Children’s Hospital Colorado Referred to Federal Investigators Over Billing Practices

Contempt Proceedings Over Court-Ordered Care

Attorneys representing families suing Children’s Hospital Colorado asked Denver District Judge Ericka Englert to hold the facility in contempt of a mid-May Colorado Supreme Court order requiring the hospital to resume gender-affirming care for minors, according to coverage by the Colorado Sun. John McHugh, co-counsel for the families, urged the court to impose a $50,000-per-day penalty until the hospital fully restores care options for young patients.

“What do we want the hospital to do? Provide this care,” McHugh said in court, as reported by the Colorado Sun. McHugh argued that the hospital cannot evade legal mandates by shifting responsibility to its medical staff. According to the Colorado Sun, Elliot Peters, representing Children’s Hospital Colorado, countered that the institution complied by lifting its formal prohibition on the care, but noted that the hospital cannot force independent physicians—who technically work for the University of Colorado’s School of Medicine—to offer specific treatments when they harbor well-founded fears of federal persecution.

Federal Pressure and Billing Investigations

Attorneys in the case introduced a letter dated August 2026, in which Health and Human Services Secretary Robert F. Kennedy Jr. asked the Department of Health and Human Services Inspector General to investigate Children’s and other hospitals regarding Medicaid billing tied to puberty blockers prescribed to minors, according to the Colorado Sun.

In a formal statement issued Thursday, Children’s Hospital Colorado maintained that it “has always provided appropriate care in compliance with applicable state and federal requirements governing medical and mental health care” and stated it has “no evidence of any billing improprieties,” as reported by the Colorado Sun. The Colorado Sun noted that federal scrutiny intensified in July 2025 when the U.S. Department of Justice issued a subpoena for patient records and personnel files at the hospital, though that subpoena has remained on hold pending a federal magistrate judge’s recommendation to dismiss it.

Testimony and Next Steps in the Denver Courtroom

Following opening statements on Thursday, Judge Englert closed the courtroom to the public and media while anonymous doctors testified about their decisions to halt gender-affirming care due to fears of federal consequences, according to the Colorado Sun. The courtroom reopened later for testimony from mothers of transgender children, including one testifying as Denise Doe, who shared her interactions with hospital staff regarding her daughter’s interrupted treatment, as detailed by the Colorado Sun.

The multi-day hearing is set to resume on Friday, with attorneys expected to wrap up their arguments. Judge Englert is slated to issue a ruling on the contempt motion in the coming weeks.