CourtListener 10691105•Cecile Erwin Young, in Her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission; Molina Healthcare of Texas, Inc.; And Aetna Better Health of Texas, Inc. v. Cook Children's Health Plan, Texas Children's Health Plan, Superior Health Plan, Inc., and Wellpoint Insurance Company
Cecile Erwin Young, in Her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission; Molina Healthcare of Texas, Inc.; And Aetna Better Health of Texas, Inc. v. Cook Children's Health Plan, Texas Children's Health Plan, Superior Health Plan, Inc., and Wellpoint Insurance Company
CourtListener 10691105Txctapp15Sep 29, 2025
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ACCEPTED
15-24-00114-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
9/29/2025 4:09 PM
No. 15-24-00114-CV CHRISTOPHER A. PRINE
CLERK
In the Fifteenth Court of Appeals FILED IN
15th COURT OF APPEALS
AUSTIN, TEXAS
Austin, Texas 9/29/2025 4:09:30 PM
CHRISTOPHER A. PRINE
Clerk
Cecile Erwin Young, in her Official Capacity as the Executive Commissioner
of the Texas Health and Human Services Commission; Molina Healthcare
of Texas, Inc.; and Aetna Better Health of Texas, Inc.,
Appellants,
v.
Cook Children’s Health Plan, Texas Children’s Health Plan,
Superior Health Plan, Inc., and Wellpoint Insurance
Company,
Appellees.
On Appeal from the 353rd Judicial District of Travis County,
No. D-1-GN-24-003839
Brief of Appellant
Molina Healthcare of Texas, Inc.
Scott Douglass &
McConnico LLP
Jason R. LaFond
State Bar No. 24103136
jlafond@scottdoug.com
Cheryl Joseph LaFond
303 Colorado Street, Suite 2400
Austin, Texas 78701
(512) 495-6300
Counsel for Appellant Molina Healthcare of Texas, Inc.
Oral Argument Requested
Identity of Parties and Counsel
Appellants
Parties Counsel
Cecile Erwin Young Office of the Attorney General
William F. Cole
William.Cole@oag.texas.gov
Cory A. Scanlon
Cory.Scanlon@oag.texas.gov
Jennifer Cook
Jennifer.Cook@oag.texas.gov
Thomas Bevilacqua
Thomas.Bevilacqua@oag.texas.gov
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1700
Fax: (512) 474-2697
Molina Healthcare of Scott, Douglass, & McConnico, LLP
Texas, Inc. Jason R. LaFond
jlafond@scottdoug.com
Cheryl Joseph LaFond
clafond@scottdoug.com
303 Colorado Street, Suite 2400
Austin, Texas 78701
Tel.: (512) 495-6300
Fax: (512) 495-6399
Aetna Better Health of Ewell, Brown, Blanke & Knight LLP
Texas, Inc. Joseph R. Knight
jknight@ebbklaw.com
111 Congress Avenue, 28th Floor
Austin, Texas 78701
Tel.: (512) 770-4010
Fax: (877) 851-6384
Taft Stettinius & Hollister LLP
Marc J. Kessler (pro hac vice)
mkessler@taftlaw.com
41 South High Street, Ste 1800
Columbus, OH 43215-6106
Tel.: (614) 220-0237
Fax: (614) 221-2007
Appellees
Parties Counsel
Cook Children’s Health Alexander Dubose & Jefferson LLP
Plan Amy Warr
awarr@adjtlaw.com
Anna M. Baker
abaker@adjtlaw.com
100 Congress Avenue, Suite 1450
Austin, Texas 78701-2709
Tel.: (512) 482-9300
Fax: (512) 482-9303
Burgess Law PC
Karen Burgess
kburgess@burgesslawpc.com
Katie Dolan-Galaviz
kgalaviz@burgesslawpc.com
404 West 13th Street
Austin, Texas 78701
Tel.: (512) 482-8808
Fax: (512) 900-6325
Perkins Coie LLP
Matthew P. Gordon
mgordon@perkinscoie.com
1201 Third Avenue, Ste 4900
ii
Seattle, Washington
Tel.: (206) 359-8000
Fax: (206) 359-9000
Texas Children’s Health Norton Rose Fulbright US LLP
Plan Susan Feigin Harris
susan.harris@nortonrosefulbright.com
Warren S. Huang
warren.huang@nortonrosefulbright.com
1550 Lamar, Suite 2000
Houston, Texas 77010
Tel.: (713) 651-5151
Fax: (713) 651-5246
Paul D. Trahan
paul.trahan@nortonrosefulbright.com
98 San Jacinto Boulevard, Ste 1100
Austin, Texas 78701
Tel.: (512) 474-5201
Fax: (512) 536-4598
Thomas A. Coulter
tom.coulter@nortonrosefulbright.com
799 9th Street, NW, Ste 1100
Washington, D.C. 20001
Tel.: (202) 662-0200
Fax: (202) 662-4643
Superior Health Plan, Inc. Holland & Knight LLP
Richard B. Phillips, Jr.
rich.phillips@hklaw.com
One Arts Plaza
1722 Routh Street, Ste 1500
Dallas, Texas 75201
Tel.: (214) 964-9500
Fax: (214) 964-9501
iii
Karen D. Walker
karen.walker@hklaw.com
Tiffany Roddenberry
tiffany.roddenberry@hklaw.com
315 South Calhoun Street, Ste 600
Tallahassee, Florida 32301
Tel.: (850) 425-5612
Fax: (850) 224-8832
Wellpoint Insurance Foley & Lardner LLP
Company
Robert F. Johnson III
rjohnson@foley.com
600 Congress Avenue, Ste 3000
Austin, Texas. 78701
Tel.: (512) 542-7000
Fax: (512) 542-7100
Michelle Y. Ku
mku@foley.com
Stacy R. Obenhaus
sobenhaus@foley.com
2021 McKinney, Ste 1600
Dallas, Texas 75201
Tel.: (214) 999-3000
Fax: (214) 999-4667
Benjamin J. Grossman
bjgrossman@foley.com
106 East College Avenue, Ste 900
Tallahassee, Florida 32301
Tel.: (850) 222-6100
Fax: (850) 561-6475
iv
Table of Contents
Page
Identity of Parties and Counsel ................................................................................. i
Table of Authorities .............................................................................................. viii
Statutory Changes .................................................................................................. xv
Statement of the Case ........................................................................................... xvi
Statement Regarding Oral Argument ................................................................... xvii
Issues Presented .................................................................................................. xviii
Introduction ............................................................................................................. 1
Statement of Facts.................................................................................................... 2
A. STAR, CHIP, and STAR Kids ..................................................................... 2
B. The STAR CHIP procurement process ....................................................... 3
1. The STAR CHIP RFP ........................................................................... 4
2. The notice of intent to award ................................................................. 6
3. The Losing Plans’ protests .................................................................... 7
a. Protests generally ............................................................................. 7
b. Wellpoint’s solicitation protest ........................................................ 8
c. The Losing Plans’ award protests .................................................... 8
C. Procedural history. ....................................................................................... 9
D. The intervening legislative session ............................................................. 12
Standard of Review ................................................................................................ 12
Summary of the Argument .................................................................................... 14
Argument ............................................................................................................... 16
I. The Losing Plans’ Claims Fail to Overcome Sovereign Immunity,
and Should Be Dismissed with Prejudice. ........................................................ 16
A. The Losing Plans lack sufficient interest to maintain their ultra
vires claims. ............................................................................................... 16
v
1. Government procurement standards do not create private
rights. ................................................................................................... 18
2. Even if procurement standards could create private
rights, the Losing Plans waived them. .................................................. 19
B. Commissioner Young’s authority does not depend on how she
or other HHSC officials apply procurement standards. ............................. 27
1. Commissioner Young’s authority. ....................................................... 29
2. Commands are distinct from consequences. ........................................ 30
3. The procurement standards the Losing Plans rely on are not
conditions on Commissioner Young’s authority. ................................. 33
C. Commissioner Young’s unconstrained discretion precludes the
Losing Plans’ ultra vires claims. ................................................................. 36
1. Commissioner Young’s ultimate and unrestrained objective
in the procurement process is to interpret collateral law. ..................... 37
2. Commissioner Young has unconstrained discretion to
procure for best value. ......................................................................... 41
3. No specific, substantive, or objective standards govern
Commissioner Young’s exercise of judgment. ..................................... 45
II. Alternatively, the Losing Plans’ Claims Should Be Dismissed
Without Prejudice for Failure to Exhaust Administrative
Remedies.......................................................................................................... 53
III. Equitable Factors Do Not Support the Temporary Injunction......................... 55
A. The status quo is Commissioner Young’s authority to procure
STAR CHIP contracts. .............................................................................. 56
B. The Losing Plans have no probable right to relief. ..................................... 56
C. The Losing Plans’ claimed irreparable harm arises from the
expiration of their contracts, not HHSC’s reprocurement. ....................... 56
D. The balance of the equities weighs against the Losing Plans...................... 58
Conclusion and Prayer ........................................................................................... 59
Certificate of Compliance ...................................................................................... 61
vi
Appendix
Tab
1 Order denying Commissioner Young’s Plea to the Jurisdiction and
Granting Plaintiffs’ Application for Temporary Injunction
2 PX38: STAR CHIP Request for Proposals
3 Tex. Gov’t Code § 522.0051
4 Tex. Gov’t Code § 523.051
5 Tex. Gov’t Code § 525.0101
6 Tex. Gov’t Code § 532.0051
7 Tex. Gov’t Code § 540.0051
8 Tex. Gov’t Code § 540.0203
9 Tex. Gov’t Code § 540.0204
10 Tex. Gov’t Code § 540.0206
11 Tex. Gov’t Code § 543A.0052
12 Tex. Gov’t Code § 2155.076
13 Tex. Gov’t Code § 2155.144
14 Tex. Health & Safety Code § 62.051
15 Tex. Health & Safety Code § 62.053
16 Tex. Health & Safety Code § 62.055
17 Tex. Health & Safety Code § 62.155
18 Act of May 29, 2023, 88th Leg., R.S., ch. 1170, § 1, art. IX, sec. 17.09
19 1 Tex. Admin. Code 91.101
20 1 Tex. Admin. Code § 391.209
21 1 Tex. Admin. Code § 391.307
22 1 Tex. Admin Code § 111.3 (1997)
vii
Table of Authorities
Page(s)
Cases
AC Ints., L.P. v. TCEQ,
543 S.W.3d 703 (Tex. 2018) ................................................................................ 35
Acker v. Tex. Water Comm’n,
790 S.W.2d 299 (Tex. 1990) ................................................................................ 37
Armstrong v. Exceptional Child Ctr., Inc.,
575 U.S. 320 (2015) ............................................................................................ 35
Ascendant Servs., LLC v. United States,
160 Fed. Cl. 275 (2022) .......................................................................................51
Blue & Gold Fleet, L.P. v. United States,
492 F.3d 1308 (Fed. Cir. 2007) ................................................................19, 20, 24
Blue Cross Blue Shield of Texas v. Duenez,
201 S.W.3d 674 (Tex. 2006) ................................................................................ 53
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ................................................................................. 54
Campbell v. Wilder,
487 S.W.3d 146 (Tex. 2016) ................................................................................ 56
City of Dall. v. Dall. Consol. Elec. St. Ry.,
148 S.W. 292 (Tex. 1912) .................................................................................... 16
City of El Paso v. Heinrich,
284 S.W.3d 366 (Tex. 2009) .......................................................................... 15, 35
City of Hous. v. Rhule,
417 S.W.3d 440 (Tex. 2013) ................................................................................ 53
City of Hous. v. Gomez,
716 S.W.3d 161 (Tex. 2025)................................................................................. 12
Cobb v. Harrington,
190 S.W.2d 709 (Tex. 1945) .................................................................................15
Dall. Cnty. v. Sweitzer,
881 S.W.2d 757 (Tex. App.—Dallas 1994, writ denied) ...................................... 56
viii
Davis v. State,
12 S.W. 957 (Tex. 1889) ...................................................................................... 30
Delta Data Sys. Corp. v. Webster,
744 F.2d 197 (D.C. Cir. 1984) ............................................................................. 36
Ex parte Young,
209 U.S. 123 (1908) ............................................................................................ 16
Fed. Sign v. Tex. S. Univ.,
951 S.W.2d 401 (Tex. 1997)..................................................................................15
Fort Worth Cavalry Club v. Sheppard,
83 S.W.2d 660 (Tex. 1935) ...................................................................................31
Foxwood Homeowners Ass’n v. Ricles,
673 S.W.2d 376 (Tex. App.—Houston [1st Dist.] 1984), writ ref’d n.r.e.) .......... 54
French v. Edwards,
80 U.S. (13 Wall.) 506 (1872) .............................................................................. 30
Friends of Canyon Lake, Inc. v. Guadalupe–Blanco River Auth.,
96 S.W.3d 519 (Tex. App.—Austin 2002, pet. denied) ....................................... 30
Hall v. McRaven,
508 S.W.3d 232 (Tex. 2017) ..................................................................... 27, 36, 39
Hayes Int’l Corp. v. McLucas,
509 F.2d 258 (5th Cir. 1975) ............................................................................... 39
Helena Chem. Co. v. Wilkins,
47 S.W.3d 486 (Tex. 2001).................................................................................. 35
Honors Acad., Inc. v. TEA,
555 S.W.3d 54 (Tex. 2018) .................................................................................. 28
Hous. Belt & Terminal Ry. v. City of Hous.,
487 S.W.3d 154 (Tex. 2016) ..................................................................... 36, 44, 45
In re Morris,
663 S.W.3d 589 (Tex. 2023) .......................................................................... 30, 45
In re Prudential Ins. Co. of Am.,
148 S.W.3d 124 (Tex. 2004) ................................................................................ 18
In re Rudolph Auto., LLC,
674 S.W.3d 289 (Tex. 2023) ................................................................................ 12
ix
In re State,
692 S.W.3d 466 (Tex. 2021) ................................................................................ 55
In re Stetson Renewables Holdings, LLC,
658 S.W.3d 292 (Tex. 2022) .............................................................. 28, 29, 32, 35
Indus. Specialists, LLC v. Blanchard Ref. Co.,
652 S.W.3d 11 (Tex. 2022) ............................................................................ 44, 45
Janek v. Gonzalez,
2013 WL 1748795 (Tex. App.—Austin 2013, no pet.) ........................................ 53
Jessen Assocs., Inc. v. Bullock,
531 S.W.2d 593 (Tex. 1975) ..................................................................................31
K-Con, Inc. v. Sec’y of Army,
908 F.3d 719 (Fed. Cir. 2018) ....................................................................... 24, 25
Kinnett Dairies, Inc. v. Farrow,
580 F.2d 1260 (5th Cir. 1978) ............................................................................. 36
Labatt Food Serv., Inc. v. United States,
577 F.3d 1375 (Fed. Cir. 2009) .............................................................................51
Landry’s Seafood Inn & Oyster Bar-Kemah, Inc. v. Wiggins,
919 S.W.2d 924 (Tex. App.—Houston [14th Dist.] 1996, no pet.) ...................... 58
Mo., Kan. & Tex. Ry. v. Shannon,
100 S.W. 138 (Tex. 1907) .................................................................................... 16
Morath v. Kingsville ISD,
710 S.W.3d 918 (Tex. App.—15th Court 2025, no pet.)...........................27, 30, 40
Morath v. Pecos-Barstow-Toyah ISD,
2025 WL 1833467 (Tex. App.—15th Court 2025, no pet.) ................................. 27
Ojo v. Farmers Grp., Inc.,
356 S.W.3d 421 (Tex. 2011)................................................................................. 33
Packard Elevator v. I.C.C.,
782 F.2d 112 (8th Cir. 1986)................................................................................ 56
Perkins v. Lukens Steel Co.,
310 U.S. 113 (1940) ..............................................................................................17
Phillips v. McNeill,
635 S.W.3d 620 (Tex. 2021) .................................................................................15
x
Rivercenter Assocs. v. Rivera,
858 S.W.2d 366 (Tex. 1993) ................................................................................ 57
S.C. v. M.B.,
650 S.W.3d 428 (Tex. 2022) ............................................................................... 32
Sanchez v. Saghian,
2009 WL 3248266 (Tex. App.—Houston [1st Dist.] 2009, no pet.) .................. 56
Schroeder v. Escalera Ranch Owners’ Ass’n, Inc.,
646 S.W.3d 329 (Tex. 2022) .......................................................................... 35, 39
State ex rel. Dep’t of Crim. Just. v. VitaPro Foods, Inc.,
8 S.W.3d 316 (Tex. 1999) ............................................................................... 31, 32
State v. $435,000,
842 S.W.2d 642 (Tex. 1992) ............................................................................... 33
State v. Hollins,
620 S.W.3d 400 (Tex. 2020) ............................................................................... 56
State v. Loe,
692 S.W.3d 215 (Tex. 2024) ................................................................................ 12
State v. Reagan Cnty. Purchasing Co.,
186 S.W.2d 128 (Tex. App.—El Paso 1944, writ ref’d w.o.m.) ........................... 32
State v. Sw. Bell Tel. Co.,
526 S.W.2d 526 (Tex. 1975) ................................................................................ 55
TEA v. Devereux Tex. League City,
2023 WL 3325932 (Tex. App.—Austin 2023, no pet.) ....................................... 45
TEA v. Hous. ISD,
660 S.W.3d 108 (Tex. 2023)................................................................................ 27
Terrell v. Kasch,
10 S.W.2d 208 (Tex. App.—Austin 1928, writ ref’d) ......................................... 16
Tex. Highway Comm’n v. El Paso Bldg. & Const. Trades Council,
234 S.W.2d 857 (1950) ................................................................................... 17, 39
Tex. Logos, L.P. v. Tex. Dep’t of Transp.,
241 S.W.3d 105 (Tex. App.—Austin 2007, no pet.) ............................................ 32
Tex. Parks & Wildlife Dep’t v. RW Trophy Ranch, Ltd.,
712 S.W.3d 943 (Tex. App.—15th Court 2025, mandamus denied) ................... 39
xi
Tex. State Bd. of Examiners in Optometry v. Carp,
343 S.W.2d 242 (1961) ................................................................................... 56, 57
Tex. Tech Univ. Health Scis. Ctr. v. Niehay,
671 S.W.3d 929 (Tex. 2023) ................................................................................ 38
Thomas v. Long,
207 S.W.3d 334 (Tex. 2006)................................................................................ 53
TMRJ Holdings, Inc. v. Inhance Techs., LLC,
540 S.W.3d 202 (Tex. App—Houston [1st Dist.] 2018, no pet.) ......................... 27
United States v. James Daniel Good Real Prop.,
510 U.S. 43 (1993) .............................................................................................. 30
Warrior Focused Sols., LLC v. United States,
175 Fed. Cl. 416 (2025) ....................................................................................... 19
Wis. Gas Co. v. FERC,
758 F.2d 669 (D.C. Cir. 1985) ............................................................................. 56
Constitutional Provisions
Tex. Const. art. I, § 13 ............................................................................................. 11
Statutes
Act of May 29, 2023, 88th Leg., R.S., ch. 1170, § 1, art. IX, sec. 17.09(b)(4) ... 20, 41
Tex. Gov’t Code
§ 311.016(2)–(3) ................................................................................................. 35
§ 523.0051 .......................................................................................................... 28
§ 524.0001(b) ..................................................................................................... 40
§ 525.0101........................................................................................................... 28
§ 532.0051 .......................................................................................................... 29
§ 540.0051 ..................................................................................................... 10, 21
§ 540.0051(a)(1)(B), (a)(6) ................................................................................. 48
§ 540.0203.......................................................................................................... 47
§ 540.0203(a) ............................................................................................ 6, 11, 33
§ 540.0204 ......................................................................................................... 45
§§ 540.0204, 543A.0052 .................................................................................... 21
§ 540.0204(1) ............................................................................................... 10, 22
§ 540.0204(3) .......................................................................................... 10, 23, 46
§ 540.0206 .................................................................................................. passim
§ 543A.0052 ....................................................................................................... 46
xii
§ 543A.0052(d) .................................................................................................. 10
§ 2155.076 .................................................................................................... 18, 29
§ 2155.076(a) ................................................................................................. 34, 37
§ 2155.083(j) ...................................................................................................... 33
§ 2155.131 ............................................................................................................51
§ 2155.144.................................................................................................... passim
§ 2155.144(b), (b-1)(2) ........................................................................................ 37
§ 2155.144(c)–(d)................................................................................................ 40
§ 2155.144(d), (d)(11) ......................................................................................... 42
§ 2155.144(d)(5) ................................................................................................. 44
§ 2155.144(f ) ...................................................................................................... 42
§ 2155.444(a) ...................................................................................................... 46
Tex. Health & Safety Code
§ 62.051 .......................................................................................................... 2, 47
§ 62.051(e) ..................................................................................................... 11, 47
§ 62.052(1) ......................................................................................................... 28
§ 62.053(3) ..................................................................................................... 8, 49
§ 62.155 ........................................................................................................ 29, 49
§ 62.155(c)(1)...................................................................................................... 49
Tex. Hum. Res. Code § 32.021(a)............................................................................. 2
Tex. Loc. Gov’t Code
§ 252.061 ............................................................................................................ 33
§§ 252.061(2), 262.003 ...................................................................................... 39
Agency Materials
12 Tex. Reg. 2986 (Sept. 4, 1987) ........................................................................... 19
12 Tex. Reg. 4523 (Dec. 4, 1987) ............................................................................ 18
Ctrs. for Medicare & Medicaid Servs., Medicaid Managed Care Enrollment
and Program Characteristics: 2021 (2023) .............................................................. 3
HHSC, Request for Public Comment on Best Value Criteria for STAR & CHIP
Managed Care Procurement (Apr. 28, 2022) .......................................................... 4
In re Armorworks Enters., LLC,
B-400394, 2008 WL 4415709 (Comp. Gen. 2008)............................................. 24
In re DynCorp Int’l LLC,
B-415349, 2018 WL 397133 (Comp. Gen. 2018)) ............................................... 19
xiii
In re Veterans2work, Inc.,
B-416935, 2019 WL 497577 (Comp. Gen. 2019)................................................. 20
STAR CHIP Managed Care Services, Electronic State Business Daily,
https://tinyurl.com/zyc7j889 (Addendum No. 2 HHSC Responses to
Questions) ............................................................................................................ 6
Star Kids, Tex. Health & Hum. Servs., https://tinyurl.com/7a22ann5 .................... 3
Tex. Att’y Gen. Op. No. GA-0685 (2008) ..............................................................17
Other Authorities
Marshall J. Doke, Jr., State and Local Government Bidding Preferences,
42 Procurement Law 7 (Summer 2007) ............................................................. 46
3 Sutherland Statutory Construction § 57:5 (8th ed.)..................... 34
Webster’s Third New International Dictionary (unabr.
2002 ed.) ............................................................................................................ 48
xiv
Statutory Changes
During this appeal (on April 1, 2025), several provisions of the Government
Code relevant to the appeal moved locations. Molina cites the current statutes and
parenthetically notes their prior location. For ease of reference, here is a key to the
changes:
Out-of-Date Government
Current Location in the
Code Provisions Cited in the
Government Code
District Court
§ 533.002 § 540.0051
§ 533.003(a) § 540.0204
§ 533.0035 § 540.0203
§ 533.004 § 540.0206
§ 536.052 § 543A.0052
xv
Statement of the Case
Nature of the Appellees, disappointed bidders in an HHSC procurement, sued
Case: the agency’s apex official, Appellant Commissioner Young, under
an ultra vires theory, seeking declaratory and injunctive relief to
halt the awarding, execution, and performance of Medicaid and
CHIP managed care contracts under the STAR CHIP and STAR
Kids requests for proposals (RFPs). CR.3308–41, 3510–57, 4231–
82, 4716–65 (live petitions).
Trial Court: 353rd Judicial District Court, Travis County, Cause No. D-1-GN-
24-003839, Hon. Laurie Eiserloh
Course of Appellees applied for a temporary injunction, CR.3339–40, 3549,
Proceedings: 4276, 4762–63, and Commissioner Young filed a plea to the
jurisdiction, CR.2949–3113. The district court considered both at
a multi-day evidentiary hearing. 5.RR–8.RR.
Trial Court The district court denied Commissioner Young’s plea to the
Disposition: jurisdiction and entered a temporary injunction enjoining
Commissioner Young “and all other persons or entities in active
concert or participation with” Commissioner Young “from
awarding, signing, entering into, executing, implementing, or
otherwise taking action to effectuate or perform any contracts
resulting from or in connection with the STAR & CHIP RFP or to
further the procurement or contracting process for the STAR &
CHIP RFP.” CR.5875–5884. The district court granted similar
injunctive relief as to the STAR Kids RFP. CR.5883.
xvi
Statement Regarding Oral Argument
Molina Healthcare of Texas, Inc. respectfully requests oral argument. This ap-
peal presents important questions about the proper role of each branch of govern-
ment in ongoing state procurements. At stake are not only the immediate procure-
ments but also the broader rules that govern how disappointed bidders may (or may
not) enlist courts to halt state contracting. The Court’s resolution will have signifi-
cant implications for how procurement disputes are handled in Texas and for the
scope of judicial involvement in ongoing agency proceedings. Oral argument will give
the Court the opportunity to probe the doctrinal boundaries of ultra vires claims, test
the interplay between procurement statutes and sovereign immunity, and ensure
clarity in an area of law with far-reaching consequences.
xvii
Issues Presented
1. Does a plaintiff state a viable ultra vires claim when the plaintiff’s rights
are not at stake, the official sued has the express authority to take the actions attacked
as unlawful, and the claim attacks an official’s unconstrained discretion?
2. When the Legislature has granted exclusive jurisdiction to an agency to
resolve a dispute, may a plaintiff bring that same dispute to court before the agency’s
resolution?
3. Does a district court abuse its discretion when it issues a temporary in-
junction that upsets the status quo in favor of a plaintiff who has no probable right to
relief and has not shown any irreparable harm traceable to the actions the plaintiff
seeks to enjoin?
xviii
To the Honorable Fifteenth Court of Appeals:
HHSC spent years designing a fair and transparent process for procuring
managed care contracts serving millions of Medicaid and CHIP beneficiaries. Four
participants in the STAR CHIP procurement—Cook Children’s, Texas Children’s,
Superior, and Wellpoint (the “Losing Plans”)—were disappointed by its results.
Rather than proceed through the administrative process the Legislature directed
HHSC to establish, the Losing Plans slapped “ultra vires” on their procurement
grievances and sued.
The ultra vires exception to sovereign immunity is narrow. It does not invite
disappointed bidders to bypass administrative channels, nor does it empower courts
to supervise procurement minutiae. Texas courts do not sit as super-procurement
officers second-guessing agency evaluations of proposals, applications of amorphous
procurement standards, and best-value determinations. Yet that is the role the
district court seized for itself here: haling senior and apex HHSC officials into court
to justify their procurement decisions, rejecting their justifications, and forbidding
them from completing a massive and critically important procurement. The district
court’s approach threatens to transform every disappointed bidder into a potential
plaintiff, and to destabilize state contracting.
This Court should reverse and render because sovereign immunity bars
disappointed bidders from policing state procurements with lawsuits against agency
officials. The Losing Plans’ claims do not satisfy the ultra vires exception because the
Losing Plans’ rights are not at stake, because Commissioner Young has express
authority to perform the acts the Losing Plans seek to enjoin, and because the
standards the Losing Plans rely on do not constrain Commissioner Young’s
discretion. And even if the Losing Plans had brought viable ultra vires claims, they
would be premature: HHSC has exclusive jurisdiction over this dispute at least until
the Losing Plans exhaust administrative remedies.
In the alternative, and at a minimum, the Court should reverse the district
court’s temporary injunction because none of the relevant factors favors
extraordinary equitable relief.
Statement of Facts
A. STAR, CHIP, and STAR Kids
In the underlying procurements, HHSC is seeking vendors to serve beneficiar-
ies (or “members”) under two federal-state benefit programs: Medicaid and the
Children’s Health Insurance Program (CHIP). HHSC administers both programs
for Texas. See Tex. Hum. Res. Code § 32.021(a); Tex. Health & Safety Code § 62.051.
The “State of Texas Access Reform (STAR) Program” is “the Medicaid man-
aged care program in which HHSC contracts with MCOs [Managed Care Organiza-
tions] to provide, arrange, and coordinate preventive, primary, acute care, behavioral
health, and pharmacy [services] for low-income families, children, and pregnant
women.” 12.RR.DX54.027. “As of January 2021, contracted MCOs participating in
STAR served an estimated 3,930,310 Members statewide.” 12.RR.DX54.006.
CHIP’s beneficiaries are primarily children in families with low incomes, but
not incomes low enough to qualify for Medicaid. See 12.RR.DX54.006. “HHSC
2
contracts with MCOs to provide, arrange for, and coordinate Covered Services for
enrolled CHIP Members.” 12.RR.DX54.011. “As of August 2021, contracted MCOs
participating in CHIP served an estimated 213,213 Members statewide.”
12.RR.DX54.007. HHSC has discretion to “coordinate [CHIP] with the Medicaid
program.” 12.RR.DX.54.006 (quoting Tex. Health & Safety Code § 62.053(3)).
Another Medicaid program, STAR Kids, is the subject of a separate ongoing
procurement that uses the same best value structure as STAR CHIP. MCOs have
submitted STAR Kids proposals, but oral presentations have yet to occur, and HHSC
has not issued a notice of selected vendors. STAR Kids beneficiaries are up to 20
years old and have disabilities. Star Kids, HHSC, https://tinyurl.com/7a22ann5 (last
visited Sept. 15, 2025). As of 2021, MCOs participating in STAR Kids served an es-
timated 168,194 members statewide. See Ctrs. for Medicare & Medicaid Servs., Med-
icaid Managed Care Enrollment and Program Characteristics: 2021 at 151–152 (2023),
https://tinyurl.com/3sckypp7.
B. The STAR CHIP procurement process
The current STAR CHIP procurement began in 2019, when HHSC hired
Mercer Health Benefits to assess HHSC’s managed care evaluation tools and proce-
dures. 9.RR.PX92.002. Mercer’s report focused primarily on the development and
assessment of best value criteria. Id. The report discussed forming a workgroup to
determine: (1) the criteria’s content, weighting of best value criteria for the questions
comprising the competition, and submission requirements, 9.RR.PX19.011–012;
3
(2) the process for finalizing and approving the criteria, 9.RR.PX19.015–018; and
(3) the process for evaluating proposals against the criteria, 9.RR.PX19.021–028.
Building on Mercer’s recommendations, HHSC’s Medicaid Managed Care
Procurement Collaboration Committee began to develop the evaluation process for
the STAR CHIP procurement. 9.RR.PX92.002. HHSC then solicited public input
on HHSC’s proposed best value criteria. CR.4833 n.9. 1 And HHSC staff met with
MCOs, including the Losing Plans, in “pre-solicitation meetings, so to speak, where
the managed care organizations could come in and look at [HHSC’s] best value cri-
teria and give us feedback on that criteria.” 6.RR.198:5–199:3; 6.RR.195:22–196:3.
1. The STAR CHIP RFP
The result of that process was the STAR CHIP Request for Proposals (RFP),
released December 2022, after approval from the multiagency Contract Advisory
Team and the federal government. See CR.942, 1997; see also Molina Resp. to Mots.
for Temp. Relief at 7–8, 19–20. HHSC planned to have new STAR CHIP contracts
in place by February 2025. See 9.RR.PX38.010.
The STAR CHIP RFP advised that HHSC’s conception of best value would
guide its evaluation of proposals: “HHSC shall make an award to the Respondent
that, in HHSC’s sole determination, provides the best value to the State of Texas as
set out in this Solicitation.” 9.RR.PX38.021 (emphasis added). The RFP clearly set
out what best value meant to HHSC, and informed vendors that scores on their
1
See HHSC, Request for Public Comment on Best Value Criteria for STAR & CHIP Managed Care
Procurement (Apr. 28, 2022), https://tinyurl.com/2zshb6j5 (archived Feb. 27, 2023); see also
6.RR.196:4–6.
4
answers to the RFP’s Technical Questions would be tied to HHSC’s best value cri-
terion. See 9.RR.PX38.025–026, .033–040; see also 9.RR.PX290 (RFP sample scoring
rubric); 12.RR.DX54 (RFP scope of work); CR.1905 (RFP exhibit stating how many
points were available for each Technical Question).
The RFP also detailed how HHSC would select MCOs for awards. HHSC
would evaluate proposals on a 2000-point scale—1800 points available for responses
to 18 Technical Questions, and 200 points available for Oral Presentations. HHSC
intended to make 45 awards across the State’s 13 service areas (three to five MCOs
per area). 9.RR.PX38.029–030. HHSC would not award an MCO more than seven
service areas. 9.RR.PX38.029–030. The only exception to this rubric was for MCOs
linked to hospital districts under Government Code § 540.0206, “Mandatory Con-
tracts.” And the RFP stated that HHSC would award no more than one mandatory
contract in any service area. 9.RR.PX38.030.
HHSC followed up the release of the RFP with multiple opportunities for pro-
spective MCOs to ask questions about the procurement. HHSC held a pre-proposal
conference for prospective MCOs. See 9.PX.38.010. And the RFP offered MCOs an
opportunity to submit questions about the solicitation, while cautioning that failing
to alert HHSC to “any ambiguity, conflict, discrepancy, exclusionary specification,
or other error” in the RFP by the deadline for questions would “waive[] any claim of
error.” 9.PX.38.011–013. HHSC answered 110 vendor questions, several of which
pertained to the best value criteria, and HHSC incorporated the questions and an-
swers into the RFP at Addendum 2. See STAR CHIP Managed Care Services, Elec-
tronic State Business Daily, https://tinyurl.com/zyc7j889 (Addendum No. 2 HHSC
5
Responses to Questions). “No issue was raised as to the location or inclusion of [any]
statutory preferences in the” RFP’s “BVCs [best value criteria] or Technical Ques-
tions in the Vendor Q&A or pre-solicitation meetings.” 9.RR.PX157.002 n.3; see also
9.RR.PX158.005 n.9.
Following submissions, HHSC evaluated the MCOs and certified that each is
reasonably able to fulfill the contract terms, including all federal and state law require-
ments, as required by Government Code § 540.0203(a). See, e.g., 9.RR.PX.84; (cer-
tification); 9.RR.PX.192.
2. The notice of intent to award
In March 2024, HHSC released the results of its evaluation in a Notice of In-
tent to Award. See 9.RR.PX95; see also 12.RR.PX284 (HHSC “Action Memoran-
dum” detailing evaluation). HHSC first assigned five mandatory contracts to their
respective MCOs, then assigned the highest scoring plan its top-ranked service areas,
then the second-highest scoring MCO its top-ranked service areas, and so on. See
9.RR.PX92.006–.007. As service areas reached their maximum number of MCOs,
plans that competed in many service areas but did not score as highly would not be
selected for their preferred service areas or for as many service areas as hoped.
Molina was the high-scoring plan, with 1,942 of 2,000 points, and so HHSC
assigned Molina each of its seven top-ranked service areas. See 9.RR.PX95.001;
9.RR.PX195; 9.RR.PX198. Wellpoint finished fifth (1,874 points), and was selected in
the six service areas it ranked second, fourth, fifth, sixth, twelfth, and thirteenth. See
id. Superior finished seventh (1,830 points), and was assigned to three service areas
6
it ranked eighth, eleventh, and twelfth. See id. Neither Cook Children’s (eighth place
with 1,826 points)—competing for only its single current service area—nor Texas
Children’s (fourteenth place with 1,636 points)—competing for only its two current
service areas—were selected to serve in any service area. See id.
3. The Losing Plans’ protests
a. Protests generally
HHSC has promulgated “procedures for resolving protests relating to pur-
chases as required by Texas Government Code § 2155.076.” 1 Tex. Admin Code
§ 391.301. These rules provide bidders two opportunities to inform HHSC of poten-
tial inconsistencies with statutes and regulations: solicitation protests and award pro-
tests. Id. § 391.303(b).
Protests raising issues present in a solicitation—e.g., the criteria for evalua-
tion, scoring ground rules, etc.—“must be filed no later than the date that re-
sponses . . . are due.” Id. § 391.305(a)(1). Protests raising issues specific to evalua-
tions and awards must be filed within 10 days of HHSC’s notice of intent to award.
Id. § 391.305(a)(2). Any protest ground not timely raised is waived. See id.
§ 391.307(a)(1)(A), (c), (d)(1); see also, e.g., 9.RR.PX158.002.
HHSC delegates to its Deputy Commissioner for Procurement the authority
to “determine[]” whether HHSC violated “the specific statutory or regulatory pro-
visions, cited by the protestant” and, if so, “any appropriate remedial action.” 1 Tex.
Admin Code § 391.307(c)(1)–(2). A bidder dissatisfied with that determination may
appeal to Commissioner Young. Id. § 391.307(d). Because Commissioner Young’s
7
review is limited to the Deputy Commissioner for Procurement’s determination and
is the final decision on protest issues, id. § 391.307(d)(3), that review, too, concerns
whether a “specific statute or regulation has been violated.”
HHSC generally does not award contracts when protests are pending. Id.
§ 391.309.
b. Wellpoint’s solicitation protest
Only one of the Losing Plans—Wellpoint—submitted a timely solicitation
protest in the STAR CHIP procurement. Wellpoint raised a single objection: that it
would be improper to award CHIP contracts to the MCOs awarded mandatory con-
tracts under Government Code § 540.0206. Wellpoint argued that because the man-
datory contracts statute only applies to Medicaid, and CHIP is not a Medicaid pro-
gram, attaching CHIP awards to STAR awards in the case of mandatory contracts
was inconsistent with certain statutes. See 9.RR.PX44; but see, e.g., Tex. Health &
Safety Code § 62.053(3) (allowing HHSC to “coordinate” Medicaid and CHIP).
The Deputy Commissioner for Procurement denied Wellpoint’s protest, and
Commissioner Young denied Wellpoint’s appeal. CR.1956, 1996. Wellpoint did not
respond with an ultra vires claim. Instead, Wellpoint voluntarily submitted to evalu-
ation and award under the RFP as written.
There were no administrative protests of the terms of the STAR Kids RFP.
c. The Losing Plans’ award protests
In the wake of the Notice of Intent to Award, eight MCOs filed protests, in-
cluding the four plaintiffs here. See 6.RR.131:2–15. The Deputy Commissioner for
8
Procurement denied each of the protests in eight separate “determination letters.”
5.RR.147:6–9; 9.RR.PX155; 9.RR.PX157–59. All eight protesting MCOs appealed to
Commissioner Young. 6.RR.131:11–15. Those appeals remain pending.
C. Procedural history
Rather than await the result of their respective administrative appeals, the Los-
ing Plans sued. Because the Legislature has not provided for judicial review of state
procurement decisions, the Losing Plans sued Commissioner Young, attempting to
plead ultra vires claims. Their claims merely parrot their administrative filings, rela-
beling protest grounds as ultra vires acts. Compare, e.g., CR.3531–49 (Superior live
petition), and CR.4719–20 (Texas Children’s live petition), with CR.1567–94 (Supe-
rior’s protest), and CR.5800–01 (Texas Children’s protest).
The Losing Plans seek to permanently stop Commissioner Young from decid-
ing their appeals, completing the procurement, or executing and performing the re-
sulting contracts. See CR.3308–41, 3510–57, 4231–82, 4716–65. But the Losing Plans’
petitions do not claim, and they never tried to prove, that any of the errors they allege
prejudiced them or caused the result of the STAR CHIP procurement to be any dif-
ferent than it would have been had the alleged errors not occurred.
The Losing Plans also applied for temporary injunctive relief enjoining the
STAR CHIP and STAR Kids procurements. See id.; CR.3339–40. Commissioner
Young opposed the applications for a temporary injunction and filed a plea to the
jurisdiction. CR.2949–3113. The district court held a multiday evidentiary hearing
on the Losing Plans’ application and Commissioner Young’s plea to the jurisdiction
9
in which high-ranking HHSC officials were forced to justify the agency’s procure-
ment decisions. See 5.RR–8.RR. At the hearing’s conclusion, the Losing Plans
pressed seven purportedly ultra vires acts (CR.5841):
2
The district court denied Commissioner Young’s plea to the jurisdiction and
entered a sweeping temporary injunction. 5.RR–8.RR; CR.5875–5884. The district
court concluded that various “statutory and regulatory violations” occurred during
the STAR CHIP procurement and leading up to HHSC’s notices of intent to award
contracts from that procurement. CR.5878. In addition to accepting alleged
2
Former Government Code § 533.003(a)(1) is now § 540.0204(1); former Government Code
§ 536.052(d) is now § 543A.0052(d); former Government Code § 533.002 is now § 540.0051; for-
mer Government Code § 533.004 is now § 540.0206; and former Government Code
§ 533.003(a)(3) is now § 540.0204(3).
10
violations pressed by the Losing Plans, the district court also found two other statu-
tory and regulatory violations:
1. The procurement purportedly violated Government Code § 540.0203(a)
(née § 533.0035(a)) and Health & Safety Code § 62.051(e) because HHSC sup-
posedly failed “to evaluate and certify that MCOs are reasonably able to fulfill the
terms of the STAR contract . . . and to review MCOs to confirm their ability to
fulfill the requirements of the CHIP contract,” CR.5877; and
2. HHSC’s protest determinations purportedly violated 1 Texas Administrative
Code § 391.307(d)(1) by “refusing to consider as untimely any information sub-
mitted in supplemental protests and/or after the protest filing deadline . . . when
good cause for delay is shown,” CR.5878.
The district court found that any single one of these purported “statutory or
regulatory violations” is alone sufficient to make the “intended contract
awards . . . invalid and unlawful.” Id. 3 As a result, the district court concluded, any
“further execution and implementation of such intended contract awards will be ul-
tra vires acts.” Id.
The district court’s temporary injunction enjoins Commissioner Young “and
all other persons or entities in active concert or participation with” Commissioner
3
In addition to these supposed “statutory and regulatory violations,” the district court found that
Commissioner Young somehow violated the Constitution’s open courts guarantee “by not providing
a meaningful bid protest process after promising one.” CR.5878 (citing Tex. Const. art. I, § 13).
But the district court did not find that this supposed constitutional violation made concluding the
procurement and executing and performing the contracts ultra vires. See id. (citing only “statutory
and regulatory violations”).
11
Young “from awarding, signing, entering into, executing, implementing, or other-
wise taking action to effectuate or perform any contracts resulting from or in connec-
tion with the STAR & CHIP RFP or to further the procurement or contracting pro-
cess for the STAR & CHIP RFP.” CR.5875–5884. The district court granted similar
injunctive relief as to the STAR Kids RFP. CR.5883.
Molina intervened and appealed the temporary injunction. CR.5946–52,
5964–67.
D. The intervening legislative session
The Court abated this appeal during the most recent legislative session. Dur-
ing that session, a handful legislators introduced ten bills that would have impacted
the noticed awards, such as by suspending the awards or creating a new statutory
scheme in line with the Losing Plans’ desires (House Bills 2388, 3538, 5183, 5184,
5185, and 5284; and Senate Bills 2331; 2547, 2548, and 2988), but none progressed
even to a hearing. A rider to the General Appropriations Act targeting the procure-
ment also failed.
Standard of Review
Orders on temporary injunctions are reviewed for an abuse of discretion, State
v. Loe, 692 S.W.3d 215, 226 (Tex. 2024), but courts of appeals “review legal determi-
nations de novo,” id., and a trial court always “abuses its discretion when it makes
an error of law.” In re Rudolph Auto., LLC, 674 S.W.3d 289, 302 (Tex. 2023).
12
Summary of the Argument
The district court’s temporary injunction rests on the Losing Plans’ ultra vires
claims. CR.5878–79. But the Losing Plans’ allegations and evidence do not satisfy
the ultra vires exception to sovereign immunity. The Losing Plans’ claims fail to over-
come sovereign immunity for multiple independent reasons and thus should have
been dismissed with prejudice. See Part I.
At the outset, the Losing Plans lack the interest necessary to satisfy the ultra
vires exception. See Part I.A. Viable ultra vires claims require more than disappoint-
ment; they require an invasion of rights. But the procurement standards the Losing
Plans invoke are directives to government, not private rights enforceable in court. See
Part I.A.1. And even if they were private rights, the Losing Plans waived those rights
by sitting silent until after losing. See Part I.A.2.
Still more, the Losing Plans’ ultra vires theory is fatally incomplete. See Part
I.B. Sovereign immunity yields when a plaintiff shows that an official threatens to act
without authority. The Legislature has expressly vested in Commissioner Young au-
thority to procure managed care contracts, and to execute and perform those con-
tracts. See Part I.B.1. Even so, the Losing Plans say Commissioner Young lacks that
authority here because the STAR CHIP procurement offended various procurement
standards. But that flawed logic fails to appreciate the difference between commands
and consequences. See Part I.B.2. None of the standards the Losing Plans invoke
withdraws Commissioner Young’s express authority, so none can support the Losing
Plans’ claims. See Part I.B.3.
13
Beyond those antecedent defects, the Losing Plans’ claims run aground on
Commissioner Young’s unconstrained discretion to interpret and apply the stand-
ards governing the challenged procurements. See Part I.C. The Legislature estab-
lished a procurement system that delegates to state agencies authority and discretion
to interpret collateral laws related to the agency’s procurement processes—often-
overlapping purposes, considerations, preferences, etc. Those interpretations are not
subject to second-guessing in an ultra vires suit. See Part I.C.1. If that were not
enough, the Legislature specifically delegated authority to Commissioner Young to:
(a) procure things like managed care contracts according to “best value,” and (b) the
unconstrained discretion to determine what constitutes “best value” in a particular
procurement. See Part I.C.2. And none of the standards the Losing Plans rely on
includes the type of specific, substantive, or objective standards necessary to subject
Commissioner Young’s exercise of discretion to review in an ultra vires suit. See Part
I.C.3.
The deficiencies in the Losing Plans’ ultra vires claims are not the only juris-
dictional defect the district court overlooked. Procurement disputes are within
HHSC’s exclusive jurisdiction at least until a disappointed bidder exhausts the pro-
test and appeal process. The Losing Plans have not exhausted that process, so the
district court lacked jurisdiction to adjudicate their claims. See Part II.
Finally, even if the district court had jurisdiction, its temporary injunction is
an abuse of discretion because it alters the status quo, the Losing Plans do not have a
probable right to relief, the Losing Plans failed to show irreparable harm, and the bal-
ance of the equities weighs against the Losing Plans. See Part III.
14
Argument
I. The Losing Plans’ Claims Fail to Overcome Sovereign Immunity, and
Should Be Dismissed with Prejudice.
The ultra vires doctrine provides that “an action to determine or protect a
private party’s rights against a state official who has acted ultra vires—that is, without
legal or statutory authority—is not a suit against the State that sovereign immunity
bars.” Phillips v. McNeill, 635 S.W.3d 620, 628 (Tex. 2021). The Losing Plans’ claims
do not overcome sovereign immunity because the Losing Plans’ rights are not at
stake, and because the Losing Plans cannot show that Commissioner Young lacks
authority to complete the underlying procurements and to execute and perform the
resulting contracts.
A. The Losing Plans lack sufficient interest to maintain their ultra
vires claims.
Ultra vires claims are an accepted exception to sovereign immunity only be-
cause they are necessary to “protect a private party’s rights against a state official”
acting without authority or failing to perform a ministerial act. Phillips, 635 S.W.3d at
628. Protecting a “private party’s rights” is thus at the heart of “the rationale be-
hind” the ultra vires exception. City of El Paso v. Heinrich, 284 S.W.3d 366, 370 (Tex.
2009) (quoting Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 404 (Tex. 1997) (emphasis
added)); accord Cobb v. Harrington, 190 S.W.2d 709, 712 (Tex. 1945) (“[A]n action
against the officials by one whose rights have been invaded or violated by such acts,
for the determination and protection of his rights, is not a suit against the State within
the rule of immunity of the State from suit.”).
15
That feature of modern ultra vires law has a strong pedigree. An invasion of
private rights has always been a fundamental prerequisite of equitable actions against
state officials. Paralleling Ex parte Young, it has been “well settled” for at least a cen-
tury in Texas “that [an] injunction is a proper remedy to prevent a public officer from
exceeding his authority under the law when such conduct seriously invades the private
rights of an individual without a corresponding benefit to the public.” Terrell v. Kasch,
10 S.W.2d 208, 210 (Tex. App.—Austin 1928, writ ref’d) (emphasis added). 4 As a
result, “without such invasion of rights there can be no lawful exercise of judicial
authority” against government officials. City of Dall. v. Dall. Consol. Elec. St. Ry., 148
S.W. 292, 295 (Tex. 1912). 5
The Losing Plans have the understandable desire to acquire valuable govern-
ment contracts. But that desire is insufficient for an ultra vires claim. The Losing
Plans lack sufficient interest because the procurement standards they rely on do not
create rights. And even pretending the procurement standards the Losing Plans raise
could bestow rights, the Losing Plans waived those rights for the STAR CHIP pro-
curement by failing to raise any objection until HHSC had completed its evaluation
of proposals and noticed its intent to award. For either reason, the Losing Plans may
4
See Ex parte Young, 209 U.S. 123, 154 (1908) (“a suit against individuals, for the purpose of pre-
venting them, as officers of a state, from enforcing an unconstitutional enactment, to the injury of
the rights of the plaintiff, is not a suit against the state within the meaning of that [11th] Amendment”
(emphasis added) (quotation marks omitted)).
5
Accord, e.g., Mo., Kan. & Tex. Ry. v. Shannon, 100 S.W. 138, 140 (Tex. 1907) (Texas “courts have
no power to enjoin the officers of a state from taking action under a statute claimed to be unconsti-
tutional and deemed to be prejudicial to the complainants, unless the officers are about to do some
act which, if not authorized by a valid law, constitutes an unlawful interference with their rights.”
(emphases added)).
16
not invoke the equitable power of the courts to interfere with the underlying procure-
ments.
1. Government procurement standards do not create private
rights.
The Supreme Court has made clear that legislative directives instructing agen-
cies how to go about procuring goods and services are “not intended to be a bestowal
of litigable rights upon those desirous of selling to the Government.” Tex. Highway
Comm’n v. El Paso Bldg. & Const. Trades Council, 234 S.W.2d 857, 860 (1950); see also
Molina Resp. to Mots. for Temporary Relief 16–20 ( July 24, 2025); Tex. Att’y Gen.
Op. No. GA-0685 (2008) (“Other than requiring each state agency to develop and
adopt rules to resolve vendor protests, we find no provision in the Purchasing Act by
which a bidder or any other person can compel a state agency to reconsider the ap-
plication of bidding preferences.”).
Texas Highway Commission relied on Perkins v. Lukens Steel Co., 310 U.S. 113
(1940), which explained that when the Legislature “lay[s] down guide posts by which
its agents are to proceed in . . . procurement,” it does so “for the purpose of keeping
its own house.” Id. at 127. A procurement standard thus “create[s] duties to the Gov-
ernment alone.” Id. It “is a self-imposed restraint for violation of which the Govern-
ment—but not private litigants—can complain.” Id.
With no rights at stake, the Losing Plans may not invoke the ultra vires excep-
tion to sovereign immunity.
17
2. Even if procurement standards could create private
rights, the Losing Plans waived them.
Even if procurement standards could create rights, rights may be waived, in-
cluding by failing to comply with required procedures. See In re Prudential Ins. Co. of
Am., 148 S.W.3d 124, 130 (Tex. 2004). The Losing Plans waived any rights they may
have had in most of the procurement standards they now raise, because they sat on
those hypothetical rights when they should have been invoking them.
The Waiver Rule
Protests raising issues apparent on the face of a “solicitation”—here, the
STAR CHIP RFP—“must be filed no later than the date that responses . . . are due.”
1 Tex. Admin. Code § 391.305(a)(1). Failure to timely protest results in waiver. Id.
§ 391.307(d)(1) 6; see also 9.PX.38.011 (additional waiver rule in RFP § 2.2).
The Legislature endorsed the waiver rule in 1997, when it amended the Pur-
chasing Act to direct agencies to “develop and adopt protest procedures . . . con-
sistent with the comptroller’s [previously the State Purchasing and General Services
Commission’s] rules.” Tex. Gov’t Code § 2155.076 (emphasis added). At that time,
the Comptroller’s predecessor agencies had a similar waiver rule. See 1 Tex. Admin
Code § 111.3(a), (i) (1997) 7; 12 Tex. Reg. 4523, 4523 (Dec. 4, 1987) (adopting original
1 Tex. Admin Code § 111.3(a), (i), without change as proposed in 12 Tex. Reg. 2986,
6
“A protest or appeal that is not timely filed shall not be considered unless good cause for delay is
shown or the HHSC Executive Commissioner determines that an appeal raises issues that are sig-
nificant to HHSC's procurement practices or procedures in general.”
7
The Secretary of State’s online regulatory archive goes back only to 1999. The 1999 rule’s source
note shows it had not been amended since 1992. See 1 Tex. Admin Code § 111.3 (1999); see also 17
Tex. Reg. 6894, 6894 (Oct. 6, 1992) (amending rule). The 1997 version is included in the appendix.
18
2986–87 (Sept. 4, 1987)). The Legislature essentially directed other agencies to adopt
the waiver rule, which HHSC did.
Texas’s waiver rule mirrors the federal practice. Protests submitted to federal
agencies that are “based on alleged improprieties in a solicitation shall be filed before
bid opening or the closing date for receipt of proposals.” 48 C.F.R. § 33.103(e); accord
4 C.F.R. § 21.2(a)(1) (analogous rule of the Government Accountability Office).
Thus, “a protester may not wait until after an award has been made to protest alleged
flaws in a procurement’s ground rules that are apparent prior to submitting its pro-
posal.” In re DynCorp Int’l LLC, B-415349, 2018 WL 397133, *7 (Comp. Gen.
2018)). “The government must conduct acquisitions in accordance with applicable
law. However, a bidder with knowledge of a solicitation defect may not choose to stay
silent when submitting its proposal.” Warrior Focused Sols., LLC v. United States, 175
Fed. Cl. 416, 426 (2025).
Alleged defects in a solicitation that are not protested before proposals are due
are forever waived. See, e.g., 1 Tex. Admin. Code § 391.307(d)(1); Blue & Gold Fleet,
L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007) (“[A] party who has the
opportunity to object to the terms of a government solicitation containing a patent
error and fails to do so prior to the close of the bidding process waives its ability to
raise the same objection subsequently in a bid protest action in the Court of Federal
Claims.”). Commissioner Young may consider an untimely protest in specific cir-
cumstances. See 1 Tex. Admin. Code § 391.307(d)(1). But that is Commissioner
Young’s right; not the protesting party’s. Contra CR.5878.
19
The goals of the waiver rule are manifest and manifold. It discourages sand-
bagging, promotes fairness, and preserves resources:
In the absence of a waiver rule, a contractor with
knowledge of a solicitation defect could choose to stay si-
lent when submitting its first proposal. If its first proposal
loses to another bidder, the contractor could then come
forward with the defect to restart the bidding process, per-
haps with increased knowledge of its competitors. A
waiver rule thus prevents contractors from taking ad-
vantage of the government and other bidders, and avoids
costly after-the-fact litigation.
Blue & Gold Fleet, 492 F.3d at 1314; cf. CR.4186 (Wellpoint hoping HHSC will “have
to cancel the procurement and restart it”). The rule also helpfully ensures that “chal-
lenges to the fundamental ground rules by which a competition is conducted [are]
resolved as early as practicable during the solicitation process” and “without unduly
disrupting or delaying the procurement process.” In re Veterans2work, Inc., B-416935,
2019 WL 497577, at *3 (Comp. Gen. 2019). Indeed, the Legislature directed HHSC
(and other procuring agencies) to “[e]nsure that contract award decisions are deter-
mined based on best value criteria established in solicitation documents.” Act of May
29, 2023, 88th Leg., R.S., ch. 1170, § 1, art. IX, sec. 17.09(b)(4), 2023 Tex. Gen. Laws
3573, 4510 (emphasis added).
The Losing Plans have made the alleged obviousness of the procurement de-
fects a central feature of their case. They have walked themselves into waiver.
Preferences, Considerations, Continuity of Care, and Past Performance
The Losing Plans insist, for example, that HHSC erred by failing to give pref-
erences during its evaluation of proposals as supposedly required by Government
20
Code §§ 540.0204, 543A.0052 (née §§ 533.003, 536.052). See, e.g., CR.5841–45.
They also claim HHSC failed to consider or document past performance as suppos-
edly required by Government Code § 2155.144. See, e.g., CR.5845–47. They also
claim that HHSC failed to promote continuity of care, as supposedly required by
Government Code § 540.0051 (née § 533.002). See, e.g., CR.5848–49. These errors
are plain, they say, because the RFP did not ask for the information HHSC needed
to comply with those statutes.
From their opening at the evidentiary hearing:
[HHSC] did not ask the health plans – they did not ask us for the information.
They didn’t even put in the questions the information that you would need to
find out about past performance or quality initiatives or continuity of care. 8
And again:
The various statutes require HHSC to give a preference. There are some of the
statutes that require them to consider specific factors. And it’s simply impossible
for the defendant and HHSC to have considered or to give preference if they did
not ask in the RFP for the respondents to provide that information so that they
had information on all of the respondents. . . .
But if the question is not asked, and if the data is not assembled for all of the
respondents, then it’s impossible to actually give consideration or preference. 9
This theme continued in their questioning of HHSC’s Deputy Commissioner
for Procurement. For example:
8
5.RR.30:5–9 (emphases added); see also, e.g., Children’s Plans Mot. for Temp. Relief at 37 ( July
10, 2025) (“[T]he procurement did not ask bidders for data or evidence about successful imple-
mentation of existing or prior quality initiatives,” and “did not ask bidders to submit information
on their past performances.”).
9
5.RR.49:7–22 (emphases added).
21
Q. Well, it didn’t mention the word “preference”; correct?
A. Yes. I mean, the word “preference” is not in the RFP. 10
And here:
Q. Now, in the RFP, HHSC did not specifically ask about past vendor
performance, did it?
A. No.
Q. And the published evaluation criteria in the RFP don’t use the words “past
performance,” do they?
A. No. 11
The Losing Plans also object that the RFP did not provide a preference for
MCOs whose provider networks include “each health care provider in the region
who has traditionally provided care to Medicaid and charity care patients.” Tex.
Gov’t Code § 540.0204(1) (née § 533.003(a)(1)). The structure of the RFP—which
required each MCO to submit a single statewide proposal no matter the number of
service areas for which they were competing—prevented such region-by-region as-
sessments:
Q. Now, Section 533.003(a)(1) uses the word “region”; right? . . .
A. I think region’s there, yes.
Q. Okay. But the responses to the RFP weren’t broken down by region, were
they?
A. No. It was a statewide procurement. 12
10
5.RR.86:2–5 (emphasis added).
11
5.RR.105:18–23 (emphases added).
12
5.RR.97:15–23 (emphases added); see also, e.g., Children’s Plans Mot. at 38 (“[T]he STAR &
CHIP procurement did not ask bidders to provide information about charity care providers in their
22
Mandatory Contracts
The Losing Plans also complain HHSC violated Government Code § 2155.144
and the Health & Safety Code by automatically awarding CHIP service areas to
MCOs entitled to mandatory Medicaid contracts in those areas under Government
Code § 540.0206 (née § 533.004). See CR.5849–50. But they acknowledge that
HHSC’s approach was clear from the RFP, which “does not provide a separate pro-
cess for awarding CHIP contracts to respondents that also meet section 533.004’s
requirements for mandatory Medicaid contracts.” Superior Mot. for Temp. Relief at
5–6 ( July 10, 2025). That is why Wellpoint protested on this ground before submis-
sions were due, noting that “courts and administrative bodies throughout the coun-
try routinely hold that legal infirmities evident on the face of a procurements specifi-
cations must be raised at the outset of the procurement.” CR.1961. The rest of the Losing
Plans did not, and therefore waived their identical complaints.
Different Populations
Another alleged flaw in the procurement was HHSC’s supposed failure to
“consider the need to use different managed care plans to meet the needs of different
populations.” Tex. Gov’t Code § 540.0204(3) (née § 533.003(a)(3)); CR.5850–81.
But the Losing Plans concede that this supposed flaw is plain from the very nature of
the RFP, which “is conducted in a statewide manner,” CR.5850, and because the
existing networks.”); Superior Mot. for Temp. Relief at 13 ( July 10, 2025) (“[T]he proposals were
not divided by region because the RFP was a statewide procurement, and there was no scoring
based on region.”); id. at 14 (“[N]othing in the RFP asked respondents to provide information
about their existing provider networks from which the preference in section 533.003(a)(1) could be
determined.”); CR.3520 (Superior live petition) (similar).
23
RFP does not ask questions to elicit information about serving different populations.
See 6.RR.89:14–90:25.
The Losing Plans’ Excuses Fall Flat
As this evidence shows, the RFP “clearly placed offerors on notice of its in-
tended” evaluation criteria. In re Armorworks Enters., LLC, B-400394, 2008 WL
4415709, *4 (Comp. Gen. 2008) (finding protest untimely). The Losing Plans should
have known of every complaint they have about the criteria HHSC used (or did not
use) to evaluate RFP responses before they responded and voluntarily submitted to
HHSC’s advertised method of evaluation. See, e.g., Blue & Gold Fleet, 492 F.3d at
1313 (“The terms of the solicitation prospectus did not include any requirement that
the bidders consider the Service Contract Act . . . . Therefore, Blue & Gold’s asser-
tion that the proposals should have been evaluated according to the Act is a challenge
to the solicitation.”). So their current complaints are untimely and waived.
Below, the Losing Plans tried to avoid the consequences of their sandbagging,
hiding behind the RFP’s statement that HHSC intended to conform to state law:
“Proposals shall be evaluated in accordance with State law, including, but not limited
to, applicable provisions of Chapters 533, 536, and 2155 of the Texas Government
Code.” 9.RR.PX38.021 (RFP § 3.1.1); see, e.g., CR.4064 (Children’s Plans); see also
CR.3931 (Superior). The Losing Plans’ excuse does not withstand scrutiny.
A solicitation “defect is patent if it could have been discovered by reasonable
and customary care.” K-Con, Inc. v. Sec’y of Army, 908 F.3d 719, 722 (Fed. Cir. 2018).
A reasonable respondent’s concern is how the government interprets the law it com-
mits to follow. Crucially, as just shown by the Losing Plans’ own words, the RFP itself
24
“would place a reasonable contractor on notice” that HHSC’s interpretation of the
law differed from the Losing Plans’ interpretation. Id.
Even more, the difference in interpretations is clear just from the RFP sections
the Losing Plans rely on as excuses. The Children’s Plans rely on RFP § 3.1.1, which
makes plain that HHSC views its best value criteria as set out in the RFP as comply-
ing with applicable law—in direct conflict with the Losing Plans’ interpretation of
the law:
3.1.1 Conformance with State Law
Proposals shall be evaluated in accordance with state law, including, but not
limited to, applicable provisions of Chapters, 533, 536, and 2155 of the Texas
Government Code. . . . HHSC shall make an award to the respondent that, in
HHSC’s sole determination, provides the best value to the state of Texas as set
out in this solicitation. 13
And Superior relies on RFP § 3.1.4, which just as plainly reveals HHSC’s view
that applying the RFP’s express best value criteria and the RFP’s express scoring
guides satisfies its legal obligations—in direct conflict with the Losing Plans’ inter-
pretation of the law:
3.1.4 Best Value Evaluation Criteria
Best Value Evaluation Criteria for this Solicitation is the basis upon which the
written responses to the Technical Questions . . . will be scored, in addition to the
considerations provided by the Technical Question Scoring Guide . . . .
Responses to the Oral Presentation scenarios will also be scored against Best
Value Evaluation Criteria and the Oral Presentation Scoring Guide . . . .
Best Value Evaluation Criteria, Technical Questions, and Oral Presentation
Scenarios were developed to ensure HHSC requests the information necessary
13
9.RR.PX38.021 (emphasis added).
25
to ensure that the Respondent selected for Contract award can achieve the
outcomes mandated in Texas Government Code Sections 533.002, 533.003(a)(1),
536.052, and 2155.144. 14
Wellpoint, meanwhile, points to only the single issue it timely raised in a solic-
itation protest. CR.4187. For every other issue, however, Wellpoint is in the same
position as the rest of the Losing Plans. 15
The Losing Plans cannot escape their collective choice to stay silent until they
saw the results of the procurement. They have waived any rights the cited standards
may have given them.
B. Commissioner Young’s authority does not depend on how she or
other HHSC officials apply procurement standards.
Even if the Losing Plans’ rights were at stake, their ultra vires theory still fails
because, of the many procurement standards they raise, just one arguably constrains
Commissioner Young’s authority to procure, execute, or perform contracts. And
HHSC officials plainly complied with that standard. The rest are irrelevant. Com-
missioner Young maintains authority to move forward with the STAR CHIP and
STAR Kids procurements.
The Losing Plans seek to stop Commissioner Young from completing the
STAR CHIP and STAR Kids procurements, and from executing and performing re-
sulting contracts. See CR.5876–78. The Losing Plans’ burden is thus to show that
14
9.RR.PX38.024–25 (emphasis added).
15
Wellpoint also mistakenly says its solicitation protest was denied as premature. CR.4187. In fact,
Commissioner Young denied it on the merits. See 9.RR.PX160.002 (describing Commissioner
Young’s decision).
26
such future conduct “would exceed the bounds of the Commissioner’s legal author-
ity or conflict with the law itself.” Morath v. Pecos-Barstow-Toyah ISD, 2025 WL
1833467, at *2 (Tex. App.—15th Court 2025, no pet.); see also TEA v. Hous. ISD, 660
S.W.3d 108, 118 (Tex. 2023) (“The question . . . is whether the evidence shows that
the Commissioner will act ultra vires under current law.”); Hall v. McRaven, 508
S.W.3d 232, 243 (Tex. 2017) (“[O]nly when these improvident actions are unauthor-
ized does an official shed the cloak of the sovereign and act ultra vires.”).
Commissioner Young, however, has express authority to procure, execute, and
perform contracts with MCOs to carry out the STAR and CHIP programs. And run-
ning afoul of a legislative instruction or a regulation does not mean the offending of-
ficial loses authority to continue to act as the Legislature expressly authorized. See,
e.g., Morath v. Kingsville ISD, 710 S.W.3d 918, 925 (Tex. App.—15th Court 2025, no
pet.) (violating a statute did not mean official lost authority to issue order). To suc-
ceed, then, it is not enough for the Losing Plans to show that Commissioner Young
failed to follow some procurement standard (they have not, see infra, Part I.C). The
Losing Plans must establish that any such failure would withdraw Commissioner
Young’s express authority to perform the acts the Losing Plans seek to enjoin. See,
e.g., TMRJ Holdings, Inc. v. Inhance Techs., LLC, 540 S.W.3d 202, 212 (Tex. App—
Houston [1st Dist.] 2018, no pet.) (Bland, J.) (“An injunction . . . must not . . . enjoin
a defendant from acting within its lawful rights.”).
The Losing Plans have not met and cannot meet their burden because they do
not and cannot show that Commissioner Young’s authority to complete the underly-
ing procurements or to execute and perform the resulting contracts is tied to
27
complying with the various procurement standards they rely on. This reality does not
mean HHSC and Commissioner Young are free to violate the cited procurement
standards; it means only that the Losing Plans’ ultra vires claims are not the way to
ensure compliance with those standards. See In re Stetson Renewables Holdings, LLC,
658 S.W.3d 292, 297 (Tex. 2022).
1. Commissioner Young’s authority.
“ʻUltra vires claims depend on the scope of the state official’s authority,’ not
the quality of the official’s decisions.” Honors Acad., Inc. v. TEA, 555 S.W.3d 54, 68
(Tex. 2018) (citation omitted). Commissioner Young’s authority over HHSC mat-
ters is expansive, as she alone governs the agency:
Gov’t Code § 523.0051. Executive Commissioner
(a) The commission is governed by an executive commissioner.
(b) The governor appoints the executive commissioner with the advice and
consent of the senate . . . .
As a result, HHSC’s authority and discretion is also her authority and discretion. 16
Commissioner Young has the unconditional authority to enter contracts for
the performance of HHSC activities:
Gov’t Code § 525.0101. General Contract Authority
The commission may enter into contracts as necessary to perform any of the
commission’s powers or duties. 17
16
References below to Commissioner Young’s authority and discretion thus include authority and
discretion granted to HHSC.
17
See also, e.g., Tex. Health & Safety Code § 62.052(1) (“The commission may . . . implement con-
tracts with health plan providers under” CHIP).
28
Commissioner Young has the specific authority to procure contracts with
MCOs to help deliver Medicaid benefits to beneficiaries (all emphases added):
Gov’t Code § 532.0051. Commission Administration of Medicaid
(a) The commission is the state agency designated to administer federal
Medicaid funds.
(b) The commission shall:
(1) in each agency that operates a portion of Medicaid, plan and direct
Medicaid, including the management of the Medicaid managed care system
and the development, procurement, management, and monitoring of contracts
necessary to implement that system; . . . .
And contract with MCOs to help deliver CHIP benefits:
Health & Safety Code § 62.155. Health Plan Providers
(a) The commission shall select the health plan providers under the program
through a competitive procurement process. . . .
Commissioner Young also has the authority to hear and decide administrative
protests to HHSC procurement decisions:
Gov’t Code § 2155.076. Protest Procedures
(a) The comptroller and each state agency by rule shall develop and adopt protest
procedures for resolving vendor protests relating to purchasing issues. An
agency’s rules must be consistent with the comptroller’s rules. . . . .
2. Commands are distinct from consequences.
“All law should be followed.” Stetson, 658 S.W.3d at 297. But the conse-
quences for not following the laws, like the laws themselves, “are the proper domain
of the legislature.” Id. Here, even assuming HHSC did not follow the procurement
standards the Losing Plans raise, a question remains: What consequence, if any, did
29
the Legislature intend as a result? The Losing Plans and the district court assumed
that the consequence for not following a procurement standard is loss of authority
over the procurement. They mistakenly ignored the difference between commands
and consequences.
This distinction between commands and consequences is well established.
Courts have “long recognized” that a public official’s failure to follow a statutory
direction does not alone reduce the official’s sphere of authority. United States v.
James Daniel Good Real Prop., 510 U.S. 43, 63 (1993) (applying French v. Edwards, 80
U.S. (13 Wall.) 506, 511 (1872)). This Court recognized the distinction between com-
mands and consequences recently in Morath v. Kingsville ISD, holding that an offi-
cial’s missing a mandatory deadline did not strip his authority to continue to act be-
cause the Legislature did not impose that consequence for violating the statute. See
710 S.W.3d at 925.
So, even if it “may be granted” that a procurement standard is “a command
to” HHSC and Commissioner Young, “it does not follow that it is mandatory in the
sense that it makes . . . compliance . . . essential to the legality of the” procurement.
Davis v. State, 12 S.W. 957, 962 (Tex. 1889); see also, e.g., In re Morris, 663 S.W.3d 589,
595 & n.30 (Tex. 2023); Friends of Canyon Lake, Inc. v. Guadalupe–Blanco River Auth.,
96 S.W.3d 519, 528 (Tex. App.—Austin 2002, pet. denied) (applicant’s “fail[ure] to
provide statutorily required information to the TNRCC” as part of permit applica-
tion process did not vitiate agency’s authority to issue permit).
The importance of that distinction is magnified in the case of procurements.
The Losing Plans and the district court posit that any foul-up during a procurement
30
destroys the official-in-charge’s authority to continue that procurement and to exe-
cute and perform the resulting contract(s). The Losing Plans “allege that Defendant
administered the RFP in a manner that violates Texas law and that consequently, any
award, execution, or implementation of the intended STAR & CHIP managed care
contract . . . will constitute ultra vires acts.” CR.5876. And the temporary injunction
order the Losing Plans drafted for the district court sets out a laundry list of griev-
ances and then declares:
These statutory and regulatory violations, each singly and
together collectively, have resulted in intended contract
awards that will be invalid and unlawful, and the further ex-
ecution and implementation of such intended contract awards
will be ultra vires acts.
CR.5878 (emphases added). To them, without a perfect procurement, there’s no au-
thority to contract.
But if an error in a procurement vitiates authority to continue that procure-
ment and to execute and perform the resulting contract, then procured contracts face
untenable uncertainty. Actions exceeding an official’s authority “have no effect.”
Jessen Assocs., Inc. v. Bullock, 531 S.W.2d 593, 598 (Tex. 1975). Thus, contracts en-
tered without authority are “null and void.” Fort Worth Cavalry Club v. Sheppard, 83
S.W.2d 660, 665 (Tex. 1935); accord, e.g., State ex rel. Dep’t of Crim. Just. v. VitaPro
Foods, Inc., 8 S.W.3d 316, 322 (Tex. 1999) (“[O]nly persons authorized by the Consti-
tution or a statute can make a contract binding on the State.” (emphasis added)). If
the Losing Plans’ ultra vires theory is correct, either party to a procured contract
could, years into a contract, use a procurement error to escape its obligations. See,
31
e.g., VitaPro Foods, 8 S.W.3d at 326 (State’s counterparty could not enforce unauthor-
ized contract); State v. Reagan Cnty. Purchasing Co., 186 S.W.2d 128, 135–37 (Tex.
App.—El Paso 1944, writ ref’d w.o.m.) (State could not enforce agreement executed
by Attorney General without authority).
3. The procurement standards the Losing Plans rely on are not
conditions on Commissioner Young’s authority.
An “accurate [statutory] construction frequently eliminates consequences
that otherwise might seem troubling.” S.C. v. M.B., 650 S.W.3d 428, 450 (Tex. 2022).
So it is here. “[T]he Purchasing Act . . . does not reflect legislative intent to render
void an otherwise-authorized contract executed in violation of its requirements.”
Tex. Logos, L.P. v. Tex. Dep’t of Transp., 241 S.W.3d 105, 121 (Tex. App.—Austin 2007,
no pet.). Violating a procurement standard does not vitiate existing express authority
to complete a procurement or to execute or perform a resulting contract.
As elsewhere, “the legislature has ample authority to examine [any] failure to
comply” with procurement standards, and to engage “legislative responses.” In re
Stetson, 658 S.W.3d at 297; see supra, p. 12 (discussing legislative activity). 18 The Leg-
islature likewise has the power to condition HHSC’s (and other government enti-
ties’) authority to contract, and the validity of its contracts, on HHSC’s compliance
with procurement standards. For example, “[a] contract or procurement award made
by a state agency that violates the applicable minimum time for [public] posting . . . is
In addition to the Legislature, HHSC and its officials also answer on procurement issues to the
18
Governor, the Attorney General, the Comptroller, the State Auditor, and the cross-agency Contract
Advisory Team. See Molina Resp. to Mots. for Temp. Relief at 19–20.
32
void.” Tex. Gov’t Code § 2155.083(j) (emphasis added). And, for municipal procure-
ments, “[i]f the contract is made without compliance with [procurement standards],
it is void and the performance of the contract, including the payment of any money
under the contract, may be enjoined.” Tex. Loc. Gov’t Code § 252.061.
But just one of the standards raised here could possibly impose a condition on
Commissioner Young’s authority: That statute provides that, “[n]otwithstanding
any other law,” HHSC “may not award a contract under” the Medicaid managed
care program to an MCO that HHSC has not “evaluate[d] and certif[ied] . . . is rea-
sonably able to fulfill the contract terms, including all federal and state law require-
ments.” Tex. Gov’t Code § 540.0203(a) (emphasis added) (formerly § 533.0035(a)).
There is no question, however, that HHSC evaluated and certified the MCOs in the
STAR CHIP procurement. See, e.g., 9.RR.PX.84.007–008 (certification);
9.RR.PX.192 (certification questionnaire). The Losing Plans complain only about
how thoroughly HHSC conducted its evaluation, see, e.g., CR.5852–53—but that is a
subject § 540.0203(a) does not cover. See infra, Part I.C.3. So the one possible condi-
tion to an effective award that the Losing Plans cite is satisfied.
“Because the Legislature chose not to” impose any similar condition or con-
sequence for failing to follow the rest of the procurement standards the Losing Plans
rely on, “but did do so” elsewhere in the Government Code and other codes, we
should “conclude that the Legislature did not intend” any similar condition or con-
sequence here. Ojo v. Farmers Grp., Inc., 356 S.W.3d 421, 427 (Tex. 2011); see also,
e.g., State v. $435,000, 842 S.W.2d 642, 644 (Tex. 1992) (“If the Legislature had in-
tended dismissal to be the consequence of a failure to hear a forfeiture case within
33
the prescribed period, it could easily have said so.”); 3 Sutherland Statutory
Construction § 57:5 (8th ed.) (“[C]ontrasting language in similar statutes may
indicate a legislature intended a different standard of compliance in one than in the
other, and make clear that one is mandatory and the other directory.”).
Government Code § 2155.076(a) provides still more support, as it shows the
Legislature expected that procurements would continue even if some statutory or
regulatory standard had not been followed. It directs agencies to adopt protest rules
“consistent” with those of the Comptroller and its predecessors. In 1997, when the
Legislature enacted § 2155.076, the rules of the Comptroller’s predecessor—en-
dorsed by the Legislature—left remedial action in the case of a statutory or regula-
tory violation during a procurement to the discretion of the agency:
If the director determines that a violation of the rules or
statutes has occurred in a case where a contract has not
been awarded, he shall so inform the protesting
party . . . by letter which sets forth the reasons for the de-
termination and the appropriate remedial action.
1 Tex. Admin. Code § 111.3(e)(2) (1997) (emphasis added)). That rule would be su-
perfluous if running afoul of a procurement standard vitiated an agency’s authority
to continue with the procurement—for example, by deciding the proper remedy for
some violation. See 1 Tex. Admin. Code § 391.307(c)(2) (HHSC’s nearly identical
rule). The Legislature knew and approved that an agency’s authority to procure was
not tied to compliance with every procurement standard.
The Losing Plans observe that “[e]ach of these statutes imposes a mandatory
duty on the Commissioner by using the command ʻshall.’” Children’s Plans Mot.
34
for Temp. Relief 33. But “shall” does not alone create a condition precedent or any
consequence. See Tex. Gov’t Code § 311.016(2)–(3). So even accepting that the
standards create a mandatory duty, there is still “no corresponding provision dictat-
ing” any consequence “for noncompliance” with the duty. Helena Chem. Co. v. Wil-
kins, 47 S.W.3d 486, 495 (Tex. 2001). This “lack of guidance is what guides us” be-
cause “creat[ing] a statutory consequence for noncompliance . . . is the Legislature’s
job, not” the courts’. AC Ints., L.P. v. TCEQ, 543 S.W.3d 703, 713 (Tex. 2018).
Judicial imposition of “mandatory private enforcement” for breaching a stat-
ute is “a limitation unheard-of with regard to state legislatures.” Armstrong v. Excep-
tional Child Ctr., Inc., 575 U.S. 320, 326 (2015) (refusing to allow Ex parte Young
claim). Instead, “it is primarily for the legislature to determine how far it is worth
pressing to achieve compliance with its own statutory directives.” In re Stetson, 658
S.W.3d at 297. The Legislature has not gone as far as the Losing Plans need.
C. Commissioner Young’s unconstrained discretion precludes the
Losing Plans’ ultra vires claims.
Putting aside the Losing Plans’ lack of rights and the procurement standards’
lack of consequences, the Losing Plans’ lawsuit still fails because the discretion Com-
missioner Young has over procurements forecloses ultra vires claims. An ultra vires
“suit must not complain of a government officer’s exercise of discretion, but rather
must allege, and ultimately prove, that the officer acted without legal authority or
failed to perform a purely ministerial act.” Heinrich, 284 S.W.3d at 372. It follows that
when an officer’s discretion is unconstrained, no ultra vires claim is viable. See
Schroeder v. Escalera Ranch Owners’ Ass’n, Inc., 646 S.W.3d 329, 333–36 (Tex. 2022);
35
Hall, 508 S.W.3d at 241–43; Hous. Belt & Terminal Ry. v. City of Hous., 487 S.W.3d
154, 161 (Tex. 2016).
Courts often “are ʻill-equipped to settle the delicate questions involved in pro-
curement decisions.’” Delta Data Sys. Corp. v. Webster, 744 F.2d 197, 203 (D.C. Cir.
1984) (Scalia, J.) (quoting Kinnett Dairies, Inc. v. Farrow, 580 F.2d 1260, 1271 (5th
Cir. 1978)). The Legislature thus established a procurement process that leaves Com-
missioner Young with unconstrained discretion to interpret and apply procurement
standards while evaluating proposals and making awards. Commissioner Young an-
swers to other Executive Branch officials and the Legislature for HHSC’s exercise of
discretion—not to desirous vendors in litigation.
This ultra-vires-killing discretion has three independent sources: (1) The Leg-
islature’s decision to channel bidders’ statute- and regulation-based complaints into
the administrative protest procedure; (2) the Legislature’s decision to accord “best
value” primacy above all other procurement standards; and (3) the Legislature’s de-
cision to omit specific, substantive, or objective standards to govern Commissioner
Young’s exercise of judgment in applying procurement standards.
1. Commissioner Young’s ultimate and unrestrained objective
in the procurement process is to interpret collateral law.
The Legislature has tasked Commissioner Young with procuring HHSC con-
tracts and finally resolving complaints that HHSC procurements violated statutes or
regulations. The procurement structure established by the Legislature has left the
interpretations of statutes and regulations that guide the setting of evaluation criteria
and assessments of proposals to the unrestrained discretion of HHSC as the
36
procuring agency. That discretion precludes the Losing Plans’ ultra vires claims
based on their complaints that HHSC’s choice of evaluation criteria was inconsistent
with various procurement standards or that the procurement was unfair for this or
that reason.
In 1997, the Legislature significantly revised the State Purchasing and General
Services Act, Gov’t Code tit. 10, subtit. D, including by enacting sections 2155.076
and 2155.144. Section 2155.144 expressly delegates to HHSC unconditional authority
to procure goods and services, including from MCOs. Tex. Gov’t Code
§ 2155.144(b), (b-1)(2). Section 2155.076 directs all state agencies to “develop and
adopt protest procedures for resolving vendor protests relating to purchasing issues”
and required that such rules “be consistent with the comptroller’s [previously the
State Purchasing and General Services Commission’s] rules.” Id. § 2155.076(a). At
the same time, the Legislature did not provide for judicial review of protest resolu-
tions. As a result, HHSC has the authority to evaluate the bids and proposals of pro-
spective vendors, and finally resolve vendor complaints about its evaluation.
While the Legislature did not define “vendor protests relating to purchasing
issues” in section 2155.076(a), context makes clear that the Legislature had in mind
claims—like the Losing Plans’—that a purchasing agency had misapplied some stat-
ute or regulation. That context is the State Purchasing and General Services Com-
mission’s protest rules at the time the Legislature enacted § 2155.076. See Acker v.
Tex. Water Comm’n, 790 S.W.2d 299, 301 (Tex. 1990) (“A statute is presumed to have
been enacted by the legislature with complete knowledge of the existing law and with
reference to it.”); see also Tex. Tech Univ. Health Scis. Ctr. v. Niehay, 671 S.W.3d 929,
37
936 (Tex. 2023) (“[W]e can presume that the Legislature was aware of this regula-
tory interpretation and was accepting of that meaning . . . when it adopted the ADA
definition of ʻdisability.’”). Under those rules, protests consisted exclusively of “stat-
utory or regulatory provision(s) that the action complained of is alleged to have vio-
lated.” 1 Tex. Admin. Code § 111.3(c)(1)–(2) (1997). As directed, HHSC adopted an
essentially identical rule. See 1 Tex. Admin Code § 391.305(c).
And while the Legislature did not define “resolving,” the same context makes
clear that the Legislature intended that the agency would “determine[]” whether or
not “a violation of the rules or statutes has occurred,” and if so, “the appropriate
remedial action.” 1 Tex. Admin. Code § 111.3(e)–(h) (1997); see id. § 391.305(c)
(HHSC’s essentially identical rule). When the Legislature directed agencies to adopt
rules “consistent with” the State Purchasing and General Services Commission’s
rules, it knew it was delegating to state agencies the same authority the State Pur-
chasing and General Services Commission exercised under the existing rule: The au-
thority to interpret collateral laws related to the agency’s procurement processes.
And the Legislature did not provide for judicial review of final protest determina-
tions. The upshot is that the Legislature intended agencies like HHSC to have the
last word in resolving vendor complaints about alleged violations of statutory and
regulatory requirements in the procurement process.
The Legislature’s structure of the procurement process—granting HHSC un-
conditional authority to procure and channeling legal disputes into HHSC proceed-
ings in which HHSC is tasked with determining the existence and effect of alleged
statutory and regulatory violations by HHSC—created the type of duty whose
38
exercise is “not subject to judicial review.” Schroeder, 646 S.W.3d at 334. Like the
defendants in Schroeder and Hall, when Commissioner Young is procuring contracts,
“the ultimate and unrestrained objective of [her] duty is to interpret collateral law”
in the form of overlapping and sometimes conflicting procurement preferences, con-
siderations, purposes, goals, and other standards. Id. at 333 (quoting Hall, 508 S.W.3d
at 242).
Thus, “a misinterpretation is not overstepping such authority; it is a compli-
ant action even if ultimately erroneous.” Id. (quoting Hall, 508 S.W.3d at 242). The
Losing Plans may “disagree[] with” HHSC’s “determination,” but the scheme es-
tablished by the Legislature “does not ʻallow third parties to second-guess [HHSC]
in this way.’” Tex. Parks & Wildlife Dep’t v. RW Trophy Ranch, Ltd., 712 S.W.3d 943,
959 (Tex. App.—15th Court 2025, mandamus denied) (quoting Schroeder, 646
S.W.3d at 335).
Like the platting process in Schroeder, the state procurement “process is in-
tended to be an expeditious one that favors” contracting. Id. at 336; see, e.g., Hayes
Int’l Corp. v. McLucas, 509 F.2d 247, 258 (5th Cir. 1975) (noting the “strong public
interest in avoiding disruptions in procurement”); see also Tex. Highway Comm’n, 234
S.W.2d at 860 (noting “the traditional principle of” keeping executive branch pro-
curement “free from vexatious and dilatory restraints at the suits of prospective or
potential sellers.” (quotation marks omitted)). So, like in Schroeder, the Legislature
has intentionally “not created a mechanism for . . . judicial review,” unlike in similar
areas, 646 S.W.3d at 336—here, municipal and county procurements. See Tex. Loc.
Gov’t Code §§ 252.061(2), 262.003. Yet, to this point, the STAR CHIP procurement
39
has been saddled with delays worse than those Chief Justice Brister found so frus-
trating in Kingsville ISD. See 710 S.W.3d at 931 (Brister, C.J., concurring).
Commissioner Young’s unrestrained discretion to determine the meaning of
the statutes and regulations the Losing Plans rely on is fatal to their ultra vires claims.
2. Commissioner Young has unconstrained discretion to
procure for best value.
The procurement standards the Losing Plans rely on are independently insuf-
ficient because none overcome the Legislature’s prime directive to Commissioner
Young: Procure for “best value.” Tex. Gov’t Code § 2155.144(c)–(d); see also Tex.
Gov’t Code § 524.0001(b) (“The commission shall implement the powers and du-
ties given to the commission under Section[] . . . 2155.144.”).
The Legislature granted Commissioner Young the authority to procure goods
and services according to best value, plus the discretion to determine what is relevant
to best value (all emphases added):
Gov’t Code § 2155.144.
Procurements by Health and Human Services Agencies
...
(b) An agency to which this section applies is delegated the authority to procure
its goods and services, except as provided by this section.
(c) An agency to which this section applies shall acquire goods or services by any
procurement method approved by the Health and Human Services Commission
that provides the best value to the agency. The agency shall document that it
considered all relevant factors under Subsection (d) in making the acquisition.
(d) Subject to Subsection (e) [repealed], the agency may consider all relevant
factors in determining the best value, including:
...
40
(11) any other factor relevant to determining the best value for the agency in
the context of a particular acquisition. . . .
Plus the specific authority (and instruction) to award contracts based on whatever
best value criteria are set out in its published request for proposals. Each biennial
General Appropriations Act provides:
General Appropriations Act
Art. IX, Sec. 17.09. Contract Management and Oversight.
...
(b) Agencies and institutions should manage contracts consistent with state
statute, . . . including: . . . (4) ensure that contract award decisions are
determined based on best value criteria established in solicitation documents to
ensure fair and open competition; . . . . 19
The Legislature also accorded priority to “best value” over other procure-
ment standards, with just two exceptions:
Gov’t Code § 2155.144.
Procurements by Health and Human Services Agencies
...
(n) To the extent of any conflict, this section prevails over any other state law
relating to the procurement of goods and services except a law relating to
contracting with historically underutilized businesses or relating to the
procurement of goods and services from persons with disabilities. . . . 20
19
Act of May 29, 2023, supra, § 1, art. IX, sec. 17.09(b)(4).
20
See, e.g., Tex. Gov’t Code § 2155.441 (preexisting preference for products of persons with intel-
lectual or physical disabilities). By expressly exempting two procurement standards from this con-
flict provision, the Legislature made clear its conclusion that the myriad procurement standards
that dot the Texas codes and direct HHSC to apply this preference or that consideration conflict
with the freedom § 2155.144 gives the agency to procure for best value. Otherwise, the exemptions
would be superfluous. For the same reason, HHSC need not reconcile that conflict by folding all
the various procurement standards into its best value determination.
41
Implementing § 2155.144, HHSC’s procurement rules have long made that
priority clear without objection from the Legislature: The rules’ express “pur-
pose . . . is to . . . obtain best value when purchasing goods and services.” 1 Tex. Ad-
min. Code § 391.101(3). And they plainly advise that, when procuring good and ser-
vices through an RFP, “[a] contract is awarded to the respondent whose proposal
offers the best value.” Id. § 391.209(5).
The best value standard controls and is inherently discretionary. The Legisla-
ture did not attempt to control ex ante the considerations that go into determining
best value. Rather, it freed HHSC to consider “all relevant factors in determining the
best value,” including “any . . . factor relevant to determining the best value for the
agency in the context of a particular acquisition.” Id. § 2155.144(d), (d)(11).
This freedom includes the selection and implementation of preferences, con-
siderations, purposes, standards, criteria and other factors spread throughout the
State’s statutes and regulations—including Government Code Chapters 540 and
543A, Health & Safety Code Chapter 62, and HHSC’s rules—all under § 2155.144’s
ultimate objective of “best value.” And this freedom makes plain the Legislature’s
recognition that HHSC officials like Commissioner Young—not courts—are best
positioned to determine what’s best for HHSC and the State in these circumstances.
Confirming the intended exclusion of judicial scrutiny of best value, the Legislature
provided its own method of ex post review: Audit. See id. § 2155.144(f ) (“The state
auditor may audit the agency’s acquisitions of goods and services before or after a
warrant is issued to pay for an acquisition.”).
42
The STAR CHIP procurement shows why the Legislature’s chosen structure
makes sense. HHSC’s bid protest process is a far better forum for adjudicating the
solicitation and awards of MCO contracts than the courts. The STAR CHIP con-
tracts ultimately may total $150 billion, 21 and, as shown, the best value criteria for
this procurement has been in development since at least 2019. The “preferences”
and “considerations” about which the Losing Plans complain are just a few of the
hundreds of potential factors, explicit and implied in statute, HHSC weighed in de-
veloping the RFP, with inputs from many stakeholders, including the MCOs. And,
as demonstrated by the long roster of counsel, all MCOs were advised by experienced
public health care and procurement counsel from Texas and around the country.
Most of this lawsuit will have been spent trying to educate judges on managed care
complexities that dozens of professionals on all sides have devoted their professional
careers to learning. But for this judicial detour, Commissioner Young long ago would
have fairly and conclusively decided this matter within HHSC’s protest process.
The Losing Plans do not contend, and the district court did not find, that Com-
missioner Young sought anything but best value. Commissioner Young honored the
Legislature’s direction by determining the best value for STAR CHIP would be ob-
tained by an assessment of the competitors’ responses to 18 Technical Questions and
four oral presentation scenarios. See 9.RR.PX38.025–26, 33–40; see also 9.RR.PX290
(sample scoring rubric included with RFP); 12.RR.DX54 (RFP scope of work). Upon
21
In the years before the 2022 release of the RFP, the approximate spend on STAR CHIP was $9.7
billion annually, and, with options, these new contracts will last up to 12 years. 9.RR.PX.38.006.
43
publishing the RFP, those criteria guided HHSC’s evaluation, just as the Legislature
intended. In sum, HHSC carefully crafted the RFP “to ensure HHSC requests the
information necessary to ensure [the selected MCOs] can achieve the outcomes man-
dated” by the governing statutes. 9.RR.PX38.024. 22
Commissioner Young’s unconstrained discretion in determining best value,
together with her unquestioned pursuit of her conception of best value, dooms the
Losing Plans’ claims.
3. No specific, substantive, or objective standards govern
Commissioner Young’s exercise of judgment.
Even if some procurement standard could constrain Commissioner Young’s
discretion, the standards the Losing Plans rely on cannot. Below, the Losing Plans
leaned hard into Houston Belt & Terminal Railway v. City of Houston. But Houston Belt
shows why their claims fail.
In the first place, Commissioner Young’s statutory authority to procure and
contract is unconditional. See supra, Part I.B.1. So, unlike the defendant’s authority
in Houston Belt, Commissioner Young’s statutory authority is not “explicitly lim-
ited.” 487 S.W.3d at 166. The unconditional and unreserved nature of this authority
“distinguishes [it] from other grants of authority that have supported ultra vires
22
Yet the district court concluded, as the Losing Plans argued, that the STAR CHIP procurement
nonetheless violated § 2155.144 by “fail[ing] to consider MCOs past performances.” CR.5877. Not
so. Section 2155.144 allows but does not require Commissioner Young to consider past performance.
See Tex. Gov’t Code § 2155.144(d)(5) (“[T]the agency may consider all relevant factors in deter-
mining the best value, including . . . past vendor performance.” (emphasis added)). The “nature
of the word ʻmay’” is “fundamentally discretionary.” Indus. Specialists, LLC v. Blanchard Ref. Co.,
652 S.W.3d 11, 17 (Tex. 2022).
44
claims where, for example, the grants require the decisionmaker to act only ʻaccord-
ing to’ or ʻin accordance with’ another law.” TEA v. Devereux Tex. League City, 2023
WL 3325932, at *5 (Tex. App.—Austin 2023, no pet.) ( Jones, J.) (rejecting ultra vires
claim, distinguishing Houston Belt).
Even more, Houston Belt clarified that the “type of discretion that immunity
protects” is “discretion where no specific, substantive, or objective standards govern
the exercise of judgment.” Hous. Belt, 487 S.W.3d at 161. That description fits the
standards relied on by the Losing Plans. Directives to “give preference,” “consider,”
“to the extent possible,” “evaluate,” and “review” are inherently and intentionally
vague, not specific, substantive, or objective. And “[e]ven if we . . . believe that guid-
ing principles are ʻparticularly important’ in these circumstances, we cannot rewrite
a statute that imposes no such principles.” Indus. Specialists, LLC v. Blanchard Ref.
Co., 652 S.W.3d 11, 16 (Tex. 2022); see also In re Morris, 663 S.W.3d at 608 (Young, J.,
dissenting) (discussing issue not reached by majority, explaining that a statutory “re-
quirement” is not “judicially cognizable” unless courts “have access to judicially
administrable standards”).
Take the preferences and considerations, for example (all emphases added):
Gov’t Code § 540.0204.
Contract Considerations Relating to Managed Care Organizations
In awarding contracts to managed care organizations, the commission shall:
(1) give preference to an organization that has significant participation in the
organization’s provider network from each health care provider in the region
who has traditionally provided care to Medicaid and charity care patients; . . .
45
(3) consider the need to use different managed care plans to meet the needs of
different populations; . . . 23
Gov’t Code § 543A.0052.
Financial Incentives and Contract Award Preferences
...
(d) In awarding contracts to managed care organizations under the child health
plan program and Medicaid, the commission shall, in addition to considerations
under Section 540.0204 of this code and Section 62.155, Health and Safety
Code, give preference to an organization that offers a managed care plan that:
(1) successfully implements quality initiatives under Subsection (a) as the
commission determines based on data or other evidence the organization
provides; or
(2) meets quality-of-care and cost-efficiency benchmarks under
Subsection (b).
Many preference statues throughout the country direct how a statutory preference is
to be applied. See Marshall J. Doke, Jr., State and Local Government Bidding Prefer-
ences, 42 Procurement Law 7, 7–8 (Summer 2007); see also Tex. Gov’t Code
§ 2155.444(a)(1) (where cost and quality are equal, requiring purchase from a service-
disabled Texas resident and then to other Texas residents before awarding to out-of-
state vendors). But not these preference statutes. Supplying a “preference” does not,
for example, direct HHSC to ask questions about preferences in an RFP, or to reflect
preferences in scoring proposals at all. Contra CR.5841–45. The same goes for “con-
sider.” Contra CR.5845–47, 5850–51. 24
23
See also Tex. Gov’t Code § 543A.0052(d) (referring to § 504.0204’s “considerations”).
24
As an HHSC official explained, HHSC has “consider[ed] the need to use different managed care
plans to meet the needs of different populations,” Tex. Gov’t Code § 540.0204(3), and so set up
46
“[E]valuate” and “review” are similarly amorphous:
Gov’t Code § 540.0203. Certification by Commission
(a) Before the commission may award a contract under this chapter to a managed
care organization, the commission shall evaluate and certify that the organization
is reasonably able to fulfill the contract terms, including all federal and state law
requirements. . . .
Health & Safety Code § 62.051.
Duties of Executive Commissioner and Commission in General
...
(e) The commission shall conduct a review of each entity that enters into a
contract under Section 62.055 or 62.155 to ensure that the entity is available,
prepared, and able to fulfill the entity’s obligations under the contract in
compliance with the contract, this chapter, and rules adopted under this chapter.
...
The terms suggest some sort of appraisal, but they tell one nothing about the depth
required. 25 The statutes say nothing about what sorts of information is sufficient or
insufficient. Contra CR.5852–53.
The record easily disproves the substance of the Losing Plans’ assertion in any
event. HHSC certified MCOs only after independently assessing MCOs’ responses
to certification questions and supporting documentation. See, e.g., CR.174 (explain-
ing that HHSC completed “a comprehensive certification process”); CR.2041-44
entirely separate STAR programs (STAR, STAR Kids, STAR PLUS, and STAR Health) with en-
tirely separate procurements. See 6.RR.102:1–104:5.
25
Also, Health & Safety Code § 62.051(e)’s “review” is of an MCO that “enters into a contract,”
and thus does not need to occur during the procurement.
47
(HHSC’s determination that Molina met the certification criteria based on a review
of 57 pages of supporting documentation submitted in response to questions).
The other statutes the Losing Plans rely on are of no more assistance to their
position. The Losing Plans (at CR.5848–49) rely on Government Code
§ 540.0051(a)(1)(B) and (a)(6), which provide:
Government Code § 540.0051. Purpose and Implementation
The commission shall implement the Medicaid managed care program by
contracting with managed care organizations in a manner that, to the extent
possible:
(1) improves the health of Texans by: . . . (B) promoting continuity of care; and
...
(6) reduces administrative and other nonfinancial barriers for recipients in
obtaining health care services.
“To the extent possible” deprives the statute of any specific, substantive, or objec-
tive standard. HHSC decides what is possible without further direction.
Regardless, the statute has nothing to do with procurement. The foremost
“manner” of “contracting” to achieve some goal is to put it in the contract. See Con-
tract (v., sense 1.a), Webster’s Third New International Dictionary
494 (unabr. 2002 ed.) (“to establish or undertake by contract”). HHSC has done
that. See, e.g., 12.RR.DX54.272 (requiring a turnover plan that “assure[s] . . . [t]he
least disruption in the delivery of Covered Services to Members during the transition
to a subsequent contractor.”).
The Losing Plans also insist that pairing CHIP service areas with mandatory
Medicaid MCO contracts, see Tex. Gov’t Code § 540.0206, runs afoul of
48
requirements for “best value” and “competitive” procurements. CR.5849–50 (cit-
ing Tex. Gov’t Code § 2155.144; Tex. Health & Safety Code § 62.155). But neither
of those terms is defined in the cited statutes. So it would be within Commissioner
Young’s discretion to conclude that an MCO being entitled to a mandatory Medicaid
contract in a particular service area made that MCO more competitive or of better
value for CHIP in that service area by, for example, making it easier for HHSC to
“coordinate [CHIP] with the Medicaid program.” Tex. Health & Safety Code
§ 62.053(3). On top of that, Health & Safety Code § 62.155(c)(1) expressly allows
Commissioner Young to “give preference to a person who provides similar coverage
under the Medicaid program.”
Thus, Commissioner Young did not award “mandatory CHIP contracts” to
any MCO. Contra CR.5888. Commissioner Young linked Medicaid and CHIP as she
has the discretion to do. And Commissioner Young had compelling reasons to link
STAR and CHIP here. Federal law requires states to offer CHIP members a choice
of plans, so each service area must have at least two plans. See 9.RR.PX92.009. But
CHIP alone is a tiny piece of HHSC’s managed care portfolio: In 2021, the 3.9 mil-
lion STAR members outnumbered the 200,000 CHIP members about 20-to-1. See
12.RR.DX54.006–.007. As a result, “an MCO offering only CHIP services in a [ser-
vice area] may not be sustainable or may result in uneconomical services.”
9RR.PX92.008 (action memorandum to Commissioner Young); cf. CR.1298 (Cook
Children’s observing that large managed care programs “provide[] economies of
scale”).
49
So, as Commissioner Young testified, HHSC has long “had a very difficult
time getting people to bid on CHIP, so they’ve always been awarded together.”
6.RR.154:16–18. Given the small number of potential members for which multiple
CHIP-only plans would be vying, it made sense for HHSC to ensure that each service
area could support at least two plans by awarding the smaller CHIP program to the
plans chosen to serve the much larger STAR membership in the service area.
The regulations the Losing Plans rely on are no better. During the STAR CHIP
procurement, proposals were inadvertently released to an affiliate of one respondent,
Aetna. See 9.RR.PX77–78; 9.RR.PX80–81. The release occurred after the evaluations
of the 1,800-point Technical Question responses, but before the 200-point oral
presentations. See 9.RR.PX77. The Losing Plans say this accidental disclosure vio-
lated the “purpose” of HHSC’s procurement rules to “provide for consistent and
uniform management of procurement and contracting processes.” 1 Tex. Admin.
Code § 391.101(2) (cited at CR.5851).
Declaring a “purpose,” however, is facially insufficient to limit discretion, and
says nothing about disclosure in any case. The same goes for HHSC’s statement that
it “utilizes an evaluation method which provides for . . . the fair consideration of pro-
posals.” Id. § 391.209(3)(A) (cited at CR.5851). That statement is nothing more than
informational. The Losing Plans’ reliance on the Comptroller’s regulation about dis-
closures is even farther afield. See CR.5851 (citing 34 Tex. Admin. Code
§ 20.208(d)(3)). That regulation does not offer any standards for HHSC because it
does not apply to HHSC. The rules of which it is a part apply only to agencies that,
unlike HHSC, have been delegated purchasing authority by the Comptroller via
50
regulation. See 34 Tex. Admin. Code § 20.81(b) (“Chapter 20 of this title applies to
any state agency delegated the authority to purchase goods and services pursuant to
the Act and these rules.” (emphasis added)); cf. Tex. Gov’t Code § 2155.131 (“The
comptroller may delegate purchasing functions to a state agency.”).
In any case, the more important regulation is HHSC’s rule that a protestor
must show that it suffered an “adverse impact.” 1 Tex. Admin. Code § 391.305(c);
see also, e.g., Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1378 (Fed. Cir.
2009) (requiring bid protestor to show competitive prejudice); Ascendant Servs., LLC
v. United States, 160 Fed. Cl. 275, 288 (2022) (noting that a “finding of prejudicial
error requires that the correction of the error must yield a different result”) (internal
quotations and citations omitted).
The Losing Plans never attempted to show prejudice from the release of pro-
posals, instead resorting to general assertions of unfairness and procurement integ-
rity. See, e.g., CR.5851–52. That is because the inadvertent disclosure of proposals
before oral presentations could not have prejudiced the Losing Plans. HHSC scored
all 18 plans highly on oral presentations, assigning to each MCO between 170 and
200 points of the 200 oral presentation points available. 9.RR.PX195. HHSC evalu-
ated Aetna’s oral presentation at 190 points. Id. Of the Losing Plans, Wellpoint
scored the highest with 1,874 points, finishing 48 points behind Aetna. See id. Aetna
would have finished below Wellpoint only if it received an implausible 140 oral
presentation points—50 points lower than Aetna actually scored and 30 points below
any of the other 17 MCOs. The inadvertent disclosure was harmless.
51
The district court’s reliance on HHSC’s protest rules is likewise misplaced.
The district court said Commissioner Young acted ultra vires by not considering un-
timely “supplemental protests.” CR.5878. But no statute or regulation even provides
for supplemental protests. And no statute or regulation “require[s] consideration of
a protest or appeal submitted after the filing deadline when good cause for delay is
shown.” Id. (citing 1 Tex. Admin. Code § 391.307(d)(1)). Section 391.307(d)(1) pro-
vides that an untimely protest “shall not be considered unless good cause for delay is
shown” (emphases added). The text beginning with “unless” is an authorization,
not a command. Anyway, determining “good cause” is inherently discretionary.
The Losing Plans’ ultra vires claims fail because they merely ask the courts to
substitute their discretion for HHSC’s and Commissioner Young’s. Sovereign im-
munity forbids that result.
II. Alternatively, the Losing Plans’ Claims Should Be Dismissed Without
Prejudice for Failure to Exhaust Administrative Remedies.
Every disappointed bidder in a state procurement knows the rules. Complaints
must be raised in a timely protest, may be appealed within the agency, and are re-
solved administratively. That route is not optional; it is the Legislature’s chosen
mechanism for balancing fairness and efficiency in procurement. The Losing Plans
here knew that process, participated in it, and even have administrative appeals still
pending. Yet rather than await the result, they rushed to court and persuaded the
district court to seize jurisdiction the Legislature had reserved exclusively for HHSC.
The comprehensive legislative scheme for procuring MCO contracts and re-
solving protests at the very least shows that HHSC has exclusive jurisdiction to make
52
an initial determination on the issues presented in this litigation. See Thomas v. Long,
207 S.W.3d 334, 340–42 (Tex. 2006); see also, e.g., Blue Cross Blue Shield of Texas v.
Duenez, 201 S.W.3d 674, 676 (Tex. 2006) (“A party cannot circumvent an agency’s
exclusive jurisdiction by filing a declaratory-judgment action if the subject matter of
the action is one over which the Legislature intended the administrative agency to
exercise exclusive jurisdiction.” (cleaned up)); Janek v. Gonzalez, 2013 WL 1748795,
at *6 (Tex. App.—Austin 2013, no pet.) (exclusive jurisdiction barred ultra vires
claims against HHSC Commissioner). Molina Resp. to Mots. for Temp. Relief 27–
31.
Courts do not have subject matter jurisdiction over a case that is within an
agency’s exclusive jurisdiction at least until the aggrieved party has exhausted avail-
able administrative remedies. City of Hous. v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013)
(per curiam). The Losing Plans have not exhausted administrative remedies.
The Losing Plans exercised their option to appeal the denials of their protests
to Commissioner Young; see CR.3315 n.1, 3529, 4249–50, 4264, 4717 n.2; 1 Tex. Ad-
min. Code § 391.307(d). But rather than let Commissioner Young decide the appeals,
the Losing Plans contemporaneously sued Commissioner Young. And then they ob-
tained an injunction forbidding Commissioner Young from “taking action . . . to fur-
ther the procurement . . . processes for the STAR & CHIP RFP.” CR.5883. The Los-
ing Plans’ administrative appeals thus remain outstanding and unresolved, but not
prejudged, as Commissioner Young explained:
A. . . . [A]ssuming the Court will allow me to move forward, I would then finish
the appeals process, the review of the appeals, and make a decision, one or the
53
other, on each of the individual appeals. And then once that process is finished,
then I would move forward. . . . Depending on how those appeals come out.
...
Q. And in deciding the appeal -- the appeals, you, yourself, still need to
determine whether the State complied with the law --
A Yes.
Q -- in relation to this procurement?
A Yes, sir. 26
So even if sovereign immunity did not bar the Losing Plans’ claims, the district
court still lacked jurisdiction to adjudicate them.
III. Equitable Factors Do Not Support the Temporary Injunction.
“A temporary injunction is an extraordinary remedy and does not issue as a
matter of right.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). Its “pur-
pose is to preserve the status quo of the litigation’s subject matter pending a trial on
the merits.” Id. The party seeking a temporary injunction must show “a probable
right to the relief sought” and an “irreparable injury” in the absence of an injunction.
Id. And because “[i]njunctive relief is an equitable remedy,” courts consider “the
balance of the equities,” including whether “the complaining party . . . ha[s] acted
promptly to enforce its right.” Foxwood Homeowners Ass’n v. Ricles, 673 S.W.2d 376,
379 (Tex. App.—Houston [1st Dist.] 1984), writ ref’d n.r.e.). None of these factors
favor the Losing Plans.
26
6.RR.132:7–23.
54
A. The status quo is Commissioner Young’s authority to procure
STAR CHIP contracts.
“The status quo is the last actual, peaceable, noncontested status which pre-
ceded the pending controversy.” State v. Sw. Bell Tel. Co., 526 S.W.2d 526, 528 (Tex.
1975). When a claim challenges the authority of a government official to act, the sta-
tus quo turns on whether the official “asserted his authority” before a challenge
arose. In re State, 692 S.W.3d 466, 467 (Tex. 2021) (per curiam). Here, Commissioner
Young has always maintained her authority to procure STAR CHIP contracts. The
status quo is Commissioner Young exercising her authority, and the district court’s
injunction upsets that status quo.
B. The Losing Plans have no probable right to relief.
As shown, sovereign immunity and HHSC’s exclusive jurisdiction foreclose
the Losing Plans’ claims. As a result, the Losing Plans cannot show a probable right
to relief.
C. The Losing Plans’ claimed irreparable harm arises from the
expiration of their contracts, not HHSC’s reprocurement.
The district court found that the Losing Plans would suffer irreparable harm
unless the court enjoined “the award, execution, and implementation of the intended
STAR & CHIP contracts.” CR.5879. The district court clearly erred—all the harm
identified results from the expiration of the Losing Plans’ contracts, not from any of
the acts the Losing Plans claim are ultra vires.
Allegedly “unlawful acts of public officials may be restrained when they would
cause irreparable injury.” Tex. State Bd. of Examiners in Optometry v. Carp, 343 S.W.2d
55
242, 245 (1961) (emphasis added). 27 Thus, only irreparable harm that “would result”
from allegedly ultra vires acts can support an injunction. See CR.5879; Carp, 343
S.W.2d at 245; State v. Hollins, 620 S.W.3d 400, 410 (Tex. 2020); see also, e.g., Wis.
Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (“T]he movant must show that
the alleged harm will directly result from the action which the movant seeks to en-
join.”); Packard Elevator v. I.C.C., 782 F.2d 112, 115 (8th Cir. 1986) (same).
The irreparable harms identified by the district court all stem from the Losing
Plans’ loss of incumbency. Thus, the district court describes harm from “[t]he loss
of STAR CHIP contracts,” not the award of a desired contract to others. CR.5879
(emphasis added). For Cook, this loss threatened its participation “in the STAR Kids
program” because its “larger STAR & CHIP contracts” allow for “economies of
scale” that the smaller STAR Kids contracts do not. Id. Cook’s customers will be
forced to change plans. Id. Cook is suffering “hiring difficulties and the delay of
needed internal projects.” Id. Cook “can no longer negotiate a new pharmacy bene-
fits contract alongside other Texas-only Medicaid plans.” Cook’s “375 employees
are at risk of losing their jobs.” “New STAR & CHIP entrants in the Tarrant Service
area will likely poach Cook Children’s experienced employees.” The “irreparable
harm” for the other Losing Plans tracks Cook’s. See CR.5879–81.
27
Accord Campbell v. Wilder, 487 S.W.3d 146, 152 (Tex. 2016); Sanchez v. Saghian, 2009 WL
3248266, at *7 (Tex. App.—Houston [1st Dist.] 2009, no pet.); Dall. Cnty. v. Sweitzer, 881 S.W.2d
757, 769 (Tex. App.—Dallas 1994, writ denied).
56
These harms are all tied to loss of incumbency. 28 The Losing Plans’ loss of
incumbency, however, results directly from their existing contracts expiring, 29 not from
HHSC procuring new contracts with others. The only way the STAR CHIP procure-
ment could have saved the Losing Plans from the harm they allege is if its result was
to award the Losing Plans new contracts in their current service areas. But the Losing
Plans did not try to show (and cannot show) that, but for the alleged ultra vires acts,
they would have received those new contracts. See, e.g., CR.3928 (“Superior does
not, as Defendant contends, ʻallege that the sole and mandatory outcome of the pro-
curement is that [Superior] be awarded all the contracts [it] desire[s].’”).
None of the alleged “unlawful acts of public officials” here have “cause[d]
irreparable injury,” so there is no basis for an injunction. Carp, 343 S.W.2d at 245.
D. The balance of the equities weighs against the Losing Plans.
“Equity aids the diligent and not those who slumber on their rights.” River-
center Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993) (quotation marks omitted).
Most of the objections the Losing Plans now raise were apparent on the face of the
STAR CHIP RFP, and so the Losing Plans needed to raise those objections before
the proposal deadline, when HHSC began the arduous task of evaluating proposals.
Instead, the Losing Plans waited to see the results before complaining. That is not
28
And many are self-inflicted. For Superior and Wellpoint, the district court also found harm from
contracts Superior and Wellpoint entered into with others to assist Superior and Wellpoint in per-
forming their incumbent contracts but that have terms beyond Superior’s and Wellpoint’s expiring
contracts. CR.5880–81. No one, least of all Commissioner Young, forced Superior and Wellpoint
to take those risks.
29
See 6.RR.145:14–15 (“We have reached the end date for . . . the current contracts that we have.”).
57
diligence. See, e.g., Landry’s Seafood Inn & Oyster Bar-Kemah, Inc. v. Wiggins, 919
S.W.2d 924, 927-28 (Tex. App.—Houston [14th Dist.] 1996, no pet.) (rejecting tem-
porary injunction where plaintiff waited eight months, until just before defendant’s
operations began, to sue). The same result holds for Wellpoint’s timely solicitation
protest about mandatory contracts: Rather than bring an ultra vires claim immedi-
ately, Wellpoint sat on its hands after its protest and appeal were denied and as the
procurement proceeded. That is not diligence. See id.
The post-solicitation objections the Losing Plans raise does not shift the bal-
ance of the equities in their favor because they fail to show any prejudice. They com-
plain that HHSC violated general procurement standards of “fair and equal” treat-
ment by disclosing competitors’ proposals to Aetna-affiliated entities in between re-
sponses to technical questions and oral presentations. But, as explained supra, Part
I.C.3., the Losing Plans failed to show that any advantage Aetna could have possibly
gained through this disclosure was enough to make a difference in the final tally of
scores and thus the noticed awards.
Conclusion and Prayer
The Court should reverse and render judgment dismissing the Losing Plans’
claims with prejudice.
58
Respectfully submitted,
Scott Douglass &
McConnico LLP
Jason R. LaFond
State Bar No. 24103136
jlafond@scottdoug.com
Cheryl Joseph LaFond
State Bar No. 24104015
clafond@scottdoug.com
303 Colorado Street, Suite 2400
Austin, Texas 78701
(512) 495-6300
Cheryl Joseph LaFond
Counsel for Appellant Molina Healthcare of
Texas, Inc.
59
Certificate of Compliance
Microsoft Word 2019 reports that this brief contains 14,189 words,
excluding the portions of the brief exempt from the word count under Texas Rule of
Appellate Procedure 9.4(i)(1).
Jason R. LaFond
60
No. 15-24-00114-CV
In the Fifteenth Court of Appeals
Austin, Texas
Cecile Erwin Young, in her Official Capacity as the Executive Commissioner
of the Texas Health and Human Services Commission; Molina Healthcare
of Texas, Inc.; and Aetna Better Health of Texas, Inc.,
Appellants,
v.
Cook Children’s Health Plan, Texas Children’s Health Plan,
Superior Health Plan, Inc., and Wellpoint Insurance
Company,
Appellees.
Appendix
Tab
1 Order denying Commissioner Young’s Plea to the Jurisdiction and
Granting Plaintiffs’ Application for Temporary Injunction
2 PX38: STAR CHIP Request for Proposals
3 Tex. Gov’t Code § 522.0051
4 Tex. Gov’t Code § 523.051
5 Tex. Gov’t Code § 525.0101
6 Tex. Gov’t Code § 532.0051
7 Tex. Gov’t Code § 540.0051
8 Tex. Gov’t Code § 540.0203
9 Tex. Gov’t Code § 540.0204
10 Tex. Gov’t Code § 540.0206
11 Tex. Gov’t Code § 543A.0052
12 Tex. Gov’t Code § 2155.076
13 Tex. Gov’t Code § 2155.144
14 Tex. Health & Safety Code § 62.051
15 Tex. Health & Safety Code § 62.053
16 Tex. Health & Safety Code § 62.055
17 Tex. Health & Safety Code § 62.155
18 Act of May 29, 2023, 88th Leg., R.S., ch. 1170, § 1, art. IX, sec. 17.09
19 1 Tex. Admin. Code § 391.101
20 1 Tex. Admin. Code § 391.209
21 1 Tex. Admin. Code § 391.307
22 1 Tex. Admin Code § 111.3 (1997)
TAB 1
Filed in The District Court
of Travis County, Texas
,. j
OCT O 4 2024 /V'f2-
CAUSE NO. D-1-C -24-003839
At�L/ 'fl f) M.
Vet•,�- :...,. � Distrk t Clerk
COOK CHILDREN'S HEAL TH PLAN; § IN THE DISTRICT COURT
TEXAS CHILDREN'S HEALTH PLAN; §
SUPERIOR HEALTHPLAN, INC.; and §
WELLPOINT INSURANCE COMPANY, §
§
Plaintiffs, §
§
v. § TRAVIS COUNTY, TEXAS
§
CECILE ERWIN YOUNG, in her official §
capacity as Executive Com missioner of the §
Texas Health and Human Services §
Commission, §
§
Defendant. § 353rd JUDICIAL DISTRICT
TEMPORARY INJU NCTION AND ORDER DENYING
DEFENDA T'S PLEA T O THE JURISDICTION
Before the Court are the Applications for Temporary Injunction (the '"Applications") filed
by Plaintiffs Cook Children's Health Plan ("Cook Children's"), Texas Children's Health Plan
("TCHP"), Superior HealthPlan, Inc. ("Superior"), and Wellpoint Insurance Company
("Wellpoint," and collectively, "Plaintiffs"); and the Plea to the Jurisdiction (the "Plea") filed by
Defendant Cecile Erwin Young ("Defendant"), in her official capacity as Executive Commissioner
of the Texas Health and Human Services Commission (''HHSC"). After considering Plaintiffs'
Applications and Defendant's response; Defendant's Plea and Plaintiffs' responses; the pleadings
and attached evidence in these consolidated cases (Nos. D- I-GN-24-003839, D- I-GN-24-003874,
D-1-GN-004059, and D-1-G -24-004327); the parties' prehearing briefing; the evidence admitted
in the record and adduced at the hearing held on September 30, October I , October 2, and October
plicable authorities; the arguments of counsel, and alI other matters properly before the
ourt DENIES Defendant's Plea and GRA TS Plaintiffs' Applications.
Page I of 10
Page 5875
The ourt makes the following findings:
1. The Court has ubject-matter jurisdiction over the claims in these consolidated
ca es because Plaintiffs have alleged and offered e idence demonstrating that Defendant will act
ultra vires in awarding, executing, and implementing the contracts arising out of Request for
Proposals o. HHS00 I 1152 (the '·RFP" or " T R & CHIP RFP'') because he has acted ultra
vires in admini tering the RFP. Plaintiffs properly seek only pro pective relief-specifically,
injunctive relief prohibiting Defendant from awarding, executing, or otherwise implementing the
intended RFP contracts and thus preventing further unlawful acts in connection with Defendant's
procurement or contracting proces es, as well as accompanying declaratory relief. Accordingly
sovereign immunity does not bar Plaintiffs' claims or deprive the Court of subject-matter
jurisdiction.
2. The Court ha per onal jurisdiction o er the parties in these consolidated cases.
3. Venue is proper in this Court.
4. Through the RFP Defendant sought to procure managed care services for the tate
of Texas ccess Reform (" T R ') Medicaid program and the Children s Health Insurance
Program(' CHIP,' and together with STAR, "STAR & CHIP").
5. Plaintiffs allege that Defendant administered the RFP in a manner that violates
Texas law and that consequently, any award, execution, or implementation of the intended STAR
& CHIP managed care contract that Defendant announced on March 7 2024, will constitute ultra
vires acts.
6. Plaintiffs have established a cause of action against Defendant and a probable right
ief ought on their claim that Defendant has violated and, unless enjoined, will continue
v tatutory and regulatory requirements applicable to the RFP.
Page 2 of 10
Page 5876
7. pecifically, Plaintiffs have established that Defendant has violated and will
continue to violate the Texa Government Code, Texas Health and afety Code, and Te as
Administrative Code in procuring managed care contracts for STAR & CHIP in Texas, and that
any award, e ecution, or implementation of Defendant's intended contract awards would be
unlawful, becau e:
• Defendant's intended contract award will fail to give preference to managed care
organizations ("MCO ") that have ignificant participation in their pro ider
networks from each healthcare provider in the region who has traditionally
provided care to Medicaid and charity care patients as required by Texa
Government Code§ 533.003(a)( I);
• Defendant's intended contract awards will fail to give preference to MCOs that
have successful! implemented quality initiatives as required by Texas Government
Code§ 536.052(a) and (d);
• Defendant ha failed to develop and implement the co t-efficiency and quality of
care benchmarks mandated by Texas Government Code 536.052(b) despite being
subject to an obligation to do so for o er a decade. Defendant's intended contract
awards will likewise fail to give preference to MCOs that have met such
benchmark a required by Texas Go ernment Code 536.052(d);
• Defendant s intended contract awards will fail to consider MCOs past
performances a required by Texas Government Code§ 2155.144;
• Defendant's intended contract awards will fail to evaluate and certify that M Os
are reasonably able to fulfill the term of the STAR contract as required by Texas
Government Code§ 533.0035 and to review MCOs to confirm their ability to fulfill
the requirement of the CHIP contract a required by Texas Health & Safety Code
62.051 (e);
• In August 2023 and again in October 2023, Defendant wrongfully disclosed the
RFP proposals of Plaintiffs and other re pondents-with the August disclo ure
recipients including legal counsel for Aetna, one of the competing respondents,
while the procurement was ongoing and prior to completion of the oral
presentations-thu , destroying any integrity of the procurement process and
creating an unlevel playing field that cannot ensure fair consideration of all
proposals and i far from consistent, uniform, and transparent as required by I
Texas Admini trative Code§§ 391.10 I and 391.209·
Defendant's intended contract awards will fail to implement the Medicaid managed
care program in a manner that improves the health of Texans by promoting
Page 3 of 10
Page 5877
continuity of care and provides a medical home for recipients as required by Texas
Government Code§ 533.002;
• Defendant's intended contract awards will fail to reduce administrative and other
nonfinancial barriers for recipients as required by Texas Government Code
§ 533.002;
• Defendant's intended contract awards will fail to consider the need to use different
managed care plans to meet the needs of different populations as required by Texas
Government Code§ 533.003(a)(3);
• Defendant's intended contract awards will unlawfully award mandatory CHIP
contracts to MCOs to which Defendant intends to award mandatory STAR
contracts in violation of Texas Health and Safety Code§§ 62.055 and 62.155;
• Defendant's intended award of mandatory CHIP contracts will fail to give
consideration to statutorily required factors, including those under Texas
Government Code § 533.003, in violation of Texas Government Code
§ 533.004(a);
• Defendant's continuing practice of denying relevant information about a
procurement to bidders until after the deadline to submit a bid protest violates the
Due Course of Law provision of Article I, Section I 3 of the Texas Constitution by
not providing a meaningful bid protest process after promising one in 1 Texas
Administrative Code Chapter 391; and
• Defendant's continuing practice of refusing to consider as untimely any
information submitted in supplemental protests and/or after the protest filing
deadline is inconsistent with the procedural protections promised to protestants in
bid protest rules that require consideration of a protest or appeal submitted after the
filing deadline when good cause for delay is shown under 1 Texas Administrative
Code§ 391.307(d)(l ).
8. These statutory and regulatory violations, each singly and together collectively,
have resulted in intended contract awards that will be invalid and unlawful, and the further
execution and implementation of such intended contract awards will be ultra vires acts.
9. Furthermore, Defendant is currently evaluating bids for STAR Kids, a separate
Texas Medicaid managed care program, through Request for Proposals No. HHS00 13071 (the
ids RFP"). The procurement processes in the STAR & CHIP RFP and the STAR Kids
bstantively identical. Plaintiffs have demonstrated that Defendant has no intention of
Page 4 of 10
Page 5878
voluntarily correcting her cour e of action for future procurements, including altering the proces es
and procedure u ed in administering the STAR Kids RFP. The resulting TAR Kids contract
award will therefore also violate tatutory and regulatory requirement and be ultra vires.
I 0. Plaintiffs have e tablished a probable right to relief and that Defendant s award,
execution, and implementation of the intended unla fully procured T R & CHIP contract will,
if not enjoined cause Plaintiffs to suffer imminent and irreparable injury.
11. Cook Children' ha established that execution and implementation of the contracts
would re ult in irreparable harm to Cook hildren's because:
• The loss of TAR & CHIP contracts threatens Cook Children's financial viability
and might lead to the forced wind-down of the entity;
• Cook Children s participation in the ST R Kids program is in jeopardy because
the larger STAR & CHIP contracts pro ide economie of cale to limit losses from
TAR Kids;
• ook Children's I 00,000-plu T R & CHIP member will be forced to change to
different health plans from different companies, risking disruption to the members'
healthcare and their access to their current primary care providers, specialty care
providers, or both;
• Cook Children's has suffered immediate operational di ruptions, including hiring
difficulties and the delay of needed internal projects;
• Cook Children s can no longer negotiate a new pharmacy benefits contract
alongside other Texas-only Medicaid plan and con equently will need to pay more
for pharmaceuticals·
• ook Children's 375 employees are at risk of losing their jobs-both the 70% of
employees who focus on STAR & CHIP and the 30% ho focus on STAR Kids;
and
• ew STAR & CHIP entrants in the Tarrant Service rea will likely poach Cook
hildren's experienced employees before the new contracts go into effect-thus
threatening ook Children's T R & HIP operation while it is still required to
provide service under its current contract .
J TCHP has e tabli hed that execution and implementation of the contracts would
eparable harm to TCHP because:
Page 5 of 10
Page 5879
• TCHP's 425,000 TAR & CHIP members will be forced to change their health
plans, impacting their access to care;
• TCHP has uffered and will continue to suffer disruptions in workforce
threatening the future viability of th health plan-a employees voice concern
about job security in light of the intended contract awards;
• TCHP's 650 employees are at risk of lo ing their jobs, impacting the financial
health of its entire Texas Children' Health Care Sy tern beyond that of the health
plan;
• TCHP has already uffered and will continue to suffer the poaching of its well
trained employees by other MCO -further endangering its operations while it
remains under contract with HHSC;
• TCHP will lo e members and providers, further threatening the viability of the
health plan and confusing member and providers·
• TCHP has and ill suffer damage to its reputation and goodwill; and
• TCHP's participation in the TAR Kid program is at risk because the larger TAR
& CHIP contract are needed to provide economie of cale to limit losse from
TAR Kid . If TCHP loses its STAR Kids contract, its 26 000 TAR Kids
members would need to change their health plans, thereby adversely impacting
those member ' access to care, adversely impacting TCHP's workforce, adversely
impacting TCHP's ability to operate and damaging TCHP's reputation and
goodwill.
13. uperior has establi hed that execution and implementation of the contracts would
result in irreparable harm to uperior because:
• uperior will experience a reduction in the number of TAR & CHIP members it
serves today, forcing member to change plans even before the operational tart
date of the new contract ;
• Superior will need to begin reducing its workforce ju t as new MCO entrants and
MCOs expanding their membership ill seek to poach uperior's employees, who
are already grappling with the uncertainty of their jobs in light of the intended
awards;
• Providers will be less likely to contract with Superior a contract renewals are being
negotiated over the next few months and Superior's leverage in provider contract
negotiations will be ubstantially diminished;
Superior has made substantial investments in partnerships that promote HHSC's
alue-based care priorities. These partnerships involve risk-sharing agreements
Page 6 of 10
Page 5880
between uperior and the partner entities and have been built to scale over time.
uperior will lo e the benefit of its initial investment in these partnership ; and
• uperior's ability to provide the ame level of ervice currently provided under
e i ting ST R & CHIP contracts through the Augu t 31, 2025 expiration date will
be diminished due to workforce challenge that would be caused by execution of
the TAR & CHIP contracts, which will impact Superior's operations and cau e it
to suffer reputational damage.
14. Wellpoint ha e tablished that execution and implementation of the contract ould
result in irreparable harm to Wellpoint because:
• Almost 380,000 current Wellpoint members will be forced to change their health
plan, thus lo ing access to their existing Wellpoint provider network;
• Wellpoint will be forced to consider ub tantial reductions in and/or relocation of
its existing I 200-plus-person workforce dedicated to the Texas Medicaid
programs;
• Wellpoint ha already suffered and will continue to uffer the poaching of its highly
trained employees by other MCOs. During the review and transition period which
HHSC has stated will take at least a full year, Wellpoint must continue to pro ide
uninterrupted healthcare to its members, and its ability to do so will be substantially
jeopardized if there are key staff vacancie ;
• Wellpoint has already suffered and will continue to uffer difficulty retaining its
existing, robu t provider network in the impacted ervice areas. Maintaining it
network of healthcare providers is critical to Wellpoint' commitment to pro iding
high-quality, co t-efficient healthcare for the entire duration of its exi ting
contracts. Worse yet, Wellpoint has learned that some providers are informing
members that Wellpoint will no longer be providing TAR & CHIP service in
impacted areas and are encouraging them to switch plans on the basis of
Defendant's intended contract award
• Wellpoint ha made significant investments in service areas that it will be forced to
exit and has longstanding provider partnerships with alternative payment models
that were developed and built to scale over multiple year . Wellpoint will lose the
benefit of its in estments in tho e ervice areas and partnerships.
• There is no legal remedy that can fully compensate Wellpoint for (I) the loss of its
members, (2) the harm to its busines resulting from the intended, unlawfully
procured contract award , and (3) the harm to its ability to compete in a fair and
lawful procurement process in future procurements; and
The harm to Wellpoint is imminent because Defendant did not follow the
requirements of Texas law in procuring the STAR & CHIP contracts but
Page 7 of 10
Page 5881
nevertheless intends to execute and b gin implementing the intended, unlawfully
procured contract awards. In addition, the harm to Wellpoint is imminent as
Defendant doe not intend to correct her unlawful course of action for future
procurements or the ongoing STAR Kid RFP.
l 5. Plaintiff have also presented evidence that they will begin losing TAR & CHIP
members now even though operation under the intended STAR & CHIP contract awards are not
scheduled to start until September 1, 2025. Provider are already informing Plaintiffs' members
that Plaintiffs will no longer be providing STAR & CHIP services in certain service area of the
tate and are encouraging members to switch plan . The confusion among providers and members
alike will onl worsen if the intended contract awards are executed notwithstanding the pending
challenge to their legality.
16. oney damages are not adequate compen ation becau e the harms Plaintiffs will
suffer cannot be measured by any certain pecuniary tandard. Furthermore, Plaintiffs cannot be
adequately compensated in damages because Defendant i immune from suit for damages and any
limited waiver of immunity i in ufficient to compen ate for Plaintiffs' harms.
17. The harms to Plaintiffs outweigh any potential harm to Defendant or HH C that
would re ult from preserving the status quo during the pendency of these consolidated cases.
either Defendant nor HH C would be harmed if the execution and further implementation of the
intended STAR & CHIP contract are delayed given that (I) operation under the intended contract
awards are not scheduled to tart until September 1, 2025, and (2) HH C has previously delayed
the Rf P several times and was able to continue pro iding coverage through the current STAR &
CHIP contracts by extending the contracts in effect at the time.
18. The public will not suffer harm if a temporary injunction is granted but will suffer
fendant executes and implements the intended, unlawfully procured contract awards.
d contract awards will impose ignificant harm and confusion on millions of Texas's
Page 8 of 10
Page 5882
TAR & CHIP members. More than 1.5 million Texan , mo tly children-and 43% of the total
TAR & CHIP population-will be forced to change health plan . Thi in turn would cau e
ignificant harm to tho e beneficiarie , for hich there i no ad quate remedy at la a ailable
again t Defendant, including:
• Confu ion among tho e beneficiarie due to difficultie in informing them of the
change in a ailable health plan ;
• Di ruption to tho e beneficiarie ' acce to care and continuit of care, thereb
threatening the medical care and the ery health and elfare of tho e beneficiarie •
and
• dministrative burden of finding ne health plan and potentially ne healthcar
provider
19. The injuncti e relief Plaintiffs reque t i narrow m cope and tailored to prohibit
Defendant from continuing to act ultra vires. The balance of equitie and public interest weigh in
favor of granting Plaintiff: • reque ted injuncti e relief.
ccordingly it i therefore OR D RED that Defendant' Plea to the Juri diction
DE IED.
Tt is further ORD RED that Plaintiff:' pplications for Temporary Injunction are
GRA TED. The ourt OR D R that:
• Defendant, and all other per on or entities in acti e concert or participation ith
Defendant, hall refrain from a arding signing, entering into, e ecuting,
implementing, or otherwi e taking action to effectuate or perform any contracts
re ulting from or in connection ith the TAR & CHIP RFP or to further the
procurement or contracting proce s for the TAR & HfP RFP; and
• Defendant and all other per on or entitie in acti e concert or participation ith
Defendant, hall refrain from further proceeding with the procurement of, i uing a
notice of intent to award or awarding contracts under, or otherwi e implementing
re ult from th T R Kid RFP.
Page 9 of 10
Page 5883
IT I F RTH ER ORD RED that D fendant hall pro ide notice of thi Temporary
Injunction to her officers, agent , ser ants, employees, and attorney a well a any per ons or
entities in active concert or participation with Defendant.
IT I F RTHER ORDER D that Plaintiff: ' bond or cash depo it in lieu of bond i et in
the amount of 1 ,000.
IT I FURTHER OR DER D that, on the filing by Plaintiff of the bond and on appro ing
the bond according to law (or the cash deposit in lieu of bond), the Clerk hall is ue a Temporary
Injunction in conformity ith th law and the term of this order.
IT I F RTHER ORDERED that this Temporary Injunction shall not expire until final
judgment in this case is entered or thi case is otherwi e dismissed by this Court.
JT I F RTHER ORDERED that the trial on Plaintiff: ultra vires claim eeking
declaratory relief, permanent injuncti e relief, and mandamus relief i et for ovember 3, 2025 .
SIG ED on Oc. t o 1o er 'f 2024.
�d::;4(
J OGE PRESIDI G
Judge Laurie Eiserloh
455th District Court
, VELVA L PR CE, Difltrict Clerk, Travis County,
Texas, do hereby certify that this is a true and
corred copy as same ppears of record in my
office. Witness my hand and sea of office
On ----------�---
11/01/
11/ 01/202
20244 09:2
9:28:2
8:211
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-(' .,.;; VELVA L. PRICE
..,.. ·• • D STRICT CLERK
1 693 1 7251 , Deputy; ::) H Page 10 of 10
Page 5884
TAB 2
Cecile E. Young, Executive Commissioner
Request for Proposals (RFP)
for
STAR & CHIP Managed Care Services
RFP No. HHS0011152
Date of Release: December 7, 2022
Responses Due: February 17, 2023 by 10:30 a.m. Central Time
958-56 Health Care Management Services, Including Managed Care Services
915-20 Call Center Services
948-07 Administration Services, Health
STAR & CHIP RFP No. HHS0011152 Page 1 of 57
HHSC
P-038.001
Table of Contents
Article I. Introduction, Definitions, and Authority ...........cccceccceeecceeee
cece
eeeeeeeeeeceaeeeaeseeeeeeeesaaeseaeseeneseneeeaaes 5
UintrOduction cccece cece cece eeeeeeeeeeceaeeeaeeeeeeesaee cease eeeseeeeeaaeeeaesaeeseeeesaaesaeseeeeseeeesaaeecaeseeeeseneesiaeenaeee 5
Scope Of Work ceccecccceccceneeceee seas eaeeesaeeeeaeeceaesaaesseeeesaeeceaeseaeeseneesaeeseaeseeeeseeeeseeseaeees 5
Contract Award, Term, and HistoricalCompensation. 5 ..........c..cccccecceeeeeeeeeeeeeeeeeeeeeeeneeseeenaeees
1.1.3 No Guarantee of Volume, Usage, or Compemnsation...........:ccccceececeseceeeeeeeeeeeeeceaeeeeeeeeeeeteeenaeens 6
Definitions cee eccceccceceeeceeeeeeeeeeeeeceeeceeeeeeeeecaeeceaeeaeeceeeesaaecaaeseeesseeeecaaeseaeseaeeseeeesaaeeneeseereseeeesaeeeeaeee 6
AUthority cccecnee eens ceeeeeeeeecaee cae eeeeeseeeeeaeeceaeeaeeseeeesaaeeaaeseeeseeeeseaeeaeseaeeseeeesaeenaeseeeeseneesaeenaeee 9
Article I]. Administrative Information...........cccccceccceeececeeeeeeeeeeeeeeeeceaeeaeeeeeeesaeeseaeseeeeseeeesaeeseaeseeeeseeeeseeeeaeees 10
2.1 Schedule of Events .0.......cecccccceceseeeeeceeeeeeeeececeeeeeeeeneeeaeecaaeceaeeseeeesaeecaaessaeseeneesaeeseaeeeeeseeeesieeseeseaeeeees 10
Ambiguity, Conflict, or Discrepancy ..........:cceccceccceeseeceeeeeeeeeeeeeeeeeceaeeeeeeeeneesaeesaeseeeseneeseeseaeeeeresaes 11
VAQUITIOS cece cece cee ceneeeee cece ceae cease aeeecacecaeesaaeseeeeeeeecaaeeeaeeeaeeesaceseaeseaessceeeeaaeseaseceeseneescesseseeeeeees 11
2.3.1 Sole Point of Contact ..cceeccccccceseceeecceeeeeeeecececeeeeeeneecaeesaaeseaeeseneesaeesaaeseaesseneesaeeseaeeeneeesneesaees 11
2.3.2 Prohibited Communication ..ccceccceccceeeeeceeeeeeeeeeeeecaceceaeseaeescaeesaaeseaeeceeseaeesacessaeseneeseeeeeaaes 12
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2.3.4 Solicitation Questions ...........cccccccccccssseceesssseeeeseseeesecseseeecesssaeeecsessesessceeeeeesesaeeeesssaeeeeseseneeess 12
2.3.5 Pre-Proposal Conference ..ccceseeeeeeeeceeeeeeeeeeeceeeeeeeecaceceaeseeeescaeesaaeseaeecaeeseaeesacessaeeeareseeeesaaes 13
2.4 Proposal Composition Requirement ..........::ccccccccceeseceeeceeeeeeeeeeeeeceaeeeeeeseneesaeesaeseeeseneeseeseaeeeneenees 15
2.4.1 General Information cece
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2.4.2 Page Limit and Supporting Documentation.............c:cccccceseeeeeeeeeeeeeeeceeeseeeeeeneeeaeeseaeeeeeeeeeeesaees 15
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2.4.4 ExXCeptions cece
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2.4.5 ASSUITIPLIONS.. . . .ceeeceeeceee cece cece eeeeeeeeeeeaeeceaeeaaeeaeeseaeesaaeseaesaeeseaeecaaesaeseaeeseaeesaaeseaeseeeeseneesaaes 16
2.4.6 Binding Offer... ceccccccccceeececececeeeeeeeeeeeeeceaeeeaeeceeeeeaeecacesaeseaeesceeesaaeseaeeceeeseaeescessaeseereseeeesaes 16
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2.5 Proposal Submission and Delivery cage
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Deadline ceecceccececececeeeeeeeeeeeeeceaeceaecceeeeaeecaaesaaeseneecaeecaaeseaeesneesaeesaeseeesseneeeaaeseaeseaeeeeeeenaees 17
2.5.2 Submission Instructions cece
eeeeeeeeeecaaeceaeseeeseaeecaaeseaeseaeeseeeesaeeeaeseaeeseneesaaes
...........ccccccccceecceeeeeceee 17
2.5.3 Labeling and Delivery... .cccceeccecccceeeeeeee cece cee eeeeeeeeeecaaeceaeecaeeeeaeesaceseaeseaeeseaeesaaeseasecaeeeeneetaaes 18
2.5.4 Submission Checklist...........ccccccccccseceeecceeeeeeeeceeeceeeeeeneecaeecaeseaeeseneesaeeseeseesseneesaaeseaeeeareeseeesaees 19
Article II. Proposal Evaluation and Award Process cee
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Evaluation Criteria... .ccccceeececeeceeeee cece ceeeeeeneecaeeceaeeeaeeceeeesaeecaaeseaeeseneesaaesaeseaeeseeeesaeeseaeseeesseneeeaaes 21
3.1.1 cece
Conformance with State Law........cccceccccccceeeeeceee 21 eeeeeeeeeeceaeseaesseneeeaeeseaeseaeeseneesaeeseaeseeeeseeeesaees
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3.1.2 Mandatory Contracts ........cccecccceccceeeeeeeeeeeeeceaeceaeeceeeeeaeecaceseeseeescaeesaaeseaeecaeeseaeesacessaeseareseeeeeaaes 21
3.1.3 Selection Methodology ...........cccccecceeeeceeeeeeeeeceaeeeeeeeeeeesaceceaeseaeeseneeeaeeseaeseeeeseneesaeeseaeseeeeeeneesaaes 21
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5.1 cee
Affirmations and Certifications...........cccccccceeeecece 41 eeeeeeeeeeeeeeceaeeeeeeseneesaeecaeseaeeseneesaeeseaeseeeeeeneesaaes
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Company Profile .ccecccccceeceeeececeeeceeeeeeeeeeaaecaaecaeeseeeesaceceaeseaeeseceesaaeseaeecaeeseneesacessaeseeeeseeeesaaes 42
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5.5.3. Dun and Bradstreet Report........cccecccecccceeceeeeeceeeeeeeeeeneeeeee 47 cae seaeeseneesaeeceaeseeeeseneeseeeseaeeeareeeeeesaaes
5.5.4 Financial Statements cece
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............cccceececeeecceeeeeeeeeece 47
Alternate Report... cecccecccceececceeceeeeeeeceeeeeaeeceaecaaesseneecaeeceaeseaeesneesaeesaaeseaesseneesaaeseaeeeareeseeesaees 49
DisClOSUres .........cccceececeseceeeeeeeeeesce
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5.6 Key Personnel ..0.......ceccccececeseceeeeeeeeeeece
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Article VI. General Terms and Conditions cae eeeeeeeeeeeace seas
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...0....0.ceccceececeeeceeeeeeeeeeeee $1
6.1 General Conditions.. . . . cccceccceccceeceeeeee cece eeeeeecaeeceaeeaeeseeeesaaecaaesaeeseeeesaaeseaeseaeeseeeesaeeseaeseeeeseneesaaes 51
6.1.1 Changes, Modifications, and Cancellation sees
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............cccceececeeeceeeeeeeeeeece 51
6.1.2 Offer Period ..ceceecececcceeeceeeeeeceeeeaeceaeeeeeeeeaeecaaeseaesseneecaeeceaeseaeesaeeesaeecaaeseaesseneeeaeeseaesenreseeeesaees 51
Cost INCurred......c eececcceceee ec cece ceeece cee 51
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6.1.4 Contract Responsibility... occ $1
ceccceeceeeeeceeeceeeeeaeeceeeeeaeecaaeseaesseneecaaeseaeseaeeseneesaeeseaeseereeeneeeaees
6.1.5 Public Information Act Respondent Requirements Regarding Disclosure.............:::::008 $1
—
6.1.6 Respondent Waiver Intellectual Property —
54 ...........cccccceccceeeceeeeeeeeeeeeeeeaeeceeeseneesacesnaeseeeeeeeeeeaees
Standards of Conduct for Vendors...........cccccceseeeeeceeeeeeeeceeeceeeeseneecaeeseaeeeaeeseneesaeeseaeseeeeseneesaaes 54
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HHSC
P-038.003
Coo 55
6.2.1 Required Coverage... ceccccccceeececeneceeeeeeeeeeaeecaaeseaesseeeeeaeecaaeccaeesaeeesacessaeseaesseeeeseaeseasecereeeneesaees 55
(CO 10)006 55
(ors 0) 55
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STAR & CHIP RFP No. HHS0011152 Page 4 of 57
HHSC
P-038.004
ARTICLE I. INTRODUCTION, DEFINITIONS, AND AUTHORITY
Ll INTRODUCTION
The State of Texas, by and through the Texas Health and Human Services Commission (HHSC),
announces the request for proposals (RFP) No. HHS0011152 for State of Texas Access Reform
(STAR), Children’s Health Insurance Program (CHIP) Managed Care Services, and Healthy Texas
Women (HTW) (collectively STAR & CHIP). Information regarding HHSC and its programs is
regarding STAR, CHIP, and HTW can be found in Exhibit H, STAR & CHIP Scope of Work
(SOW).
populations to STAR & CHIP at any time during
HHSC may, at its discretion, add new Services or
the Contract as described in Exhibit H,STAR & CHIP Scope of Work (SOW), Section 2.6.4
(Future Initiatives).
Scope of Work
The Scope of Work and information concerning the programs and eligible population is provided
in Exhibit H,STAR & CHIP Scope of Work (SOW).
1.1.2 Contract Award, Term, and Historical Compensation
Contract Award and Execution
HHSC intends to award Contracts to at least three (3) Managed Care Organizations (MCOs) for
each Service Area (SA) as a result of this Solicitation. HHSC intends to award a set number of
Contracts to MCOs for each Service Area (SA) as a result of this Solicitation and in accordance
with Section 3.1.7.2 (Service Areas). Any award is contingent upon approval of the HHSC
executive commissioner or their designee.
If, for any reason, a final Contract cannot be executed with a Respondent selected for award within
sixty (60) Days of HHSC determination to seek to Contract with that Respondent, HHSC may
negotiate a Contract with another Respondent in accordance with Article III or may withdraw or
modify this Solicitation.
Affiliates of the same parent organization shall not submit separate Proposals in response to this
RFP; only one Proposal is permitted on behalf of all Affiliates of the same parent organization. If
multiple Affiliates of the same parent organization submit Proposals, HHSC will determine which
Proposal moves forward in the process, and the remaining Proposal(s) will be disqualified. HHSC
may contact the parent organization for clarifying information in making this determination. If a
determination cannot be made, HHSC reserves the right to disqualify all affected Proposals.
STAR & CHIP RFP No. HHS0011152 Page 5 of 57
HHSC CP_0019300
P-038.005
Contract Term
a. The initial term of any Contract resulting from this Solicitation will be six (6) years. HHSC,
at its sole option, may extend or renew the resulting Contract for a maximum of three (3)
periods of two (2) years each. Except as provided in Subsection (b), the maximum Contract
term, including the initial Contract term and allowable renewals or extensions, is twelve
(12) years.
b. Following the initial Contract term and allowable extensions and renewals, HHSC may, if
authorized by applicable law, extend the resulting Contract to address immediate
operational or service delivery needs. A Contract extension under this section is subject to
all requirements and limitations as may be provided under applicable law.
112.3 Historical Compensation
The cumulative annual compensation under prior contracts resulting from a STAR & CHIP
solicitation was approximately $9,700,000,000.00.
1.1.3 No Guarantee of Volume, Usage, or Compensation
HHSC makes no guarantee of volume, usage, or total compensation to be paid to any Respondent
under any awarded Contract, if any, resulting from this Solicitation. Any awarded Contract is
subject to appropriations and the continuing availability of funds.
HHSC reserves the right to cancel or decline to award a Contract under this Solicitation at any
time at its sole discretion.
1.2 DEFINITIONS
Refer to Exhibit A, HHSC Managed Care Uniform Contract Terms and Conditions v. 1.0;
Exhibit B, Texas Medicaid and CHIP Uniform Managed Care Manual (UMCM); and
-
Exhibit H, STAR & CHIP Scope of Work (SOW), for additional definitions.
specified or the context clearly indicates
As used in this Solicitation, unless a different definition is
otherwise, the following terms and conditions have the meanings assigned below:
“$33.004 Claim” is a Respondent’s request to be considered for a contract awarded pursuant to
Texas Government Code Section 533.004, as provided by Section 3.1.2 (Mandatory Contracts),
in a Service Area designated by the Respondent in Exhibit D, Service Area Map and Selection
Form.
Claim Rejected” or “Rejected 533.004 Claim” is a Respondent’s 533.004 Claim that
HHSC, in its sole discretion, determines does not meet the requirements of contract award under
Texas Government Code Section 533.004(a). If a Respondent’s 533.004 Claim is denied, the
STAR & CHIP RFP No. HHS0011152 Page 6 of 57
HHSC CP_0019301
P-038.006
Respondent will proceed through the procurement process as though they made no 533.004 Claim
for the Service Area.
Claim Validated by HHSC” or “Valid 533.004 Claim” is a Respondent’s 533.004 Claim
that HHSC, in its sole discretion, determines qualifies the Respondent to be considered for a
contract awarded pursuant to Texas Government Code Section 533.004, based on the
Respondent’s demonstration and HHSC’s determination that, with respect to the designated
Service Area, the Respondent is described by Texas Government Code Sections 533.004(a)(1),
(2), or (3). May also be referred to as “Validated 533.004 Claim.”
Claim Assigned for 533.004 Contract” is a Respondent’s Validated 533.004 Claim that
results in assignment of the Respondent to the designated Service Area in accordance with Section
3.1.7.3 (Service Area Assignment) based on the Respondent having the highest Final Weighted
Score of all Respondents with a Valid 533.004 Claim proposing that Service Area. A Respondent
with a Valid 533.004 Claim, but not assigned for a Contract in that Service Area, will proceed
through the procurement process as though they made no 533.004 Claim for that Service Area.
“Addendum” means a written clarification or revision to this Solicitation issued by HHSC PCS
and posted to the ESBD.
“Advancement Criteria” means the criteria advertised in the Solicitation by which a Respondent
may advance to the next phase of evaluation.
“Award Consideration (AC) Documents” means the documents Respondent must submit as part
of the Proposal to be considered for negotiations or award.
“Best Value Evaluation Criteria” means the criteria against which all responses to the Technical
Questions, and any Oral Presentation, will be measured; may also be referred to as “Best Value
Criteria” and “BVC.”
“Competitive Range’ has the same meaning as the definition under Title 1 of the Texas
“Consensus Scoring Meeting” means the process whereby the HHSC evaluation team members
meet to collectively discuss Technical Question or Oral Presentation responses, select a score, and
justify their decision.
“DEFPS” means the Department of Family and Protective Services.
“DSHS” means the Department of State Health Services.
“ESBD” means the Electronic State Business Daily, the electronic marketplace where State of
Texas bid opportunities over $25,000 are posted. The ESBD may currently be accessed at
hitp://www.tasmartbuy.com/#esbd.
STAR & CHIP RFP No. HHS0011152 Page 7 of 57
HHSC
P-038.007
“Final Weighted Score” means the combination of the Weighted Technical Question Score and
the Weighted Oral Presentation Score.
“HHSC” means the Health and Human Services Commission.
“HHSC PCS” means Procurement and Contracting Services (PCS), a division of HHSC.
“HUB” has the same meaning as the definition in Exhibit A, HHSC Managed Care Uniform
Contract Terms and Conditions v. 1.0.
“HUB Subcontracting Plan” or means written documentation regarding the use of
Subcontractors, which is required to be submitted with all responses to state agency contracts with
an expected value of $100,000 or more where the state agency has determined subcontracting
opportunities are probable. The HSP subsequently becomes a provision of the awarded Contract
and shall be monitored for compliance by the state agency during the term of the Contract.
“Cjral Presentation” means a secondary evaluation method following the evaluation of the written
responses. The method is utilized for the purpose of distinguishing between Respondents that meet
the Advancement Criteria specified in this Solicitation.
“Oral Presentation Score” means the 0-5 score provided for each scenario following the evaluation
of the Respondent’s Oral Presentation as described by Section 3.1.3.4 (Oral Presentations) and
conducted in accordance with the criteria in Section 3.1.5 (Oral Presentation Criteria) and
Exhibit O, Scoring Guides.
“Points” means the unit of measurement for the Weighted Technical Question Score and the
Weighted Oral Presentation Score, as provided by Exhibit P-1, Evaluation Tool and Sample
Scoring Example.
“Proposal” means the entire written response to the Technical Questions and all documents listed
in Section 2.5.4 (Submission Checklist) as submitted by Respondent.
“Respondent” means the individual or entity responding to this Solicitation, regardless of whether
the individual or entity is making a 533.004 Claim in a particular Service Area.
“Sole Point of Contact” means the person listed in Section 2.3.1 (Sole Point of Contact).
“Solicitation” means this RFP including all exhibits, attachments, forms, and Addenda, if any.
“Solicitation Consideration (SC} Documents” means the documents that must be submitted by
Respondent as part of the Proposal in order to be considered for evaluation and cannot be
resubmitted or have errors remedied after the submission due date and time in Section 2.1
(Schedule of Events) has passed.
“State” means the State of Texas and its instrumentalities, including HHSC, and any other state
agency, its officers, employees, or authorized agents.
STAR & CHIP RFP No. HHS0011152 Page 8 of 57
HHSC CP_0019303
P-038.008
“Technical Questions” means the questions in Article TV which will be used to assess the
Respondent’s ability to meet the Best Value Evaluation Criteria in Section 3.1.4.
“Technical Question Score” means the 0-5 score from the evaluation of the Technical Questions
(Article IV) as described by Section 3.1.3.2 (Proposal Evaluation) and conducted in accordance
with the criteria in Section 3.1.4 (Best Value Evaluation Criteria) and Exhibit OQ, Scoring
Guides.
“Weighted Oral Presentation Score” means the sum of the number of Points earned by a
Respondent based on the Oral Presentation Score received for each scenario, in accordance with
Exhibit O, Scoring Guides, and the Points available for each scenario in Exhibit P- 1, Evaluation
Tool and Sample Scoring Example.
“Weighted Technical Question Score” means the sum of the number of Points earned by a
Respondent based on the Technical Question Score received for each Technical Question, in
accordance with Exhibit O, Scoring Guides, and the Points available for each Technical Question
in Exhibit P-1, Evaluation Tool and Sample Scoring Example.
AUTHORITY
HHSC is soliciting the Services stated in this Solicitation through its authority under the Texas
Government Code Chapters 531, 533, and 536 and Section 2155.144.
STAR & CHIP RFP No. HHS0011152 Page 9 of 57
HHSC CP_0019304
P-038.009
ARTICLE II. ADMINISTRATIVE INFORMATION
2.1 SCHEDULE OF EVENTS
EVENT DATE/TIME
Solicitation Posting to ESBD Date December 7, 2022
Pre-proposal Conference December 21, 2022 at 12:00
(Section 2.3.5, Pre-Proposal Conference) PM 4:00 PM Central Time
—
Deadline for Submitting Questions or Requests for Clarification| January 3, 2023 at 10:30 AM
(Section 2.3.4, Solicitation Questions) Central Time
Tentative Date Responses to Questions or Requests for January 25, 2023
Clarification Posted on ESBD
(Section 2.3.4, Solicitation Questions)
Deadline for courtesy HSP review January 30, 2023 at
(Section 5.2, HUB Subcontracting Plan) 2:00 PM Central Time
Deadline for Submission of Proposals February 17, 2023 at 10:30
Proposals must be RECEIVED by HHSC by the deadline AM Central Time
(Section 2.5, Proposal Submission and Delivery)
Evaluation Period February June 2023
-
(Section 3.1.3, Selection Methodology)
Respondent Oral Presentation July August 2023
-
(Section 3.1.3.4, Oral Presentations)
Anticipated Notice of Award February 2024
Anticipated Operational Start February 2025
Respondents must submit their Proposals to HHSC in accordance with the due date and time
indicated in this Schedule of Events or as changed via an Addendum posted to the ESBD.
NOTE: All dates are tentative and HHSC reserves the right to modify these dates at any time. At
the sole discretion of HHSC, events listed in the Schedule of Events are subject to scheduling
changes and cancellation. Scheduling changes or cancellation determinations made prior to the
Deadline for Submission will be published by posting an Addendum to the ESBD. After the
Deadline for Submission, if there are delays that significantly impact the anticipated award date,
STAR & CHIP RFP No. HHS0011152 Page 10 of 57
HHSC
P-038.010
HHSC, at its sole discretion, may post updates regarding the anticipated award date to the
Procurement Forecast_on the HHS Procurement Opportunities web page. Each Respondent is
responsible for checking the ESBD and Procurement Forecast
for updates.
By submitting a Proposal, Respondent represents and warrants that any individual submitting the
Proposal and any related documents on behalf of the Respondent is authorized to do so and to bind
the Respondent under any Contract that may result from this Solicitation.
202 AMBIGUITY, CONFLICT, OR DISCREPANCY
Respondent must notify the Sole Point of Contact (Section 2.3.1) of any ambiguity, conflict,
discrepancy, exclusionary specification, omission, or other error in the Solicitation in the manner
and by the deadline described in Section 2.3.4 (Solicitation Questions).
Each Respondent submits a Proposal at its own risk.
If Respondent fails to properly and timely notify the Sole Point of Contact identified in Section
2.3.1 of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error
in the Solicitation, the Respondent, whether awarded a Contract or not:
a. Waives any claim of error or ambiguity in the Solicitation and any resulting Contract;
b. Must not contest the interpretation by HHSC of such provision(s); and
c. compensation, relief, or time by reason of ambiguity, conflict,
Is not entitled to additional
discrepancy, exclusionary specification, omission, or other error or its later correction.
2.3 INQUIRIES
2.3.1 Sole Point of Contact
All requests, questions, or other communication about this Solicitation shall be made in writing to
HHSC PCS addressed to the person listed below (Sole Point of Contact). Additionally, a phone
number is provided for purposes such as instructing a potential Respondent through an IT system
or website referenced in this Solicitation. Communications via telephone are not binding.
Name Iris Triana-Zuniga, CTCD
Title PCS Purchaser
Address 1100 W. 49th Street, MC 2020, Austin, TX 78756
E-mail texas. gov
ivis.triana-zunigauvbhs
The Sole Point of Contact will authorize a secondary purchaser to serve as the Sole Point of
Contact in the event of their absence and, in such an event, will include the contact information
for the secondary point of contact in their automatic reply out-of-office message. Respondents
seeking to contact the Sole Point of Contact should do so via e-mail in order to receive updated
contact information.
STAR & CHIP RFP No. HHS0011152 Page 11 of 57
HHSC
P-038.011
See also Section 2.3.3 (Exception to Sole Point of Contact) below.
2.3.2 Prohibited Communication
Except as provided in Sections 2.3.1 and 2.3.3, Respondents are prohibited from any
communication with HHSC regarding the Solicitation. HHSC and its representative(s), will not
otherwise discuss the contents of this Solicitation with any potential Respondent or its
representative(s). Attempts to ask questions by phone or in person will not be allowed or recognized
as valid. Respondent shall rely only on written statements issued by or through HHSC PCS as
provided by Section 2.3 (Inquiries). This restriction does not preclude discussions between
affected parties for the purposes of conducting business unrelated to this Solicitation. Failure to
comply with these restrictions may result in disqualification of Respondent’s Proposal.
2.3.5 Lxeeption te Sole Point of Contact
Exceptions to Section 2.3.1 (Sole Point of Contact) are as follows:
a. Respondents with questions relating to the HUB Subcontracting Plan are permitted to
direct those questions to the HUB coordinator at Cheryl.Bradley@hhs.texas.gov; and
b. Where it is expressly directed by the Sole Point of Contact that another designated HHSC
representative may speak to the Respondent, such as during Contract negotiations.
Respondents are required to ensure that communications have been authorized by the Sole
Point of Contact before engaging in such communication. Failure to comply with this
requirement may result in the disqualification of a Respondent’s Proposal.
2.3.4 Solicitation Questions
HHSC allows for the submission of written questions (including requests for clarification)
regarding this Solicitation. Questions must be submitted by e-mail to the Sole Point of Contact
(Section 2.3.1) by the deadline established in Section 2.1 (Schedule of Events). Responses to
written questions will be consolidated and posted to the ESBD and will not be provided
individually to requestors. Questions submitted during the pre-proposal conference will be
addressed in accordance with Section 2.3.5.2 (Questions at Pre-Proposal Conference).
HHSC reserves the right to amend answers previously posted, prior to the Proposal deadline in
Section 2.1 (Schedule of Events). Amended answers will be posted on the ESBD. It is the
Respondent’s responsibility to check the ESBD. Only answers posted to the ESBD are binding.
All questions should include the following information:
a. Solicitation number;
b. Solicitation reference (e.g., page number, section, and where applicable, the exhibit or
procurement library document title);
STAR & CHIP RFP No. HHS0011152 Page 12 of 57
HHSC CP_0019307
P-038.012
c. Question topic (e.g., “Schedule of Events” or “Technical Question
d. The question the Respondent would like HHSC to address; and
e. Contact information, including:
1. Company name;
2. Name of company’s representative;
3. Contact phone number for representative; and
4. E-mail address for representative.
HHSC reserves the right to not respond to questions that do not include the above listed
information. Questions received after the deadline in Section 2.1 (Schedule of Events) may be
reviewed by HHSC but may not be answered. Only answers to questions submitted to the Sole
Point of Contact in writing, in accordance with this section, are binding.
2.3.5 Pre-Proposal Conference
HHSC PCS will conduct pre-proposal conference. Attendance is optional but highly
a
recommended as the pre-proposal conference will include the training on the proper completion
of the HUB Subcontracting Plan. See Section 5.2 (HUB Subcontracting Plan).
Attendees to the virtual pre-proposal conference are required to send an e-mail to the Sole Point
of Contact (Section 2.3.1) prior to the pre-proposal conference, advising of participation in the
pre-proposal conference. The attendee’s e-mail must provide the following:
a. The legal business entity name which will be used if submitting a proposal;
b. The name of each representative on the call; and
c. The e-mail address for the entity’s point of contact.
Attendees will receive a reply e-mail containing the log-in information for the pre-proposal
conference.
2.3.5.1 Conference Logistical informatian
HHSC PCS will hold the pre-proposal conference via Microsoft Teams, on the date and time set
out in Section 2.1 (Schedule of Events).
People with disabilities who wish to attend the pre-proposal conference and require auxiliary aids
or accessibility services should contact the Sole Point of Contact (Section 2.3.1) at least seventy-
two (72) hours before the pre-proposal conference so appropriate arrangements can be made.
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Pre-proposal Microsoft Teams Information:
HHSC will broadcast the pre-proposal conference via Microsoft Teams at the date and time listed
in Section 2.1 (Schedule of Events).
Participants must register for the pre-proposal conference via Microsoft Teams prior to the event
according to Section 2.3.5 (Pre-Proposal Conference). After registration, participants will
receive another e-mail with the link to the Microsoft Teams pre-proposal conference meeting.
By telephone:
Participants may call-in to the pre-proposal conference using the information below and use a
telephone as the speaker and microphone when attending the pre-proposal conference via
Microsoft Teams.
United States: +1 (512) 580-4366
Pre-proposal conference phone ID: To be provided to registered participants via e-mail.
2.3.5.2 Questions at Pre-Proposal Conference
The following apply to questions submitted at the pre-proposal conference:
a. Reference Section 2.3.4 (Solicitation Questions) for the required format and information
to be provided for submission of questions and requests for clarification.
b. Attendees may submit questions in writing at the pre-proposal conference. All questions
must be in the required format and include the participant information as referenced in
Section 2.3.4 (Solicitation Questions). Questions must be submitted via e-mail to the Sole
Point of Contact (Section 2.3.1).
c. During the pre-proposal conference, HHSC may provide verbal responses to questions but
only written responses posted by HHSC PCS as an Addendum to the Solicitation on the
ESBD will be considered binding.
d. HHSC reserves the right to amend, prior to the Proposal deadline, answers previously
posted. Amended answers will be posted on the ESBD.
e. Except for the Sole Point of Contact, conversations with HHSC staff before or after the
pre-proposal conference are prohibited.
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2.4 PROPOSAL COMPOSITION RE QUIREMENTS
2.4.1 General Information
Failure to submit all Proposal documents in the required format(s) may result in disqualification
of the Proposal without further consideration, see Section 2.5.4 (Submission Checklist).
Respondent shall prepare a Proposal that clearly and concisely represents its qualifications and
capabilities. Colored displays, promotional materials, etc. are not necessary or desired. Respondent
should focus on the instructions and requirements of the Solicitation.
2.4.2 Page Limit and Supporting Documentation
The number of pages for the responses to the Technical Questions must not exceed the page
limitations specified in Section 4.2 (Technical Questions). All documents submitted with the
Proposal except as expressly provided in this section, including the Technical Questions, must be
properly paginated, formatted as an 8 %" x 11" page with 1-inch margins, and use a 12 point or
larger font, except that a smaller font may be used for page headers and footers, footnotes, and
illustrations such as tables, charts, diagrams, figures, graphs and other visual aids. If a font smaller
than 12 point is used, the text when printed on 8 x 11" paper must not require magnification to
be legible. Times New Roman font is preferred. Supporting documents such as SEC Filings and
financial statements that cannot be altered may be submitted in their native format as long as the
supporting documents are submitted electronically in accordance with Section 2.5.2 (Submission
Instructions). Large organizational charts, such as those required by Section 5.5.1 (Company
Organization), may be formatted as an 11” x 17” page.
The responses to the Technical Questions must not include other documents embedded as
electronic files within the text. The responses to the Technical Questions, submitted as an
electronic file, should be pre-formatted for printing on 8 %" x 11" paper.
2.4.3 Discrepancies
In the event of any discrepancies or variations between copies, HHSC is under no obligation to
resolve the inconsistencies and may make its scoring and selection decisions accordingly,
including the decision to disqualify a Proposal. If Respondent is required to designate an “Original
Proposal,” but fails to do so, HHSC, in its sole discretion, will determine the unredacted version
to be used as the “Original Proposal” or may disqualify the Proposal (see Section 6.1.5 (Public
Information Act —
Respondent Requirements Regarding Disclosure) regarding redacted
Public Information Act copies). If the Respondent submits a redacted Proposal as the “Original
Proposal,” HHSC will disqualify the Proposal, and it will not be evaluated. HHSC will not accept
submissions after the “Deadline for Submission of Proposals” in the Schedule of Events (Section
2.1) to remedy discrepancies or variations in Proposal submissions.
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2.4.4 Yxeceptions
Although permitted, exceptions are disfavored. Instead, Respondents are highly encouraged, in
lieu of including exceptions in their Proposals, to address all issues that might be advanced by way
of exception by submitting such issues as questions or requests for clarification pursuant to Section
2.3.4 (Solicitation Questions).
Changes or exceptions to RFP requirements or exceptions to Solicitation or Contract terms
required by law or otherwise required by HHSC policy or practice, as determined by the agency
in its sole discretion, may disqualify a potential Respondent. If a Respondent includes exceptions
in its Proposal, Respondent is required to use the Exceptions Form included as Exhibit L to this
Solicitation and provide all information requested on the form. Any exception that does not provide
all required information in the format set forth in Exhibit L, Exceptions Form, may be rejected
without consideration.
No exception, nor any other term, condition, or provision in a Proposal that differs, varies from,
or contradicts this Solicitation will be considered to be part of any Contract resulting from this
Solicitation unless expressly identified, incorporated, and made a part of the Contract in writing
by HHSC.
2.4.5 Assumptions
Respondent must identify on the Assumptions Form, included as Exhibit M, any business,
economic, legal, programmatic, or practical assumptions that underlie the Respondent’s response
to the Solicitation. HHSC reserves the right to accept or reject any assumptions. All assumptions
not expressly identified and incorporated in writing by HHSC into any Contract resulting from this
RFP are deemed rejected by HHSC.
24.6 Binding Offer
A Proposal should be responsive to the Solicitation as worded and without any assumption that
any or all terms, conditions, or provisions of the Solicitation will be negotiated. Furthermore, all
Proposals constitute binding offers. Any Proposal that includes any type of disclaimer or other
statement indicating that the response does not constitute a binding offer will be disqualified.
If a Respondent’s ability to enter into a Contract is contingent upon any exception or assumption
provided in accordance with Section 2.4.4 (Exceptions) or Section 2.4.5 (Assumptions), the
Respondent may be disqualified from further consideration for Contract award.
By submitting a Proposal, Respondent grants HHSC the right to ask questions, request
clarifications and to obtain any information from any lawful source regarding the past history,
practices, conduct, ability and eligibility of the Respondent to fulfill requirements under this RFP,
and the past history, practices, conduct, ability, and eligibility of any director, officer, or key
employee of the Respondent. Such information may be taken into consideration in evaluating the
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Proposal. By submitting a Proposal, the Respondent releases from liability and waives all claims
against any party providing information about the Respondent at the request of HHSC.
2.4.7 Modifications and Withdrawals
Prior to the Proposal submission deadline in Section 2.1 (Schedule of Events), Respondent may:
(1) withdraw its Proposal by submitting a written request via e-mail to the Sole Point of Contact
(Section 2.3.1); or (2) modify its Proposal by submitting a written amendment to the Sole Point of
Contact (Section 2.3.1). The Respondent must reference the section(s) of its submission that will
be replaced by the amendment or removed by written request.
2.5 PROPOSAL SUBMISSION AND OFLIVERY
Deadline
Proposals must be received at the address in Section 2.5.3 (Labeling and Delivery) and delivered
in a shipping box or package time stamped by HHSC PCS no later than the date and time specified
for the “Deadline of Submission of Proposals” in Section 2.1 (Schedule of Events).
All received Proposals will remain sealed until the date and time specified for the “Deadline for
Submission of Proposals” in Section 2.1 (Schedule of Events).
Late submittals will not be accepted.
2.5.2 Submission Instructions
Respondents must propose their desired Service Areas (SAs) using Exhibit D, Service Area Map
and Selection Form in accordance with Section 3.1.7.2 (Service Areas). Regardless of the
number of SAs in which a Respondent proposes, Respondents must submit only one Proposal in
accordance with this section; see also Sections 2.4.1 (General Information) and 2.4.3
(Discrepancies). Respondent shall submit two (2) USB drives one (1) labeled “Orginal
—
Submission” and one (1) labeled “Copy of Submission” containing the following documents:
—
a. Each USB drive must contain one folder named “Original Proposal” that contains the
Respondent’s entire Proposal in searchable portable document format (PDF).
b. In accordance with Section 6.1.5 (Public Information Act Respondent Requirements
—
Regarding Disclosure), cach USB must contain one (1) folder named “Public Information
Act Copy” that contains the Respondent’s entire Proposal in searchable PDF, if applicable.
c. In accordance with Section 5.2 (HUBSubcontracting Plan), each USB must contain one
(1) file named “HUB Subcontracting Plan” in searchable PDF, that contains the
Respondent’s HUB Subcontracting Plan and all supporting documentation.
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d. Respondent may submit a Proposal with electronic signatures (e.g., a handwritten signature
on a paper document that is converted to electronic format, or a digital signature placed on
an electronic document using a software application).
2.5.3 Labeling and Delivery
Respondent must deliver Proposals submitted via USB drive(s) in a shipping box or package by
one of the methods below.
Overnight/Express/Priority Mail Hand Delivery
Health and Human Services
Health and Human Services
Commission
Commission
ATTN: Response Coordinator
ATTN: Response Coordinator
Tower BuildingRoom 108
Procurement & Contracting
Services Building
1100 W. 49th St., MC 2020
1100 W. 49th St., MC 2020
Austin, Texas 78756 Austin, Texas 78756
BE ADVISED, all Proposals become the property of HHSC after submission and will not be
returned to Respondent. It is Respondent’s responsibility to appropriately mark and deliver the
Proposal to HHSC by the specified date. A U.S. Postal Service (USPS) postmark or round
validation stamp; a mail receipt with the date of mailing, stamped by the USPS; a dated shipping
label, invoice of receipt from a commercial carrier; or any other documentation in lieu of the on-
site time stamp WILL NOT be accepted.
Each Respondent is solely responsible for ensuring its Proposal is submitted in accordance with
all Solicitation requirements, including, but not limited to, proper labeling of packages, sufficient
postage, or delivery fees, and ensuring timely receipt by HHSC. In no event will HHSC be
responsible or liable for any delay or error in delivery. Proposal must be received by HHSC
by the Proposal deadline identified in Section 2.1 (Schedule of Events).
Proposals submitted via USB drive(s) by mail or hand delivery shall be placed in a sealed package.
Due to COVID-19, a Respondent submitting a Proposal by hand delivery must contact the Sole
Point of Contact (Section 2.3.1) one (1) business day prior to the delivery attempt. Hand
deliveries will not be accepted outside normal business hours, which are Monday-Friday 8:00 am
—
5:00 pm, not including state and federal holidays. The sealed package as well as the USB drive(s)
shall be clearly labeled on the outside as follows:
Solicitation No: HHS0011152
Solicitation Name: STAR & CHIP Managed
Care Services
Proposal Deadline: February
17, 2023 at 10:30 AM Central Time
Purchaser Name: IrisTriana-Zuniga,
CTCD
Respondent Name: [Respondent Name]
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Respondent’s sole responsibility to ensure that packaging is sufficient to prevent damage to
It is
contents. HHSC is not responsible or liable for any damage, and damaged Proposals will not be
considered at HHSC’s sole discretion.
HHSC is not responsible for any Proposal that is mishandled prior to receipt by HHSC. It is the
Respondent’s sole responsibility to appropriately label and deliver the Proposal to HHSC by the
specified date and time. HHSC is not responsible for late delivery, inappropriately identified
documents, or other submission errors that may lead to disqualification or nonreceipt of the
Respondent’s Proposal. Respondent USB drive submissions that contain a Solicitation
Consideration Document (see Section 2.5.4) that is corrupted or otherwise inaccessible to HHSC
in both the “Original Submission” and the “Copy of Submission,” as required by Section 2.5.2
(Submission Instructions), will be disqualified.
2.5.4 Submission Checklist
Solicitation Consideration and Award Consideration Documents, reference Section 1.2
(Definitions), must be submitted by the deadline for Proposal submissions in Section 2.1
(Schedule of Events). Solicitation Consideration Documents will be reviewed as-is, without any
opportunity to remedy missed requirements. HHSC, at its sole discretion, may request some or all
of the Respondents to remedy missing elements of Award Consideration Documents.
The Proposal must be submitted using the approved method identified in Section 2.5.2
(Submission Instructions) and labeled and delivered in accordance with Section 2.5.3 (Labeling
and Delivery). Proposals submitted through any other method will not be accepted or
considered for Contract award. The subsections below set out all the required documents that
make up the Proposal. Those documents marked “SC” are Solicitation Consideration Documents
and those marked “AC” are Award Consideration Documents (see Section 1.2, Definitions) as
follows:
Required Proposal Documents
a. Executive Summary (Section 4.1) SC
b. Technical Question (Section 4.2) SC
Responses
c. HHS Solicitation (Section and SC
Affirmations Exhibit I)
d. HUB Subcontracting (Section 5.2 and SC
Plan Exhibit N)
e. Authorization to (Section 5.3) AC
Conduct Business in
Texas
f. Exceptions (if (Section 2.4.4 AC
applicable) and Exhibit L)
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Assumptions (if (Section 2.4.5 AC
applicable) and Exhibit
M)
Supporting (Section 3.1.2) AC
Documentation for
533.004 Claim for each
SA (if applicable)
Service Area Map and (Section 3.1.7.2 AC
Selection Form and Exhibit D)
Assurances —
Non- (Section 5.1 and AC
Construction Programs Exhibit J)
Certification Regarding (Section 5.1 and AC
Lobbying Exhibit K)
Company Profile (Section 5.4) AC
Required Financial (Section 5.5) AC
Information
Key Personnel (Section 5.6) AC
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ARTICLE III. PROPOSAL EVALUATION AND AWARD PROCESS
3.1 EVALUATION CRITERIA
3.1.1 Conformance with State Law
Proposals shall be evaluated in accordance with State law, including, but not limited to, applicable
provisions of Chapters 533, 536, and 2155 of the Texas Government Code. HHSC will also review
the reports available in the VPTS for each responsive Respondent in accordance with Texas
HHSC’s sole determination, provides the best value to the State of Texas as set out in this
Solicitation.
3.1.2 Mandatory Contracts
Respondent making a 533.004 Claim must include, in its Proposal, supporting documentation (e.g.,
organization charter, city ordinance, commissioners court order) that evidences its eligibility under
Texas Government Code Section 533.004(a). Respondent must include such documentation for
each SA in which Respondent asserts a 533.004 Claim. Respondent claiming eligibility under
Texas Government Code Section 533.004(a)(1) must provide a certificate of fact (or similar
document) showing Respondent is “wholly owned and operated by a hospital district in that
region.” Respondent claiming eligibility under Texas Government Code Section 533.004(a)(2)
must provide a copy of the “contract, agreement, or other arrangement with a hospital district in
that region or with a municipality in that region that owns a hospital licensed under Chapter 241,
Health and Safety Code.” Respondent claiming eligibility under Texas Government Code Section
must provide a copy of “the contract, agreement, or other arrangement with a
hospital district in that region.” Respondent must designate all SAs where it asserts a 533.004
Claim in Exhibit D, Service Area Map and Selection Form, Table D-1: Proposed Service
Area(s). HHSC will reject Respondent’s 533.004 Claim in an SA if HHSC determines Respondent
does not meet the eligibility criteria of Section 533.004(a)(1), (2), or (3) in the SA. In that event,
Respondent will proceed through the procurement process as though it made no 533.004 Claim
for that SA.
3.1.3 Selection Methodology
Proposals that satisfy the initial compliance screening, Section 3.1.3.1 (Initial Screening), will be
submitted to the HHSC evaluation team for review and scoring. Each member of the HHSC
evaluation team will receive a copy of each Proposal that satisfies the initial compliance screening
for review. The HHSC evaluators will not individually score the Technical Questions or Oral
Presentations. This procurement will utilize a consensus scoring methodology as outlined by this
section.
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The HHSC evaluators will score the responses to the Technical Questions in accordance with the
Exhibit O, Scoring Guides. Respondents meeting the Advancement Criteria (Section 3.1.3.3)
will be invited to Oral Presentations (Section 3.1.3.4).
The following subsections describe the evaluation process, including the criteria for advancement
to the various phases of evaluation, where applicable.
Initial Screening
During the initial screening of the Proposals, HHSC will review the Proposals for compliance with
the submission requirements in Article II of this RFP (“initial compliance screening”). Failure to
meet the submission requirements in Article II may, at any time, result in disqualification of the
Respondent without further consideration or evaluation of its Proposal.
HHSC will automatically disqualify any Proposal that does not include any document
identified as a Solicitation Consideration Document in Section 2.5.4 (Submission Checklist).
At its sole discretion, HHSC may disqualify any Proposal that does not include all required Award
Consideration Documents. Reference Section 2.5.4 (Submission Checklist).
HHSC will also identify Respondents making one or more 533.004 Claims in accordance with
Section 3.1.2 (Mandatory Contracts). Additionally, HHSC will record each Respondent’s
proposed SA(s) and order of SA preference as submitted on Exhibit D, Service Area Map and
Selection Form in accordance with Section 3.1.7.2 (Service Areas).
3.1.3.2 Proposal Evaluatian
Each member of the HHSC evaluation team will read their assigned Technical Question responses
in the Proposals in preparation for evaluation. In accordance with Section 4.2 (Technical
Questions), cach Technical Question response must be a complete response to the Technical
Question at issue and Respondents should not assume the evaluators will consider or look for
additional information in the response to other Technical Questions not at issue. The HHSC
evaluation team will score the responses to the Technical Questions (Article IV) for all Proposals
that pass initial compliance screening (Section 3.1.3.1, Initial Screening) against the criteria in
Section 3.1.4 (Best Value Evaluation Criteria) using the Technical Question Scoring Guide in
Exhibit O, Scoring Guides. Each one of these 0-5 scores given to a Respondent’s Technical
Question are known as a Technical Question Score.
There will not be individual scores from each HHSC evaluation team member. Rather, the HHSC
evaluation team will participate in one or more Consensus Scoring Meetings. At the Consensus
Scoring Meetings, the HHSC evaluation team will come to a consensus on the Technical Question
Scores for responses to each Technical Question. The Consensus Scoring Meetings will be led by
a facilitation team who will facilitate the discussion and record the scores. The HHSC evaluation
team may be assisted by non-scoring technical advisors as needed.
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3.1.3.3 Advancement Criteria
After the evaluation of the Proposal responses to the Technical Questions, certain Respondents
will be selected for invitation to Oral Presentations using the Competitive Range Advancement
Criteria specified by this section.
As defined in Texas Administrative Code, Title 1, Part 15, Chapter 391, Subchapter A, Rule
§ 391.107(3), the Competitive Range consists of the “[P]roposals that have a reasonable chance of
being selected for award taking into account the evaluation criteria and basis for award as stated
in the [S]olicitation.” A Respondent meeting the Competitive Range must receive a Technical
Evaluation Score that has, in the sole determination of HHSC based on the Respondent’s highest
possible Final Weighted Score if all available Oral Presentation points were awarded to that
Respondent, a reasonable chance of being selected for award when considered in addition to the
following factors:
a. Respondent’s proposed SAs and order of SA preference as submitted on Exhibit D,
Service Area Map and Selection Form;
b. The maximum number of SAs allowed to be awarded to any individual Respondent as set
out in Section 3.1.7.2 (Service Areas) and Section 3.1.7.3 (Service Area Assignment);
and
c. The maximum number of MCOs per SA as set out in Table 1 of Section 3.1.7.2 (Service
Areas) including whether a Valid 533.004 Claim exists for an SA.
After HHSC’s consideration of the factors set out in this section, all Respondents without a
reasonable chance for award will be eliminated from the Competitive Range and will not advance
to Oral Presentations. Notwithstanding the factors stated in this section, all Respondents with a
Validated 533.004 Claim will advance to Oral Presentations.
Oral Presentations
To further identify the Respondents providing best value, Oral Presentations will be requested.
The Advancement Criteria, as described by Section 3.1.3.3 (Advancement Criteria), will be
utilized to determine which Respondents will advance to Oral Presentations. Failure to participate
in Oral Presentations will result in disqualification from further consideration for Contract award.
Respondents selected for Oral Presentations will be the final group of Respondents eligible for
potential Contract award. A Consensus Scoring Meeting will take place following each
presentation, in order to score the Respondent’s Oral Presentation. Information from the Oral
Presentation will be used to score the scenarios using the Oral Presentation Scenario Scoring
Guide in Exhibit O, Scoring Guides and Section 3.1.4 (Best Value Evaluation Criteria) in
accordance with Points available for Oral Presentation scenarios specified by Exhibit P-1,
Evaluation Tool and Sample Scoring Example. Each one of these 0-5 scores given to a
Respondent’s Oral Presentation scenarios are known as an Oral Presentation Score.
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Respondents will be provided with advance notice of any such Oral Presentation and are
responsible for their own presentation equipment. All Respondents will be provided the same
scenarios and given the same amount of time to prepare and respond. HHSC plans to conduct the
Oral Presentations in-person, however HHSC reserves the right to conduct Oral Presentations
virtually. This policy may change as needed and logistical information will be provided to invited
Respondents prior to their presentation.
Advance notice will include an agenda, ground rules, and any other logistical information HHSC
wishes to provide. The specific scenarios for the topic areas listed in Section 3.1.5 (Oral
Presentation Criteria) will be provided on the day of the presentation, as outlined below.
Each Oral Presentation will be scheduled for a block of time to be used as follows:
Introductions and Provision of Question(s) 15 minutes
Respondent Prep Time 60 minutes
Respondent Presentation 90 minutes
The Respondent’s presentation team will be limited to individuals identified as Key Personnel or
those who are responsible for direct oversight of the program in Texas if awarded a Contract; no
other consultants or staff, including Respondent corporate executives, will be allowed to
participate in Oral Presentations.
HHSC will ask each Respondent to confirm the Respondent’s intent to participate in the Oral
Presentation and provide names, current positions, length of employment with the organization,
areas of responsibility within the organization, and role under the STAR & CHIP Contract (if
awarded), which must be submitted by the deadline provided in any invitation to Oral
Presentations.
Respondents will be given a maximum of ninety (90) minutes to provide a comprehensive response
to thequestions. If any visual aids are presented, Respondents must e-mail the visual aids to the
Sole Point of Contact immediately following the presentation. Visual aids will be considered part
of Respondent’s Oral Presentation and will be retained by HHSC.
HHSC is not responsible for any costs incurred by the Respondents in preparation for any Oral
Presentation. All costs incurred by Respondents are the responsibility of Respondents.
3.1.4 Best Value Evaluation Criteria
Best Value Evaluation Criteria for this Solicitation is the basis upon which the written responses
to the Technical Questions in Article IV will be scored, in addition to the considerations provided
by the Technical Question Scoring Guide in Exhibit O, Scoring Guides. Responses to the Oral
Presentation scenarios will also be scored against Best Value Evaluation Criteria and the Oral
Presentation Scoring Guide in Exhibit O, Scoring Guides, in accordance with Sections 3.1.3.4
and 3.1.5. See also, Exhibit P, Consensus Scoring Rubric.
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Best Value Evaluation Criteria, Technical Questions, and Oral Presentation Scenarios were
developed to ensure HHSC requests the information necessary to ensure that the Respondent
selected for Contract award can achieve the outcomes mandated in Texas Government Code
Sections 533.002, 533.003(a)(1), 536.052, and 2155.144.
BVC 1. Delivers Person-Centered Service Coordination that connects Member needs to
effective care.
a. Demonstrates an understanding of the unique elements of Service Coordination
and the needs of the STAR & CHIP population with special physical and
behavioral health care needs.
Demonstrates an effective, Person-Centered process and infrastructure toidentify,
assess, and respond to individual Member’s needs and strengths.
Demonstrates engagement of Providers, Member’s family, and community
supports serving the Member in the Service Coordination process.
Supports successful transitions of care for Members between programs, services,
and settings, including transitions between Medicaid and Healthy Texas Women
(HTW).
Demonstrates how data will be used to inform Service Coordination approaches
and to measure success.
BVC 2. Ensures Members have timely access to the Services they need.
a. Demonstrates the ability to deliver person-centered Services timely in the most
clinically appropriate and cost-effective setting for Members covered in the STAR
& CHIP Program.
Demonstrates use of innovative and proven strategies to promote access to
Providers and Services, including addressing Provider shortages and barriers to
care in specific areas of the State.
Demonstrates the ability to provide, arrange, and coordinate preventive, primary,
acute care, behavioral health and pharmacy services that contribute to the well-
being of women, children, and families.
Demonstrates a proactive approach to outreach and education regarding a
Member’s management of their services and supports that is culturally and
linguistically appropriate, accessible, and responsive to the needs of Members in
the STAR & CHIP Program.
BVC 3. Encourages Providers to participate in the Medicaid program.
a. Demonstrates effective collaboration and communication with the Provider
community as evidenced by Network participation and Provider satisfaction.
Demonstrates proactive strategies to streamline processes and reduce
administrative burden for Providers.
policies and processes for key business
Demonstrates transparent and efficient
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operations, such as Credentialing, contracting, claims payment, and Utilization
Management.
d. Demonstrates support to Providers in complex clinical decision-making through
decision-support tools, best practice guidelines, and Utilization Management
approaches.
e. Utilizes Network development strategies and incentives that ensure appropriate
access for Members, including access to consistent providers across programs and
services.
f. Demonstrates support to Providers serving the Member using technology, data, and
processes and tools to better inform and improve care.
BVC 4. Ensures a sustainable Medicaid program by incentivizing value in the Service delivery
model and optimizing resources.
a. Demonstrates proven strategies to monitor and manage healthcare quality and
improve key quality metrics that align with the goals of the State.
b. Demonstrates a system of care that identifies, invests in, and rewards desired
outcomes for access and high-value care.
c. Demonstrates advances in value-based care and delivery system reform and
supports Providers through the transition to value-based payment arrangements
with necessary data and information.
d. Demonstrates achievable cost efficiencies and program integrity through effective
monitoring and control of spending and Utilization Management trends.
BVC 5. Uses data, technology, and reporting to facilitate and demonstrate strong
performance and oversight.
a. Demonstrates capability to meet all requirements related to access to Services,
Service delivery, quality of care, operations, and financial performance.
b. Demonstrates consistent, timely, and accurate delivery of data, analysis, and
reporting.
c. Demonstrates process improvements and cost efficiencies using automation and
data solutions.
d. Utilizes integrated systems and processes with the State and other vendors to
facilitate appropriate Member transitions.
3.1.53 Oral Presentation Criteria
Oral Presentations will add up to a possible 200 additional Points to a Respondent’s Final
Weighted Score (Section 3.1.6).
The opportunity to participate in Oral Presentations will be given in accordance with Section
3.1.3.3 (Advancement Criteria). Only one oral presentation will occur per selected Respondent
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regardless of the number of proposed SAs submitted in Exhibit D, Service Area Map and
Selection Form. Additional information can be found in Section 3.1.3.4 (Oral Presentations).
Oral Presentations will be scored based on Respondent’s performance in addressing specific Oral
Presentation scenarios which will cover the following topics:
a. Oversight and coordination with subcontractors;
b. Addressing maternal mortality and morbidity;
c. Coordination with Dental Maintenance Organizations (DMOs); and
d. Addressing preventive care rates.
This section is meant to provide an indication of the scenarios the Respondent will be expected to
address. The complete scenarios will be provided only to Respondents that are invited to Oral
Presentations and not before completion of the Proposal Evaluation (Section 3.1.3.2). Scenarios
will be scored using the Oral Presentation Scenario Scoring Guide in Exhibit O, Scorin
Guides and Section 3.1.4 (Best Value Evaluation Criteria), in accordance with Points available
for Oral Presentation scenarios specified by Exhibit P-1, Evaluation Tool and Sample Scoring
Example.
3.1.6 Final Weighted Score
A Respondent’s Final Weighted Score will be a combination of the Weighted Technical Question
Score (see Article IV) and theWeighted Oral Presentation Score except as provided below.
The Weighted Technical Question Score is the score from the evaluation of the Technical
Questions (Article IV) as described by Section 3.1.3.2 (Proposal Evaluation) and scored using
the Technical Question Scoring Guide in Exhibit O, Scoring Guides, and Section 3.1.4 (Best
Value Evaluation Criteria), in accordance with Points available for Technical Questions
specified by Exhibit P-1, Evaluation Tool and Sample Scoring Example.
A Respondent who does not meet the Advancement Criteria (Section 3.1.3.3) will not be asked
to Oral Presentations and therefore receives no Points for the Weighted Oral Presentation Score
added to the Weighted Technical Question Score. A Respondent with a 533.004 Validated Claim
by HHSC in one or more SAs will only receive a Weighted Oral Presentation Score in those SAs
with a 533.004 Validated Claim or in those SAs in which they meet the Competitive Range in
Section 3.1.3.3 (Advancement Criteria). In SAs with multiple Respondents with Validated
533.004 Claims, Respondents that are not the 533.004 Claim Assigned for 533.004 Contract in
that SA will only maintain the Weighted Oral Presentation Score in that SA if they meet the
Competitive Range in Section 3.1.3.3 (Advancement Criteria) in the same manner as
Respondents with no 533.004 Claim. The total number of available Points for the Weighted
Technical Question Score is 1,800 and the total number of available Points for the Weighted Oral
Presentation Score is 200. The total number of Points available for the Final Weighted Score is
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HHSC
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2,000 and is the maximum number of Points available to a Respondent resulting from the
evaluation activities for this Solicitation.
All Respondents with a Validated 533.004 Claim will advance to Oral Presentations in accordance
with Section 3.1.3.3 (Advancement Criteria) and receive a Final Weighted Score.
3.1.7 Final Consideration for Award
Respondents must satisfactorily meet each of the final considerations in the manner described by
this Solicitation in order to be eligible for Contract award. The scope and criteria for each review
is provided by this section.
Required Financial Information
Respondents must submit the required financial information in the manner and form provided by
Section 5.5 (Required Financial Information) and Section 5.4 (Company Profile). The
financial due diligence review process may take place concurrently with the Oral Presentations.
The information submitted in Section 5.4 (Company Profile) and Section 5.5 (Required
Financial Information) will be reviewed to establish that Respondent provided satisfactory
assurances regarding its financial solvency in accordance with the requirements under 42 C.F.R.
§ 438.116, Solvency Standards and this Solicitation. The requested financial information will be
analyzed in accordance with accepted financial industry standards and HHSC’s financial
requirements set forth in Exhibit A,HHSC Managed Care Uniform Contract Terms and
Conditions v. 1.0, Section 12.03, Minimum Net Worth, and Section 12.04, Solvency.
Respondents must demonstrate financial solvency based on the following requirements:
1. Exhibit B, Texas Medicaid and CHIP Uniform Managed Care Manual (UMCM),
—
and Sections 2.5, 2.6 and 2.7 of Exhibit H,STAR & CHIP Scope of Work (SOW);
2. Reasonableness and likelihood of compliance with the contractual performance measures
(e.g., the ability to meet immediate liabilities and sufficient capitalization to perform all
requirements of the resulting Contract and the preservation of Medicaid funds for Medicaid
operations by Respondent);
3. Liquidity and capital resources, assets and liabilities, commonly used financial ratios, audit
and/or actuarial opinions and written risk factors; and
4. Dun and Bradstreet report (if any).
HHSC reserves the right, at any time, to request additional information to supplement the
information required by Section 5.4 (Company Profile) and Section 5.5 (Required Financial
Information). To the extent Respondent does not provide adequate assurance of financial stability
or solvency, whether initially or through supplementation, and in HHSC’s sole discretion,
Respondents will be required to provide an explanation and other assurances (e.g., capital
contributions, high-cost reinsurance, letters-of-credit, etc.) based on the needs of HHSC to resolve
STAR & CHIP RFP No. HHS0011152 Page 28 of 57
HHSC
P-038.028
any financial viability or solvency concerns raised in the review of this selection criterion. The
sufficiency of any such remedial efforts will be determined by HHSC in its sole discretion. If a
Respondent refuses to, or is unable to, give such explanation or assurance to HHSC’s reasonable
satisfaction, Respondent may not be considered for Contract award. HHSC’s determination
whether Respondent has provided satisfactory assurances regarding its financial solvency shall be
final.
Service Areas
After the Final Weighted Score is calculated, Respondents will be further reviewed according to
the final considerations described by this section.
All Respondents must submit a single Proposal in response to the Solicitation and must use Exhibit
D, Service Area Map and Selection Form to designate the Service Areas (may also be referred
to as SAs, Service Delivery Areas, and SDAs) the Respondent is proposing. Respondents will rank
their desired SAs in order of preference on Exhibit D, Service Area Map and Selection Form
for consideration by HHSC as provided by this section. The order of preference is not dispositive
nor a guarantee of Contract award. Respondent will be recommended for Contract award in SAs
following the calculation of the Final Weighted Score and in accordance with Section 3.1.7.3
(Service Area Assignment).
HHSC will not award more than 7 SAs to any individual Respondent except as provided by Section
3.1.7.4 (Additional SA Assignment). Respondents may propose in and rank all SAs desired on
Exhibit D, Service Area Map and Selection Form including selecting and ranking all thirteen
SAs. Respondents will not be assigned in SAs not selected on Exhibit D, Service Area Map and
Selection Form,
The maximum number of MCOs to be awarded per SA is set out in Table 1: Maximum Number
of MCOs per SA.
Table 1: Maximum Number of MCOs per SA
SA Maximum Number of MCOs FY2020 Average Monthly
per SA Enrollment
(excludes HTW)
Harris 5 820,837
Hidalgo 4 346,241
Dallas 4 453,350
Bexar 4 295,882
Tarrant 4 315,257
Northeast Texas 3 174,129
West Texas 3 156,294
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HHSC CP_0019324
P-038.029
SA Maximum Number of MCOs FY2020 Average Monthly
per SA Enrollment
(excludes HTW)
Central Texas 3 144,270
Travis 3 173,775
El Paso 3 131,552
Nueces 3 98,507
Jefferson 3 90,840
Lubbock 3 86,240
The goals of SA assignments are to provide best value to the State of Texas by providing Members
a choice of plans in accordance with federal law, encouraging competition among plans to promote
efficiency and quality of service delivery, and minimizing financial and operational risk to the
State from plan performance issues or exit from the program. In order to achieve these goals,
HHSC will follow the SA assignment methodology as provided by this section and Section 3.1.7.3
(Service Area Assignment).
3.4.7.3 Service Area Assignment
SA assignments will be determined by the following method:
a. In each SA with only one Respondent with a Validated 533.004 Claim, the Respondent
with the Validated 533.004 Claim will be assigned to the SA.
b. In each SA with more than one Respondent with a Validated 533.004 Claim, the
Respondent with the highest Final Weighted Score of those Respondents with Validated
533.004 Claims in the SA will be assigned to that SA. All other Respondents with a
Validated 533.004 Claim in the SA will be considered in the same manner as Respondents
without a Validated 533.004 Claim in the SA; and
c. Following assignment of Respondents to SAs under Section 3.1.7.3(a) and (b),
Respondents will be assigned to SAs designated by its Exhibit D, Service Area Map and
Selection Form by order of ranked preference with a maximum total assignment of 7 SAs
per Respondent except as provided in Section 3.1.7.4 (Additional SA Assignment).
Assignment of Respondents to SAs will proceed in descending order of Final Weighted
Score, until the maximum number of MCOs per SA has been assigned as set forth in Table
1: Maximum Number of MCOs per SA.
3.4.7.4 Additional SA Assignment
HHSC may assign Respondents to more than 7 SAs if, for any reason following the SA
assignments made in accordance with Section 3.1.7.3 (Service Area Assignment), an SA has not
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P-038.030
reached the maximum number of MCOs as set forth in Table 1: Maximum Number of MCOs
per SA.
To make additional SA assignments under this section, HHSC will assign to the SA the
Respondent with the highest Final Weighted Score of the Respondents who designated the SA in
Exhibit D, Service Area Map and Selection Form. Such assignments will continue in this
manner until each SA has the maximum number of MCOs. Accordingly, Respondents may select
and rank as many SAs as desired on Exhibit D, Service Area Map and Selection Form including
selecting and ranking all thirteen SAs. A Respondent will not be assigned SAs it has not selected
on Exhibit D, Service Area Map and Selection Form.
3.4.7.5 Certification
All Respondents recommended for Contract award must be certified by HHSC as reasonably able
to fulfill the terms of the Contract, as required by Texas Government Code Section 533.0035.
Certification will not impact a Respondent’s Final Weighted Score described by Section 3.1.6
(Final Weighted Score), but failure to obtain certification will result in no further consideration
for Contract award, and another Respondent may be considered for Contract award in accordance
with this section.
3.1.8 Final Award Determination
The final determination for award will be based on the evaluation process described in Section
3.1.3 (Selection Methodology) in accordance with Section 3.1.4 (Best Value Evaluation
Criteria), Section 3.1.5 (Oral Presentation Criteria) as well as the reviews conducted in
accordance with Section 3.1.7 (Final Considerations for Award). A Respondent’s Proposal must
pass the initial compliance screening (Section 3.1.3.1), meet the Advancement Criteria (Section
3.1.3.3) for Oral Presentations following the Proposal evaluation (Section 3.1.3.2), receive a Final
Weighted Score (Section 3.1.6) following Oral Presentations (Section 3.1.3.4), and meet the
requirements in Section 3.1.7 (Final Considerations for Award) in order to be considered for
Contract award.
ARTICLE IV. EXECUTIVE SUMMARY AND TECHNICAL QUESTIONS
4.1 EXECUTIVE SUMMARY
Respondent must provide a high-level overview of their approach to meeting the requirements
contained in Exhibit H,STAR & CHIP Scope of Work (SOW). The Summary must demonstrate
an understanding of HHSC goals and objectives for this Solicitation.
If the Respondent is providing Services or Deliverables beyond those specifically requested, those
Services or Deliverables must be identified. If the Respondent is offering Services or Deliverables
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that do not meet the specific requirements of this RFP, but in the opinion of the Respondent are
equivalent or superior to those specifically requested, any such differences must be noted in the
Executive Summary. The Respondent should realize, however, that failure to provide the Services
and Deliverables specifically requested may result in disqualification.
The Executive Summary must not exceed two (2) pages and should represent a full and concise
summary of the contents of the Proposal. HHSC will not read or consider any response in excess
of the page limitations. While the Executive Summary is not a scored element of the Proposal, a
Proposal with an Executive Summary that does not adhere to the requirements in Section 2.4.2
(Page Limits and Supporting Documentation) may be disqualified from further consideration
for Contract award.
42 TECHNICAL QUESTIONS
Respondents must submit with each Proposal a written response to the Technical Questions
provided below. Respondents must provide a complete answer to each Technical Question that
does not reference other Technical Questions or materials. Each Technical Question response must
be clearly labeled to indicate which Technical Question it is applicable to and where that Technical
Question’s response begins and ends. Repeating the Technical Question within the response is not
required. Each Technical Question will be reviewed in isolation and it should not be assumed that
any evaluator has read or will read any other Technical Question response. Technical Questions
will be evaluated in accordance with the Technical Question Scoring Guide in Exhibit O, Scoring
Guides, Section 3.1.3.2 (Proposal Evaluation), and Section 3.1.4 (Best Value Evaluation
Criteria).
Respondents must answer each question with consideration of the “SOW Reference” and the
“BVC Descriptor” listed for that Technical Question. Sections listed for the “SOW Reference”
refer to Exhibit H,STAR & CHIP Scope of Work (SOW). “SOW References” are inclusive of
all subsections unless expressly limited. Sections listed for “BVC Descriptor” refer to this
document, Section 3.1.4 (Best Value Evaluation Criteria). To the extent that any exhibits or
attachments documenting the BVC, “BVC Descriptors,” and “SOW References” associated with
a Technical Question differ from this section of the RFP, this section of the RFP prevails. In
answering some Technical Questions, it may be beneficial to reference the Exhibit Q,
Procurement Library.
Respondents must also adhere to the page limitations for each Technical Question and must
number all pages submitted with the Proposal. HHSC will not read or consider any response in
excess of the
page limitations. In addition, Technical Question responses that do not adhere to the
requirements in Section 2.4.2 (Page Limits and Supporting Documentation) may be
disqualified from further consideration for Contract award.
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P-038.032
Technical Question Ni
Describe the Respondent’s model for managing and coordinating services for Members with
multiple complex medical, physical health, and/or Behavioral Health (BH) needs. At a
minimum, the response should:
a. Describe processes to conduct initial and periodic assessments of Members’ needs;
b. Describe how a Person-Centered Service Plan is developed within required timeframes;
c. Describe elements of the Service Coordination model design specific to meeting the
needs of Members with Special Health Care Needs (MSHCN); and
d. Describe communication of initial and subsequent risk assessments to a Member’s
Primary Care Provider (PCP) and prenatal care Provider and include specific strategies
to ensure the coordination of physical health and BH.
SOW Reference: 2.6.33; 2.6.34; 2.6.36; 2.6.43;
2.6.44; 2.6.46; 2.6.48; 2.6.50; 2.6.53.7; and 2.6.53.11
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 1a; 1b; 1c; and le
Page Limit: 10
Describe the Respondent’s process for completing Member outreach and engagement,
including education and messaging to a Member about available Service Coordination. At a
minimum, the response should:
a. Include a description of how attempts are made to contact and engage a Member; and
b. Describe best practices for contacting and engaging with Members or a parent/legal
guardian of a Member who declines Service Coordination.
SOW Reference: 2.6.16; 2.6.17; 2.6.18; 2.6.19; and 2.6.44
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) la; 1b; and le
Page Limit: 5
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HHSC
P-038.033
A Member is a 36-year-old woman in her second trimester of pregnancy. She has received no
prenatal care to date. She is noted to have relapsed in her substance use about six months ago,
abusing alcohol and opiates after two years of sobriety. Since becoming pregnant, she has
experienced blood pressure and blood sugar hitting high and low levels with little stability or
predictability. She is noted to have high-levels of stress after losing her job and she has little
family support. Describe the Service Coordination plan during the remainder of this Member’s
pregnancy and the post-partum period.
SOW Reference: 2.6.33; 2.6.34; 2.6.36; 2.6.43;
2.6.44; 2.6.46; 2.6.48; 2.6.50; 2.6.53.3; 2.6.53.8; and 2.6.53.11
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) la; 1b; 1c; and le
Page Limit: 5
A Member is a six-year-old boy diagnosed with asthma and Type 1 diabetes. The child was
recently admitted to the Hospital for pneumonia that exacerbated his asthma. A few days after
discharge, he was assessed in the emergency department due to lightheadedness and low blood
sugar. He is the oldest of four siblings and his parents describe being overwhelmed by his
medical needs. Describe the Service Coordination plan following the child’s Hospital stay and
emergency department care and how services will be coordinated to achieve improved health
outcomes for this child. Please include a description of how preventative care and family support
will be provided.
SOW Reference: 2.6.33; 2.6.34; 2.6.36; 2.6.43; 2.6.44; 2.6.45; 2.6.46; 2.6.48; 2.6.50;
2.6.53.1; 2.6.53.8; and 2.6.53.11
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 1a; 1b; 1c; 1d; and le
Page Limit: 5
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HHSC
P-038.034
Technical Question No. 5
Describe the Respondent’s initiatives to educate Members on seeking non-emergency care in
the primary care setting and to encourage Members to establish and maintain a PCP
relationship.
SOW Reference: 2.4.2; 2.6.17.1; and 2.6.18
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 2a and
2d
Page Limit: 7
Describe the Respondent’s strategies for monitoring and addressing Network Provider issues
including:
a. Compliance with timely access standards and improving a Member’s ability to obtain
Services as needed;
b. Ongoing Provider compliance with appointment timeliness standards;
c. Provider Network adequacy including developing Services and Providers where they are
needed, including Non-Emergency Medical Transportation (NEMT) and Healthy Texas
Women (HTW) Providers;
d. Developing and promoting the use of Telemedicine/Telehealth; and
e. Potential challenges, including Network gaps, and how the Respondent would address
those challenges.
SOW Reference: 2.6.23.3; 2.6.34; and 2.6.35
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 2b and 2c
Page Limit: 10
Describe how the Respondent will ensure the delivery of the federally mandated Early and
Periodic Screening, Diagnostic, and Treatment (EPSDT) Services. Please describe the
process, including tracking routine screening and immunizations and addressing low
utilization of these services, education to Members, and monitoring the provision of
treatment and related health outcomes. Describe how the Respondent will use the
information to improve Member checkup rates.
SOW Reference: 2.6.18; 2.6.50; and 2.6.51
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 2b and 2c
Page Limit: 5
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HHSC CP_0019330
P-038.035
Ms. Myat is a 24-year-old woman who is seeking care for her 2 % year-old son, Arkar. She
has become concerned that he doesn’t seem to be talking as much as other children his age. Of
note, Ms. Myat, her husband, and their son Arkar are Karenni and emigrated from Myanmar
about 2 years ago seeking asylum. Ms. Myat has limited English proficiency and her preferred
language is Karenni. After discussing her concern with a fellow parent, it was suggested that
Ms. Myat set up an appointment with Arkar’s pediatrician so Arkar can be evaluated. Arkar’s
last visit to the pediatrician was over a year ago when he last received immunizations. Ms.
Myat was directed to call the number on the back of Arkar’s Medicaid identification card.
Upon calling, Ms. Myat had difficulty understanding the instructions. She then sought the
assistance of a representative from the local advocacy organization. Please describe
Respondent’s approach to address this scenario. At a minimum, the response should:
a. Describe how the Respondent will address the communication barrier for a Member with
limited English proficiency;
b. Describe how the Respondent will address a Member’s need for a developmental
assessment in a culturally sensitive manner; and
c. Describe how the Respondent will identify additional health promotion opportunities and
provide health education activities.
SOW Reference: 2.6.7.3; 2.6.16; 2.6.17; 2.6.18; 2.6.19; and 2.6.51
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 2c and 2d
Page Limit: 5
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HHSC CP_0019331
P-038.036
Technical Question No. 9
Describe the Respondent’s approach to developing, contracting, and managing a robust,
qualified, and culturally competent Provider Network. The response should describe the
Respondent’s strategies to collaborate and evaluate Provider satisfaction, processes for Provider
contracting and credentialing, and incentive programs or other mechanisms to promote Provider
participation.
SOW Reference: 2.6.6; 2.6.7; 2.6.10; 2.6.11; 2.6.23.4; 2.6.30; 2.6.31; 2.6.36; 2.6.37; and
Chapters 3, 5.28 and 8 (except 8.3 and 8.6) of Exhibit B, Texas Medicaid and CHIP —
UMCM.
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 3a; 3c; and
3e
Page Limit: 10
Describe areas of Provider burden the Respondent has identified and the proposed approaches
to mitigating these barriers and challenges. The response should explain how the Respondent
shares and maintains key business operations policies and processes with Providers and the
approach to minimize Provider complaints, contracting issues, Prior Authorization (PA)
disputes, and claims/reimbursement concerns.
SOW Reference: 2.6.6; 2.6.7; 2.6.11; 2.6.15; 2.6.23; 2.6.30; 2.6.31; 2.6.37; and Chapter 3 of
Exhibit B, Texas Medicaid and CHIP UMCM. -
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 3a; 3b; 3c; and 3f
Page Limit: 7
Describe how the Respondent supports Providers in decision-making, trainings, best practices
guidelines, and other Utilization Management (UM) tools available to Providers.
SOW Reference: 2.6.7; 2.6.24; 2.6.36; and 2.6.48
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 3c; 3d; and 3f
Page Limit: 7
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Describe the Respondent’s approach for proper UM of Covered Services under STAR, CHIP,
and HTW. Describe any strategies and/or intervention(s) aimed at improving the consistency
and quality of care of Covered Services.
SOW Reference: 2.6.7; 2.6.9; 2.6.10; and 2.6.24
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 4a and 4b
Page Limit: 5
Technical Question No. 13
Describe the Respondent’s Quality Improvement and performance evaluation strategies and
initiatives specific to the STAR, CHIP, and HTW populations. At a minimum, the response
should:
a. Identify methods for evaluating Member outcomes and how the evaluation results are
incorporated into the Respondent’s Quality Improvement program;
b. Describe processes for incorporating Provider input into the design and evaluation of the
Respondent’s Quality Improvement strategies and initiatives and processes for
disseminating outcome results to Providers for continued improvement; and
c. Describe a clinical or non-clinical initiative that Respondent proposes to pursue in the
first year of the Contract specific to the HTW population and why the topic warrants
investment. Describe the Respondent’s measurable goals for the initiative and how its
impact will be evaluated.
SOW Reference: 2.6.23
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 4a; 4b; and 4c
Page Limit: 10
Technical Question No. 14
Describe Alternative Payment Models (APM) that the Respondent intends to implement for the
STAR, CHIP, and HTW populations. The response should include a description of how those
APMs improve health outcomes or experience of Members, lower healthcare cost trends, and
increase quality and efficiency of the program. Once the APMs have been implemented, the
Respondent should describe how APMs will be evaluated on an ongoing basis to determine the
effectiveness and how the Respondent will increase the use of APMs over the term of the
Contract.
SOW Reference: 2.6.23.4; 2.6.23.5
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 4a; 4b; and 4c
Page Limit: 5
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P-038.038
Technical Question 15
Explain the Respondent’s strategies to detect, prevent, and report on Provider and Member
Fraud, Waste, and Abuse (FWA). The explanation should include how the Respondent will use
resources to identify possible areas of Overpayment or overutilization of Services which lead to
inefficiencies and increased cost to the program and how these strategies will be effective for the
populations covered under STAR, CHIP, and HTW.
SOW Reference: 2.6.11.4; 2.6.24; and 2.6.29
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 4a and 4d
Page Limit: 5
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HHSC CP_0019334
P-038.039
echnical Question No. 1
Describe the Respondent’s proposed information systems and processes that, at a minimum,
address the functional areas listed below:
a. Implementation cycles for systems change management, including Member, utilization,
Provider, and Network management;
Claims processing and Encounters, payments, and coordination of benefits;
eno
Formularies and Medicaid Preferred Drug Listing (PDL);
Electronic Visit Verification (EVV); and
Any other ancillary systems supporting the program.
SOW Reference: 2.5.3.6; 2.6.13; and 2.6.28
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 5a and 5d
Page Limit: 15
Technical Question No. 17
Describe how the Respondent will use systems, data, and technology to identify trends in Service
delivery and utilization. Provide examples of how trends are identified and used to inform
continuous improvement activities and Service delivery.
SOW Reference: 2.6.23; 2.6.24; 2.6.27; and 2.6.28
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 5a and 5c
Page Limit: 7
Technical Question No. 18
Describe the Respondent’s capability to meet current and possibly new reporting requirements
specified in the SOW. At a minimum, the response should include:
a. Capabilities and processes to build, configure, and/or expand systems to produce reports
in predetermined formats, such as the reports included in the SOW;
b. Processes for compiling data from multiple sources/systems for the purpose of
reporting, including processes to obtain, validate, and monitor compliance data from
Subcontractors;
c. reported information and compliance
Processes to ensure accuracy and timeliness of
with contractual reporting requirements;
d. Capabilities to produce financial and non-financial Medicaid and CHIP reports on a
monthly, quarterly, annual, and ad hoc basis; and
e. The approach to continuous Quality Improvement activities related to reporting,
including development, implementation, and monitoring of internal plans of correction.
SOW Reference: 2.6.23; 2.6.27; and 2.6.28
BVC Descriptor: Section 3.1.4 (Best Value Evaluation Criteria) 5b and 5c
Page Limit: 7
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ARTICLE V. ADDITIONAL REQUIRED DOCUMENTATION
3.1 AFFIRMATIONS AND CERTIFICATIONS
Respondent must complete and return in its Proposal all of the following affirmations and
certifications:
a. Exhibit I], HHS Solicitation Affirmations v. 2.3;
b. Federal Assurance and Certifications:
1. Exhibit J, Assurances —
Non-Construction Programs; and
2. Exhibit K, Certification Regarding Lobbying.
tan
4 HUB SUBCONTRACTING PLAN
Respondent must submit the HUB Subcontracting Plan in accordance with Section 2.5 (Proposal
Submission and Delivery). The HSP should be labeled: “HUB Subcontracting Plan (HSP)” and
include all supporting documentation in accordance with Exhibit N, HUB Subcontracting Plan,
and the HSP.
In accordance with Texas Government Code Section 2161.252(b), a Proposal that does not contain
an HSP is non-responsive. See also Texas Administrative Code, Title 34, Part 1, Chapter 20,
snbonasennscennonenonenseihoneneneeutnanononsnteneneccenrsnesusnecennsnonananseninnadbencacnecananeesennsnedatnssonataersncenonsnenocenchaecenAeadycocendeceaes
accordance with Exhibit N, HUB Subcontracting Plan shall be rejected without further
evaluation. In addition, if HHSC determines that the HSP was not developed in good faith, it will
reject the Proposal for failing to comply with material RFP specifications.
OPTIONAL HUB HSP TRAINING AND COURTESY HSP REVIEW ARE OFFERED FOR
THIS SOLICITATION. PLEASE CONTACT THE HUB COORDINATOR (SECTION
2.3.3, EXCEPTION TO THE SOLE POINT OF CONTACT) FOR MORE INFORMATION.
3.3 AUTHORIZATION TO CONDUCT BUSINESS IN TEXAS
Respondent must be authorized to do business in the State of Texas prior to an award. Respondent
must provide either a Certificate of Fact from the Texas Secretary of State showing that it is
authorized to do business in Texas, or a Certificate of Compliance from the Texas Department of
Insurance (TDJ), as applicable.
Respondent must be set up in the Texas franchise tax system prior to Contract award. Respondents
claiming an exemption under Tax Code Chapter 171, Subchapter B must submit in its Proposal a
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copy of Respondent’s exemption status with the Texas Comptroller. Texas franchise tax
information can be accessed at https://coniptroller.texas.govMaxes/franchise/,
Respondent must submit in its Proposal a copy of Respondent's licensure, certification, or approval
from the TDI to operate as a health maintenance organization (HMO), approved non-profit health
corporation (ANHC), or exclusive provider organization (EPO)/issuer of an exclusive provider
benefit plan (EPBP). If Respondent has not received TDI licensure, certification, or approval then
Respondent must submit in its Proposal a copy of the application filed with TDI. In accordance
with Section 2.5.6 of Exhibit H, STAR & CHIP Scope of Work (SOW), Respondent must receive
TDI approval no later than 60 Days after the Effective Date of the Contract.
Respondent must complete with its Proposal the TDI Certificate of Authority Table in the
Exhibit Q, Procurement Library, located on the ESBD, to indicate whether the Respondent is
currently authorized by TDI to operate as an MCOin all counties in the State. For each county
where the Respondent is not authorized to conduct business as an MCOin all or part of the county,
the Respondent must state in the TDI Certificate of Authority Table the date that it applied for
such approval and the status of its TDI application.
3.4 COMPANY PROFILE
Respondent must provide in its Proposal a company profile that includes the following information:
a. Ownership structure and legal status (e.g., corporation, partnership, LLC, or sole
proprietorship, wholly owned subsidiary of a publicly traded corporation, wholly owned
subsidiary of a private closely held non-traded corporation, subsidiary or component of a
tax-exempt, non-governmental foundation, etc.). Respondent must provide the ownership
structure and legal status in a narrative and as a graphical representation. If Respondent is
an Affiliate, as defined in Exhibit
H,STAR & CHIP Scope of Work (SOW), of or has a
joint venture or strategic alliance with another company, Respondent must identify the
percentage of ownership of each joint venture member or Affiliate and the percentage of the
parent’s ownership. The entity performing the majority of the Services and Deliverables
under the Contract resulting from this RFP, throughout the duration of the Contract, must
be the primary Respondent;
b. The year the company was founded and/or incorporated and where it is commercially
domiciled. If incorporated, Respondent must indicate the state where the company is
incorporated and the date of incorporation. Respondent must also include all states in which
Respondent is licensed to do business as an HMO, ANHC, or EPO/EPBP;
c. The number of employees in the company, both locally and nationally, and the location(s)
from which employees will be assigned;
d. The full name, title, and address of Respondent’s executive authorized to sign the
Contract(s);
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The full name, address, and telephone number of Respondent’s point of contact(s) for the
Contract;
Indicate whether the company has ever contracted with any State agency. If “Yes,” specify
the term of the contract, the company’s duties, and the State agency;
Respondent’s complete and exact legal name, as well as any trade name, d.b.a., acronym,
and any other name under which Respondent currently does business or has done business
in the past five (5) years of the Solicitation Posting to ESBD Date;
The complete and exact legal name of the ultimate parent, if any, of Respondent. Further,
state whether Respondent’s ultimate parent or its Subsidiaries operate in multiple states or
only in Texas;
With respect to Respondent and its ultimate parent, including other managed care
Subsidiaries of the ultimate parent, briefly describe all regulatory actions, sanctions, or fines
imposed by any federal or Texas regulatory entity, or a regulatory entity in another state,
within the five (5) years prior to the Solicitation Posting to ESBD Date, related to financial
issues or maintenance of status as an insurer in a state;
If Respondent has Affiliates operating under a different legal name or trade name that do
business with HHSC, or are applying to do business with HHSC, provide the complete and
exact legal name, as well as any trade name, d.b.a., acronym, and any other name under
which the Affiliate currently does business or has done business in the past five (5) years,
and describe each contract involved;
State whether Respondent, including its ultimate parent and all Affiliates, directly or
indirectly, wholly or partially, own, control, operate, or lease any Hospitals. If so, briefly
describe each Hospital, including the name of the Hospital; the city it is in; the number of
beds; and any population type focus, such as being a children’s Hospital;
State whether Respondent, including its ultimate parent and all Affiliates, own or control
any of the following types of health services providers, networks, companies, or facilities
directly or indirectly, wholly or partially:
1. Behavioral Health (BH);
2. Vision;
3. Pharmacy Benefit Manager (PBM);
4. Physician groups;
5. Health clinics;
6. Emergency centers or urgent care centers;
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7. Diagnostic or specialty (includes facilities that provide such services as x-ray, blood
work, colonoscopy, labs, chemotherapy, physical therapy, counseling, rehabilitation,
medical supplies, nursing home, and similar);
8. Dental;
9. Medical transportation;
10. Utilization Management (UM);
11. Real estate management, commercial space leasing, or similar services;
12. Workforce services, including temporary or contract workers, and placement services;
13. Consulting services or information technology (IT) services; or
14. Reinsurance.
m. The physical location of all businesses potentially associated with the Proposal;
n. A statement attesting that all business functions associated with any resulting Contract,
including call lines and data, will remain within the United States;
o. The name and address of all other sponsoring corporations or others, excluding the
Respondent's ultimate parent, who provide financial support to Respondent and the type of
support provided, e.g., guarantees or letters of credit. Indicate whether there are maximum
limits of the additional financial support;
p. The name and address of each health professional that has a five (5) percent or greater
financial interest in Respondent and the type of financial interest it has; and
q. Ifany change of ownership of Respondent’s company or its parent is anticipated during the
12 months following the Solicitation Posting to ESBD Date, Respondent must describe the
circumstances of the change and indicate when the change is likely to occur.
5.4 REQUIRED FINANCIAL INFORMATION
As a financial due diligence process, prior to awarding the Contract, HHSC will review the required
financial information submitted by Respondent in accordance with this section, and information in
Section 5.4 (Company Profile). The Required Financial Information and Company Profile will be
considered in accordance with Section 3.1.7 (Final Considerations for Award).
In addition to thefollowing required financial information, Respondents may choose to submit
other information that Respondent believes should be taken into consideration to address any
concerns or other unfavorable items disclosed in accordance with this section.
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3.3.1 Company Organization
In itsProposal, Respondent must provide its planned operating structure for the Services required
in this Solicitation and designate which entities (e.g., parent company, Affiliate, joint venture,
Subcontractor) will be performing the Services by submitting the organizational charts and
information requested below. For each organizational chart, include an explanatory narrative no
more than one-page in length, in the format prescribed by Article II. The narrative must highlight
the key functional responsibilities and reporting requirements of each organizational unit relating
to Respondent’s proposed management of the Program. With regard to any proposed Material
Subcontractors managing BH Services, dental services, vision services, or pharmacy services,
indicate whether Respondent and any proposed Material Subcontractor will collocate their offices,
and if so, how and where. Each narrative must be labelled so it is associated with the appropriate
chart, e.g., “Narrative for Chart A.”
Respondent must include the following:
a. An organizational chart (labelled as Chart A) showing the corporate structure and lines of
responsibility and authority in the administration of Respondent’s business as a whole;
b. An organizational chart (labelled as Chart B) showing the Texas organizational structure,
including staffing and functions performed within the State, including the organizational
structure in each city if Respondent proposes to maintain offices in more than one city in
Texas;
c. An organizational chart (labelled as Chart C) illustrating how administration of Services to
Members is integrated into the overall organizational structure. Specifically, show the
organizational structure if Respondent proposes to maintain offices in more than one city in
Texas;
d. An organizational chart (labelled as Chart D) showing the Management Information
Systems’ (MIS) staff organizational structure. Specifically, show the organizational
structure if Respondent proposes to maintain offices in more than one city in Texas;
e. An organizational chart (labelled as Chart E) showing Respondent’s structure and lines of
accountability; and
f. If applicable, an organizational chart (labelled as Chart F) demonstrating how the Material
Subcontractors will be managed within Respondent’s Texas organizational structure,
including the primary individuals at the Respondent’s organization and at each Material
Subcontractor who will be responsible for overseeing the Subcontract.
Material Subcontractor Information
Respondent must identify any current or anticipated Material Subcontractors who will perform
under the Contract. Material Subcontractor is a defined term in Exhibit A,HHSC Managed Care
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Uniform Contract Terms and Conditions vy. 1.0. Respondent must list the identified Material
Subcontractors in descending order of estimated annual payments, the estimated total under all
managed care programs, and provide the following information for each Material Subcontractor:
a. The Material Subcontractor’s legal name, trade name, acronym, d.b.a., and all other names
under which the Material Subcontractor does business or has done business in the past five
(5) years from the Solicitation Posting to ESBD Date.
b. The full and exact legal name of the Material Subcontractor’s ultimate parent.
c. All of Respondent’s estimated annual payments to the Material Subcontractor that may be
included in any Financial Statistical Reports submitted by Respondent under the Contract
or any other HHSC contract. Show separate amounts by managed care program for each
Material Subcontractor.
d. The physical address, mailing address, and telephone number of the Material
Subcontractor’s headquarters office, and the name of its chief executive officer.
e. A definitive statement specifying whether the Material Subcontractor is an Affiliate of the
Respondent or an unrelated third party.
f. If the Material Subcontractor is an Affiliate, Respondent must provide the following
information:
1. The Material Subcontractor’s relationship to Respondent;
2. The proportion, if any, of the Material Subcontractor’s total Revenues received from
non-Affiliates. If the Material Subcontractor has significant Revenues from non-
Affiliates, then also indicate the portion, if any, of those external, non-Affiliate
Revenues that are for Services similar to those that Respondent would procure under the
proposed Material Subcontract;
3. A description of the proposed method of pricing under the Material Subcontract;
4. anticipated mark-up, margin, profit, or
statement as to whether there is, or is not, any
amount in excess of actual incurred costs anticipated to be included in the pricing;
5. The number of employees, both staff and management, who are dedicated full-time to
the Affiliate’s business. Do not include any staff or management that have other duties
in addition to working on this specific Affiliate’s business; and
6. A statement regarding whether the Affiliate’s office facilities are completely separate
from Respondent and Respondent’s ultimate parent. If not completely separate, include
the approximate number of square feet of office space dedicated solely to the Affiliate’s
business.
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3.3.5 Dun and Bradstreet Report
Respondent with a Dun and Bradstreet number must include a Comprehensive Insight Plus Report,
Business Information Report, or Credit Evaluator Report in its Proposal.
3.3.4 Financial Statements
Respondent must submit the following information:
a. Audited financial statements from the three (3) years immediately prior to the Solicitation
Posting to ESBD Date, including all supplements, management discussion and analysis, and
actuarial opinions. If audited financial statements are not available, Respondent must submit
unaudited financial information and any other information Respondent believes meets the
requirements of this section. Reference Section 5.5.5 (Alternate Report). At a minimum,
financial statements must include a balance sheet, income statements, statement of
changes in financial position, statement of cash flows, and capital expenditures.
Note that these must be the financial statements of the legal entity of Respondent itself and
not those of the ultimate parent or any other entity or operating component. However, if
Respondent is substantially owned or controlled, in whole or in part, by one or more other
legal entities, Respondent must also submit in its Proposal the most recent financial
statement and documentation required under this section for each such entity. These
statements must include the independent auditor’s report, audit opinion letter to the board
or shareholders, the notes to the financial statements, any written description of legal issues
or contingencies, and any management discussion or analysis. Ensure that the name and
address of any firm that has audited Respondent within the three (3) years immediately prior
to the Solicitation Posting to ESBD Date is included. State the date of the most recent audit
and whether Respondent is audited annually or otherwise. State definitively if there has or
has not been any of the following:
1. A “going concern” statement by any auditor issued in the three (3) years immediately
prior to the Solicitation Posting to ESBD Date and, ifso, include the relevant audit report
and opinion letter;
2. A qualified opinion by any auditor issued in the three (3) years immediately prior to the
Solicitation Posting to ESBD Date and if so, include the relevant audit report and
opinion letter;
3. A change of audit firms in the three (3) years immediately prior to the Solicitation
Posting to ESBD Date; and
4. Any delay of two (2) months or more in completing the current audit.
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. A description of the organization and operation of all of Respondent's business outside of
that with HHSC, including ownership, markets served, type of entity, number of locations
and employees, and dollar amount and type.
A disclosure of any material contingencies and any current, past in the three (3) years
immediately prior to the Solicitation Posting to ESBD Date), or known potential material
litigation, regulatory proceedings, bankruptcies, award of punitive damages against
Respondent, legal matters, or similar issues;
Respondent’s most recent quarterly and annual financial statements filed with TDI, and, if
Respondent is domiciled in another state, the financial statements filed with the state
insurance department in its state of domicile. The annual financial statement must include
all schedules, attachments, supplements, management discussion, analysis, and actuarial
opinions;
Respondent’s most recent financial examination report issued by TDI and Respondent’s
most recent financial examination reports issued by any state insurance department in states
where Respondent operates a Medicaid or comparable managed care product. If any
financial examination report submitted is two (2) or more years old, or if Respondent has
never had
a financial examination report issued, submit the anticipated approximate date of
the next issuance of a TDI or other state department of insurance financial examination
report;
Respondent’s most recent Form B Registration Statement disclosure filed with TDI and any
similar form filed with any state insurance department in other states where Respondent
operates a Medicaid or comparable managed care product. If Respondent is exempt from
the TDI Form B filing requirement, demonstrate and explain the nature of the exemption;
In the three (3) years immediately prior to the Solicitation Posting to ESBD Date, if
Respondent has been the subject of any bond rating analysis, ratings affirmation, write-up,
or related report, such as by AM Best, Fitch Ratings, Moody’s, or Standard & Poor’s, submit
the most recent detailed report from each rating entity that has produced sucha report;
If applicable, submit the consolidated statements for any holding companies or Affiliates
for the three (3) years immediately prior to the Solicitation Posting to ESBD Date;
A full disclosure of any events, liabilities, or contingent liabilities that could affect
Respondent's financial ability to perform this Contract, inclusive of financially relevant
press releases, in the 12 months immediately prior to the Solicitation Posting to ESBD Date;
If Respondent is a corporation required to report to the Securities and Exchange
Commission (SEC), then submit its three (3) most recent SEC Form 10K, Annual Reports,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, Title 15 of the
United States Code Chapter 2B, Sections 78m or 780(d);
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k. If Respondent is a tax-exempt entity, then submit the most recent annual IRS Form 990
filing, including all attachments and schedules. If Respondent is a tax-exempt entity that is
exempt from the IRS Form 990 filing requirement, then demonstrate and explain the nature
of the exemption;
l. If Respondent is a tax-exempt entity that is a component or Subsidiary of a county Hospital
district, or otherwise an entity of a government, then submit the most recent annual financial
statements as prepared under the relevant rules or statutes governing annual financial
reporting and disclosure for Respondent, including all attachments, schedules, and
supplements. This may be the Comprehensive Annual Financial Report (CAFR) or other
existing county Hospital district financial statements;
m. If Respondent is either substantially or wholly owned by another corporate (or legal) entity,
then Respondent must include the information required for each such entity, including the
most recent detailed financial report for each such entity; and
n. In additional to the above-referenced documents, Respondent must submit an annual report
or similar item if it is different than, or supplementary to, the other financial statements
submitted and particularly if such documents are distributed to shareholders, customers,
employees, owners, ultimate parent, banks, creditors, donors, communities, any regulatory
body, or constituents, or is otherwise externally distributed or posted. Respondent must
provide the most recent version of such annual reports or similar items.
5.5.5 Alternate Report
If Respondent is unable to provide the annual report specified above, Respondent must provide an
alternate report. At a minimum, financial statements must include a balance sheet, income
statement, statement of changes in financial position, statement of cash flows, and capital
expenditures. The alternate report must contain the following information:
a. Unaudited financial statements from the three (3) years immediately prior to the Solicitation
Posting to ESBD Date, including all supplements, management discussions and analyses,
and actuarial opinions;
b. An unaudited financial statement of the most recent quarter of operations; and
c. A full disclosure of any events, liabilities, or contingent liabilities that could affect
Respondent’s financial ability to perform this Contract.
5.5.6 Disclosures
Respondent must submit with its Proposal the following information from the three (3) years
immediately prior to the Solicitation Posting to ESBD Date:
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a. Report of Legal and Other Proceedings and Related Events Respondent must submit a
—
report as described in Chapter 5.8 of Exhibit B, Texas Medicaid and CHIP Uniform
—
Managed Care Manual (UMCM), regarding the disclosure of certain matters involving
either Respondent, its Affiliates, or its anticipated Material Subcontractors;
b. Affiliate Report Respondent must submit an Affiliate Report as described in Chapter 5.11
—
of Exhibit B, Texas Medicaid and CHIP Uniform Managed Care Manual (UMCM).
-
This report must include all anticipated transactions with Affiliates applicable to the
Contract, including parental overhead assessments. Failure to include Affiliate transactions
may result in such transactions being deemed as unallowable costs in the Contract; and
c. Disclosure Statement —
Respondent must submit an MCO Disclosure Statement as
described in Chapter 5.3.2 of Exhibit B, Texas Medicaid and CHIP Uniform Managed
-
Care Manual (UMCM). This Disclosure Statement must include disclosures of other
contracts held, amount of assets and net equity, information on facilities in Texas, number
of employees, requirements to pay the health insurer providers’ fee, and certain federally
required disclosures. Material omissions or misrepresentations in the Disclosure Statement
could be deemed a material breach of the Contract, which could lead to termination or other
remedies as may be available to HHSC.
If Respondent previously filed these Reports and the Disclosure Statement with HHSC under a
different contract, then Respondent may instead provide an updated submission of those documents,
current as of the approximate time of the Solicitation Posting to ESBD Date.
Corporate Guarantee
If Respondent is substantially owned or controlled, in whole or in part, by one or more other legal
entities, Respondent must also include a statement that the entity or entities will unconditionally
guarantee performance by Respondent for each and every obligation, warranty, covenant, term, and
condition of any Contract resulting from this Solicitation. If HHSC determines that an entity does
not have sufficient financial resources to guarantee Respondent’s performance, HHSC may require
Respondent to obtain another acceptable financial instrument or resource from such entity, or to
obtain an acceptable guarantee from another entity with sufficient financial resources to guarantee
Respondent’s performance. Acceptability of such instruments, resources, and/or guarantees shall
be determined by HHSC at its sole discretion.
5.6 KEY PERSONNEL
Respondents must provide key staffing profiles for all key staff who will be responsible for the
performance of the Services in accordance with Section 4.02 of Exhibit A,HHSC Managed Care
Uniform Contract Terms and Conditions v. 1.0.
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ARTICLE VI. GENERAL TERMS AND CONDITIONS
6.1 GENERAL CONDITIONS
6.1.1 Changes, Modifications, and Cancellation
HHSC reserves the right to make changes to and/or cancel this RFP and will post all changes and
modifications, whether made as a result of a potential Respondent’s written inquiries or otherwise,
and cancellation notices on the ESBD. It is the responsibility of the Respondent to check the ESBD
regularly for any additional information regarding this RFP. If the Respondent fails to monitor the
ESBD for any changes or modifications to the RFP, such failure will not relieve the Respondent
of its obligation to fulfill the requirements as posted.
6.1.2 Offer Period
Proposals shall be binding for a period of 240 Days after the submission due date. A Respondent
may extend the time for which its Proposal will be honored. No other costs, rates, or fees shall be
payable to the successful Respondent unless expressly agreed upon in writing by HHSC.
6.1.3 Cost Incurred
Respondents understand that issuance of this Solicitation in no way constitutes a commitment by
HHSC to award a Contract or to pay any costs incurred by a Respondent in the preparation of a
Proposal or response to this Solicitation. HHSC is not liable for any costs incurred by a
Respondent. Costs of developing Proposals, preparing for or participating in Oral Presentations,
or any other similar expenses incurred by a Respondent, are entirely the responsibility of the
Respondent and will not be reimbursed in any manner by the State of Texas.
6.1.4 Contract Responsibility
HHSC will look solely to the successful Respondent for the performance of all contractual
obligations that may result from an award based on this Solicitation. The successful Respondent
shall not be relieved of its obligations for any nonperformance by its Subcontractors.
6.1.5 Public Information Act —-
Respondent Requirements Regarding Disclosure
Proposals and any resulting contracts are subject to the Texas Public Information Act (PIA), Texas
Government Code Chapter 552, and may be disclosed to the public upon request. Other legal
authority also requires HHSC to post contracts and proposals on its public website and to provide
such information to the Legislative Budget Board for posting on its public website.
HHSC will strictly adhere to the requirements of the PIA regarding the disclosure of public
information. As a result, by participating in this Solicitation process, Respondent acknowledges
that all information, documentation, and other materials submitted in the Proposal in response to
this Solicitation may be subject to public disclosure under the PIA. HHSC does not have authority
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to agree that any information submitted will not be subject to disclosure. Disclosure is governed
by the PIA and by rulings of the Office of the Texas Attorney General. Respondents are advised
to consult with their legal counsel concerning disclosure issues resulting from this process and to
take precautions to safeguard trade secrets and proprietary or otherwise confidential information.
HHSC assumes no obligation or responsibility relating to the disclosure or nondisclosure of
information submitted by Respondents.
Proposals should not be marked or asserted as copyrighted material. By submitting a proposal,
Respondent agrees to reproduction and posting on public websites by the State of Texas, including
all other state agencies, without cost or liability and, additionally, agrees to allow the State of Texas
to provide a copy of the Proposal to individuals making a PIA request for the proposal.
Exemptions from Disclosure: Under the PIA, certain information is protected from public release.
If Respondent asserts that information provided in its Proposal is exempt from disclosure under
the PIA, Respondent must do all of the following:
a. Mark Original Proposal:
1. Mark the Original Proposal, on the top of the front page, with the words “CONTAINS
CONFIDENTIAL INFORMATION” in large, bold, capitalized letters (the size of or
equivalent to 12-point Times New Roman font or larger);
2. Mark the bottom of each page the Proposal that contains information that
on
Respondent claims is exempt from public disclosure with the words “CONTAINS
CONFIDENTIAL INFORMATION”; and
3. Identify, adjacent to each portion of the Proposal that Respondent claims is exempt
from public disclosure, the claimed exemption from disclosure (NOTE: no redactions
are to be made in the Original Proposal).
b. Submit Public Information Act Copy of Proposal:
Submit a separate “Public Information Act Copy” of the Original Proposal (in addition to
the original and all copies otherwise required under the provisions of this Solicitation). The
Public Information Act Copy must meet the following requirements:
1. The copy must be clearly marked as “Public Information Act Copy” on the front page
in large, bold, capitalized letters (the size of or equivalent to 12-point Times New
Roman font or larger);
2. Each portion Respondent claims is exempt from public disclosure must be redacted
(blacked out); and
3. Respondent must identify, adjacent to each redaction, the claimed exemption from
disclosure. Each identification provided in the Public Information Act Copy must be
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identical to those set forth in the Original Proposal as required in Subsection (a)(2),
above. The only difference in required markings and information between the Original
Proposal and the “Public Information Act Copy” of the Proposal will be redactions -
which can only be included in the “Public Information Act Copy.” There must be no
redactions in the Original Proposal.
c. Certify in Original Proposal —
HHS Solicitation Affirmations v. 2.3 (attached as
Exhibit I to this Solicitation):
Certify, in the designated section of the HHS Solicitation Affirmations v. 2.3, Respondent’s
confidential information assertion and the filing of its Public Information Act Copy.
Respondent should not submit a Public Information Act Copy indicating that the entire Proposal
is exempt from disclosure. Merely making a blanket claim that the entire Proposal is protected
from disclosure because it contains any amount of confidential, proprietary, trade secret, or
privileged information is not acceptable.
If any Respondent submits partial information suggesting inclusion of confidential information in
their document and fails to comply with the requirements set forth in this section, HHSC, in its
sole discretion, reserves the right to (1) disqualify all Respondents that fail to fully comply with
the requirements set forth in this section or (2) offer all Respondents that fail to fully comply with
the requirements set forth in this section additional time to comply.
By submitting a response to this Solicitation, Respondent agrees that if Respondent does not
mark the Original Proposal, provide the required certification in the HHS Solicitation
Affirmations vy. 2.3, and submit the Public Information Act Copy, Respondent’s Proposal
will be considered public information that, without notice to the Respondent, may be released
to the public in any manner including, but not limited to, being posted on the HHSC public
website, being posted on the Legislative Budget Board’s public website, or released in
accordance with the Public Information Act.
For more information concerning the PIA, including the types of information that may be withheld,
please refer to the Public Information Act Handbook published by the Office of the Texas Attorney
General or contact the Attorney General’s Open Government Hotline at (512) 478-OPEN (6736)
or toll-free at(877) 673-6839 (877- OPEN TEX). To access the Public Information Act Handbook,
please visit the attorney general’s website at texasattorneygeneral gov.
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6.1.6 Respondent Waiver —
Intellectual Property
SUBMISSION OF ANY DOCUMENT TO HHSC IN RESPONSE TO THIS
SOLICITATION CONSTITUTES AN IRREVOCABLE WAIVER AND AGREEMENT
BY RESPONDENT TO FULLY INDEMNIFY THE STATE OF TEXAS AND HHSC
FROM ANY CLAIM OF INFRINGEMENT BY HHSC REGARDING THE
INTELLECTUAL PROPERTY RIGHTS OF RESPONDENT OR ANY THIRD
PARTYFOR ANY MATERIALS SUBMITTED TO HHSC BY RESPONDENT.
6.1.7 Standards of Conduct for Vendors
Pursuant to Title 1 of the Texas Administrative Code Part 15, Chapter 391, Subchapter D, Rule
§ 391.405, Contractors, Subcontractors, Respondents, and Vendors interested in working with
HHSC are required to implement standards of conduct for their own personnel and agents on terms
at least as restrictive as those applicable to HHSC. These standards must adhere to ethics
requirements adopted in rule, in addition to any ethics policy or code of ethics approved by the
HHSC Executive Commissioner. Respondent must sign and submit all ethics, disclosure,
confidentiality, and other forms required under the procurement and any resulting contract.
The standards of conduct must include the ten standards of ethical conduct set forth in Section I of
the HHS Ethics Policy and must also include requirements to comply with ethical standards set
forth in federal and State law (including, but not limited to, Title 1 of the Texas Administrative
Code Part 15, Chapter 391, Subchapter D, Rule § 391.405). Standards of conduct of any
Contractor, Respondent, or Vendor may be reviewed and/or audited by the State Auditor and
HHSC. The Contractor, Respondent, or Vendor must cooperate with the review and/or audit.
Additionally, pursuant to Title 1 of the Texas Administrative Code Part 15, Chapter 391,
Subchapter D, Rule § 391.405(a), HHSC may examine a Respondent’s standards of conduct in the
evaluation of any bid, offer, proposal, quote, or other applicable expression of interest in a
proposed purchase of Goods or Services.
As a condition of contracting with HHS, any vendor or contractor, must (1) cooperate with any
audit conducted by the state auditor; and (2) cooperate with any audit conducted by HHSC or any
entity designated by HHSC, including the Office of Inspector General.
Any Vendor, Contractor, or Subcontractor, that violates a provision of Title 1 of the Texas
Administrative Code Part 15, Chapter 391, Subchapter D may be barred from receiving future
contracts or may have an existing contract canceled. Additionally, HHSC may report the vendor’s
actions to the Comptroller of Public Accounts for statewide debarment, or law enforcement.
6.1.8 Disclosure of Interested Parties
Pursuant to Section 2252.908 of the Texas Government Code, a successful Respondent to be
awarded a Contract with a value of $1 million or more or awarded a Contract that would require
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P-038.054
the successful Respondent to register as a lobbyist under Texas Government Code Chapter 305
must submit a disclosure of interested parties form to HHSC at the time the Respondent submits
the signed Contract. Rules and filing instructions may be found on the Texas Ethics Commission's
public website and additional instructions will be given by HHSC to the successful Respondent.
6.2 INSURANCE
6.2.1 Required Coverage
For the duration of any Contract resulting from this Solicitation, the successful Respondent shall
acquire insurance, bonds, or both, with financially sound and reputable independent insurers, in
the type and amount listed in Exhibit A,HHSC Managed Care Uniform Contract Terms and
Conditions v. 1.0, Section 15.01, Insurance Coverage. Failure to maintain insurance coverage
or acceptable alternative methods of insurance shall be deemed a breach of the Contract.
Acceptability of such alternative methods of insurance shall be determined by HHSC in its sole
discretion.
6.3 BONDS
Prior to beginning any Services and Deliverables under any Contract resulting from this
Solicitation, the successful Respondent shall acquire bonds in the type and on the form listed in
Exhibit A,HHSC Managed Care Uniform Contract Terms and Conditions v. 1.0, Section
15.02, Performance Bond, and Section 15.03, TDI Fidelity Bond.
6.4 PROTEST
Any protest shall be governed by the rules published by HHSC in the Texas Administrative Code,
STAR & CHIP RFP No. HHS0011152 Page 55 of 57
HHSC
P-038.055
ARTICLE VII. LIST OF EXHIBITS AND ATTACHMENTS
Exhibit B, Texas Medicaid and CHIP Uniform Managed Care Manual (UMCM) and Exhibit
E, Texas Medicaid Provider Procedures Manual (TMPPM) to this procurement, are two
documents that contain policy and procedures relating to the delivery of Managed Care Services
and related Deliverables that are frequently amended to reflect the most current delivery of
Services and reporting requirements. As such, Exhibit B provides a link to the live documents
maintained on the Agency’s website, and information contained within Exhibit E reflects the
documents’ contents as of the date noted within each document at the time of posting. By
submitting a response to this procurement, Respondent understands and agrees to the fact that
Exhibit B is a live document that may be amended at any time during this Solicitation and to the
“snapshot in time” format of Exhibit E. Furthermore, Respondent understands and agrees that if
awarded a Contract as a result of this procurement, the Respondent will accept and be bound to
the terms of Exhibit B, Texas Medicaid and CHIP Uniform Managed Care Manual (UMCM)
and Exhibit E, Texas Medicaid Provider Procedures Manual (TMPPM), as written at the time
of the execution of the Contract including any amendments that may be issued during the term of
the Contract.
EXHIBIT A HHSC MANAGED CARE UNIFORM CONTRACT TERMS AND CONDITIONS V.
1.0
EXHIBIT B TEXAS MEDICAID AND CHIP -
UNIFORM MANAGED CARE MANUAL
(UMCM)
EXHIBIT C DELIVERABLES/LIQUIDATED DAMAGES MATRIX
EXHIBIT D SERVICE AREA MAP AND SELECTION FORM
EXHIBIT E TEXAS MEDICAID PROVIDER PROCEDURES MANUAL (TMPPM)
EXHIBIT F ACCESS STANDARDS MAP
EXHIBIT G CHIRP PROVIDERS AND RATE INCREASES
EXHIBIT H STAR & CHIP SCOPE OF Work (SOW)
EXHIBIT I HHS SOLICITATION AFFIRMATIONS V. 2.3
EXHIBIT J ASSURANCES —
NON-CONSTRUCTION PROGRAMS
EXHIBIT K CERTIFICATION REGARDING LOBBYING
EXHIBIT L EXCEPTIONS FORM
EXHIBIT M ASSUMPTIONS FORM
EXHIBIT N HUB SUBCONTRACTING PLAN
EXHIBIT O SCORING GUIDES
STAR & CHIP RFP No. HHS0011152 Page 56 of 57
HHSC CP_0019351
P-038.056
EXHIBIT P CONSENSUS SCORING RUBRIC
EXHIBIT P-1 EVALUATION TOOL AND SAMPLE SCORING EXAMPLE
EXHIBIT PROCUREMENT LIBRARY
EXHIBIT R STAR & CHIP CONTRACT SIGNATURE DRAFT TEMPLATE
ATTACHMENT A | HHS CONTRACT AFFIRMATIONS V. 2.2
STAR & CHIP RFP No. HHS0011152 Page 57 of 57
HHSC
P-038.057
TAB 3
9/14/25, 12:09 PM GOVERNMENT CODE CHAPTER 522. PROVISIONS APPLICABLE TO ALL HEALTH AND HUMAN SERVICES AGENCIES AND…
Sec. 522.0051. NEGOTIATION AND REVIEW OF CERTAIN CONTRACTS FOR HEALTH
CARE PURPOSES. (a) This section applies to a contract with a contract
amount of $250 million or more:
(1) under which a person will provide goods or services in
connection with the provision of medical or health care services, coverage,
or benefits; and
(2) that will be entered into by the person and:
(A) the commission;
(B) a health and human services agency; or
(C) any other state agency under the commission's
jurisdiction.
(b) An agency described by Subsection (a)(2) must notify the office
of the attorney general at the time the agency initiates the planning phase
of the contracting process for a contract described by Subsection (a). A
representative of the office of the attorney general or another attorney
advising the agency as provided by Subsection (d) may:
(1) participate in negotiations or discussions with proposed
contractors; and
(2) be physically present during those negotiations or
discussions.
(c) Notwithstanding any other law, before an agency described by
Subsection (a)(2) may enter into a contract described by Subsection (a), a
representative of the office of the attorney general shall review the form
and terms of the contract and may make recommendations to the agency for
changes to the contract if the attorney general determines that the office
of the attorney general has sufficient subject matter expertise and
resources available to provide this service.
(d) If the attorney general determines that the office of the
attorney general does not have sufficient subject matter expertise or
resources available to provide the services described by this section, the
office of the attorney general may require the agency described by
Subsection (a)(2) to enter into an interagency agreement or obtain outside
legal services under Section 402.0212 for the provision of services
described by this section.
(e) The agency described by Subsection (a)(2) shall provide to the
office of the attorney general any information the office of the attorney
general determines is necessary to administer this section.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 4
9/14/25, 12:10 PM GOVERNMENT CODE CHAPTER 523. HEALTH AND HUMAN SERVICES COMMISSION
Sec. 523.0051. EXECUTIVE COMMISSIONER. (a) The commission is
governed by an executive commissioner.
(b) The governor appoints the executive commissioner with the advice
and consent of the senate, and shall make the appointment without regard to
race, color, disability, sex, religion, age, or national origin.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 5
9/14/25, 12:11 PM GOVERNMENT CODE CHAPTER 525. GENERAL POWERS AND DUTIES OF COMMISSION AND EXECUTIVE COMMISSIONER
Sec. 525.0101. GENERAL CONTRACT AUTHORITY. The commission may enter
into contracts as necessary to perform any of the commission's powers or
duties.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 6
9/28/25, 7:32 PM GOVERNMENT CODE CHAPTER 532. MEDICAID ADMINISTRATION AND OPERATION IN GENERAL
Sec. 532.0051. COMMISSION ADMINISTRATION OF MEDICAID. (a) The
commission is the state agency designated to administer federal Medicaid
funds.
(b)
The commission shall:
(1) in each agency that operates a portion of Medicaid, plan and
direct Medicaid, including the management of the Medicaid managed care
system and the development, procurement, management, and monitoring of
contracts necessary to implement that system; and
(2) establish requirements for and define the scope of the
ongoing evaluation of the Medicaid managed care system conducted in
conjunction with the Department of State Health Services under Section
108.0065, Health and Safety Code.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 7
9/14/25, 12:08 PM GOVERNMENT CODE CHAPTER 540. MEDICAID MANAGED CARE PROGRAM
Sec. 540.0051. PURPOSE AND IMPLEMENTATION. The commission shall
implement the Medicaid managed care program by contracting with managed
care organizations in a manner that, to the extent possible:
(1)
improves the health of Texans by:
(A) emphasizing prevention;
(B) promoting continuity of care; and
(C) providing a medical home for recipients;
(2) ensures each recipient receives high quality, comprehensive
health care services in the recipient's local community;
(3) encourages training of and access to primary care physicians
and providers;
(4) maximizes cooperation with existing public health entities,
including local health departments;
(5) provides incentives to managed care organizations to improve
the quality of health care services for recipients by providing value-added
services; and
(6) reduces administrative and other nonfinancial barriers for
recipients in obtaining health care services.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 8
9/14/25, 12:04 PM GOVERNMENT CODE CHAPTER 540. MEDICAID MANAGED CARE PROGRAM
Sec. 540.0203. CERTIFICATION BY COMMISSION. (a) Before the
commission may award a contract under this chapter to a managed care
organization, the commission shall evaluate and certify that the
organization is reasonably able to fulfill the contract terms, including
all federal and state law requirements. Notwithstanding any other law, the
commission may not award a contract under this chapter to an organization
that does not receive the required certification.
(b) A managed care organization may appeal the commission's denial of
certification.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 9
9/14/25, 12:06 PM GOVERNMENT CODE CHAPTER 540. MEDICAID MANAGED CARE PROGRAM
Sec. 540.0204. CONTRACT CONSIDERATIONS RELATING TO MANAGED CARE
ORGANIZATIONS. In awarding contracts to managed care organizations, the
commission shall:
(1) give preference to an organization that has significant
participation in the organization's provider network from each health care
provider in the region who has traditionally provided care to Medicaid and
charity care patients;
(2) give extra consideration to an organization that agrees to
assure continuity of care for at least three months beyond a recipient's
Medicaid eligibility period;
(3) consider the need to use different managed care plans to meet
the needs of different populations; and
(4) consider the ability of an organization to process Medicaid
claims electronically.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 10
9/14/25, 12:07 PM GOVERNMENT CODE CHAPTER 540. MEDICAID MANAGED CARE PROGRAM
Sec. 540.0206. MANDATORY CONTRACTS. (a) Subject to the
certification required under Section 540.0203 and the considerations
required under Section 540.0204, in providing health care services through
Medicaid managed care to recipients in a health care service region, the
commission shall contract with a managed care organization in that region
that holds a certificate of authority issued under Chapter 843, Insurance
Code, to provide health care in that region and that is:
(1) wholly owned and operated by a hospital district in that
region;
(2) created by a nonprofit corporation that:
(A) has a contract, agreement, or other arrangement with a
hospital district in that region or with a municipality in that region that
owns a hospital licensed under Chapter 241, Health and Safety Code, and has
an obligation to provide health care to indigent patients; and
(B) under the contract, agreement, or other arrangement,
assumes the obligation to provide health care to indigent patients and
leases, manages, or operates a hospital facility the hospital district or
municipality owns; or
(3) created by a nonprofit corporation that has a contract,
agreement, or other arrangement with a hospital district in that region
under which the nonprofit corporation acts as an agent of the district and
assumes the district's obligation to arrange for services under the
Medicaid expansion for children as authorized by Chapter 444 (S.B. 10),
Acts of the 74th Legislature, Regular Session, 1995.
(b) A managed care organization described by Subsection (a) is
subject to all terms to which other managed care organizations are subject,
including all contractual, regulatory, and statutory provisions relating to
participation in the Medicaid managed care program.
(c) The commission shall make the awarding and renewal of a mandatory
contract under this section to a managed care organization affiliated with
a hospital district or municipality contingent on the district or
municipality entering into a matching funds agreement to expand Medicaid
for children as authorized by Chapter 444 (S.B. 10), Acts of the 74th
Legislature, Regular Session, 1995. The commission shall make compliance
with the matching funds agreement a condition of the continuation of the
contract with the managed care organization to provide health care services
to recipients.
(d) Subsection (c) does not apply if:
(1) the commission does not expand Medicaid for children as
authorized by Chapter 444, Acts of the 74th Legislature, Regular Session,
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9/14/25, 12:07 PM GOVERNMENT CODE CHAPTER 540. MEDICAID MANAGED CARE PROGRAM
1995; or
(2) a waiver from a federal agency necessary for the expansion is
not granted.
(e) In providing health care services through Medicaid managed care
to recipients in a health care service region, with the exception of the
Harris service area for the STAR Medicaid managed care program, as the
commission defined as of September 1, 1999, the commission shall also
contract with a managed care organization in that region that holds a
certificate of authority as a health maintenance organization issued under
Chapter 843, Insurance Code, and that:
(1) is certified under Section 162.001, Occupations Code;
(2) is created by The University of Texas Medical Branch at
Galveston; and
(3) has obtained a certificate of authority as a health
maintenance organization to serve one or more counties in that region from
the Texas Department of Insurance before September 2, 1999.
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 11
9/14/25, 12:12 PM GOVERNMENT CODE CHAPTER 543A. QUALITY-BASED OUTCOMES AND PAYMENTS UNDER MEDICAID AND CHILD HEA…
Sec. 543A.0052. FINANCIAL INCENTIVES AND CONTRACT AWARD PREFERENCES.
(a) The commission may allow a managed care organization participating in
the child health plan program or Medicaid increased flexibility to
implement quality initiatives in a managed care plan offered by the
organization, including flexibility with respect to financial arrangements,
to:
(1) achieve high-quality, cost-effective health care;
(2) increase the use of high-quality, cost-effective delivery
models;
(3) reduce the incidence of unnecessary institutionalization and
potentially preventable events; and
(4) in collaboration with physicians and other health care
providers, increase the use of alternative payment systems, including
shared savings models.
(b) The commission shall develop quality-of-care and cost-efficiency
benchmarks, including benchmarks based on a managed care organization's
performance with respect to:
(1) reducing potentially preventable events; and
(2) containing the growth rate of health care costs.
(c) The commission may include in a contract between a managed care
organization and the commission financial incentives that are based on the
organization's successful implementation of quality initiatives under
Subsection (a) or success in achieving quality-of-care and cost-efficiency
benchmarks under Subsection (b). The commission may implement the
financial incentives only if implementing the incentives would be cost-
effective.
(d) In awarding contracts to managed care organizations under the
child health plan program and Medicaid, the commission shall, in addition
to considerations under Section 540.0204 of this code and Section 62.155,
Health and Safety Code, give preference to an organization that offers a
managed care plan that:
(1) successfully implements quality initiatives under Subsection
(a) as the commission determines based on data or other evidence the
organization provides; or
(2) meets quality-of-care and cost-efficiency benchmarks under
Subsection (b).
Added by Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 1.01, eff.
April 1, 2025.
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TAB 12
9/14/25, 12:13 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
Sec. 2155.076. PROTEST PROCEDURES. (a) The comptroller and each
state agency by rule shall develop and adopt protest procedures for
resolving vendor protests relating to purchasing issues. An agency's rules
must be consistent with the comptroller's rules. The rules must include
standards for maintaining documentation about the purchasing process to be
used in the event of a protest.
(b) A state agency that is not subject to Chapter 2001 shall provide
public notice of its proposed and adopted protest rules and provide a
procedure for public comment on the proposed rules.
Added by Acts 1997, 75th Leg., ch. 1206, Sec. 6, eff. Sept. 1, 1997.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 1071 (H.B. 1524), Sec. 15, eff.
September 1, 2019.
https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2155.htm#2155.076 1/1
TAB 13
9/14/25, 12:15 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
Sec. 2155.144. PROCUREMENTS BY HEALTH AND HUMAN SERVICES AGENCIES.
(a) This section applies only to the Health and Human Services Commission,
each health and human services agency, the Department of Family and
Protective Services, and agencies administratively attached to the Health
and Human Services Commission. For the purposes of this section, the
Department of Family and Protective Services or an agency administratively
attached to the Health and Human Services Commission is considered a health
and human services agency.
(b) An agency to which this section applies is delegated the
authority to procure its goods and services, except as provided by this
section.
(b-1) An agency to which this section applies is not delegated the
authority to procure common commodities or services:
(1) including goods and services acquired for direct consumption
or use by the agency in the day-to-day support of the agency's
administrative operations, such as office supplies and equipment, building
maintenance and cleaning services, or temporary employment services; and
(2) not including consulting services, professional services,
health care services, information resources technology, goods or services
acquired for the benefit or on behalf of clients of programs operated by
the agency, procurements specifically authorized or delegated to the agency
by statute, or the contracting out of agency purchasing functions or other
administrative or program functions.
(b-2) The Health and Human Services Commission is delegated the
authority to procure goods and services related to a contract for:
(1) a project to construct or expand a state hospital operated by
a health and human services agency or a state supported living center as
defined by Section 531.002, Health and Safety Code; or
(2) a deferred maintenance project for a health facility
described by Subdivision (1).
(b-3) Notwithstanding any other law, the Texas Civil Commitment
Office is delegated the authority to procure common commodities or services
described by Subsection (b-1)(1) for office use if the total cost of the
purchase is less than the total cost of the purchase under the
comptroller's purchasing authority or as offered for sale as provided by
Chapter 122, Human Resources Code. The Texas Civil Commitment Office, in
collaboration with the comptroller, shall identify best practices for
comparing the total costs and documenting cost savings.
(c) An agency to which this section applies shall acquire goods or
services by any procurement method approved by the Health and Human
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9/14/25, 12:15 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
Services Commission that provides the best value to the agency. The agency
shall document that it considered all relevant factors under Subsection (d)
in making the acquisition.
(d) Subject to Subsection (e), the agency may consider all relevant
factors in determining the best value, including:
(1) any installation costs;
(2) the delivery terms;
(3) the quality and reliability of the vendor's goods or
services;
(4) the extent to which the goods or services meet the agency's
needs;
(5) indicators of probable vendor performance under the contract
such as past vendor performance, the vendor's financial resources and
ability to perform, the vendor's experience and responsibility, and the
vendor's ability to provide reliable maintenance agreements;
(6) the impact on the ability of the agency to comply with laws
and rules relating to historically underutilized businesses or relating to
the procurement of goods and services from persons with disabilities;
(7) the total long-term cost to the agency of acquiring the
vendor's goods or services;
(8) the cost of any employee training associated with the
acquisition;
(9) the effect of an acquisition on agency productivity;
(10) the acquisition price; and
(11) any other factor relevant to determining the best value for
the agency in the context of a particular acquisition.
(e) Repealed by Acts 2003, 78th Leg., ch. 785, Sec. 75(2).
(f) The state auditor may audit the agency's acquisitions of goods
and services before or after a warrant is issued to pay for an acquisition.
(g) The agency may adopt rules and procedures for the acquisition of
goods and services under this section.
(h) The Health and Human Services Commission shall adopt rules and
procedures for the acquisition of goods and services under this section
that apply to all health and human services agencies, including rules
adopted with the commission's assistance that allow an agency to make
purchases through a group purchasing program except when a better value is
available through another procurement method. The rules of the health and
human services agencies must be consistent with the rules of the Health and
Human Services Commission.
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9/14/25, 12:15 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
(i) Subject to Section 524.0001(b), the Health and Human Services
Commission shall develop a single statewide risk analysis procedure. Each
health and human services agency shall comply with the procedure. The
procedure must provide for:
(1) assessing the risk of fraud, abuse, or waste in health and
human services agencies contractor selection processes, contract
provisions, and payment and reimbursement rates and methods for the
different types of goods and services for which health and human services
agencies contract;
(2) identifying contracts that require enhanced contract
monitoring; and
(3) coordinating contract monitoring efforts among health and
human services agencies.
(j) Subject to Section 524.0001(b), the Health and Human Services
Commission shall publish a contract management handbook that establishes
consistent contracting policies and practices to be followed by health and
human services agencies. The handbook may include standard contract
provisions and formats for health and human services agencies to
incorporate as applicable in their contracts.
(k) Subject to Section 524.0001(b), the Health and Human Services
Commission, in cooperation with the comptroller, shall establish a central
contract management database that identifies each contract made with a
health and human services agency. The comptroller may use the database to
monitor health and human services agency contracts, and health and human
services agencies may use the database in contracting. A state agency
shall send to the comptroller in the manner prescribed by the comptroller
the information the agency possesses that the comptroller requires for
inclusion in the database.
(l) The Health and Human Services Commission shall coordinate the
procurement practices of all health and human services agencies and
encourage those agencies to use efficient procurement practices such as the
use of a group purchasing program, combining maintenance contracts into one
contract, and obtaining prompt payment discounts. In implementing this
duty, the Health and Human Services Commission may review the procurement
and rate-setting procedures of each health and human services agency to
ensure that amounts paid to contractors are consistent and represent the
best value for the state. The Health and Human Services Commission may
disapprove a procurement and rate-setting procedure of a health and human
services agency. A health and human services agency may not use a
procurement or rate-setting procedure that has been disapproved by the
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9/14/25, 12:15 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
commission. The Health and Human Services Commission may transfer the
procurement functions of a health and human services agency to another
appropriate state agency if it determines that transferring those functions
would be advantageous to the state. Other state agencies and institutions
with experience in acquiring goods and services using the procedures
allowed under Subsections (c) and (d) shall on request assist the Health
and Human Services Commission to perform its functions under this section.
(m) Subject to Section 524.0001(b), the Health and Human Services
Commission shall develop and implement a statewide plan to ensure that each
entity that contracts with a health and human services agency and any
subcontractor of the entity complies with the accessibility requirements of
the Americans with Disabilities Act of 1990 (42 U.S.C. Section 12101 et
seq.).
(n) To the extent of any conflict, this section prevails over any
other state law relating to the procurement of goods and services except a
law relating to contracting with historically underutilized businesses or
relating to the procurement of goods and services from persons with
disabilities.
(o) If the Health and Human Services Commission does not receive any
responsive bids on a competitive solicitation for goods or services for a
state hospital operated by a health and human services agency or a state
supported living center as defined by Section 531.002, Health and Safety
Code, the commission after making a written determination that competition
is not available may negotiate with and award the contract to any qualified
vendor who meets the requirements of the original solicitation:
(1) at a price consistent with the current market value of the
goods or services; and
(2) for a term not to exceed five years.
(p) In this section, "health and human services agency" has the
meaning assigned by Section 521.0001.
Added by Acts 1997, 75th Leg., ch. 1045, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 1460, Sec. 3.11, eff. Sept. 1, 1999;
Acts 2003, 78th Leg., ch. 309, Sec. 7.07, eff. June 18, 2003; Acts 2003,
78th Leg., ch. 785, Sec. 75(2), eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 937 (H.B. 3560), Sec. 1.09, eff.
September 1, 2007.
Acts 2015, 84th Leg., R.S., Ch. 837 (S.B. 200), Sec. 2.08(b)(3), eff.
September 1, 2015.
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9/14/25, 12:15 PM GOVERNMENT CODE CHAPTER 2155. PURCHASING: GENERAL RULES AND PROCEDURES
Acts 2019, 86th Leg., R.S., Ch. 953 (S.B. 65), Sec. 16, eff. September
1, 2019.
Acts 2021, 87th Leg., R.S., Ch. 621 (S.B. 1896), Sec. 15, eff. June
14, 2021.
Acts 2021, 87th Leg., R.S., Ch. 855 (S.B. 799), Sec. 9, eff. September
1, 2021.
Acts 2023, 88th Leg., R.S., Ch. 351 (S.B. 1179), Sec. 17, eff.
September 1, 2023.
Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 2.20, eff. April
1, 2025.
Acts 2025, 89th Leg., R.S., Ch. 1145 (S.B. 1610), Sec. 27, eff.
September 1, 2025.
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TAB 14
9/14/25, 12:16 PM HEALTH AND SAFETY CODE CHAPTER 62. CHILD HEALTH PLAN FOR CERTAIN LOW-INCOME CHILDREN
Sec. 62.051. DUTIES OF EXECUTIVE COMMISSIONER AND COMMISSION IN
GENERAL. (a) The executive commissioner shall administer a state-designed
child health plan program to obtain health benefits coverage for children
in low-income families. The executive commissioner shall ensure that the
child health plan program is designed and administered in a manner that
qualifies for federal funding under Title XXI of the Social Security Act
(42 U.S.C. Section 1397aa et seq.), as amended, and any other applicable
law or regulations.
(b) The executive commissioner is responsible for making policy for
the child health plan program, including policy related to covered benefits
provided under the child health plan. The executive commissioner may not
delegate this duty to another agency or entity.
(c) The executive commissioner shall oversee the implementation of
the child health plan program and coordinate the activities of each agency
necessary to the implementation of the program, including the Texas
Department of Insurance.
(d) The executive commissioner shall adopt rules as necessary to
implement this chapter.
(e) The commission shall conduct a review of each entity that enters
into a contract under Section 62.055 or 62.155 to ensure that the entity is
available, prepared, and able to fulfill the entity's obligations under the
contract in compliance with the contract, this chapter, and rules adopted
under this chapter.
(f) The commission shall ensure that the amounts spent for
administration of the child health plan program do not exceed any limit on
those expenditures imposed by federal law.
Added by Acts 1999, 76th Leg., ch. 235, Sec. 1, eff. Aug. 30, 1999.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0192, eff. April
2, 2015.
https://statutes.capitol.texas.gov/Docs/HS/htm/HS.62.htm#62.051 1/1
TAB 15
9/14/25, 12:18 PM HEALTH AND SAFETY CODE CHAPTER 62. CHILD HEALTH PLAN FOR CERTAIN LOW-INCOME CHILDREN
Sec. 62.053. AUTHORITY OF COMMISSION RELATING TO ELIGIBILITY AND
MEDICAID COORDINATION. The commission may:
(1) accept applications for coverage under the child health plan
and implement the child health plan program eligibility screening and
enrollment procedures;
(2) resolve grievances relating to eligibility determinations;
and
(3) coordinate the child health plan program with the Medicaid
program.
Added by Acts 1999, 76th Leg., ch. 235, Sec. 1, eff. Aug. 30, 1999.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0193, eff. April
2, 2015.
https://statutes.capitol.texas.gov/Docs/HS/htm/HS.62.htm#62.051 1/1
TAB 16
9/14/25, 12:19 PM HEALTH AND SAFETY CODE CHAPTER 62. CHILD HEALTH PLAN FOR CERTAIN LOW-INCOME CHILDREN
Sec. 62.055. CONTRACTS FOR IMPLEMENTATION OF CHILD HEALTH PLAN. (a)
It is the intent of the legislature that the commission maximize the use of
private resources in administering the child health plan created under this
chapter. In administering the child health plan, the commission may
contract with a third party administrator to provide enrollment and related
services under the state child health plan.
(b), (c) Repealed by Acts 2003, 78th Leg., ch. 198, Sec. 2.156(a)(1).
(d) Repealed by Acts 2015, 84th Leg., R.S., Ch. 1, Sec. 3.1639(23),
eff. April 2, 2015.
(e) The executive commissioner shall retain all policymaking
authority over the state child health plan.
(f) The commission shall:
(1) procure all contracts with a third party administrator
through a competitive procurement process in compliance with all applicable
federal and state laws or regulations; and
(2) ensure that all contracts with child health plan providers
under Section 62.155 are procured through a competitive procurement process
in compliance with all applicable federal and state laws or regulations.
https://statutes.capitol.texas.gov/Docs/HS/htm/HS.62.htm#62.051 1/1
TAB 17
9/14/25, 12:20 PM HEALTH AND SAFETY CODE CHAPTER 62. CHILD HEALTH PLAN FOR CERTAIN LOW-INCOME CHILDREN
Sec. 62.155. HEALTH PLAN PROVIDERS. (a) The commission shall select
the health plan providers under the program through a competitive
procurement process. A health plan provider, other than a state
administered primary care case management network, must hold a certificate
of authority or other appropriate license issued by the Texas Department of
Insurance that authorizes the health plan provider to provide the type of
child health plan offered and must satisfy, except as provided by this
chapter, any applicable requirement of the Insurance Code or another
insurance law of this state.
(b) A managed care organization or other entity shall seek to obtain,
in the organization's or entity's provider network, the participation of
significant traditional providers, as defined by commission rule, if that
organization or entity:
(1) contracts with the commission or with another agency or
entity to operate a part of the child health plan under this chapter; and
(2) uses a provider network to provide or arrange for health care
services under the child health plan.
(c) In selecting a health plan provider, the commission:
(1) may give preference to a person who provides similar coverage
under the Medicaid program; and
(2) shall provide for a choice of at least two health plan
providers in each service area.
(d) The executive commissioner may authorize an exception to
Subsection (c)(2) if there is only one acceptable applicant to become a
health plan provider in the service area.
Added by Acts 1999, 76th Leg., ch. 235, Sec. 1, eff. Aug. 30, 1999.
Amended by Acts 2003, 78th Leg., ch. 198, Sec. 2.52, eff. Sept. 1, 2003.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0205, eff. April
2, 2015.
https://statutes.capitol.texas.gov/Docs/HS/htm/HS.62.htm#62.051 1/1
TAB 18
88th LEGISLATURE-REGULAR SESSION Ch. 1170, § 1
MISCELLANEOUS PROVISIONS
(Continued)
review described below, the General Revenue Fund shall be reduced and an equal amount of
the Sporting Goods Sales Tax (SGST) transfer to General Revenue-Dedicated State Parks
Account No, 64 is appropriated to TPFA for debt service expenditures on GO bonds issued and
authorized for statewide park repairs.
(1) Before October 1 ofeach year, Texas Parks and Wildlife Department (TPWD) in
cooperation with TPFA shall use expenditure schedules and any other necessary
documentation to determine the actual amount of debt service expended from both sources
on statewide park repairs and submit the findings ofthis review to the Comptroller of
Public Accounts and the Legislative Budget Board.
(2) Before October 31 ofeach year, TPWD shall transfer an amount equal to the actual costs
ofdebt service to TPFA from the SGST allocation in General Revenue-Dedicated State
Parks Account No. 64. In the event that the sum ofthe actual costs for debt service
exceeds SGST cash available for these purposes, the additional amounts shall be funded
from the available remaining balance ofGeneral Revenue-Dedicated State Parks Account
No, 64. The Comptroller shall authorize the necessary expenditure transfers at TPFA
needed to credit the General Revenue Fund from General Revenue-Dedicated State Parks
Account No. 64 for the actual costs ofdebt service.
(b) In the event that actual costs of debt service for statewide park repairs exceed the available
remaining balance of General Revenue-Dedicated Slate Parks Account No. 64, the Comptroller
shall adjust debt service payments to be made from other revenues deposited to the credit of the
General Revenue Fund accordingly.
See. 17.08. Reporting Requirement for Funds Held Outside the Treasury.
(a) The Comptroller of Public Accounts and the Legislative Budget Board shall jointly prepare a
report on funds held outside the Treasury on a biennial basis. The report should contain the
following information for operating funds and any other funds held outside the Treasury
selected by the Comptroller of Public Accounts and the Legislative Budget Board:
(1) the legal/statutory basis for the fund or revenue held outside the Treasury;
(2) the allowable uses ofthe fund or revenue held outside the Treasury;
(3) a listing of programs for which the fund or revenue held outside the Treasury is currently
expended or could be expended;
(4) the estimated or actual revenues and expended or budgeted amounts by fisral year for the
most recently completed and current fiscal biennia and
(5) the estimated or actual balance as ofAugust 31 ofeach year in the most recently
completed and current fiscal biennia.
(b) Any state agency that receives, expends, or administers funds or revenues held outside the
Treasury, either by the Comptroller of Public Accounts, the Texas Treasury Safekeeping Trust
Company, or a private financial institution shall assist the Comptroller of Public Accounts and
the Legislative Budget Board in preparing this report and shall submit all data and information
as prescribed by the Comptroller ofPublic Accounts or the Legislative Budget Board.
(c) In prescribing data to be reported and reporting deadlines, the Comptroller ofPublic Accounts
and the Legislative Budget Board shall collaborate with state agencies to maximize the use of
existing data sources and minimize work required to compile and submit information.
(d) The report shall be available to the Governor, members ofthe Legislative Budget Board, the
Senate Finance Committee and the House Appropriations Committee no later than the last day
in February ofeach year in which a regular session ofthe Texas Legislature convenes.
See. 17.09. Contract Management and Oversight.
(a) it is the intent of the Legislature that all agencies and institutions of higher education establish
effective processes and controls to manage contracts and ensure the cost-effective use of state
appropriations for contracted goods and services.
A99T-Conf-9-A IX-82 May 20, 2023
4509
Ch. 1170, § .1 88th LEGISIATURE-REGULAR SESSION
MISCELLANEOUS PROVISIONS
(Continued)
(b) Agencies and institutions should manage contracts consistent with state statute, the General
Appropriations Act, and the State ofTexas Procurement and Contract Management Guide and
ensure proper oversight ofcontract processes including:
(1) provide adequate time for applicable external reviews by the Quality Assurance Team
(QAT) and Contract Advisory Team when establishing procurement timelines;
(2) follow recommendations made by the Contract Advisory Team or adequately explain any
deviations from the recommendations and why the deviation is necessary;
(3) ensure proper justification for proprietary purchases and that contracts are established and
approved by the Statewide Procurement Division ofthe Office ofthe Comptroller;
(4) ensure that contract award decisions are determined based on best value criteria
established in solicitation documents to ensure fair and open competition;
(5) ensure that staffinvolved in contract management or administration duties are adequately
trained to perform those duties;
(6) periodically review internal contracting practices and manuals to ensure that they are
current and updated with current regulations and best practices;
(7) ensure that provisions related to service level and pricing mechanisms in existing contracts
are correctly enforced;
(8) enforce damage provisions for vendor non-performance and collect monetary refunds for
improper payments to vendors;
(9) ensure dollar values ofperformance bonds and insurance are consistent with risk ofnon-
performance; and
(10) ensure that vendor performance is reported to the Vendor Performance Tracking System
(VPTS) and that VPTS data is used in selecting vendors for contract awards.
(c) Agencies shall make a good faith effort to identify and execute savings and efficiencies in their
use of contracted goods and services. An agency or institution of higher education may not use
monies appropriated elsewhere in this Act to pay for a contract for goods or services unless it
(1) Seeks competitive bids or proposals before renewing or extending a contract that has been
in effect more than five years and is valued at the lesser of$10 million or 10 percent ofthe
agency's All Funds budget for the 2024-25 biennium. The following contracts are exempt
from the requirements ofthis Subsection (c)(l):
(A) TxSmartBuy, term, and cooperative contracts administered by the Comptroller or
Department of Information Resources;
(B) grants;
(C) interagency contracts;
(D) contracts that relate to a construction project as defined by Government Code,
Section 2166.001;
(E) contracts that relate to highway construction or highway engineering;
(F) contracts that relate to major information resources projects, as defined by
Government Code, Section 2054.003(10);
(0) contracts not required by law to be competitively procured; and
(H) managed care contracts in the Medicaid and CHIP program.
(2) Conducts a cost-benefit analysis to compare canceling or continuing any major
information resource project and related contracts subject to QAT monitoring that is more
than 50 percent over budget or over schedule. QAT must approve the cost-benefit analysis
for the project to continue. Ifthis requirement is not met, corrective actions in Section 9.02
apply.
(d) An agency or institution may request, with regards to a contract, an additional exemption from
the requirements ofSubsection (c)(1) by submitting a request to the Legislative Budget Board
which outlines the justification for requesting the exemption. The request shall be considered to
be approved unless the Legislative Budget Board issues a written disapproval within 30
A9fT-Conf-9-A IX-83 May 20, 2023
4510
88th LEGISLATURE-REGULAR SESSION Ch. 1170, § 1
MISCELLANEOUS PROVISIONS
(Continued)
business days of the date on which the staff of the Legislative Budget Board concludes its
review of the proposal to exempt the contract and forwards its review to the Chair of the House
Appropriations Committee, Chair ofthe Senate Finance Committee, Speaker ofthe House of
Representatives, and Lieutenant Governor.
The request shall state that the agency or institution agrees to enhanced oversight ofthe
contract upon Legislative Budget Board approval ofthe exemption. The Legislative Budget
Board shall determine the level ofenhanced oversight that is necessary or may choose to waive
oversight. Enhanced oversight may include, but is not limitedto, the following elements:
additional reporting requirements, increased monitoring ofthe contract, and the formation ofan
executive steering committee for the project to which the contract relates. For information
technology related contracts, an executive steering committee may include members ofQAT
and/or its designee(s). Responsibilities ofan executive steering committee may include, but are
not limited to, review ofprocurement and contract terms prior to solicitationlexecution and
ongoing oversight ofthe management ofthe contract. The Legislative Budget Board shall
determine whether an agency or institution has met the requirements ofenhanced oversight. If
the Legislative Budget Board determines that the requirements have not been met, additional
corrective actions, including but not limited to those specified in Section 9.02, may be applied.
(e) It is the intent of the Legislature that agencies and institutions minimize the use of extensions
that extend a contract beyond the base term and any optional extensions provided in a contract.
An agency or institution may not use monies appropriated elsewhere in this Act to pay for an
extension to an existing agency contract beyond the base term and optional extensions provided
for in that contract unless all the following conditions are met:
(1) The extension is limited in duration and cost to not more than one additional option
period, as defined in the contract, to address the immediate operational or service delivery
needs. Ifa contract does not contain a defined option period, the extension is limited to
one year.
(2) The agency or inatitution provides notice of the extension at least 30 calendar days prior to
execution ofthe extension by uploading required information to the Legislative Budget
Board contracts database on a form prescribed by the Legislative Budget Board, Required
information includes but is not limited to: the cost ofthe contract; the duration ofthe
contract; the reason for the extension of the contract; and a plan to ensure that the contract
can be completed within the extension period, signed by the executive director or other
similar agency or institution administrator, or designee of the agency or institution.
(3) The agency or institution ensures, prior to providing notice pursuant to Subsection (e)(2),
that all information and documents specified in Section 7.11(d) have been uploaded to the
Legislative Budget Board contracts database regardless of whether the information and
documents are otherwise required to be uploaded under Section 7.11.
(f) Each agency and institution of higher education that receives appropriations in this Act, shall
provide a report to the Legislative Budget Board and the Governor that details the steps taken to
ensure compliance with state procurement requirements and any other information required by
the Legislative Budget Board. The report for activities undertaken in fiscal year 2024 is due not
later than September 30, 2024, and a summary report for the 2024-25 biennium is due August
31,2025.
(g) The State Preservation Board is exempt from the competitive bidding process described by this
section and by Government Code, Sec. 2269,101, Contract for Facilities: Competitive Bidding,
for work related to legislative facilities,
See. 17.10. Energy Efficiency Savings for State Facilities.
(a) In this section, "facility" means a facility with at least 100,000 gross square feet.
(b) It is the intent ofthe Legislature that a state agency that is appropriated money by this Act with
charge and control over a facility shall have a remote or on-site assessment ofthe facility
performed by the Energy Systems Laboratory at Texas A&M Engineering Experiment Station
or another qualified provider to determine whether implementation of continuous
commissioning or existing building commissioning practices would result in estimated savings
A99T-Conf-9-A IX-84 May 20, 2023
4511
TAB 19
9/14/25, 12:24 PM § 391.101. Purpose | Regulations | Texas | Westlaw Precision
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter A. General Provisions
Effective: May 10, 2022
1 TAC § 391.101
§ 391.101. Purpose
Currentness
The purpose of these rules is to:
(1) provide transparency to the public, the legislature, state agencies, and vendors on the procedures
followed by HHSC procurement personnel;
(2) provide for consistent and uniform management of procurement and contracting processes; and
(3) obtain best value when purchasing goods and services to better serve Texas residents and
businesses.
Credits
Source: The provisions of this §391.101 adopted to be effective May 12, 2021, 46 TexReg 3017; amended
to be effective May 10, 2022, 47 TexReg 2732.
https://next.westlaw.com/Document/N2971FEA0D5BB11ECA822C37083975BC5/View/FullText.html?transitionType=UniqueDocItem&contextData=(sc… 1/1
TAB 20
9/14/25, 12:27 PM § 391.209. Request for Proposals | Regulations | Texas | Westlaw Precision
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter B. Procurement and Special Contracting Methods
Division 1. Procurement Methods
Effective: May 10, 2022
1 TAC § 391.209
§ 391.209. Request for Proposals
Currentness
Goods or services may be purchased through a Request for Proposals (RFP) as authorized by this section.
(1) Advertisement. Public notice of the issuance of an RFP is posted on the Electronic State Business
Daily in accordance with Texas Government Code §2155.083. The solicitation must include evaluation
and selection criteria and the process for making a selection.
(2) Minor irregularities in a response. HHSC may waive a minor irregularity or permit a respondent to
correct a minor irregularity in a response, if the irregularity:
(A) is purely a matter of form rather than substance; and
(B) does not materially affect price, quality, or delivery of the desired goods or services.
(3) Evaluation and selection. HHSC utilizes an evaluation method which provides for:
(A) the fair consideration of proposals; and
(B) if applicable, a process for determining the competitive range.
(4) Negotiations.
(A) HHS or DFPS may discuss acceptable or potentially acceptable proposals with respondents to assess
a respondent's ability to meet the solicitation requirements.
(B) After receiving a proposal but before making an award, HHS or DFPS may permit the respondent to
revise its proposal to obtain the best and final offer at any stage in the evaluation or negotiation process.
(5) Award. A contract is awarded to the respondent whose proposal offers the best value for the state in
accordance with Texas Government Code §2155.144.
Credits
Source: The provisions of this §391.209 adopted to be effective May 12, 2021, 46 TexReg 3017; amended
to be effective May 10, 2022, 47 TexReg 2732.
https://1.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000374&cite=1TXADCS391.209&originatingDoc=ID140E500CFA411ECA7… 1/1
TAB 21
9/14/25, 12:28 PM § 391.307. Review and Disposition of Protests | Regulations | Texas | Westlaw Precision
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter C. Protests
Effective: May 12, 2021
1 TAC § 391.307
Formerly cited as 1 TX ADC § 391.407
§ 391.307. Review and Disposition of Protests
Currentness
(a) Upon receipt of a protest, the Deputy Executive Commissioner of Procurement and Contracting
Services may:
(1) dismiss the protest if:
(A) it is not timely; or
(B) it does not meet the requirements of §391.305 of this subchapter (relating to Filing of a Protest);
(2) solicit written responses to the protest from other interested parties; or
(3) attempt to resolve the protest by mutual agreement.
(b) The Deputy Executive Commissioner of Procurement and Contracting Services may confer with the
HHSC Chief Counsel at any time during the review of the protest.
(c) If the protest is not dismissed or resolved by mutual agreement, the Deputy Executive Commissioner of
Procurement and Contracting Services will issue a written determination on the protest.
(1) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that no
violation of the specific statutory or regulatory provision cited by the protestant has occurred, they shall so
inform the protestant and other interested parties by letter that sets forth the reasons for the determination.
(2) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS
violated the specific statutory or regulatory provision cited by the protestant in a case where HHS has not
awarded a contract, they shall so inform the protestant and other interested parties by letter that sets forth
the reasons for the determination and any appropriate remedial action.
(3) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS
violated the specific statutory or regulatory provision cited by the protestant in a case where HHS awarded
a contract, they shall so inform the protestant and other interested parties by letter that sets forth the
reasons for the determination, which may include ordering the contract void.
(4) The Deputy Executive Commissioner of Procurement and Contracting Services' written determination is
the final administrative action by HHSC on a protest filed under this subchapter unless the protestant files
an appeal of the determination under subsection (d) of this section.
(d) The protestant may appeal the Deputy Executive Commissioner of Procurement and Contracting
Services' determination on a protest to the HHSC Executive Commissioner. The appeal must be in writing
https://1.next.westlaw.com/Document/N7216DC40B7B011EBA8DA90D3093981D0/View/FullText.html?transitionType=UniqueDocItem&contextData=(… 1/2
9/14/25, 12:28 PM § 391.307. Review and Disposition of Protests | Regulations | Texas | Westlaw Precision
and submitted by electronic mail to HHSCExecutiveCommissioner@hhs.texas.gov no later than 10
business days after the date of the Deputy Executive Commissioner of Procurement and Contracting
Services' determination. The appeal shall be limited to review of the Deputy Executive Commissioner of
Procurement and Contracting Services' determination. The protestant must mail or deliver copies of the
appeal to other interested parties, and each copy must contain a certified statement that such copies have
been provided.
(1) A protest or appeal that is not timely filed shall not be considered unless good cause for delay is shown
or the HHSC Executive Commissioner determines that an appeal raises issues that are significant to
HHSC's procurement practices or procedures in general.
(2) The HHSC Executive Commissioner may confer with the HHSC Chief Counsel at any time during the
review of the appeal.
(3) The HHSC Executive Commissioner will review the appeal of the Deputy Executive Commissioner of
Procurement and Contracting Services' determination and render a final decision on the protest issues.
(4) A decision issued in writing by the HHSC Executive Commissioner shall be the final administrative
action of HHSC on a protest determination that is appealed under this subchapter.
https://1.next.westlaw.com/Document/N7216DC40B7B011EBA8DA90D3093981D0/View/FullText.html?transitionType=UniqueDocItem&contextData=(… 2/2
TAB 22
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EXECUTIVE ADMINISTRATION DIVISION 1 TAC § 111.3
Source: The provisions of this §11 I.I adopted to be effective company has its principal place of business in
October 19, 1992, 17 TcxRcg 6894.
Texas.
§ 111.2. Definitions Payment bond-A deposit, pledge, or contract of
guaranty supplied by a success[ul bidder to protect
The following words and terms, when used in the state against loss due to the bidder's failure to
this title, shall have the following meanings, unless pay material suppliers and subcontractors. Accept
the context clearly indicates otherwise. able forms of payment bonds are: cashier's check,
Act-The State Purchasing and General Services certified check, or irrevocable letter of credit issued
Act, Texas Civil Statutes, Article 601 b. by a financial institution subject to the laws of
Texas; a surety or blanket bond from a company
Best interests of the state-Most advantageous to chartered or authorized to do business in Texas;
the state . in light of all relevant circumstances. United States treasury bond; or certificate of de
Commission-The General Services Commis posit.
sion. Performance bond-A deposit, pledge, or con
Competitive bidding-The. process of inviting and tract of guaranty supplied by a successful bidder to
obtaining bids from competing sources in response protect the state against loss due to· the bidder's
to advertised competitive specifications, by which inability to complete the contract as agreed. Ac
an award is made to the lowest and best bidder ceptable forms of performance bonds are those
meeting the specifications. The process contem listed in the definition of payment bond.
plates giving potential bidders a reasonable oppor Principal place of business in Texas-A perma
tunity to bid, and requires that all bidders be nent business office located in Texas from which a
placed on the same plane of equality. Each bidder bid is submitted and from which business activities
must bid on the same advertised specifications, are conducted other than submitting bids to gov
terms, and conditions in all the items and parts of a ernmental agencies, where at least one employee
contract. The purpose of competitive bidding is to works for the business entity submitting bids.
stimulate competition, prevent favoritism, and se
Texas resident bidder-A bidder with its princi
cure the best goods and services at the lowest
pal place of business in Texas, including a bidder
practicable price, for the benefit of the state. Com
whose majority owner or parent company has its
petitive bidding cannot occur where contract speci
principal place of business in Texas.
fications, terms, or conditions prevent or unduly
Source: The provisions of this § 111.2 adopted to be effective
restrict competition, favor a particular vendor, or February 16, 1994, 19 Tex.Reg 713.
increase the cost of goods or services without pro
viding a corresponding benefit to the state. § 111.3. Protests/Dispute Resolution/Hearing
Electronic data interchange (EDI)-Exchange of (a) Any actual or prospective bidder, offeror, or
information electronically between business parties contractor who is aggrieved in connection with the·
in a structured format, including, but not limited solicitation, evaluation, or award of a contract may
to, computer direct or indirect electronic informa formally protest to the division director (the di
tion exchange, exchange of computer tapes and rector) in whose division the action is (was) being
disks, and telefacsimile transmission. processed. Such protests must be in writing and
Local government-A county, municipality, received in the executive director's office within 10
school district, special district, junior college dis working days after such aggrieved person knows,
trict, or other legally constituted political subdivi or should have known, of the occurrence of the
sion of the state. action which is protested. Formal protests must
conform to the requirements of this subsection and
Minor technicality-A requirement in a bid invi- subsection (c) of this section, and shall be resolved
tation which, if waived or modified by the commis- in accordance with the procedure set forth in sub-
sion when evaluating bids, would not give a bidder sections (d) and (e) of this section. Copies of the
an unfair advantage over other bidders or result in protest must be mailed or delivered by the protest-
a material change in the contract. ing party to the using agency and other interested
Nonresident bidder-A bidder whose principal parties. For the purposes of this section, "intcrest-
place of business is not in Texas, but does not ed parties" means all vendors who have sub1nitted
include a bidder whose majority owner or parent bids or proposals for the contract involved.
413
--
1 TAC § 111.3 GENERAL SERVICES COMMISSION
(b) In the event of a titncly protest or appeal forth the reasons for the determination, which
under this section, the state shall not proceed fur may include ordering the contract void.
ther with the solicitation or with the award of the (0 The director's determination on a protest may
contract unless the executive director, after consul be appealed by an interested party to the executive
tation with the using agency and the appropriate director of the commission. An appeal of the di
dhision director, makes a written determination rector's determination must be in writing and must
that the award of contract without delay is neces be received in the executive director's office no
sary to protect substantial interests of the state. later than 10 working days after the date of the
(c) A formal protest must be sworn and contain: director's determination. The appeal shall be limit
(1) a specific identification of the statutory or
ed to review of the director's determination. Copies
regulatory provision(s) that the action com of the appeal must be mailed or delivered by the
plained of is alleged to have violated; appealing party to the using agency and other
interested parties and must contain an affidavit
(2) a specific description of each act alleged to that such copies have been provided.
have violated the statutory or regulatory provi
sion(s) identified in paragraph (1) of this subsec (g) The general counsel shall review the protest,
tion; director's determination, and the appeal and pre
(3) a precise statement of the relevant facts; pare a written opinion with recommendation to the
executive director. The executive director may, in
( 4) an identification of the issue or issues to be his discretion, refer the matter to the commission
resolved; ers for their consideration at a regularly scheduled
(5) argument and authorities in support of the open meeting or issue a written decision on the
protest; and protest.
(6) a statement that copies of the protest have (h) When· a protest has been appealed to the
been mailed or delivered to the using agency and executive director under subsection (0 of this sec
other identifiable interested parties. tion and has been referred to the commissioners by
(d) The director shall have the authority, prior to the executive director under subsection (g) of this
appeal to the executive director of the commission, section, the following requirements shall apply.
to settle and resolve the dispute concerning the (1) Copies of the appeal, responses of interest
solicitation or award of a contract. The director ed parties, if any, and general counsel recom
may solicit written responses to the protest from mendation shall be mailed to the commissioners,
other interested parties. and copies of the general counsel's recommenda
(e) If the protest is not resolved by mutual agree tion shall be mailed to the using agency, the
ment, the director will issue a written determina appealing party, and other interested parties.
tion on the protest. (2) All interested parties who wish to make an
(1) If the director determines that no violation
oral presentation at the open meeting are re
of rules or statutes has occurred, he shall so quested to notify the commission general counsel
inform the protesting party, the using agency, at least 48 hours in advance of the open meeting.
and other interested parties by letter which sets (3) The commissioners may consider oral pre
forth the reasons for the determination. sentations and written documents presented by
staff and interested parties. The chairman shall
(2) If the director determines that a violation of
set the order and amount of time allowed for
the rules or statutes has occurred in a case
where a contract h as not been awarded, he shall presentations.
so inform the protesting party, the using agency, (4) The commissioners' determination of the
and other interested parties by letter which sets appeal shall be by duly adopted resolution re-
forth the reas ons for the determination and the fleeted in the minutes of the open meeting, and
appropriate remedial action. shall be final.
(3) If the director determines that a violation of (i) Unless good cause for delay is shown or the
the rules or statutes h as occurred in a case commission determines that a protest or appeal
where a contract h as been awarded, he shall so raises issues significant to procurement practices
inform the protesting party, the using agency, or procedures, a protest or appeal that is not filed
and other interested parties by letter which sets timely will not be considered.
414
-
EXECUTIVE ADMINISTRATION DIVISION 1 TAC § 111.12
(j) A decision issued either by the commissioners Cross References: This Section cited in 1 TAC §113.20, (relating
to Group Purchasing Programs).
in open meeting, or in writing by the executive
director, shall be the final administrative action of HISTORICALLY UNDERUTILIZED BUSINESS
the commission. CERTIFICATION PROGRAM
Source: The provisions of this §111.3 adopted to be effective
September 16, 1982, 7 TexReg 3205; amended to be effective Authority: The provisions of these §§111.11-11 I .23 issued under
September 7, 1983, 8 TexReg 3266; amended to be effective Chapter 684, §6S(c), Acts of the 73rd Legislature (1993).
December 16, I 987, 12 TexReg 4523; amended to be effective
October 19, 1992, 17 TexReg 6894.
Cross References: This Section cited in 1 TAC § I 13.19, (relating § 111.11. Policy and Purpose
to Catalogue Purchase Procedure for Automated Information Sys
tems). It is the policy of the commission to encourage
the use of historically underutilized businesses by
§ 111.4. Ethical Standards state agencies and to assist agencies to achieve
(a) This section states the ethical standards of these goals through race, ethnic, and gender neu
conduct required of commission employees, ven tral means. The goal of this program is to promote
dors, potential vendors, and employees of other full and equal business opportunity for all bu�i
agencies when acting under authority delegated nesses in state contracting.
Source: The provisions of this §1 I 1.1 I adopted to be effective
from the commission. October 4, 1995, 20 TexRcg 7473.
(b) An employee may not: Cross References: This Section cited in 1 TAC §I 11.15, (relating
to Agency Planning Responsibilities).
( 1) participate in work on a commission con
tract knowing that the employee, or member of
their immediate family has an actual or potential § 111.12. Definitions
. financial interest in the contract, including pro The following words and terms, when used in
spective employment; this subchapter, shall have the following meanings,
(2) solicit or accept anything of value from an unless the context clearly indicates otherwise.
actual or potential vendor; Applicant-A corporation, sole-proprietorship,
(3) be employed by, or agree to work for, a partnership, joint venture, or supplier that applies
vendor or potential vendor; to the commission as an historically underutilized
( 4) knowingly disclose confidential information business.
for personal gain.
Application-A written request for certification
(c) A former employee who had a pay classifica as an historically underutilized business in the re
tion of Group 17, Step 1 or higher may not repre quired format submitted to the commission.
sent or receive compensation concerning any mat
Commodities-Materials, supplies, or equip
ter in which the former employee participated
ment.
during his or her employment with the state.
Comptroller-Comptroller of Public Accounts.
(d) A vendor or potential vendor may not: offer,
give, or agree to give an employee anything of Contractor-A supplier of commodities or ser
value. vices to a state agency under a purchase order
(e) When an actual or potential violation of sub contract or other contract.
sections (b)-(d) is discovered, the person involved • Directory-The Texas Certified Historically Un
shall promptly file a written statement concerning derutilized Business Directory.
the matter with an appropriate supervisor. The Disparity Study-The State of Texas Disparity
person may also request written instructions and Study, performed by the National Econo1nic Re
disposition of the matter. search Associates, Inc. (NERA).
(f) If an actual violation of subsections (b)-(d)
Historically Underutilized Business-A business
occurs or is not disclosed and remedied, the em
outlined in subparagraphs (C)-(H) in which the
ployee involved may be either reprimanded, sus
owner(s):
pended, or dismissed. The vendor or potential ven
dor may be barred from receiving future contracts (A) have a proportionate interest and demon
and an existing contract may be canceled. strate active participation in the control, oper
Source: The provisions of this § 111.4 adopted to be cffocth-c ation, and n1anagcmcnt of the entities' affairs;
April.20, I 993, 18 TcxReg 2297. and
415
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
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Jason LaFond on behalf of Jason LaFond
Bar No. 24103136
jlafond@scottdoug.com
Envelope ID: 106218880
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Molina Healthcare of Texas, Inc. Brief Requesting Oral
Argument
Status as of 9/29/2025 4:29 PM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Michaelle Peters mpeters@scottdoug.com 9/29/2025 4:09:30 PM SENT
Julie Wright julie.wright@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Amanda DoddsPrice amanda.price@squirepb.com 9/29/2025 4:09:30 PM SENT
Maria Williamson maria.williamson@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Mandy Patterson mpatterson@adjtlaw.com 9/29/2025 4:09:30 PM SENT
Michelle Joyner mjoyner@scottdoug.com 9/29/2025 4:09:30 PM SENT
William FCole William.Cole@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Abril Rivera arivera@scottdoug.com 9/29/2025 4:09:30 PM SENT
Nancy Villarreal nancy.villarreal@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Cory Scanlon cory.scanlon@oag.texas.gov 9/29/2025 4:09:30 PM SENT
David Johns david@cobbjohns.com 9/29/2025 4:09:30 PM SENT
Jessie Johnson jessie.johnson@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Stacey Jett sjett@adjltaw.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Cook Children's Health Plan
Name BarNumber Email TimestampSubmitted Status
Karen Burgess 796276 kburgess@burgesslawpc.com 9/29/2025 4:09:30 PM SENT
Anna Baker 791362 abaker@adjtlaw.com 9/29/2025 4:09:30 PM SENT
Amy Warr 795708 awarr@adjtlaw.com 9/29/2025 4:09:30 PM SENT
Juliana Bennington jbennington@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Jonathan Hawley jhawley@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Jason LaFond on behalf of Jason LaFond
Bar No. 24103136
jlafond@scottdoug.com
Envelope ID: 106218880
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Molina Healthcare of Texas, Inc. Brief Requesting Oral
Argument
Status as of 9/29/2025 4:29 PM CST
Associated Case Party: Cook Children's Health Plan
Jonathan Hawley jhawley@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Trisha Marino tmarino@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Katie Dolan-Galaviz kgalaviz@burgesslawpc.com 9/29/2025 4:09:30 PM SENT
Perkins Docketing Team DocketSEA@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Matthew Gordon mgordon@perkinscoie.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Texas Children's Health Plan
Name BarNumber Email TimestampSubmitted Status
Mark Emery 24050564 mark.emery@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Warren Huang 796788 warren.huang@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Paul Trahan 24003075 paul.trahan@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Susan Harris 6876980 susan.harris@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Thomas Coulter 4885500 tom.coulter@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Kayla Ahmed kayla.ahmed@nortonrosefulbright.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Wellpoint Insurance Company
Name BarNumber Email TimestampSubmitted Status
Robert Johnson 10786400 rjohnson@foley.com 9/29/2025 4:09:30 PM SENT
Michelle Ku 24071452 mku@foley.com 9/29/2025 4:09:30 PM SENT
Kristin Hernandez kristin.hernandez@foley.com 9/29/2025 4:09:30 PM SENT
Stacey Obenhaus sobenhaus@foley.com 9/29/2025 4:09:30 PM SENT
Benjamin Grossman bjgrossman@foley.com 9/29/2025 4:09:30 PM SENT
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Jason LaFond on behalf of Jason LaFond
Bar No. 24103136
jlafond@scottdoug.com
Envelope ID: 106218880
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Molina Healthcare of Texas, Inc. Brief Requesting Oral
Argument
Status as of 9/29/2025 4:29 PM CST
Associated Case Party: Superior Healthplan Inc.
Name BarNumber Email TimestampSubmitted Status
Richard Phillips 24032833 Rich.Phillips@hklaw.com 9/29/2025 4:09:30 PM SENT
J McCaig 24070083 meghan.mccaig@outlook.com 9/29/2025 4:09:30 PM SENT
Karen Walker karen.walker@hklaw.com 9/29/2025 4:09:30 PM SENT
Tiffany Roddenberry tiffany.roddenberry@hklaw.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Texas Health and Human Services
Name BarNumber Email TimestampSubmitted Status
Victoria Gomez victoria.gomez@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Jennifer Cook Jennifer.Cook@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Associated Case Party: Molina Healthcare of Texas, Inc.
Name BarNumber Email TimestampSubmitted Status
Cheryl LaFond 24104015 clafond@scottdoug.com 9/29/2025 4:09:30 PM SENT
Jason R.LaFond jlafond@scottdoug.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Aetna Better Health of Texas, Inc.
Name BarNumber Email TimestampSubmitted Status
Joseph Knight 11601275 jknight@ebbklaw.com 9/29/2025 4:09:30 PM SENT
Associated Case Party: Cecile Erwin Young, Texas Health and Human Services
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Jason LaFond on behalf of Jason LaFond
Bar No. 24103136
jlafond@scottdoug.com
Envelope ID: 106218880
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Molina Healthcare of Texas, Inc. Brief Requesting Oral
Argument
Status as of 9/29/2025 4:29 PM CST
Associated Case Party: Cecile Erwin Young, Texas Health and Human Services
Name BarNumber Email TimestampSubmitted Status
Cory Scanlon 24104599 cory.scanlon@oag.texas.gov 9/29/2025 4:09:30 PM SENT
Jeffrey Stephens jeff.stephens@oag.texas.gov 9/29/2025 4:09:30 PM SENT
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