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Changes to Medicaid Contracts Should Prioritize Benefiting Recipients Over Corporate MCO’s

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Unless the Texas Health and Human Services Commission (Commission) decides to cancel a procurement or delay a decision until the Legislature can act, three of the state’s largest nonprofit children’s health plans, including Driscoll Health Plan (DHP), may lose out on the state’s $9 billion annual Medicaid contract. Image for illustration purposes
Unless the Texas Health and Human Services Commission (Commission) decides to cancel a procurement or delay a decision until the Legislature can act, three of the state’s largest nonprofit children’s health plans, including Driscoll Health Plan (DHP), may lose out on the state’s $9 billion annual Medicaid contract. Image for illustration purposes
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By State Senator Juan “Chuy” Hinojosa

Unless the Texas Health and Human Services Commission (Commission) decides to cancel a procurement or delay a decision until the Legislature can act, three of the state’s largest nonprofit children’s health plans, including Driscoll Health Plan (DHP), may lose out on the state’s $9 billion annual Medicaid contract. This decision could impact 700,000 families, pregnant women, and children statewide. The Commission’s focus should be on making the right decision for the recipients rather than strictly following a flawed procurement process that affects nonprofit health plans currently serving our communities. Losing Driscoll Health Plan from this contract would be detrimental to the Corpus Christi community and the South Texas region.

DHP, which has been serving 23 counties in South Texas for over two decades, operates as a nonprofit organization with headquarters and leadership based in Corpus Christi. Unlike the for-profit entities under consideration, DHP keeps jobs in our communities and directs its funding towards meeting recipients’ needs. Excluding DHP from the contract would disrupt care for 180,000 women and children in our communities and sever essential health care relationships with providers. DHP estimates an annual expenditure of $1.2 billion in the service area, with a substantial portion of these resources remaining within the region, instead of directing administrative fees out-of-state like the new entities would.

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DHP plays an important role in meeting the healthcare needs of our communities by ensuring access to subspecialty care for our children and pregnant women. It has been instrumental in reducing maternal morbidity, mortality, and improving infant outcomes by funding 75 percent of the maternal fetal medicine specialists (MFM’s) in South Texas, as well as mental health resources for children. Over the years that it has served the region, DHP has invested more than $150 million to help reduce NICU costs. This investment includes recruiting and funding MFM’s and flying doctors across South Texas five days a week to serve their patients.

It is not realistic to expect that the level of care from the new MCO’s will be equivalent to that provided by DHP. Building trust with providers requires collaboration and support that takes years to create. It requires significant investment and resources to build the proper infrastructure to achieve high performance. DHP has all this already in place. It would take the new MCO’s that have never served our region years to build that infrastructure. Proceeding with awarding the contract as is would disrupt care for our most vulnerable population, and worse, it would set us back in time.

The procurement process the Commission used to make a decision overlooks key factors such as experience, past performance, and value, despite DHP being recognized as the top-performing managed care organization in terms of quality by the Commission. The current laws governing the Request for Proposals in this procurement are outdated and need modernization to ensure fairness and transparency. The process cannot be considered “fair” if fairness means that there is no consideration given to the past performance of existing MCOs, their positive outcomes, high patient and provider satisfaction, investment, innovation, and quality – just to make it more competitive for external MCOs to enter the service region. I fail to see any benefit to this approach for anyone in the state, except for the profits of the MCOs that will now receive the contract.

To add to the flawed procurement process, it was reported earlier this year that the Commission released redacted information to some of the MCOs before the start of the oral presentation of the applicants. While the release of the information is permissible, the law also provides a clear exception to the disclosure of the information prior to a contract award. The Commission should have exercised that exception to prevent any unfair perception of an advantage and further calling into question the fairness of this process.

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To address these issues, the South Texas legislative delegation has recommended to the Commission to remove MCO-related procurement caps to increase competition among MCOs statewide. This change would benefit both MCOs and Medicaid members, providers, and communities, avoiding disruptions currently anticipated. If the authority to make this change is not available under current procurement laws, we urge the Commission to delay finalizing the awards until the Texas Legislature can provide guidance during the next session which begins in January 2025.

The impact on our women and children, the continuity of their care, and the benefit of our nonprofit community plans outweigh making a rushed decision that will ultimately lead to lawsuits being filed that will cost the state and our taxpayers more money. Delaying the decision until further guidance is received from the Texas Legislature would ensure a more informed and transparent process to maintain quality access to care and for the benefit of all Texans.

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