The fight over whether Cook Children’s Health Care System can keep offering its health care plan to more than 125,000 families in the Tarrant County area is headed to court.
Cook Children’s has filed a lawsuit against the Texas Health and Human Services Commission to protest the agency’s decision to drop its plan from Medicaid STAR and CHIP plans. Hospital officials announced the legal actions during a June 26 press conference.
“Our families are worth fighting for, and we’re going to continue to fight until the state does the right thing,” Karen Love, president of Cook Children’s Health Plan, said during the conference. “The stakes are too high and the consequences are too great to have this flawed decision set in stone. We are determined to ensure that it does not.”
Launched in 2000, Cook Children’s Health Plan provides health coverage to Tarrant County-area families with Medicaid and CHIP. The Medicaid STAR and CHIP programs cover the cost of routine, acute and emergency medical visits.
STAR is primarily for pregnant women, low-income children and some adults who cannot afford health insurance, and STAR Kids is for children with disabilities. CHIP provides care to children in families who earn too much money to qualify for Medicaid, but cannot afford to buy private insurance.
If the current ruling is upheld, the Cook Children’s Health Plan, alongside the Driscoll Health Plan in South Texas and the Texas Children’s Health Plan in the Houston area, will be removed from the STAR and CHIP programs starting in September 2025.
To prevent that outcome, the Fort Worth-based health system filed a petition against Cecile Young, executive commissioner of the health and human services commission.
Cook Children’s filed a temporary restraining order request to stop the state agency from finalizing its procurement results. Both of the suits were filed in Travis County.
Tiffany Young, a spokesperson for the Texas Health and Human Services Commission, said the agency would not comment on pending litigation.
Cook Children’s said the state’s process was “deeply flawed” and failed to give preference to health plans with successful track records that provide care to special populations. The state’s decision didn’t consider how continuity of care would be impacted, according to the health system.
Representatives for Cook Children’s also allege the state agency did not go through the proper process for selecting providers and instead gave Aetna, one of the winning bidders, “an unfair advantage by prematurely disclosing copies of its competitors’ proposals.”
“The state made a mistake,” said Rick W. Merrill, CEO and president of Cook Children’s. “They based their decision on a flawed process, one that ignored the very things that make children special … but most importantly, they ignored the human cost.”
With its legal actions, Cook Children’s hopes to remain on the list of options for families in its network. If the health system does not win its legal challenge, Cook Children’s would likely shut down its health plan, but the hospital itself is not in danger.
Love said there is an opportunity for lawmakers to remove the cap on how many organizations can be awarded a Medicaid contract. The state agency currently contracts with 20 managed care organizations.
“There are a number of options that would allow for families to have a choice of for-profit, not-for-profit plans or local national plans,” Love said.
Family says plan removal could be ‘catastrophic’
During the June 26 press conference, Fort Worth parents Samuel and Kathy Grace Sudolcan shared the story of their 2-year-old son, Zechariah, who was born with a rare chromosomal disorder. He requires a trach, ventilator and g-button for feeding.
Zechariah sees more than a dozen specialists within the Cook Children’s system and is covered under the Texas’ STAR Kids program by Cook Children’s Health Plan.
Samuel Sudolcan said losing the family’s coverage under Cook Children’s Health Plan would be “catastrophic.”
“These (doctors) are people who have dealt with (Zechariah’s) very complex and very rare genetic disease since birth,” he said. “We would have to get a new plan. It’s that kind of switch that can be hard. That would mean a complete change, potentially for his life.”
The Sudolcan family called for the Texas Health and Human Services Commission’s decision to be overturned.
“There’s 125,000 kids, all with varying needs, and this changes all that,” he said. “We’re very fortunate, my job provides for both of us, but that’s not the case for a lot of people.”
How we got here
In Texas, Medicaid STAR and CHIP contracts run for six years, with three two-year renewal options. After contracts have been in place for 12 years, the agency runs a new procurement. During that process, the agency issues requests for proposals, accepts bids, puts insurers through an evaluation process, and then awards the new contracts.
When the health and human services commission directed managed care organizations to start preparing proposals for new contracts in December 2022, it included new elements. Among the changes was a new scoring-and-ranking system that placed more emphasis on numerical scores rather than health care quality, community preferences, market share and historical performance.
Cook Children’s filed its original protest March 21 and argued that the changes in the scoring rubric from the state agency lacked transparency. Hospital officials said the process was set up to work against regional, provider-based sponsored plans like theirs and instead favored for-profit companies.
In early June, a group of bipartisan Tarrant County lawmakers sent a letter to the commission expressing concerns about the decision’s possible impact on more than 125,000 families with children in the Tarrant County area. The lawmakers asked the state agency to delay finalizing the contract awards until the state Legislature meets in January 2025.
Later that week, the commission formally rejected a protest from the health system seeking to remain in the state Medicaid plan.
The decision to remove the health plan would affect 400 local employees, over 1,455 primary care providers and 2,550 specialists, Cook Children’s representatives said.
Employees “are in a situation where they don’t know what’s going on, and they’re rightfully concerned,” Love previously told the Report. “If this transition happens, we’re going to take care of our employees. We’ve got time to work with them to figure out other positions within the system.”
The health system advises its health plan members to continue seeking care from doctors and other providers as coverage will remain active for at least the next year and a half.
David Moreno is the health reporter for the Fort Worth Report. His position is supported by a grant from Texas Health Resources. Contact him at david.moreno@fortworthreport.org or @davidmreports.
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