In the landmark case, Katharine Prescott argues the Rady Children's Hospital-San Diego (RCHSD) in California discriminated against her transgender son based on his sex.
The civil complaint filed in a federal court in the state of California comes amid a raging debate in the United States about the rights of the lesbian, gay, bisexual and transgender (LGBT) community.
The 14-year-old transgender boy, Kyler Prescott, committed suicide about five weeks after staying at the hospital in 2015 where he was treated for having suicidal thoughts and self-inflicted wounds.
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.
The plaintiff's attorney, Alison Pennington, with the Oakland-based Transgender Law Center, 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.
In a telephone interview, the mother 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.
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."
Court documents did not list a defense attorney.
The Affordable Care Act is the first federal healthcare law to explicitly ban discrimination against transgender people, said Dru Levasseur, a spokesman at Lambda Legal, a New York City-based LGBT rights group.
A ruling by a Minnesota federal court last year became the first to recognize discrimination against a transgender person under the healthcare law, Levasseur said.
The 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 U.S. respondents said they had attempted suicide.