Gender-Affirming Care Targeted for Potential False Claims Act Enforcement

On August 19, 2025, the Office of Personnel Management (OPM) informed insurers participating in the Federal Employees Health Benefits or Postal Service Health Benefits programs that gender-affirming care would no longer be covered for federal workers starting in 2026. This coverage decision is the Trump Administration’s latest action stemming from Executive Order 14187 which aims to prevent certain treatments, such as gender-affirming hormone therapy, surgeries, and puberty blockers for those under the age of 19. As previously discussed, the Administration has also signaled its intent to use various law enforcement tools against gender-affirming care, including  Section 5 of the Federal Trade Commission Act to police false or unsupported claims by medical professionals about gender-affirming treatments.

As discussed below, several recent events suggest that the Department of Justice (DOJ) is acting upon the presidential directive in Executive Order 14187 to “prioritize investigations and take appropriate action” in connection with cases of alleged fraud involving gender-affirming care including the potential use of the False Claims Act (FCA), the government’s primary civil enforcement tool used to combat healthcare fraud.    

Civil Division’s New Enforcement Policies

In response to Executive Order 14187, the Attorney General issued a memo directing the Civil Division’s Fraud Section to pursue FCA investigations of false claims submitted to federal health care programs for “any noncovered services related to radical gender experimentation.” The Attorney General’s memo lists among the examples “physicians prescribing puberty blockers to a child for an illegitimate reason (e.g., gender dysphoria) but reporting a legitimate purpose (i.e., early onset puberty) to the Centers for Medicare & Medicaid Services, and hospitals performing surgical procedures to remove or modify a child’s sex organs while billing Medicaid for an entirely different procedure.”  

Attorney General Bondi’s memo also expressed the DOJ’s eagerness to work with qui tam whistleblowers with knowledge of any such violations. The FCA’s qui tam provisions include financial incentives for private citizens (referred to as “relators” under the statute) to file fraud claims on behalf of the United States. The relators’ bar that handles FCA cases frequently looks to take on cases that align with DOJ’s enforcement priorities, thus underscoring the potential enforcement risks in connection with gender-affirming care in the years ahead.  

Following the Attorney General’s directive, Brett Shumate (the Assistant Attorney General for the Civil Division) released a memorandum on the day of his swearing-in setting forth enforcement priorities, which stated that the Civil Division will “aggressively” pursue claims under the FCA against providers that bill the federal government for “impermissible” services such as attempting to “evade state bans on gender dysphoria treatments by knowingly submitting claims to Medicaid with false diagnosis codes.”

Last month, DOJ issued a press release stating that the Department had sent more than 20 subpoenas to doctors and clinics involved in performing transgender medical procedures on children. Reporting by the Washington Post indicates that the subpoenas were issued by DOJ’s Consumer Protection Branch, which has authority to undertake investigations of violations of the Food, Drug, and Cosmetic Act. According to the Post’s reporting, which attaches a copy of one of the subpoenas, the subpoenas seek information related to medical care for young transgender patients, including billing information and communication with drug manufacturers. DOJ’s issuance of the subpoenas, and the unusual decision to publicly announce such investigative activity, suggests that it may only be a matter of time before the Department utilizes Civil Investigative Demands—i.e., the primary investigative tool in FCA investigations.  In addition, while these subpoenas were issued by DOJ’s Civil Division, the scope of the requests is broad and—depending on what is uncovered—could potentially lead to referrals to DOJ’s Criminal Division for criminal investigation and/or prosecution.

What Comes Next?

It remains to be seen what theory of FCA liability DOJ (or a qui tam relator) might rely on in a case involving gender-affirming care. It is possible that these issues could be pursued under a medical necessity theory, but such cases are often challenging for the government because they frequently turn on questions of clinical judgment where there is often room for differences of opinion. As alluded to in the Attorney General’s memo, gender-affirming care cases could also potentially be pursued under a miscoding theory of liability—e.g., where a provider bills a federal payor for a covered procedure despite performing a different procedure. This is a well-established theory of FCA liability although not one that has previously been applied in these circumstances.

Moreover, the Administration’s potential use of the FCA in connection with gender-affirming care is just the latest example of the administration linking potential FCA enforcement to policy objectives articulated in executive orders. For example, as previously discussed, DOJ’s announcement in June of the Civil Rights Fraud Initiative aligns with the administration’s stated intention in Executive Order 14173 of eliminating certain DEI preferences. In the face of this evolving enforcement landscape, it is important that providers and other recipients of federal dollars fully understand the risks associated with these new areas of investigation in order to deploy strategies to mitigate FCA exposure. If you have any questions or would like additional information, please contact any of the authors of this alert.