Kyler Prescott, 14, committed suicide five weeks after staying at the hospital in San Diego in 2015, where he was treated for having suicidal thoughts and self-inflicted wounds.
His mother, Katharine Prescott, is now suing the Rady Children’s Hospital-San Diego (RCHSD) in California, arguing that her son was discriminated against based on his sex.
The lawsuit comes amid a raging debate in the US about the rights of the lesbian, gay, bisexual and transgender (LGBT) community.
Heartbroken Mrs Prescott said filing the lawsuit was painful but she hoped it would ensure no other parents or child go through the same ordeal.
“I believed that they would be able to help him feel better,” she told the Thomson Reuters Foundation.
“They really just made things worse.”
According to the suit, RCHSD said on its website that it was competent in caring for transgender children and teens.
But the complaint claims that the hospital’s nursing and other staff “repeatedly addressed and referred to Kyler as a girl, using feminine pronouns”.
The transgender boy, who had legally changed his name and gender, subsequently called his experience at the hospital “horrible”, the complaint said.
The suit claims the hospital violated anti-discrimination provisions in federal and state laws, including the Affordable Care Act, President Barack Obama’s signature healthcare law.
Mrs Prescott’s lawyer, Alison Pennington, said she believed it was the first case to claim an underage transgender person had suffered sex-based discrimination under the Affordable Care Act.
Less than half a dozen similar suits have claimed discrimination against adult transgender people since the law was enacted in 2010, she said.
A spokesman for RCHSD said that while he could not comment on pending legal matters, “any allegations of wrongdoing, including discrimination, are investigated thoroughly and followed up on”.
The Affordable Care Act is the first federal healthcare law to explicitly ban discrimination against transgender people.
A ruling by a Minnesota federal court last year became the first to recognise discrimination against a transgender person under the healthcare law.
Kyler’s mother is seeking damages and restitution, as well as an injunction that would force the hospital to institute policies preventing the discrimination of transgender youth based on sex.
In 2011, the National Transgender Discrimination Survey found that 41 percent of transgender and gender non-conforming US respondents said they had attempted suicide.