Check this out from Federal Prisons memos
If a diagnosis of GID is reached, a proposed treatment plan will be developed which promotes the physical and mental stability of the patient. The development of the treatment plan is not solely dependent on services provided or the inmates life experiences prior to incarceration. The treatment plan may include elements or services that were, or were not, provided prior to incarceration, including, but not limited to: those elements of the real life experience consistent with the prison environment,
hormone therapy, and counseling. Treatment plans will be reviewed regularly and updated as necessary.
Current, accepted standards of care will be used as a reference for developing the treatment plan. All appropriate treatment options prescribed for inmates with GID in currently accepted standards of care will be taken into consideration during evaluation by the appropriate medical and mental health care staff. Each treatment plan or denial of treatment must be reviewed by the Medical Director or BOP Chief Psychiatrist. Hormone therapy must be requested through the non-formulary review process, and approved by the Medical Director and /or Chief Psychiatrist. Consultation with the Chief of Psychology prior to such approval may be appropriate in some cases.
http://www.glad.org/uploads/docs/cases/adams-v-bureau-of-prisons/2011-gid-memo-final-bop-policy.pdf
I think "current, accepted standards of care" is where the military is going to run into problems because hormone therapy and surgery are listed as treatment in the DSM-V and the military will have to justify why they won't follow current, medical accepted practice and why military prisoners have fewer medical and amendment rights than federal prisoners. Especially since both are taxpayer-funded.
I know the military doesn't like to be dragged into the 21st century but sometimes it happens, especially in the case of LBTIQ rights and this is an extension of that.