According to the administration’s analysis, insurance claims from 2015 through 2025 contained roughly $50 million in claims for puberty-blocking drugs submitted using the diagnostic code E34.9, which refers to “endocrine disorder, unspecified.” HHS also identified nearly $11 million in claims involving patients between 13 and 17 years old that were submitted under a code associated with precocious puberty.
That distinction is central to the administration’s concerns.
The HHS report argues that a diagnosis involving precocious puberty would generally not be appropriate for many patients older than 13. The report therefore raises questions about whether some providers used broader or potentially inaccurate diagnoses to obtain insurance reimbursement for treatments that might otherwise have faced coverage restrictions.
The financial figures cited by HHS extend beyond medication claims.
All-payer claims data reviewed by the department showed nearly $120 million in billed charges since 2019 for procedures and treatments involving minors. The total reportedly included more than 5,500 surgical procedures and approximately 8,500 courses of hormones or puberty blockers.
Those numbers have become a major part of the administration’s argument that the issue deserves a federal investigation rather than simply an administrative review.
HHS Secretary Robert F. Kennedy Jr. separately referred a specific group of claims to the department’s Inspector General after identifying what officials described as potentially unusual billing patterns.
Among the examples were claims for puberty blockers combined with an unspecified endocrine-disorder diagnosis without corresponding gender-dysphoria or precocious-puberty codes for patients between ages 9 and 17. Officials also flagged claims involving precocious-puberty diagnoses for patients ages 13 through 17.
Other patterns identified by HHS reportedly involved same-day prescriptions for cross-sex hormones accompanied by a primary gender-dysphoria diagnosis in states where such treatment for minors was restricted. Additional billing relationships involving affiliated providers were also identified for further examination.
The report does not itself establish criminal liability. Instead, the administration is asking investigators to determine whether particular billing practices crossed the line from coding mistakes or questionable practices into deliberate fraud.
That distinction could prove critical if the matter advances to the Justice Department.
In his letter to Blanche, Vance pointed to research cited in the HHS report as part of the reason for further scrutiny.
“One study showed that only about 4.7 percent of patients diagnosed with ‘endocrine disorder, unspecified,’ had that actual condition. Another notes a 30 percent increase in the number of endocrine disorder diagnoses, despite it being unlikely that there has been a substantial increase in pediatric endocrine disorders,” the vice president wrote.
Vance argued that knowingly manipulating diagnostic codes to obtain coverage could have serious consequences.
“When providers miscode treatment in order to secure insurance coverage for gender-transitioning interventions that insurance would not otherwise cover, they should be held accountable. If they have done so intentionally, thereby perpetrating a fraud on Medicaid or on private insurers, they should go to prison,” the letter went on.
The vice president also made clear that the administration views the issue as extending beyond questions of insurance reimbursement.
“Rather than allow the proliferation of harmful, sex-rejecting procedures on our children, we must send a clear message that any hospitals and providers that have participated in these practices will face justice.”
The administration’s financial argument is also striking.
HHS says the average annual healthcare cost for a minor is approximately $3,000. By comparison, the report estimates that treatment pathways involving the interventions examined can reach approximately $75,000 without surgery and nearly $170,000 when surgery is included.
The report argues that the financial incentives may extend well beyond an individual procedure, citing continuing monitoring, prescriptions and follow-up treatment as potential sources of recurring revenue.
That claim is now part of a broader Trump administration effort to scrutinize federal spending connected to gender-related medical treatment for minors.
The referral comes shortly after the administration moved to end federal Medicaid and Children’s Health Insurance Program funding for certain sex-rejecting procedures involving minors. HHS officials have argued that taxpayer-funded programs must be protected from improper billing while children receive appropriate medical care.
For the Justice Department, however, the central question will be whether the billing practices identified by HHS actually constitute violations of federal law.
Incorrect medical coding does not automatically prove fraud. Determining intent, the accuracy of individual claims and whether providers knowingly submitted false information will likely be essential to any potential prosecution. The department has not publicly announced charges against the providers identified in the report.
As of the latest reporting, the Justice Department had not issued a public response to Vance’s referral.
For now, the referral places the allegations squarely in the hands of federal investigators. If prosecutors find evidence that providers intentionally manipulated diagnoses to secure payments, the controversy could develop into a significant federal healthcare-fraud investigation—putting hospitals, insurers and the broader pediatric gender-medicine industry under an unusually intense level of scrutiny.
