HHS Report on Alleged Pediatric Gender-Treatment Fraud: 5 Key Takeaways

A report released Aug. 13 by the Department of Health and Human Services (HHS) has shined a light on alleged fraud by health providers who performed pediatric gender procedures.

Rather than use already-existing, specific codes related to gender identity disorders, HHS alleged they used what the study called “proxy diagnosis codes” that were vague, or outright false.

One common diagnosis was “endocrine disorder—unspecified,” which allowed doctors to bill for cross-sex hormones. HHS data showed that between 2015 and 2025, more than $42 million was billed to insurance companies under the unspecified disorder diagnosis.

A 2023 study by the University of Iowa Hospitals and Clinics found that out of 1,480 patients diagnosed with unspecified endocrine disorder, only 71 actually had such an illness. An analysis by the Manhattan Institute also found a 30 percent rise in such diagnoses between 2020 and 2022, HHS said.

Another common miscoding was for “precocious puberty,” which allowed the doctors to prescribe and bill insurers for puberty blockers. The study found that between 2015 and 2025, insurers were billed more than $11 million under this diagnosis for patients aged 13 to 17.

The Epoch Times reached out to these organizations for comment.

In one instance, a Harvard-affiliated gender clinic called Fenway Health advocated using “more vague” diagnosis codes, but also warned that using inaccurate coding is illegal.

Another organization, the Campaign for Southern Equality, put together a toolkit called “Insurance Coding Alternatives For Trans Healthcare” that outlined workarounds for patients with gender dysphoria.

Most insurers exclude gender procedures unless state law requires coverage, the document states. The toolkit shows which coding is frequently rejected by insurers, and which commonly accepted codes to use instead.

If the insurer denies coverage, the toolkit suggests appealing repeatedly. After the third appeal, the case “goes to an outside agency, and is often accepted.”

For example, a patient can claim orchialgia—persistent pain in the testicles—to justify surgical castration, according to the report.

“How do you do a mastectomy, but then bill an insurance company and not raise any red flags? … You bill it as breast reduction instead of a mastectomy,” said Dr. Eithan Haim, an author of the report.

“This guide is essentially a template for how to commit medical fraud. We should all remember that this is something that people go to prison for. This is a major deal.”

“You take a little girl and put her on testosterone, or a little boy and put them on estrogen. Well, they’re going to be on that forever and ever, right?” Assistant HHS Secretary Adm. Brian Christine said in an interview with NTD, The Epoch Times’ sister media outlet.

The surgeries and hormone treatments can also result in severe side effects, requiring more doctor visits and racking up hospital fees, the report noted. Mental therapy is often needed, too.

Citing data from the Human Rights Campaign—an organization that supports these procedures in minors—the report said the costs can range from $25,000 to $75,000 per patient.

If the client chooses to have surgeries, the total can skyrocket as high as $170,000 and beyond. Those numbers don’t include peripheral costs, such as hair removal, voice therapy, or reversal procedures.

The report included testimony from one young man who was told that “facial feminization” surgery would cost him $200,000.

“This new patient cohort—young, insured, or Medicaid-eligible, and requiring perpetual follow-ups—represented a strategic area of growth,” the report stated.

“Endocrinology and surgery departments gained volume and prestige, while hospital administrators gained a reliable revenue line that helps subsidize lower-margin services.”

The Biden administration said healthcare workers were bound by the rules of the Affordable Care Act, and refusing gender treatments was “discrimination on the basis of sexual orientation and gender identity.”

“Attempts to restrict, challenge, or falsely characterize this potentially lifesaving care as abuse is dangerous,” a Biden-era HHS document stated.

The approach was multi-faceted. The Equal Employment Opportunity Commission told employers that their insurance couldn’t exclude such procedures. HHS, the DOJ, and the Department of Education also “took the position in guidance, regulations, and litigation that prohibitions on disability-based discrimination … may apply to individuals with gender dysphoria.”

The Office of Personnel Management also mandated that federal insurance carriers cover the procedures. The National Institute of Health also conducted a $10 million study to probe the impact of gender procedures on children, the HHS report said.

The Epoch Times reached out to the DOJ to learn if the department would do so but received no response by time of publication.

As Fenway Health noted in one of its guidance documents, deliberately miscoding to deceive insurers is illegal, and the liability risk increases when Medicaid is involved because such fraud can run afoul of the  Federal False Claims Act.

That law allows the government to recoup triple damages and impose other financial penalties, and opens the door for private citizens to file civil suits on its behalf.