Relating to contracts with managed care organizations, including the procurement of managed care contracts, under Medicaid and the child health plan program.
HB 5183 would substantially revise how the Texas Health and Human Services Commission contracts with managed care organizations for Medicaid and the Children’s Health Insurance Program (CHIP), including STAR, STAR Kids, STAR+Plus, and the child health plan program. The bill removes fixed contract terms for these plans and instead allows contracts to continue until they are terminated through a new performance-based process or at the managed care organization’s request. It also requires the commission to adopt and publish detailed performance measures, including cost efficiency, quality of care, member and provider satisfaction, provider network adequacy, prior experience, CAHPS survey results, and HEDIS results, and to evaluate plans monthly by region and post the results publicly.
The bill creates a structured enforcement ladder for underperforming plans. If a managed care organization fails to comply with its contract or falls into the bottom quartile statewide or lowest in its region, the commission must first require a corrective action plan, then seek damages, then suspend default enrollment, and finally terminate the contract if performance does not improve over 18 months. HB 5183 also directs the commission to limit the number of managed care organizations and, in some cases, the number of regions in which they may operate, which would give the state more control over market participation in Medicaid and CHIP managed care.
For CHIP, the bill changes procurement rules so that after a contract ends, the commission may select providers through competitive procurement rather than being required to do so in all cases. It also requires CHIP health plan providers to hold appropriate Texas insurance authority and comply with applicable insurance laws, while similarly removing fixed contract terms and limiting termination to the new performance-based process or provider request. The bill further revises contract-award considerations to emphasize provider network participation, continuity of care, population-specific plan needs, and electronic claims processing.
The bill would also require HHSC to enter into contracts with certain existing managed care organizations for STAR, CHIP, STAR Kids, and later STAR+Plus, cancel pending procurements for those programs, and preserve enrollment continuity for affected recipients unless they choose another plan, lose eligibility, or are in a plan that is terminated in their region. In practical terms, the bill would shift Texas away from periodic rebidding and toward longer-running, performance-monitored managed care relationships with existing contractors.
There is little direct recorded debate or voting history in the available materials, so the overall sentiment appears neutral to supportive in concept, with the bill framed as a management and accountability measure rather than a major policy expansion. The main points of contention implied by the text are the reduced role of competitive procurement, the state’s ability to limit the number of plans and regions, and the stronger termination and enrollment controls, which could be viewed as improving accountability by some stakeholders and as reducing competition or market access by others.
HB 5183 would amend the Government Code and Health and Safety Code to change HHSC’s authority over Medicaid and CHIP managed care contracting. It would add new statutory sections governing contract duration, performance measurement, public reporting, termination standards, and limits on the number of managed care organizations and health plan providers operating in each region. It would also alter CHIP procurement rules and require continuity for certain existing contracts and enrollees, affecting managed care organizations, health plan providers, Medicaid recipients, and CHIP participants.
No committee transcript or vote record is provided, so there is no documented floor or committee sentiment to summarize. Based on the bill text, the measure appears to be presented as a performance-accountability and continuity-of-care reform, suggesting likely support from proponents of stronger oversight and stability in managed care contracting. At the same time, the bill’s restrictions on procurement and market entry suggest it could draw concern from stakeholders favoring broader competition and more frequent rebidding.
The likely points of contention are the bill’s move away from fixed-term, competitively rebid contracts and toward continuing contracts with existing managed care organizations, its authority for HHSC to limit the number of plans and regions, and its mandatory termination pathway for low-performing plans. Managed care organizations and insurers may object to reduced procurement opportunities and tighter state control, while consumer advocates or providers may support the bill’s emphasis on quality metrics, public transparency, and continuity of care. The bill also centralizes significant discretion in HHSC over regional market structure and contract enforcement, which could be debated as either necessary oversight or excessive restriction.