Texas Attorney General Ken Paxton filed landmark healthcare-fraud allegations against two North Texas physicians accused of illegally prescribing prohibited sex-alteration drugs to minors and then submitting misleading diagnosis codes that enabled Medicaid reimbursement.
The new filings expand ongoing lawsuits against Dr. May Lau and Dr. M. Brett Cooper, who were previously sued in 2024 for providing high-dose cross-sex hormones to dozens of minors in alleged violation of Senate Bill 14, the state law prohibiting sex-alteration interventions for children.
The attorney general’s office said the updated cases mark the first time any state has sought healthcare-fraud penalties for unlawful “transitioning” of minors.
According to the petitions, Lau and Cooper allegedly wrote prescriptions for testosterone or estrogen to biological minors for the purpose of altering their physical sex characteristics, then used false or misleading diagnosis codes — including codes for endocrine disorders — to conceal the purpose of the treatments from insurers and Medicaid systems.
Texas Medicaid rules bar reimbursement for prohibited sex-alteration procedures and medications.
Investigators also alleged that both physicians altered patient records, medical histories, or billing information to hide the use of sex-altering drugs for minors.
The petitions outline more than 30 minors who reportedly received drugs after SB 14 took effect on September 1, 2023. Lau previously surrendered her Texas medical license in 2025 while the underlying case against her continued.
“What these radicals were doing was evil, and I will pursue every available legal tool to stop and punish this cruel child abuse,” Paxton said in the announcement. “Any fraudulent scheme to steal hardworking Texans’ taxpayer dollars will be stopped and repaid in full.”
SB 14, which was upheld by the Texas Supreme Court in 2024, prohibits physicians from prescribing hormone inhibitors, supraphysiologic testosterone to biological females, or supraphysiologic estrogen to biological males for sex-alteration purposes.
The attorney general is seeking financial penalties, recovery of Medicaid funds, and injunctions preventing the physicians from providing restricted treatments to minors or billing Medicaid for them.
The petitions also allege deliberate efforts to bypass SB 14’s requirements by issuing prescriptions before the law took effect with instructions to fill them afterward — an action the attorney general argues still violates the statute because the drugs were dispensed and used after the prohibition began.
Texas is pursuing treble damages under the Texas Health Care Program Fraud Prevention Act, in addition to daily civil penalties for each alleged violation. Both cases remain pending in Collin County district court.