Editor's note: This story has been updated to clarify that managed care organization Amerigroup is now operating under the name Wellpoint in Texas.
The state of Texas plans to drop Driscoll Health Plan from two health insurance programs for low-income children and pregnant women, threatening the future of the nonprofit health plan that currently serves over 185,000 people in South Texas.
The health plan, part of the Driscoll Health System, has served South Texans for over two decades, investing millions in community health initiatives and recording some of the highest performance metrics in the state.
To the shock of some in the Coastal Bend and Rio Grande Valley communities, the state acknowledges it isn’t taking this history into account when deciding which health plans it will work with in South Texas in the future to serve low-income children and pregnant women who can’t afford to buy private health insurance.
Though Texas Health and Human Services will continue to operate care programs for low-income families, the state is reducing the number of managed care organizations it contracts with to administer the state’s Medicaid STAR and Children’s Health Insurance Program.
STAR primarily serves pregnant women and low-income children. CHIP is a federal program serving low-income children whose families earn too much to qualify for Medicaid but still cannot afford private insurance.
Next fall, Texas Health and Human Services plans to redistribute contracts, dropping six managed care organizations, including Driscoll Children’s Health Plan and two other large nonprofit Texas children’s health plans.
Driscoll Health Plan currently serves about 78% of those eligible for these programs in Corpus Christi. This means that unless the state reverses course and decides to continue working with Driscoll Health Plan, these families will have to pick a new health plan.
And Driscoll Health Plan, which employs hundreds of South Texans, would likely shut down.
Driscoll Children’s Hospital, a separate entity within the Driscoll Health System, is not in danger of shutting down and will continue to operate regardless of the health plan’s fate, but programs in the community that have been specifically funded by the health plan are in jeopardy.
“The hospital is as strong as ever and it will not be impacted... but the health plan is really another tool in the tool chest of serving South Texas and a very important one,” Driscoll Health Plan CEO Craig Smith said.
Hundreds of South Texas residents have reached out to lawmakers and a bipartisan legislative delegation from the region has come together to express concern about the state’s plans.
What is the Driscoll Health Plan? Why is it under threat?
The state of Texas contracts with private entities to provide Medicaid services, meeting the health needs of members. Texas Health and Human Services determines which managed care organizations it will work with, limiting the number of organizations by region.
Currently, the Nueces region, which includes Nueces, San Patricio, Live Oak, Bee, Karnes, Goliad, Victoria, Calhoun, Refugio, Aransas, Jim Wells, Kleberg Brooks and Kenedy counties, is served by Driscoll Health Plan, Superior HealthPlan and UnitedHealthcare.
Driscoll Health Plan also operates in the Hidalgo managed care service area, which includes 10 Rio Grande Valley counties. In the Hidalgo service area, Driscoll Health Plan has only been a managed care organization for the STAR and STAR Kids programs.
Driscoll Health Plan first began serving CHIP families in the Nueces region in 1999, eventually becoming a STAR managed care organization and beginning to operate in the Hildago region in later years.
Members of the health plan have access to case management, free education health and safety classes, telemedicine, transportation to appointments and after-hours care.
In 2022, the state began a new procurement process for managed care providers for CHIP and STAR. In March, the state announced that it did not plan to award a contract to Driscoll Health Plan for either the Nueces or Hildago service areas, which cover most of South Texas.
Texas Children’s Health Plan and Cook Children’s Health Plan, which serve the Houston region and North Texas respectively, are in a similar position, at risk of being dropped from service areas where they currently operate.
In total, about 1.8 million Texans will have to find new health plans next year under the state’s current plan. This includes about 75% of the children and pregnant women served by CHIP and STAR in South Texas.
While the non-profit children’s health plans are being dropped, the state’s plan would allow national for-profit chains to expand, according to reporting from the Texas Tribune.
The state’s procurement process did not consider past performance specifically, focusing on what the potential managed care organizations said they planned to do.
At a June 4 meeting of the Texas House Committee on Human Services, lawmakers questioned Texas Health and Human Services staff about the procurement process.
Texas Health and Human Services Commission executive commissioner Cecile Young said during the meeting that considering past experience would “favor only the incumbents” because newcomers would not have metrics of past performance.
Kay Molina, deputy executive commissioner for the Health and Human Services Commission's procurement and contracting services division, said state law does not allow for any bias.
“(State law) basically requires us to put something out that is fair to everyone, which makes it very hard to give extra points for someone who’s already in the space doing something because then it’s not fair and everybody’s not judged the same way,” Molina said.
Molina indicated to the House committee that the current way might not be the best way.
“And if there is a better way to do it, if you could put it in the law, that would make it so much easier for us here right now to answer these questions because we’re kind of boxed back into a corner using a state law that has to apply to everything,” Molina told the committee.
Leaders at Driscoll Health Plan have a different perspective.
“It doesn’t really make sense that you could find the best value to the state if you don’t even consider the value you already have within the state,” Driscoll Health Plan CEO Craig Smith said last week.
Smith said that “common sense” and “good public policy” went out the window as the state was caught up in a bureaucratic process.
“Unfortunately, what I took away from that hearing, in my opinion, was that the state’s process was more focused on managed care companies that don’t live here than the pregnant mothers and children that do,” Smith said.
According to the Texas Health and Human Services performance indicator dashboard, Driscoll Health Plan has the highest percentage of “above high performance standard” measures of any of the current managed care service organizations.
These performance measures indicate access to care.
In 2022, the most recent year included in the data, close to 53% of Driscoll Health Plan’s performance measures were at the highest standard for CHIP. Only about 23% of the plan’s measures were below the minimum performance standard – that's the lowest percentage of measures at the lowest standard of any health plan.
For STAR in 2022, 62.5% of Driscoll Health Plan’s measures were at the highest level, second to only Blue Cross Blue Shield. For CHIP, Blue Cross Blue Shield did not meet the highest standard for any measures and only met the minimum performance standard in less than 22% of measures.
“All three children’s health plans have an undeniable reputation in quality and all three of them have been removed from the Medicaid system,” Smith said.
For the Nueces service area, Texas Health and Human Services issued a notice of intent to award for STAR and CHIP to Amerigroup Insurance Company, Superior HealthPlan and Humana Health Plan. In Texas, Amerigroup is now known as Wellpoint.
For STAR, Superior met the highest performance standard in about 22% of measures in 2022, falling below the minimum standard in about 41% of measures.
Neither Amerigroup, now known as Wellpoint, nor Humana has managed STAR in Texas before.
For CHIP, Superior met the highest standard in about 17% of measures and fell below the minimum standard in 50% of measures. Amerigroup, now known as Wellpoint, met the highest standard in about 56% of measures and fell below the minimum in 26% of measures, though this data is from other regions of the state, not South Texas.
Humana has not managed CHIP in Texas before.
For the Hidalgo service area, notice of intent to award for STAR and CHIP was issued to United Healthcare Community Plan of Texas, Molina Healthcare of Texas and Superior HealthPlan.
If the state continues with this plan, all of the families served by Driscoll Health Plan for STAR and CHIP will have to pick from one of these new plans.
“The first thing a parent would have to do is see where their doctor is because their doctor might not be contracted with one of these new health plans,” Smith said.
What impact does the Driscoll Health Plan have on the community?
Driscoll Health Plan has spent millions investing in health care infrastructure in the community, including in programs and services that any South Texas residents can access, not just health plan members.
“One thing that the state absolutely ignores is the amount of investment that it takes in health infrastructure to hit those performance metrics,” Smith said.
In particular, Driscoll Health Plan has been instrumental in attracting maternal fetal medicine specialists to South Texas. These specialists treat pregnant mothers with high-risk health needs, including mothers who have lost pregnancies before or who have conditions such as high blood pressure, diabetes, cancer or pregnancy complications.
“Our success through this program has really translated to success for the entire region,” Smith said.
Dr. Mary Dale Peterson is the executive vice president and chief operating officer for Driscoll Health System. Peterson said the maternal fetal medicine program began because Driscoll Health System was concerned about the preterm birth rate in the region, which was about 15% in 2008.
Driscoll Children’s Hospital does not deliver babies, but it does operate a NICU.
After consulting with obstetricians in the community, Driscoll invested in prenatal education. But a remaining concern was the number of complicated pregnancies in the region that local obstetricians weren’t always prepared to treat.
Driscoll Health System launched a maternal fetal medicine program in 2008, bringing clinics to Brownsville, McAllen, Victoria, Laredo and Corpus Christi, where there are two locations. The health plan provided the funding to attract maternal fetal medicine specialists to South Texas. The clinics also have nurses and nurse practitioners.
Driscoll Health Plan still provides the core funding for six of the eight maternal fetal medicine specialists in South Texas. There were no maternal fetal medicine specialists in the region before the program began.
Maternal fetal medicine specialists train for an additional three years on top of four years of obstetrics and gynecology resident training. It takes about 15 years after high school for a maternal fetal medicine specialist to complete undergraduate and medical school and residency programs.
Dr. Javier Castillo is the medical director for the maternal fetal medicine program. He’s one of the doctors Driscoll Health Plan brought to the area.
“Driscoll really came and created something that no one else wanted to do, that no one else could do and no one else had plans to do,” Castillo said.
When doctors from Brownsville to Victoria come across a woman facing a dangerous pregnancy, they call Castillo and his colleagues. They’re projected to complete 30,000 visits this year alone at high-risk clinics.
“The maternal fetal medicine network we have here is a safety net for the community,” Castillo said. “When they get in trouble and the general OBGYN doesn’t know what the answer is, we’re a true safety net.”
Driscoll Health Plan has contributed over $150 million to the program in total and continues to contribute $10 million annually.
“If we don’t have this program funded by the health plan, how is the program going to get funded?” Peterson said.
As outcomes have improved for births, the program is estimated to have saved the state $1 billion in neonatal intensive care unit costs alone, Smith said.
“When you talk to moms and dads about the children we have saved or maybe they couldn’t have a successful pregnancy before and now they have a healthy baby, to me that’s priceless,” Peterson said.
Today, South Texas has some of the lowest maternal mortality rates in the state despite high rates of diabetes and other pre-existing conditions, Peterson said.
“I attribute it to the education we’re providing these women, which would go away, as well as the strong work of our obstetricians and maternal fetal medicine specialists working together,” Peterson said.
Losing the maternal fetal medicine program would impact a generation of mothers, Castillo and Peterson said.
“It’s dangerous for the moms of South Texas and very dangerous for the babies of South Texas,” Castillo said.
The health plan has also provided grants to local providers to put behavioral health professionals in primary care offices.
Like the maternal fetal medicine program, this effort is funded by Driscoll Health Plan but benefits many more individuals in the community.
“We have opened that program to anyone that needs those individuals and that’s because of the Driscoll mission to serve the families of South Texas,” Smith said.
Driscoll Health Plan also partners with over 500 community organizations.
Driscoll Health Plan is an entity of Driscoll Health System, which has deep roots in the community beginning with Driscoll Children’s Hospital in 1953.
The hospital was funded through the will of Clara Driscoll, known more widely as the “Savior of the Alamo” for her role in preserving the historical site. Driscoll Health Plan is entirely based in South Texas.
Smith raised concerns that new managed care providers stepping into South Texas for the first time won’t have the same commitment and care for the region.
“This has to be your number one priority,” Smith said.
Driscoll Health Plan employs hundreds of people. In 2022, The Perryman Group analyzed the economic impact of the Driscoll Health System and the Driscoll Health Plan.
According to the economic report, the Driscoll Health Plan spends $1.2 billion per year in South Texas with a significant level of resources remaining in Texas instead of flowing out of state through administrative fees as might be the case with a national company. The Perryman Group estimated that keeping those funds in Texas results in an increase in business activity of about $330 million in gross product and 2,816 jobs.
How have the community and Driscoll Health Plan responded?
Without STAR and CHIP, the Driscoll Health Plan would be left with one remaining program unless it is dropped during the pending STAR Kids procurement process as well. With just STAR Kids, it is unclear whether Driscoll Health Plan would survive.
“We’ll fight for everything we can to continue serving all the children that we can service,” Smith said. “It’s our mission. But the reality is that STAR Kids on its own is such a volatile business product that we simply might not have the choice.”
Ahead of a recent hearing by the Texas House of Representatives Committee on Human Services, hundreds of individuals primarily from South Texas submitted public comments expressing concerns about the procurement process.
Many specifically named Driscoll Health Plan. Those who wrote to the committee identified themselves as concerned residents, members of the health plan, supporters of community organizations that partner with Driscoll and members of the medical community.
“They care about us community members,” one Corpus Christi resident wrote.
A Kingsville resident called the health plan “a lifeline.” A Corpus Christi resident called it “a beacon of hope.”
A Corpus Christi mother of four who said she benefits from the program said she prays it can continue to serve children and women in her community. Another mother whose children are covered by the health plan called the potential loss of Driscoll Health Plan “profound.”
Driscoll Health Plan and other impacted managed care organizations have already attempted one protest which was rejected earlier this month by Texas Health and Human Services.
Driscoll Health Plan intends to file an appeal to Texas Health and Human Services this week. Young, commissioner of Texas Health and Human Services, will provide a response.
“We hope that she will pause this process and allow the legislature to create a fair, equitable and competitive process,” Peterson said.
If the appeal is rejected, there will still be time for the Texas Legislature to act before the changes go into effect in September 2025.
“Beyond the results of that appeal we truly believe that this issue needs to continue to be discussed at the highest level of the state,” Smith said.
Smith said Driscoll Health Plan would like to see increased competition, allowing more health plans to work with the state.
“I encourage companies to come to town and compete because they should come in and bring their best and put it on the table,” Smith said. “Match how much we invest. Match how we innovate to serve our members.”
Nineteen state senators and state representatives, including state Sen. Chuy Hinojosa, state Rep. Todd Hunter, state Sen. Morgan LaMantia, state Rep. Abel Herrero and state Rep. J. M. Lozano signed letters to Gov. Greg Abbott and Commissioner Young in April.
The letters urge Young to intervene, touting Driscoll Health Plan’s record in reducing maternal morbidity and mortality and improving infant outcomes, as well as in children’s mental health. The letters also note that the plan is based in South Texas, with an economic impact on the region and a cultural presence.
The lawmakers ask Young to remove the limit on the number of managed care organizers allowed to operate in each region to create more robust competition that would allow the Driscoll plan to continue operating. The letters also indicate that the Texas Legislature could choose to address the issue when it convenes in January, months ahead of when the changes are scheduled to take effect in September 2025.
“It seems that HHSC did not take into consideration our communities’ needs and preferences, nor did it seek input from legislators, providers, or other stakeholders impacted by the decision,” the letter reads.
Denying a contract with Driscoll would cause “irreparable harm” to the most vulnerable residents in South Texas, the letter claims.
Corpus Christi Mayor Paulette Guajardo also sent a letter to the governor dated May 30, using much of the same language as the letter from the South Texas delegation of lawmakers.
Driscoll Health Plan held a news conference Wednesday morning to update the community on the appeal.
At the news conference, Smith said the health plan will keep all legal options open if the appeal is denied.
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This article originally appeared on Corpus Christi Caller Times: Driscoll Health Plan to appeal state decision, touts successes
