Vice President JD Vance requested on Thursday that the Justice Department investigate dozens of hospitals for alleged fraudulent billing related to gender-affirming care for minors. The request followed a Department of Health and Human Services (HHS) report titled \"Wolves in White Coats,\" which claims medical providers are using incorrect diagnostic codes to secure insurance coverage for procedures like puberty blockers and hormone therapy. The Justice Department confirmed receipt of the referral and stated it would review the allegations.
The HHS report analyzed a nationwide database of claims from 2015 to 2025. It alleged that public and private insurers were billed nearly $50 million for puberty-blocking drugs for patients aged 9 to 17 who were assigned a diagnosis of an endocrine disorder. The report argues that providers may be using these non-specific hormone disorder codes in place of gender-related codes to ensure reimbursement from insurers that might otherwise deny coverage for gender-affirming care.
Medical organizations, including the American Medical Association and the American Academy of Pediatrics (AAP), have defended gender-affirming care as necessary medical treatment. AAP President Susan J. Kressly stated that government intervention in determining patient care sets a \"dangerous precedent.\" The Trump administration maintains that some hospitals are motivated by profit, using a practice known as upcoding—the use of more lucrative diagnostic codes—to inflate bills for these services.
The scale of the alleged billing issues involves approximately 30 identified facilities and nearly $50 million in insurance claims over a decade. While the per-patient cost varies, the report focuses on the $50 million billed for puberty blockers under endocrine disorder codes for children aged 9 to 17. The policy shift could lead to a change in how medical services are coded and billed, potentially affecting anyone receiving hormone-related treatments, as insurers and providers may implement stricter verification processes to avoid federal fraud charges.
The knock-on effects extend to the stability of hospital funding and the broader regulatory environment for healthcare providers. This action follows a recent Centers for Medicare and Medicaid Services (CMS) rule that cut off Medicaid and Children’s Health Insurance Program (CHIP) funding for gender-affirming care for minors. The precedent set by using the White House’s Anti-Fraud Task Force to investigate specific medical treatments could influence how future administrations use law enforcement to regulate medical standards. The Justice Department has not yet announced a timeline for its review, but previous health fraud recoveries have totaled billions of dollars.