SB 2548

relating to awarding contracts to managed care organizations under
Medicaid and the child health plan program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 540.0204, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 540.0204.  CONTRACT CONSIDERATIONS RELATING TO MANAGED
CARE ORGANIZATIONS.  (a)  In awarding contracts to managed care
organizations, the commission shall:
(1)  subject to Subsection (b), give preference to an
organization that has significant participation in the
organization's provider network from each health care provider in
the region who has traditionally provided care to Medicaid and
(2)  give extra consideration to an organization that
agrees to assure continuity of care for at least three months beyond
a recipient's Medicaid eligibility period;
(3)  consider the need to use different managed care
plans to meet the needs of different populations, including a plan
with a children's hospital that serves a special patient population
in the plan's provider network; [and]
(4)  consider the ability of an organization to process
Medicaid claims electronically;
(5)  in accordance with Section 540.0051(2), consider
the impact not renewing an organization's contract may have on
access to care and the quality of care that is available in
recipients' local communities; and
(6)  in the South Texas service region, give extra
consideration to an organization that is either:
(A)  locally owned, managed, and operated, if one
(B)  in compliance with the requirements of
(b)  In determining whether a managed care organization must
be given preference under Subsection (a)(1), the commission shall:
(1)  inquire about and evaluate the organization's
current provider network in the region where the organization seeks
(2)  review and consider publicly available
information about the organization.
(c)  The commission shall ensure bid evaluators are aware of
the requirements of this section, including the commission's duty
under Subsection (a)(1) to give preference to a managed care
organization that has significant participation in the
organization's provider network from health care providers who
traditionally provide care to Medicaid and charity care patients.
SECTION 2.  Section 543A.0052(d), Government Code, as
effective April 1, 2025, is amended to read as follows:
(d)  In awarding contracts to managed care organizations
under the child health plan program and Medicaid, the commission
shall, in addition to considerations under Section 540.0204 of this
code and Section 62.155, Health and Safety Code, give preference to
an organization that offers a managed care plan that:
(1)  successfully implements quality initiatives under
Subsection (a) as the commission determines based on data or other
evidence the organization provides; and [or]
(2)  meets quality-of-care and cost-efficiency
benchmarks under Subsection (b).
SECTION 3.  Section 2155.144, Government Code, as effective
April 1, 2025, is amended by adding Subsection (e) to read as
(e)  In addition to all relevant factors under Subsection
(d), when determining best value in awarding a contract to a managed
care organization to provide health care services to enrollees or
recipients under the child health plan program or Medicaid, the
Health and Human Services Commission shall consider the
organization's past performance under similar contracts and, if
applicable, review and score the organization's past performance
under any contract entered into with the commission.
SECTION 4.  (a)  Subject to Subsection (b) of this section,
the changes in law made by this Act apply only to a contract awarded
on or after the effective date of this Act.  A contract awarded
before the effective date of this Act is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
(b)  For purposes of Subsection (a) of this section, a
contract is not considered awarded if on the effective date of this
(1)  the Health and Human Services Commission has not
progressed beyond issuing an intent to award a contract under the
(2)  the award is subject to pending litigation.
(c)  In awarding a contract to a managed care organization
under a procurement described by Subsection (b)(1) or (2) of this
section, the Health and Human Services Commission shall conduct a
reevaluation of bids for each service delivery area in accordance
with the changes in law made by this Act, and if, based on the
reevaluation, the commission determines that an organization
submitted a higher scoring bid for the area than the bid submitted
by the organization the commission intended to award, or awarded, a
contract to under the law as it existed immediately before the
effective date of this Act, the commission shall instead award the
contract to the organization that submitted the highest scoring
SECTION 5.  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 6.  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.