Melanie and Joseph are seen in a flashback at the beginning of the episode. When Jackson was born, he had genetic mosaicism and they had to make a decision as to whether to raise him as a boy or a girl.
As Jackson gets worse, Thirteen, probably remembering her own feelings about bisexuality at the same age, implores Melanie and Joseph to tell Jackson the truth. Joseph is sympathetic, but Melanie tells her that this isn't the time.
However, as the case progresses, Thirteen refuses to lie any more. Melanie and Joseph have to tell Jackson the truth. He gets angry and won't let them in his room. Melanie strikes out at Thirteen for breaking up her family.
However, at Lisa Cuddy's urging, Melanie and Joseph return to Jackson's side. House finds them there and breaks the news - Jackson was only suffering from dehydration when he arrived - it was the contrast in the MRI that caused all the new symptoms. He tells the parents not to treat their child like a freak, even though he is one.