CourtListener 10758221•Cecile Erwin Young, in Her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission v. Cook Children's Health Plan, Texas Children's Health Plan, Superior HealthPlan, Inc., and Wellpoint Insurance Company
Cecile Erwin Young, in Her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission v. Cook Children's Health Plan, Texas Children's Health Plan, Superior HealthPlan, Inc., and Wellpoint Insurance Company
CourtListener 10758221Txctapp159 de dez. de 2025
Texto completo
ACCEPTED
15-24-00114-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
12/9/2025 6:21 PM
No. 15-24-00114-CV CHRISTOPHER A. PRINE
CLERK
FILED IN
In the Court of Appeals for the 15th COURT OF APPEALS
Fifteenth District of Texas AUSTIN, TEXAS
12/9/2025 6:21:11 PM
CHRISTOPHER A. PRINE
Clerk
Cecile E. Young, in her official capacity as Commissioner of the Texas
Health & Human Services Commission,
Appellant,
v.
Cook Children’s Health Plan, Texas Children’s Health Plan, Superior
HealthPlan, Inc., and Wellpoint Insurance Company,
Appellees.
Appeal from the 455th Judicial District Court, Travis
County, Texas, Trial Court Cause No. D-1-GN-24-003839,
Hon. Laurie Eiserloh, Presiding
Appellee Superior HealthPlan, Inc.’s
Response Brief
Karen D. Walker Richard B. Phillips, Jr.
Admitted Pro Hac Vice Texas Bar No. 24032833
karen.walker@hklaw.com rich.phillips@hklaw.com
Tiffany Roddenberry Holland & Knight LLP
Admitted Pro Hac Vice One Arts Plaza
tiffany.roddenberry@hklaw.com 1722 Routh Street, Suite 15500
Holland & Knight LLP Dallas, Texas 75201
315 S. Calhoun Street, Suite 600 (214) 964-9500 (telephone)
Tallahassee, Florida 32301 (214) 964-9501 (facsimile)
(850) 425-5612 (telephone)
(850) 224-8832 (facsimile)
Counsel for Appellee Superior HealthPlan, Inc.
Identity of Parties and Counsel
Appellant Counsel
Cecile Erwin Young, in her Offi- Ken Paxton
cial Capacity as the Brent Webster
Commissioner of the Texas William R. Peterson
Health and Human Services William F. Cole
Commission Cory A. Scanlon
Jeffrey A. Stephens
Mohmed I. Patel
Jennifer Cook
Thomas Bevilacqua
Stephanie Criscione
Reuben Blum
Office of the Attorney General
P.O. Box 12548
Austin, Texas 78711-2548
Appellees Counsel
Superior HealthPlan, Inc. Richard B. Phillips, Jr.
Meghan McCaig1
Holland & Knight LLP
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Karen D. Walker
Tiffany Roddenberry
Holland & Knight LLP
315 S. Calhoun Street, Suite 600
Tallahassee, Florida 32301
1
Ms. McCaig is no longer associated with Holland & Knight LLP and is no longer
counsel for Superior HealthPlan, Inc. in this case.
-i-
Cook Children’s Health Plan Amy Warr
Anna M. Baker
Alexander Dubose & Jefferson LLP
100 Congress Avenue, Suite 1450
Austin, Texas 78701-2709
Karen C. Burgess
Katie Dolan-Galaviz
Burgess Law PC
404 West 13th Street
Austin, Texas 78701-1825
Matthew P. Gordon
Perkins Coie LLP
1201 Third Avenue, Suite 4900
Seattle, Washington 98101-3099
Texas Children’s Health Plan Susan Feigin Harris
Warren S. Huang
Norton Rose Fulbright US,
LLP
1550 Lamar, Suite 2000
Houston, Texas 77010
Paul Trahan
Norton Rose Fulbright US,
LLP
98 San Jacinto Boulevard, Suite 1100
Austin, Texas 78701
Thomas A. Coulter
Norton Rose Fulbright US,
LLP
799 9th Street, NW, Suite 1000 Wash-
ington, D.C. 20001
-ii-
Wellpoint Insurance Company Robert F. Johnson III
Foley & Lardner LLP
600 Congress, Suite 3000
Austin, Texas 78701
Michelle Y. Ku
Stacy R. Obenhaus
Foley & Lardner LLP
2021 McKinney, Suite 1600
Dallas, Texas 75201
-iii-
Table of Contents
Page
Identity of Parties and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . i
Index of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
Statement of the Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv
Statement Regarding Record References . . . . . . . . . . . . . . . . . . . xv
Statement Regarding Oral Argument. . . . . . . . . . . . . . . . . . . . . xvi
Issues Presented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. The RFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Commissioner’s Ultra Vires Actions . . . . . . . . . . . . . . 5
3. HHSC’s Wrongful Disclosure . . . . . . . . . . . . . . . . . . . . 11
4. The Intended Contract Awards . . . . . . . . . . . . . . . . . . . . 13
5. The Unlawful STAR Kids Procurement . . . . . . . . . . . . . . . 15
6. The Trial Court’s Temporary Injunction . . . . . . . . . . . . . . 15
Summary of Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-iv-
Page
Standard of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1. The trial court correctly denied the
Commissioner’s plea to the jurisdiction. . . . . . . . . . . . . . . 22
A. Appellees’ claims are ripe. . . . . . . . . . . . . . . . . . . . 22
B. Appellees were not required to exhaust
administrative remedies before bringing their
ultra vires suits. . . . . . . . . . . . . . . . . . . . . . . . . . 29
2. The trial court correctly concluded that
Appellees have a probable right to relief on their
ultra vires claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
A. The Commissioner does not have unlimited
discretion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
B. The trial court did not abuse its discretion in
concluding that the Commissioner has acted
(and will act) ultra vires. . . . . . . . . . . . . . . . . . . . . 34
(1) Appellees have standing to challenge the
Commissioner’s ultra vires conduct. . . . . . . . . . . . 34
(2) The “best value” analysis cannot trump other
specific statutory requirements. . . . . . . . . . . . . . . . 36
(3) The Commissioner’s arguments about
Appellees’ conduct are also misplaced. . . . . . . . . . 38
-v-
Page
(4) The trial court did not abuse its discretion in
finding that Appellees are likely to succeed on
their claims that the Commissioner failed to
apply statutory mandates. . . . . . . . . . . . . . . . . . 42
C. The disclosure to Aetna violated basic
procurement law.. . . . . . . . . . . . . . . . . . . . . . . . . 47
D. The trial court properly applied other statutory
requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
E. The Commissioner mischaracterizes the relief
Appellees seek. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3. The trial court correctly found that Superior
faces irreparable harm without injunctive relief. . . . . . . . . . . 55
A. Superior established that it is threatened with
imminent, irreparable harm. . . . . . . . . . . . . . . . . . . . 56
B. The Commissioner’s other arguments about
irreparable harm are unavailing. . . . . . . . . . . . . . . . . 58
4. The trial court correctly concluded that the
equities weigh in favor of Appellees. . . . . . . . . . . . . . . . . . 61
5. The Commissioner’s other complaints lack
merit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
A. The injunction order complies with Rule 683. . . . . . . . . 64
(1) The Commissioner waived any complaint about
the adequacy of the temporary-injunction order. . . . . 64
(2) In any event, the temporary-injunction order
complies with Rule 683. . . . . . . . . . . . . . . . . . . 66
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Page
B. The trial court did not err in declining to admit
the scoring rubrics. . . . . . . . . . . . . . . . . . . . . . . . 68
Conclusion and Prayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Certificate of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Appendix
A — Temporary Injunction
(CR:5875) . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab A
B — Tex. Gov’t Code § 533.003
(now Tex. Gov’t Code § 540.0204) . . . . . . . . . Tab B
C — Tex. Gov’t Code § 533.0035
(now Tex. Gov't Code § 540.0203) . . . . . . . . . Tab C
D — Tex. Gov’t Code § 533.004
(now Tex. Gov’t Code § 540.0206) . . . . . . . . . Tab D
E — Tex. Gov’t Code § 536.052
(now Tex. Gov’t Code § 543A.0052) . . . . . . . . Tab E
F — Tex. Gov’t Code § 2155.144 . . . . . . . . . . . . . Tab F
G — Tex. Health & Safety Code § 62.155 . . . . . . Tab G
-vii-
Index of Authorities
Page
Cases
31 Holdings I, LLC v. Argonaut Ins. Co.,
640 S.W.3d 915 (Tex. App.—Dallas 2022, no pet.) . . . . . . . . . . . 22
Abbott v. Doe,
691 S.W.3d 55 (Tex. App.—Austin 2024, no pet.) . . . . . . . . . . . 23
AutoNation, Inc. v. Hatfield,
186 S.W.3d 576 (Tex. App.—Houston [14th Dist.] 2005,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Cantu v. Horany,
195 S.W.3d 867 (Tex. App.—Dallas 2006,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
City of Austin v. Utility Assocs., Inc.,
517 S.W.3d 300 (Tex. App.—Austin 2017,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
City of Dallas v. Brown,
373 S.W.3d 204 (Tex. App.—Dallas 2012,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
City of El Paso v. Heinrich,
284 S.W.3d 366 (Tex. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . 55
Crosstex Energy Servs. LP v. Pro Plus, Inc.,
430 S.W.3d 384 (Tex. 2014) . . . . . . . . . . . . . . . . . . . . . . . . . 33
Duarte v. Disanti,
292 S.W.3d 733 (Tex. App.—Dallas 2009,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
E&L Constr. Grp., LLC v. U.S.,
159 Fed. Cl. 115 (2022) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-viii-
Page
Elcon Enters., Inc. v. Wash. Metro. Area Transit Auth.,
977 F.2d 1472 (D.C. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . 34
Emerson v. Fires Out, Inc.,
735 S.W.2d 492 (Tex. App.—Austin 1987,
no writ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Etan Indus., Inc. v. Lehmann,
359 S.W.3d 620 (Tex. 2011) . . . . . . . . . . . . . . . . . . . . . . . . 23
Frank v. Liberty Ins. Corp.,
255 S.W.3d 314 (Tex. App.—Austin 2008,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 42
Function Media, L.L.C. v. Google, Inc.,
No. 2:07–CV–279–CE, 2010 WL 276093 (E.D. Tex.
Jan 15, 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Gunn v. McCoy,
554 S.W.3d 645 (Tex. 2018) . . . . . . . . . . . . . . . . . . . . . . . . 72
Hall v. McRaven,
508 S.W.3d 232 (Tex. 2016) . . . . . . . . . . . . . . . . . . . . . . 32, 33
Hensley v. State Comm’n on Judicial Conduct,
692 S.W.3d 184 (Tex. 2024) . . . . . . . . . . . . . . . . . . . . . . 30, 31
Hoist Liftruck Mfg., Inc. v. Carruth-Doggett, Inc.,
485 S.W.3d 120 (Tex. App.—Houston [14th Dist.] 2016,
no pet.) (Frost, C.J., concurring) . . . . . . . . . . . . . . . . . . . . . . 65
Horizon/CMS Healthcare Corp. v. Auld,
34 S.W.3d 887 (Tex. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . 37
Houston Belt & Terminal Ry. Co. v. City of Houston,
487 S.W.3d 154 (Tex. 2016) . . . . . . . . . . . . . . . . . . . . . . passim
In re State,
711 S.W.3d 641 (Tex. 2024) (orig. proceeding) . . . . . . . . . . . . . 62
-ix-
Page
In re Stetson Renewables Holdings, LLC,
658 S.W.3d 292 (Tex. 2022) (orig. proceeding) . . . . . . . . . . . 52, 53
Marble Falls Indep. Sch. Dist. v. Scott,
275 S.W.3d 558 (Tex. App.—Austin 2008,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Matzen v. McLane,
659 S.W.3d 381 (Tex. 2021) . . . . . . . . . . . . . . . . . . . . . . . . 54
McGarry v. Houston Firefighters’ Relief & Ret. Fund,
680 S.W.3d 14 (Tex. App.—Houston [1st Dist.] 2023,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Morath v. Kingsville Indep. Sch. Dist.,
710 S.W.3d 918 (Tex. App.—15th Dist. 2025,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53, 54
Omniplex World Servs. Corp. v. U.S.,
105 Fed. Cl. 706 (2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Phillips v. McNeill,
635 S.W.3d 620 (Tex. 2021) . . . . . . . . . . . . . . . . . . . . . . . . 54
Riner v. City of Hunters Creek,
403 S.W.3d 919 (Tex. App.—Houston [14th Dist.] 2013,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 27
Ritchie v. Rupe,
443 S.W.3d 856 (Tex. 2014) . . . . . . . . . . . . . . . . . . . . . . . . . 36
S.O. v. Univ. of Tex.,
No. 03-16-00726-CV, 2017 WL 2628072 (Tex. App.—
Austin June 15, 2017, no pet.) . . . . . . . . . . . . . . . . . . . . . . . 23
State v. Loe,
692 S.W.3d 215 (Tex. 2024) . . . . . . . . . . . . . . . . . . . . . . . . 22
Sw. Elec. Power Co. v. Lynch,
595 S.W.3d 678 (Tex. 2020) . . . . . . . . . . . . . . . . . . . . . . 23, 28
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Page
Sw. Life Ins. Co. v. Montemayor,
24 S.W.3d 581 (Tex. App.—Austin 2000,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Taylor Hous. Auth. v. Shorts,
549 S.W.3d 865 (Tex. App.—Austin 2018,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64, 65
Tex. Dep’t of Parks & Wildlife v. Miranda,
133 S.W.3d 217 (Tex. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tex. Educ. Agency v. Hous. Indep. Sch. Dist.,
660 S.W.3d 108 (Tex. 2023) . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tex. Propane Gas Ass’n v. City of Houston,
622 S.W.3d 791 (Tex. 2021) . . . . . . . . . . . . . . . . . . . . . . . . 32
Tex. Tech Univ. Health Sci. Ctr. v. Rao,
105 S.W.3d 763 (Tex. App.—Amarillo 2003,
pet. dism’d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Transp. Co. of Texas v. Robertson Transports, Inc.,
261 S.W.2d 549 (Tex. 1953) . . . . . . . . . . . . . . . . . . . . . . . . 66
Turner v. Joshua Indep. Sch. Dist.,
583 S.W.2d 939 (Tex. App.—Waco 1979,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
VAS Realty, LLC v. U.S.,
26 F.4th 945 (Fed. Cir. 2022) . . . . . . . . . . . . . . . . . . . . . . . . 35
Vote.Org v. Callanen,
39 F.4th 297 (5th Cir. 2022) . . . . . . . . . . . . . . . . . . . . . . . . . 61
Wilson v. Cmty. Health Choice Texas, Inc.,
607 S.W.3d 843 (Tex. App.—Austin 2020,
pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
-xi-
Page
Statutes
Act of May 19, 2023, 88th Leg., R.S., Ch. 769, sec. 1.01 . . . . . . . . . . . 2
Act of May 27, 2019, 86th Leg., R.S., Ch. 1353, art. IX, §
17.10(e), 2019 Tex. Gen. Laws 4035, 4929 . . . . . . . . . . . . . . . . . 63
Act of May 31, 2021, 87th Leg., R.S., Ch. 1053, art. IX, §
17.09(e), 2021 Tex. Gen. Laws 2805, 3695 . . . . . . . . . . . . . . . . . 63
Tex. Gov’t Code § 311.016(2) . . . . . . . . . . . . . . . . . . . . . . 40
Tex. Gov’t Code § 311.026. . . . . . . . . . . . . . . . . . . . . . . . . 37
Tex. Gov’t Code § 524.0002 . . . . . . . . . . . . . . . . . . . . . . 32
Tex. Gov’t Code § 533.003 . . . . . . . . . . . . . . . . . . . . . passim
Tex. Gov’t Code § 533.004 . . . . . . . . . . . . . . . . . . . . . passim
Tex. Gov’t Code § 533.0035 . . . . . . . . . . . . . . . . . . . 4, 9, 10, 49
Tex. Gov’t Code § 536.052 . . . . . . . . . . . . . . . . . . . . . passim
Tex. Gov’t Code § 540.0203. . . . . . . . . . . . . . . . . . . . . . . . 4
Tex. Gov’t Code § 540.0204 . . . . . . . . . . . . . . . . . . . . . . . 6
Tex. Gov’t Code § 540.0206 . . . . . . . . . . . . . . . . . . . . . . . 2
Texas Gov’t Code § 543A.0052 . . . . . . . . . . . . . . . . . . . . . 7
Tex. Gov’t Code § 2155.144 . . . . . . . . . . . . . . . . . . . . . passim
Tex. Health & Safety Code § 62.155 . . . . . . . . . . . . . 8, 50, 51
Regulations and Rules
1 T.A.C. § 391.101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 47
1 T.A.C. § 391.209(3)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 47
-xii-
Page
Tex. R. Civ. P. 296 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Tex. R. Civ. P. 683 . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Tex. R. Evid. 803(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-xiii-
Statement of the Case
Nature of This case arises from the procurement conducted by the
the Case: Texas Health and Human Services Commission (“HHSC”)
for managed healthcare services for the State of Texas Ac-
cess Reform Medicaid program and the Children’s Health
Insurance Program. (CR:3511–12.) Appellees assert that Ap-
pellant Cecile E. Young, in Her Official Capacity as
Executive Commissioner of HHSC (the “Commissioner”)
has acted (and will continue to act) ultra vires in the conduct
of the procurement. (Id.) They filed suit seeking declaratory
and injunctive relief to stop the ultra vires conduct.
(CR:3550–56.)
Course of Pro- The Commissioner agreed not to take further action on the
ceedings: procurement until a hearing on Appellees’ application for a
temporary injunction. (CR:2629.) The Commissioner filed a
plea to the jurisdiction. (CR:2949.) Following expedited dis-
covery, the trial court conducted a four-day hearing on the
application for a temporary injunction. (See generally 5RR,
6RR, 7RR, 8RR.)
Trial Court’s The trial court denied the Commissioner’s plea to the juris-
Disposition: diction. (CR:5875.) The court also found that Appellees have
a likelihood of success on the merits of their ultra vires claim,
that they face imminent irreparable harm, and that the equi-
ties weigh in favor of injunctive relief. (Id.) The court
therefore granted a temporary injunction prohibiting the
Commissioner from continuing with the procurement. (Id.)
-xiv-
Statement Regarding Record References
The record on appeal comprises the following:
• the one-volume clerk’s record filed in this Court on November 1,
2024, which will be cited as “CR:[page];”
• the 20-volume reporter’s record filed in this Court on October 29,
2024, which will be cited as “[volume]RR:[page];” and
• a one-volume supplemental reporter’s record filed in this Court on
November 4, 2024, which will be cited as “Supp.RR:[page].”
The exhibits from the temporary injunction hearing are in volumes 9
through 20 of the reporter’s record and will be cited as “Ex. P-[number]” or
“Ex. D-[number].”
-xv-
Statement Regarding Oral Argument
Given the significance of the procurement and the importance of the is-
sues presented in this appeal, Superior HealthPlan, Inc. (“Superior”)
requests oral argument, which will give the Court the opportunity to fully vet
the parties’ arguments and obtain any clarifications necessary to decide the
case.
-xvi-
Issues Presented
1. The trial court correctly denied the Commissioner’s plea to
the jurisdiction because (a) Appellees have asserted viable
ultra vires claims; (b) those claims are ripe; and (c) Appellees
were not required to exhaust administrative remedies before
bringing their claims.
2. The trial court did not abuse its discretion in entering the
temporary injunction because (a) Appellees have a likelihood
of success on the merits of their ultra vires claims; (b) Appel-
lees face imminent irreparable harm; (c) the equities favor
injunctive relief; (d) the injunctive order fully complies with
Texas Rule of Civil Procedure 683; and (e) the trial court did
not abuse its discretion in excluding the individual com-
pleted scoring rubrics.
-xvii-
Introduction
Appellant Cecile E. Young, in Her Official Capacity as the Executive
Commissioner (the “Commissioner”) of the Texas Health and Human Ser-
vices Commission (“HHSC”) failed to follow statutory mandates during the
largest procurement in state history—for contracts to provide managed
healthcare for over 1.5 million vulnerable Texans for 10 years, involving total
payments of over $100 billion. The Legislature carefully prescribed standards
for awarding these contracts, including required preferences based on existing
provider networks and quality to ensure a certain level of value in contracted
managed care contracts. The Commissioner acted in direct contravention of
those requirements in many respects. In so doing, she has acted outside the
bounds of her discretion and thus has acted (and will continue to act) ultra
vires. The trial court correctly denied the Commissioner’s plea to the juris-
diction and correctly granted a temporary injunction to prevent the execution
of the unlawfully awarded contracts. This Court should affirm.
Statement of Facts
1. The RFP
This case arises from HHSC’s most recent attempt to procure contracts
worth in total over $100 billion for the State of Texas Access Reform
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 1
(“STAR”) Medicaid program and the Children’s Health Insurance Program
(“CHIP”) (together, “STAR & CHIP”). (CR:3512.) HHSC cancelled two
prior failed procurements (in 2018 and 2020) without awarding any contracts.
(5RR:180; 6RR:233.)
In December 2022, HHSC issued Request for Proposals No.
HHS0011152 (the “RFP”) soliciting proposals for STAR & CHIP managed
care services in all 13 service areas (“SAs”) throughout the State. (CR:3519;
5RR:76–77 & Ex. P-38.) The RFP required respondents to designate and rank
the SAs in which they wanted to provide services. (CR:3520; 5RR:76–77 & Ex.
P-38 § 2.5.2.)
Texas Government Code section 533.004 2 requires HHSC to award cer-
tain Medicaid managed-care contracts (including STAR) to managed care
organizations (“MCOs”) that meet the statute’s requirements (each a “man-
datory contract”). See Tex. Gov’t Code § 533.004(a). The RFP required
2
Portions of Texas Government Code Chapter 533 were repealed and recodified as
part of “the nonsubstantive revision of the health and human services laws govern-
ing the Health and Human Services Commission, Medicaid, and other social
services.” Act of May 19, 2023, 88th Leg., R.S., Ch. 769, sec. 1.01. Section 533.004
has been recodified as Texas Government Code section 540.0206. Id. Because the
applicable statutes were in Chapter 533 at the time of the temporary-injunction hear-
ing, and for consistency of reference, Superior will continue to refer to the sections
in Chapter 533.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 2
respondents asserting a Section 533.004 claim to provide documentation to
substantiate any claim to a mandatory contract. (Ex. P-38 § 3.1.2.)
The RFP describes a multistage evaluation process:
• Initial compliance screening (Ex. P-38 § 3.1.3))
• Scoring responses to technical questions (id.)
• Oral presentations by:
o All respondents with a valid section 533.004 mandatory contract
claim (regardless of score on technical questions) (CR:3521;
5RR:76–77 & Exs. P-38 §§ 3.1.3.3, 3.1.6 & P-284 at 6)
o All other respondents with scores on the technical questions in
the competitive range (CR:3521; 5RR:76–77, 79–80 & Exs. P-38
§ 3.1.3.3 & P-284 at 5–6)
The RFP identified the four topics to be addressed during oral presenta-
tions. (CR:3521; 5RR: 76–77 & Ex. P-38 § 3.1.5.) Each respondent’s final
weighted score was determined by combining the weighted technical-question
score with the weighted oral-presentation score. (CR:3521; 5RR:76–77 & Ex.
P-38 §§ 3.1.5, 3.1.6; 5RR:208–09.)
The RFP also sets forth a methodology for determining contract awards.
(CR:3521–22; 5RR:76–77 & Ex. P-38 § 3.1.7.3.) Under the RFP’s formulaic
approach:
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 3
• in each SA where only one respondent has a validated section
533.004 mandatory-contract claim, that respondent will be
assigned to the SA without any consideration of scores;
• in each SA where more than one respondent has a validated
mandatory-contract claim, the respondent with the highest final
weighted score of those respondents with a validated mandatory-
contract in the SA will be assigned to the SA, and all other
respondents with a validated mandatory-contract claim will be
considered in the same manner as respondents without a
validated mandatory-contract claim;3 and
• after assignment of respondents with validated mandatory-
contract contract claims, respondents will be assigned to SAs in
descending order based on each respondent’s final weighted
score until the maximum number of MCOs per SA has been
assigned, using each respondent’s ranked order of preference up
to a maximum of seven SA assignments per respondent.
(CR:3521–22; 5RR:76–77 & Ex. P-38 § 3.1.7.3.)
The RFP requires HHSC to certify that each respondent recommended
for an award is “reasonably able to fulfill the terms of the Contract, as required
by Texas Government Code Section 533.0035.” (CR:3522; 5RR:76–77 & Ex.
P-38 § 3.1.7.5.) 4 The RFP states that failure to obtain this certification “will
result in no further consideration for Contract award, and another Respondent
3
No SA had more than one respondent with a validated mandatory-contract claim.
(5RR:79–80 & Ex. P-284 at 3–4.)
4
Section 533.0035 has been recodified as Texas Government Code section
540.0203.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 4
may be considered for Contract award in accordance with this section.”
(CR:3522; 5RR:76–77 & Ex. P-38 § 3.1.7.5.)
2. The Commissioner’s Ultra Vires Actions
Multiple sections of the Texas Government Code and the Texas Health
and Safety Code establish requirements that the Commissioner must follow in
conducting the STAR & CHIP procurement. And Texas Government Code
section 2155.144 requires that the Commissioner document the consideration
of relevant factors. See Tex. Gov’t Code § 2155.144(c). Although the RFP
indicated that HHSC would follow these requirements in contract awards (Ex.
P-38 § 3.1.4; 6RR:99-100; Ex. P-38 at 25), HHSC, led by the Commissioner,
did not do so. Appellees established that the Commissioner has acted and will
act ultra vires in at least the following ways:
First, in determining the intended contract awards, HHSC, under the
Commissioner’s direction, failed to “give preference to organizations that
have 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” as required by Texas Government Code
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 5
section 533.003.5 James Ramirez, who was HHSC’s director of the major pro-
curements office for Medicaid and CHIP during the procurement, admitted
at the temporary-injunction hearing that section 533.003(a)(1) is mandatory,
that it requires HHSC to give a preference based on existing provider net-
works, and that it requires those networks to be evaluated by region.
(5RR:221–23.) But the proposals were not divided by region, and there was no
scoring based on region. (5RR:97–98.) Nor did HHSC consider publicly avail-
able information that would demonstrate the extent of the respondents’
existing provider networks. (CR:3534–35; 5RR:98.) HHSC’s training for the
evaluators failed to instruct them to consider any respondent’s existing pro-
vider network, much less any respondent’s existing network by region, or
whether the network includes providers that have traditionally provided Med-
icaid and charity care. (5RR:88–90.) Nor did HHSC instruct evaluators to give
any preference as required by section 533.003(a)(1) or otherwise inform eval-
uators about the required statutory preference based on provider networks.
(5RR:88–89 (“Q. HHSC didn’t instruct the evaluators on the Section 533.003
or 536.052 preferences, did it? A. No.”).)
5
Section 533.003 has been recodified as Texas Government Code section 540.0204.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 6
Second, in determining the intended contract awards, HHSC, under the
Commissioner’s leadership, failed to give preference to organizations that
have successfully implemented quality initiatives or meet quality of care and
cost-efficiency benchmarks as required by Texas Government Code section
536.052(d). (CR:3535–38; 5RR:88–89; 5RR:100–03.)6 The Commissioner ad-
mitted in public testimony before the House Human Services Committee that
existing quality metrics were not considered in making the contract awards;
rather, HHSC considered what the respondents promised to do in the future.
(6RR:162–64; Ex. P-148 at 64–65.) The evaluators were not informed of the
mandatory quality preference, nor did they receive any training indicating that
they should provide a preference based on quality initiatives or benchmarks.
Kay Molina, HHSC’s deputy executive commissioner for procurement and
contracting services, testified that evaluators received no instruction about
consideration of past implementation of quality initiatives and would not have
considered it unless a respondent happened to include that information in
their proposal. (5RR:102–04.)
6
Section 536.052 has been recodified without substantive change at Texas Govern-
ment Code section 543A.0052.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 7
Third, HHSC, under the Commissioner’s direction, is proposing to un-
lawfully award CHIP contracts to respondents that HHSC has found to satisfy
the requirements for a mandatory contract under Texas Government Code
section 533.004, even though that section applies only to Medicaid programs
(such as STAR) but not to CHIP, which is not a Medicaid program. Aside
from section 533.004, this action would also violate Texas Health & Safety
Code section 62.155, which requires HHSC to competitively procure CHIP
contracts without any mandatory contract set-aside. Tex. Health &
Safety Code § 62.155. Kay Molina conceded that section 533.004 does not
apply to CHIP. (5RR:111.) Instead, under the “guise” of a best-value determi-
nation, HHSC intends to award CHIP contracts to those respondents HHSC
has determined are entitled to a mandatory contract under section 533.004
without any statutory authority and without considering the procurement
scores. (5RR:125–26.) In fact, HHSC intends to award a CHIP contract to
every respondent in the STAR & CHIP procurement that claimed entitlement
to a Medicaid mandatory contract under section 533.004, regardless of that
respondent’s score, including the respondent that came in last place out of all
18 respondents. (6RR:59, 157.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 8
In response to a protest to the STAR & CHIP RFP submitted by Well-
point (formerly Amerigroup) before the proposal deadline, HHSC considered
amending the RFP to provide for mandatory-contract awards only for STAR
contracts, with CHIP awards being determined based on scoring. (6RR:51–
52.) But the Commissioner decided that HHSC should deny Wellpoint’s pro-
test and not amend its process. (6RR:153–54; 8RR:70.) By allowing HHSC to
move forward with contracts that unlawfully award CHIP contracts based on
a respondent’s eligibility for a mandatory contract under section 533.004, the
Commissioner will exceed the scope of her legal authority. (CR:3538–40.)
Fourth, HHSC, under the Commissioner’s leadership, failed to address
the considerations in Texas Government Code sections 533.003 and 533.0035
as required section 533.004(a), before making mandatory-contract awards for
STAR contracts. Tex. Gov’t Code § 533.004(a). Those considerations
include whether the bidder has significant participation in its network by pro-
viders who traditionally provide Medicaid and charity care in the SA and
certification that the bidder is reasonably able to fulfill the terms of the con-
tract. See Tex. Gov’t Code §§ 533.003, 533.0035. The mandatory-
contract awards would be ultra vires because the HHSC, under the Commis-
sioner’s leadership has not addressed the required elements in Section
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 9
533.003(a) in making mandatory-contract award decisions. (CR:3541–42;
5RR:124–26.)
Fifth, the Commissioner intends to award contracts that do not comply
with HHSC’s obligation under Texas Government Code section 533.0035 to
“evaluate and certify that the organization is reasonably able to fulfill the
terms of the contract, including all requirements of applicable federal and state
law” before awarding a contract. Rather than conducting its own investigation
into whether a respondent could fulfill the contract’s terms, HHSC simply
relied on each respondent’s self-certification. (CR:3532; 5RR:266–68 & Ex. P-
192; see also 5RR:274 (“Q. And so HHSC just took as to true anything that an
MCO put in their responses to the specific certification questions; is that cor-
rect? A. Yes. We relied on the representation of truth and accuracy that’s
made in the context of submitting a response, yes.”).) Because the statute re-
quires certification by HHSC, not self-certification, if the Commissioner
proceeds with finalizing the intended contract awards, they will violate this
statute.
Sixth, HHSC did not document its consideration of the relevant best-
value criteria as required by Texas Government Code section 2155.144(c).
The requirement that HHSC document that it has considered all relevant
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 10
best-value factors is mandatory, not discretionary. (CR:3533, 3549; 5RR:107–
08, 169, 226–27.) The Commissioner cannot show that HHSC’s intended
contract awards comply with the requirement in section 2155.144(c) to docu-
ment that HHSC considered all relevant factors, including, but not limited to,
quality and past performance.
3. HHSC’s Wrongful Disclosure
The procurement is also fundamentally flawed because the Commis-
sioner intends to proceed with the intended contract awards knowing that
HHSC erroneously disclosed proposals (including Superior’s) to third par-
ties, including one of Superior’s competitors, while the procurement was
ongoing. (CR:3526–27; 5RR:129, 137–40.) This wrongful disclosure under-
mined the procurement’s integrity, destroying any level playing field.
(CR:3526–27; 5RR:126–29; 6RR:14–16 (government-procurement expert’s
testimony that the disclosure irretrievably compromised the procurement’s
integrity).)
In August 2023, while the procurement was still ongoing, HHSC improp-
erly disclosed the proposals to third parties. (CR:3526–27, 3588–3602;
5RR:129, 135–38; 6RR:161–62.) The proposals were disclosed to legal counsel
for Aetna, a respondent to the RFP. This same information was not available
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 11
to other respondents, including Superior. The disclosure happened during the
evaluation of proposals and before Aetna’s oral presentation. (CR:3526, 3588–92;
5RR:137–40.) In January 2024, months after wrongfully disclosing the pro-
posals, HHSC recognized its error. It emailed the recipients of the erroneously
disclosed proposals asking that the proposals be destroyed, but this attempted
cure was too late. (CR:3527; 5RR:138–39, 142–45 & Exs. P-78, P-80, P-81.)
Moreover, HHSC did not confirm, and does not know, whether all the copies
were destroyed. (CR:3527; 5RR:138–39.)
This improper disclosure of the proposals to Aetna destroyed the pro-
curement’s integrity and created an unlevel playing field where Aetna enjoyed
an unfair competitive advantage going into its oral presentations. (CR:3526–
27; 6RR:15, 31–32.) Aetna is an intended contract awardee under the Com-
missioner’s notice of intent to award contracts. (CR:3562.) The RFP
identified the subjects for oral presentations. (CR:3526–27; 5RR:76–77 & Ex.
P-38 § 3.1.5; 5RR:140.) All the subjects were covered in each respondent’s
proposal. (CR:3526–27.) Wellpoint’s representative testified that the dis-
closed copy of its proposal reflected Wellpoint’s strategy relating to
subcontracting, and he explained how Wellpoint’s competitors could have
used that information in preparing for their oral presentations. (6RR:35–37 &
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 12
Ex. P-236; 8RR:88–89.) Thus, the undisputed evidence demonstrated that
Aetna could use the information in its competitors’ proposals to bolster its
own oral presentation and undercut its competitors. (CR:3526–27; 6RR:30–
32, 37.)
HHSC’s release of the proposals before the oral presentations and while
the evaluation was ongoing irretrievably compromised the procurement’s in-
tegrity. (CR:3528, 3603–39; see also 6RR:16–17.) The procurement process did
not provide fair consideration of proposals as required by 1 T.A.C. sec-
tion 391.209(3)(A), and it was far from consistent, uniform, and transparent,
as required by 1 T.A.C. section 391.101. (CR:3546–47, 3588–3639; see also
6RR:16–17.) Thus, HHSC failed to follow applicable law requiring a consistent
and uniform procurement process, fair consideration of proposals, and trans-
parency as required by HHSC’s own rules governing the procurement.
(CR:3528; see also 6RR:16–17.) This occurred under the Commissioner’s over-
sight, and she authorized the intended contract awards knowing of the
wrongful proposal disclosure.
4. The Intended Contract Awards
In March 2024 (after oral presentations were scored), HHSC, under the
Commissioner’s direction, issued notice of the intended contract awards from
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 13
the RFP. (See CR:3523–24; 5RR:81–82 & Ex. P-95.) As shown above, these
intended contract awards are based on a procurement process in which
HHSC, under the Commissioner’s leadership, violated statutory procure-
ment requirements. Thus, if the intended contract awards are finalized, the
Commissioner will exceed her authority under the statutes governing
HHSC’s procurement of Medicaid and CHIP managed care contracts and will
negatively impact more than 1.5 million children, pregnant mothers, and fam-
ilies throughout the State of Texas. (See CR:3512, 3514, 3524–25, 3555–56,
3585–87; 7RR:102–04.) The ultra vires intended contract awards will have
devastating implications for STAR & CHIP members, healthcare providers,
and the Texas Medicaid managed care system as a whole. (CR:3512, 3514,
3518, 3524–25, 3555–56; see also 6RR:144 (Commissioner conceding that the
intended contract awards will require more than 1.5 million Texans to change
health plans).) A substantial number of Texas’s most vulnerable citizens
would be forced to change health plans at a level without precedent in this
state or any other. Those STAR & CHIP members would be left to choose
lower-quality plans with less developed provider networks than they have to-
day. Superior seeks prospective relief prohibiting the Commissioner from
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 14
finalizing awards made under a process that violates the Commissioner’s law-
ful authority. (CR:3525–26.)
5. The Unlawful STAR Kids Procurement
In May 2024, HHSC issued Request for Proposals No. HHS0013071 (the
“STAR Kids RFP”) seeking bids for STAR Kids, a separate Texas Medicaid
managed care program that provides benefits to disabled children and young
adults. (CR:3530.) The STAR Kids RFP is nearly identical to the STAR &
CHIP RFP. (CR:3530; see also 5RR:78; 6RR:229–30.) HHSC developed the
process for both procurements together. Kay Molina and James Ramirez tes-
tified that HHSC is using the same process for the STAR Kids RFP that it
used for the STAR & CHIP RFP and that the statutory mandates will be
treated the same. (5RR:78; 6RR:229–30.) In other words, HHSC will fail to
apply the statutorily required preferences, and the Commissioner again will
act ultra vires if she awards contracts based on the same process. (CR:3530.)
6. The Trial Court’s Temporary Injunction
After a four-day evidentiary hearing with 11 witnesses (including the
Commissioner) testifying, the trial court denied the Commissioner’s plea to
the jurisdiction and enjoined the Commissioner from awarding, signing, exe-
cuting, or taking any other action to implement the intended contract awards
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 15
under the RFP. (CR:5883.) The court also enjoined the Commissioner from
proceeding with the STAR Kids RFP. (Id.)
The trial court found that “[Appellees] have established a cause of action
against [the Commissioner] and a probable right to the relief sought on their
claims that [the Commissioner] has violated and, unless enjoined, will con-
tinue to violate statutory and regulatory requirements applicable to the RFP.”
(CR:5876.) The court specifically found that “[Appellees] have established
that [the Commissioner] 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.”
(CR:5877.) The court determined that “sovereign immunity does not bar [Ap-
pellees’] claims or deprive the [trial court] of subject-matter jurisdiction”
because “[Appellees] properly seek only prospective relief—specifically in-
junctive relief prohibiting [the Commissioner] from awarding, executing, or
otherwise implementing the intended RFP contract and thus preventing fur-
ther unlawful acts in connection with Defendants’ procurement or
contracting processes, as well as accompanying declaratory relief.”(CR:5876.)
The court also made specific findings about the ways the Commissioner has
and will continue to act ultra vires unless enjoined. (CR:5877–78.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 16
The court also concluded that each Appellee would suffer irreparable
harm without injunctive relief. (CR:5879–82.) Superior’s harm includes (i)
loss of members even before the proposed contracts’ implementation; (ii) loss
of employees that would occur almost immediately upon any contract awards
becoming final; (iii) loss of providers participating in Superior’s network be-
cause of the uncertainty and lack of leverage in provider negotiations; (iv) loss
of investments in strategic partnerships intended to scale over time; (v) and a
decrease in Superior’s ability to continue to offer the same level of service un-
der its existing contract in the time leading up to the proposed contracts’
implementation. (CR:5880–81.) The court found that money damages would
not be adequate compensation because the harm to Superior and the other
Appellees harm cannot be measured by any certain pecuniary standard and
because the Commissioner would be immune from any damages claims.
(CR:5882.)
The court also found that the potential harm to Appellees outweighs any
potential harm to the Commissioner or HHSC from maintaining the status
quo, considering HHSC has extended STAR & CHIP contracts in the past.
(Id.) Finally, the court found that the public will not be harmed by a temporary
injunction but would suffer harm without injunctive relief, particularly given
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 17
that more than 1.5 million STAR & CHIP members would be forced to change
health plans. (CR:5883–84.)
The Commissioner appealed the denial of her plea to the jurisdiction and
the grant of the temporary injunction.
Summary of Argument
The trial court correctly denied the Commissioner’s plea to the jurisdic-
tion because Appellees have pleaded viable ultra vires claims. They have
pleaded and shown that the Commissioner has acted (and will act) outside the
bounds of her discretion. Contrary to the Commissioner’s arguments, those
claims are ripe. Her statements at the temporary-injunction hearing and in her
filings in this Court show that she stands ready to execute the proposed con-
tracts. And because the Commissioner is acting ultra vires, Appellees were not
required to exhaust administrative remedies before seeking injunctive relief in
court.
The trial court did not abuse its discretion in entering the temporary in-
junction. Appellees have established a likelihood of success on their ultra vires
claims. Contrary to the Commissioner’s argument, she does not have unlim-
ited discretion in conducting the procurement and awarding these contracts.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 18
The Commissioner has no discretion to ignore mandatory statutory prefer-
ences. But the evidence shows that the procurement failed to apply the
required preferences. The evidence also establishes that, during the procure-
ment, HHSC improperly disclosed proposals to other bidders, including
Aetna. That disclosure created an uneven playing field and gave Aetna an un-
fair advantage, and the Commissioner is acting ultra vires by proceeding with
contract awards with knowledge of the improper disclosure. The relief Appel-
lees seek (a declaration that the Commissioner is acting ultra vires and an
injunction to stop the ultra vires conduct) is the appropriate remedy. Once the
courts determine that the Commissioner’s conduct is ultra vires, it will be up
to the Commissioner (not the courts) to determine a path forward that is com-
pliant with state law. The Court should reject the Commissioner’s efforts to
mischaracterize the relief Appellees seek.
The trial court also correctly concluded that Appellees will suffer irrepa-
rable harm without immediate injunctive relief. The court heard undisputed
testimony that if the Commissioner proceeds with executing the proposed
contracts, Superior will likely suffer destabilization of its workforce, its mem-
bership, and its provider networks. Money damages would be insufficient to
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 19
cure this harm (and would likely be barred by sovereign immunity). The Com-
missioner does not challenge the trial court’s fact findings about irreparable
harm but argues about whether that harm supports injunctive relief. None of
the Commissioner’s arguments supports reversal of the imminent harm find-
ings.
The trial court also correctly found that the public interest favors an in-
junction. The Commissioner ignores that this suit’s entire purpose is to
reassert the state’s control over an official who is acting outside her discretion.
The state has no interest in protecting or continuing the Commissioner’s ultra
vires conduct. And it is in the public interest to ensure that the Commissioner
follows the law in this procurement process.
The Commissioner’s other arguments for reversal also fail. The injunc-
tion order fully complies with Rule 683 because it specifically explains why an
injunction is necessary to prevent irreparable harm to Appellees. In any event,
the Commissioner waived these complaints by not raising them in the trial
court. Nor did the trial court abuse its discretion in excluding the individual
scoring rubrics. The Commissioner waived any argument about the exclusion
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 20
by failing to address in this Court all grounds for exclusion. Nor can the Com-
missioner show that the evidence was admissible under the business-record
exception or that its exclusion was harmful.
Standard of Review
This Court reviews the trial court’s ruling on the plea to the jurisdiction
de novo. Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154,
160 (Tex. 2016). The Commissioner has challenged whether Appellees’
pleadings are sufficient to establish jurisdiction. (CR:2960; EC Br. at 11–16.)
In reviewing the pleadings, this Court “construe[s] the pleadings liberally in
the pleaders’ favor and look[s] to their intent.” Id. “Only if the pleadings af-
firmatively negate jurisdiction should the plea to the jurisdiction be granted
without affording the plaintiffs an opportunity to replead.” Id. (citing Tex.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004)).
The Court reviews “each aspect of the trial court’s injunction for an
abuse of discretion.” Tex. Educ. Agency v. Hous. Indep. Sch. Dist., 660 S.W.3d
108, 116 (Tex. 2023). “A trial court abuses its discretion when it misapplies
the law to established facts or when the evidence does not reasonably support
the trial court’s determination of probable injury or probable right of recov-
ery.” City of Dallas v. Brown, 373 S.W.3d 204, 208 (Tex. App.—Dallas 2012,
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 21
pet. denied). The Court defers to the trial court’s fact findings if the evidence
supports them but reviews legal determinations de novo. State v. Loe, 692
S.W.3d 215, 226 (Tex. 2024). The Court also views the evidence in the light
most favorable to the trial court’s order, indulges every reasonable inference
in favor of the order, and defers to the trial court’s resolution of conflicting
evidence. 31 Holdings I, LLC v. Argonaut Ins. Co., 640 S.W.3d 915, 922 (Tex.
App.—Dallas 2022, no pet.).
Argument
1. The trial court correctly denied the Commissioner’s plea to the juris-
diction.
A. Appellees’ claims are ripe.
The Commissioner argues that Appellees’ claims are not ripe because
their administrative bid protest appeals remain pending before the Commis-
sioner. (EC Br. at 11.) The ripeness argument hinges on the contention that
there can be no cognizable injury to Appellees until the Commissioner decides
their pending bid-protest appeals. (EC Br. at 12.) But the Commissioner mis-
construes the law and the testimony at the temporary-injunction hearing.
Appellees face an imminent injury that is ripe for adjudication.
A dispute is ripe if “the facts are sufficiently developed ‘so that an injury
has occurred or is likely to occur, rather than being contingent or remote.’”
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 22
Sw. Elec. Power Co. v. Lynch, 595 S.W.3d 678, 683 (Tex. 2020) (internal cita-
tions omitted). “A claimant is not required to show that an injury has already
occurred, provided the injury is imminent or sufficiently likely.” S.O. v. Univ.
of Tex., No. 03-16-00726-CV, 2017 WL 2628072, at *2 (Tex. App.—Austin
June 15, 2017, no pet.). A declaratory-judgment claim is ripe when there is a
live controversy, harm will occur if it is not resolved, and the declaration
sought will “actually resolve the controversy.” Lynch, 595 S.W.3d at 685; see
also Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011) (“[The
UDJA] is intended as a means of determining the parties’ rights when a con-
troversy has arisen but before a wrong has been committed.”). When a party
asserts that a governmental actor is acting ultra vires, the party need not wait
for a final agency determination before challenging the ultra vires action and
seeking declaratory relief. See Abbott v. Doe, 691 S.W.3d 55, 76 (Tex. App.—
Austin 2024, no pet.).
To argue that Appellees’ claims are not ripe, the Commissioner selec-
tively quotes portions of the hearing transcript about the status of the
administrative appeals. (EC Br. at 12–13.) The Commissioner contends that
“whether the Commissioner will proceed with the results from HHSC’s pro-
curement scoring or alter them in some way is far from certain.” (EC Br. at
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 23
13.) This statement cannot be squared with the Commissioner’s testimony.
She testified that she believes that the procurement properly gave preference
to historical quality ratings. (6RR:135.) She also testified that she tried to find
a way to give awards to the children’s health plans, but she “couldn’t come
up with a principled way to do it.” (6RR:141.) Finally, she testified that at the
time of the hearing, HHSC’s position was that it was “not going to do any-
thing different” other than move forward with the intended contract awards.
(6RR:168.) This testimony shows that any statements about needing to resolve
the administrative appeals are hollow references to technical procedures.
The Commissioner’s arguments in opposition to Appellees’ second mo-
tion to extend time to file their briefs in this Court also belie her argument that
Appellees’ claims are not ripe. (Appellant’s Response in Opposition to Ap-
pellees’ Second Joint Motion for Extension of Time to File Appellees’ Briefs
(filed Oct. 29, 2025).) The Commissioner urged the Court to deny the exten-
sion by arguing that the contracts she intends to award should go into effect as
soon as possible. (Id. at 3.) The Commissioner unabashedly refers to the in-
tended contract awardees as “the winning bidders” who should receive the
taxpayer dollars at issue (id. at 2) and Appellees as the “wrong parties” to
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 24
receive any taxpayer dollars (id. at 4). The response indicates that the Com-
missioner believes there is nothing left to do before she executes those
proposed contracts and that she intends to proceed with contract awards to
those she has already determined are the “winning bidders.” (Id.)
The Commissioner also disregards evidence of imminent harm. She tes-
tified that she “could execute the contracts immediately after denying the
appeals.” (6RR:147 (emphasis added).) That is, absent injunctive relief now,
there would likely be no way for Appellees to stop the contracts’ execution
after the Commissioner denies the administrative appeals. The trial court
heard uncontroverted evidence of the imminent harm that Superior is already
suffering and will suffer from the contracts’ execution. Superior’s then CEO
testified that “the harm would be immediate” following the contracts’ execu-
tion. (7RR:113.) He described that once the contracts are executed, Superior
will start losing employees, which will affect Superior’s ability to perform un-
der its current contract and result in reputational damage. (7RR:115.) He
explained that as soon as the contracts are signed, Superior would suffer dam-
age to its investment in its value-based contracted network. (7RR:116.) He also
testified that if the contracts are signed, it would impact Superior’s ability to
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 25
negotiate with providers in its network, as those providers would begin focus-
ing on other health plans. (Id.) Similarly, plan participants would start looking
at other plans. (7RR:117.) He noted that even though the contracts have not
been signed, Superior is already “hearing reports of providers informing
members that Superior has lost and is exiting service areas and encouraging
them to switch plans.” (Id.) He testified that this activity would intensify if
the contracts are signed. (Id.) Thus, the evidence establishes (1) a live contro-
versy about the legality of the Commissioner’s actions and (2) imminent harm
from that conduct. Thus, Appellees’ claims are ripe for determination.
The cases the Commissioner cites for her ripeness arguments are distin-
guishable. She cites Riner v. City of Hunters Creek, 403 S.W.3d 919, 923–24
(Tex. App.—Houston [14th Dist.] 2013, no pet.), to support her argument
that claims are not ripe while the administrative appeals are pending. In Riner,
the plaintiffs complained that a city planning and zoning commission miscon-
strued an ordinance concerning lot size and that this was the primary reason
the commission disapproved their plat. Id. at 921. But the commission’s order
identified 14 reasons for disapproving the plat. Id. The court of appeals found
that the plaintiffs’ claims were not ripe because they could not show that the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 26
alleged mistaken interpretation of the lot-size ordinance had caused them in-
jury or would soon do so. Id. at 924. The court noted that the alleged injury
was hypothetical because it was contingent on (a) the plaintiffs’ ability and
willingness to eliminate their plat’s other deficiencies, (b) the commission’s
disapproval of a revised plat, and (c) the board of adjustment’s refusal to re-
verse the commission’s continued disapproval or grant variances. Id. The
court emphasized that the plaintiffs’ declaratory-judgment claim focused on
only one of the commission’s 14 reasons for disapproving the plat (the lot-size
ordinance) and merely assumed that the other bases would be resolved. Id.
Thus, the court could not find that the lot-size ordinance “has caused [plain-
tiffs] a concrete injury, or will soon do so.” Id.
Here, in contrast, the Commissioner’s ultra vires conduct is the cause of
the harm Appellees face. The administrative appeals’ pendency does not af-
fect this analysis. The Commissioner continues to take the position that she
and HHSC complied with all applicable laws, and unless a court tells her oth-
erwise, the Commissioner stands poised to deny the appeals and execute the
contracts immediately thereafter. Thus, the alleged harm in Riner was materi-
ally more contingent and attenuated than the harm at issue here.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 27
The Commissioner also cites Marble Falls Independent School District v.
Scott, 275 S.W.3d 558, 567 (Tex. App.—Austin 2008, pet. denied). But that
case addresses exhaustion of administrative remedies, not ripeness. And as
discussed in Part 1.B., Appellees were not required to exhaust administrative
remedies before seeking a declaration that the Commissioner is acting ultra
vires. Marble Falls is also inapposite because the dispute was subject to the
Administrative Procedure Act and statutory prerequisites to suit, and neither
applies here. See id. at 567–68.
The facts here are more analogous to the facts in Lynch, which involved a
dispute about the rights granted under a blanket easement. 595 S.W.3d at 684.
The defendant argued that the claim was not ripe because plaintiffs’ concerns
stemmed from the easement’s possible future use. Id. The Supreme Court
acknowledged this but noted that the claims were “inextricably tethered to a
present disagreement” about the easement’s scope. Id. The Court also noted
that declaratory-judgment actions “are often brought with an eye to future
harm.” Id. at 685. The Court held that the “present disagreement” (though
narrower than the larger dispute) was sufficient to create a ripe dispute about
the easement’s scope. Id.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 28
Similarly, there is a “present disagreement” here about the Commis-
sioner’s interpretation of the statutes governing the procurements, and
Appellees have shown that they are likely to suffer harm if that controversy is
not resolved. The harm is neither contingent nor remote. The dispute is there-
fore ripe for adjudication.
B. Appellees were not required to exhaust administrative remedies
before bringing their ultra vires suits.
Relatedly, the Commissioner argues that this Court lacks jurisdiction be-
cause Appellees should have exhausted their administrative remedies before
filing suit. (EC Br. at 14.) But administrative exhaustion is not required when
the plaintiff asserts a valid ultra vires claim. See, e.g., McGarry v. Houston Fire-
fighters’ Relief & Ret. Fund, 680 S.W.3d 14, 34–35 (Tex. App.—Houston [1st
Dist.] 2023, pet. denied). The Commissioner concedes that Texas courts have
recognized that at least some ultra vires claims are exempt from the adminis-
trative-exhaustion requirement. (EC Br. at 16.) But she argues that the ultra
vires exception applies only to claims where the administrative body wholly
lacks authority to decide the issue. (Id.) That argument is premised on cases
that predate the Texas Supreme Court’s clarification about what constitutes
an ultra vires claim.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 29
In 2016, the Supreme Court decided Houston Belt & Terminal Railway Co.
and clarified what constitutes an ultra vires claim. 487 S.W.3d at 163. In that
case, the City of Houston argued that ultra vires claims are cognizable only
when the official had no discretion whatsoever. Id. at 161. That is, according
to the City, if the official had any discretion, no ultra vires claim could ever be
brought. Id. The Supreme Court rejected that argument. Id. at 163. The Court
instead held that ultra vires claims are cognizable to address “an officer’s ex-
ercise of judgment or limited discretion without reference to or in conflict with
the constraints of the law authorizing the official to act.” Id. The Court rea-
soned that the purpose of ultra vires claims is not to “attempt to exert control
over the state” but to “attempt to reassert the control of the state.” Id. at 164.
Thus, the issue is not whether the official has discretion or not, but whether
the plaintiff adequately alleges that the official acted outside whatever author-
ity the Legislature has granted. Id.
The Commissioner cites Hensley v. State Commission on Judicial Conduct,
692 S.W.3d 184, 194 (Tex. 2024), for the proposition that “when an available
administrative remedy ‘may moot the claim … the claim is barred.’” (EC Br.
at 14–15.) But in that case, the Supreme Court concluded that the plaintiff did
not have to exhaust her administrative remedies because “exhaustion would
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 30
be a pointless waste of time and resources.” 692 S.W.3d at 194. That holding
is fully consistent with the ultra vires exception’s application. When the plain-
tiff has a viable claim that the official is acting outside the authority granted by
the Legislature, requiring the plaintiff to complete the administrative process
before bringing the claim in court is futile. That is particularly true here, where
completing the administrative process would involve the Commissioner de-
ciding whether her own conduct is ultra vires.
An ultra vires claim’s purpose is to reassert the state’s control over a way-
ward official. Houston Belt, 487 S.W.3d at 164. And the ultra vires exception
to the exhaustion requirement recognizes that there is no reason to make a
plaintiff wait through an administrative process to assert that the official con-
ducting that process is acting without authority or beyond the scope of their
authority. That purpose is fully satisfied here. There is no reason to force Ap-
pellees to complete the administrative process before bringing their claims
that the Commissioner has acted and will continue to act outside her authority
unless enjoined.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 31
2. The trial court correctly concluded that Appellees have a probable
right to relief on their ultra vires claims.
A. The Commissioner does not have unlimited discretion.
The Commissioner argues for the first time on appeal that she cannot be
acting ultra vires because Texas Government Code section 2155.144 grants
her absolute discretion to award managed care contracts based solely on her
determination of “best value.” (EC Br. at 19.) She claims sole discretion to
determine what factors to consider in deciding which contracts will provide
the best value to the state and that she cannot act ultra vires. (Id.) The Com-
missioner is wrong.7
To begin with, although the Commissioner is generally required to use
procurement methods that provide best value under section 2155.144, she also
remains bound to comply with specific statutory requirements when awarding
7
Aetna Better Health of Texas, Inc. argued in its brief that Appellees’ ultra vires
claims are not viable because Appellees did not sue the correct official. (Aetna Br. at
14.) Although Aetna is no longer a party to the appeal (and the Commissioner has
not made this argument), this Court has a duty to examine its own jurisdiction. E.g.,
Tex. Propane Gas Ass’n v. City of Houston, 622 S.W.3d 791, 797 (Tex. 2021). Superior
therefore offers the following response. Aetna relies on Hall v. McRaven, 508 S.W.3d
232, 240 (Tex. 2016). In Hall, the defendant did not have statutory responsibility
for the decision at issue. Id. at 240. Here, in contrast, the Commissioner has ultimate
authority for the decisions at issue here. See Tex. Gov’t Code § 524.0002. She
conceded as much at the hearing. (6RR:141.) Moreover, she will be the official who
executes the proposed contracts. (6RR:147.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 32
managed care contracts, including those in sections 533.003, 533.004, and
536.052(d). See Wilson v. Cmty. Health Choice Texas, Inc., 607 S.W.3d 843,
846–47, 854 (Tex. App.—Austin 2020, pet. denied). These statutory man-
dates for managed care contracts reflect the Legislature’s emphasis on
provider networks to maintain access and quality, helping prevent contracts
that result in substandard care. Nothing in section 2155.144 allows the Com-
missioner to disregard these statutory mandates. 8 Her argument for
unfettered discretion would render those statutory requirements meaningless.
See Crosstex Energy Servs. LP v. Pro Plus, Inc., 430 S.W.3d 384, 390 (Tex. 2014)
(“We must not interpret the statute ‘in a manner that renders any part of the
statute meaningless or superfluous.’” (internal citation omitted)).
Contrary to the Commissioner’s argument, Appellees are not arguing that
she merely misinterpreted the law. (EC Br. at 20 (citing Hall, 508 S.W.3d at
239.) Instead, as discussed in Part 2.B., the trial court correctly found that
8
Aetna also argues that the Commissioner has unfettered discretion in how she de-
cides the pending administrative appeals. (Aetna Br. at 20.) But in deciding the
administrative appeals, the Commissioner is still bound by the same statutory re-
quirements that govern the procurement. And as noted above, the Commissioner
has already signaled exactly how she will decide the protest appeals if given the op-
portunity.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 33
Commissioner failed to follow statutory mandates. In so doing, the Commis-
sioner exceeded whatever discretion she has regarding this managed-care
procurement and thus has acted (and will continue to act) ultra vires. Houston
Belt, 487 S.W.3d at 158 (“A government officer with some discretion to inter-
pret and apply a law may nonetheless act ‘without legal authority,’ and
thus ultra vires, if he exceeds the bounds of his granted authority or if his acts
conflict with the law itself.”).
B. The trial court did not abuse its discretion in concluding that the
Commissioner has acted (and will act) ultra vires.
(1) Appellees have standing to challenge the Commissioner’s ultra
vires conduct.
The Commissioner first asserts that Appellees lack standing to challenge
her failure to apply the mandatory statutory preferences, arguing that Appel-
lees must show that the failure caused Appellees to be passed over in the
procurement process. (EC Br. at 23.) The sole case the Commissioner cites
for this argument is a federal bid-protest case. (Id. (citing Elcon Enters., Inc. v.
Wash. Metro. Area Transit Auth., 977 F.2d 1472, 1483–84 (D.C. Cir. 1992).)
But Appellees have not brought a bid protest; they seek a declaration that the
Commissioner has acted (and will act) ultra vires. A bid-protest case is not
instructive about standing for an ultra vires claim. The Commissioner cited no
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 34
authority for her contention that standing to bring an ultra vires claim requires
such a narrow focus on the type of harm from the ultra vires conduct.
In any event, the Commissioner ignores federal bid-protest case law con-
firming that the “prejudice” necessary to standing includes a showing that
“there was a substantial chance [the plaintiff] would have received the con-
tract award but for th[e] error.” E&L Constr. Grp., LLC v. U.S., 159 Fed. Cl.
115, 119 (2022). A “substantial chance” includes the ability to compete if a
rebid occurs, particularly where the challenger is an incumbent like Superior.
VAS Realty, LLC v. U.S., 26 F.4th 945, 949–50 (Fed. Cir. 2022); Omniplex
World Servs. Corp. v. U.S., 105 Fed. Cl. 706, 713–14 (2012) (recognizing that
incumbency and being in the competitive range are relevant to establishing a
“substantial chance” of being awarded a contract). Thus, the Commis-
sioner’s federal case law does not support her standing argument.
Moreover, contrary to the Commissioner’s argument (EC Br. at 23), Wil-
son v. Community Health Choice Texas, Inc., is instructive. The court did not
limit its ruling to the fact that the plaintiff there was an entity qualifying for
the mandatory contract award under section 533.004(a). See 607 S.W.3d at
854 (holding that by alleging that the Commissioner refused to award a con-
tract in accordance with section 533.004(a), plaintiff alleged an ultra vires act).
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 35
The teaching of Wilson is that the “best value” provisions of the procurement
statutes do not excuse the Commissioner’s disregard of other statutory re-
quirements. Id.; see also, e.g., Ritchie v. Rupe, 443 S.W.3d 856, 867 (Tex. 2014)
(holding that statutory construction requires focusing on “the language of the
specific provision at issue, within the context of the statute as a whole, endeav-
oring to give effect to every word, clause, and sentence”).
(2) The “best value” analysis cannot trump other specific statutory
requirements.
The Commissioner next contends that section 2155.144’s general require-
ment to seek the best value somehow trumps any mandatory statutory
preferences that the Commissioner deems in conflict with that directive. (EC
Br. at 24.) Nothing in section 2155.144 states (or even suggests) that the best-
value determination allows the Commissioner to ignore other statutory re-
quirements. If the Commissioner argues there is a conflict among the statutes,
this Court should be wary of finding conflict, particularly where the statutes
can easily be harmonized. See, e.g., Duarte v. Disanti, 292 S.W.3d 733, 735
(Tex. App.—Dallas 2009, no pet.) (“Finally, we do not give a statute meaning
that conflicts with other provisions if we can reasonably harmonize the provi-
sions.”); Sw. Life Ins. Co. v. Montemayor, 24 S.W.3d 581, 585 (Tex. App.—
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 36
Austin 2000, pet. denied) (“Indeed when there is a positive and clear incon-
sistency between two statutes, courts must adopt a reading that harmonizes
the statutes if at all possible.”). The statutes can be harmonized here by con-
cluding that the best-value determination must be made in light of all of the
required statutory preferences and other mandates that apply to the procure-
ment. 9
The court in Wilson rejected the Commissioner’s argument about section
2155.144’s effect. There, the then-Commissioner pointed to section
2155.144(n) and likewise argued that “he could award the contracts to any en-
tities that provided the best value” regardless of the mandatory contract
requirement in section 533.004(a). Wilson, 607 S.W.3d at 853. The court dis-
agreed, finding no conflict in requiring the Commissioner to adhere to both
the “generally applicable best value requirements” in section 2155.144 and
the requirement to award a contract in accordance with section 533.004(a),
even over the Commissioner’s arguments that this did not achieve best value.
Id. at 854; see also id. at 846–47 (acknowledging that the Commissioner “must
9
And even if the statutes were in conflict, the more specific statutes applicable to
this managed-care procurement (including sections 533.003, 533.004, and 536.052)
prevail over the more general statute, section 2155.144. See Tex. Gov’t Code §
311.026; Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 2000).
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 37
comply with statutory requirements such as those found in chapter 2155 …,
which addresses ‘General Rules and Procedures’ for purchasing” and also
“must implement the Medicaid managed care program by contracting with
MCOs in a manner consistent with chapter 533”).
So too here. Although the Commissioner must comply with the generally
applicable requirement to seek the best value, that does not mean she can ig-
nore the mandatory statutory preferences and requirements in sections
533.003, 533.004, and 536.052(d) in awarding managed-care contracts. See id.
at 854. 10
(3) The Commissioner’s arguments about Appellees’ conduct are
also misplaced.
The Commissioner next argues that Appellees waived any complaints
about the conduct of the procurement by not objecting until after the Com-
missioner issued the notice of intent to award contracts. (EC Br. at 25.) But
Appellees could not have known the Commissioner would ignore the required
10
The Commissioner’s new argument that “best value” trumps all other consider-
ations also runs counter to the Commissioner’s intent to award a CHIP contract to
every respondent in the procurement that claimed entitlement to a Medicaid man-
datory contract under section 533.004, regardless of that respondent’s score under
the purported best-value criteria, including the respondent that came in last place
out of all 18 respondents. (6RR:59, 157.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 38
statutory preferences until after the notice of intent to award was issued, par-
ticularly when the RFP—as the Commissioner agrees—indicated that HHSC
would follow these statutes. (Id.)
The Commissioner also attempts to shift blame to Appellees for failing to
include information in their bids about the mandatory statutory preferences.
(EC Br. at 25.) But the statutes place the responsibility of effecting the man-
dates on the Commissioner and HHSC, not Appellees. Tex. Gov’t Code
§ 533.003(a) (“In awarding contracts to managed care organizations, the com-
mission shall … .” (emphasis added)); Tex. Gov’t Code § 536.052(d) (“In
awarding contracts to managed care organizations under [CHIP] and Medi-
caid, the commission shall … give preference ….” (emphasis added)). This
argument is even more nonsensical because the Commissioner and HHSC al-
ready have access to information they would need to apply the mandates (such
as quality metrics and information regarding provider networks) yet chose to
ignore that information. (6RR:162–64; 5RR:162.)
Additionally, regardless of information provided by the bidders, the Com-
missioner failed to apply the mandates in sections 533.003(a)(1) and
536.052(d), which require preferences for certain plans based on their pro-
vider networks and quality metrics. The Commissioner failed to even train or
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 39
instruct the evaluators about the existence or application of the mandatory
preferences. (5RR:88–89.) The evaluators’ ignorance of the mandates is borne
out by the results, as the proposed contract awards would eliminate the high-
est-ranked plan—including Superior in certain service areas—in 11 out of 13
regions, and the awarded plans lack participation from providers who have
historically served Medicaid or charity care populations. (7RR:104–12.)
The Commissioner also violated section 2155.144 by failing to document
consideration of past performance. HHSC deemed past performance a rele-
vant factor in this procurement. (5RR:225–26.) Section 2155.144 mandates
that HHSC document any factors considered relevant. See Tex. Gov’t
Code § 2155.144(c) (“The agency shall document that it considered all rele-
vant factors under Subsection (d) in making the acquisition.” (emphasis
added)). The term “shall” is mandatory and leaves no room for discretion.
See Tex. Gov’t Code § 311.016(2) (“ʻShallʼ imposes a duty”); see also,
e.g., Frank v. Liberty Ins. Corp., 255 S.W.3d 314, 324 (Tex. App.—Austin
2008, pet. denied) (noting that the word “shall” in a statute is generally con-
strued as creating a “mandatory duty”).
Once HHSC deemed past performance a relevant factor under section
2155.144(d), it was required to specifically document past performance under
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 40
subsection (c), but it did not. (5RR:107–08, 168–69, 225–26.) Despite the stray
comment the Commissioner cites as somehow showing documentation of the
consideration of past performance, HHSC witnesses Kay Molina and James
Ramirez could point to no documentation of past performance outside of ge-
nerically referring to the entire procurement file. (5RR:227–28 (admitting past
performance was not “an express and independent consideration”); see also
5RR:110–11 (conceding that “the words ‘past performance’ are [not] going to
show up anywhere” in any evaluations of respondents’ proposals.).) And the
Commissioner rejected her own consultant’s recommendation about docu-
menting past performance. (5RR: 181.)
Despite the Commissioner’s arguments to the contrary, section 2155.144
imposed a nondiscretionary duty upon the Commissioner to document all rel-
evant factors considered under the statute in making the contract awards,
including past performance, which she did not do. The Commissioner asserts
that “entire procurement file” documents the relevant factors. (EC Br. at 21.)
But as discussed above, the phrase “past performance” is not in the evalua-
tion files. This gives rise to an ultra vires claim.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 41
(4) The trial court did not abuse its discretion in finding that Ap-
pellees are likely to succeed on their claims that the
Commissioner failed to apply statutory mandates.
The Court should also reject the Commissioner’s attempts to defend the
conduct of the procurement. She first argues that she has “absolute discre-
tion” to decide how to give the preference required by section 533.003. (EC
Br. at 26.) She argues that it is permissible to apply the preference only if two
MCOs would be otherwise tied. (Id.) But section 533.003(a)(1) is clear: “In
awarding contracts to managed care organizations, the commission shall …
give preference to organizations that have significant participation” by pro-
viders in the region who have traditionally provided care to Medicaid and
charity care patients. Tex. Gov’t Code § 533.003(a)(1). “Shall” is man-
datory. See, e.g., Frank, 255 S.W.3d at 324. Nothing supports the
Commissioner’s argument that she had the discretion to apply the preference
only when she wished to, e.g., in case of a tie or all things being equal. Arguing
that there is some discretion in determining what “significant participation”
means or who qualifies as a provider who has “traditionally provided care to
Medicaid and charity care patients” does not absolve the Commissioner’s
complete disregard of the statutory requirement. There is no evidence that the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 42
Commissioner applied any preference, let alone a preference that took into
account any particular definition of these phrases.
The Commissioner also cannot rely on the best-value evaluation criteria
or technical questions to show that HHSC somehow did apply the required
section 533.003(a)(1) preference in the procurement. Section 533.003(a)(1)
requires HHSC to give preference by region to those MCOs that have signifi-
cant participation in the MCO’s provider network from each health care
provider in the region that has traditionally provided care to Medicaid and
charity care patients. Thus, section 533.003(a)(1) mandates that HHSC give
preference based on provider networks already in place in each region when
HHSC makes contract awards. None of the best-value evaluation criteria or
technical questions requested information about a respondent’s existing pro-
vider network at all, let alone by region. And even the provisions the
Commissioner cites do not relate expressly to providers who traditionally pro-
vide care to Medicaid and charity care patients, but “Providers” broadly. (See
EC Br. at 26.) Nor were the evaluators given any information necessary to ap-
ply the preference, such as which providers traditionally provide care to
Medicaid and charity patients, nor were they informed of any preference re-
quirement. (5RR:98.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 43
The Commissioner next argues that she had substantial discretion in ap-
plying section 536.052(d) and applied the required preference through some
of the best-value criteria and technical questions. (EC Br. at 28.) The record
shows otherwise. Section 536.052(d) is clear and mandatory: the commission
“shall” give preference either to an MCO that “meets quality of care and
cost-efficiency benchmarks” as specified under the statute or to an MCO
“that offers a managed care plan that successfully implements quality initia-
tives.” Tex. Gov’t Code § 536.052(d) (emphasis added).
The Commissioner did neither. She admits HHSC never developed the
quality and cost-efficiency benchmarks referenced in section 536.052(d). In-
stead, she claims that she was proceeding under the subsection requiring
consideration of which MCO has successfully implemented quality initiatives.
(EC Br. at 28.) But she admitted in testimony before the House Human Ser-
vices Committee that existing quality metrics were not considered in making
the contract awards. (6RR:162–64; Ex. P-148 at 64–65.) HHSC merely con-
sidered what the respondents promised to do in the future. (Id.) That does not
comply with the statute. Nor is it sufficient to argue that respondents should
have submitted the relevant information for the preference’s application
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 44
themselves; the statute assigns the responsibility to HHSC to grant the pref-
erence. Tex. Gov’t Code § 536.052(d).
The Commissioner suggests that HHSC considered the information nec-
essary to employ the preference by considering responses to Technical
Question 13. (EC Br. at 29.) But the question did not ask about past perfor-
mance or quality initiatives that any MCO was already implementing. (Ex. P-
38 at 38.) Instead, it asked about “strategies and initiatives” that the bidder
proposed to employ if awarded a contract. (Id.) This is consistent with the
Commissioner’s legislative testimony that the technical questions were “de-
signed to elicit how an – an organization is going to fulfill those quality
requirements.” (Ex. P-148 at 64–65.) James Ramirez also confirmed that the
procurement process did not consider or evaluate the quality initiatives previ-
ously implemented by any plan. (5RR:224–28.)
The Commissioner next disputes that she failed to ensure mandatory con-
tracts under section 533.004 were awarded considering section 533.003(a)(1),
which requires giving preference to organizations with significant participa-
tion in their provider network from health care providers in the region who
have traditionally provided Medicaid and charity care. (EC Br. at 29.) As ex-
plained above, the Commissioner did not actually employ the preference
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 45
required by section 533.003(a)(1), and thus her argument that the selection of
mandatory contracts was also under that provision falls flat. Indeed, the evi-
dence shows that the only consideration in awarding a mandatory contract
under section 533.004(a) was whether HHSC validated a claim of entitlement
to a mandatory contract. (6RR:59, 157.) And contrary to what the Commis-
sioner says, it is a question of the Commissioner’s authority to choose a
winner, and not a question of what “weight HHSC gave various factors.” (EC
Br. at 30.) The statutes that Appellees have identified outline clear, nondis-
cretionary duties that the Commissioner must perform when awarding
managed-care contracts. She has failed (and will fail) to adhere to these stat-
utes in implementing the proposed contract awards.
In sum, the procurement is governed by specific statutory provisions that
require HHSC to use identified preferences in making contracting decisions.
The Commissioner does not have discretion to disregard those requirements
just because one of several statutes governing her authority in managed-care
procurements directs her to seek the best value for the state. The evidence is
more than sufficient to support the trial court’s findings that the Commis-
sioner has acted (and will continue to act) ultra vires. The trial court thus did
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 46
not abuse its discretion in finding that Appellees have a likelihood of success
on the merits of their ultra vires claims.
C. The disclosure to Aetna violated basic procurement law.
The trial court also correctly found that HHSC’s wrongful disclosure of
the proposals, including to Aetna’s lawyers, destroyed the procurement’s in-
tegrity and created an unlevel playing field. As a result, the intended contract
awards were procured through a process that does not provide fair considera-
tion of proposals as required by 1 T.A.C. section 391.209(3)(A), and that is not
consistent, uniform, or transparent, as required by 1 T.A.C. section 391.101.
There is no dispute that Aetna received the proposals. And in its brief filed in
this Court before its appeal was dismissed, Aetna did not deny using them to
its advantage. (Aetna Br. at 59.)
The Commissioner responds that all RFP respondents agreed to the ap-
plication of the Public Information Act (“PIA”) to their proposals, and that if
HHSC mistakenly responded to a PIA request, that is simply a discretionary
application of the PIA. (EC Br. at 32.) The Commissioner is wrong.
No one disputes that respondents knew that PIA versions of their pro-
posals were eventually subject to public disclosure. But by wrongfully making
the disclosure while the competitive evaluation process was still underway,
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 47
HHSC created an unlevel playing field and favored one bidder over others.
Kay Molina agreed to the general proposition that proposals are protected un-
til an award decision is made to protect the procurement’s integrity, and she
admitted that she knew of no other instance where a proposal was released
before notices of intent to award were posted. (5RR:128–29.) Notably, the PIA
proposals were wrongfully disclosed to Aetna, but not to all other respond-
ents, before oral presentations, when Aetna could use the information for a
unique advantage in its preparation. (5RR:136–40 (Kay Molina acknowledging
the value of the prematurely-disclosed proposals to Aetna).)
The Commissioner points to the conclusory resolution of Superior’s pro-
test that, in HHSC’s view, the premature disclosure did not affect the
procurement. (EC Br. at 34.) But she ignores the evidence from the tempo-
rary-injunction hearing, including HHSC’s own admission that the disclosure
was wrongful. (5RR:138–39 (discussing correspondence in which HHSC em-
ployees admitted the proposals were disclosed in error and asked the recipient
to destroy the copies); CR:3546–47, 3588–3639.) She also ignores the uncon-
tradicted testimony of Superior’s procurement expert that the disclosure
violated standards of procurement law and fatally tainted the procurement.
(6RR:16–17.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 48
In short, the Commissioner failed to show that the trial court abused its
discretion in finding that the premature disclosure supports an injunction.
The disclosure gave Aetna an advantage that other respondents lacked. And
the Commissioner acted ultra vires in proceeding with the intended contract
after the premature disclosure while the procurement was pending and will
continue to act ultra vires if she awards and executes the contracts knowing of
the wrongful disclosure.
D. The trial court properly applied other statutory requirements.
The Commissioner next argues that the trial court “invented” statutory
mandates in support of the temporary injunction. (EC Br. at 35.) But the trial
court simply applied the plain language of the relevant statutes to the facts and
found that Appellees have a probable right to relief on their claims sufficient
to warrant a temporary injunction.
Texas Government Code section 533.0035(a) is one such clear, nondis-
cretionary statute: “Before the commission may award a contract under this
chapter to a managed care organization, the commission shall evaluate and certify
that the organization is reasonably able to fulfill the terms of the contract, including
all requirements of applicable federal and state law.” Tex. Gov’t Code §
533.0035(a) (emphasis added). While the Commissioner contends that this
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 49
statute requires no investigation by HHSC, and that HHSC may simply rely
on what is presented by the respondents (EC Br. at 36), the word “evaluate”
in the statute plainly requires more than the self-certification that HHSC al-
lowed. Contrary to the Commissioner’s argument, she does not have absolute
discretion to avoid her obligation to evaluate by simply accepting the respond-
ents’ self-serving representations.
The Commissioner also argues that there is no statutory basis to prohibit
the procurement of CHIP and STAR services together. (CR Br. at 37.) This
misconstrues Appellees’ argument. Appellees do not assert that CHIP and
STAR services may not be procured through the same RFP. But the statutes
do prohibit awarding CHIP contracts under the Medicaid mandatory-contract
requirements of section 533.004. The section expressly applies only to Medi-
caid managed care services, not CHIP, and is an exception to the general
requirement of competitive procurement. See Wilson, 607 S.W.3d at 854
(holding that Texas Health & Safety Code section 62.155(a) mandates com-
petitive procurement for CHIP contracts). Section 62.155(c)(1)’s statement
that the Commissioner “may give preference to a person who provides similar
coverage under the Medicaid program” does not change the analysis. Tex.
Health & Safety Code § 62.155(c)(1) (emphasis added). Construed as
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 50
a whole, section 62.155 requires CHIP services to be procured through a com-
petitive process. The mandatory-contract process in Section 533.004 is not
competitive. The Legislature could have included CHIP in section 533.004.
It did not.
The Commissioner boldly contends that “HHSC’s decision to procure
the CHIP piece with the mandatory STAR piece is consistent with the best-
value scoring to award the CHIP contracts competitively” (EC Br. at 38 (emphasis
added)), but this is demonstrably untrue. The CHIP contracts awarded to
mandatory STAR contract recipients were not awarded based on any “best-
value scoring.” They were automatically given without regard to the score un-
der the best-value criteria. That is how the lowest-scoring of all 18 respondents
stands to receive a mandatory CHIP contract. (6RR:59, 157.)
E. The Commissioner mischaracterizes the relief Appellees seek.
The Commissioner complains that Appellees “lack a judicially enforcea-
ble right to compel the Commissioner to redo the procurement because
nothing in statute authorizes such relief” and argues that this relief would be
barred by sovereign immunity as retroactive. (EC Br. at 38.) But this argument
misstates the relief Appellees seek. The Commissioner does not cite any por-
tion of the record where Appellees have sought an order compelling the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 51
Commissioner to redo the procurement. (Id.) That is because there is no such
pleading. Instead, Superior seeks (1) declarations that the Commissioner is re-
quired to comply with the statutes governing the procurement and that the
Commissioner has failed and will continue to fail to comply with such statutes
if the proposed contract awards are finalized and (2) an injunction stopping
the Commissioner from proceeding with the proposed contract awards.
(CR:3550–56.) If the courts grant that relief, the Commissioner would have
the responsibility to determine the next steps to comply with the law.
The Austin Court of Appeals has already held that a suit to enjoin the
Commissioner from executing a contract procured in violation of statutory re-
quirements states a valid ultra vires claim. Wilson, 607 S.W.3d at 855. Thus,
Appellees’ similar claims are also cognizable. That is, by seeking to stop the
Commissioner from violating the law, the claim seeks prospective relief. And
injunctive relief to stop improper conduct is a recognized and proper remedy
for an ultra vires claim.
Further, the cases the Commissioner cites to defeat the strawman argu-
ment she’s offered are readily distinguishable. The Commissioner first cites
In re Stetson Renewables Holdings, LLC, 658 S.W.3d 292, 297 (Tex. 2022)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 52
(orig. proceeding) for the proposition that absent a legislatively crafted rem-
edy, there is no remedy at all for ultra vires conduct. (EC Br. at 39.) But Stetson
does not support that argument. A taxpayer sought mandamus relief ordering
the Comptroller to process its application to participate in a tax incentive pro-
gram. 658 S.W.3d at 293. The Supreme Court held that because the
Legislature had expressly provided that the program ended on a date certain,
a court could not order the Comptroller to process an application after that
date. Id. at 299. Nothing in the opinion can reasonably be read to prevent the
Court from holding the Commissioner to her statutory obligations in the con-
text of her procurement duties, as Appellees seek here.
The Commissioner next cites Morath v. Kingsville Independent School Dis-
trict, 710 S.W.3d 918, 925 (Tex. App.—15th Dist. 2025, no pet.), for the
proposition that “the lack of a legislatively mandated judicial remedy is fatal
to [Appellees’] claims.” (EC Br. at 39.) Again, the case does not support that
proposition. The issue there was whether a school district was entitled to an
order compelling the Commissioner of Education to cancel school district rat-
ings rather than issuing them retroactively because they were not timely under
the statute. 710 S.W.3d at 921–22. This Court held that issuing the ratings
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 53
retroactively was not an ultra vires act because the statute gave the Commis-
sioner of Education broad discretion about the timing of issuance. Id. at 927.
This case does not address what the remedy would have been if the commis-
sioner was acting ultra vires.
Finally, the Commissioner cites City of Austin v. Utility Associates, Inc.,
517 S.W.3d 300, 312–13 (Tex. App.—Austin 2017, pet. denied), to argue that
Appellees seek retrospective relief rather than prospective relief. (EC Br. at
41.) But that case establishes that Appellees are seeking prospective relief. In
Utility Associates, the plaintiff sought injunctive relief to stop enforcement of
an existing contract the city had previously executed. 517 S.W.3d at 312–13.
The court held that this was improper retrospective relief. Id. Of course, here
Appellees seek injunctive relief to stop the Commissioner from awarding and
signing the contracts. That is prospective relief.
More fundamentally, the Commissioner’s argument cannot be squared
with the many cases recognizing that injunctive relief is proper to stop ultra
vires actions. See, e.g., Matzen v. McLane, 659 S.W.3d 381, 388 (Tex. 2021)
(“Texas law recognizes ‘ultra vires’ claims seeking prospective injunctive re-
lief against individual government officials in their official capacities.”);
Phillips v. McNeill, 635 S.W.3d 620, 627–28 (Tex. 2021) (noting that ultra vires
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 54
suits against government officials trace their roots “to courts’ issuance of
writs of habeas corpus, mandamus, and injunction against government offi-
cials to check acts in excess of lawful authority”); Houston Belt, 487 S.W.3d at
160 n.4 (noting that a successful plaintiff on an ultra vires claim is entitled to
injunctive relief); City of El Paso v. Heinrich, 284 S.W.3d 366, 373, 376 (Tex.
2009) (same). In short, the relief Appellees seek is judicially cognizable.
3. The trial court correctly found that Superior faces irreparable harm
without injunctive relief.
The Commissioner has not shown that the trial court abused its discretion
in concluding that Superior faces irreparable harm without immediate injunc-
tive relief. The Commissioner’s irreparable-harm discussion does not
challenge the trial court’s fact findings that Superior will be harmed. (EC Br.
at 46.) Instead, she argues that the harm does not result from the procurement
process and that it is not irreparable. (Id.) But the trial court correctly found
that Superior faces imminent, irreparable harm in the absence of injunctive
relief.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 55
A. Superior established that it is threatened with imminent, irrepa-
rable harm.
The trial court made specific fact findings about the imminent, irreparable
harm Superior faces. The court found that execution of the proposed con-
tracts would begin transition activities toward new contracts that would
substantially reduce the number of STAR & CHIP members that Superior
serves today, causing real and immediate harm to Superior. (CR:5880–81;
7RR:104 (over 700,000 current Superior members will have to change plans if
the Commissioner proceeds with the intended contract awards).) Contract ex-
ecution would destabilize Superior’s workforce, as its employees—already
grappling with the uncertainty of their jobs in light of the intended awards—
would be at heightened risk for targeted recruitment by competing MCOs.
(CR:5880–81; 7RR:113–15.) Superior also demonstrated that, absent injunc-
tive relief, the intended contract awards would jeopardize its provider
networks by discouraging providers from contracting with Superior and di-
minishing Superior’s bargaining power in provider negotiations. (CR:5880–
81; 7RR:115–16.) The loss of employees and providers will make it difficult or
impossible for Superior to continue providing the same level of service that it
currently provides under its existing STAR & CHIP contracts through the end
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 56
of the term of those contracts. (CR:5880–81; 7RR:115.) This will not only hin-
der Superior’s operations but will also cause reputational damage. (Id.)
Superior also presented evidence that it will begin losing membership im-
mediately if the contracts are executed, even though the new STAR & CHIP
contracts are not scheduled to be operational for some time. (CR:5880–81;
7RR:116–17.) Providers have already been informing Superior’s members that
Superior will no longer be providing STAR & CHIP services in certain areas
of the state and are encouraging members to switch plans. (Id.) The confusion
among providers and members alike will only worsen if the contract awards
are executed notwithstanding the pending challenge to their legality. (Id.)
Money damages will not be sufficient because the harm Superior will suffer
will be extremely difficult to measure by any pecuniary standard. (CR:5882.)
Moreover, money damages will not be sufficient because the state would claim
immunity from any damages claims. (Id.)
The Commissioner did not offer any contrary evidence in the trial court.
And on appeal, she does not challenge any of the trial court’s fact findings
about the harm Superior faces. (EC Br. at 46–48.) Instead, she asserts that the
harm is not “imminent” because Appellees’ claims are not ripe. (Id.) But as
discussed in Part 1.A., Appellees’ claims are ripe. For the same reasons, the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 57
Court should reject the Commissioner’s argument that the harm is not immi-
nent.
B. The Commissioner’s other arguments about irreparable harm
are unavailing.
The Commissioner raises five other arguments about Appellees’ harm,
but none of them can support reversal of the temporary injunction. First, the
Commissioner asserts that Appellees’ “problem is not with the process but
with the result.” (EC Br. at 46.) But as discussed in Part 2, Appellees’ com-
plaints are about both the process and the result from that process. The result
is unlawful because the process is unlawful. The trial court found that the pro-
cess will result in “invalid and unlawful” contract awards. (CR:5878.) The
Commissioner cites no authority for her assertion that Appellees have a bur-
den to show that they would have been awarded additional contracts but for
the unlawful procedure. 11
Second, the Commissioner argues that beneficiaries having to change
plans is not “irreparable harm,” because those changes are inevitable conse-
quences of re-procurement and may, in fact, be good for beneficiaries. (EC Br.
11
Moreover, as discussed in Part 2.B.(1), federal bid-protest law (the Commissioner
relies on) requires only a showing of a substantial chance that the plaintiff would
have received an award.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 58
at 46.) That argument misses the point. Appellees do not assert a property
right to continuation of their contracts. The irreparable harm arises because
beneficiaries will be forced to change plans (potentially for the worse) because
of the Commissioner’s ultra vires acts. The case the Commissioner cites for
this argument is distinguishable. Turner v. Joshua Indep. Sch. Dist., 583 S.W.2d
939, 942 (Tex. App.—Waco 1979, no pet.) (addressing a generic property
right to contract renewal). That case has nothing to say about ultra vires
claims. The Commissioner’s mischaracterization of the relief Appellees seek
also undercuts her argument that Appellees do not have cognizable harm. (EC
Br. at 47.) As discussed in Part 3.A., Appellees have established that they face
imminent, cognizable harm.
Third, the Commissioner’s argument that contractual harms cannot be
irreparable fares no better. Appellees are not pursuing a contractual remedy.
They have viable ultra vires claims to ensure a procurement process in which
they participated was conducted in accordance with law and are entitled to
injunctive relief to prevent ultra vires actions. Appellees established that they
face irreparable harm. As discussed in Part 1.A., the Commissioner has sig-
naled that absent injunctive relief, she will proceed with executing the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 59
proposed contracts and will likely argue that this action moots Appellees’
claims.
Fourth, the Commissioner suggests that Appellees should have protested
how HHSC would employ the mandatory statutory preferences before the no-
tices of intent to award were issued. (EC Br. at 47.) But Appellees could not
have known the Commissioner would ignore the statutory mandates until af-
ter the notices of intent to award were issued, particularly when the RFP
expressly stated that HHSC would follow these statutes. (EC Br. at 4.)
Fifth, the Commissioner makes the absurd claim that Appellees’ “posi-
tion threatens the very structure of state government itself.” (EC Br. at 48.)
As discussed above, Appellees seek nothing more than to require the Com-
missioner to follow state law. The Commissioner has violated state law, not
Appellees. The entire purpose of ultra vires claims is to reassert the state’s
control over the Commissioner’s conduct of the procurement. Houston Belt,
487 S.W.3d at 164. This is not an argument against Appellees’ irreparable
harm.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 60
4. The trial court correctly concluded that the equities weigh in favor of
Appellees.
The trial court also examined the equities and concluded that they weigh
in favor of injunctive relief, and the Commissioner has not shown that conclu-
sion was an abuse of discretion. The Commissioner first argues that her
interest and the public interest are the same. (EC Br. at 49.) But that argument
ignores the context of this case. The only authority the Commissioner cites
for this argument is an opinion from the Fifth Circuit about a constitutional
challenge to a statute. (Id. (citing Vote.Org v. Callanen, 39 F.4th 297, 309 (5th
Cir. 2022)). But in an ultra vires suit, the public’s interests are not aligned with
the defendant’s interests. To the contrary, an ultra vires suit’s purpose is “to
reassert the control of the state” over an official who is acting contrary to law.
Houston Belt, 487 S.W.3d at 164. Because the Commissioner’s ultra vires acts
are by definition unlawful, id., her interests and the public’s interests are not
the same. Instead, the public has an interest in ensuring that the Commis-
sioner complies with the laws enacted by their elected representatives. Thus,
the public interest is served by an injunction that reasserts the state’s control
over an official who is acting contrary to law.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 61
The Commissioner next argues that the injunction violates the separation
of powers by interfering with her supposedly unlimited discretion to deter-
mine how to obtain the best value for the state. (EC Br. at 49.) That argument
has two fatal flaws. First, as discussed in Part 2.A., the Commissioner does not
have unlimited discretion. Second, an ultra vires suit does not violate the sep-
aration of powers because its purpose is to ensure that the Commissioner
follows the law. Houston Belt, 487 S.W.3d at 164. The Commissioner has no
right to violate the law. See In re State, 711 S.W.3d 641, 648 (Tex. 2024) (orig.
proceeding) (“The County is not harmed by being required to follow the
Texas Constitution.”).
The Commissioner also argues that forcing 1.5 million vulnerable Texans
to change health plans cannot support injunctive relief. (EC Br. at 50.) But her
arguments again ignore the nature of this case. It is immaterial that beneficiar-
ies can choose to change plans at any time. The Commissioner’s ultra vires acts
will force them to change. Which plans beneficiaries should be able to choose
from should be determined by a lawful procurement process. Because the
Commissioner has violated and will continue to violate the law, members’
choices in many cases will not include their current plans, and they will be
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 62
limited to plans that HHSC itself has found to be lower quality with less de-
veloped provider networks. This constitutes harm to the public that the trial
court properly considered.
Finally, the Commissioner argues that in the General Appropriations Act
for the 2024-25 Biennium, the Legislature has expressed a policy preference
against extensions of existing contracts. (EC Br. at 50–51.) According to the
Commissioner, this provision “forecloses” the possibility of additional exten-
sions of the existing contracts. (Id.) But the Commissioner ignores that the
Legislature included the identical policy statements in the General Appropri-
ations Act for the 2022-23 Biennium and the General Appropriations Act for
the 2020-21 Biennium. See Act of May 31, 2021, 87th Leg., R.S., Ch. 1053, art.
IX, § 17.09(e), 2021 Tex. Gen. Laws 2805, 3695; Act of May 27, 2019, 86th
Leg., R.S., Ch. 1353, art. IX, § 17.10(e), 2019 Tex. Gen. Laws 4035, 4929.
Those provisions did not stop the Commissioner from extending the existing
contracts in 2020 after the last failed procurement. (5RR:180–81.) In fact, the
Commissioner conceded that HHSC could extend the contract again, if
needed. (6RR:145.) Thus, the policy statement in the most recent appropria-
tions act has no impact on the propriety of injunctive relief. Moreover, nothing
in that general statement of preference overrides the need to prevent ultra
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 63
vires actions by state officials and to conduct procurements in accordance with
applicable law.
5. The Commissioner’s other complaints lack merit.
A. The injunction order complies with Rule 683.
The Commissioner for the first time asserts that the temporary-injunction
order fails to comply with Rule 683 because it does not adequately set forth
the reasons for its issuance. (EC Br. at 51.) This argument cannot support re-
versal because: (1) the Commissioner waived it by not complaining in the trial
court and (2) the temporary-injunction order complies with the requirement
to explain the reasons for its issuance.
(1) The Commissioner waived any complaint about the adequacy of
the temporary-injunction order.
First, the Commissioner did not raise her complaints about the form of
the temporary-injunction order in the trial court. This Court has not yet had
occasion to decide whether complaints about an order’s compliance with Rule
683 must be presented in the trial court to preserve them. But other Texas
appellate courts have held that complaints that an order violates Rule 683
must be raised in the trial court or waived. See, e.g., Taylor Hous. Auth. v.
Shorts, 549 S.W.3d 865, 877 (Tex. App.—Austin 2018, no pet.); Tex. Tech
Univ. Health Sci. Ctr. v. Rao, 105 S.W.3d 763, 768 (Tex. App.—Amarillo
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 64
2003, pet. dism’d); Emerson v. Fires Out, Inc., 735 S.W.2d 492, 493–94 (Tex.
App.—Austin 1987, no writ). In Emerson, the Austin Court of Appeals rea-
soned that familiar error-preservation rules required that the trial court be
given a chance to address the appellant’s complaints in the first instance. 735
S.W.2d at 494. The court held that “it serves no good purpose to permit ap-
pellants to lie in wait and present this error in form for the first time on
appeal.” Id. Instead, “on proper request, the district court could easily have
added to the judgment” the findings that the appellant contended were re-
quired by Rule 683, but missing. Id. That procedure would have given the trial
court the opportunity to cure the alleged error and “appellate review would
have been facilitated.” Id. The Austin Court of Appeals has repeatedly reaf-
firmed its reasoning and holding from Emerson. See, e.g., Taylor Hous. Auth.,
549 S.W.3d at 877. This Court should adopt the same reasoning and rule and
require appellants to present to the trial court any complaints about a tempo-
rary-injunction order’s compliance with Rule 683.12 Because the
12
Other courts of appeals have disagreed with the Austin Court of Appeals’ ap-
proach. See Hoist Liftruck Mfg., Inc. v. Carruth-Doggett, Inc., 485 S.W.3d 120, 124
(Tex. App.—Houston [14th Dist.] 2016, no pet.) (Frost, C.J., concurring) (discuss-
ing split among courts of appeals). But as Chief Justice Frost observed, the courts
that require presentation in the trial court have the better reasoning. Id. This Court
should adopt that better reasoning.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 65
Commissioner did not present these arguments to the trial court, the Court
should hold that they have been waived.
(2) In any event, the temporary-injunction order complies with
Rule 683.
Even if the Commissioner had not waived her Rule 683 complaints, they
would still not offer a basis for reversal. The Commissioner complains that the
injunction order fails to explain why the trial court found that Appellees have
a probable right to relief and that “the order does not address the Commis-
sioner’s evidence or arguments concerning Plaintiffs’ lack of irreparable
harm.” (EC Br. at 52–53.) Neither argument supports reversal.
The Texas Supreme Court has long held that Rule 683 does not require a
temporary-injunction order to “set forth the reasons why the court believes it
probable that the applicant will prevail on a final trial.” Transp. Co. of Texas v.
Robertson Transports, Inc., 261 S.W.2d 549, 553 (Tex. 1953). Instead, the rule
requires only that the order set forth “the reasons why the court believes the
applicant’s probable right will be endangered if the writ does not issue.” Id.
Thus, the Commissioner’s complaint about the lack of detail about Ap-
pellees’ likelihood of success is misplaced. Rule 683 does not require the
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 66
explanation the Commissioner demands. If the Commissioner wanted de-
tailed findings of fact and conclusions of law about the likelihood of success,
she should have requested them under Rule 296. See id.
The Commissioner’s complaint about the order’s irreparable-harm find-
ings is also misplaced. The Commissioner’s sole argument is that “the order
simply parrots Plaintiffs’ arguments about the economic consequences of los-
ing the contracts.” (EC Br. at 53.) That is not a valid basis to attack an
injunction’s compliance with Rule 683. A temporary-injunction order is ade-
quate if it identifies “the probable injury that will be suffered by appellees, why
the injury is irreparable, and why appellees will have no adequate legal remedy
if the injunction does not issue.” AutoNation, Inc. v. Hatfield, 186 S.W.3d 576,
582 (Tex. App.—Houston [14th Dist.] 2005, no pet.). And in determining
whether the order complies with Rule 683, the court looks only to the order
itself. Id.
Here, the trial court’s irreparable-harm findings span five single-spaced
pages of the temporary-injunction order. (CR:5879–83.) The court made mul-
tiple, detailed findings about the injuries Appellees face, why those injuries
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 67
would be irreparable, and why Appellees would have no legal remedy if an in-
junction did not issue. (Id.) This is more than sufficient to comply with Rule
683.
B. The trial court did not err in declining to admit the scoring ru-
brics.
The Commissioner also complains that the trial court declined to admit
consensus scoring rubrics that she attempted to offer into evidence. (EC Br.
at 53.) But the Commissioner has failed to address all of Appellees’ objections
to this evidence. For this reason alone, the Court should reject the Commis-
sioner’s argument on this point. In any event, the testimony she points to in
this Court does not establish that the completed rubrics are business records.
Nor can she show that the exclusion of those records was harmful error.
When the Commissioner first offered the completed rubrics into evi-
dence, Appellees objected on two grounds: (1) the completed rubrics are
hearsay and (2) the witness through whom they were offered had not reviewed
them and therefore did not have personal knowledge to testify about them or
their admissibility. (7RR:21–25.) The trial court correctly sustained both ob-
jections but suggested that she might be willing to reconsider if the
Commissioner could present a witness with personal knowledge. (Id.) Later in
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 68
the hearing, the Commissioner made an offer of proof and proposed offering
a business-records affidavit that had not been previously produced. (8RR:139,
145.) The parties and the court held a lengthy discussion about the documents
and Appellees’ objections. (8RR:139–58.) But the Commissioner does not
even mention this interchange in her brief in this Court. (See EC Br. at 53–56.)
Appellees objected to the new offer on the basis that the Commissioner’s
representatives testified at their depositions that they had not reviewed all the
completed scoring rubrics and that the application of the mandates was in-
stead reflected in the “master rollup sheets” rather than the individual
scoring rubrics. (8RR:140.) Appellees had requested that the corporate repre-
sentatives be prepared to testify at their depositions about the mandatory
statutory preferences, but they were not prepared to discuss the individual
scoring rubrics. (8RR:145.) Appellees offered the deposition excerpts into ev-
idence in support of their objection. (Ex. P-320.) They also cited and provided
copies of authorities for the proposition that a corporate representative cannot
disclaim knowledge of a subject at their deposition and then offer testimony
on that subject at trial. (8RR:152–55.) As one example, they cited Function Me-
dia, L.L.C. v. Google, Inc., No. 2:07–CV–279–CE, 2010 WL 276093, at *1
(E.D. Tex. Jan 15, 2010) (“When the 30(b)(6) representative claims ignorance
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 69
of a subject during the deposition, courts have precluded the corporation from
later introducing evidence on that subject.”). The Commissioner does not ad-
dress this argument in her brief in this Court. (EC Br. at 53–56.)13
Appellees also objected on the basis of relevance because the Commis-
sioner’s representative testified at his deposition that the relevant score sheet
was the “master rollup sheet” not the individual scoring rubrics. (8RR:145–
46.) The Commissioner does not address this objection either. (EC Br. at 53–
56.) Because she did not address all of Appellees’ objections to the evidence,
the Commissioner has waived any complaint about the exclusion. E.g., Cantu
v. Horany, 195 S.W.3d 867, 871 (Tex. App.—Dallas 2006, no pet.) (“When an
appellee urges several objections to a particular piece of evidence and, on ap-
peal, the appellant complains of its exclusion on only one of those bases, the
appellant has waived that issue for appeal.”).
Even if the Commissioner had preserved her argument, it would still not
succeed. In this Court, she points to testimony from James Ramirez to try to
establish that the completed rubrics are business records. (EC Br. at 55 (citing
13
The Commissioner is therefore also wrong when she asserts that the trial court
did not give a reasoned basis for her decision to sustain Appellees’ objections. (EC
Br. at 57.)
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 70
20RR:345–46).) The reliance on this testimony fails for several reasons. First,
the cited testimony discusses a blank scoring rubric form (which was admitted
into evidence), not the completed rubrics that the Commissioner complains
about on appeal. (20RR:345–46.) Second, the testimony does not address the
elements to make business records admissible. Compare id., with Tex. R.
Evid. 803(6). Nothing in the testimony the Commissioner points to ad-
dresses whether the records were made at or near the time of the events
recorded, whether they were made by someone with knowledge, or whether
the records were made in the course of a regularly conducted activity. That
failure is unsurprising because the witness affirmatively testified that he had
not reviewed the completed rubrics. (5RR:228; 6RR:216.) Thus, he could not
provide the necessary testimony about them. The Commissioner therefore
failed to show that the evidence is admissible under the business-record ex-
ception to the hearsay rule.
Because the evidence was properly excluded, the Court need not engage
in a harmful error analysis. Even so, the Commissioner did not carry her bur-
den to show that the exclusion was harmful. She asserts that the exclusion of
the completed rubrics was harmful because knowing how each bidder scored
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 71
would be “crucial to deciding the question of whether the procurement pro-
cess complied with applicable statutes.” (EC Br. at 57.) But the Commissioner
does not explain how the completed rubrics would show compliance with the
statutes. And her representatives testified at their depositions that the “mas-
ter rollup sheets” were the relevant documents, not the individual scoring
rubrics. (Ex. P-320.)
The bare assertion that the evidence would have made a difference is not
sufficient. As discussed above, the trial court heard ample evidence that the
process failed to properly account for the statutorily required preferences.
The Commissioner has not attempted to explain how the completed rubrics
could have overridden all of that other evidence and caused a different result.
The Commissioner thus has not carried her burden on appeal to show that the
exclusion of this evidence was harmful. See Gunn v. McCoy, 554 S.W.3d 645,
666 (Tex. 2018) (“To reverse a trial court’s judgment based on the exclusion
of evidence, we must find that the trial court did in fact commit error, and that
the error was harmful.”).
Conclusion and Prayer
The trial court correctly denied the Commissioner’s plea to the jurisdic-
tion. Appellees have asserted viable ultra vires claims, and those claims are
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 72
ripe for determination. The Commissioner has not established that the trial
court abused its discretion in entering the injunction. The Commissioner does
not have unfettered discretion to make procurement decisions. Rather, those
decisions are subject to specific statutory requirements. And the trial court did
not abuse its discretion in determining that it is likely that the Commissioner
has violated (and will continue to violate) those requirements. Nor did the trial
court abuse its discretion in concluding that the other requirements for injunc-
tive relief are met here. Superior therefore requests that the Court affirm the
trial court’s denial of the Commissioner’s plea to the jurisdiction and affirm
the temporary injunction. Superior further requests general relief.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 73
Dated: December 9, 2025
Respectfully submitted,
Holland & Knight LLP
By: /s/ Richard B. Phillips, Jr.
Richard B. Phillips, Jr.
Texas Bar No. 24032833
rich.phillips@hklaw.com
One Arts Plaza
1722 Routh Street, Suite 15500
Dallas, Texas 75201
(214) 964-9500 (telephone)
(214) 964-9501 (facsimile)
Karen D. Walker
Admitted Pro Hac Vice
karen.walker@hklaw.com
Tiffany Roddenberry
Admitted Pro Hac Vice
tiffany.roddenberry@hklaw.com
315 S. Calhoun Street, Suite 600
Tallahassee, Florida 32301
(850) 425-5612 (telephone)
(850) 224-8832 (facsimile)
Attorneys for Appellee
Superior HealthPlan, Inc.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 74
Certificate of Compliance
This brief complies with the typeface requirements of Tex. R. App. P.
9.4(e), because it has been prepared in Equity font in 14-point for text and 13-
point for footnotes. This document also complies with the word-count limita-
tions of Tex. R. App. P. 9.4(i), because it contains 14,809 words, excluding
any parts exempted by Tex. R. App. P. 9.4(i)(1).
/s/ Richard B. Phillips, Jr.
Richard B. Phillips, Jr.
Appellee Superior HealthPlan, Inc.’s Response Brief —
Page 75
Tab
A
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
Tab
B
§ 540.0204. Contract Considerations Relating to Managed..., TX GOVT § 540.0204
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 540. Medicaid Managed Care Program (Refs & Annos)
Subchapter E. Contract Administration
V.T.C.A., Government Code § 540.0204
Formerly cited as TX GOVT § 533.003
§ 540.0204. Contract Considerations Relating to Managed Care Organizations
Currentness
In awarding contracts to managed care organizations, the commission shall:
(1) give preference to an organization that has significant participation in the organization's provider network from each
health care provider in the region who has traditionally provided care to Medicaid and charity care patients;
(2) give extra consideration to an organization that agrees to assure continuity of care for at least three months beyond a
recipient's Medicaid eligibility period;
(3) consider the need to use different managed care plans to meet the needs of different populations; and
(4) consider the ability of an organization to process Medicaid claims electronically.
Credits
Added by Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 1.01, eff. April 1, 2025.
<Chapter 540 added as a nonsubstantive revision by Acts 2023,
88th Leg., ch. 769 (H.B. 4611) § 1.01, effective April 1, 2025.>
V. T. C. A., Government Code § 540.0204, TX GOVT § 540.0204
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
Tab
C
§ 540.0203. Certification by Commission, TX GOVT § 540.0203
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 540. Medicaid Managed Care Program (Refs & Annos)
Subchapter E. Contract Administration
V.T.C.A., Government Code § 540.0203
Formerly cited as TX GOVT § 533.0035
§ 540.0203. Certification by Commission
Currentness
(a) Before the commission may award a contract under this chapter to a managed care organization, the commission shall
evaluate and certify that the organization is reasonably able to fulfill the contract terms, including all federal and state law
requirements. Notwithstanding any other law, the commission may not award a contract under this chapter to an organization
that does not receive the required certification.
(b) A managed care organization may appeal the commission's denial of certification.
Credits
Added by Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 1.01, eff. April 1, 2025.
<Chapter 540 added as a nonsubstantive revision by Acts 2023,
88th Leg., ch. 769 (H.B. 4611) § 1.01, effective April 1, 2025.>
V. T. C. A., Government Code § 540.0203, TX GOVT § 540.0203
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
Tab
D
§ 540.0206. Mandatory Contracts, TX GOVT § 540.0206
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 540. Medicaid Managed Care Program (Refs & Annos)
Subchapter E. Contract Administration
V.T.C.A., Government Code § 540.0206
Formerly cited as TX GOVT § 533.004
§ 540.0206. Mandatory Contracts
Currentness
(a) Subject to the certification required under Section 540.0203 and the considerations required under Section 540.0204, in
providing health care services through Medicaid managed care to recipients in a health care service region, the commission
shall contract with a managed care organization in that region that holds a certificate of authority issued under Chapter 843,
Insurance Code, to provide health care in that region and that is:
(1) wholly owned and operated by a hospital district in that region;
(2) created by a nonprofit corporation that:
(A) has a contract, agreement, or other arrangement with a hospital district in that region or with a municipality in that
region that owns a hospital licensed under Chapter 241, Health and Safety Code, and has an obligation to provide health
care to indigent patients; and
(B) under the contract, agreement, or other arrangement, assumes the obligation to provide health care to indigent patients
and leases, manages, or operates a hospital facility the hospital district or municipality owns; or
(3) created by a nonprofit corporation that has a contract, agreement, or other arrangement with a hospital district in that
region under which the nonprofit corporation acts as an agent of the district and assumes the district's obligation to arrange
for services under the Medicaid expansion for children as authorized by Chapter 444 (S.B. 10), Acts of the 74th Legislature,
Regular Session, 1995.
(b) A managed care organization described by Subsection (a) is subject to all terms to which other managed care organizations
are subject, including all contractual, regulatory, and statutory provisions relating to participation in the Medicaid managed
care program.
(c) The commission shall make the awarding and renewal of a mandatory contract under this section to a managed care
organization affiliated with a hospital district or municipality contingent on the district or municipality entering into a matching
funds agreement to expand Medicaid for children as authorized by Chapter 444 (S.B. 10), Acts of the 74th Legislature, Regular
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 540.0206. Mandatory Contracts, TX GOVT § 540.0206
Session, 1995. The commission shall make compliance with the matching funds agreement a condition of the continuation of
the contract with the managed care organization to provide health care services to recipients.
(d) Subsection (c) does not apply if:
(1) the commission does not expand Medicaid for children as authorized by Chapter 444, Acts of the 74th Legislature, Regular
Session, 1995; or
(2) a waiver from a federal agency necessary for the expansion is not granted.
(e) In providing health care services through Medicaid managed care to recipients in a health care service region, with the
exception of the Harris service area for the STAR Medicaid managed care program, as the commission defined as of September
1, 1999, the commission shall also contract with a managed care organization in that region that holds a certificate of authority
as a health maintenance organization issued under Chapter 843, Insurance Code, and that:
(1) is certified under Section 162.001, Occupations Code;
(2) is created by The University of Texas Medical Branch at Galveston; and
(3) has obtained a certificate of authority as a health maintenance organization to serve one or more counties in that region
from the Texas Department of Insurance before September 2, 1999.
Credits
Added by Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 1.01, eff. April 1, 2025.
<Chapter 540 added as a nonsubstantive revision by Acts 2023,
88th Leg., ch. 769 (H.B. 4611) § 1.01, effective April 1, 2025.>
V. T. C. A., Government Code § 540.0206, TX GOVT § 540.0206
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
Tab
E
§ 543A.0052. Financial Incentives and Contract Award..., TX GOVT § 543A.0052
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 543A. Quality-Based Outcomes and Payments Under Medicaid and Child Health Plan Program
Subchapter B. Quality-Based Payments Relating to Managed Care Organizations
V.T.C.A., Government Code § 543A.0052
Formerly cited as TX GOVT § 536.052
§ 543A.0052. Financial Incentives and Contract Award Preferences
Currentness
(a) The commission may allow a managed care organization participating in the child health plan program or Medicaid increased
flexibility to implement quality initiatives in a managed care plan offered by the organization, including flexibility with respect
to financial arrangements, to:
(1) achieve high-quality, cost-effective health care;
(2) increase the use of high-quality, cost-effective delivery models;
(3) reduce the incidence of unnecessary institutionalization and potentially preventable events; and
(4) in collaboration with physicians and other health care providers, increase the use of alternative payment systems, including
shared savings models.
(b) The commission shall develop quality-of-care and cost-efficiency benchmarks, including benchmarks based on a managed
care organization's performance with respect to:
(1) reducing potentially preventable events; and
(2) containing the growth rate of health care costs.
(c) The commission may include in a contract between a managed care organization and the commission financial incentives
that are based on the organization's successful implementation of quality initiatives under Subsection (a) or success in achieving
quality-of-care and cost-efficiency benchmarks under Subsection (b). The commission may implement the financial incentives
only if implementing the incentives would be cost-effective.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 543A.0052. Financial Incentives and Contract Award..., TX GOVT § 543A.0052
(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).
Credits
Added by Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 1.01, eff. April 1, 2025.
<Chapter 543A added as a nonsubstantive revision by Acts 2023,
88th Leg., ch. 769 (H.B. 4611) § 1.01, effective April 1, 2025.>
V. T. C. A., Government Code § 543A.0052, TX GOVT § 543A.0052
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
Tab
F
§ 2155.144. Procurements by Health and Human Services..., TX GOVT § 2155.144
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 10. General Government (Refs & Annos)
Subtitle D. State Purchasing and General Services (Refs & Annos)
Chapter 2155. Purchasing: General Rules and Procedures (Refs & Annos)
Subchapter C. Delegations of and Exclusions from Comptroller's Purchasing Authority and Certain
Exemptions from Competitive Bidding
V.T.C.A., Government Code § 2155.144
§ 2155.144. Procurements by Health and Human Services Agencies
Currentness
(a) This section applies only to the Health and Human Services Commission, each health and human services agency, the
Department of Family and Protective Services, and agencies administratively attached to the Health and Human Services
Commission. For the purposes of this section, the Department of Family and Protective Services or an agency administratively
attached to the Health and Human Services Commission is considered a health and human services agency.
(b) An agency to which this section applies is delegated the authority to procure its goods and services, except as provided
by this section.
(b-1) An agency to which this section applies is not delegated the authority to procure common commodities or services:
(1) including goods and services acquired for direct consumption or use by the agency in the day-to-day support of the
agency's administrative operations, such as office supplies and equipment, building maintenance and cleaning services, or
temporary employment services; and
(2) not including consulting services, professional services, health care services, information resources technology, goods
or services acquired for the benefit or on behalf of clients of programs operated by the agency, procurements specifically
authorized or delegated to the agency by statute, or the contracting out of agency purchasing functions or other administrative
or program functions.
(b-2) The Health and Human Services Commission is delegated the authority to procure goods and services related to a contract
for:
(1) a project to construct or expand a state hospital operated by a health and human services agency or a state supported living
center as defined by Section 531.002, Health and Safety Code; or
(2) a deferred maintenance project for a health facility described by Subdivision (1).
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 2155.144. Procurements by Health and Human Services..., TX GOVT § 2155.144
(b-3) Notwithstanding any other law, the Texas Civil Commitment Office is delegated the authority to procure common
commodities or services described by Subsection (b-1)(1) for office use if the total cost of the purchase is less than the total
cost of the purchase under the comptroller's purchasing authority or as offered for sale as provided by Chapter 122, Human
Resources Code. The Texas Civil Commitment Office, in collaboration with the comptroller, shall identify best practices for
comparing the total costs and documenting cost savings.
(c) An agency to which this section applies shall acquire goods or services by any procurement method approved by the Health
and Human Services Commission that provides the best value to the agency. The agency shall document that it considered all
relevant factors under Subsection (d) in making the acquisition.
(d) Subject to Subsection (e), the agency may consider all relevant factors in determining the best value, including:
(1) any installation costs;
(2) the delivery terms;
(3) the quality and reliability of the vendor's goods or services;
(4) the extent to which the goods or services meet the agency's needs;
(5) indicators of probable vendor performance under the contract such as past vendor performance, the vendor's financial
resources and ability to perform, the vendor's experience and responsibility, and the vendor's ability to provide reliable
maintenance agreements;
(6) the impact on the ability of the agency to comply with laws and rules relating to historically underutilized businesses or
relating to the procurement of goods and services from persons with disabilities;
(7) the total long-term cost to the agency of acquiring the vendor's goods or services;
(8) the cost of any employee training associated with the acquisition;
(9) the effect of an acquisition on agency productivity;
(10) the acquisition price; and
(11) any other factor relevant to determining the best value for the agency in the context of a particular acquisition.
(e) Repealed by Acts 2003, 78th Leg., ch. 785, § 75(2).
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
§ 2155.144. Procurements by Health and Human Services..., TX GOVT § 2155.144
(f) The state auditor may audit the agency's acquisitions of goods and services before or after a warrant is issued to pay for
an acquisition.
(g) The agency may adopt rules and procedures for the acquisition of goods and services under this section.
(h) The Health and Human Services Commission shall adopt rules and procedures for the acquisition of goods and services
under this section that apply to all health and human services agencies, including rules adopted with the commission's assistance
that allow an agency to make purchases through a group purchasing program except when a better value is available through
another procurement method. The rules of the health and human services agencies must be consistent with the rules of the
Health and Human Services Commission.
(i) Subject to Section 524.0001(b), the Health and Human Services Commission shall develop a single statewide risk analysis
procedure. Each health and human services agency shall comply with the procedure. The procedure must provide for:
(1) assessing the risk of fraud, abuse, or waste in health and human services agencies contractor selection processes, contract
provisions, and payment and reimbursement rates and methods for the different types of goods and services for which health
and human services agencies contract;
(2) identifying contracts that require enhanced contract monitoring; and
(3) coordinating contract monitoring efforts among health and human services agencies.
(j) Subject to Section 524.0001(b), the Health and Human Services Commission shall publish a contract management handbook
that establishes consistent contracting policies and practices to be followed by health and human services agencies. The
handbook may include standard contract provisions and formats for health and human services agencies to incorporate as
applicable in their contracts.
(k) Subject to Section 524.0001(b), the Health and Human Services Commission, in cooperation with the comptroller, shall
establish a central contract management database that identifies each contract made with a health and human services agency.
The comptroller may use the database to monitor health and human services agency contracts, and health and human services
agencies may use the database in contracting. A state agency shall send to the comptroller in the manner prescribed by the
comptroller the information the agency possesses that the comptroller requires for inclusion in the database.
(l) The Health and Human Services Commission shall coordinate the procurement practices of all health and human services
agencies and encourage those agencies to use efficient procurement practices such as the use of a group purchasing program,
combining maintenance contracts into one contract, and obtaining prompt payment discounts. In implementing this duty, the
Health and Human Services Commission may review the procurement and rate-setting procedures of each health and human
services agency to ensure that amounts paid to contractors are consistent and represent the best value for the state. The Health
and Human Services Commission may disapprove a procurement and rate-setting procedure of a health and human services
agency. A health and human services agency may not use a procurement or rate-setting procedure that has been disapproved by
the commission. The Health and Human Services Commission may transfer the procurement functions of a health and human
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 3
§ 2155.144. Procurements by Health and Human Services..., TX GOVT § 2155.144
services agency to another appropriate state agency if it determines that transferring those functions would be advantageous to
the state. Other state agencies and institutions with experience in acquiring goods and services using the procedures allowed
under Subsections (c) and (d) shall on request assist the Health and Human Services Commission to perform its functions under
this section.
(m) Subject to Section 524.0001(b), the Health and Human Services Commission shall develop and implement a statewide plan
to ensure that each entity that contracts with a health and human services agency and any subcontractor of the entity complies
with the accessibility requirements of the Americans with Disabilities Act of 1990 (42 U.S.C. Section 12101 et seq.).
(n) To the extent of any conflict, this section prevails over any other state law relating to the procurement of goods and services
except a law relating to contracting with historically underutilized businesses or relating to the procurement of goods and
services from persons with disabilities.
(o) If the Health and Human Services Commission does not receive any responsive bids on a competitive solicitation for goods
or services for a state hospital operated by a health and human services agency or a state supported living center as defined by
Section 531.002, Health and Safety Code, the commission after making a written determination that competition is not available
may negotiate with and award the contract to any qualified vendor who meets the requirements of the original solicitation:
(1) at a price consistent with the current market value of the goods or services; and
(2) for a term not to exceed five years.
(p) In this section, “health and human services agency” has the meaning assigned by Section 521.0001.
Credits
Added by Acts 1997, 75th Leg., ch. 1045, § 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1460, § 3.11, eff. Sept.
1, 1999; Acts 2003, 78th Leg., ch. 309, § 7.07, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 785, § 75(2), eff. Sept. 1, 2003;
Acts 2007, 80th Leg., ch. 937, § 1.09, eff. Sept. 1, 2007; Acts 2015, 84th Leg., ch. 837 (S.B. 200), § 2.08(b)(3), eff. Sept. 1,
2015; Acts 2019, 86th Leg., ch. 953 (S.B. 65), § 16, eff. Sept. 1, 2019; Acts 2021, 87th Leg., ch. 621 (S.B. 1896), § 15, eff.
June 14, 2021; Acts 2021, 87th Leg., ch. 855 (S.B. 799), § 9, eff. Sept. 1, 2021; Acts 2023, 88th Leg., ch. 351 (S.B. 1179), §
17, eff. Sept. 1, 2023; Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 2.20, eff. April 1, 2025; Acts 2025, 89th Leg., ch. 1145
(S.B. 1610), § 27, eff. Sept. 1, 2025.
V. T. C. A., Government Code § 2155.144, TX GOVT § 2155.144
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 4
Tab
G
§ 62.155. Health Plan Providers, TX HEALTH & S § 62.155
Vernon's Texas Statutes and Codes Annotated
Health and Safety Code (Refs & Annos)
Title 2. Health
Subtitle C. Programs Providing Health Care Benefits and Services
Chapter 62. Child Health Plan for Certain Low-Income Children (Refs & Annos)
Subchapter D. Child Health Plan
V.T.C.A., Health & Safety Code § 62.155
§ 62.155. Health Plan Providers
Currentness
(a) The commission shall select the health plan providers under the program through a competitive procurement process. A
health plan provider, other than a state administered primary care case management network, must hold a certificate of authority
or other appropriate license issued by the Texas Department of Insurance that authorizes the health plan provider to provide
the type of child health plan offered and must satisfy, except as provided by this chapter, any applicable requirement of the
Insurance Code or another insurance law of this state.
(b) A managed care organization or other entity shall seek to obtain, in the organization's or entity's provider network, the
participation of significant traditional providers, as defined by commission rule, if that organization or entity:
(1) contracts with the commission or with another agency or entity to operate a part of the child health plan under this chapter;
and
(2) uses a provider network to provide or arrange for health care services under the child health plan.
(c) In selecting a health plan provider, the commission:
(1) may give preference to a person who provides similar coverage under the Medicaid program; and
(2) shall provide for a choice of at least two health plan providers in each service area.
(d) The executive commissioner may authorize an exception to Subsection (c)(2) if there is only one acceptable applicant to
become a health plan provider in the service area.
Credits
Added by Acts 1999, 76th Leg., ch. 235, § 1, eff. Aug. 30, 1999. Amended by Acts 2003, 78th Leg., ch. 198, § 2.52, eff. Sept.
1, 2003; Acts 2015, 84th Leg., ch. 1 (S.B. 219), § 3.0205, eff. April 2, 2015.
V. T. C. A., Health & Safety Code § 62.155, TX HEALTH & S § 62.155
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 62.155. Health Plan Providers, TX HEALTH & S § 62.155
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
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