On Tuesday August 11, the Centers for Medicare and Medicaid Services (CMS) – a branch of the U.S. Department of Health and Human Services (HHS) – released its final rule ending federal funding via Medicaid and the Children’s Health Insurance Program (CHIPS) used for sex-rejecting procedures on minors.

At the same time, HHS has identified that hundreds of hospitals and clinics, including several Planned Parenthood affiliates, may be committing insurance/medical fraud, and is recommending for further investigation. Vice President JD Vance is calling for criminal prosecution if the investigation confirms fraud.

Key Takeaways:

• The Centers for Medicare and Medicaid Services under the Trump administration released its final rule ending federal funding used for sex-rejecting procedures for minors.

• The federal funding will still be available for up to six months in what the agency calls a “tapering-off period” from October 13, 2026, which is when the final rule is scheduled to take effect. 

• HHS has also released a report and documentary that implicate hospitals and clinics, including Planned Parenthood, in misusing insurance codes to fraudulently obtain taxpayer funds for sex-rejecting procedures.

• Hospitals and clinics identified in the report have been referred by VP Vance and HHS Secretary Kennedy to the Department of Justice and HHS Office of the Inspector General (OIG) for “possible violations of federal law.” 

• The report highlighted “cross-sex hormones” prescriptions that were either allegedly prescribed and written on the same day for minors, or prescribed and then (at least 95%) of the claim was billed through the affiliate, in states with laws prohibiting such actions.

The Details:

An HHS press release noted that the federal funding will still be available for up to six months in what the agency calls a “tapering-off period” from October 13, 2026, which is when the final rule is scheduled to take effect. 

 The Department of Justice (DOJ) defines “sex-rejecting procedures” as: 

… any medical, surgical, or pharmaceutical intervention provided to an individual that is intended to suppress, alter, or eliminate endogenous pubertal development, or to modify primary or secondary sex characteristics, for the purpose of aligning with or affirming an individual’s asserted gender identity rather than the individual’s sex, where such intervention would not otherwise be indicated for a congenital, pathological, or nonmental disorder or disease-related condition. 

Previously, a Congressional Budget Office analysis found that from 2019 to 2023, over $135 million of taxpayer-funded Medicaid and CHIPS money was spent on sex-rejecting procedures, including body-harming surgeries, performed on minors across a five-year span. 

HHS Secretary Robert F Kennedy stated regarding the decision, “Today, we are ending federal taxpayer funding for sex-rejecting procedures on children…These interventions carry serious risks and can cause irreversible harm. The federal government will no longer use Medicaid and CHIP dollars to fund procedures that fail to meet the evidentiary standard our children deserve.”

Dr. Mehmet Oz, administrator of CMS, added that the decision will ensure that “experimental interventions that pose serious risks and convey no proven benefits” are not carried out on minors. He stated that this action is “following the science, saving taxpayer dollars, and, most importantly, protecting children from potentially irreversible harm so they can truly flourish.”

The Report

On the heels of the CMS ruling, HHS released a report entitled “Wolves in White Coats: How Doctors and Hospitals Pushed and Profited from the Fraud of ‘Gender Medicine,’” which investigated more than 225 hospitals and other “pediatric gender programs” across the country, including Planned Parenthood affiliates. 

The report "concludes that a litany of political and financial incentives led providers to offer, and indeed urge, the prescription of sex-rejection drugs and surgeries for minors." It analyzed insurance data claims nationwide from 2015-2025, and identified “approximately $50 million in insurance claims for puberty blockers billed using endocrine disorder diagnostic code E34.9 (Endocrine Disorder, Unspecified).” 

In the HHS documentary, author and medical doctor, Aaron Kheriaty states:

“What sex rejecting procedures do is they take kids who are physiologically and medically healthy and make them dependent upon the health care system–very often–for life. It's a sort of captive patient model that allows for continuous generation of revenue–estimates range between $25,000 and $75,000 per patient.”

This generates enormous profits for clinics and hospitals. The report refers to these procedures as the “pediatric gender clinic model.” 

According to the HHS press release, this analysis found “that nearly $11 million in claims for patients ages 13–17” were billed under questionable ICD codes.

The International Classification of Diseases (ICD-10, or ICD for short) is a “classification system developed collaboratively between the World Health Organization (WHO) and 10 international centers so that the medical terms reported by physicians…can be grouped together for statistical purposes,” the HHS report states. 

According to CMS guidelines, ICD codes must be accurately reported when dealing with Medicaid and Medicare: “Specifically, these guidelines mandate that doctors ‘[c]ode all documented conditions that coexists at the time of the encounter/visit and that require or affect patient care, treatment or management.”

Failure to accurately report may be found fraudulent under the False Claims Act in addition to other state laws “barring the submission of false claims.” 

In response to this analysis, Vice President JD Vance – alongside Secretary of HHS Robert F. Kennedy, Jr. – referred the hospitals and clinics identified in the report to the Department of Justice and HHS Office of the Inspector General (OIG) for “possible violations of federal law.” 

VP Vance called for "criminal prosecutions" for any of those named in the HHS report, including Planned Parenthood's named affiliates, if further investigations confirm fraudulent activity.

Fox News reported Vance's statement in a letter to Attorney General Todd Blanche, which stated that "providers who intentionally miscoded treatment to defraud Medicaid or private insurers 'should go to prison.'"

So far, the Department of Justice (DOJ) has settled three cases with children’s hospitals that it claims filed “false billings” of its sex-rejecting services which includes the Texas Children’s Hospital and the Cleveland Clinic Foundation (or ‘Cleveland Clinic’).        

Notably, Planned Parenthood was also named throughout the report. 

Potential fraud 

Last year, Live Action News began reporting on Planned Parenthood affiliates openly describing how they utilize the very same ICD codes for which other clinics were being investigated. Experts in the field also noted this during a workshop hosted by the Federal Trade Commission (FTC). The HHS report similarly points to the Southeastern and Western Pennsylvania Planned Parenthood affiliates receiving millions in taxpayer dollars while stating on its website how it used the same questionable ICD codes.  

The report further highlighted “cross-sex hormones” prescriptions that were either allegedly prescribed and written on the same day, or prescribed and then (at least 95%) of the claim was billed through the affiliate, in states with laws prohibiting sex rejecting medicalized practices on minors. The report recommended further investigations to “determine potential wrongdoing.”

Organizations listed included several Planned Parenthood affiliates: 

• Planned Parenthood Great Northwest, Hawai’i, Alaska, Indiana, Kentucky 

• Planned Parenthood Minnesota, North Dakota, South Dakota

• Planned Parenthood of Greater Texas 

• Planned Parenthood of the Heartland

• Planned Parenthood South Atlantic

• Planned Parenthood Southwest Ohio Region 

• Planned Parenthood Greater Ohio

• Planned Parenthood of Southwest and Central Florida 

• Planned Parenthood Health Systems 

• Planned Parenthood Gulf Coast

• Planned Parenthood of Florida

• Planned Parenthood of Greater New York (already facing congressional scrutiny)  

Previously, Planned Parenthood Action called the proposed rules by the Trump administration “a dangerous escalation” while boasting of being “proud to serve patients of all gender identities and expressions.” 

The Backstory:  

Upon taking office, the Trump administration vowed to combat gender ideology and tactics forced upon minors. To date, the administration’s attempts include some initial efforts to prohibit or minimize propaganda-fueled ‘sex ed’ programs like those provided or endorsed by Planned Parenthood, and some attempts to halt select clinics or hospitals from utilizing taxpayer funds for sex-rejecting practices on minors. 

In January 2025, President Trump signed Executive Order (EO) 14187, dubbed “Protecting Children From Chemical and Surgical Mutilation,” directing HHS to “take all appropriate actions consistent with applicable law to end the chemical and surgical mutilation of children… including regulatory and sub-regulatory actions for specific programs” with the goal of ending federally funded sex-rejecting care on minors. 

In response, two proposed rules were filed:

• Proposed Rule 90 FR 59463 – “Medicare and Medicaid Programs; Hospital Condition of Participation: Prohibiting Sex-Rejecting Procedures for Children.” 

• Proposed Rule 90 FR 59441 – “Medicaid Program; Prohibition on Federal Medicaid and Children’s Health Insurance Program [CHIPS] Funding for Sex-Rejecting Procedures Furnished to Children.” 

Live Action’s latest report explains the vast negative impacts of sex-rejecting gender ideology and practices, particularly on young minds and bodies. Gender ideology ranges from grooming tactics and propaganda that often continue into medicalized practices euphemistically called “gender affirming care.” This “care” often includes puberty blockers, hormones, and body-damaging surgeries, often with life-altering consequences and they are instead referred to as “sex-rejecting procedures” by the DOJ and other government agencies and experts.

Why It Matters: 

As a self-proclaimed leader in sex-rejecting procedures—in addition to ending the lives of nearly 1,200 preborn human beings every single day—Planned Parenthood now faces serious allegations of fraudulent activity. 

And yet, on July 4, Planned Parenthood regained full access to federal Medicaid funding. 

Congress can still act to unequivocally and permanently defund Planned Parenthood – which kills hundreds of thousands of preborn human beings each year, promotes and performs life-altering sex-rejecting procedures on minors, and engages in fraudulent and deceptive practices – as it doesn’t deserve a single taxpayer funded cent.  

The Bottom Line:

Mark Wiltz, Live Action’s Director of Government Affairs, praised the Trump administration’s ruling, calling it a “significant step by the Trump Administration to protect children and taxpayers.”

Wiltz added, “CMS projects this will save about $138 million in federal funds over the next decade. Taxpayers should not be forced to fund these procedures. This is the kind of action we should expect from an administration committed to protecting children and using taxpayer dollars responsibly.”