Texas judge halts $116 billion Medicaid proposal

DALLAS – The Dallas Morning News reports that a state judge Friday halted a $116 billion Medicaid contract proposal that would have excluded three Texas children’s hospital plans — including one run by Cook Children’s Hospital in Fort Worth — and forced 1.8 million low-income Texans to change their health coverage. District Judge Laurie Eiserloh of Travis County blocked Texas Health and Human Services Executive Commissioner Cecile Erwin Young from finalizing a set of contracts that would have displaced nearly half the Texans who receive Medicaid and Children’s Health Insurance Plan coverage from six managed care organizations across the state, switching them to new plans next year. The judge granted the temporary injunction sought by four health plans that have lost billions of dollars after 12 years in the program. Eiserloh found the proposed changes violated state law and exceeded the state agency’s authority.

“The intended contract awards will impose significant harm and confusion on millions of Texas’s STAR & CHIP members,” the judge wrote in a 10-page order. The ruling came after a week of testimony from health plan officials and leaders of the Texas Health and Human Services Commission. Eiserloh set a Nov. 3 trial on a permanent injunction. The ruling can be appealed before then, or Young could opt to cancel the procurement and start the agency’s fourth attempt to renegotiate the contracts in the past six years. In addition, state lawmakers concerned with the proposal have said they plan to revisit procurement laws next spring. Officials with Cook Children’s Health Plan in Fort Worth, which would have been eliminated under the proposal, celebrated the ruling. “This decision is a major win for the 125,000 children and families who rely on CCHP for their health care coverage,” plan officials said in a statement. “We believe this ruling will help ensure that our Members continue to have access to the care they need, when they need it.” Officials at Texas HHS did not return emailed requests for comment.