Thousands of Texans will have to find new health insurance providers once the state’s Medicaid reforms are finalized.
FORT WORTH, Texas — Medical equipment covers Zechariah Sudolkan’s walls. Boxes full of wound dressings and tracheal lavage kits are stacked near the doorway of his bedroom.
“There are only 40 to 50 documented cases of this disease,” his father, Samuel, said, “and yet there is no case exactly like his.”
A rare chromosomal abnormality has affected the two-year-old’s heart, lungs, kidneys, brain and development, and his mother, Cathy Grace, says he requires near-constant care.
Since Zechariah was born, the Sudolkans have relied on Cook Children’s Health Plan for their health insurance.
“For us, it just made sense,” Samuel said. “They’re local. We’re already here. They’ve seen Cook Medical Center do so much for Zechariah in the past, so it just made sense to choose their health plan.”
Cook Children’s Health has approximately 125,000 members and has been serving Medicaid STAR and CHIP patients since 2000. Members are primarily low-income families, children with serious health problems and pregnant mothers.
But the Texas Health and Human Services Commission decided earlier this year that four for-profit managed care organizations could provide better value to those patients, and the commission, using a new process for selecting insurers, awarded the region’s Medicaid contracts to Aetna, Molina, UnitedHealthcare and Blue Cross Blue Shield of Texas.
The state did not strike a deal with Cook Children’s Health Plan, leaving 125,000 members to find new insurance plans and possibly new doctors.
“[Zechariah]is used to the medical equipment he has,” Samuel said later. “We’re used to the medical equipment he has. He’s used to the medical personnel. He’s used to driving 15 minutes to get to the hospital. That makes all the difference.”
HHSC has so far rejected Cook Children’s’ formal challenges and is doubling its commitments to four providers that were awarded state Medicaid contracts.
On Wednesday, Cook Children’s Hospital announced it would sue the commissioners to block insurance reform.
“If this decision stands, they will end hundreds of thousands of lives based on a flawed methodology,” said Karen Love, president of Cook Children’s Health Plan.
Texas recently tweaked its Medicaid contract procurement process, essentially adopting new standards for evaluating organizations that bid on contracts. State officials tweaked the process in response to a scathing 2018 audit that found Texas had improperly awarded $3.4 billion in Medicaid contracts because of flaws in its selection process.
“The state had issues in 2018,” Love said. “The state brought in consultants to try to straighten things out and redo the procurement process. How that all worked out, all of that is unclear to us.”
Love called the adjustments an “overcorrection.” In the lawsuit, Cook Children’s Hospital alleges that HHSC did not adequately review the redesigned process.
The state has asked a Travis County judge to block the commissioners from entering into new contracts. If the judge overturns the ruling, the state could renew existing Medicaid contracts or force insurers to reapply for new contracts on a different basis.
Love worries that if the deal goes ahead, the transition for patients to new insurers won’t be smooth. Even in the best-case scenario, the transition will be a paperwork headache for patient families, Love said.
Cook Children’s isn’t the only health plan affected by the contract procurement changes: up to 1.8 million Texans could be forced to sign up with new managed care organizations.
“All of them will have to transition to new health insurance on Sept. 1, 2025,” Love said. “The concern is … there will be gaps in care. People will go to the pharmacy and not be able to get their prescription filled because their insurance coverage is not listed correctly.”
HHSC does not comment on pending litigation but noted that transitions between managed care providers need to be “as seamless as possible.”
“Established beneficiary and provider relationships, existing treatment protocols and ongoing service plans are a critical part of any transition,” an HHSC spokesperson wrote to WFAA.
Love questioned whether the transition would be seamless for as many as 1.8 million Texans, given recent issues with the end of continued Medicaid coverage for patients during the pandemic.
The Sudolkans said they didn’t want to lose the planning coordinator, whose compassionate demeanor they praised.
“We have a lot of families who come to us from other managed care operations, and we hear from them, ‘It’s really refreshing here. You guys really care about us. You care about our families,'” Love said.
A judge could issue a temporary injunction as early as next week delaying the contract’s implementation.
Regardless of who wins in the lawsuit, the legal process could buy lawmakers interested in finding a middle ground.
The next legislative session begins Jan. 14.
