Texas Cancels Contracts – Cites Flawed RFP Process

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Texas cancels controversial Medicaid contracts after complaints of subjective scoring

“This decision is necessary to ensure the contract award processes are conducted with integrity, fairness and transparency,” a spokeswoman for the Texas Health and Human Services Commission said.


Texas health officials announced Wednesday that they are starting over on a years long process to pick health insurance companies to operate a $10 billion portion of the state’s privatized Medicaid program.

More than half a dozen health insurers had protested the Texas Health and Human Services Commission’s awarding of contracts in Medicaid’s STAR+PLUS program on the grounds that the scoring process was arbitrary and inconsistent.

The health commission, with recently appointed acting Executive Commissioner Phil Wilson now in charge, appears to agree.

“This decision is necessary to ensure the contract award processes are conducted with integrity, fairness and transparency of the agency’s procurement of Medicaid managed care services and product-lines,” said Christine Mann, a spokeswoman for the Texas Health and Human Services Commission.

“The protests raised questions about inconsistent scores by individual evaluators, and outliers in scoring,” she said. “With such significant concerns raised, it is important to cancel these contracts and ensure our processes result in the best care for our clients at the best value for Texas.”

The agency also announced Wednesday it would start over on another pending contract procurement for health insurers looking to do business in STAR — a Medicaid program for low-income children, pregnant women and families — and the Children’s Health Insurance Program, which combined have a roughly $19.2 billion contract value. The state had not yet announced a tentative list of winners for those contracts.

The cancellations “will not impact or disrupt any benefits or services for clients in any of the programs,” Mann said.

About 530,000 Texans with complex and expensive health problems receive coverage through Medicaid’s STAR+PLUS program. The program covers elderly, blind or disabled adults.

The health commission announced tentative STAR+PLUS contract winners in October, but the final decision was tied up as many health plans filed protests. That announcement was a long time in the making; the state first asked health insurers to submit business proposals in March 2018 but then halted and restarted the process two times, finally requiring proposals to be submitted in November 2018.

Even while the award decisions were pending, the state paid an outside consultant to identify ways to improve its procurement processes. Mercer, the consultant, offered recommendations such as “better and more consistent training” of state scorers, which the state will incorporate, Mann said.

Correction: An earlier version of this story misstated which program has a contract value of roughly $19.2 billion.