The administration is using the rule-making process to cut off culpable hospitals from Medicaid and the Children’s Health Insurance Program.
The Department of Health and Human Services will soon begin the rule-making process to prohibit the federal government from directly funding sex-trait modifications for minors through Medicaid and the Children’s Health Insurance Program (CHIP), National Review has learned.
The White House is in “the final stage of review for a new rule that would make it a condition of hospitals participating in Medicare or Medicaid that they not provide sex trait modifications to minors,” according to an administration official. The prohibition will apply to hospitals that provide puberty blockers, cross-sex hormones, and gender-transition surgeries to minors.
The groundbreaking decision by the White House to use the power of the executive to ban federally funded gender-transition services for minors follows an unsuccessful attempt by congressional Republicans to ban federal funding for such practices through the budget reconciliation process. The Senate parliamentarian ruled that the legislative language included in the “One Big Beautiful Bill Act” did not clear the Byrd rule, prompting GOP lawmakers to spike the language from the final bill that passed earlier this month.
The Trump administration’s latest move could have far-reaching effects. While some children’s hospitals paused gender-transition services for minors earlier this year in response to the Trump administration’s executive order aggressively pushing back against the practice, the new guidance could have drastic financial consequences for hospitals that do not change their policies.
“We are actively combing through all federal grants that go to the hospitals that still provide these procedures (surgeries, hormones, and puberty blockers) to kids, and sorting through what funding could be cut without jeopardizing the health and safety of other patients and critical research needs,” an administration official tells National Review. “We are identifying what cuts can be made consistent with ongoing injunctions and what cuts can be made immediately after the injunction is lifted.”
The White House has identified multiple hospitals to investigate and audit over their alleged failure to obtain informed consent – in compliance with existing informed consent conditions for Medicaid and Medicare reimbursements — from children seeking gender-transition services. Citing the testimony of patients who regret their childhood transitions, the administration claims the hospitals routinely fail to inform the children in their care about the damaging and often irreversible effects of gender-transition treatments.
An administration official tells National Review that multiple individuals who underwent these procedures as children and have since “de-transitioned” have alleged publicly, in litigation, and “in private” with administration officials “that they were misled by providers and did not have an opportunity to give informed consent to these procedures.”
The White House is also signaling an eagerness to investigate Medicaid and Medicare fraud related to child-transition care. According to the senior administration official, HHS and other relevant departments are also “reviewing specific instances of questionable billing for sex trait modifications, particularly in states which have already prohibited these procedures for minors — if a credible allegation of fraud is found, Medicaid funding can be cut off quickly and entirely.”
Health care provider testimony suggests this phenomenon is common. In April, for example, general surgeon Eithan Haim testified before the House Judiciary Committee’s Subcommittee on the Constitution and Limited Government about how some hospitals use deceptive billing codes to fraudulently disguise gender-transition surgeries as other procedures. He cited a fact sheet from the progressive group Campaign for Southern Equality, which provides guidance to health care providers on which insurance codes are rejected and accepted by insurance companies.
“What this document does is inform doctors at these clinics how to get insurance companies, whether private or government, to cover interventions without revealing that it’s being used for gender dysphoria,” Haim testified. For example, the fact sheet advocates that doctors use code E34.9 to diagnose patients with an “endocrine disorder” so that children can receive insurance-accepted hormone therapy, and code “ovarian cyst” so that doctors can remove children’s ovaries for gender-transition purposes. The fact sheet has since been removed from the nonprofit’s website.
The administration is currently reviewing current hospital policies to evaluate which providers should be removed from Medicaid or Medicare reimbursement for providing “excess or improper care” and therefore failing to comply with the new American Cass report on the long-term effects of these interventions.
HHS’s forthcoming rule changes are part of an aggressive effort by the Trump administration to roll back pediatric gender transition care – often called gender-affirming care by some medical professionals and activists — nationwide. Earlier this year, President Trump signed an executive order, titled “Protecting Children from Chemical and Surgical Mutilation,” directing relevant agencies to roll back gender-transition services for minors.
Since then, HHS released a detailed review of evidence and best practices surrounding the “rapid onset gender dysphoria” diagnosis for minors and the pediatric medical interventions that often follow. “These interventions carry risk of significant harms including infertility/sterility, sexual dysfunction, impaired bone density accrual, adverse cognitive impacts, cardiovascular disease and metabolic disorders, psychiatric disorders, surgical complications, and regret,” the review concluded. “Meanwhile, systematic reviews of the evidence have revealed deep uncertainty about the purported benefits of these interventions.”
Taking cues from Trump’s executive order, several other departments have demonstrated an aggressive eagerness to crack down on providers that promote or financially benefit from gender-transition interventions for minors. Earlier this year, the FBI launched criminal investigations into three pediatric hospitals for providing gender-transition care to minors, and the Department of Justice earlier this month sent more than 20 subpoenas to select doctors and hospitals that perform these interventions on children.
The Centers for Medicare and Medicaid Services (CMS), a department that falls under HHS, sent letters earlier this year to select hospitals expressing concern about the standards of care for children surrounding invasive medical interventions that can cause “long-term and irreparable harm.” In accordance with its review of federal reimbursements for hospitals that provide gender-transition care to minors, CMS requested hospitals provide within 30 days a raft of financial data related to the procedures, such as “all billing codes utilized for pediatric sex trait modifications,” hospital revenue generated from these interventions, and projected provider revenue forecast for these services.
For years, health care whistleblowers, conservative lawmakers, and independent researchers have alleged that American pediatric associations and hospitals that promote gender-transition services for minors have been captured by progressive activists, and have been parroting the activists’ dubious claim that the benefits of so-called gender-affirming care clearly outweigh the substantial costs.
Late last year, the United Kingdom indefinitely banned the supply of puberty blockers for children under age 18 for treatment of “gender incongruence” or “gender dysphoria” following independent advice from medical experts that there is an “unacceptable safety risk in the continued prescription of puberty blockers to children.” Puberty blockers are often prescribed to children to slow the development of sex organs and secondary sex characteristics – such as facial hair and a lower voice register — before they can undergo hormone therapy or even surgery.
But in the U.S., science has confronted a toxic political environment. Last year, for example, a New York Times report revealed that a prominent doctor who has long advocated for gender-transition care for minors, Johanna Olson-Kennedy, decided not to publish a “long-awaited study” on the effect of puberty blockers on children because she did not want the researchers’ work “to be weaponized” through Republican-led efforts to ban access to gender-transition care for minors.