Federal Fraud Probe Targets Billing Codes That Keep Trans Adults on Hormones
Texas' Grand Jury subpoenas aren’t just about kids. Read the fine print.
This morning (Friday, June 5th, 2026), a federal judge in California is holding an emergency hearing on whether Stanford’s children’s hospital has to hand over the private medical records of trans minors to a grand jury in Texas.
There’s a hearing in Maryland on Tuesday. Another in Manhattan on Wednesday. Three courts in one week, all weighing the same question: can the federal government seize the medical records of a category of patients it has decided to target?
Over the last year, at least eight federal judges (appointed by presidents of both parties) have blocked the government’s earlier attempts. One called the justification a “smokescreen.” Another said the DOJ “issued the subpoena first and searched for a justification second.”
So, the administration changed tactics. Instead of administrative subpoenas, they went to a grand jury in Fort Worth, Texas and got criminal subpoenas for the same records. May 7. The hospitals have until June 10 to comply.
The subpoenas demand everything. Patient identities. Diagnoses. Treatment histories. Parent consent forms. Every record “from initial consultation to the most recent treatment provided.”
There’s no usage limitations. No restrictions on which government employees can access the files. No safeguards against the information being shared with state prosecutors, which in states like Texas itself, is increasingly dangerous for the parents of trans youth who are trying to get their children the support they need.
The families whose records are being sought weren’t told. They learned about the subpoenas through public reporting on other hospitals.
The Justice Department says this is about ‘healthcare fraud’ - specifically, whether providers pushed off-label drug use for hormone therapy and puberty suppression, and whether “fraudulent billing practices” occurred.
Most people are focused on the first charge. The second one is the one that I instantly zeroed in on when I read it in their statements.
For years, insurance companies have been hostile to covering gender-affirming care. So providers have coded it using diagnostic codes for endocrine disorders or hormonal imbalances - codes insurers would actually accept. This isn’t unique to trans healthcare. It happens across medicine when insurers won’t cover what a doctor has determined a patient needs.
But if the government starts prosecuting that practice specifically for trans care, it doesn’t stop at the pediatric ward. Every trans adult whose provider used a non-standard billing code to get their hormones covered is sitting on a potential fraud case. Every clinic that kept patients on medication by working around insurance denials is now a target. The DOJ is quietly building the legal framework to criminalize the workaround that makes adult transition care financially possible in the first place.
The DOJ has stressed in court filings that its probe “is not - and has never been - an investigation of patients or parents.” The investigation isn’t aimed at the people receiving care. It’s aimed at the infrastructure that provides it. Take out the providers, overwhelm the billing departments with legal exposure, and you don’t need to ban care for adults. You just make it impossible to get.
Before Dobbs, abortion wasn’t banned in most states who were pushing restrictions - it was regulated into extinction. Compliance burdens so heavy, liability so severe, that hospitals stopped offering the procedure on their own. That’s the model here. Stanford already paused its gender care program last June. NYU Langone shut its down in February. Some of the hospitals receiving these subpoenas have already stopped providing the care. The subpoenas are going to them anyway.
Today’s hearing is about six families - identified by pseudonyms - asking a judge to stop Stanford from handing over their children’s records. Their argument: the Fourth Amendment protects against unreasonable searches, the Fifth guarantees due process, and the constitutional right to informational privacy protects patients’ medical histories from compelled disclosure regardless of whether the administration thinks a category of patients deserves protection.
The Maryland judge on Tuesday will consider a nationwide ruling blocking compliance. The Manhattan judge on Wednesday will weigh a similar request.
If you’re a trans adult whose provider ever coded your care to get insurance to cover it, this investigation has you in its scope. If you’re a provider who’s ever worked around a denial to keep a patient on hormones, you too. The government isn’t going after patients. It’s going after every person and institution that make it possible for patients to survive.