Trump admin accuses Philadelphia hospital of insurance fraud over gender transition drugs

WASHINGTON, DC: The Trump administration has accused the Children’s Hospital of Philadelphia (CHOP) of committing insurance fraud to cover the cost of gender transition treatments for minors.

The Department of Justice (DOJ) claimed this week it has “evidence” of “fraudulent billing practices” related to puberty blockers and cross-sex hormones.

DOJ alleges fraudulent billing in gender transition care for minors

The DOJ under President Donald Trump escalated its legal battle against CHOP on Monday, October 2, filing new declarations in a Pennsylvania federal court.

DOJ Acting Director of the Enforcement and Affirmative Litigation Branch, Lisa Hsiao, alleged that the hospital’s Gender and Sexuality Development Program misused billing codes to obtain insurance coverage for puberty blockers and hormones prescribed for gender transition purposes.

According to court filings, investigators believe CHOP engaged in “incorrect diagnosis and/or billing codes” when treating young patients. “We have ample reason to suspect wrongdoing within CHOP’s Gender and Sexuality Development Program,” Hsiao wrote.

DOJ says diagnoses were 'beyond typical age range'

Hsiao said the DOJ hired outside contractors to analyze anonymized insurance claims from 2017 to 2024, which showed that nearly 250 minors, many aged between 14 and 18, had been diagnosed with central precocious puberty—a condition where puberty begins abnormally early.

“This is well beyond the age at which children are typically diagnosed with precocious puberty,” Hsiao noted, calling the findings “deeply concerning.”

The DOJ alleges CHOP used this diagnosis as a cover to prescribe puberty blockers and hormones off-label for gender dysphoria treatment, despite knowing insurers may not cover such uses.

Claims of rushed treatments and lack of consent

The filing also included allegations that a minor was prescribed puberty blockers after a first visit and cross-sex hormones after a second, without what Hsiao described as a “meaningful assessment.” She claimed doctors “failed to provide the necessary information regarding the risks of taking such medications.”

An earlier version of Hsiao’s declaration had referred to these allegations as part of a “lawsuit,” but that reference was removed in a revised filing after inquiries from The Philadelphia Inquirer.

Hospital challenges DOJ subpoena

On Tuesday night, CHOP filed a motion to limit the DOJ’s subpoena power, arguing that the new evidence was submitted improperly. The hospital also claimed that Hsiao’s altered filing, where references to a lawsuit were removed, undermined the credibility of the DOJ’s claims.

CHOP maintained that the department never brought these accusations forward in a separate case, urging the judge not to consider the new evidence. However, the hospital requested that if the evidence is considered, it be allowed to submit a full response.

Part of wider crackdown on transgender medical procedures

The move is part of a broader Trump administration initiative to investigate hospitals and clinics performing gender transition procedures on minors.

In April, Attorney General Pam Bondi vowed to pursue potential violations of the False Claims Act, focusing on whether healthcare facilities billed federal programs for “noncovered services related to radical gender experimentation.”

By July, the DOJ had issued more than 20 subpoenas to doctors and medical centers nationwide as part of what it described as a campaign against “healthcare fraud and false statements.”

“Medical professionals and organizations that mutilated children in the service of a warped ideology will be held accountable by this Department of Justice,” Bondi said in a statement at the time.