Historic False Claims Act settlement delivers unprecedented accountability, operational reforms, and long-term care for harmed patients
HOUSTON, TX — August 5, 2026 — Burke Law Group, PLLC announced today that it secured a historic and unprecedented settlement with Texas Children’s Hospital (“Texas Children’s”) that sets the bar for enforcement actions against hospitals that provide sex-rejecting “gender transition” procedures to minors. The settlement resolves alleged violations of the federal False Claims Act, the Texas Medicaid Fraud Prevention Act, the federal Food, Drug, and Cosmetic Act, and federal fraud and conspiracy laws on behalf of nurse-whistleblower Vanessa Sivadge. Under the terms of the agreement, Texas Children’s will:
- Pay $10 million in penalties;
- Build and operate a free Detransition Clinic that will deliver full-service care to patients who underwent sex-rejecting “gender-transition” procedures at any hospital or clinic nationwide;
- Publicly admit in a written statement that it made false statements to the public about its practices and acknowledge its legal obligations going forward;
- Permanently terminate and revoke the privileges of five physicians who carried out the prohibited procedures with an agreement never to re-hire or credential them;
- Implement sweeping operational reforms including training healthcare professionals on the dangers and illegality of sex-rejecting “gender transition” treatments or procedures, including training employees on how to blow the whistle if they witness same;
- Rewrite its institutional bylaws so that any physician who engages in prohibited sex-rejecting, “gender-transition” procedures on minors automatically forfeits clinical privileges; and
- Commit to a permanent prohibition on sex-rejecting, “gender-transition” services at any of its facilities.
The case, Sivadge v. Texas Children’s Hospital, et al., Case No. 4:24-cv-2018 (S.D. Tex.), alleged that Texas Children’s Hospital, Texas Children’s Health Plan, Inc., and physicians Dr. David L. Paul and Dr. Richard Ogden Roberts III knowingly submitted false claims to Medicaid by prescribing puberty blockers, cross-sex hormones, and other gender-transition treatments to minors in violation of Texas Medicaid policies, and billing those prohibited services to federal and state healthcare programs using fraudulent diagnosis codes. The covered conduct period extends from as early as January 1, 2010 (January 1, 2016, as to the federal claims), through the effective date of the settlement. Under the settlement, three current physicians will have their privileges permanently and irrevocably terminated, and two former physicians are permanently barred from holding credentials or privileges at any Texas Children’s facility.
This settlement is the first of its kind in the nation and establishes a legal framework for pending DOJ settlements in other states. It goes beyond financial penalties, mandating that Texas Children’s must implement sweeping operational reforms.
Most significantly for the individuals harmed by these practices, the settlement requires Texas Children’s to build and operate a free Detransition Clinic that will deliver multidisciplinary detransition-related care to patients up to and including age 21 who underwent sex-rejecting “gender-transition” procedures—whether at Texas Children’s or another hospital or facility—with detransition-related obstetric and gynecological care available to older patients. The clinic will provide free treatment for the medical consequences associated with these procedures, including fertility-related injuries, endocrine system damage, psychiatry, and other long-term health effects. Texas Children’s must provide the clinic’s services at no cost to patients for a minimum of five years, and donations designated for the clinic will be used to fund free detransition services beyond that initial five-year term.
“We are proud to have fought on behalf of our brave client, Vanessa Sivadge,” said Marcella Burke, Chairman of Burke Law Group. “Through her courage and cooperation with the government, Vanessa helped secure reforms that will begin to address the devastating harm alleged in this case. This outcome reflects the importance of individuals willing to come forward and the government’s commitment to investigating serious allegations and pursuing accountability where appropriate.”
Ms. Sivadge, a nurse at Texas Children’s Specialty Care Cy-Fair clinic, first observed that transgender patients continued to be treated in the Endocrine and Gynecology departments despite the hospital’s 2022 public statement that it had discontinued gender-affirming care for minors.
The settlement resolves a multi-year investigation conducted in coordination with the Office of the Texas Attorney General and the United States Department of Justice. It stands as one of the most comprehensive healthcare fraud resolutions involving a major children’s hospital, combining a significant financial recovery, permanent professional consequences for certain current and former physicians, and lasting structural reforms at the institution. The settlement provides a roadmap for similar enforcement actions across the country.
Access the Disclosure Settlement
Access the Settlement Agreement with the State of Texas
Access the Settlement Agreement with the US Department of Justice
Access the Order Dismissing and Closing Case
About Burke Law Group
Burke Law Group is a Houston-based boutique delivering elite legal counsel for high-stakes matters. The firm advises companies across the United States on complex environmental, regulatory, and enforcement matters, high-stakes commercial litigation, and corporate transactions, pairing the sophistication of an Am Law platform with the focus, agility, and responsiveness of a boutique. Burke Law Group was recognized as a leading firm in the 2026 Chambers USA Guide, ranked in Texas for Environment, and Chairman and Managing Partner Marcella Burke is individually ranked for Environment in Texas.