Texas Hospital Association

Expansion of Medicaid managed care in Texas


March 1, 2012                                  >> Time Sensitive <<


SUBJECTExpansion of Medicaid managed care in Texas

Today, the Texas Health and Human Services Commission begins expanding Medicaid managed care throughout the state. As a result, more than 3 million people or 77 percent of the Medicaid population will be enrolled in a managed care organization. Although THHSC has worked hard to be ready for this transition, providers and Medicaid enrollees may be alarmed by the changes to the program.

The Texas Hospital Association developed the following guide on MCO obligations and helpful tips to ease the transition.

  • MCOs obligations:  
    • Contract with and credential providers.
    • Negotiate reimbursement rates with provider (MCO may use 100 percent of prevailing Medicaid rate as starting point in negotiations).
    • MCOs may have their own authorization requirements and providers must follow the MCO’s rules.
    • Provide a medical home through a Primary Care Physician and make referrals as needed for specialty provider visits.
    • MCO may offer value-added services (ex: sports physicals, extra vision benefits, health and wellness benefits).
  • Member Eligibility:
    • All members receive a MCO Plan ID Card, in addition to a “Your Texas Benefits Medicaid” card from the State.
    • The card contains the following information: Member’s name and Medicaid ID number;  Identification of Healthcare Program (STAR); MCO name; Primary care provider name and telephone number; Toll-free telephone numbers for member services and behavioral health services hotline; Additional information may be provided (e.g., date of birth, service area, primary care provider address).
    • Maximus, the state’s contractor, handles eligibility for all public programs. The Maximus phone number is 1-800-964-2777, Monday - Friday, 8 a.m. to 8 p.m. Central. After office-hours, call the MCO’s hotline.
  • Claims Payment:
    • Claims are paid by the MCO based on the written contract with the provider.
    • Effective March 1, 2012, HHSC has established a Claims Clearinghouse for providers to submit claims for routing to MCOs.
    • Providers must file claims within 95 days of Date of Service.
    • MCOs are required to adjudicate within 30 days. See also Uniform Managed Care Claims Manual at: http://www.hhsc.state.tx.us/
    • Don’t forget to monitor changes in the Medicaid program by watching Medicaid Manual and bulletins at: http://www.tmhp.com/default.aspx.
  • Provider Complaints:
    • Initial point of contact is MCO.
    • Providers may submit written complaint to HHSC at: hpm_complaints@hhsc.state.tx.us.
    • HHSC will intervene in issues when MCO is not complying with HHSC contract.
    • Be careful of HIPAA issues when submitting complaints.
    • MCOs are licensed by the Texas Department of Insurance. Providers can also send complaints to: http://www.tdi.texas.gov/hprovider/doctors3.html.
  • Out-of-Network Reimbursement and Standards:
    • General Rules: A MCO shall reimburse an out-of-network, in area service provider 95 percent of the Medicaid Fee-For-Service rate or for 100 percent FFS rate for out-of-network, out-of-area service providers.
    • See 1 Texas Administrative Code Section 353.4 for additional details on the Network standards the MCOs must maintain for compliance with the MCO contract with HHSC.
  • Administrative Issues (Authorizations, Span of Coverage and Default Enrollment):
    • Authorization for services may be limited and are service specific. MCOs will have their own specific authorization process and providers must follow MCOs rules. HHSC will require the MCOs to honor TMHP prior authorizations for at least three months during initial transition.
    • For details regarding Span of Coverage for members enrolled in an MCO see Section 5.06 and the default enrollment provisions for STAR, STAR+PLUS and CHIP see Sections 5.08 -5.10 included in HHSC’s Uniform Managed Care Contract with the MCOs: http://www.hhsc.state.tx.us/medicaid/
  • Additional Resources or Questions:

According to Texas Government Code 305.027, portions of this material may be considered “legislative advertising.” Authorization for its publication is made by John Hawkins, Texas Hospital Association, P.O. Box 679010, Austin, TX 78767-9010.

Michelle Apodaca, J.D., vice president, advocacy, legal and public policy, 512/465-1506

John Berta, senior director, policy analysis, 512/465-1556

Subsidiaries and Affiliates


Texas Hospital Insurance Exchange

Texas Hospital Association Foundation

Texas Healthcare Trustees


According to Texas Government Code 305.027, portions of this material may be considered “legislative advertising.” Authorization for its publication is made by John Hawkins, Texas Hospital Association, 1108 Lavaca, Suite 700, Austin, Texas, 78701-2180.