HHSC terminates CHIP contracts over procurement error

Texas Health and Human Services Commission has terminated CHIP contracts with 5 managed care organizations due to a scoring error during the procurement process.

The short-term contracts for CHIP Rural and Hidalgo Service Areas were scheduled to being September 1, 2018 and run through December 31, 2019. The MCOs awarded the contracts were Blue Cross and Blue Shield of Texas, Driscoll Children’s Health Plan, Texas Children’s Health Plan, Molina Healthcare of Texas and Superior Health Plan.

Molina Healthcare of Texas provided the following statement:

The Texas Health and Human Services Commission (HHSC) has decided to cancel the new CHIP RSA contracts and provide an extension of Molina Healthcare’s existing contract. Regardless of any changes in the contracting process, Molina remains steadfastly committed to providing children across Texas with access to high quality health care.

HHSC has issued contract extensions to Molina and Superior Health Plan, the existing MCOs in the areas, through 2019 in order to ensure there is no impact on delivery of service. A new RFP has been released with services to begin January 1, 2020.

HHSC provided the following statement:

“Procurement errors are unacceptable, and the agency shoulders the responsibility to ensure the quality and accuracy of every procurement. The agency welcomes a close review of our practices and looks forward to working with the Inspector General and the State Auditor’s Office during this process. We terminated three employees, associated with this procurement.

We are continuously working to have the best system in place. Back in March 2017, the agency specifically requested from the Sunset Commission a review of our procurement and contracting processes to help ensure compliance. Separately, last month the agency requested an internal audit of our procurement processes and asked that it be at the top priority of our internal audit staff.

We’ll work closely with the SAO [Texas State Auditor’s Office] and IG’s [Inspector General’s] offices and fully provide any information they need to help us. We’ll quickly implement any fixes and improvements identified through this process.”

Governor Abbott has asked both the Texas State Auditor’s Office and the Inspector General’s Office to investigate the error. Speaker Joe Straus asked the House Appropriations Committee to further look into HHSC’s contracting practices.

HHSC was criticized earlier this year over mismanagement of its Medicaid managed care contract with Superior HealthPlan.