HB 3538

relating to the Managed Care Consumer Choice Program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0021 and 533.0022 to read as follows:
Sec. 533.0021. MANAGED CARE CONSUMER CHOICE PROGRAM.  (a)
The commission may periodically issue a request for applications to
enter into a contract with the commission to provide health care
(b)  The commission shall not enter into a contract under
this section with a managed care organization until the commission
(1)  Certified the managed care organization under
Section 533.0035 for any service delivery area for which the
managed care organization will provide services to recipients under
(2)  Determined in writing the managed care
organization has provided satisfactory assurances regarding its
(3)  Determined in writing the managed care
organization complies with the performance measures outlined in
(c)  Any contract entered under this section shall contain
the required contract provisions in Section 533.005 and all other
provisions required to be included in a contract between a managed
care organization and the commission under this chapter.
(d)  The managed care organization shall not provide any
services to recipients, and the commission shall not make any
payments, under any contract entered into under this section until
the managed care organization completes readiness review as
(e)  The commission shall offer to contract with any managed
care organization that submits an application in response to a
request for applications under Section 533.011 and meets the
requirements of Subsection (a) of this section for the programs and
service delivery areas for which the managed care organization will
provide services under the contract.
(f)  The programs to which this section applies include STAR,
CHIP, STAR Kids, and STAR + PLUS.  This section does not apply to the
(g)  The commission shall ensure that a recipient may select
any managed care plan offered by a managed care organization in good
standing that has entered into a contract with the commission under
this section to provide services in the recipient’s service
delivery area for the program under which the recipient is eligible
(h)  If a managed care organization that has contracted with
the commission under this section fails to comply with a material
requirement of this section or its contract with the commission, or
does not comply with the performance measures defined in Section
533.0036, the commission may pursue any or all of the following
remedies in addition to any remedies available to the commission
(1)  require submission of and compliance with a
(2)  seek recovery of actual damages or liquidated
damages specified in the contract;
(3)  suspend automatic enrollment process of
recipients to the managed care organization in one or more service
(4)  terminate the contract for cause.
Sec. 533.0022.  MINIMUM SELECTION CRITERIA.  (a) The
commission shall publish criteria by which managed care
organizations will be measured prior to participation in the
managed care program consistent with the performance measures in
(b)  An applicant managed care organization is responsible
for providing the necessary data for analysis to determine
performance on the minimum selection criteria published by the
commission under subsection (a).  The commission shall allow the
applicant managed care organization an adequate opportunity to cure
any deficiency identified by the commission related to the minimum
SECTION 2.  Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0036 fto read as follows:
Sec. 533.0036.  PERFORMANCE MEASURES.  (a) The commission
shall establish quality and performance measures to evaluate
managed care organizations participating in the Managed Care
Consumer Choice Program under Section 533.0021 based on experience
in the Texas Medicaid and CHIP market.
(b)  In adopting the measures under Subsection (a), the
(1)  cost efficiency, quality of care, experience of
care, member and provider satisfaction;
(2)  the quality of a managed care organization’s
(3)  provider experience with the managed care
(1)  annually evaluate a managed care organization’s
performance and quality by service delivery area; and
(2)  post on its Internet website the results of the
annual performance evaluations conducted under this section in a
format that is readily accessible to and understandable by a member
SECTION 3.  Section 62.155(a), Health and Safety Code, is
Sec. 62.155  HEALTH PLAN PROVIDERS.  (a) Beginning with
services provided on or after September 1, 2027, the commission
shall contract with [select the] health plan providers under the
program through the Managed Care Consumer Choice Program in Section
533.0021[a competitive procurement process].  A health plan
provider, other than a state administered primary care case
management network, must hold a certificate of authority or other
appropriate license issued by the Texas Department of Insurance
that authorizes the health plan provider to provide the type of
child health plan offered and must satisfy, except as provided by
this chapter, any applicable requirement of the Insurance Code or
another insurance law of this state.
SECTION 4.  As soon as practicable after the effective date
of this act, but not later than September 1, 2026, the Health and
Human Services Commission shall begin requesting applications for
the Managed Care Consumer Choice Program, and begin entering into
contracts with managed care organizations under Section 533.0021,
SECTION 5.  (a) The Health and Human Services Commission
shall extend contracts that were in effect as of January 1, 2025
with managed care organizations for the STAR, CHIP, STAR Kids, and
STAR + PLUS programs until new contracts are entered under
Subsections (b) or (c).  The commission shall cancel all
procurements for the STAR, CHIP, or STAR Kids programs that were
(b)  The commission shall enter into contracts with managed
care organizations under the Managed Care Consumer Choice Program,
Section 533.0021, Government Code, for the STAR and CHIP programs
with services to recipients under such contracts no later than
(c)  The commission shall enter into contracts with managed
care organizations under the Managed Care Consumer Choice Program,
Section 533.0021, Government Code, for the STAR Kids and STAR + PLUS
program with services to recipients under such contracts on
(d)  The Managed Care Consumer Choice Program, Section
533.0021, Government Code, shall be the exclusive means by which
the commission may enter into new contracts with managed care
organizations for the STAR, CHIP, STAR Kids, and STAR + PLUS
programs after the effective date of this Act.
(e)  A recipient enrolled in a managed care plan prior to the
date services are provided under a contract entered into under
Subsections (b) or (c) shall, until such time as the recipient
chooses to be enrolled in a different managed care plan or is no
longer eligible for services continue enrollment in the same
managed care plan if the managed care organization contracts to
provide services in the recipient’s service delivery area under
SECTION 6.  If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 7.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.