Texas Children’s Hospital Said It Stopped Transitioning Kids in 2022. It Didn’t — and Just Paid $10 Million to Admit It.
In March 2022, Texas Children’s Hospital — the largest children’s hospital in the country — told the public it had stopped prescribing puberty blockers and cross-sex hormones to minors, after Attorney General Ken Paxton (R-TX) issued an opinion declaring such treatment a form of child abuse under state law. Internal hospital records leaked a year later told a different story.
On August 5, 2026, Texas Children’s finalized a settlement resolving a sealed federal False Claims Act lawsuit and a parallel Texas Medicaid-fraud investigation: the hospital will pay $10,291,200combined, permanently strip five physicians of hospital privileges, and build and fund the nation’s first hospital-based “detransition clinic.” It must also issue a written statement acknowledging its providers “performed sex-rejecting procedures on both minor and adult patients” — retracting the public claims that started this case.
The path to that settlement ran through two whistleblowers — one of whom the Biden administration’s Justice Department indicted, not the hospital.
- $10,291,200 combined settlement — $8,576,000 to the State of Texas plus $1,715,200 to whistleblower Vanessa Sivadge — Texas Attorney General's Office, Aug. 5, 2026
- Five physicians permanently stripped of hospital privileges; bylaws now make it automatic going forward — Settlement terms, Texas AG's Office
- 2022–2023 the window Texas Children's told the public it had halted pediatric gender-transition treatment while, whistleblowers allege, quietly continuing it — City Journal, May 2023
- 4 felony counts filed against whistleblower Dr. Eithan Haim by a prosecutor later recused over an undisclosed hospital-linked conflict of interest — all dismissed with prejudice — DOJ dismissal order, Jan. 24, 2025
Texas Children’s ran its pediatric gender program through what its own published clinical literature called its Multidisciplinary Gender Medicine Team. In February 2022, Attorney General Ken Paxton (R-TX) issued a nonbinding opinion declaring puberty blockers, cross-sex hormones and related procedures for minors a form of child abuse under Texas law, and Governor Greg Abbott (R-TX) directed the state’s child-welfare agency to investigate. The following month, Texas Children’s announced it would pause hormone-related prescriptions for existing adolescent patients, saying the step protected physicians and families from potential criminal exposure.
Dr. Eithan Haim, a general surgeon with admitting privileges at the hospital, said it never actually stopped. In April 2023 he had his access to the hospital’s electronic health-record system reactivated, pulled internal documents, and in May 2023 shared them with Christopher Rufo, a senior fellow at the Manhattan Institute, who published the records in City Journal. According to Haim and the documents he provided, at least three physicians associated with Texas Children’s continued performing the procedures on children between 11 and 17 through 2023 — a year after the hospital’s public announcement. Weeks later, the Texas Legislature passed Senate Bill 14, banning gender-transition procedures for minors statewide effective that September.
The Biden administration’s Justice Department, then led by Attorney General Merrick Garland, did not investigate the hospital. It investigated Haim. A federal grand jury indicted him on four counts of criminally violating HIPAA — obtaining and disclosing patient health information under false pretenses — in an indictment led by Assistant U.S. Attorney Tina Ansari and unsealed June 18, 2024, exposing him to up to 10 years in prison and $250,000in fines per count. It later emerged that Ansari’s family owned a Houston vending-and-coffee-service company with contracts across the same hospital network, including Texas Children’s — an undisclosed conflict of interest that got her removed from the case. On January 24, 2025, Acting U.S. Attorney Jennifer B. Lowery moved to dismiss all four counts with prejudice, and Judge David Hittner signed the order.
Haim was not the only person inside Texas Children’s raising alarms. Vanessa Sivadge, a nurse at the hospital’s Specialty Care clinic in Cy-Fair, had asked for a religious exemption from dispensing puberty blockers and cross-sex hormones to minors. The hospital denied it and fired her in 2024. Sivadge had also seen — and would later attest to — the same pattern Haim described: gender-transition treatment continuing for pediatric patients after the hospital’s public 2022 statement that it had stopped.
What the public didn’t know at the time was that Sivadge had already filed a sealed lawsuit. Represented by Burke Law Group, she brought a federal False Claims Act qui tam action — filed under seal as United States ex rel. Doe v. Texas Children’s Hospital, et al., later identified publicly as Sivadge v. Texas Children’s Hospital, Case No. 4:24-cv-2018, in the U.S. District Court for the Southern District of Texas — naming Texas Children’s Hospital and its Medicaid managed-care arm, Texas Children’s Health Plan. The complaint alleges that from at least 2010 through the settlement, the hospital and affiliated physicians billed Texas Medicaid and other insurers for gender-transition treatment by entering false diagnosis codes — attributing claims to conditions the patients did not actually have — to secure reimbursement for procedures the hospital had told the public it no longer performed.
The U.S. Department of Justice’s Civil Division and the Texas Attorney General’s Healthcare Program Enforcement Division opened parallel investigations, eventually reviewing more than 5 million pages of hospital records. That combined federal-state posture — a private relator’s sealed suit alongside a state Medicaid-fraud probe opened in 2023 — is what ultimately produced the settlement.
The agreement, announced in principle on May 15, 2026 and formally finalized on August 5, 2026, resolves claims under the federal False Claims Act, the Texas Medicaid Fraud Prevention Act, the federal Food, Drug and Cosmetic Act, and federal fraud and conspiracy statutes. Texas Children’s will pay $8,576,000 to the State of Texas and $1,715,200 to Sivadge as her relator’s share — a combined $10,291,200that Paxton’s office and most coverage round to “$10 million.”
Like most False Claims Act resolutions, the settlement does not constitute a blanket admission of legal liability. Texas Children’s own statement, issued when the deal was first announced, said “all reviews and investigations continue to support the facts — we have been compliant with all laws,” and that it was settling “to protect our resources from endless and costly litigation” after three years it called “wrought with falsehoods and distractions.” But it is not a simple denial either: the agreement separately requires Texas Children’s to issue a written statement acknowledging its providers “performed sex-rejecting procedures on both minor and adult patients,” and that its earlier public statements “are removed and superseded” — a specific factual concession, distinct from conceding fraud liability, that corroborates what Haim and Sivadge said.
The settlement also permanently and irrevocably strips five physicians of hospital privileges, bars former physicians among them from ever regaining credentials at any Texas Children’s facility, and rewrites hospital bylaws so that performing a gender-transition procedure on a minor now triggers automatic loss of privileges going forward. Texas Children’s must also train staff on “the dangers and illegality of sex-rejecting ‘gender transition’ treatments” and on whistleblower protections — training that would have applied to Haim and Sivadge four years too late.
The settlement’s most novel term is operational, not financial: Texas Children’s must open the nation’s first hospital-based Detransition Clinic by the end of October 2026, offering endocrinology, surgical reversal, primary care, fertility counseling, psychiatry and psychotherapy — free of charge for at least five years — to patients who previously received gender-transition treatment there.
Assistant Attorney General Brett A. Shumate, head of the DOJ’s Civil Division, called the settlement institutional reform rather than pure punishment: “I am grateful that Texas Children’s wants to be part of the solution and no longer the problem,” he said. Attorney General Ken Paxton (R-TX) was blunter: “This settlement sends an unmistakable message: if you put radical ideology over children’s health, my office will go after you.”
Today is a monumental day in the fight to stop the radical transgender movement. My office helped establish the first-ever Detransition Clinic, secured millions, and have ensured that the deranged child mutilators who hurt our kids are fired and held accountable.
The impossible was done by @KenPaxtonTX and his team at the @TXAG's office. Because of their hard work, the country's first detransitioner clinic will be opening at Texas Children's Hospital. I cannot believe this happened.
Sivadge, whose sealed lawsuit forced the reckoning, marked the finalization with a message of her own.
“Your whistleblower case will one day result in America's First Detransitioner Clinic... It's over. I won. To God be the Glory.”
Vanessa Sivadge · former Texas Children's Hospital nurse · relator, Sivadge v. Texas Children's Hospital
Attorney General Paxton Finalizes Historic Settlement with Texas Children's Hospital, Creating First-Ever Detransition Clinic and Securing Nearly $10 Million for Texas
The settlement resolves a Medicaid billing-fraud case. It does not undo the two years a federal prosecution machine spent chasing the person who exposed it. The Biden administration’s Justice Department indicted Haim on HIPAA charges carrying decades of theoretical prison exposure, using a prosecutor with an undisclosed personal financial stake in the hospital network she was defending — while the underlying Medicaid billing fraud went uninvestigated by that same department for years. It took a change in DOJ leadership, and Sivadge’s separate, privately filed lawsuit, to reverse course.
Ken Paxton (R-TX), Texas Attorney General — opened the state investigation in 2023 and negotiated the finalized settlement announced Aug. 5, 2026.
Greg Abbott (R-TX), Governor — directed the state child-welfare investigation that preceded Texas Children’s 2022 public halt announcement.
Merrick Garland, U.S. Attorney General under President Biden (D) — led the Justice Department that indicted whistleblower Dr. Eithan Haim rather than the hospital.
Tina Ansari, Assistant U.S. Attorney — led Haim’s 2024 indictment; removed from the case after an undisclosed family financial tie to the hospital network surfaced.
Brett A. Shumate, Assistant Attorney General, DOJ Civil Division — negotiated the finalized 2026 settlement under the Trump administration’s DOJ.
Texas Children’s Hospital told the public in 2022 it had stopped. A settlement it finalized on August 5, 2026 requires it to say, in writing, that it hadn’t — and to pay $10,291,200and build a detransition clinic to prove it means it now. The hospital denies broader legal liability, as most settlements do. What it can no longer deny is what its own providers did. And the whistleblower the Biden Justice Department chose to prosecute instead of the hospital walked away with all charges dismissed with prejudice — a reminder that institutional accountability, when it finally arrived, came from a change in DOJ leadership and a nurse’s sealed lawsuit, not from the agency that had the evidence first.
