Philadelphia children's hospital cheated insurance codes to give 'trans kids' puberty blockers: DOJ

The Department of Justice has revealed in a recent court filing that it has "evidence" raising questions of "fraudulent billing practices" at the Children’s Hospital of Philadelphia (CHOP) and the Children’s Hospital of Pittsburgh. 

Authorities are probing whether doctors at the two Pennsylvania hospitals have been lying about diagnoses delivered to patients in an effort to get health insurance companies to cover off-label use of prescription drugs that stop puberty for children who claim to be transgender, per the Philadelphia Inquirer, which claimed that the drugs were to treat "gender dysphoria — a medical condition in which a person’s body does not match their gender identity."

Lisa Hsiao, acting director of the DOJ’s Enforcement and Affirmative Litigation Branch, alleged in the filing that the DOJ suspects doctors are using "incorrect diagnosis and/or billing code" to prescribe drugs "because they know that certain insurance plans may not cover off-label prescription of puberty blockers or cross-sex hormones for gender-related treatment."

In the case involving CHOP, the DOJ accused doctors of diagnosing minors with "central precocious puberty," a condition in which children show signs of puberty at a younger age than normal, even though some of those diagnosed were well into puberty. 

Hsiao said the DOJ had hired contractors to analyze "extensive anonymized insurance claims" submitted by doctors at CHOP. Data and billing codes showed that between 2017 and 2024, 25 minors were diagnosed with central precocious puberty by CHOP providers at the age of 10 or older, "including numerous teenagers aged 14 to 18."

"This is well beyond the age at which children are typically diagnosed with precocious puberty," said Hsiao, adding that the DOJ suspects doctors are using the diagnosis to get insurance companies to cover off-label use of drugs. Drugs such as Lupron and Zoladex have been approved by the FDA to treat central precocious puberty, which slows the development of breasts, ovaries, and testicles. 

The revelation came in "declarations" submitted in Pennsylvania federal courts as part of an investigation into possible Food, Drug, and Cosmetic Act (FDCA) violations. Earlier in the year, federal lawyers sent subpoenas to at least 20 hospitals nationwide to be able to view patient medical records. Among those hospitals were CHOP and the Pittsburgh hospital, which is part of the University of Pittsburgh Medical Center (UPMC).

Lisa Hsiao, acting director of the DOJ’s Enforcement and Affirmative Litigation Branch, wrote, "Given the significant number of children treated at CHOP’s gender clinic, combined with its knowledge that potential federal healthcare offenses may systematically be occurring in the provision of gender-related medical care for minors, the government has ample reason to suspect that such offenses may be occurring at CHOP."

She added, "the government is aware of information particular to CHOP that raises concern that federal healthcare offenses may be occurring there."

The court filings were made in Pennsylvania-based cases that involve both former patients as well as the parents of children who received sex change treatments at CHOP and UPMC. The plaintiffs are urging judges to allow them to keep their medical records private.