Cook Children’s Health Plan sues the state of Texas over Medicaid contract dispute

Cook Children’s Health Plan, a major provider of Medicaid health insurance to Fort Worth kids and families, is suing Texas over its decision not to award a Medicaid contract to the health system.

Officials with Cook Children’s announced the lawsuit Wednesday.

The suit stems from a dispute over the state’s decision not to hire Cook Children’s to provide Medicaid health insurance to families in the Tarrant County region. For decades, Cook Children’s has been paid by the state to be one of several health insurance providers for children, pregnant and postpartum moms, and children with disabilities and other serious health needs.

In February, Cook Children’s Health Plan submitted a proposal for the upcoming contract, which begins in 2025. Medicaid contracts are among the largest contracts awarded by state governments. Every year, Texas pays billions of dollars to insurance providers, including Cook Children’s, who are then responsible for administering health insurance for those who qualify for Medicaid in Texas.

In a surprise move in March, the Texas Health and Human Services Commission announced that it would not award a Medicaid contract to Cook Children’s and multiple other community health plans across the state. Instead, the state said it planned to award the contracts to United Healthcare, Molina, Blue Cross and Blue Shield, and Aetna for Tarrant County and five neighboring counties.

Cook Children’s previously filed an appeal over the state’s decision, but the state has stood by its original award . Now, the health plan is escalating its fight to keep its state contract in its suit against the state . In the suit, Cook Children’s is arguing that the state used a flawed process to decide which companies to hire. Cook Children’s is accusing the state of ignoring requirements to look at health plans’ previous track records.

Currently, Cook Children’s Health Plan has two state contracts. One is to provide Medicaid health insurance to all of the kids and pregnant people enrolled in the STAR and CHIP programs. The health plan also has a second contract to provide Medicaid health insurance to kids with disabilities in the STAR Kids program.

One of those children is Zechariah Sudolcan, a 2-year-old born with a rare chromosomal disorder that can affect the development of the heart, kidneys and lungs. Zechariah gets his health insurance through the STAR Kids program, the second Medicaid contract that Cook Children’s Health Plan is fighting to get.

Zechariah’s chromosomal abnormality is so rare that there are fewer than 50 recorded cases of it in medicine, his father Samuel Sudolcan said at a press conference Wednesday. Initially, his parents weren’t sure if he would survive birth. But Zechariah has survived and thrived in his first years of life, thanks in large part to an extensive network of doctors, nurses, therapists and other professionals who help him to grow and develop. That care is paid for through Zechariah’s Medicaid health insurance, and his family gets help navigating the complex system thanks to a case worker with Cook Children’s Health Plan.

Altogether, there about 125,000 people in the area who get their health insurance through Cook Children’s Health Plan.

But the state’s decision affects more than just Cook Children’s and the 125,000 kids and families who get their health insurance from the local provider. The state also chose not to award a contract to Wellpoint, which provides health insurance to about 46% of kids and families with Medicaid and CHIP health insurance in the Tarrant County region. If the state’s decision stands, more than three out of every four people on Medicaid would have to pick a new plan next year. These families would still be eligible for Medicaid and CHIP health insurance, but critics of the state’s decision said that the complex process of switching insurance providers could cause a delay in care.

The disruption in care that most advocates fear has already happened to Zechariah: Earlier this year, Zechariah lost his health insurance for almost a month, causing him to lose necessary therapy appointments, because the state had incorrectly removed him from the Medicaid program that pays for his health care, said his mom, Kathy Grace Sudolcan. The mistake is one that advocates believe has happened to thousands of Texas kids in the last year while the state is going through a complex administrative process of checking every person on Medicaid to make sure they are still eligible. Critics of the state agency have said they don’t have enough staff, which is why children like Zechariah lost their health insurance even though they remained eligible.

In Tarrant County, parents fear a similar mistake could happen if thousands of children suddenly needed to switch their health insurance plans.

For kids like Zechariah, even a brief disruption in care could be harmful. The developmental range for children with Zechariah’s chromosmal disorder is extreme, his father said: Some children develop just a bit behind their peers, while others might never be able to walk or talk. Zechariah’s parents don’t yet know where their son will fall on that spectrum, but they’re hopeful that with regular care, he can continue to progress. A recent milestone for Zechariah is that he’s begun turning the pages of books as his older brother reads to him.

If Zechariah lost his health insurance, even briefly, because of administrative issues during the state’s transition to new contractors, it could delay his progress. And if Zechariah’s new health plan required him to switch doctors, therapists, and other care workers, it could force Zechariah and his family to build a new network from scratch. That would not only impact Zechariah’s care, but also his wellbeing, his mom said. Their son is “not a people person,” she said, although there are some exceptions. (The two-year-old is a big fan of his pulmonologist, for example.)

“He has his people, and he’s learned his people throughout his three years of life,” Kathy Grace said. “I think changing that would be hard for him.”

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