HHS report raises scrutiny of gender-affirming care billing and coding

HHS followed up its final rule blocking Medicaid funding for gender-affirming care in minors by publishing a commissioned report alleging “potentially fraudulent” billing and coding among providers of the services.

The report, released Aug. 13, alleges that financial incentives drove hospitals and physicians to expand access to the care, and that deceitful billing practices took place.

“What began as a handful of specialized clinics in the early 2010s grew into programs at over 225 hospitals and health systems nationwide by the early 2020s,” the report claims.

A news release states that Vice President JD Vance and HHS Secretary Robert F. Kennedy Jr. referred hospitals listed in the report to the Department of Justice (DOJ), which could investigate possible violations of federal law.

“This report identifies troubling billing practices that demand scrutiny,” Kennedy stated.

As suggested by its title, “Wolves in White Coats: How Doctors and Hospitals Pushed and Profited from the Fraud of ‘Gender Medicine,’” along with the affiliations of some of the 10 listed authors, the report has an undertone of advocacy. It uses strongly critical language about gender-affirming care.

Citations for the findings include DOJ investigations into two health systems and legal settlements involving a pair of systems. The authors also said they analyzed claims data indicating that millions of dollars were improperly billed for gender-affirming care.

HHS alleges improper coding in gender-affirming care claims

In the report, gender clinics and other providers are said to have created a “captive patient” model wherein minors become long-term patients who require ongoing treatment that might have been unnecessary at the outset.

Lifetime cost estimates can approach $170,000 per patient, according to the report. HHS refers to data estimating nearly $120 million in submitted charges involving gender-related services for minors in 2019-2023, with 5,747 minors who underwent surgeries and 8,579 who received hormones or puberty blockers.

The reference for those findings is a March 2026 report by the Stop the Harm Database, a public online archive launched by Do No Harm, which advocates against gender-affirming care in minors and healthcare initiatives that it says prioritize diversity over meritocratic standards.

In the HHS report, providers are alleged to have substituted out gender dysphoria codes to secure reimbursement, instead using other codes that would not get flagged by payers. Such practices are described as violating the False Claims Act (FCA), along with CMS guidelines about ICD-10 coding specificity.

Referring to the period of 2015-2025, the authors said their analysis identified $47.6 million in billed charges for puberty blockers on claims carrying an E34-series endocrine disorder diagnosis but no gender-related or central precocious puberty diagnosis. Of that amount, $42.6 million involved E34.9, “Endocrine Disorder, Unspecified.”

The report identified $11.1 million in charges for puberty blockers on claims carrying an E30.1 central precocious puberty diagnosis for patients ages 13 to 17. Such codes are suspect, the authors wrote, because the condition is typically diagnosed before age 8 or 9, with use of puberty blockers generally discontinued by age 11. The authors thus say the submitted claims for patients ages 13 to 17 are inconsistent with the diagnosis.

Limitations with the methodology and references

An appendix to the report lists all organizations that billed what are deemed to be suspicious claims. A stated caveat is that the lists are not indicative of volume, meaning a listed provider organization could have billed only one disputed claim.

HHS also does not characterize the claims analysis as a determination that the identified claims were improper. The report says the results are “directional signals” that “require verification against underlying records.”

Cited settlements in FCA cases against Texas Children’s Hospital (TCH) and Cleveland Clinic took place out of court, meaning the allegations have not been independently adjudicated. The DOJ did not determine liability in either case, and neither organization admitted fault.

The $10 million Texas Children’s settlement, arising from a joint investigation by the DOJ and the Texas attorney general’s office, involved issues of coding accuracy but also general Medicaid billing of gender-affirming services that had been made illegal under Texas state law in 2023, along with “misbranding” of services in the context of commercial insurance billing.

The settlement with Cleveland Clinic involved a payment of $308,000. In addition, the health system agreed to a 20-year halt on gender-related care for minors, although such services already are restricted in the state of Ohio. Cleveland Clinic denied the fraud allegations and attributed the discrepancies to “an unintentional coding issue involving a small number of patients.”

TCH agreed to attest annually for six years that “all coding for treatment of gender dysphoria, gender dysphoria-like conditions, and endocrine disorders is specific and accurate,” according to the settlement with the state. Cleveland Clinic pledged to conduct an annual review of medical records to ensure appropriate billing.

Other hospital investigations remain contested

The report also notes DOJ court filings describing billing practices that merited further scrutiny at Children’s Hospital of Philadelphia and Boston Children’s Hospital. The department subpoenaed patient records of minors who received gender-affirming care at those facilities.

Courts in both instances granted motions to quash the subpoenas, citing a lack of a legitimate investigative purpose and an invasion of privacy. An appeal by the government remains pending in the Boston Children’s matter.

The HHS report also details policy decisions made during the Biden administration, which the authors say “sought to impose, unilaterally, general ideology through reinterpreting Federal civil rights law.”