Cook Children’s sues Texas over possible loss of Medicaid contract

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Cook Children’s Health Plan has filed two lawsuits against the state to stop the Texas Health and Human Services Commission from removing them as a long-term Medicaid contractor.

At a news conference Wednesday, the Fort Worth-based health care system announced the lawsuits as an effort to stop the $116 billion Medicaid procurement process that is removing the health plans of Cook Children’s and two other children affiliated with the hospital from Medicaid. STAR and the Children’s Health Insurance Program, also known as CHIP.

The proposed changes would drop Cook Children’s Health Plan in the state’s Tarrant service area, Texas Children’s Health Plan in Harris County and Driscoll Health Plan in South Texas in favor of private companies. Together, the three plans operate as managed care organizations that provide Medicaid coverage to Texans in their respective regions.

The three plans, created two decades ago, serve more than 700,000 families, pregnant women and children.

If the state health agency’s decision stands, it would mean a reduction in the number of managed care organizations that administer STAR and CHIP, shifting to for-profit national health companies in most areas of the state.

It would also require the nearly 1.8 million Texans who receive Medicaid coverage from six managed care organizations across the state to switch to new insurers by next year.

The lawsuits were in Travis County. A petition seeks declaratory judgment and injunctive relief against HHSC Commissioner Cecile Erwin Young in hopes of overturning the contract award. The second lawsuit filed is a temporary restraining order against the state health agency to stop the finalization of procurement results.

“These actions we are taking are strong but necessary,” said Rick W. Merrill, president and CEO of Cook Children’s Health Care System, in a news release.

Jennifer Ruffcorn, a spokeswoman for HHSC, said the agency does not discuss pending litigation, but noted that the contract situation is still pending.

“Although the (Request for Proposals) has been posted, responded to and evaluated, it remains an open procurement until all protests and complaints filed by respondents have been resolved and contracts have been executed,” Ruffcorn said in an email. .

Currently, the future of the procurement process is entirely at Young’s discretion. She has no deadline to decide whether to uphold the agency’s decision, reverse it and start over, or formally delay it until lawmakers can respond when they meet next year.

In a news release Wednesday, Karen Love, president of Cook Children’s Health Plan, said the removal of Medicaid contracts from the three hospital affiliates is based on a flawed process that will put Texas families at the mercy of profitable national insurance. companies.

“The state got it wrong and we’re asking the courts to fix it,” she said.

The Texas Medicaid STAR and CHIP programs cover the cost of routine, acute and emergency medical visits. STAR is primarily for pregnant women, low-income children and their caregivers. CHIP provides health care to low-income children whose family income is too high for Medicaid, which has some of the lowest income limits in the country. Their members make up the vast majority of Texans in state Medicaid programs.

Medicaid managed care contracts are typically the most expensive contracts taxpayers fund.

Texas officials earlier this month rejected efforts by several managed care organizations to overturn a proposal that would have removed them from the state’s Medicaid program.

Representatives of Driscoll Health Plan said Thursday that their organization has appealed the decision to the state, as more than 500 jobs could be eliminated if it is finalized.

Craig Smith, CEO of Driscoll Health Plan, told The Texas Tribune on Thursday that his organization filed a second appeal last week and is now awaiting a decision. He said he is also prepared to pursue legal action against the state if the appeal is rejected.

Representatives of Superior HealthPlan, a managed care organization that operates similarly to the Driscoll and Cook health plans, expressed their disappointment Thursday at the decision to deny the protests made by the three hospital plans. The organization is also exercising its right to appeal the current decision made by the state health agency, which they anticipate will result in the largest disruption in member care in Texas Medicaid history.

If the procurement is denied, it would be Texas HHS’s third failed attempt in six years to award contracts to Medicaid programs that include the vast majority of low-income Texas recipients of state health insurance.

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