Texas payer warns of closure amid new state Medicaid contracts

Driscoll Health Plan is warning about its future ability to remain operational following Texas' decision not to award the payer a Medicaid contract earlier this year.

Earlier this year, Texas tentatively awarded a majority of its Medicaid and CHIP contracts to Blue Cross Blue Shield of Texas, Molina Healthcare, Aetna and UnitedHealthcare, which are collectively worth $116 billion. Centene, which currently holds contracts in nine of the state's 13 service areas, picked up just three in the tentative award.

In June, Texas officials rejected protests from eight insurers challenging the Medicaid contract awards, which came from AmeriHealth Caritas, CareSource Bayou Health, Cook Children's Health Plan, Driscoll Health Plan, Baylor Scott & White Health Plan, Superior HealthPlan (Centene) and Wellpoint (Elevance Health). 

On June 19, Driscoll's CEO, Craig Smith, warned the future of the health plan is at stake if the decision is not reversed and said the organization would appeal again. If the second appeal is rejected, the health plan said it will pursue legal action against the state.

“It's a decision by the agency that if not reversed, could effectively mean the end of Driscoll Health Plan," Mr. Smith said. "As a result, three-quarters of the children and pregnant mothers on Medicaid across South Texas will have their health insurance disrupted. More than 500 jobs in our part of the state could be eliminated, and access to pediatric care and maternal care will be reduced for a generation of individuals in need."

Driscoll Health Plan serves 185,000 members across 24 counties. It is part of Corpus Christi-based Driscoll Health System, which operates two children's hospitals.

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