Three Texas health systems are facing major potential changes for their health plans amid the state's decision to remove them as Medicaid administrators earlier this year.
"We were all formed at roughly the same time specifically to serve the Medicaid and CHIP populations, and none of us are in any other lines of business at the current time," Karen Love, President of Cook Children’s Health Plan, told Becker's. "We are exploring some other options, but this is dire if we are not awarded this contract."
In March, Texas tentatively awarded a majority of its Medicaid STAR and CHIP contracts to Blue Cross Blue Shield of Texas, Molina Healthcare, Aetna and UnitedHealthcare, which are collectively worth $116 billion. If the new contracts are implemented, nearly 1.8 million Medicaid beneficiaries in the state will have to move to new insurers by next year.
Fort Worth-based Cook Children's Health Plan, Houston-based Texas Children's Health Plan and Corpus Christi-based Driscoll Children's Health Plan were all denied contracts in the tentative award process.
Executives at Cook Children's and Driscoll Health told The Texas Tribune in April that their health plans will likely shut down if they are not awarded the Medicaid contracts from the state.
Texas Children's has not said the same — a system spokesperson told the newspaper that the health plan "has a long and storied history of serving the children and women of Texas and looks forward to continuing to support Texas’s Medicaid population." Collectively, the three plans serve more than 700,000 people.
"This would take a significant amount of top level revenue from our system," Ms. Love said. "Last year, we were in the neighborhood of $900 million in premium revenues. Above all, this would dismantle our ability to collaboratively coordinate care for these kids, most of whom have a relationship with one or more providers. This change is going to hurt the families we serve much more than it's going to hurt Cook Children's."
Cook Children's is challenging the new Medicaid contract awards in court. Texas HHS has also rejected challenges from Cook Children's and seven other organizations disputing the contract awards, a process that is still ongoing.
"We're seeing a disturbing trend nationally of more and more contracts going to these big national Medicaid companies, and the landscape is getting tougher for provider-sponsored plans," Ms. Love said. "We are an integrated delivery system with hospitals, a physician group and the payer all under one umbrella. To take the health plan out of that is removing one of the key pillars of our pediatric system."
The procurement is still considered open until all protests and appeals have been resolved. If the procurement is not successful, it would mark the state's third unsuccessful attempt within six years to award new Medicaid contracts, the Texas Tribune reported.