From The Texas Tribune:
Texas officials on Thursday rejected attempts by several major insurers for needy families to cancel a proposal that would drop them from the state Medicaid program and shake up the coverage of nearly 2 million low-income Texans.
At issue are some $116 billion in Medicaid contracts that Texas Health and Human Services officials are attempting to award by the end of the summer, a plan announced earlier this year that has drawn wide criticism because it would eliminate three major health plans run for decades by the state’s premiere nonprofit children’s hospitals.
Some 1.8 million Texans who receive Medicaid coverage from six managed care organizations across the state would lose their current health plans and be shifted to new insurers next year if the decision stands.
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 caretakers. CHIP provides health care to low-income children whose family’s income is too high for Medicaid, which has some of the lowest income limits in the country.
Thursday’s decision is a significant step toward finalizing the plan, which would:
* Reduce the number of managed care organizations that administer the state’s Medicaid STAR and Children’s Health Insurance Program
* Give contracts to more for-profit companies in most areas of the state
* Result in a smaller number of top-rated plans administering care
* Attract new national plans to replace local managed care organizations, or MCOs, that historically served some regions
The health plans are expected to appeal the decision, which puts the future of the procurement — the term for a new contract for the MCOs that run STAR and CHIP — squarely at the discretion of Texas Health and Human Services Executive Commissioner Cecile E. Young.
“We remain disappointed that the agency continues to push forward with what was shown this week … as a short-sighted, flawed and biased process,” said Craig Smith, CEO of Corpus Christi-based Driscoll Children’s Health Plan, one of the three children’s hospital plans that would be dropped under the proposal and which would likely shut down if it’s finalized. “We appreciate the tremendous response and testimony of South Texans fighting to have their voices heard, and we will keep fighting on their behalf to serve our community.”
Young has been under mounting pressure from lawmakers, business leaders, health plans and the residents they cover to ditch it and revamp a process many describe as unfair, illegal and antiquated.
“Don’t let corporate greed take away outstanding and caring care for our children,” McAllen resident Angelica Mata wrote to lawmakers earlier this week. Mata was one of about 500 people who submitted written testimony decrying the plan during a Texas House hearing.
If the protesting MCOs get their way and the contracting plan is canceled, it would be the agency’s third unsuccessful attempt to finalize new contracts for STAR and CHIP managed care organizations since they were first signed a dozen years ago.
Regardless of what Young decides, the matter will likely end up in court given the uproar, division and growing uncertainty around the legitimacy of the procurement.
No deadline for a decision
Critics say the procurement process does not adhere to state laws that, over the years, have sought to favor health plans that had invested in and been well-received by their communities, or that are tailored to unique population groups like children, and that would allow the greatest continuity of care.
They also say the entire process was tainted by the early release of some competitive bid proposal information to one of the eventual winners in the procurement, an error the state acknowledged in emails to some health plans but maintains was not illegal and did not affect the outcome. Young told lawmakers under questioning earlier this week that the agency was handling the matter internally but did not elaborate.
On Tuesday, Young and other agency officials testified before the Texas House Human Services Committee that the agency complies with state law governing contract procurements. Those include requirements that the state give a fair shake to all applicants, whether new to the state or longtime contractors, and therefore cannot give any advantage to plans like the children’s hospital-affiliated plans that have track records in the state.
Young did not address what she plans to do about the current procurement and has declined to discuss it publicly, saying she is limited to what she can say until the process is over.
In a letter to lawmakers earlier this week and obtained by The Texas Tribune, Young declined to address concerns about the latest STAR/CHIP contract proposal but said Medicaid recipients would not experience an interruption in care during any transition.
Young has no deadline for deciding whether to uphold the decision by her agency’s procurement division, cancel it and start over, or officially delay it until lawmakers can respond to it when they meet in session next year.
Medicaid managed care contracts are routinely the most expensive contracts states pay for with taxes, and Texas’ contracts are among the largest in the nation.
Among those who would be affected by the proposed procurement are a collective 700,000 families, pregnant women and children covered by Cook Children’s Health Plan in the state’s Tarrant service area, Texas Children’s Health Plan in the Harris region, and Driscoll Health Plan in South Texas, all which formed when the state’s CHIP program was created two decades ago.
Cook Children’s and Driscoll Health plans would likely both shut down if the new plan is finalized. The hospitals themselves are not in danger, they said. In an emailed statement Thursday, officials from Cook’s plan blasted the process as “flawed from the beginning” and promised to pursue “every legal option available.”
“We are confident in the strength of our case and believe we will prevail,” the statement read. “We know every child’s life is sacred, and we will continue to fulfill our promise of improving the well-being of every child entrusted to our care and within our communities.”
Meanwhile, a handful of national for-profit chains would significantly expand their foothold in those markets — in one case growing from serving just one region of Texas to seven — while the others are either diminished or forced out.
The change would force nearly half of the Medicaid STAR and CHIP enrollees in the state out of their current health plan, potentially causing changes in providers, pharmacies, and mental health services.
It would also trigger a massive effort by the state to inform all those families of the change, which would take effect late next year if the plan holds.
