Cook Children’s takes legal action against state to save Medicaid contracts

FORT WORTH — Cook Children’s Health Plan is filing a lawsuit against the Texas Health and Human Services Commission in response to the state’s decision to remove its longstanding Medicaid contracts.

The HHSC revealed earlier this year that it would be discontinuing STAR and CHIP contracts, which provide Medicaid health insurance coverage for low-income children and pregnant women, with Cook Children’s Health Plan and other nonprofit providers in favor of national for-profit companies like Aetna, UnitedHealthcare, Blue Cross Blue Shield and Molina. Cook Children’s Health Plan’s lawsuit alleges that HHSC failed to follow protocol in selecting providers for STAR and CHIP contracts and neglected the Fort Worth-based nonprofit health insurer’s track record of managing care, according to a news release.

“Texas Health and Human Services’ decision to deny us a renewal of our contract won’t hurt Cook Children’s nearly as much as it will hurt the families we serve, while denying them a meaningful choice of plans and the right to choose us,” Cook Children’s Health Plan President Karen Love said at a Wednesday news conference.

Earlier this year, HHSC went through one of its periodic recontracting processes to assess providers’ performance, handing out STAR and CHIP contracts worth billions of dollars to plans and insurance companies that score highly, Love said. This is where Cook Children’s Health Plan claims an error was made.

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“HHSC announced contract awards (Notice of Intent) following a competitive solicitation where all respondents were scored using the same evaluation criteria,” an HHSC spokesperson wrote in an email. “The resulting awards across all service areas were to MCOs (managed care organizations) that received the highest scores. This will provide the best value to the state and quality of care and service to all STAR & CHIP recipients.”

The nonprofit has filed two suits in Travis County in response: one petition for declaratory judgment and injunctive relief leveled at HHSC commissioner Cecile Erwin Young, as well as a temporary restraining order to “stop HHSC from finalizing its procurement results.”

The HHSC spokesperson said in the email that procurement will remain open “until all protests and appeals submitted by respondents have been resolved, and contracts have been executed.” The spokesperson declined to comment on pending litigation.

More than 125,000 low-income people throughout the Fort Worth area could be left without health insurance, Love said, and many families simply can’t afford the time or resources required to find a new provider if they are forced out of their current plans.

“These are just unnecessary hassles for these families that have enough struggles in their lives,” Love said. “They don’t need the added stress of having to pick up a new plan.”

“A change in managed care organizations holding contracts with HHSC does not affect whether a Medicaid recipient receives services, nor does it affect the services that a recipient is eligible to receive,” the HHSC spokesperson said. “MCOs are contractually required to provide continuity of care for both newly enrolled recipients and recipients transferring from another MCO. HHSC requires that the transition to a new MCO be as seamless as possible for Medicaid recipients and their providers.”

The decision to remove Cook Children’s Health Plan’s contracts is the latest development in a growing statewide health coverage problem, with more than two million Texans losing Medicaid coverage since March 2023.

Love said nearly half of Texas children — those in families with an income 200% of the poverty line or below — are eligible for Medicaid and CHIP, with 300,000 across six counties around Fort Worth. Somewhere between 40% to 46% of the area’s kids are covered by Cook Children’s Health Plan, as well as roughly 80% of children with severe conditions requiring intensive care.

Cook Children’s Health Care System, which primarily operates a pediatric hospital, created its health insurance wing specifically to allow local families to access Medicaid services through CHIP and STAR contracts. The nonprofit has received Medicaid contracts from the state for nearly 20 years.

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