Gender-Affirming Care Caught in Legal Gray Area, Liability Possible
October 1, 2025 10 minutes read
Executive Summary
The legal issues surrounding gender-affirming care are murky after directives from President Trump. Failure to understand and adhere to new limitations can pose liability risks to healthcare organizations.
- The definition of gender-affirming care is unclear and may be interpreted broadly.
- The Food and Trade Commission is focusing on marketing and advertising related to gender-affirming care.
- Many organizations are scaling back their gender-affirming care services.
By Gregory Freeman
Healthcare organizations providing gender-affirming care — which may be defined broadly — could face consequences if they do not conform with recently imposed federal restrictions. Understanding the changes and how they affect clinical treatment is key to avoiding potentially serious regulatory violations and other liability.
There is a lot going on in this space, and healthcare organizations may find it difficult to keep up, says Kyle Y. Faget, JD, partner with the Foley & Lardner law firm in Boston. President Trump issued an executive order titled, “Protecting Children from Chemical and Surgical Mutilation,” which directs agencies and programs to work toward significantly limiting youth access to gender-affirming care nationwide.
The order directs agency and department heads to take steps to prohibit those receiving certain federal research grants, including hospitals and medical schools, from providing gender-affirming care to children. It also directs the Secretary of Health and Human Services to end gender-affirming care for children “including [through] regulatory and sub-regulatory actions, which may involve the following laws, programs, issues, or documents …”
The order states that this may include Medicare or Medicaid conditions of participation or conditions for coverage; clinical-abuse or inappropriate-use assessments relevant to state Medicaid programs; mandatory drug use reviews; section 1557 of the Patient Protection and Affordable Care Act; and quality, safety, and oversight memoranda. The Trump administration has called into question whether gender-affirming care, particularly for minors, is the appropriate standard of care, Faget says.
Many states have undertaken state-level restrictions, she notes. The administration has put forward, as a condition of participation for Medicare, that the healthcare organization state that it does not provide gender-affirming care to minors, she says. The possibility of losing Medicare participation is a huge threat to healthcare organizations that leaves them with few options, she says.
“That is probably the biggest issue out there, because almost every healthcare system in America, particularly the ones that provide care to minors, are going to be participants in Medicare,” she says. “What happens is that institutions are getting rid of their gender-affirming care programs, and honestly, who can blame them?”
A significant challenge is defining exactly what constitutes gender-affirming care, Faget says. Is it providing therapy? Does it have to include hormones? Does it have to include surgery? Where is the line drawn? So far, there are no clear answers to those questions, Faget says.
“If it’s just focused on surgery, I don’t think that that’s a huge risk, because it’s not really the standard of care to perform surgery for minors anyway. If it’s limiting hormones and hormone blockers, that would have an impact,” she says. “I would think that therapy would fall outside of the purview of that, so what it might do ultimately is limit hospitals and hospital systems and providers that provide gender-affirming care to only being able to provide therapeutic services, like mental health services, and not being able to provide any kind of hormone or hormone blockers. The risk would be that, if you do that, you could be excluded from participation in Medicare. And that’s a huge problem.”
Most healthcare organizations probably will choose to play it safe and restrict gender-affirming care, no matter how their leaders and clinicians feel about the issue, Faget says.
“If there were claims made in any way, obviously not under Medicare but potentially under Medicaid, there could be some real issues there,” she says. “But I don’t even think you get there because, to be perfectly honest, the threat is big enough that I think that any anyone [who is] participating in Medicare isn’t going to risk their eligibility by continuing to provide whatever it is that’s ultimately defined as sex trait modification procedures.”
The extent of the Trump administration’s interest in this issue was demonstrated by a July Federal Trade Commission (FTC) workshop focused on perceived “dangers” arising from unfair or deceptive trade practices in marketing under the label of “gender-affirming care” for minors. Faget notes that medical professionals and a variety of other interested parties shared their perspectives on consumer protection under the authority of FTC and the provision of gender-affirming care, she says.
Faget calls this a clear shift in FTC approach and a new area of FTC enforcement priority. Section 5 of the Federal Trade Commission Act provides broad authority to protect consumers from unfair or deceptive acts or practices, she explains, but previously, the FTC had limited its review of healthcare marketing claims.
FTC Chairman Andrew N. Ferguson stated that the FTC’s review is intended to protect parents and children and “ensure that everyone can make an informed choice about their own path to healing.” FTC Commissioner Melissa Holyoak stated that the FTC’s role is to “protect children from deceptive statements regarding such treatments.” She also explained that claims about health benefits must be backed by “competent and reliable scientific evidence,” and not only practitioners’ experience and advisories from medical organizations.
“That is super unusual, because FTC is really looking at advertising and promotion and if you have … appropriate backing for how you advertise a service or a product or service. FTC isn’t typically involved in such political questions,” Faget says. “So, if you’re a provider and you provide information on your website, for example, about gender-affirming care you offer as a service, and you may cite to some studies, you might say we follow WPATH (World Professional Association for Transgender Health). It’s arguable that FTC could come after you for deceptive advertising if you were to make any kind of claim associated with gender-affirming care.”
This poses a risk that many healthcare organizations may not have considered before. Citing the WPATH guidelines may seem like enough to substantiate the gender-affirming care on offer, Faget explains, but now that those guidelines are in doubt and questioned by the Trump administration, that marketing could be considered improper. “FTC can go after anybody [who is] advertising and promoting products and services for deceptive or misleading advertising, so that really opens up the arena in terms of who can be targeted. Our advice to providers, whether they’re Medicare participants or not, is that you can certainly cite to the fact that you are providing gender-affirming care, but in this universe right now, be very careful about what it is you say about gender-affirming care,” Faget says. “You might want to think twice before you cite to any standard of care that your practice follows, or you might want to be careful about citing to any potential outcomes one way or the other, because it’s those kinds of claims about gender-affirming care, like what you can expect as a result of gender-affirming care, that could end up being problematic.”
That approach may contrast with other traditional marketing efforts in healthcare, she notes. It is not uncommon for a hospital to advertise that it has the best orthopedic surgeons, for instance, and cite their good outcomes.
“And that would be exactly the kind of thing you’d be concerned about when advertising the success of your practice in terms of gender-affirming care. FTC is going to ask whether there are people that have adverse effects as a result of receiving gender-affirming care. Sure, that’s going to be true in anything in medicine, but it doesn’t mean you throw the baby out with the bath water. If somebody ends up undertaking some kind of surgery and the outcome either isn’t as anticipated, or they don’t like the outcome, we don’t all of a sudden say we’re going to stop practicing that wholesale, but that’s kind of exactly what’s happening with the FTC.”
The Trump administration is serious about pursuing this issue, Faget says. There has hardly been a week that has gone by that the administration has not done something to go after this issue or advertise its opposition to this issue, she says. The issue affects more than individual facilities or health systems, Faget explains. Many states themselves are participants in Medicare, meaning their state health systems are participants in the program.
“This will tie the hands of many states, so state funding for gender-affirming care is going to be potentially upended as well. It would relegate the practice of gender-affirming care that would include any kind of hormone treatment to the private pay world,” Faget says. “Pharmacy has a similar condition of participation, so if the administration zeroes in on pharmacies that will start to tie the hands of pharmacies being able to actually dispense the hormones that are prescribed, even if you come up with a successful workaround for this sex trait modification limitation.”
Any healthcare organization providing gender-affirming care — using a broad definition — should work with a legal advisor familiar with FTC laws and regulations to review any outward facing materials, Faget says. That includes anything from printed materials to websites that mention gender-affirming care, she says. “I also think reviewing informed consent materials would be extremely important right now for anybody providing gender-affirming care,” Faget says. “I would definitely review your informed consent in light of these requirements and the way the administration has indicated it is looking at these issues.”
Provision of gender-affirming care also can expose healthcare organizations to interest from the Department of Justice (DOJ), says Jonathan Kent Osborne, JD, shareholder with the Gunster law firm in Fort Lauderdale, FL. The DOJ under Attorney General Pam Bondi has stated it is prioritizing investigations both on the civil side and the criminal side against doctors, hospitals, pharmacies, manufacturers, and anyone else in the healthcare space who is involved in manufacturing drugs or devices that the government deems to be illegal in the context of gender-affirming care, he says.
Some of the things that are specifically mentioned are puberty blockers, sex hormones, or any drug used to facilitate a child’s gender transition, he explains. The DOJ is looking at the issue through the lens of the False Claims Act, as well as the Food and Drug Administration laws under the Food, Drug and Cosmetic Act, he says. “The first thing that a company has to do is take stock of what, if any, specific business activities they have that fall into that space. If they deem that they have exposure, even if they disagree with the policy or think the policy is unfair, then the next question is, how does our compliance program comply with the new policy?” Osborne says. “If it doesn’t comply with the new policy, I think a business and legal judgment has to be made whether the company wants to get compliant with the policy or choose to continue business as usual and run the risk of having litigation with the government.”
Healthcare organizations are conducting deep assessments of their risk from the administration’s focus on gender-affirming care, as well as other DOJ initiatives, he says. “They are absolutely trying to get their bearings by looking at what services they actually provide through the lens of what the government is now claiming is illegal. And second, they’re kind of on high alert because, with such new policy positions being taken by the Department of Justice, some of them unprecedented, it’s kind of difficult to know what exactly is going to happen,” Osborne says. “You know how quickly prosecution offices build cases against healthcare companies at the institutional level, much less at the individual doctor level. Compliance obligations differ based on the type of business that you have, but there is a high level of concern.”
False Claims Act May Apply to DEI, Other Issues
Gender-affirming care is not the only issue that may prompt scrutiny from federal prosecutors and regulators, Osborne says. The Trump administration’s opposition to diversity, equity, and inclusion (DEI) programs also can result in unwanted attention, he says. Osborne advises evaluating your compliance program now and conducting a comprehensive investigation if the company later becomes either the target of a civil investigative demand from the DOJ civil division or gets wind that there may be a whistleblower or a relator in the False Claims Act context who is trying to build a case against the company.
“To use the DEI example, the government has been very public about its dislike for certain college programs that are DEI and DEI-related admissions policies and other things. Those types of things have been very public, and we’re watching whether healthcare companies, doctors, pharmaceutical manufacturers are receiving inquiries from the government or civil investigative demands,” Osborne says. “I think the prevalence of action in this area remains to be seen, because those types of government investigations are not typically public at the outset. Some of this will unfold as we move forward.”
In reviewing compliance programs, Osborne advises including an audit of contracts and agreements with business partners. “We need to know what our business partners and competitors are doing in the space, and whether there is some room for collaboration for thoughtful engagement with colleagues in the space, to come up with a way to comply with the law while continuing to serve patients at the doctor level and industry partners at the institutional level,” he says.
Greg Freeman has worked with Clinican.com and its predecessor companies since 1989, moving from assistant staff writer to executive editor before becoming a freelance writer. He has been the editor of Healthcare Risk Management since 1992 and provides research and content for other Clinician.com products. In addition to his work with Clinician.com, Greg provides other freelance writing services and is the author of seven narrative nonfiction books on wartime experiences and other historical events.
Sources
- Kyle Y. Faget, JD, Partner, Foley & Lardner, Boston. Telephone: (617) 502-3292. Email: [email protected].
- Jonathan Kent Osborne, JD, Shareholder, Gunster, Fort Lauderdale, FL. Telephone: (954) 468-1322.
Healthcare organizations providing gender-affirming care — which may be defined broadly — could face consequences if they do not conform with recently imposed federal restrictions. Understanding the changes and how they affect clinical treatment is key to avoiding potentially serious regulatory violations and other liability.
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