CourtListener 10691106•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 10691106Txctapp1529 sept. 2025
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ACCEPTED
15-24-00114-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
9/29/2025 4:59 PM
No. 15-24-00114-CV CHRISTOPHER A. PRINE
CLERK
__________________________________________________________________
FILED IN
15th COURT OF APPEALS
IN THE FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS
A
USTIN, TEXAS 9/29/2025 4:59:42 PM
__________________________________________________________________
CHRISTOPHER A. PRINE
Clerk
Cecile E. Young, in her official capacity as Executive Commissioner of Texas
Health & Human Services Commission, Molina Healthcare of Texas, Inc.; and
Aetna Better Health of Texas, Inc.
Appellant,
v.
Cook Children’s Health Plan, Texas Children’s Health Plan, Superior
HealthPlan, Inc., and Wellpoint Insurance Company,
Appellees.
__________________________________________________________________
Appeal from 455th Judicial District Court, Travis County, Texas,
Trial Court Cause No. D-1-GN-24-003839,
Hon. Laurie Eiserloh, Presiding
__________________________________________________________________
APPELLANT BRIEF OF AETNA BETTER HEALTH OF TEXAS, INC.
__________________________________________________________________
TAFT STETTINIUS & HOLLISTER LLP EWELL, BROWN, BLANKE & KNIGHT LLP
Marc J. Kessler Joseph R. Knight
Admitted Pro Hac Vice State Bar No. 11601275
41 South High Street, Suite 1800 111 Congress Ave., Suite 2800
Columbus, Ohio 43215-6106 Austin, Texas 78701
(614) 220-0237 (512) 770-4010
Attorneys for Aetna Better Health of Texas, Inc.
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
The undersigned counsel of record for Appellant Aetna Better Health of
Texas, Inc. (“Aetna”) certifies that the following is a complete list of all parties to
the judgment appealed from, along with a complete list of their respective counsel
in the trial court and this Court.
Appellant: Cecile E. Young, in her official capacity as Executive Commissioner
of Texas Health & Human Services Commission
Trial-court Counsel:
Thomas Bevilacqua
Jennifer Cook
Stephanie Criscione
Ali Michelle Thorburn
Rachel Behrendt
Office of the Attorney General
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1700
Appellate Counsel:
Ken Paxton
Attorney General of Texas
Brent Webster
First Assistant Attorney General
William R. Peterson
Solicitor General
William F. Cole
Principal Deputy Solicitor General
Cory A. Scanlon
Assistant Solicitor General
Office of the Attorney General
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1700
ii
Appellant: Aetna Better Health of Texas, Inc.
Trial-court and Appellate Counsel:
Marc J. Kessler
Taft Stettinius & Hollister LLP
41 South High Street, Suite 1800
Columbus, Ohio 43215-6106
(614) 220-0237
Joseph R. Knight
Ewell, Brown, Blanke & Knight LLP
111 Congress Avenue, 28th Floor
Austin, Texas 78701
(512) 770-4010
Appellant: Molina Healthcare of Texas, Inc.
Trial-court and Appellate Counsel:
Jason R. LaFond
Cheryl Joseph LaFond
State Bar No. 24104015
Scott, Douglass & McConnico, LLP
303 Colorado Street, Suite 2400
Austin, Texas 78701
(512) 495-6300
Appellee: Cook Children’s Health Plan
Trial-court and Appellate Counsel
Amy Warr
Anna M. Baker
Alexander Dubose & Jefferson LLP
100 Congress Avenue, Suite 1450
Austin, Texas 78701-2709
(512) 482-9300
Karen C. Burgess
Katie Dolan-Galaviz
iii
Burgess Law PC
404 West 13th Street
Austin, Texas 78701-1825
(512) 482-8808
Matthew P. Gordon
Perkins Coie LLP
1201 Third Avenue, Suite 4900
Seattle, Washington 98101-3099
(206) 359.8000
Appellee: Texas Children’s Health Plan
Trial-court and Appellate Counsel
Susan Feigin Harris
Warren S. Huang
Norton Rose Fulbright US, LLP
1550 Lamar, Suite 2000
Houston, Texas 77010
(713) 651-5151
Paul Trahan
Norton Rose Fulbright US, LLP
98 San Jacinto Boulevard, Suite 1100
Austin, Texas 78701
(512) 474-5201
Thomas A. Coulter
Norton Rose Fulbright US, LLP
799 9th Street, NW, Suite 1000
Washington, D.C. 20001
(202) 662-0200
Jeff J. Wurzburg
Norton Rose Fulbright US, LLP
111 W. Houston Street, Suite 1800
San Antonio, Texas 78205
(210) 224-5575
iv
Appellee: Superior HealthPlan, Inc.
Trial-court and Appellate Counsel
Richard B. Phillips, Jr.
Holland & Knight LLP
One Arts Plaza
1722 Routh Street, Suite 15500
Dallas, Texas 75201
(214) 964-9500
Karen D. Walker
Tiffany Roddenberry
Holland & Knight LLP
315 S. Calhoun Street, Suite 600
Tallahassee, Florida 32301
(850) 425-5612
Appellee: Wellpoint Insurance Company
Trial-court and Appellate Counsel
Michelle Y. Ku
Stacy R. Obenhaus
Foley & Lardner LLP
2021 McKinney, Suite 1600
Dallas, Texas 75201
(214) 999-3000
Robert F. Johnson III
Foley & Lardner LLP
600 Congress, Suite 3000
Austin, Texas 78701
(512) 542-7000
Benjamin J. Grossman
Foley & Lardner LLP
106 E. College Ave., Suite 900
Tallahassee, Florida 32301
(850) 222-6100
v
TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................. ii
Table of Contents ......................................................................................................vi
Table of Authorities ............................................................................................... viii
Statement of the Case.................................................................................................x
Statement Regarding Oral Argument .......................................................................xi
Issues Presented ........................................................................................................xi
Statement of Facts ......................................................................................................1
Summary of the Argument.........................................................................................6
Argument....................................................................................................................8
I. The Court should dismiss this case for lack of jurisdiction
because the Executive Commissioner has not yet decided
Appellees’ protest appeals. .................................................................... 8
A. Appellees’ claims are not ripe..................................................... 9
B. Appellees fail to show that the Executive
Commissioner has engaged in any conduct outside
her authority. .............................................................................14
C. Even if the Executive Commissioner were to
erroneously deny Appellees’ appeals, she would
not act ultra vires. .....................................................................19
II. Neither HHSC nor the Executive Commissioner have
acted outside the discretion afforded by the procurement
statutes. ................................................................................................24
A. Government Code section 533.003(a)(1)..................................27
1. The text ........................................................................................28
2. The evidence...............................................................................28
B. Government Code section 536.052(d) ......................................30
1. The text ........................................................................................31
2. The evidence...............................................................................33
C. Government Code section 2155.144(c) and (d)(5) ................... 37
1. The text ........................................................................................38
vi
2. The evidence...............................................................................39
D. Government Code section 533.002 ...........................................47
1. The text ........................................................................................47
2. The evidence...............................................................................48
E. Government Code section 533.004 ...........................................52
F. Government Code section 533.003(a)(3)..................................55
1. The text ........................................................................................55
2. The evidence...............................................................................55
G. PIA disclosure of responses that Appellees
redacted .....................................................................................57
Prayer .......................................................................................................................60
Certificate of Compliance ........................................................................................61
Certificate of Service ...............................................................................................61
Appendix ..................................................................................................................61
vii
TABLE OF AUTHORITIES
Cases
Bridgeport Indep. Sch. Dist. v. Williams,
447 S.W.3d 911 (Tex. App.—Austin 2014, no pet.)............................................10
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ..................................................................................24
City of El Paso v. Madero Dev. & Constr. Co.,
803 S.W.2d 396 (Tex. App.—El Paso 1991, writ denied) ...................................10
City of El Paso, v. Heinrich,
284 S.W.3d 366 (Tex. 2009) ......................................................................... 15, 24
Hall v. McRaven,
508 S.W.3d 232 (Tex. 2016) ........................................................................ passim
Hous. Belt & Terminal Ry. Co. v. City of Hous.,
487 S.W.3d 154 (Tex. 2016) ................................................................................18
Kilgore Indep. Sch. Dist. v. Axberg,
535 S.W.3d 21 (Tex. App.—Texarkana 2017, pet. denied)................................17
Levandovsky v. Targa Res. Inc.,
375 S.W.3d 593 (Tex. App.—Houston [14th Dist.] 2012, no pet.) .....................19
Lewis v. Jacksonville Bldg. & Loan Ass’n,
540 S.W.2d 307 (Tex. 1976) ................................................................................19
Mayhew v. Town of Sunnyvale,
964 S.W.2d 922 (Tex. 1998) ..................................................................................9
Patel v. Tex. Dep’t of Licensing & Regul.,
469 S.W.3d 69 (Tex. 2015) ..................................................................................15
Patterson v. Planned Parenthood,
971 S.W.2d 439 (Tex. 1998) ............................................................................9, 10
Paxton v. Annunciation House, Inc.,
No. 24-0573, 2025 WL 1536224 (Tex. May 30, 2025) ......................................14
Perkins v. Lukens Steel Co.,
310 U.S. 113 (1940) .............................................................................................22
viii
State v. Hollins,
620 S.W.3d 400 (Tex. 2020) ................................................................................24
Sw. Elec. Power Co. v. Lynch,
595 S.W.3d 678 (Tex. 2020) ..................................................................................9
Tex. DOT v. Sefzik,
355 S.W.3d 618 (Tex. 2011) ................................................................................17
Tex. Highway Comm’n v. El Paso Bldg. & Const. Trades Council,
234 S.W.2d 857 (1950)............................................................................ 21, 22, 23
United States v. Chem. Found., Inc.,
272 U.S. 1 (1926) .................................................................................................14
Webster v. Comm’n for Law. Discipline,
704 S.W.3d 478 (Tex. 2024) ................................................................................14
Statutes
1 Tex. Admin. Code § 391.307 ............................................................. 13, 19, 20, 47
13 Tex. Admin. Code § 1.72 ....................................................................................19
Tex. Gov’t Code § 2155.076....................................................................................19
Tex. Gov’t Code § 2155.144............................................................................. 38, 46
Tex. Gov’t Code § 533.002 (now Tex. Gov’t Code § 540.0051) ............................47
Tex. Gov’t Code § 533.003(a)(1) (now Tex. Gov’t Code § 540.0204(1)) ..............28
Tex. Gov’t Code § 533.003(a)(3) (now Tex. Gov’t Code § 540.0204(3)) ..............55
Tex. Gov’t Code § 533.004 (now Tex. Gov’t Code §540.0206) .............................52
Tex. Gov’t Code § 536.052 (now Tex. Gov’t Code § 543A.0052) .........................31
Tex. Health & Safety Code § 62.055(f) ...................................................................53
Tex. Health & Safety Code § 62.155(c)(1)..............................................................53
Tex. Local. Gov’t Code § 252.061 ..........................................................................22
Other Authorities
Nichol, Ripeness and the Constitution, 54 U. Chi. L. Rev. 153, 178 (1987) ..........10
ix
STATEMENT OF THE CASE
Nature of the This appeal and underlying action seek injunctive and
Case: declaratory relief. The Appellees—health plans with
longstanding contracts with the Appellant Texas Health and
Human Services Commission (“HHSC”)—have historically
provided insurance coverage to enrollees in the STAR and
CHIP managed care programs. Following a legislatively
mandated procurement process, HHSC chose not to renew
the Appellees’ contracts or else offered them contracts in
fewer service areas than requested. Instead, HHSC
announced its intent to award new contracts to other
organizations, including Aetna, whom the agency believes
will better serve STAR and CHIP recipients and offer
greater value to Texas taxpayers. Before the Appellees
could complete their administrative protests challenging
HHSC’s proposed awards, they filed suit, asserting that it
would be unlawful for HHSC’s Executive Commissioner to
proceed with the current procurement. CR8; 74; 1419;
1819.
Trial Court: 455th Judicial District Court, Travis County, Texas, Hon.
Laurie Eiserloh, Presiding.
Course of The trial court consolidated all Appellees’ suits (CR2778)
Proceedings and conducted a combined hearing on the Executive
Commissioner’s plea to the jurisdiction and Appellees’
request for a temporary injunction. RR Vols 5-9.
Trial Court’s At the conclusion of a week-long hearing, the trial court
Disposition: promptly signed a ten-page order drafted by Appellees’
counsel denying the Executive Commissioner’s plea to the
jurisdiction and granting a sweeping injunction against the
Executive Commissioner and others acting in concert with
her. CR5875. The injunction broadly prohibits the enjoined
parties from “signing, entering into, executing,
implementing, or otherwise taking action to effectuate or
perform any contracts” relating to the procurement. Id.
x
STATEMENT REGARDING ORAL ARGUMENT
The trial-court order has sweeping consequences for nearly every Texan—
impacting millions of STAR and CHIP recipients who rely on these programs and
the taxpayers who fund them. It blocks the HHSC Executive Commissioner from
fulfilling her statutory duties and prevents the agency from contracting with
managed care organizations that HHSC has determined will better serve Texans
than the incumbent Appellees. Yet those incumbents remain in place due to
judicial overreach. The volume of parties, counsel, and briefing before this Court
reflects the magnitude of what’s at stake. Aetna believes oral argument is essential
to focus on the dispositive issues. Accordingly, Aetna respectfully urges the Court
to grant argument and consider extending the allotted time to allow meaningful
participation by more than one litigant per side.
ISSUES PRESENTED
1. Are the Appellees’ claims ripe for judicial determination, considering
that the Executive Commissioner has not yet had the opportunity to
decide Appellees’ protest appeals, which present the exact arguments and
seek the exact relief as this lawsuit?
2. Did the trial court err by denying the Executive Commissioner’s plea to
the jurisdiction because Appellees failed to show that the Executive
Commissioner acted outside the bounds of a statute that affords her some,
but less than absolute, discretion?
3. Did the trial court abuse its discretion by enjoining the Executive
Commissioner, Aetna, Molina, and others from “signing, entering into,
executing, implementing, or otherwise taking action to effectuate or
perform any contracts” resulting from a comprehensive, multi-year,
legislatively mandated procurement?
xi
STATEMENT OF FACTS
This appeal arises out of a request for proposal (“RFP”) issued by the Texas
Health and Human Services Commission (“HHSC”) on December 7, 2022.
9RR293.1 The RFP invited managed care organizations (“MCOs”) to submit bids
to provide services under HHSC contracts for three healthcare programs serving
low-income Texans: State of Texas Access Reform (“STAR”), Children’s Health
Insurance Program, and Texas Healthy Women (collectively, “CHIP”). 9RR297.
HHSC planned to award at least three contracts in each of 13 service areas across
the state, with initial terms of six years and an aggregate annual value of $9.7
billion. 9RR297-98, 321-22. MCOs offering the best value were eligible to
receive contracts in up to seven service areas. 9RR321.
The Appellees are incumbent MCOs currently serving STAR and CHIP
populations under contracts that expired years ago. 6RR142. Despite the
expiration, HHSC has been forced to repeatedly extend these contracts—at a cost
of hundreds of millions of dollars—because the agency cannot award new
contracts until the RFP process is complete. 6RR145. HHSC’s Executive
Commissioner testified that although she is statutorily prohibited from extending
contracts by more than one year, she has extended them in violation of the
1
Citations to exhibits offered at the hearing below are by reference to the page number of the
PFD file comprising the designated volume of the Reporter’s Record.
1
appropriations rider so that STAR and CHIP participants can continue to receive
the healthcare services they need. Id.
The RFP explicitly instructed all respondents that they “must notify [HHSC]
of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or
other error” in the RFP before the submission deadline. 9RR303. All respondents
agreed that by failing to raise any alleged problem with the RFP by the established
deadline they would waive “any claim of error or ambiguity in the Solicitation and
any resulting Contract.” Id.
The RFP informed prospective bidders that their 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.”
9RR313. It also stated that “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.” Id. (emphasis added). No Appellee challenged this
provision or contended that the contract awards must be based on some other
criteria.
To identify which proposals provide the best value to the state, HHSC
developed five Best Value Evaluation Criteria (“BVC”) and then asked
respondents to answer written Technical Questions and make oral presentations
designed to illuminate the respondents’ ability to meet each BVC. Reiterating its
2
ties to the relevant statutes, the RFP explained that “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.”
9RR317. Thus, bidders were explicitly on notice that HHSC was seeking, and
their responses should provide, information relevant to these statutory directives.
Not a single Appellee asserted that the RFP process was ambiguous or that its
questions failed to elicit the statutory information HHSC was required to consider.
As a result, any such claim is now unequivocally waived.
The RFP also explained how each answer to the Technical Questions would
be scored. HHSC assembled a team of subject-matter experts to evaluate the
answers, but it did not have each evaluator assign individual scores. 9RR314.
Rather, HHSC planned consensus scoring meetings at which “the HHSC
evaluation team will come to a consensus on the Technical Question Scores for
responses to each Technical Question.” 9RR314. For each respondent, HHSC
developed a written “consensus scoring rubric,” which set forth the exact scores
each respondent received for every question and explained why. See 19RR and
20RR. These documents evidence precisely what HHSC considered in evaluating
3
each proposal and why HHSC assigned each proposal a particular score. Id. Yet
the trial court refused to consider them. See 8RR139-57.
Eighteen MCOs submitted bids in response to the RFP, and they earned
scores ranging from 1,942 to 1,562 on a 2,000-point scale. 9RR1062. On March
7, 2024, HHSC announced its intent to award contracts pursuant to the RFP.
9RR422. The four highest-scoring MCOs—Molina, Blue Cross, Aetna, and
UnitedHealth—each earned contracts in seven service areas. Id. Appellee
Wellpoint (formerly Amerigroup), as the fifth-highest scoring plan, earned
contracts in six service areas. Id. Appellee Superior ranked seventh and was
selected in three service areas. Id. Appellees Cook Children’s and Texas
Children’s finished eighth and fourteenth, respectively, and consistent with their
scores, earned no contracts. Id.
Each Appellee filed a bid protest under section 391.305 of the Texas
Administrative Code, advancing the same arguments it advances in this litigation.
On June 6, 2024, HHSC’s Deputy Commissioner for Procurement and Contract
Services (“Deputy EC”) denied the protests. 9RR520; 525; 532; 540. Following
the denials, each Appellee appealed to the Executive Commissioner, continuing to
challenge the HHSC’s procurement decisions. 6RR131; see 1 Tex. Admin. Code §
391.307(d).
4
Despite actively pursuing administrative protest appeals, each Appellee also
filed suit against the Executive Commissioner, seeking an injunction to prevent her
from deciding those very appeals. CR8; 74; 1419; 1819. The trial court
consolidated the four lawsuits. CR2778. After expedited discovery, the court
conducted a combined hearing on the Executive Commissioner’s plea to the
jurisdiction (CR2949) and Appellees’ application for a preliminary injunction. See
RR5-RR8. On the last day of the hearing, the court signed, without modification, a
ten-page order drafted by Appellees’ counsel. CR5875 (App 1).
In addition to denying the Executive Commissioner’s plea to the jurisdiction,
the trial court granted Appellees’ request to prohibit the Executive Commissioner
from deciding their administrative appeals. Id. Specifically, the court enjoined the
Executive Commissioner from taking any action “to further the procurement or
contracting processes for the STAR & CHIP RFP.” CR5883. The court also
ordered that the Executive Commissioner:
and all other persons or entities in active concert or
participation with Defendant, shall refrain 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.
Id. As a result, Appellees continue to collect hundreds of millions of taxpayer
dollars under long-expired contracts, while their administrative appeals remain
unresolved—judicially stalled on the Executive Commissioner’s desk. Meanwhile,
5
MCOs such as Aetna, which have demonstrated the capacity to deliver superior
value to the state, remain unjustly sidelined.
After this appeal commenced, HHSC and the Appellees jointly requested
this Court to abate the proceedings until the 89th Legislative session concluded.
Appellees evidently believed they could convince the Legislature that HHSC was
acting contrary to the lawmakers’ directives in connection with the RFP and its
intent to award the contracts to higher-scoring MCOs such as Aetna. That effort
failed. The Legislature took no action to limit the discretion it had already granted
HHSC to carry out the procurement. Now, Appellees are left to argue—without
legislative support—that the judiciary should override the Legislature’s judgment
and declare that the Executive Commissioner exceeded her statutory authority.
SUMMARY OF THE ARGUMENT
The trial court lacked jurisdiction and should have dismissed this case
outright. It had no basis grant Appellees’ request for injunctive relief.
First, Appellees’ claims are not ripe for judicial determination. The Texas
Administrative Code affords Appellees a two-step process for resolving claims that
HHSC has violated statute in connection with a procurement, which Appellees
have commenced but not yet completed. They filed a protest identifying the
statutes they allege HHSC has violated. After the Deputy EC denied this protest,
Appellees appealed her decision to the Executive Commissioner. But their appeal
6
is still pending. By asking the judiciary to intervene before the Executive
Commissioner exercises her explicit authority to decide these issues herself,
Appellees seek an impermissible advisory opinion. Because Appellees have not
yet suffered—and may never suffer—any harm from the violations they claim, the
jurisdictional prerequisite of a ripe claim is lacking.
Second, Appellees fail to state a valid claim under the ultra vires doctrine.
Their case is premised on the assertion that HHSC violated certain statutory
mandates in connection with the RFP. But HHSC is not the defendant. The ultra
vires doctrine does not hold the leader of a state agency vicariously liable for
administrative decisions made by subordinate agency representatives. The
Executive Commissioner is presumed to act lawfully, and she retains explicit
statutory authority to decide the pending protest appeals—including determining
whether any legal violations occurred during the procurement process. Moreover,
the Executive Commissioner’s express duty to decide Appellees’ bid protest
appeals and to take next steps based on whether she sustains or denies the appeals
are future acts within her explicit grants of authority. Appellees cannot circumvent
sovereign immunity by speculating that she will act unlawfully in the future. Their
ultra vires claim therefore fails as a matter of law, and this Court should dismiss
this case for lack of jurisdiction.
7
Third, even if Appellees’ claims were ripe and legally viable, they fail on the
facts. The hearing record establishes that HHSC has conducted this procurement
within the bounds of the considerable discretion conferred on the agency by the
statutes on which Appellees rely. The RFP plainly solicited, and the bidders
plainly submitted, the very information Appellees claim was left out of the
evaluation equation. And Appellees do not even attempt to show that the outcome
of the procurement would have been any different if HHSC had given them the
preferences or considerations that they claim (incorrectly) HHSC failed to give.
These evidentiary deficiencies establish that (a) the Executive Commissioner’s
plea to the jurisdiction should have been sustained because she is immune from
suit, and (b) Appellees’ request for a temporary injunction should have been denied
because they did not establish a probability of prevailing on the merits.
ARGUMENT
I. The Court should dismiss this case for lack of jurisdiction because the
Executive Commissioner has not yet decided Appellees’ protest appeals.
The undisputed fact that the Executive Commissioner has not yet decided
Appellees’ protest appeals requires dismissal for multiple related, but independent,
reasons. First, Appellees’ claims are not ripe for judicial determination because
the injury they allege may never occur. Second, the Executive Commissioner
could not possibly have acted ultra vires because the procurement decisions made
to date have been decisions by HHSC staff members who are not defendants. The
8
Executive Commissioner’s role in the procurement is her forthcoming decision on
Appellees’ protest appeals. Finally, even if the Executive Commissioner were to
erroneously deny Appellees’ appeals, their ultra vires claims would fail pursuant
to the rationale of Hall v. McRaven, 508 S.W.3d 232, 240 (Tex. 2016), because the
Executive Commissioner has absolute discretion under the Administrative Code to
decide them and to determine what remedial action, if any, is appropriate.
A. Appellees’ claims are not ripe.
Ripeness is a component of subject-matter jurisdiction. Sw. Elec. Power Co.
v. Lynch, 595 S.W.3d 678, 682 (Tex. 2020); Mayhew v. Town of Sunnyvale, 964
S.W.2d 922, 928 (Tex. 1998). Any party may raise the issue at any time, or the
Court can consider it sua sponte. Whether a controversy is ripe for judicial
determination is a pure question of law, subject to de novo review. Id. “At the
time a lawsuit is filed, ripeness asks whether the facts have developed sufficiently
so that an injury has occurred or is likely to occur, rather than being contingent or
remote.” Patterson v. Planned Parenthood, 971 S.W.2d 439, 442 (Tex. 1998).
Ripeness is a doctrine of constitutional magnitude designed to ensure that
the judiciary does not issue advisory opinions. Id. The Texas Constitution (unlike
the federal Constitution) expressly mandates separation of powers, and it
authorizes only the attorney general to issue advisory opinions to the executive
branch of state government. Tex. Const. art. II, § 1; art. V, § 8. A case is not ripe,
9
and thus calls for a constitutionally prohibited advisory opinion, “when its
resolution depends on contingent or hypothetical facts, or upon events that
have not yet come to pass.” Patterson, 971 S.W.2d at 443.
On top of its constitutional foundation, the doctrine of ripeness is built on a
pragmatic frame. Id. Particularly applicable here, reserving judicial power for
cases that are ripe serves “to protect the agencies from judicial interference until an
administrative decision has been formalized and its effects felt in a concrete way
by the challenging parties.” Id. (quoting City of El Paso v. Madero Dev. & Constr.
Co., 803 S.W.2d 396, 398-99 (Tex. App.—El Paso 1991, writ denied)); Bridgeport
Indep. Sch. Dist. v. Williams, 447 S.W.3d 911, 917 (Tex. App.—Austin 2014, no
pet.). When parties challenge administrative actions, as Appellees do here, courts
scrupulously apply the ripeness doctrine to avoid intruding on the domains of the
politically accountable branches of government and allow them to “perform their
functions unimpeded” by judicial intervention. Id. (quoting Nichol, Ripeness and
the Constitution, 54 U. Chi. L. Rev. 153, 178 (1987)).
Appellees’ lawsuit is fatally defective because it rests on contingent facts,
events that have not yet come to pass, and an agency decision that has not yet been
formalized, much less implemented. Because the Executive Commissioner could
sustain Appellees’ protest appeals and award them all relief they seek in this
lawsuit, the jurisdictional prerequisite of ripeness is absent. Especially considering
10
the nature of relief sought here—a judicial decree that literally prohibits an
executive officer from doing her job—the courts should not interfere unless and
until Appellees demonstrate that the Executive Commissioner has unlawfully
caused them to suffer concrete injury.
Appellees’ own pleadings negate ripeness. From their initial filings all the
way through motions they have filed in this Court, Appellees have conceded that
their claimed injury is based on contingent future events that may never occur—
specifically that the Executive Commissioner may unlawfully deny their protest
appeals and then execute contracts with the winning bidders and implement them:
• Superior pled that “[t]he proposed contract awards, if implemented,
would violate multiple statutes and exceed the authority the Texas
Legislature has granted to HHSC and Defendant.” CR1420.
• Wellpoint pled that it will incur harm “if Defendant proceeds with the
STAR & CHIP procurement process and announced intended
awards.” CR4278.
• Cook Children’s pled “HHSC now stands ready to execute and direct
the implementation of the unlawfully awarded contracts that resulted
from the unlawful RFP, thereby committing ultra vires actions and
causing irreparable injury to Cook Children's and the members it
serves.” CR13.
• Texas Children’s pled that “Permitting Defendant to execute and
implement the STAR and CHIP awards would result in damages to
TCHP that cannot be measured with any certainty by a pecuniary
standard.” CR4717.
Every one of these pleadings assumes, without any factual basis, that the Executive
Commissioner has no discretion to deny the pending protest appeals but will deny
11
them anyway. Consistently, when the Appellees jointly put together a chart for the
trial court purporting to summarize the evidence they adduced in support of their
claims, they titled it anticipatorily: “Defendant Will Act Ultra Vires.” CR5841
(App. 2).
The speculative, contingent nature of Appellees’ alleged harm continues in
this Court. For example, the Children’s Plans contend that “[t]he notice of intent
to award contracts under HHSC’s current STAR & CHIP procurement would, if
finalized and implemented, inflict a seismic shift on the state’s Medicaid
landscape.” M. Temp. R. at 3 (emphasis added). Superior says “[i]f the Executive
Commissioner authorizes HHSC to execute contracts based on the intended
contract awards, her action will be ultra vires.” M. Temp. R. at 2 (emphasis
added). Wellpoint argues that it “will incur irreparable harm should the
Commissioner move forward with the new contracts or proceed further with the
subject procurements.” M. Temp. R. at 16 (emphasis added). See also Children’s
Plan M. Temp. R. at 18 (asserting that they aim to avoid the “possibility” of an
“unacceptable result”).
Yet the undisputed evidence admitted at the hearing—solicited by Appellees
themselves—establishes that the Executive Commissioner has no intention of
finalizing, executing, or implementing any contracts before she first considers
Appellees’ protest appeals. Her task in resolving the pending appeals is to decide
12
the exact issues on which Appellees’ lawsuit is based—whether HHSC acted
lawfully in the course of the procurement. This task is explicitly reserved to the
Executive Commissioner in the Texas Administrative Code, but Appellees and the
trial court have wrongly prevented her from performing it:
Q: So you’re not going to sign any contracts until you
decide the appeals?
A: That’s correct.
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.
***
Q: If the Court denies the plaintiffs’ request for an
injunction, are you poised to sign the contracts?
A: I would not -- I would not be ready to sign
contracts until after I finish the appeals process.
Q: And as part of that, you still need to determine for
yourself --
A: Yes, sir.
Q: -- whether the State complied with the law?
A: Yes, sir.
6RR132-33; see 1 Tex. Admin. Code, § 391.307(d)(3).
13
While Appellees speculate that the Executive Commissioner will treat their
pending protest appeals as a mere formality on a predetermined path to unlawful
contract awards, the judiciary must presume the opposite. Courts are bound to
presume that state officials act lawfully, in good faith, and with regularity, absent
clear evidence to the contrary. See Paxton v. Annunciation House, Inc., No. 24-
0573, 2025 WL 1536224, at *25 (Tex. May 30, 2025) (reiterating “the general rule
that coordinate branches of government receive a presumption of good faith”);
Webster v. Comm’n for Law. Discipline, 704 S.W.3d 478, 501 (Tex. 2024) (the
judiciary must extend to officials of a coordinate branch of the government “a
presumption of regularity, good faith, and legality”) (citing ).United States v.
Chem. Found., Inc., 272 U.S. 1, 14-15 (1926)
Appellees offered no evidence—let alone “clear” evidence—to rebut the
presumption. Under well-established constitutional and prudential principles of
ripeness, this Court should dismiss the case and allow the Executive Commissioner
to carry out her statutory duty to resolve the protest appeals. That process may yet
provide Appellees the relief they seek, eliminating any need for judicial
intervention into a core executive function.
B. Appellees fail to show that the Executive Commissioner has
engaged in any conduct outside her authority.
Relatedly, because the Executive Commissioner has not yet had the
opportunity to perform her duty of deciding Appellees’ protest appeals, this is an
14
ultra vires case in name only. The Executive Commissioner is not the state official
who engaged in any of the past procurement conduct of which Appellees complain,
such as designing the RFP, scoring the bids, or releasing redacted versions of the
proposal. Rather, Appellees have named HHSC’s Executive Commissioner as a
defendant simply because she is the agency’s apex official.
The Supreme Court has made clear that state action cannot be controlled by
naming top-ranking officials in their official capacities and complaining about
decisions involving other members of the entity. Ultra vires suits “do not attempt
to exert control over the state—they attempt to reassert the control of the state.”
City of El Paso, v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009). “To reassert such
control, an ultra vires suit must lie against the ‘allegedly responsible government
actor in his official capacity,’ not a nominal, apex representative who has nothing
to do with the allegedly ultra vires actions.” Hall v. McRaven, 508 S.W.3d 232,
240 (Tex. 2016) (quoting Patel v. Tex. Dep’t of Licensing & Regul., 469 S.W.3d
69, 76 (Tex. 2015)).
Undisputed evidence at the hearing confirmed that the Deputy EC oversees
the HHSC procurement department. 5RR74. The Deputy EC and her staff
conduct the procurement and then provide an action memo to the Executive
Commissioner with the recommended results. 9RR411. Notably, HHSC staff
“tries to avoid giving the Executive Commissioner any sort of advance notice
15
about the contents of a particular action memo,” underscoring her lack of
involvement in the procurement decisions prior to the formal recommendation
relating to procurements. 6RR122-23.
If any unsuccessful bidders file a protest, the Deputy EC decides whether the
protesters have demonstrated that the procurement was conducted in violation of a
specific statute. 6RR131. If the Deputy EC denies the protests and any bidder
appeals—as Appellees have—then the Executive Commissioner decides whether
the agency conducted the procurement in compliance with Texas law. 6RR132;
see also 1 Tex. Admin. Code § 391.307 (setting forth the authority of the Deputy
EC to determine whether a protest establishes a statutory violation and the
Executive Commissioner’s authority to determine any protest appeals).
The Executive Commissioner’s familiarity with the details of how the
procurement has been conducted is necessarily based on what her staff has told
her. 6RR135-36. And while she approved the action memo in reliance on her staff
conducting the procurement according to state law, the Executive Commissioner
cannot reach or render a final decision regarding the results of the procurement
until she decides the protest appeals:
Q: But you’ve testified that you relied on your staff
for purposes of this procurement.
A: I do.
Q: So you had to trust that what they did was legal?
16
A: Yes.
Q: And you still haven’t determined whether it is?
A: I’m waiting on the appeals until after we get
further down the line.
6RR142.
Appellees introduced no evidence that the Executive Commissioner
personally made any of the decisions they characterize as unlawful or in any way
acted outside the bounds of her authority. When they summarized the evidence for
the trial court, Appellees tied their proof to the Executive Commissioner only by
generically asserting (without evidentiary support) that “Defendant is
administering the STAR & CHIP RFP in conflict with governing state law by
disregarding, ignoring, or otherwise violating multiple statutory and regulatory
mandates.” CR5840 (App. 2). Tellingly, their lengthy bullet-point citations to the
record exclusively discuss action by other HHSC employees and never mention the
Executive Commissioner by name or title. See CR5841-55 (App. 2).
Absent pleadings and proof that the Executive Commissioner personally
violated a statute, Appellees’ case is a generic claim of agency misconduct, not an
ultra vires case, and it is barred by sovereign immunity. See generally Tex. DOT
v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011) (“the proper defendant in an ultra vires
action is the state official whose acts or omissions allegedly trampled on the
plaintiff’s rights”); Kilgore Indep. Sch. Dist. v. Axberg, 535 S.W.3d 21, 30 (Tex.
17
App.—Texarkana 2017, pet. denied) (plaintiff failed to state a claim against the
school district superintendent even though she was “the principal officer” of a
school district accused of illegally collecting property taxes); compare Hous. Belt
& Terminal Ry. Co. v. City of Hous., 487 S.W.3d 154, 158 (Tex. 2016) (allowing
an ultra vires claim to proceed against Houston’s Director of Public Works and
Engineering because he personally made the challenged determinations).
Every statute Appellees rely upon is directed to HHSC, not to the Executive
Commissioner. The Supreme Court in Hall expressly rejected the notion that an
apex official can be held liable on an ultra vires theory simply because others
within the agency may have acted unlawfully. See Hall, 508 S.W.3d at 240
(acknowledging that a suit against a state official is another way of pleading a case
against the entity of which the official is an agent, but rejecting the argument that
an apex official can be liable in an ultra vires case for alleged violations committed
by other members of the organization).
Appellees may argue that the Executive Commissioner cannot allow HHSC
to conduct a procurement in violation of Texas law. But that argument fails both
factually and legally. Factually, the Executive Commissioner has not yet had the
opportunity to determine—through the pending protest appeals—whether her staff
complied with the law. Legally, Hall confirms that even if an agency is acting
unlawfully, its chief officer is not acting ultra vires so long as he personally
18
remains within the bounds of his statutory authority. Because Appellees have not
identified any act by the Executive Commissioner that exceeds her lawful
authority, their ultra vires claim fails, and this Court should dismiss it for lack of
jurisdiction.
C. Even if the Executive Commissioner were to erroneously deny
Appellees’ appeals, she would not act ultra vires.
The Legislature granted HHSC the express authority to develop its own rules
for resolving vendor protests relating to purchasing issues, consistent with the
comptroller’s rules. Tex. Gov’t Code § 2155.076. HHSC’s rules are consistent
with the comptroller’s rules (see 13 Tex. Admin. Code § 1.72), and no one has
argued otherwise. “Valid rules and regulations promulgated by an administrative
agency acting within its statutory authority have the force and effect of
legislation.” Lewis v. Jacksonville Bldg. & Loan Ass’n, 540 S.W.2d 307, 310 (Tex.
1976); Levandovsky v. Targa Res. Inc., 375 S.W.3d 593, 597 (Tex. App.—Houston
[14th Dist.] 2012, no pet.) (same).
These rules explicitly address the process by which HHSC determines
whether a procurement has been conducted in accordance with state law. 1 Tex.
Admin. Code, § 391.307. The Deputy EC decides bid protests in the first instance.
1 Tex. Admin. Code, § 391.307(a)-(c). If the Deputy EC determines that a
violation has occurred before a contract has been awarded, the rules do not
mandate any particular consequence; rather the Deputy EC has absolute discretion
19
to fashion “any appropriate remedial action.” 1 Tex. Admin. Code, §
391.307(c)(2). Then, if a protestant appeals the Deputy EC’s decision, the
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.” 1 Tex. Admin. Code, § 391.307(d)(3).
That’s it. There are no restrictions whatsoever on the manner in which the
Executive Commissioner must evaluate the appeal or the criteria she must apply in
determining whether the protestant has established a statutory violation. And there
are no restrictions on what “appropriate remedial action,” if any, must be taken if a
statutory violation is found.
The Executive Commissioner is thus in the same position as Chancellor
McRaven in the Hall case. She did not personally make the decisions that
appellees allege to have violated Texas law. She is charged with deciding
Appellees’ bid protest appeals. And the rule granting her authority to perform this
task, which has the same force and effect as a statute, affords her absolute
discretion to decide the appeals and to determine appropriate remedial action, if
any. Hall, 508 S.W.3d 242.
Even if the Executive Commissioner were to erroneously determine that
HHSC complied with the applicable statutory mandates by imbedding the
legislative requirements into the BVC, technical questions, and statements of work,
20
as her staff testified, she still would not be overstepping her authority. As the
Supreme Court explained, “McRaven's interpretation is not of his organic authority
but rather federal privacy law—a law collateral to McRaven’s authority. It is
Section 5.4.6 of Regents’ Rule 10801, not FERPA, that supplies the parameters of
McRaven’s authority.” Hall, 508 S.W.3d 242.
Here, the procurement laws cited by Appellees are likewise collateral to the
Executive Commissioner’s authority to decide whether HHSC is acting in
compliance with them. The Executive Commissioner’s authority to interpret how
these laws apply to the RFP is not an interpretation of her organic authority, which
comes from 1 Texas Administrative Code, section 391.307(d)(3). “When the
ultimate and unrestrained objective of an official’s duty is to interpret collateral
law, a misinterpretation is not overstepping such authority; it is a compliant action
even if ultimately erroneous.” Hall, 508 S.W.3d 242.
That the Executive Commissioner is vested with absolute discretion to
interpret and apply the procurement laws on which Appellees rely is consistent
with historical views of these laws’ purpose. The Texas Supreme Court long ago
observed that statutory procurement directives serve as guidance to the executive
branch and 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. &
21
Const. Trades Council, 234 S.W.2d 857, 860 (1950) (quoting Perkins v. Lukens
Steel Co., 310 U.S. 113, 127 (1940)).
If the Executive Commissioner erroneously determines that HHSC properly
incorporated all applicable legislative preferences and considerations in conducting
this procurement, she may have to answer to the governor who appointed her or to
the Legislature which drafted the statutes. But the State, acting through the agency
the Executive Commissioner leads, does not have to answer to Appellees through
litigation such as this for its decision to do business with higher scoring bidders.
That is why our Supreme Court, still quoting the federal Court, concluded:
Courts have never reviewed or supervised the
administration of such an executive responsibility even
where executive duties “require an interpretation of the
law.” Judicial restraint of those who administer the
Government’s purchasing would constitute a break with
settled judicial practice and a departure into fields
hitherto wisely and happily apportioned by the genius of
our policy to the administration of another branch of
Government.
Tex. Highway Comm’n, 234 S.W.2d at 860 (quoting Perkins, 310 U.S. at 127).
If the Legislature had intended for courts to intervene whenever a
disappointed bidder challenges a state procurement, it knows how to authorize
such relief—and has done so in other contexts. For example, the Legislature has
expressly permitted bidders to seek injunctive relief against municipalities that
violate procurement requirements. Tex. Local. Gov’t Code § 252.061. The fact
22
that the Legislature has not enacted analogous statutory rights for bidders on state
contracts in the 75 years since Texas Highway Commission was decided confirms
its intent for the Executive Commissioner to interpret and apply the laws in
question here with absolute discretion.
Logically, Appellees cannot make their case better than Hall’s by suing
before the Executive Commissioner had the chance to exercise her absolute
discretion to determine HHSC’s compliance with state procurement law. If
anything, Appellees’ preemptive shot must worsen their legal position. Not only
has the premature suit and erroneous trial-court order prevented the Executive
Commissioner from exercising authority granted by administrative rules with
statutory force, but they have usurped her discretion to fashion “any appropriate
remedial action” if she were to sustain the appeals.
Rather than pursuing the administrative remedies available to them,
Appellees have secured judicially mandated paralysis—blocking HHSC from
executing a legislatively directed procurement of STAR and CHIP contracts. This
outcome serves no one but the Appellees and undermines the Executive
Commissioner’s statutory role. It directly contradicts the ultra vires doctrine as
articulated in Hall and nullifies the Executive Commissioner’s authority under 1
Tex. Admin. Code § 391.307(d)(3) to resolve bid protests and take appropriate
23
action. This Court should respectfully reverse the trial court’s decision and dismiss
the case for lack of jurisdiction.
II. Neither HHSC nor the Executive Commissioner have acted outside the
discretion afforded by the procurement statutes.
Appellees’ claims also fail on the merits. To establish jurisdiction under
their ultra vires theory, Appellees must show that the Executive Commissioner
acted without legal authority or failed to perform a purely ministerial act.
Heinrich, 284 S.W.3d at 372. None of the acts Appellees complain about are
“purely ministerial.” Appellees therefore must show that the Executive
Commissioner acted outside the bounds of a statute granting her some, but not
absolute, discretion. Hall, 508 S.W.3d at 239. For the temporary injunction to
stand, the record must not only establish the courts’ jurisdiction (it does not) but
further show that Appellees have a probable right to permanently enjoin the
Executive Commissioner from completing this procurement. State v. Hollins, 620
S.W.3d 400, 405 (Tex. 2020); Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204
(Tex. 2002).
This Appellees fail to do. The record negates both jurisdiction and the
probable-right-to-relief requirements. Although Appellees convinced the trial
court that HHSC inexplicably “ignored” legislative directives that it has applied in
numerous other HHSC procurements for decades, their contentions and proof
cannot withstand scrutiny. Appellees fail to demonstrate that the Executive
24
Commissioner or HHSC did anything but exercise the discretion granted them by
Texas law. Moreover, Appellees repeatedly fail to identify any evidence that—
even assuming ultra vires acts by the agency—such acts changed the outcome of
the procurement. Appellees thus cannot demonstrate a probability of success on
the merits.
The design and execution of the STAR and CHIP procurement was the
result of a multi-year, transparent, and inclusive effort to improve HHSC’s
procurement process. See 9RR501-03. Beginning in 2018, HHSC reviewed its
procurement processes not only with its internal staff, but with the Texas
Comptroller, the State Auditor, the Office of Inspector General, and two
professional external organizations. 9RR501. HHSC then synthesized
recommendations from all sources in designing the procurement. Id.
As HHSC entered the planning phase of this procurement, it solicited input
from Appellees and other members of the vendor community via pre-solicitation
meetings. Id. HHSC then established the BVC it would use to evaluate bids and
select the best proposals. Id. Every Appellee and other potential respondent was
invited to provide input on the BVC. 9RR502. HHSC designed technical
questions and oral presentation scenarios to assess and distinguish respondents’
relative ability to meet the BVC. 9RR501-02.
25
The whole point of the BVC, technical questions, and oral presentation
scenarios was to enable HHSC to apply the statutory directives that are at issue in
this case in a manner that distinguished among respondents and helped identify the
best bids. As the RFP states: “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.” 9RR317. The Office of
Attorney General reviewed the RFP before HHSC posted it. 9RR502.
Once HHSC posted the RFP, it hosted pre-proposal meetings to provide
Appellees and other potential respondents with information about the procurement
and allow them to ask questions. Id. The RFP informed prospective bidders, and
all Appellees agreed, that they “must notify [HHSC] of any ambiguity, conflict,
discrepancy, exclusionary specification, omission, or other error” in the RFP
before the submission deadline. 9RR303. With the exception of Wellpoint’s
objection to the way HHSC coupled four CHIP contracts with legislatively
mandated STAR contracts, no Appellee timely raised any of the purported RFP
defects it complains about today.
HHSC selected and trained a team of subject-matter experts to evaluate and
score each respondent’s bid. 9RR503. Rather than simply sum scores that each
26
individual evaluator may give, HHSC required them to discuss each response and
come to a consensus score. Id. The evaluators’ painstaking effort to objectively
measure each response against the statutorily derived BVC is set forth in hundreds
of pages of “consensus scoring rubrics.” See 19RR and 20RR. Appellees fought
hard to keep these scoring rubrics out of evidence because they demonstrate in
conclusive detail HHSC’s faithful application of every statute at issue. See
8RR139-57.
As shown below, each law that Appellees say HHSC “ignored” affords
HHSC ample discretion in its application. HHSC complied with each of them in
the design of the RFP and evaluation of the responses. And there is no evidence
that any of them had a material effect of the outcome of the procurement. For
these reasons, the trial court should have granted the Executive Commissioner’s
plea to the jurisdiction and, alternatively, should not have granted the request for
temporary injunction. Bottom line: Appellees submitted inferior responses,
confident that their status as incumbents would be all they needed to retain their
status, while Aetna and others outworked and outbid them.
A. Government Code section 533.003(a)(1)
In awarding contracts to managed care organizations, the
commission shall 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.
27
Tex. Gov’t Code § 533.003(a)(1) (now §540.0204(1)).
1. The text
Section 533.003(a)(1), originally enacted in 1997, requires HHSC—not the
Executive Commissioner, but the commission—to “give preference” to certain
organizations in awarding contracts. The text does not provide any legislative
directive on how HHSC is to apply the preference. It does not include any
instruction on how “significant participation in the organization’s provider
network” is to be determined. It does not elucidate how the preference should be
weighed against other statutory preferences in Medicaid contracting. And it does
not include any documentation requirement. HHSC’s discretion regarding the
manner in which it gives this preference during a procurement is, therefore,
absolute. Hall, 508 S.W.3d at 243.
2. The evidence
This statutory requirement served an important purpose when the state was
transitioning from fee-for-service to a managed-care model for the Medicaid and
CHIP programs because it helped HHSC “make sure that the health plans offer
contracts in their network to any of these providers who have historically served
that fee-for-service population.” 7RR69. Over time, as managed care became the
predominant model statewide, HHSC implemented rules to ensure that providers
traditionally serving Medicaid and charity populations become members of all
28
plans’ networks. According to the State Medicaid Director’s undisputed
testimony:
Health plans have to contract with Medicaid enrolled
providers. They enroll with the State first, then they can
be in a health plan network. So to say that -- you know,
any -- any health plan with a network is going to by
default have providers in it that have served Medicaid
and charity care patients because those are who the
Medicaid providers are.
Id. (emphasis added).
After requiring providers who have traditionally provided care to Medicaid
and charity care patients providers to enroll with the State, HHSC then requires
that every contracted MCO “must enter into a provider contract with any willing
provider, meaning any of these provider types listed [in the statute] who will enter
into a contract with them, they have to accept it.” 7RR70; see 12RR701 (SOW
2.6.36.25). Accordingly, “every, you know, plan in this program is required to
have those Medicaid and indigent care providers in their network if that provider
will accept the contract.” 7RR71. Therefore, as the Medicaid Director explained
without contradiction:
the requirement about Medicaid and indigent care
providers being in a network doesn’t distinguish plans
between each other because any plan with a network
which they would describe in their response would by
default have a network of Medicaid providers and charity
care providers because that's who the Medicaid providers
are. They cannot pluck a doctor who’s not enrolled in
Medicaid out of an area and put them in their network.
29
The doctors have to already been enrolled in Medicaid.
So therefore, they have a network of Medicaid providers.
7RR72-73 (emphasis added). The statutory preference is “just not a distinguishing
factor amongst plans.” 7RR69. HHSC can hardly act ultra vires in applying a
preference for which every bidder qualifies.
Even if this preference retained practical significance, Appellees introduced
no evidence that HHSC’s alleged failure to comply with section 533.003(a)(1)
made any difference in the result of the procurement. No Appellee offered
testimony that its particular network, in fact, featured “significant participation . . .
from each health care provider in the region who has traditionally provided care to
Medicaid and charity care patients.” No Appellee introduced evidence comparing
its network to that of a successful bidder in any service area the losing bidder
sought. And no Appellee showed how its score would have surpassed a relevant
successful bidder’s score if only HHSC had awarded the Appellee a preference for
its provider network.
B. Government Code section 536.052(d)
(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
30
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.
***
(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).
Tex. Gov’t Code § 536.052 (now § 543A.0052).
1. The text
Government Code section 536.052(d) concerns quality initiatives and certain
benchmarks. Subsection (a) allows MCOs financial flexibility to implement
31
quality initiatives. Subsection (b) directs HHSC to develop quality-of-care and
cost-efficiency benchmarks; but the statute does not establish a deadline by which
these benchmarks must be developed, and the evidence showed that they were not
utilized in connection with this procurement. Appellees rely on subsection (d),
which provides that HHSC—not the Executive Commissioner, but the
commission—shall give a preference in awarding MCO contracts to an
organization that “successfully implements quality initiatives under Subsection (a)
as the commission determines based on data or other evidence the organization
provides.”
The statutory text affords HHSC unconstrained discretion to “determine”
whether an organization has successfully implemented quality initiatives. The
Legislature provided no instructions on how HHSC is to make its determination
and did not require the agency to document its determination. The determination
can be based on data (of unspecified type or origin) or on other evidence the
organization provides. Similarly, the Legislature provided no guidance or
restriction on how HHSC is to implement any preference under this statute or
weigh it against preferences required by other statutes. Again, HHSC’ S discretion
regarding the manner in which it applies the preference is absolute. Hall, 508
S.W.3d at 243.
32
2. The evidence
HHSC’s Deputy Executive Commissioner for Contract Management and
Procurement Strategy, James Ramirez, used section 536.052 as an example of how
the agency incorporated statutory preferences into the BVC and how information
informing the preference was solicited through technical questions in the RFP.
The trial court asked: “How are the statutory requirements that he pointed to on
that board -- how are they incorporated in the scoring?” Ramirez answered: “They
are incorporated in the technical questions and then a higher score being given for
good answers to quality -- so the easiest one to talk about is 536.052 of the
Government Code.” 6RR208. He further explained: “We constructed a set of
questions, mostly in BVC 4, that speak to quality initiatives and the quality items
in Subsection (a) of that statute.” Id.
Ramirez also explained how the statements of work associated with BVC 4
informed each prospective bidder of HHSC’s interest in the bidder’s quality
initiatives, quality indicators, assessment, and performance. 6RR209-11. BVC 4
informed respondents that HHSC sought to determine whether each bidder
“[d]emonstrates proven strategies to monitor and manage healthcare quality and
improve key quality metrics that align with the goals of the State.” 9RR318. To
drill down on this issue, Technical Question 13 was all about quality initiatives. It
asked each respondent to:
33
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.
9RR330 (emphasis added). As Ramirez explained, HHSC implemented the
statutory preference by assigning higher scores to respondents that demonstrated
successful quality initiatives in their responses to this question. 6RR211-12.
HHSC unquestionably had discretion to implement the statutory preference in this
manner.
Not surprisingly, implementation of quality initiatives proved to be another
factor with limited utility in distinguishing among the sophisticated bidders on this
RFP. Appellees well understood that Technical Question 13 and its associated
statements of work solicited this information, and all of them—as well as the other
respondents—were able to identify successful quality initiatives.
34
Texas Children’s led off its response to question 13 by noting that a
“commitment to continuous quality improvement (QI) is embedded in our
organization’s strategic goal.” 14RR502. It emphasized that its “commitment to
continuous QI ·was most recently demonstrated by obtaining NCQA
accreditation.” Id. (emphasis in original). Among innumerable references to
quality initiatives throughout its response to question 13, Texas Children focused
on a successful “Initiative to Improve Follow-up After Hospitalization for Mental
Illness” and an “Initiative Using Data Stratification to Identify and Address
Disparities in Health Outcomes.” 14RR506.
Wellpoint devoted its answer to Technical Question 13 to discussing its
“nationally accredited Quality Assurance and Performance Improvement (QAPI)
Program.” 10RR116. Focusing on the implementation of quality initiatives,
Wellpoint told HHSC: “We designed our QAPI program to achieve measurable
improvements in health care efficiency, effectiveness, performance, accountability,
and Member outcomes.” Id. Wellpoint described in detail the process it employs
“to design, implement, and evaluate all our QI initiatives, including our QI
projects.” 10RR119-20. Wellpoint assured HHSC that it is continuously
“Implementing Interventions to Improve Outcomes.” Id. (emphasis in
original).
35
Superior opened its response to Technical Question 13 by stating that its
quality improvement efforts show “program effectiveness in all Service Areas.”
15RR109. Superior highlighted specific examples in which it had successfully
implemented quality initiatives, including its achievement of “a 16% improvement
from 2019-2020 in Asthma Medication Ratio and a 5% improvement in
comprehensive diabetes care from 2020 to 2021 for STAR Members.” Id. The
balance of Superior’s response to question 13 focuses on the successes of its
Quality Assurance and Performance Improvement Program.” 15RR109-118.
Cook Children’s likewise focused on its Quality Assurance and Performance
Improvement Program in responding to Technical Question 13. 13RR105-114.
Touting its successful implementation, Cook Children’s told HHSC that its
program “accounts for all demographic groups, care settings, and types of services
provided to STAR and CHIP.” 13RR105. The response outlined Cook Children’s
quality improvement goals for 2022 and explained the methods by which
improvement would be evaluated. 13RR106. Then it provided charts
demonstrating the statistical success of numerous quality-improvement initiatives
Cook Children’s had implemented. 13RR107.
Thus, the evidence establishes with unmistakable clarity that HHSC solicited
via Technical Question 13 information relevant to Government Code section
536.052(d), and every single Appellee provided this information in response.
36
Coupled with undisputed proof that HHSC considered all information provided in
the responses, and HHSC evaluated that information in determining the scores, this
proof conclusively establishes compliance with the statute. See 5RR109-110;
5RR171; 5RR185; 5RR190; 5RR197; 7RR29.
No Appellee introduced evidence that it had successfully implemented
quality initiatives and yet received a low score on Technical Question 13. No
Appellee proved that competing MCOs had not implemented quality improvement
initiatives. No Appellee established that, had it received a higher score on
Technical Question 13, it would have overtaken a winning bidder’s total score.
Thus, there is no evidence that HHSC—much less the Executive Commissioner—
failed to follow section 533.052(d) and no evidence that applying the statutory
preference differently would have altered the outcome of the procurement.
C. Government Code section 2155.144(c) and (d)(5)
(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), the agency may consider all
relevant factors in determining the best value,
including:
***
(5) indicators of probable vendor performance under the
37
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.
Tex. Gov’t Code § 2155.144.
1. The text
Section 2155.144 of the Government Code emphasizes the breadth of HHSC
discretion in procuring contracts, requiring it to “acquire goods or services by any
procurement method approved by the Health and Human Services Commission
that provides the best value to the agency.” Tex. Gov’t Code § 2155.144(c). It
goes on to require the agency to document that it “considered” “all relevant factors
under Subsection (d) in making the acquisition.” Id. This statute does not require
the agency to give a preference, and it does not dictate any course of action the
agency must take based on its “consideration” of any factor.
Subsection (d) sets forth a non-exclusive list of factors the agency “may
consider,” including “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.” Tex. Gov’t Code § 2155.144(d)(5)
(emphasis added). Appellees contend the Executive Commissioner acted ultra
vires because HHSC failed to consider and document the agency’s consideration of
38
respondents’ past performance. To make their argument, Appellees pretend that
they did not realize from the RFP that HHSC was interested in a vendor’s past
performance and insinuate that, despite being incumbent contractors, they did not
discuss their past performance in responding to the RFP. This is nonsense.
2. The evidence
Sixteen of the 18 bidders, including all four Appellees, were already
providing managed care services in Texas under contract with HHSC at the time of
this procurement. 6RR180-81. These sophisticated, experienced government
contractors knew perfectly well that emphasizing their past achievements was an
effective way to promote their qualifications to be selected under the current RFP.
For example, Wellpoint’s representative testified: “We have been involved
in multiple procurements in the state of Texas, and we know that providing past
performance is a good thing to do to prove that you are a good customer, that you
provide high-quality care.” 8RR116. Accordingly, Wellpoint conceded that its
response to this RFP “is filled with references to its past performance and
accomplishments.” 8RR108. Wellpoint, in fact, touted its past performance “in
almost every paragraph” of its response. Id. Cook Children’s representative
testified that its response to the RFP likewise “include[d] several highlights of [its]
25-year record of outstanding performance.” 8RR159.
39
Testimony aside, Appellees’ responses to the RFP conclusively demonstrate
that they all focused on their past performance. Looking no further than its two-
page Executive Summary, Wellpoint touted (all emphasis in original):
• Our model drives outcomes, such as our 25.24% improvement
in post-partum care from 2011-2022 (a top score in the State
for this measure), to address the most significant Member
needs.
• As evidenced by our NCQA Health Equity Accreditation,
advancing health equity is core to our purpose.
• We have partnered with our robust Network for more than 20
years — with Providers Members can trust.
• Amerigroup [n/k/a Wellpoint] placed first across all Texas
Managed Care Organizations (MCOs) in more than 10
HEDIS® measures in 2020 and increased more than 20
measures between 2018 and 2020.
• Our record of submitting reports timely along with our 99%
quality scorecard performance in FY 2021 is an indicator of
our commitment to the performance of CHIP, STAR, and
HTW.
10RR23-24. This summary set the tone for a multi-thousand page response chock
full of discussion of the entity’s past performance as an indicator of its ability to
serve under the RFP. See 10RR–11RR.
Superior opened its Executive Summary by noting, with a typo, that it
“[serves] over 2.1 million Texans in all 254 counties.” 15RR16. It went on to
emphasize its past performance, including (again, all emphasis in original):
• More than 82% of the Members we engage accept Service
Coordination, more than the combined statewide average
40
for MCOs serving STAR (75.3%) & CHIP (74.9%)
Members.
• We also grew our midwife network by nearly 40% giving
Members increased access to prenatal and post-partum care.
• Superior is the only MCO with Opioid Treatment Providers
in Travis, MRSA Central, and MRSA West, demonstrating
our ability to encourage Provider participation in the
Medicaid program.
• In 2022, 70% of Providers reported overall satisfaction with
Superior. We streamlined the Provider enrollment process,
leading to a faster turnaround and reduced the credentialing
timeline by more than 50%.
• Our Members engaged in care through Providers in our APMs
have 25% fewer ED visits, and CHIP Members had 30% fewer
inpatient admissions when connected to PCPs in our APMs.
• From 2020-2021, FQHCs reduced Csection deliveries 5.7% and
4.2% under risk-based models.
• STAR Members saw a 26.7% decrease in Readmissions for
Members with Bipolar Disorder from 2020 to 2021.
• Our compliance average for our regulatory reports since
2020 for the STAR Program of 98.55% and for the CHIP
Program of 97.80% demonstrates our consistent, timely and
accurate delivery of data.
15RR16-17. Similar past-performance references permeate the remainder of
Superior’s response. 15RR – 18RR.
Cook Children’s, which sought a contract in only one service area, was a
little more tempered. But it, too, showcased its past accomplishments where
possible in its Executive Summary (emphasis in original):
41
• We began our service to the community as a CHIP health phm
in 2000 and serve over 171,000 STAR & CHIP Members as
of December 2022.
• We significantly increased the use of Telemedicine and
Telehealth during COVID-19 and continue to develop
strategies to increase its uptake, where appropriate and effective
for our Members.
• Our successful implementation and robust oversight of the
Nonemergency Medical Transportation benefit ensures
transportation to medical appointments.
• We also currently contract with 1,400 HTW Providers and
will modify these Provider contracts to include the HTW
Program.
13RR13-14. Cook Children’s repeatedly referenced its past performance
throughout the rest of its proposal. See 13RR–14RR414.
The record does not include Texas Children’s Executive Summary. But its
heavily redacted answers to the technical questions amply demonstrate that, like
the other Appellees, Texas Children championed its past performance in its effort
to earn new contracts, including frequent reference to Texas Children’s “more than
25 years of experience in Texas Medicaid.” For example, Technical Question 17
directed respondents to: “Provide examples of how trends are identified and used
to inform continuous improvement activities and Service delivery.” 9RR332. It
would be impossible to answer this question without reference to past
performance, and here are a few examples in Texas Children’s response:
42
• Over the last two years, TCHP has invested heavily into
systems, data, and technology that allow us to identify, analyze,
and continuously improve based on the trends in our service
delivery and utilization patterns.
• TCHP has operated in STAR and CHIP for over 25 years.
• TCHP has redefined its internal processes and has opened data
access to the Medical Economics team, which has improved
data knowledge across the organization.
• In the first quarter of 2021, an evaluation of ED activity was
completed, during which we noticed an upward trend of ED
utilization.
• We successfully implemented an equitable vaccine allocation
process and framework using TCHP’s geospatial analysis
team’s analytics tracking the COVID-19 spread and vaccination
rates at the time of each vaccination rollout for people under 18
years old.
• TCHP’s efforts in the COVID-19 vaccine rollout contributed to
the reduction in COVID-19-related inpatient admissions and
costs.
• In response to a recent 32% increase in inpatient admission
among Members with sickle cell disease, TCHP created a
disease management program.
14RR536-42. Similar examples can be found in Texas Children’s responses to the
other technical questions. See 14RR415-549.
Consistent with these examples, the Executive Commissioner testified that,
in every response she personally reviewed, the bidder “included their past
performance about whatever the question was – the requirements were to address
43
how they could meet it and how they’ve done it before and doing it now.”
6RR177. And it is undisputed that whatever information bidders included about
their past performance was considered and reflected in their scores. 5RR109-110;
5RR171; 5RR185; 5RR190; 5RR197; 7RR29.
Appellees repeatedly sought to extract sound-bite testimony to the effect that
HHSC must not have “considered” past performance because the RFP did not
include a stand-alone question to the effect of “how’s your past performance
been?” Yet the evidence is undisputed that all respondents necessarily discussed
their past performance in their responses, and HHSC considered this information in
determining each respondent’s score. Ramirez explained:
Q. Well, I think we talked about the fact that HHSC
didn't consider past performance; correct?
A. If it was included in the responses we did.
Q. Okay.
A. I mean, if you answer -- most people answered the
questions with past performance, so that’s what they
were scored on.
Q. But as you sit here today, you’re not aware of any
specific document we could look to to show that past
performance was considered?
A. It was considered if it was -- we evaluated the
responses, so if it was in the responses it was
considered. I don’t want to suggest we didn’t consider
everything that y’all put in your responses. So if past
performance was there, it was considered.
44
***
Q. And do you know whether any evaluator factored that
into their scoring?
A. Again, the scoring was the entire response to the
technical question. So, I mean, if you had included
information, it would have been included in the
scoring based on how the scoring went.
5RR109-110.
Despite this overwhelming proof that the RFP requested, Appellees
provided, and HHSC considered information relating to every respondent’s past
performance, Appellees zero in on a few acontextual soundbites and anecdotes.
They posit, for example, that HHSC could not possibly have considered past
performance because Molina—the top scoring respondent—scored in the lower
ranges for quality of care according to certain publicly available report cards.
5RR261-62. But HHSC answered this vacuous accusation. When she learned
from the procurement staff that the children’s hospital plans did not score well
enough to earn contracts, the Executive Commissioner personally investigated
whether there was a principled way to add them back. But she could not find a
path to that result because HHSC cannot look at just one or two performance
measures such as the report cards. Rather “[w]e have hundreds of performance
measures that we’ve used on a SDA basis, and there wasn’t a principled way to
add them back in.” 6RR141.
45
More importantly, Appellees cannot pursue an ultra vires case under this
statute based on their view that HHSC did not “consider” past performance
properly or adequately. Section 2155.144 of the Government Code does not
include a standard by which the sufficiency of HHSC’s “consideration” of past
performance can be judicially evaluated. The Legislature requires the agency to do
nothing more than “consider” factors that indicate “probable vendor performance
under the contract,” of which past performance is merely an example. Tex. Gov’t
Code § 2155.144. The record conclusively shows that HHSC considered
everything Appellees had to say about their past performance, negating their ultra
vires claim and any probable right of recovery as a matter of law.
Proof of causation is lacking here as well. No Appellee introduced evidence
that its score would have surpassed that of a winning bidder in its preferred service
area if only HHSC had “considered” its past performance.
Nor can Appellees’ case survive based on the statute’s documentation
requirement. The concept of past performance was so pervasive throughout the
RFP, the responses, and the evaluations that, as Ramirez testified, the entirety of
the procurement file documents HHSC’s consideration of past performance.
5RR227. Of course, the consensus scoring rubrics that Appellees successfully
persuaded the trial court not to consider are replete with discussion of all
respondents’ past performance. 19RR–20 RR. And even if the statutory
46
documentation requirement were somehow lacking, that would merely emphasize
the improvidence of implementing a draconian judicial remedy before the
Executive Commissioner determines Appellees’ protest appeals. If she were to
find that HHSC did not properly document its consideration of the bidders’ past
performance, she could require “appropriate remedial action” far less disruptive
than barring the entire procurement from moving forward. 1 Tex. Admin. Code, §
391.307(c)(2).
D. Government Code section 533.002
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.
Tex. Gov’t Code § 533.002 (now Tex. Gov’t Code § 540.0051).
1. The text
Appellees focus on subsection (1)(B), which directs HHSC—not the
Executive Commissioner, but the commission—to “implement the Medicaid
managed care program by contracting with managed care organizations in a
manner that, to the extent possible . . . improves the health of Texans by . . .
promoting continuity of care.” This provision has nothing to do with HHSC’s
47
discretion in drafting RFPs, evaluating responses, or selecting entities with which it
will contract. Rather, the statute addresses only the manner in which the selected
MCOs will be contracted. HHSC plainly and undisputably satisfied this statutory
requirement.
2. The evidence
The state Medicaid Director explained how HHSC satisfies the statutory
mandate of contracting in a manner that, to the extent possible, promotes
continuity of care:
So we have a lot of continuity of care requirements in our
contract both for a transition like this and for every day.
So right now we -- for kind of regular times not related to
a procurement change, we have a requirement that for 90
days if a plan receives a new member who just switched
to them, that they would have to honor all the prior
authorizations in place, they have to honor that member’s
relationship with their provider, with their providers even
if they’re out of network until the plan has a chance to
assess that person themself if needed or help them switch
to a new provider. It’s also, you know, likely -- these
plans don't have exclusive networks, so providers are
often in, you know, the network of multiple plans, so it’s
possible someone would switch and not have to switch
providers at all.
7RR62. She even offered undisputed evidence that HHSC’s approach works,
explaining that the same contracting approach that HHSC is pursuing here was
recently implemented in the procurement of another Medicaid program, with a
high degree of success in maintaining continuity of care:
48
During these times where we have a procurement, there's
a kind of extra long continuity period in the contract for
these transitions that’s six months. So for six months the
plan has to honor those prior authorizations, honor that
member’s relationship with their provider. And, you
know, we just rolled out our STAR+PLUS program,
procured that. This went into -- STAR+PLUS went into
effect a month ago. And we had those same requirements
there where that very high needs population of older
adults and people with disabilities, you know, some of
them transitioned plans, and we have those requirements
in place, and we have heard very few complaints or
questions about any continuity issues.
7RR62-63. Appellees did not offer one whit of evidence to the contrary.
Consistent with this testimony, the Statement of Work in the RFP sets forth
lengthy, detailed contract requirements that a winning bidder must meet to promote
continuity of care. See 12RR731-34. The contractual mandate straightforwardly
implements the statutory requirement: “For newly enrolled Members, the MCO
must ensure that care is not disrupted or interrupted, particularly for Members
whose health or BH condition has been treated by specialty care providers, or
whose health could be placed in jeopardy if Covered Services are disrupted or
interrupted.” 12RR731 (emphasis added). The contractual requirements
implementing this directive go on for pages. There is no evidence identifying a
different manner of contracting that would promote continuity of care to a greater
extent than the way HHSC is doing it.
49
Nevertheless, Appellees succeeded in using section 533.002 as a
smokescreen to obscure the trial court’s vision of the hearing record. They
emphasized the superficial point that whenever an incumbent plan is not selected
for a new contract, by definition, that plan’s members must change to a new
managed care plan. The mere fact that HHSC does not intend to select the
incumbent plan for a new contract in every instance cannot possibly mean that
HHSC is proposing to contract in a manner that does not promote continuity of
care “to the extent possible.”
Yet the trial court was seemingly distracted by the smokescreen. On the first
day of the hearing, after an HHSC witness testified that the agency did not consider
the mere fact that members’ plans might change because of the legislatively
mandated new procurement of the managed care contracts, the court incredulously
interrupted:
THE COURT: Hang on a second. All right. Just stop for
a minute.
MR. COULTER: Yes, Your Honor.
THE COURT: So we have 1.5 million Texans switching
plans, and you didn’t consider that a continuity of care
issue; is that right?
5RR190. The trial court erroneously equated the fact that members will change
healthcare plans with a disruption in the continuity of their healthcare. An HHSC
witness later again explained that continuity of care was not a major factor in
50
scoring the bidders’ proposals because all successful bidders were contractually
required to ensure continuity of care when members transitioned from one plan to
another—exactly what the statute addresses. The court again expressed its
skepticism, seemingly suggesting that a non-incumbent plan was presumptively
incapable of complying with HHSC’s contractual requirements regarding
continuity of care:
Q. (BY MR. TRAHAN) So continuity of care was not a
major factor in the scoring process for this procurement,
was it?
A. It was not a major factor because it is something that
is inherently expected of all managed care organizations
that when a member switches from one plan to another,
whether it is their choice or their plans have switched out,
that their care does not drop off. That is inherent in the
operation of the Medicaid program.
THE COURT: But how did you determine that other than
what they told you?
THE WITNESS: How did -- I'm sorry?
THE COURT: How did you determine whether or not the
care would drop off? I mean, how did you know that the
care wouldn't drop off?
THE WITNESS: Because there's requirements in the
statement of work around that that --
THE COURT: Yeah, but the only thing you had to show
that was what those care plans told you; is that right?
THE WITNESS: Yes, ma’am, what they --
THE COURT: Okay. That’s all I want to know. Go
ahead, Mr. Trahan.
51
6RR82-83. But the statute does not require HHSC to “know” that care will not
drop off or to contract with incumbent plans forever. Section 533.002 only
requires the agency to incorporate provisions into its MCO contracts that promote
continuity of care to the extent possible. That is exactly what HHSC did. The
evidence conclusively establishes that the Commissioner is not acting ultra vires
when HHSC contracts with MCOs in the manner outlined in SOW 2.6.48, which
has multiple requirements to meet this statutory directive. 12 RR731-34.
E. Government Code section 533.004
This statute concerns mandatory Medicaid contracts. STAR is a Medicaid
program. CHIP is not. Four respondents qualified for a “mandatory” STAR
contract in their service area, and Appellees do not complain about HHSC’s intent
to award STAR contracts to these four bidders. See Tex. Gov’t Code § 533.004
(now Tex. Gov’t Code §540.0206). HHSC also intends to award a CHIP contract
to each of these four bidders in the same service area as their STAR contract.
Appellees accuse the Executive Commissioner of acting ultra vires with respect to
these CHIP contracts.
It is undisputed that the entities entitled to mandatory STAR contracts did
not outscore Appellees. Appellees contend that HHSC’s announced intent to
award CHIP contracts to entities with inferior proposal scores violates the agency’s
statutory duty to “ensure that all contracts with child health plan providers under
52
Section 62.155 are procured through a competitive procurement process in
compliance with all applicable federal and state laws or regulations.” Tex. Health
& Safety Code § 62.055(f).
But Appellees ignore the accompanying provision in section 62.155 that in
selecting a health plan provider under CHIP, the commission “may give preference
to a person who provides similar coverage under the Medicaid program.” Tex.
Health & Safety Code § 62.155(c)(1). The statutory text does not provide the
agency with guidance regarding the manner in which it “may” apply this
preference or the weight it “may” give to the preference. These details are left to
HHSC’s absolute discretion. Hall, 508 S.W.3d at 243.
Exercising this discretion, HHSC determined there were sufficient practical
reasons to couple the CHIP contracts with the four mandatory STAR contracts. As
resources available to low-income parents change, the plan under which each of
their children qualifies for benefits—STAR or CHIP—frequently changes too. It
is not uncommon for a particular child to switch between a STAR plan and a CHIP
plan multiple times. See, e.g., 6RR87 (explaining the “ping-pong” eligibility
consequences of a mom getting a second job and then losing the job six months
later). Under the express authority of section 62.155(c)(1), “the agency recognized
that kids move back and forth between these programs and it would just be better
for the kids if they didn’t have to change plans when that happens, so you link
53
STAR and CHIP, and so if they have to move back and forth, they’re still in the
same MCO, and that MCO has both contracts.” 6RR86.
The Executive Commissioner testified that HHSC has been coupling STAR
and CHIP contracts for this reason “going back to the mid-90s.” 6RR154. In
terms establishing the antithesis of an ultra vires act, she explained: “the children
that we serve tend to move back and forth between Medicaid and CHIP because
their income levels fluctuate.” Id. “[B]y awarding them together, you ensure that
children are able to move seamlessly, as their incomes fluctuate fairly frequently,
and continue to have one plan with a family.” 6RR155. In some instances, a
family with two children may have one child eligible for STAR and one eligible
for CHIP, in which case “having one plan is really helpful, even though your kids
are in Medicaid and CHIP.” Id.
That Appellees convinced the trial court to second-guess such a
quintessential exercise of the discretion vested in the state agency responsible for
administering these programs underscores the folly of this entire case. Because the
coupling of CHIP contracts with mandatory STAR contracts is plainly within the
commission’s absolute discretion to apply the preference of section 62.155(c)(1) in
favor of the families these programs serve, it cannot support Appellees’ attempt to
overcome the Executive Commissioner’s immunity from suit, much less support an
injunction against completing this procurement.
54
F. Government Code section 533.003(a)(3)
In awarding contracts to managed care organizations, the
commission shall:
(3) consider the need to use different managed care plans
to meet the needs of different populations.
Tex. Gov’t Code § 533.003(a)(3) (now Tex. Gov’t Code § 540.0204(3).
1. The text
Here again, Appellees rely on a statute that does not mandate a procurement
preference or impose a documentation requirement. The text requires the
agency—not the Executive Commissioner, but the commission—to do nothing
more than “consider” whether it needs to use different managed care plans to meet
the needs of different populations. HHSC has absolute discretion regarding the
effect, if any, this consideration may have on the award of a contract. Hall, 508
S.W.3d at 243.
2. The evidence
The RFP is permeated with inquiries about each plan’s ability to meet the
needs of different populations within each program. BVC 1, for example, focused
on respondents’ ability to deliver “person-centered” services, tailored to the
individual needs of the varying Medicaid and CHIP populations. 9RR317. BVC 2
further concerned respondents’ ability to manage and support different members’
needs in a manner that is “culturally and linguistically appropriate, accessible, and
responsive.” 9RR317.
55
The oral presentations covered each bidders’ ability to meet the needs of
pregnant women, focusing on maternal mortality and morbidity. 9RR319.
Technical Question 1 solicited information on each plan’s ability to develop a
person-centered service plan and to meet the needs of members with special health
care needs. 9RR325. Technical Questions 3, 4, and 8 asked each plan to explain
its ability to serve a member with unique health care and/or communication needs.
9RR326, 328. Technical Question 13 required bidders to explain their quality
improvement and performance evaluation strategies and initiatives specific to the
varying populations of the STAR, CHIP, and HTW programs. 9RR330.
When HHSC’s Medicaid Director explained in detail that these technical
questions solicited the very information section 533.003(a)(3) requires HHSC to
“consider,” 9RR82-98, Appellees aptly demonstrated that their entire complaint is
based on a misunderstanding (or mischaracterization) of the statute:
Q. Why didn’t you just ask them in terms of your past
performance, what have you done to meet the needs of
different populations? Why didn’t you just ask that
question like the statute requires?
7RR89. Nothing in section 533.003(a)(3) links this issue to “past performance”
and nothing in the text “requires” HHSC to ask in the RFP “what have you done to
meet the needs of different populations?” Not only does HHSC have absolute
discretion on how to solicit and evaluate information that statute merely requires
the agency to “consider,” but the specific series of technical questions HHSC
56
developed is an objectively superior way of seeking information relevant to the
specific populations of the STAR and CHIP programs.
Appellees’ unsupported contention that HHSC should have phrased the
questions differently comes nowhere close to supporting a cause of action against
the Executive Commissioner for acting outside of her statutory authority. And,
once more, Appellees offered no proof whatsoever that they would have overtaken
a higher-scoring bidder of only HHSC had “considered” the needs of different
populations in some unspecified different manner. The record relating to the
section 533.003(a)(3) requirement conclusively negates both Appellees’ attempt to
overcome the Executive Commissioner’s immunity and the probable-right-of-
recovery element of the injunction claim.
G. PIA disclosure of responses that Appellees redacted
Appellees’ claim that the inadvertent disclosure of heavily redacted RFP
responses “destroyed the integrity of the procurement process” rests entirely on
speculation. The record flatly contradicts their assertion that the Executive
Commissioner acted ultra vires, and it provides no basis for enjoining completion
of the procurement.
The facts are not in dispute—though Appellees obscure them through
selective framing. On August 11, 2023, Aetna’s outside counsel in Ohio submitted
an open records request to HHSC seeking proposals from a completed procurement
57
for the STAR+PLUS program, which serves adults with disabilities and seniors.
9RR1053. The STAR+PLUS procurement is wholly separate from the STAR and
CHIP procurement at issue here, which concerns children and pregnant women.
9RR293.
Due to a clerical error, a legal assistant in HHSC’s Open Records
Department mistakenly sent a CD to the law firm containing “redacted Public
Information Act copies” of the proposals relating not to the STAR+PLUS
procurement, but to the STAR and CHIP procurement at issue here. 9RR402.
These same redacted proposals are on HHSC’s public website, including
Appellees’ redacted proposals that are in the public record of this case. See 10RR–
11RR; 13RR–14RR414; 14RR415-549; 15RR–18RR. Appellees themselves
decided what to redact in the proposals, and they submitted the redacted versions
to HHSC with the express understanding that they were “Public Information Act
copies” subject to disclosure under the Public Information Act. 9RR343-45.
HHSC sent the CD to Aetna’s outside counsel more than six months after Aetna
submitted its bid in response to the RFP and shortly before the oral presentations
that comprised the last 10% of the scoring. 9RR402.
Appellees did not serve discovery on Aetna or its counsel or call a witness
from either organization to testify at the hearing. There is no evidence of what
Aetna’s counsel did upon receiving the unrequested information. Specifically,
58
there is no evidence that counsel provided the CD to Aetna and no evidence that
Aetna used it in any way in connection with the procurement at issue.
Instead, Appellees rely on a chain of hypotheticals: if Aetna received the
CD, and if it was shared internally, and if it influenced oral presentations, then
perhaps it affected scoring. This is pure conjecture. The Deputy Executive
Commissioner testified unequivocally that HHSC does not know what the law firm
did with the CD and does not know what Aetna used to prepare its presentation.
5RR139. Appellees’ expert likewise offered only conditional speculation—“If
Aetna had received this redacted proposal…”—without any proof of receipt, use,
or impact. See e.g. 6RR37.
The only concrete evidence on this issue disproves causation. The Deputy
EC reviewed the matter during Appellees’ protest appeals and appropriately
reasoned and ultimately concluded that the disclosure did not compromise the
integrity of the procurement. 5RR148. Notably, oral presentations did not alter
the bidders’ relative rankings, and scoring would not have changed even if Aetna
had received the CD. 5RR140; 5RR149.
The scoring data confirms this. All 18 bidders performed competently, with
no oral presentation score below 170 out of 200. 9RR1059–60. Aetna earned 190
points. 9RR1059. Even if Aetna had scored the lowest of all oral presentation
59
scores—170—its overall score would still have exceeded the highest-scoring
Appellee by 12 points. 9RR1062.
At most, Appellees have shown that an HHSC legal assistant made a clerical
mistake. Once realized, HHSC senior staff diligently evaluated the impact of the
mistake and determined that it was immaterial to the procurement. Such a mistake
is not an ultra vires act—certainly not one attributable to the Executive
Commissioner. There is no evidence that Aetna received the information, no
evidence that Aetna used it, and no evidence that it affected the outcome.
Speculation and stacked inferences cannot overcome the Executive
Commissioner’s immunity or satisfy Appellees’ burden to show a probable right of
recovery.
PRAYER
For all of these reasons, Aetna respectfully urges the Court to vacate the trial
court’s order, dismiss this case with prejudice, and award Aetna such further relief
to which it may be entitled.
Respectfully submitted,
EWELL, BROWN, BLANKE & KNIGHT LLP
/s/ Joseph R. Knight
Joseph R. Knight
State Bar No. 11601275
111 Congress Avenue, 28th Floor
Austin, Texas 78701
512.770.4010
jknight@ebbklaw.com
60
TAFT STETTINIUS & HOLLISTER LLP
/s/ Marc J. Kessler
Marc J. Kessler
Admitted Pro Hac Vice
41 South High Street, Suite 1800
Columbus, Ohio 43215-6106
(614) 220-0237
Attorneys for Aetna Better Health of Texas, Inc.
CERTIFICATE OF COMPLIANCE
As required by Texas Rule of Appellate Produce 9.4(i)(3), I certify that this
Brief contains 13,142 words, excluding the parts of the brief exempted by Rule
9.4(i).
/s/ Joseph R. Knight
Joseph R. Knight
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document has been
filed and served on all counsel of record on September 29, 2025, via the Court’s
electronic filing service.
/s/ Joseph R. Knight
Joseph R. Knight
APPENDIX
1. Trial court order
2. Appellees’ “Summary of the Evidence”
61
APPENDIX 1
Filed in The District Court
of Travis
County, Texa s
OCT 4 2024
At
CAUSE NO. D-1-GN-24-003839 Dis Clerk
COOK CHILDREN'S HEALTH 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 Commissioner of the §
Texas Health and Human Services §
Commission, §
§
Defendant. § 353rd JUDICIAL DISTRICT
TEMPORARY INJUNCTION AND ORDER DENYING
DEFENDANT'S PLEA TO 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-1-GN-24-003839, D-1-GN-24-003874,
D-1-GN-004059, and D-1-GN-24-004327); the parties' prehearing briefing; the evidence admitted
in the record and adduced at the hearing held on September 30, October 1, October 2, and October
4, 2024; applicable authorities; the arguments of counsel, and all other matters properly before the
Court, the Court DENIES Defendant's Plea and GRANTS Plaintiffs' Applications.
169317251.2 Page | of 10
Page 5875
The Court makes the following findings:
I. The Court has subject-matter jurisdiction over the claims in these consolidated
cases because Plaintiffs have alleged and offered evidence demonstrating that Defendant will act
ultra vires in awarding, executing, and implementing the contracts arising out of Request for
Proposals No. HHS0011152 (the "RFP" or "STAR & CHIP RFP") because she has acted ultra
vires in administering the RFP. Plaintiffs properly seek only prospective 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 processes, 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 has personal jurisdiction over 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 State
of Texas Access Reform ("STAR") 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 contracts 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
to the relief sought on their claims that Defendant has violated and, unless enjoined, will continue
to violate statutory and regulatory requirements applicable to the RFP.
169317251.2 Page 2 of 10
Page 5876
7. Specifically, Plaintiffs have established that Defendant has violated and will
continue to violate the Texas Government Code, Texas Health and Safety Code, and Texas
Administrative Code in procuring managed care contracts for STAR & CHIP in Texas, and that
any award, execution, or implementation of Defendant's intended contract awards would be
unlawful, because:
Defendant's intended contract awards will fail to give preference to managed care
organizations ("MCOs") that have significant participation in their provider
networks from each healthcare provider in the region who has traditionally
provided care to Medicaid and charity care patients as required by Texas
Government Code § 533.003(a)(1);
Defendant's intended contract awards will fail to give preference to MCOs that
have successfully implemented quality initiatives as required by Texas Government
Code § 536.052(a) and (d);
Defendant has failed to develop and implement the cost-efficiency and quality of
care benchmarks mandated by Texas Government Code § 536.052(b) despite being
subject to an obligation to do so for over a decade. Defendant's intended contract
awards will likewise fail to give preference to MCOs that have met such
benchmarks as required by Texas Government Code § 536.052(d);
Defendant's intended contract awards will fail to consider MCQOs' past
performances as required by Texas Government Code § 2155.144;
Defendant's intended contract awards will fail to evaluate and certify that MCOs
are reasonably able to fulfill the terms of the STAR contract as required by Texas
Government Code § 533.0035 and to review MCOs to confirm their ability to fulfill
the requirements of the CHIP contract as required by Texas Health & Safety Code
§ 62.05 1(e);
In August 2023 and again in October 2023, Defendant wrongfully disclosed the
RFP proposals of Plaintiffs and other respondents-with the August disclosure
recipients including legal counsel for Aetna, one of the competing respondents,
while the procurement was ongoing and prior to completion of the oral
presentations-thus, destroying any integrity of the procurement process and
creating an unlevel playing field that cannot ensure fair consideration of all
proposals and is far from consistent, uniform, and transparent as required by 1
Texas Administrative Code §§ 391.101 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
169317251.2 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);
e 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;
e 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);
e 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 13 of the Texas Constitution by
not providing a meaningful bid protest process after promising one in Texas
1
Administrative Code Chapter 391; and
e 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 Texas Administrative
|
Code § 391.307(d)(1).
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. HHS0013071 (the
"STAR Kids RFP"). The procurement processes in the STAR & CHIP RFP and the STAR Kids
RFP P are substantively identical. Plaintiffs have demonstrated that Defendant has no intention of
169317251.2 Page 4 of 10
Page 5878
voluntarily correcting her course ofaction for future procurements, including altering the processes
and procedures used in administering the STAR Kids RFP. The resulting STAR Kids contract
awards will therefore also violate statutory and regulatory requirements and be ultra vires.
10. Plaintiffs have established a probable right to relief and that Defendant's award,
execution, and implementation of the intended, unlawfully procured STAR & CHIP contracts will,
if not enjoined, cause Plaintiffs to suffer imminent and irreparable injury.
I. Cook Children's has established that execution and implementation of the contracts
would result in irreparable harm to Cook Children's because:
The loss of STAR & 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 STAR Kids program is in jeopardy because
the larger STAR & CHIP contracts provide economies of scale to limit losses from
STAR Kids;
Cook Children's 100,000-plus STAR & CHIP members 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 disruptions, 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 plans and consequently will need to pay more
for pharmaceuticals;
Cook Children's 375 employees are at risk of losing their jobs-both the 70% of
employees who focus on STAR & CHIP and the 30% who focus on STAR Kids;
and
New STAR & CHIP entrants in the Tarrant Service Area will likely poach Cook
Children's experienced employees before the new contracts go into effect-thus
threatening Cook Children's STAR & CHIP operations while it is still required to
provide services under its current contracts.
12. TCHP has established that execution and implementation of the contracts would
result in irreparable harm to TCHP because:
169317251 .2 Page 5 of 10
Page 5879
TCHP's 425,000 STAR & CHIP members will be forced to change their health
plans, impacting their access to care;
TCHP has suffered and will continue to suffer disruptions in workforce
threatening the future viability of the health plan as employees voice concern
aboutt job security in light of the intended contract awards;
TCHP's 650 employees are at risk of losing their jobs, impacting the financial
health of its entire Texas Children's Health Care System beyond that of the health
plan;
TCHP has already suffered and will continue to suffer the poaching of its well-
trained employees by other MCOs further endangering its operations while it
remains under contract with HHSC;
TCHP will lose members and providers, further threatening the viability of the
health plan and confusing members and providers;
TCHP has and will suffer damage to its reputation and goodwill; and
TCHP's participation in the STAR Kids program is at risk because the larger STAR
& CHIP contracts are needed to provide economies of scale to limit losses from
STAR Kids. If TCHP loses its STAR Kids contract, its 26,000 STAR Kids
members would need to change their health plans, thereby adversely impacting
those members' access to care, adversely impacting TCHP's workforce, adversely
impacting TCHP's ability to operate and damaging TCHP's reputation and
goodwill.
13. Superior has established that execution and implementation of the contracts would
result in irreparable harm to Superior because:
Superior will experience a reduction in the number of STAR & CHIP members it
serves today, forcing members to change plans even before the operational start
date of the new contracts;
Superior will need to begin reducing its workforce just as new MCO entrants and
MCOs expanding their membership will seek to poach Superior'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 as contract renewals are being
negotiated over the next few months and Superior's leverage in provider contract
negotiations will be substantially diminished;
Superior has made substantial investments in partnerships that promote HHSC's
value-based care priorities. These partnerships involve risk-sharing agreements
1693172512 Page 6 of 10
Page 5880
between Superior and the partner entities and have been built to scale over time.
Superior will lose the benefit of its initial investments in these partnerships; and
Superior's ability to provide the same level of service currently provided under
existing STAR & CHIP contracts through the August 31, 2025, expiration date will
be diminished due to workforce challenges that would be caused by execution of
the STAR & CHIP contracts, which will impact Superior's operations and cause it
to suffer reputational damage.
14. Wellpoint has established that execution and implementation of the contracts would
result in irreparable harm to Wellpoint because:
Almost 380,000 current Wellpoint members will be forced to change their health
pian, thus losing access to their existing Wellpoint provider network;
Wellpoint will be forced to consider substantial reductions in and/or relocations of
its existing 1,200-plus-person workforce dedicated to the Texas Medicaid
programs;
Wellpoint has already suffered and will continue to suffer 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 provide
uninterrupted healthcare to its members, and its ability to do so will be substantially
jeopardized if there are key staff vacancies;
Wellpoint has already suffered and will continue to suffer difficulty retaining its
existing, robust provider network in the impacted service areas. Maintaining its
network of healthcare providers is critical to Wellpoint's commitment to providing
high-quality, cost-efficient healthcare for the entire duration of its existing
contracts. Worse yet, Wellpoint has learned that some providers are informing
members that Wellpoint will no longer be providing STAR & CHIP services in
impacted areas and are encouraging them to switch plans on the basis of
Defendant's intended contract awards;
Wellpoint has 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 years. Wellpoint will lose the
benefit of its investments in those service areas and partnerships.
There is no legal remedy that can fully compensate Wellpoint for (1) the loss of its
members, (2) the harm to its business resulting from the intended, unlawfully
procured contract awards, 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
169317251.2 Page 7 of 10
Page 5881
nevertheless intends to execute and begin implementing the intended, unlawfully
procured contract awards. In addition, the harm to Wellpoint is imminent as
Defendant does not intend to correct her unlawful course of action for future
procurements or the ongoing STAR Kids RFP.
15. Plaintiffs have also presented evidence that they will begin losing STAR & CHIP
members now, even though operations under the intended STAR & CHIP contract awards are not
scheduled to start until September 1, 2025. Providers are already informing Plaintiffs' members
that Plaintiffs will no longer be providing STAR & CHIP services in certain service areas of the
state and are encouraging members to switch plans. The confusion among providers and members
alike will only worsen if the intended contract awards are executed notwithstanding the pending
challenge to their legality.
16. Money damages are not adequate compensation because the harms Plaintiffs will
suffer cannot be measured by any certain pecuniary standard. Furthermore, Plaintiffs cannot be
adequately compensated in damages because Defendant is immune from suit for damages and any
limited waiver of immunity is insufficient to compensate for Plaintiffs' harms.
17. The harms to Plaintiffs outweigh any potential harms to Defendant or HHSC that
would result from preserving the status quo during the pendency of these consolidated cases.
Neither Defendant nor HHSC would be harmed if the execution and further implementation of the
intended STAR & CHIP contracts are delayed given that (1) operations under the intended contract
awards are not scheduled to start until September 1, 2025, and (2) HHSC has previously delayed
the RFP several times and was able to continue providing 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
harm if Defendant executes and implements the intended, unlawfully procured contract awards.
The intended contract awards will impose significant harm and confusion on millions of Texas's
169317251.2 Page 8 of 10
Page 5882
STAR & CHIP members. More than 1.5 million Texans, mostly children and 43% of the total
STAR & CHIP population will be forced to change health plans. This in turn would cause
significant harms to those beneficiaries, for which there is no adequate remedy at law available
against Defendant, including:
Confusion among those beneficiaries due to difficulties in informing them of the
change in available health plans;
Disruption to those beneficiaries' access to care and continuity of care, thereby
threatening the medical care and the very health and welfare of those beneficiaries;
and
Administrative burdens of finding new health plans and potentially new healthcare
providers.
19. The injunctive relief Plaintiffs request is narrow in scope and tailored to prohibit
Defendant from continuing to act ultra vires. The balance of equities and public interest weigh in
favor of granting Plaintiffs' requested injunctive relief.
Accordingly, it is therefore ORDERED that Defendant's Plea to the Jurisdiction is
DENIED.
It is further ORDERED that Plaintiffs' Applications for Temporary Injunction are
GRANTED. The Court ORDERS that:
Defendant, and all other persons or entities in active concert or participation with
Defendant, shall refrain 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 RFPP or to further the
procurement or contracting processes for the STAR & CHIP RFP; and
Defendant, and all other persons or entities in active concert or participation with
Defendant, shall refrain from further proceeding with the procurement of, issuing a
notice of intent to award or awarding contracts under, or otherwise implementing
results from the STAR Kids RFP.
1693172512 Page 9 of 10
Page 5883
IT IS FURTHER ORDERED that Defendant shall provide notice of this Temporary
Injunction to her officers, agents, servants, employees, and attorneys, as well as any persons or
entities in active concert or participation with Defendant.
IT IS FURTHER ORDERED that Plaintiffs' bond or cash deposit in lieu of bond is set in
the amount of $1,000.
IT IS FURTHER ORDERED that, on the filing by Plaintiffs of the bond and on approving
the bond according to law (or the cash deposit in lieu of bond), the Clerk shall issue a Temporary
Injunction in conformity with the law and the terms of this order.
IT [IS FURTHER ORDERED that this Temporary Injunction shall not expire until final
judgment in this case is entered or this case is otherwise dismissed by this Court.
IT IS FURTHER ORDERED that the trial on Plaintiffs' u/tra vires claims seeking
declaratory relief, permanent injunctive relief, and mandamus relief is set for November 3, 2025.
SIGNED on October T 2024,
JUDGE PRESIDING
Judge Laurie Eiserloh
455th District Court
11/01/2024 09:28:21
169317251.2 Page 10 of 10
Page 5884
APPENDIX 2
10/4/2024 2:39 PM
Velva L. Price
District Clerk
Travis County
CAUSE NO. D-1-GN-24-003839 D-1-GN-24-003839
Jessica A. Limon
COOK CHILDREN’S HEALTH PLAN, § IN THE DISTRICT COURT
TEXAS CHILDREN’S HEALTH §
PLAN, SUPERIOR HEALTHPLAN, §
INC., and WELLPOINT INSURANCE §
COMPANY, §
Plaintiffs, §
§ TRAVIS COUNTY, TEXAS
v. §
CECILE ERWIN YOUNG, in her §
official capacity as Executive §
Commissioner of the Texas Health and §
Human Services Commission, §
§ 353RD JUDICIAL DISTRICT
Defendant. §
PLAINTIFFS’ SUMMARY OF ULTRA VIRES EVIDENCE
Plaintiffs Cook Children’s Health Plan (“Cook Children’s”); Texas Children’s Health Plan
(“Texas Children’s”); Superior HealthPlan, Inc. (“Superior”); and Wellpoint Insurance Company
(“Wellpoint,” and collectively, “Plaintiffs”) submit this summary of key evidence in support of
their requests for temporary injunctive relief against Defendant Cecile Erwin Young
(“Defendant”), in her official capacity as Executive Commissioner of the Texas Health and Human
Services Commission (“HHSC”).
The key evidence summarized below was presented at the hearing on September 30,
October 1, October 2, and October 4, 2024. It establishes, among other things, that (1) Defendant
is committing and will continue to commit ultra vires acts in connection with Request for Proposals
No. HHS0011152 (the “RFP” or “STAR & CHIP RFP”); (2) Defendant will not be injured if
Plaintiffs’ request for temporary injunctive relief is granted; and (3) Plaintiffs will suffer imminent
and irreparable harms if immediate relief is not entered.
169393855.4
Page 5839
I. DEFENDANT’S ULTRA VIRES ACTS
State officials commit ultra vires acts when they act without legal authority or fail to
perform purely ministerial acts. City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).
Ultra vires actions also include acts of “limited discretion . . . in conflict with the constraints of the
law authorizing the official to act.” Hous. Belt & Terminal Ry. Co. v. City of Houston, 487
S.W.3d 154, 163 (Tex. 2016); see also Wilson v. Cmty. Health Choice Tex., Inc., 607 S.W.3d 843,
854–55 (Tex. App.—Austin 2020, pet. denied) (unlawful HHSC procurement administration can
constitute ultra vires action).
The evidence admitted at the hearing has confirmed that Defendant is administering the
STAR & CHIP RFP in conflict with governing state law by disregarding, ignoring, or otherwise
violating multiple statutory and regulatory mandates. Moreover, Defendant acknowledged on the
stand that these violations are ongoing—and therefore Plaintiffs properly seek prospective relief—
because the STAR & CHIP RFP has not yet been completed. See Oct. 1 Hr’g Tr. vol. 7, at 17:22–
18:1 (Young) (“[Q.] Mr. Ramirez testified earlier that the procurement is ongoing. You would agree
with that? A. Yes, sir.”). Indeed, Defendant indicated that she has put resolution of Plaintiffs’
internal HHSC protest appeals “on pause because of the court action,” id. at 18:5–10, and that she
is awaiting this Court’s ruling for guidance, see id. at 20:17–25 (“I know that some of the issues
in this case are related to some of the same issues that some of the people who have appealed are
relying on, so I want to make sure that I am following whatever the Court says.”). And, if
Defendant is not enjoined by the Court from executing and implementing the announced STAR &
CHIP contracts, she will proceed with further ultra vires acts. See id. at 21:3–15 (“[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 other, on each of the individual appeals. And then once
that process is finished, then I would move forward.”); id. at 36:8–23 (similar).
2
169393855.4
Page 5840
The evidence has established that Defendant is violating the following statutory and
regulatory requirements:
No Preference for Medicaid and Charity Care Providers. Defendant is failing to “give
preference to organizations that have significant participation in [their] provider network[s] from
each health care provider in the region who has traditionally provided care to Medicaid and charity
care patients” as required by Texas Government Code section 533.003(a)(1).
Ms. Molina agreed that this preference is mandatory. Sept. 30 Hr’g Tr. vol. 2, at 41:19–
42:2 (Molina).
Mr. Ramirez explained that this preference relates to a respondent’s existing provider
network at the time of the RFP, not to future planned networks. Sept. 30 Hr’g Tr. vol.
4, at 29:6–30:5 (Ramirez).
Ms. Zalkovsky called this statutory preference antiquated and of limited utility. Oct. 2
Hr’g Tr. vol. 9, at 46:21–47:5, 47:6–12, 47:19–48:4 (Zalkovsky).
The RFP neither defined the word “preference” nor explained how mandatory
preferences would be applied; indeed, Ms. Molina acknowledged that “the word
‘preference’ is not in the RFP.” Sept. 30 Hr’g Tr. vol. 2, at 35:16–36:13 (Molina).
3
169393855.4
Page 5841
Information about respondents’ provider networks, even information that HHSC had
readily available, was considered only if a respondent provided it in response to a
Technical Question. Sept. 30 Hr’g Tr. vol. 4, at 37:17–23 (Ramirez).
The responses to the RFP were not broken down by region and there was no scoring
based on region. Sept. 30 Hr’g Tr. vol. 2, at 47:15–23 (Molina).
The Technical Question relevant to section 533.003(a)(1) (No. 9) does not “directly ask
any bidder to tell the agency about whether or not they have significant traditional
providers in their networks.” Oct. 1 Hr’g Tr. vol. 8, at 35:21–25 (Ramirez).
The RFP does not otherwise ask respondents about providers in their networks who
traditionally provide care to Medicaid and charity care patients. Sept. 30 Hr’g Tr. vol.
2, at 45:24–46:11 (Molina).
The RFP respondents were directed to respond only to the Technical Questions and not
provide any other materials. Sept. 30 Hr’g Tr. vol. 2, at 34:22–35:2 (Molina). Texas
Children’s representative Michael Murphy confirmed that Texas Children’s interpreted
the Technical Questions as requesting specific information that should be provided and
noted that in other states, a respondent might be penalized for offering information
beyond the call of the Technical Question. Oct. 4 Hr’g Tr. (Murphy).
Evaluators were not trained on or asked to score the section 533.003(a)(1) preference.
Sept. 30 Hr’g Tr. vol. 2, at 38:21–39:2, 39:13–15 (Molina).
Nothing in the evaluator training materials, the sole training provided to evaluators,
instructed evaluators “to give any of the statutory preferences or considerations at issue
in this case.” Sept. 30 Hr’g Tr. vol. 4, at 36:8–14, 40:5–15 (Ramirez); see also Sept. 30
Hr’g Tr. vol. 2, at 39:13–15 (Molina) (agreeing that “there was no discussion of
preference whatsoever with the evaluators”).
Ms. Molina confirmed that the STAR & CHIP RFP does not “appl[y] preference” under
section 533.003(a)(1) in the “ordinary meaning” of “choosing one thing over another.”
Sept. 30 Hr’g Tr. vol. 2, at 43:11–18 (Molina).
Ms. Molina could not tell whether any Plaintiff has received a preference under section
533.003(a)(1). Sept. 30 Hr’g Tr. vol. 2, at 50:4–7 (Molina).
Ms. Zalkovsky admitted that she has no direct knowledge of any respondent receiving
the section 533.003(a)(1) preference based on information provided about provider
networks. Oct. 2 Hr’g Tr. vol. 9, at 46:18–20, 77:6–15 (Zalkovsky).
4
169393855.4
Page 5842
Mr. Ramirez claimed that the “only way the preference was given” is through a baked-
in preference in the “graduated nonlinear scoring approach” used to score Technical
Question No. 9, Sept. 30 Hr’g Tr. vol. 4, at 50:9–13, 52:11–15 (Ramirez), but this
scoring methodology merely penalizes low-performing plans rather than reflecting a
preference, id. at 51:18–52:4; is used for all Technical Questions, not only Technical
Question No. 9, id. at 54:8–12; and gives respondents preferential scores even if they
do not include Medicaid and charity care providers in their networks, id. at 57:25–
58:19.
Based on Mr. Ramirez’s interpretation of the final scores, all eighteen respondents
received the preference required by section 533.003(a)(1). Sept. 30 Hr’g Tr. vol. 4, at
47:1–4 (Ramirez).
One respondent, Humana, received a “perfect score” on Technical Question No. 9 even
though it did not describe in its proposal whether providers in its network have
traditionally provided Medicaid and charity care. Sept. 30 Hr’g Tr. vol. 4, at 57:25–
58:19 (Ramirez); see also Oct. 1 Hr’g Tr. vol. 8, at 42:10–13 (Ramirez) (conceding that
he does not know if new entrants Humana and Bayou Health have “similarly extensive
networks as plans that were already operating in Texas”).
Another respondent, Blue Cross and Blue Shield of Texas, received a perfect score on
Technical Question No. 9 even though they have no federally qualified health centers
in the Hidalgo Service Area, and federally qualified health centers are traditional
providers of Medicaid and charity care in that service area. Oct. 2 Hr’g Tr. vol. 4, at
110:9–22 (Sanders); P-283; see also Sept. 30 Hr’g Tr. vol. 4, at 29:23–30:5 (Ramirez)
(acknowledging that section 533.003(a)(1) addresses provider networks by region (i.e.,
service area)).
The only document that reflects the support for a respondent’s score and thus whether
a respondent received a preference in scoring under section 533.003(a)(1) is HHSC’s
consensus scoring rubric, Oct. 1 Hr’g Tr. vol. 8, at 29:10–22 (Ramirez), but there is no
evidence that any consensus scoring rubric reflects a higher score based on that
preference.
No Preference for Quality of Care or Cost-Efficiency Benchmarks. Defendant is failing
to “give preference to an organization that offers a managed care plan that successfully implements
quality initiatives . . . or meets quality of care and cost-efficiency benchmarks” as required by
Texas Government Code section 536.052(d).
Ms. Molina and Mr. Ramirez acknowledged that Texas law requires HHSC to give
preference in the RFP to respondents who meet quality of care or cost-efficiency
benchmarks. Sept. 30 Hr’g Tr. vol. 3, at 52:11–14 (Molina); Sept. 30 Hr’g Tr. vol. 4, at
30:11–25 (Ramirez).
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Mr. Ramirez confirmed that HHSC has not developed quality of care or cost-efficiency
benchmarks that can be used in procurements. Oct. 1 Hr’g Tr. vol. 5, at 42:25–43:16
(Ramirez); see also Oct. 4 Hr’g Tr. (Thompson) (confirming same).
Defendant did not consider benchmarks under section 536.052(d) as part of the RFP
and has no plans to utilize benchmarks in the future to reassess the results of the RFP.
Sept. 30 Hr’g Tr. vol. 2, at 51:9–17 (Molina); Sept. 30 Hr’g Tr. vol. 3, at 83:21–23
(Molina); Sept. 30 Hr’g Tr. vol. 4, at 31:1–5 (Ramirez); Oct.1 Hr’g Tr. vol. 5, at 43:17–
20 (Ramirez).
Mr. Ramirez contends that HHSC is permitted under section 536.052 to give preference
to respondents who “successfully implement quality initiatives” in lieu of giving
preference to respondents who have met quality of care or cost-efficiency benchmarks.
Sept. 30 Hr’g Tr. vol. 4, at 31:6–10 (Ramirez).
Mr. Ramirez admitted that the preference for implementation of quality initiatives
under section 536.052(d) applies to existing or prior quality initiatives, not future
initiatives. Sept. 30 Hr’g Tr. vol. 4, at 31:11–32:1 (Ramirez).
The relevant Technical Questions (Nos. 12–15) do not request corresponding data or
evidence related to successful implementation of quality initiatives. Sept. 30 Hr’g Tr.
vol. 2, at 52:25–53:6 (Molina).
The page limit for Technical Question No. 13 was ten pages, even though the referenced
section of the Statement of Work on quality was fourteen pages long. Oct. 2 Hr’g Tr.
vol. 9, at 15:17–16:4 (Ramirez).
Ms. Molina conceded that she cannot tell if any Plaintiff has received a preference
under section 536.052(d). Sept. 30 Hr’g Tr. vol. 2, at 55:8–17 (Molina).
Ms. Zalkovsky admitted that she has no direct knowledge of any respondent receiving
the section 536.052(d) preference based on information provided about quality
initiatives. Oct. 2 Hr’g Tr. vol. 9, at 46:18–20, 77:16–22 (Zalkovsky).
All eighteen respondents received scores of three or above on Technical Questions Nos.
12–15, the questions that corresponded to quality. Sept. 30 Hr’g Tr. vol. 4, at 47:8–13
(Ramirez); P-198.
Nothing in the evaluator training materials instructed evaluators “to give any of the
statutory preferences or considerations at issue in this case.” Sept. 30 Hr’g Tr. vol. 4,
at 36:8–14 (Ramirez).
Evaluators were not instructed on the section 536.052(d) preference. Sept. 30 Hr’g Tr.
vol. 2, at 38:21–39:2, 39:13–15 (Molina).
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Evaluators were instructed to consider only the materials provided by the respondents
and did not verify whether any assertions about quality were true. Sept. 30 Hr’g Tr. vol.
2, at 53:14–20 (Molina); Sept. 30 Hr’g Tr. vol. 2, at 33:12–24 (Molina); Oct. 1 Hr’g Tr.
vol. 5, at 39:13–24 (Ramirez).
Evaluators did not consider the extensive quality data HHSC has about respondents.
Sept. 30 Hr’g Tr. vol. 4, at 37:13–16, 38:12–15 (Ramirez) (agreeing that “the agency
did not consider any . . . data in this procurement unless it was provided in response to
one of the questions”).
Molina scored highest in the STAR & CHIP RFP even though, by HHSC’s own
estimation, it scores in the lower ranges on the agency’s quality data and “does not meet
quality of care measure minimum performance standards in any of the programs it
operates in.” Sept. 30 Hr’g Tr. vol. 4, at 69:2–18 (Ramirez); P-69. Indeed, when
Molina’s value-based enrollment metrics are compared to Texas Children’s in the three
Service Areas (“SAs”) that Texas Children’s currently serves, Molina has the lowest
autoenrollments of all plans in those SAs while Texas Children’s has the highest and is
slated to lose all its membership in those SAs under the intended contract awards. Oct.
4 Hr’g Tr. (Murphy); see also Oct. 4 Hr’g Tr. (Thompson) (confirming that Molina
scores low on statewide on quality metrics, along with BCBS of Texas and Aetna—
which were all among the highest ranking MCOs in the procurement).
The only document that reflects the support for a respondent’s score and thus whether
a respondent received a preference in scoring pursuant to section 536.052(d) is HHSC’s
consensus scoring rubric, Oct. 1 Hr’g Tr. vol. 8, at 29:10–22 (Ramirez), but there is no
evidence that any consensus scoring rubric reflects a higher score based on that
preference.
HHSC attempted to obfuscate from the Legislature issues in this procurement,
including the fact that HHSC did not consider quality metrics in the STAR & CHIP
procurement. Oct. 1 Hr’g Tr. vol. 8, at 35:20–36:10 (Zalkovsky); P-299.
No Consideration or Documentation of Past Performance. Defendant is failing to
“consider” and “document . . . past vendor performance” as required by Texas Government Code
section 2155.144(c) and (d).
Ms. Molina acknowledged that Texas law requires consideration and documentation of
past performance. Sept. 30 Hr’g Tr. vol. 3, at 52:5–10 (Molina); Sept. 30 Hr’g Tr. vol.
3, at 55:19–23 (Molina).
Mr. Ramirez agreed that HHSC considered past performance to be a relevant factor
under section 2155.144 in the STAR & CHIP RFP. Sept. 30 Hr’g Tr. vol. 4, at 33:16–
19 (Ramirez):
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Mr. Ramirez agreed that HHSC is therefore required to document that it considered
past performance as part of the RFP. Sept. 30 Hr’g Tr. vol. 4, at 34:14–17 (Ramirez).
Mr. Ramirez admitted that past performance “was not an express and independent
consideration in this procurement”; that “there is no specific documentation showing
the agency’s consideration of relevant factors including past performance”; and that
“the agency did not require the submission of past vendor performance.” Sept. 30 Hr’g
Tr. vol. 4, at 34:18–35:3 (Ramirez).
Ms. Molina conceded that “the words ‘past performance’ are [not] going to show up
anywhere” in any evaluations of respondents’ proposals. Sept. 30 Hr’g Tr. vol. 2, at
60:22–61:3 (Molina).
Ms. Zalkovsky admitted that she has no direct knowledge of any respondent receiving
preference based on information provided about past performance. Oct. 2 Hr’g Tr. vol.
9, at 46:18–20, 77:25–78:3 (Zalkovsky).
Evaluators were instructed to consider how respondents would perform in the future
and did not “document anything about what [respondents] have done in the past or are
presently doing.” Sept. 30 Hr’g Tr. vol. 4, at 37:9–16 (Ramirez).
Nothing in the evaluator training materials instructed evaluators “to give any of the
statutory preferences or considerations at issue in this case.” Sept. 30 Hr’g Tr. vol. 4,
at 36:8–14 (Ramirez).
HHSC rejected Mercer’s recommendation to include past performance as a separate
category with independent scoring weight. Sept. 30 Hr’g Tr. vol. 3, at 67:3–8 (Molina);
P-114.003.
HHSC did not inform Defendant that Mercer’s recommendation to include past
performance as a separate evaluation criterion was not implemented. Oct. 1 Hr’g Tr.
vol. 7, at 28:12–21 (Young); P-116.
HHSC had considered past performance during previous STAR & CHIP procurements.
Sept. 30 Hr’g Tr. vol. 4, at 62:17–63:2 (Ramirez).
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During the 2018 procurement, past performance was weighted 24% during proposal
evaluation. P-018.158.
During the 2011 procurement, past performance was expressly listed in the proposal
evaluation criteria. P-017.002.
Mr. Ramirez conceded that it was neither unfair nor unlawful for HHSC to consider
past performance as part of prior STAR & CHIP procurements. Oct. 1 Hr’g Tr. vol. 6,
at 44:6–47:17 (Ramirez).
Superior’s quality analysis shows that, in eleven of the thirteen service areas, the
highest-ranking plan (or the plan tied for the highest ranking) will be eliminated from
STAR & CHIP. Oct. 2 Hr’g Tr. vol. 9, at 102:11–23 (Sanders).
Texas Children’s representative Michael Murphy also confirmed that Molina, for
example, which has the lowest percentage of autoenrollments of any of the plans in the
SAs that Texas Children’s serves, finished first in the procurement; in contrast, Texas
Children’s is slated to lose its entire membership despite having the highest percentage
of autoenrollments for all the SAs it serves. Oct. 4 Hr’g Tr. (Murphy).
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No Promotion of Continuity of Care or Reduction of Administrative and Nonfinancial
Barriers. Defendant is failing to “promot[e] continuity of care” and “reduce[] administrative and
other nonfinancial barriers for recipients in obtaining health care services” as required by Texas
Government Code section 533.002.
Ms. Molina confirmed that “there was an affirmative decision by HHSC not to look at
the displacement of STAR and CHIP members in making the intended contract
awards.” Sept. 30 Hr’g Tr. vol. 2, at 32:6–9 (Molina); see also Sept. 30 Hr’g Tr. vol. 3,
at 76:4–25 (Molina) (“[W]e did not consider the numbers. We considered just what was
in the responses in that in awarding the contract. So we did not look at numbers.”); Oct.
1 Hr’g Tr. vol. 6, at 29:22–30:1 (Ramirez) (“[Q.] Did HHSC consider the transition of
hundreds of thousands if not over a million of Texans when evaluating the proposals?
A. No.”).
Mr. Ramirez acknowledged that “continuity of care was not a major factor in the
scoring process for this procurement.” Oct. 1 Hr’g Tr. vol. 6, at 14:16–25 (Ramirez).
HHSC did not verify respondents’ assertions that continuity of care would not be
impacted by the contract awards. Oct. 1 Hr’g Tr. vol. 6, at 15:1–14 (Ramirez).
HHSC realized that its intended STAR & CHIP contracts could require over 1.5
beneficiaries to change health plans. Oct. 2 Hr’g Tr. vol. 9, at 36:15–18 (Zalkovsky).
Mr. Ramirez conceded that the delivery of healthcare to beneficiaries can become less
stable if they are required to switch plans and providers. Oct. 1 Hr’g Tr. vol. 8, at 51:1–
52:1 (Ramirez).
Texas Children’s witness Ashley Simms testified that there are numerous roles unique
to each health plan, including care coordinators, school advocates, medication
management teams, behavioral health teams, disease management teams, and maternal
health teams, that build individual relationships with each member and all help that
member navigate the healthcare system. Changing health plans would force the
member to sever each of these relationships and start all over with their new health
plan. Oct. 4 Hr’g Tr. (Simms).
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Ms. Simms also confirmed that the continuity of care provisions that would be in place
in the resulting contracts do not help those members that are not currently in active
treatment; if a member is on a health plan’s waitlist for a needed assessment, a change
in health plans would require that member to go to the back of the line in getting that
assessment once the member has switched plans. Oct. 4 Hr’g Tr. (Simms). This has
serious implications for, as an example, autistic members receiving ABA therapy, who
benefit the most from intervention during a specific two-year window, ages 3 to 5, but
who face a waitlist of more than a year to get the needed assessment for the therapy; if
the member is required to switch plans before getting that intervention, they may have
missed that peak window for treatment. Oct. 4 Hr’g Tr. (Simms).
If the STAR & CHIP contracts are awarded as announced, approximately 1.8 million
Texans will be forced to switch health plans, and many will also have to find new
healthcare providers. Oct. 2 Hr’g. Tr. vol. 9, at 36:15–18, 37:6–18 (Zalkovsky); Oct. 2
Hr’g Tr. vol. 9, at 102:2–7 (Sanders).
“Mandatory” CHIP Contracts. Defendant is violating Texas Government Code
sections 2155.44 and 533.004 and Texas Health & Safety Code section 62.155 by awarding
“mandatory” CHIP contracts.1
Ms. Molina and Mr. Ramirez both agreed that the mandatory contract statute, section
533.004, does not apply to CHIP contracts because that statute applies only to Medicaid
contracts (and CHIP is not Medicaid). Sept. 30 Hr’g Tr. vol. 2, at 61:10–17 (Molina);
Oct. 1 Hr’g Tr. vol. 5, at 49:3–12 (Ramirez).
HHSC considered an amendment to the RFP—in response to a pre-proposal challenge
by Wellpoint—that would have specified that “mandatory” contracts would not be
awarded for CHIP services and that CHIP contracts would be awarded based on
respondents’ scores, but HHSC elected not to make the amendment. Sept. 30 Hr’g Tr.
vol. 2, at 66:3–67:11 (Molina); P-266.
Ms. Molina testified that HHSC instead decided that it could award CHIP contracts to
managed care organizations (“MCOs”) receiving a mandatory Medicaid (STAR)
contract using a “preference” allegedly set forth in subsection 62.155(c)(1). Sept. 30
Hr’g Tr. vol. 2, at 68:13–16 (Molina).
Ms. Molina admits that HHSC treated the preference purportedly found in
section 62.155(c) differently than the preferences in sections 533.003 and 536.052—
meaning that, in the case of section 62.155(c)(1) only, HHSC used the preference to
choose one type of respondent over another. Sept. 30 Hr’g Tr. vol. 2, at 68:1–8
(Molina).
1
Cook Children’s does not assert this claim and does not join in this argument.
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Ms. Molina admitted that all of the respondents to the RFP were required to provide
similar coverage under the Medicaid program, Sept. 30 Hr’g Tr. vol. 2, at 69:9–12
(Molina), and she admitted that section 62.155 does not say anything about whether
HHSC may give a preference for a respondent that qualifies for a mandatory contract
under section 533.004, id. at 69:13–16.
Mr. Ramirez conceded that, while mandatory CHIP contracts resulted from the
“preference” described in section 62.155(c)(1), this preference was not reflected in
respondents’ final weighted scores. Oct. 2 Hr’g Tr. vol. 9, at 10:2–15 (Ramirez).
Defendant testified that the mandatory contract awards resulted in “automatic” awards
of both Medicaid and CHIP contracts to qualifying respondents, regardless of their
scoring. Oct. 1 Hr’g Tr. vol. 7, at 46:3–13 (Young).
Mr. Ramirez admitted that the lowest-scoring respondent received a mandatory
contract for both STAR and CHIP services. Oct. 1 Hr’g Tr. vol. 5, at 58:4–24 (Ramirez).
Mandatory STAR Contracts. Defendant is violating Texas Government Code
section 533.004(a) by awarding mandatory STAR contracts without taking into consideration
section 533.003.2
HHSC does not consider any of the factors listed in section 533.003 when reviewing
claims for mandatory STAR contract awards beyond requiring a respondent to submit
a proposal and participate in Oral Presentation (i.e., the respondent’s scores are not
considered). Oct. 1 Hr’g Tr. vol. 5, at 45:3–47:21 (Ramirez).
No Consideration of Different Plans for Different Populations. Defendant is failing to
“ consider the need to use different managed care plans to meet the needs of different populations”
as required by Texas Government Code section 533.003(a)(3).
Ms. Molina acknowledged that Texas law requires consideration of different managed
care plans for different populations. Sept. 30 Hr’g Tr. vol. 3, at 52:19–22 (Molina).
Mr. Ramirez admitted that this requirement applies to each procurement, including the
STAR & CHIP RFP. Oct. 1 Hr’g Tr. vol. 8, at 30:20–32:1 (Ramirez)
The RFP is conducted in a statewide manner that does not consider the needs of
different populations within the State of Texas. Oct. 1 Hr’g Tr. vol. 5, at 63:10–64:7
(Ramirez); Oct. 1 Hr’g Tr. vol. 6, at 25:18–28:19 (Ramirez).
2
Cook Children’s does not assert this claim and does not join in this argument.
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Evaluators were not informed which service areas respondents are bidding on unless
the respondents included that information in their responses to the Technical Questions.
Oct. 1 Hr’g Tr. vol. 6, at 25:4–11 (Ramirez).
Evaluators were not directed to consider service-area-by-service-area differences. Oct.
1 Hr’g Tr. vol. 8, at 37:6–18 (Ramirez).
Unlawful Disclosure. Defendant disclosed other bidders’ proposals to Aetna in violation
of Texas law and basic procurement principles. See 1 Tex. Admin. Code § 391.101(2) (HHSC
procurements must “provide for consistent and uniform management or procurement and
contracting processes”); id. § 391.209(3)(A) (HHSC must utilize evaluation method that provides
for “the fair consideration of proposals”; 34 Tex. Admin. Code § 20.208(d)(3) (“A state agency
may not disclose information derived from proposals or discussions with a respondent to any
competing respondent prior to award or cancellation of the solicitation.”).
Defendant erroneously disclosed other bidders’ proposals to counsel for Aetna in
August 2023, before Aetna’s Oral Presentation. Sept. 30 Hr’g Tr. vol. 3, at 26:14–21
(Molina).
Oral Presentations were scored elements of the RFP. Sept. 30 Hr’g Tr. vol. 3, at 26:3–
5 (Molina).
HHSC does not know what Aetna used in preparing its Oral Presentation. Sept. 30 Hr’g
Tr. vol. 3, at 27:11–17 (Molina); Sept. 30 Hr’g Tr. vol. 3, at 33:19–25 (Molina).
HHSC does not know what Aetna’s counsel did with the redacted proposals that were
erroneously disclosed by HHSC. Sept. 30 Hr’g Tr. vol. 3, at 25:14–16 (Molina).
HHSC did not make the untimely disclosed proposals available to respondents other
than Aetna. Sept. 30 Hr’g Tr. vol. 3, at 27:18–22 (Molina).
Ms. Molina acknowledged that she does not know if the RFP scoring would have
changed if Aetna had not received the untimely disclosure. Sept. 30 Hr’g Tr. vol. 3, at
35:13–17 (Molina).
Wellpoint representative Greg Thompson testified that the information included in
Wellpoint’s redacted proposal would have aided a competitor in the oral presentations,
particularly on the topic of oversight and coordination with subcontractors. Wellpoint’s
oral presentation on that topic was “almost word for word” what Wellpoint had
presented in its proposal on the use of material subcontractors and was not redacted in
the proposal that HHSC prematurely disclosed. Oct. 4 Hr’g Tr. (Thompson).
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Government procurement expert Judge Jeri Somers testified that the release of the
proposals—even redacted versions of those proposals—during the procurement to only
one bidder destroyed any level playing field and compromised the integrity of the
procurement. Oct. 1 Hr’g Tr. vol. 5, at 14:3–21, 15:13–16:6, 30:7–20 (Somers).
State Senator Charles Perry texted Defendant, expressing concern about the proposal
disclosure and recommending that HHSC take a new approach; HHSC did not follow
Senator Perry’s recommendation. Oct. 1 Hr’g Tr. vol. 7, at 57:12–25 (Young); P-
294.002.
No Evaluation and Certification. Defendant is failing to “evaluate and certify that the
organization is reasonably able to fulfill the terms of the [STAR] contract” as required by Texas
Government Code section 533.0035(a) and to “ensure that the entity is available, prepared, and
able to fulfill [its] obligations under the [CHIP] contract” as required by Texas Health & Safety
Code section 62.051(e).
HHSC’s certification questions did not cover all of terms of the STAR contract. Sept.
30 Hr’g Tr. vol. 4, at 83:1–10 (Ramirez).
HHSC did not verify the information that respondents provided in response to
certification questions. Sept. 30 Hr’g Tr. vol. 4, at 81:7–16 (Ramirez); Oct. 2 Hr’g Tr.
vol. 9, at 31:23–32:1 (Zalkovsky).
HHSC did not review any of the data it had already generated about the performances
and capabilities of current Texas Medicaid MCOs during the STAR & CHIP
certification. Sept. 30 Hr’g Tr. vol. 4, at 83:11–16 (Ramirez).
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Evaluators were given an option to choose “Will meet the criteria by the Operational
Start Date,” which is not included in either the applicable statute or rule. Sept. 30 Hr’g
Tr. vol. 4, at 71:2–72:17, 75:12–76:18 (Ramirez).
HHSC’s only evidence regarding its certification decision and reasoning consists of the
check boxes following each certification question. Sept. 30 Hr’g Tr. vol. 4, at 79:19–
80:19 (Ramirez).
Bayou Health self-certified information that was not accurate. Sept. 30 Hr’g Tr. vol. 4,
at 79:13–15 (Ramirez).
The STAR Kids RFP. Defendant will continue to commit ultra vires acts in connection
with Request for Proposals No. HHS0013071 (the “STAR Kids RFP”).
Mr. Ramirez testified that the STAR Kids RFP is being administered in the same way
as the STAR & CHIP RFP, including the same methodology for purportedly
implementing statutory preference. Oct. 1 Hr’g Tr. vol. 8, at 42:19–43:1 (Ramirez).
No Meaningful Bid Protest Process. Defendant is violating Article I, Section 13 of the
Texas Constitution; 1 Texas Administrative Code Chapter 391, Subchapter C; and the terms of the
RFP by awarding STAR & CHIP contracts without providing Plaintiffs the meaningful bid protest
procedure promised.
Wellpoint submitted a specifications protest when the STAR & CHIP RFP was issued
and before any proposals were submitted, which was denied as premature because
HHSC believed that, until contracts were awarded, Wellpoint could not show any
adverse effect. Sept. 30 Hr’g Tr. vol. 2, at 61:18–63:17 (Molina).
All eight protests submitted after the Notice of Intent to Award were denied. Sept. 30
Hr’g Tr. vol. 3, at 35:18–23 (Molina).
Even though HHSC was aware of three releases of redacted copies of proposals, it still
withheld the same information from other Public Information Act requestors, including
Plaintiffs, prior to the deadline for submitting bid protests. Sept. 30 Hr’g Tr. vol. 3, at
15:8–12, 31:24–32:6, 40:16–19 (Molina).
Ms. Molina’s stated reason for denial of the bid protests included a failure to establish
that any violations of statute affected the integrity of the solicitation, even though she
conceded that was not the standard in 1 Texas Administrative Code section 391.307(c).
Sept. 30 Hr’g Tr. vol. 3, at 38:2–16 (Molina).
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Ms. Molina did not consider any of the supplemental protests submitted by Plaintiffs
because they were not submitted within ten business days of the Notice of Intent to
Award, even though they included information that was previously unavailable and 1
Texas Administrative Code section 391.307(d)(1) requires consideration if good cause
is shown. Sept. 30 Hr’g Tr. vol. 3, at 38:17–40:19, 83:24–84:19 (Molina).
Lack of Knowledge of Defendant’s Witnesses. Additionally, hearing testimony
repeatedly demonstrated that Defendant and other HHSC personnel lack knowledge of the STAR
& CHIP RFP and the details of its administration—underscoring that the procurement process
lacks the oversight and coordination needed to ensure that Defendant complies with mandatory
statutory and regulatory requirements, and that Defendant has failed to advance a credible
evidentiary defense in this matter.
Ms. Molina acknowledged that she did not look at every response to the RFP. Sept. 30
Hr’g Tr. vol. 2, at 56:12 (Molina).
Ms. Molina did not talk to any of the evaluators. Sept. 30 Hr’g Tr. vol. 3, at 37:11–14
(Molina).
Mr. Ramirez was not an evaluator. Oct. 1 Hr’g Tr. vol. 6, at 24:25–25:3 (Ramirez).
Mr. Ramirez did not read any of the evaluators’ notes. Oct. 1 Hr’g Tr. vol. 6, at 24:7–8
(Ramirez).
Mr. Ramirez did not participate in the consensus scoring meetings. Oct. 1 Hr’g Tr. vol.
6, at 24:9–11 (Ramirez).
Mr. Ramirez admitted that he has not seen most of the consensus scoring rubrics;
indeed, he only looked at one or two of them. Oct. 1 Hr’g Tr. vol. 8, at 29:20–22
(Ramirez).
Mr. Ramirez acknowledged that he has not reviewed most of the proposals submitted
in response to the RFP, Oct. 1 Hr’g Tr. vol. 8, at 30:1–3 (Ramirez). (Ramirez); indeed,
Mr. Ramirez admitted that he has only reviewed a few of the bidders’ submissions, Oct.
1 Hr’g Tr. vol. 7, at 66:7–9 (Ramirez).
Mr. Ramirez cannot say what all or even most bidders included in their proposals. Oct.
1 Hr’g Tr. vol. 8, at 30:4–9 (Ramirez).
Mr. Ramirez testified that he does not know whether information from responses to the
Technical Questions were reviewed in the certification process. Sept. 30 Hr’g Tr. vol.
4, at 82:22–25 (Ramirez).
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Ms. Zalkovsky did not look at the proposals or the scoring and does not have direct
knowledge of the scoring of each individual bidder’s response. Oct. 2 Hr’g Tr. vol. 9,
at 46:10–17 (Zalkovsky); see also id. at 27:10–11 (Zalkovsky) (“I did not personally
score any of the responses or see the score sheets[.]”).
II. DEFENDANT’S “INJURY”
Defendant’s testimony undercuts the only injury she claimed in opposing Plaintiffs’
requests for a temporary injunction: that “[h]alting a state Medicaid program would be extremely
disruptive to the current timeline that was carefully thought out to transition and protect continuity
of care.” Def.’s Plea to Jurisdiction & Resp. to Pls.’ Reqs. for Temporary Inj. 42–43. Specifically,
Defendant testified that, given the “very robust readiness requirement,” the intended September
2025 start date for the new STAR & CHIP contracts “is no longer operative, is—is on pause.”
Oct. 1 Hr’g Tr. vol. 7, at 19:9–20 (Young). Given that the “current timeline” has already been
discarded, Plaintiffs’ requested injunction would not injure either Defendant or HHSC. See
Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 576 (Tex. App.—Austin 2000, no pet.)
(courts “balance[] the equities of the parties and the resulting conveniences and hardships” when
awarding injunctive relief).
Moreover, Ms. Molina acknowledged that, if the results of the STAR & CHIP RFP were
cancelled, HHSC could extend the current STAR & CHIP contracts to ensure coverage and
services for members—just as it did when prior procurements were cancelled. Sept. 30 Hr’g Tr.
vol. 3, at 67:9–24 (Molina). This was further confirmed by Wellpoint representative Greg
Thompson, who says the current plans are already technically operating under bridge contracts
with HHSC. Oct. 4 Hr’g Tr. (Thompson).
III. IRREPARABLE HARM
An injury is irreparable if the injured party cannot be adequately compensated in damages
or if the damages cannot be measured by any certain pecuniary standard.” Butnaru v. Ford Motor
17
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Co., 84 S.W.3d 198, 204 (Tex. 2002); see also Cardinal Health Staffing Network Inc. v. Bowen,
106 S.W.3d 230, 235 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (“An adequate remedy at law
is one that is as complete, practical, and efficient to the prompt administration of justice as is
equitable relief.”).
Superior’s corporate representative, Mark Sanders, testified that approximately 700,000 of
the 800,000 STAR & CHIP members currently served by Superior will be forced to change their
health plans. Oct. 2 Hr’g Tr. vol. 9, at 99:15–18, 102:4–10 (Sanders). Although services under the
new contracts were not slated to begin until September 1, 2025, Superior already faces the prospect
of losing employees due to concerns about Superior’s significant loss in membership under the
proposed contracts and poaching by rival MCOs, endangering Superior’s operations under its
existing contracts with HHSC and its reputation. Id. at 111:14–112:21, 113:1–17. Mr. Sanders
testified that Superior has heard reports that some providers are already informing members that
Superior will no longer be providing STAR & CHIP services in certain areas and are encouraging
members to switch plans even now. Id. at 114:21–115:5. Mr. Sanders also testified to Superior’s
difficulties retaining its existing, robust provider network, as providers will be less likely to
negotiate renewals of their contracts with Superior, and that those renewal negotiations are
occurring now. Id. at 113:18–114:4. Superior would also lose its investments in value-based
partnerships, causing further reputational harm. Id. at 114:5–20. Moreover, HHSC has previously
taken the legal position that once contracts are signed those contracts are final and there is no legal
remedy available to the health pans, even if the procurement was unlawful. Id. at 115:11–116:8.
Texas Children’s corporate representative, Michael Murphy, testified that 75% of Texas
Children’s revenues come from serving the STAR & CHIP programs, meaning that the intended
contract awards, if executed, threaten Texas Children’s very existence and virtually all of its
18
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employees’ jobs. Further, the intended contract awards announced by HHSC will result in all of
Texas Children’s 420,000 STAR & CHIP members being forced to change their health plans,
impacting access to care. Texas Children’s participation in the STAR Kids program is also at risk
because the larger STAR & CHIP contracts are needed to provide economies of scale to limit losses
from STAR Kids. Oct. 4 Hr’g Tr. (Murphy).
Wellpoint’s corporate representative, Greg Thompson, testified that the intended contract
awards, if executed, jeopardize the jobs of many of its employees and its ongoing operations. Mr.
Thompson observed that in the prior STAR+PLUS procurement, MCOs entering the market or
expanding their business began poaching employees from other MCOs that were losing business
a year before the new STAR+PLUS contracts became operational. Mr. Thompson testified that
Wellpoint has already lost associates who have moved on to different health plans. If executed, the
intended contract awards also mean that 380,000 of Wellpoint’s members will lose access to long-
standing, trusted providers and unique community services, like Wellpoint’s doula program.
Wellpoint has also made significant investments—“hundreds of millions of dollars”—in
improving health quality outcomes in the SAs it serves, and the intended contract awards if
implemented will mean those investments will not be realized. Oct. 4 Hr’g Tr. (Thompson).
Cook Children’s corporate representative, Karen Love, testified that the intended contract
awards represent an existential threat to the plan. Cook Children’s is the Tarrant SA’s only home-
grown integrated MCO, and Cook Children’s has spent more than 20 years building a robust
provider network on which its members rely. Cook Children’s participation in the STAR Kids
program is also in jeopardy because the larger STAR & CHIP contracts are needed to provide
economies of scale to limit losses from STAR Kids. The intended contract awards, if executed,
will force Cook Children’s approximately 115,000 STAR & CHIP members and 8,000 STAR Kids
19
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members to switch to health plans that are not integrated health plans, like Cook Children’s. Oct.
4 Hr’g Tr. (Love).
Thus, each Plaintiff has offered substantial evidence that it will suffer irreparable harm to
itself, its employees, and its STAR & CHIP members if the Court does not order immediate relief
and enjoin Defendant’s further ultra vires acts.
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Respectfully submitted,
By: /s/Karen C. Burgess
Karen C. Burgess
State Bar No. 00796276
Email: kburgess@burgesslawpc.com
Katie Dolan-Galaviz
State Bar No. 24069620
Email: kgalaviz@burgesslawpc.com
BURGESS LAW PC
404 West 13th Street
Austin, Texas 78701-1825
Telephone: (512) 482-8808
Matthew P. Gordon
Admitted Pro Hac Vice
Email: mgordon@perkinscoie.com
PERKINS COIE LLP
1201 Third Avenue, Suite 4900
Seattle, Washington 98101-3099
Telephone: (206) 359.8000
ATTORNEYS FOR PLAINTIFF COOK
CHILDREN’S HEALTH PLAN
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HOLLAND & KNIGHT LLP
/s/Meghan J. McCaig (with permission)
Karen D. Walker
Admitted Pro Hac Vice
Florida Bar No. 982921
District of Columbia Bar No. 90004390
karen.walker@hklaw.com
Tiffany Roddenberry
Admitted Pro Hac Vice
Florida Bar No. 92524
tiffany.roddenberry@hklaw.com
315 S. Calhoun Street, Suite 600
Tallahassee, Florida 32301
(850) 425-5612 (telephone)
(850) 224-8832 (facsimile)
Theresa Wanat
Texas Bar No. 24071469
theresa.wanat@hklaw.com
811 Main Street, Suite 2500
Houston, Texas 77002
(713) 821-7000 (telephone)
(713) 821-7001 (facsimile)
J. Meghan McCaig
Texas Bar No. 24070083
meghan.mccaig@hklaw.com
One Arts Plaza
1722 Routh Street, Suite 15500
Dallas, Texas 75201
(214) 964-9500 (telephone)
(214) 964-9501 (facsimile)
James E. Cousar
Texas Bar No. 04898700
james.cousar@hklaw.com
98 San Jacinto Blvd
Austin, Texas 78701
(512) 469-6112 (telephone)
(512) 469-6180 (facsimile
ATTORNEYS FOR PLAINTIFF SUPERIOR
HEALTHPLAN, INC.
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NORTON ROSE FULBRIGHT US LLP
/s/Paul Trahan (with permission)
Susan Feigin Harris
Texas State Bar No. 06876980
1301 McKinney, Suite 5100
Houston, Texas 77010
Telephone: (713) 651-5377
Facsimile: (713) 651-5246
Paul Trahan
Texas State Bar No. 24003075
98 San Jacinto Boulevard, Suite 1100
Austin, Texas 78701
Telephone: (512) 474-5201
Facsimile: (512) 536-4598
Thomas A. Coulter
Texas State Bar No. 04885500
799 9th Street, NW, Suite 1000
Washington, D.C. 20001
Tel: (202) 662-4765
Fax: (202) 662-4643
Jeff J. Wurzburg
Texas State Bar No. 24105140
111 W. Houston Street, Suite 1800
San Antonio, Texas 78205
Telephone: (210) 270-9338
Facsimile: (210) 270-7205
ATTORNEYS FOR PLAINTIFF
TEXAS CHILDREN’S HEALTH PLAN
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FOLEY & LARDNER LLP
/s/ Robert F. Johnson III (with permission)
Robert F. Johnson III
Texas State Bar No. 10786400
rjohnson@foley.com
600 Congress Avenue, Suite 3000
Austin, TX 78701
Tel: 512.542.7127
Fax: 512.542.7100
Michelle Y. Ku
Texas Bar No. 24071452
mku@foley.com
Brantley A. Smith
Texas Bar No. 24110375
bsmith@foley.com
2021 McKinney, Suite 1600
Dallas, Texas 75201
Tel: 214.999.3000
Fax: 214.999.4667
Benjamin J. Grossman
Admitted Pro Hac Vice
Florida Bar No. 92426
bjgrossman@foley.com
106 E. College Ave., Suite 900
Tallahassee, Florida 32301
Tel: 850.222.6100
Fax: 850.561.6475
ATTORNEYS FOR PLAINTIFF
WELLPOINT INSURANCE COMPANY
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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on all
counsel by the Court’s e-filing on this 4th day of October, 2024.
/s/Karen C. Burgess
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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.
Envelope ID: 106224120
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Aetna's Appellant's Brief
Status as of 9/30/2025 7:04 AM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Michaelle Peters mpeters@scottdoug.com 9/29/2025 4:59:42 PM SENT
Julie Wright julie.wright@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Amanda DoddsPrice amanda.price@squirepb.com 9/29/2025 4:59:42 PM SENT
Karen Burgess 796276 kburgess@burgesslawpc.com 9/29/2025 4:59:42 PM SENT
Mark Emery 24050564 mark.emery@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Robert Johnson 10786400 rjohnson@foley.com 9/29/2025 4:59:42 PM SENT
Richard Phillips 24032833 Rich.Phillips@hklaw.com 9/29/2025 4:59:42 PM SENT
J McCaig 24070083 meghan.mccaig@outlook.com 9/29/2025 4:59:42 PM SENT
Michelle Ku 24071452 mku@foley.com 9/29/2025 4:59:42 PM SENT
Joseph Knight 11601275 jknight@ebbklaw.com 9/29/2025 4:59:42 PM SENT
Amy Warr 795708 awarr@adjtlaw.com 9/29/2025 4:59:42 PM SENT
Warren Huang 796788 warren.huang@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Paul Trahan 24003075 paul.trahan@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Susan Harris 6876980 susan.harris@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Anna Baker 791362 abaker@adjtlaw.com 9/29/2025 4:59:42 PM SENT
Maria Williamson maria.williamson@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Cory Scanlon 24104599 cory.scanlon@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Mandy Patterson mpatterson@adjtlaw.com 9/29/2025 4:59:42 PM SENT
Michelle Joyner mjoyner@scottdoug.com 9/29/2025 4:59:42 PM SENT
William FCole William.Cole@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Abril Rivera arivera@scottdoug.com 9/29/2025 4:59:42 PM SENT
Nancy Villarreal nancy.villarreal@oag.texas.gov 9/29/2025 4:59:42 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.
Envelope ID: 106224120
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Aetna's Appellant's Brief
Status as of 9/30/2025 7:04 AM CST
Case Contacts
Nancy Villarreal nancy.villarreal@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Kayla Ahmed kayla.ahmed@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Kristin Hernandez kristin.hernandez@foley.com 9/29/2025 4:59:42 PM SENT
Thomas Coulter 4885500 tom.coulter@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Victoria Gomez victoria.gomez@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Cheryl LaFond 24104015 clafond@scottdoug.com 9/29/2025 4:59:42 PM SENT
Jessie Johnson jessie.johnson@nortonrosefulbright.com 9/29/2025 4:59:42 PM SENT
Benjamin Grossman bjgrossman@foley.com 9/29/2025 4:59:42 PM SENT
Cory Scanlon cory.scanlon@oag.texas.gov 9/29/2025 4:59:42 PM SENT
David Johns david@cobbjohns.com 9/29/2025 4:59:42 PM SENT
Jennifer Cook Jennifer.Cook@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Juliana Bennington jbennington@perkinscoie.com 9/29/2025 4:59:42 PM SENT
Jonathan Hawley jhawley@perkinscoie.com 9/29/2025 4:59:42 PM ERROR
Trisha Marino tmarino@perkinscoie.com 9/29/2025 4:59:42 PM SENT
Katie Dolan-Galaviz kgalaviz@burgesslawpc.com 9/29/2025 4:59:42 PM SENT
Karen Walker karen.walker@hklaw.com 9/29/2025 4:59:42 PM SENT
Tiffany Roddenberry tiffany.roddenberry@hklaw.com 9/29/2025 4:59:42 PM SENT
Stacey Obenhaus sobenhaus@foley.com 9/29/2025 4:59:42 PM SENT
Jason R.LaFond jlafond@scottdoug.com 9/29/2025 4:59:42 PM SENT
Matthew Gordon mgordon@perkinscoie.com 9/29/2025 4:59:42 PM SENT
Jeffrey Stephens jeff.stephens@oag.texas.gov 9/29/2025 4:59:42 PM SENT
Stacey Jett sjett@adjltaw.com 9/29/2025 4:59:42 PM SENT
Perkins Docketing Team DocketSEA@perkinscoie.com 9/29/2025 4:59:42 PM SENT
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