Undercover Investigation Alleges Gender Clinics Used Misleading Diagnosis Codes to Bypass State Trea

A Manhattan Institute investigation alleges that medical providers referred by an LGBTQ advocacy organization discussed using alternative billing codes, mail-order prescriptions and interstate telehealth appointments to provide gender-transition medications to minors living in states where the treatments are restricted.

By yourNEWS Media Newsroom

WASHINGTON — An undercover investigation published by the Manhattan Institute has raised allegations that medical clinics and advocacy organizations are helping families circumvent state restrictions on gender-transition treatments for minors, including through potentially misleading insurance billing codes, prescriptions delivered across state lines and remote medical appointments.

The investigation, conducted by City Journal reporter Christina Buttons, focused on the North Carolina-based Campaign for Southern Equality (CSE), which operates a national referral and financial assistance program for families seeking puberty blockers, cross-sex hormones and other gender-related medical services for minors. According to the investigation published by City Journal, representatives at several referred clinics described methods that could enable children to receive medications in states where prescribing them for gender transition is prohibited.

Buttons conducted the investigation while posing as a Tennessee mother seeking medical treatment for a fictional 11-year-old daughter who had recently begun identifying as nonbinary. The child had no longstanding history of gender-related distress and had not undergone a previous medical evaluation. After contacting CSE through its Trans Youth Emergency Project, Buttons received referrals to providers in multiple states and questioned them about obtaining treatment despite Tennessee’s restrictions.

The resulting conversations raised questions about whether some providers were using diagnosis codes unrelated to gender dysphoria to facilitate prescriptions or insurance coverage. The investigation, highlighted in a Nov. 2 report by Just the News, did not establish that the participating clinics had committed insurance fraud or that specific unlawful prescriptions had been issued. Those determinations would require examination of actual patient records, medical necessity, billing submissions and applicable state laws.

CSE, which has participated in LGBTQ advocacy efforts in the South, launched its emergency project in 2023 as states increasingly restricted medical gender-transition treatments for minors. The organization says it works with more than 130 partners and has provided over $1 million in travel grants to more than 1,200 families, along with additional financial assistance to healthcare organizations.

The organization’s activities have also attracted attention from critics examining medical billing practices. A previous Just the News investigation and an April report by the medical advocacy group Do No Harm questioned whether alternative diagnosis codes were being used to obtain public or private insurance payments for treatments otherwise excluded from coverage.

Buttons’ undercover investigation provided additional examples of how such arrangements were allegedly discussed with prospective patients. At Outpatient Family Medicine Transformed in Bloomingdale, Illinois, an employee reportedly explained that the clinic used a general endocrine disorder diagnosis code for laboratory testing and medications, while reserving a gender dysphoria diagnosis for certain puberty-blocker approvals.

The employee also described an in-house pharmacy, specialty pharmacy services capable of shipping medications to Tennessee and virtual follow-up appointments between two annual visits to Illinois. According to Buttons, CSE had offered financial assistance covering the clinic’s $170 monthly membership fee for minors, totaling $2,040 annually.

At Main Line Health in Pennsylvania, a nurse discussing services provided by clinician Dane Menkin allegedly described similar arrangements, including mail-order prescriptions and diagnostic codes that “don’t specifically say anything about gender.” When Buttons mentioned an endocrine disorder diagnosis, the nurse reportedly agreed that it could be used.

A representative at Oregon Health & Science University’s Doernbecher Children’s Hospital also discussed alternative diagnostic coding. Asked whether an endocrine disorder diagnosis could be used instead of gender dysphoria, the employee responded, “That is one possible avenue,” before explaining that insurance requirements would determine whether the approach could be used.

The employee further stated that the clinic sometimes used such methods when an insurance plan accepted the diagnosis. However, the undercover conversations alone do not establish that the hospital submitted a fraudulent claim or prescribed medication without a medically appropriate diagnosis.

Another referral involved WMed Health Family Medicine–Crosstown Clinic in Kalamazoo, Michigan, where an employee allegedly discussed modifying prescription wording and offering remote appointments to out-of-state patients. The clinic disputed those statements when contacted for comment.

“We do not alter prescription wording or diagnosis coding to circumvent applicable legal restrictions,” the clinic’s communications director told City Journal, adding that patients must confirm they are physically located in Michigan during telehealth appointments.

The investigation also examined QueerMed, a telehealth provider whose office manager allegedly suggested that families could travel temporarily to states where the clinician was licensed, conduct a video appointment and return home with medication delivered through a specialty pharmacy.

Buttons questioned whether the company could reliably verify patients’ locations during those appointments. QueerMed founder Dr. Izzy Lowell subsequently disputed aspects of the account, stating that the company did not mail medications directly and that its providers verified patient locations in compliance with applicable telemedicine laws.

The differences between employee statements and official clinic responses illustrate the limits of the investigation. While the conversations document what representatives reportedly told a prospective patient, they do not independently establish the frequency of the described practices or whether particular transactions violated state or federal law.

In a social media statement accompanying her investigation, Buttons said she had identified practices that could expose children to medical risks when their prescribing physicians were located hundreds or thousands of miles away.

The legality of interstate prescribing depends on multiple factors, including the patient’s location, the provider’s licensing status, applicable state restrictions and the specific medication involved. Traveling to another state for lawful medical treatment is not inherently illegal, nor is every use of an endocrine disorder diagnosis improper. Deliberately reporting a false diagnosis to obtain insurance payments, however, can raise fraud concerns.

The allegations emerge as the Trump administration increases scrutiny of pediatric gender-transition services. Federal officials have threatened restrictions on funding for providers accused of improper billing, while Vice President JD Vance and Health Secretary Robert F. Kennedy Jr. have supported referrals for potential prosecution arising from federal investigations.

The administration has also supported new diagnostic codes addressing detransition-related care, which could help clinicians document complications and provide follow-up treatment for patients who discontinue or reverse earlier medical interventions.

One closely watched case involves Texas Children’s Hospital, which recently opened a specialized detransition clinic following a federal settlement concerning its previous gender-related treatment practices.

Physician and whistleblower Eithan Haim has separately raised allegations involving diagnostic coding after examining medical records provided with patient consent. In an October social media post, Haim described what he believed were substitute diagnoses used to obtain insurance payments for gender-related procedures.

His analysis included the case of Fox Varian, who received a $2 million malpractice jury award following a lawsuit against medical providers involved in her treatment. Haim alleged that a breast hypertrophy diagnosis had been used in connection with her mastectomy and questioned whether the coding accurately represented the procedure’s medical purpose. The malpractice verdict does not, by itself, establish insurance fraud.

Another federal investigation involves Rhode Island Hospital, which has produced more than 112,000 pages of records concerning pediatric gender-related care in response to a Justice Department subpoena. According to court documents detailing the dispute, the records were submitted for judicial review amid litigation concerning patient privacy and the government’s investigative authority.

A separate court filing documented the hospital’s production of records for review by a federal judge in Texas. Proceedings in Rhode Island have restricted Justice Department access to sensitive patient information, leaving significant legal questions unresolved.

Haim criticized resistance to the subpoena, arguing that federal investigators should be permitted to examine whether providers had misrepresented treatment purposes in medical or insurance records.

“While DOJ attorneys are fighting tooth and nail to obtain these records, establishment forces are doing everything they can to prevent that from happening,” Haim said. “There is no mystery behind the unprecedented resistance to this otherwise standard request […] the evidence of misconduct is astonishing.”

The broader legal landscape changed in June 2025 when the Supreme Court upheld Tennessee’s restrictions on certain gender-transition medical treatments for minors. The ruling permitted states to enforce such laws under the constitutional challenge presented, although it did not resolve every question involving interstate treatment, telemedicine or insurance billing.

CSE and other organizations opposing the restrictions argue that families should retain access to medically indicated treatment and that state bans interfere with healthcare decisions. Supporters of the restrictions emphasize questions about long-term outcomes, medical risks and the quality of evidence supporting particular treatments for minors.

The controversy also coincides with a separate federal dispute over mail-order abortion medication regulations, illustrating broader disagreements about how state medical restrictions apply when prescriptions and medications cross state boundaries.

Buttons’ investigation adds a new dimension by documenting conversations with medical providers about insurance codes, prescription fulfillment and telehealth practices. In her published account of the undercover findings, she emphasized that further investigation would be required to determine whether any laws had been broken.

CSE Executive Director Jasmine Beach Ferrara and Communications Manager Emma Chinn did not respond to inquiries from Just the News seeking comment on the allegations. The publication reported that the organization’s publicly linked staff directory redirects to its homepage, although its organizational information remains available and an archived staff directory contains historical contact information. An independent organizational profile also documents CSE’s advocacy activities.

The findings leave unresolved whether the described conduct involved unlawful prescribing, false billing or legally permissible arrangements for interstate medical care. Those questions remain for licensing authorities, insurers and investigators to examine using actual treatment records, while the undercover reporting has intensified scrutiny of how pediatric gender-related medical services are provided across state lines.