An unprecedented settlement agreement has been reached in a case brought by Texas Attorney General Ken Paxton that requires Texas Children’s Hospital in Houston to pay $10 million to the state and create a “detransition clinic.”

The settlement comes following an investigation initiated by the attorney general’s office in 2023, according to a report by The Texas Tribune. That same year, Gov. Greg Abbott signed Senate Bill 14 into law, which prohibits trans-identifying minors from receiving puberty blockers and hormone therapies. Although the agreement was reached in May, it was announced by Paxton’s office on Friday that the historic settlement has now “been fully executed.”

Under the agreement, the hospital must pay $10 million to the state for allegedly billing Texas Medicaid to fund illegal gender-transition interventions and using false diagnosis codes. It also forced Texas Children’s to fire and revoke the medical privileges of five physicians who provided such care. So far, the names of the terminated physicians have not been released. 

“Today is a monumental day in the fight to stop the radical transgendermovement,” Paxton said in a press release. “I applaud Texas Children’s Hospital for changing course and committing to being a part of the solution by agreeing to form a first-of-its-kind Detransition Clinic that will help provide free care to those who have been victimized by twisted, morally bankrupt transgender ideology.”

Texas Children’s Hospital, a nonprofit, in Houston is the world’s largest children’s hospital.Patrish Jackson/Shutterstock

Paxton, who is running for the U.S. Senate against Democrat James Talarico, said the new clinic, which must be open and operating by the end of October, will offer medical care to patients “who were subjected to ‘gender-transition’ procedures.” The agreement also requires that the hospital fund the clinic and offer free services to patients for the first five years. This “detransition clinic” would be the first of its kind in the U.S.

Following the announcement of the settlement in May, Texas Children’s, which describes itself as the nation’s largest pediatric hospital, released a statement saying that settling was a “difficult decision” and that the three-year legal battle was “wrought with falsehoods and distractions.”

“All reviews and investigations continue to support the facts — we have been compliant with all laws,” the statement read. “To be clear — we are settling to protect our resources from endless and costly litigation … We stand proud knowing we will always put our purpose over politics and that we have and will continue to follow the law.”