Rady Children’s Health is facing a lawsuit from the state of California over its decision to end gender-affirming care for patients younger than 19, the latest example of the conflicting pressure campaigns pediatric providers are facing on the contentious issue.
The San Diego-based pediatric system—three hospitals and a network of care centers following the merger of Rady Children’s Hospital San Diego and Children’s Hospital of Orange County at the end of 2024—announced Jan. 20 to patients and press that it would be ending gender-affirming “medical interventions, procedures and prescriptions.” Other services like counseling and care coordination would continue, it said.
The organization’s statement suggested federal policies outlined last year to prohibit Medicare and Medicaid funding for hospitals offering the services forced its hand, and added it had recently been referred to the U.S. Department of Health and Human Services Office of Inspector General for investigation.
“Taken together, these developments affect our role and responsibilities as a provider participating in federal programs such as Medicaid and Medicare, which are essential to caring for children and families in our communities,” Rady Children’s Health said in a statement given to press.
That decision puts the system in conflict with terms it agreed to with the state of California when seeking approval for its recent merger, California Attorney General Rob Bonta said in a Jan. 30 release announcing the litigation. Bonta is among a coalition of 20 attorneys general that are opposing (PDF) HHS’ Medicare and Medicaid funding policy and similar restrictions they said are illegal.
“Rady Children’s Health has chosen to violate its merger agreement and California law in response to the Trump Administration’s illegal campaign against providers of gender-affirming care,” Bonta said in a statement. “Rady flagrantly disregarded its legal obligations by unilaterally deciding to preemptively comply with the Administration’s demands and cease medically necessary care for roughly 1,450 patients. We will not allow Rady to violate its obligations to its patients and the State.”
Rady Children’s Health is California’s largest pediatric healthcare system with over 200,000 patients, according to the lawsuit, and is the largest provider of gender-affirming care in Southern California with about 1,900 patients receiving the services (1,450 of whom are under the age of 19).
The state’s lawsuit outlines two conditions of the merger’s approval it alleges Rady Children’s Health is now violating: one that “requires continuous maintenance of existing and licensed specialty healthcare services, including ‘gender-affirming care services’ offered in the spaces and settings of [Rady’s hospitals] for 10 years,” and another that ‘prohibits discrimination on the basis of protected personal characteristics, including gender and gender identity.” The organization is also required to give 90 days’ notice before service eliminations to Medicaid managed care plans, local officials and the state’s health department, which the lawsuit alleges Rady Children’s Health also did not do.
The organization had been limiting the services to existing patients since last summer and stopped scheduling certain procedures in the fall, according to news reports and the attorney general’s lawsuit. Its most recent cutoff triggered protests from transgender rights advocates.
Rady Children’s Health, in a statement, said it is aware of the lawsuit but declined to comment on its specific allegations, saying that it would address the claims through the legal process. The system reiterated that changes to its gender-affirming care services "reflect a very difficult decision [that] guided by our responsibilities as a nonprofit pediatric healthcare system to continue serving all children and families across our communities, including through participation in essential federal programs."
The Trump administration signaled its opposition to gender-affirming care in its opening days, and last year released a 400-page review of youth gender dysphoria research describing evidence in favor of gender-affirming care as “low quality/low certainty. This culminated in a series of regulatory actions in December targeting such care for minors being delivered at hospitals, including the proposed rules referenced by Rady Children’s and other pediatric providers across the country that have limited services.
"Nearly all U.S. hospitals participate in Medicare and Medicaid and this action is designed to ensure that the U.S. government will not be in business with organizations that intentionally or unintentionally inflict permanent harm on children," HHS officials said in a press release issued at the time.
The proposed policies are undergoing a public comment period and have not yet been enacted. In addition to their existing litigation, Bonta and other attorneys general have said they would take further legal action should the proposals be finalized.
Dozens of major pediatric hospitals and systems, often citing the threats to funding, have taken steps to limit or cease gender-affirming care in the past year, to the joy of the White House, Republican legislators and other conservative groups. Like Rady, a subset have also found themselves the subject of federal probes triggered by the president’s executive orders, with Johns Hopkins Health among the most recent. Some like Children’s Hospital Colorado and Seattle Children’s Hospital successfully deflected information requests with the help of the federal courts.
According to KFF, 27 states have also enacted laws or policies to limit minors’ access to gender affirming care since the Supreme Court’s United States v. Skrmetti decision last summer. Several blue states have gone the other direction, with officials like Bonta stressing that decisions to limit gender-affirming care would run afoul of civil rights protections.
The range of behavioral, social and medical interventions comprising gender-affirming care are widely supported by major medical groups such as the American Academy of Pediatrics, the American Medical Association and the American Psychological Association when used in line with medical guidelines.
HHS officials have suggested professional organizations that support the services are suppressing the views of dissenting members, and on Feb. 3 promoted in a press release the decision (PDF) of another professional group, the American Society of Plastic Surgeons, to recommend surgeons delay gender-related breast/chest, genital, and facial surgery until a patient is at least 19 years old.
“We commend the American Society of Plastic Surgeons for standing up to the overmedicalization lobby and defending sound science,” HHS Secretary Robert F. Kennedy, Jr. said in that release. “By taking this stand, they are helping protect future generations of American children from irreversible harm.”