not be independently verified at the time of the announcement.
“This landmark settlement signifies a fundamental shift away from extreme ‘gender’ ideologies,” Paxton stated, highlighting the significance of the agreement.
Paxton’s office did not release a copy of the agreement, and the statement from Texas Children’s did not discuss its specific terms.
The leader of the LGBTQ rights group Equality Texas said Texas Children’s “has lost its integrity and put politics over patients” and called the settlement “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.”
Under Trump, the U.S. Department of Health and Human Services has moved to use its regulatory power to block gender-affirming care for minors, and the DOJ has demanded access to providers’ records. Acting U.S. Attorney General Todd Blanche said in a statement Friday that the DOJ would “use every weapon at its disposal” to stop gender-affirming care for children.
Paxton is running for the U.S. Senate, and he announced the settlement less than two weeks before a May 26 runoff with him locked in a tight race to unseat GOP incumbent Sen. John Cornyn. President Donald Trump — who has aggressively sought to roll back transgender rights — has not publicly endorsed a candidate in the race.
Most major medical groups see access to gender-affirming care as important for people with gender dysphoria. Transgender youth, parents and providers have described it as life-saving for youth who are depressed or suicidal because their gender identities do not match the sex assigned them at birth.
Gender-affirming care may include counseling, medications that block puberty, hormone therapy to produce physical changes or surgeries to transform chests and genitals, although those are rare for minors.
The hospital said it fully cooperated with Paxton’s office and the DOJ, produced more than 5 million documents and did its own internal investigations. All of them showed that it never violated the law, the hospital said.
“These efforts have required significant staff time and financial resources to defend ourselves,” its statement said. “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 said the agreement also requires Texas Children’s to fire — “and never again hire” — five doctors who provided gender-affirming care, agree never to provide such care and to change its bylaws so that any doctor violating the state law automatically loses any privileges at the hospital.
The $10 million payment will go to the state’s Medicaid program. Paxton had accused the hospital of submitting false billings, an allegation it rejected.