Cook Children's sues Texas to retain Tarrant County Medicaid patients

The Cook Children's Health Plan is suing the State of Texas over its plans to end its Medicaid contract next year, alleging the decision was "unilateral" and "flawed."

The big picture: For decades, the state's health commission has contracted with community-based health systems to provide care to low-income families and families with specialized needs.

• The commission now wants to give Medicaid's STAR and CHIP contracts to for-profit companies.

Why it matters: The changes will affect 1.8 million Texans, per Cook Children's .

• The Fort Worth-based system has helped hundreds of thousands of Tarrant County families for over 20 years through its partnership with STAR and CHIP.

State of play: The state also plans to remove Driscoll Health Plan in South Texas and Texas Children's Health Plan in the Houston area from STAR and CHIP starting in September 2025.

• Molina Healthcare, Blue Cross Blue Shield, Aetna and United Healthcare — all private companies — will be given the contracts instead.
• Cook Children's filed a protest with the state in March, but it was denied.

Zoom in: Cook Children's is appealing the decision in a Travis County court, alleging that the commission didn't follow Texas' requirements to consider continuity of care and give preference to health plans offering charity care and serving special populations.

The intrigue: Republican and Democratic lawmakers have opposed the changes, per the Fort Worth Report .

What they're saying: "These actions we take are strong but necessary… There is zero chance that a national for-profit will care about these patients the way we do," Cook Children's president Rick Merrill said in a statement.

The other side: The Texas Health and Human Services Commission tells Axios it doesn't comment on pending litigation. The changes won't affect a patient's eligibility for Medicaid nor the services they are eligible for, the commission says.

• All interested providers went through a comprehensive bidding and review process, per the commission. New providers are contractually obligated to ensure a smooth transition.

What we're watching: If the state Legislature, which reconvenes in January, will take up the issue.